United States v. Marston , 90 A.L.R. Fed. 2d 729 ( 2012 )

United States Court of Appeals
For the First Circuit
No. 11-2100
UNITED STATES OF AMERICA,
Appellee,
v.
RAMIE MARSTON,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]
Before
Boudin, Hawkins* and Dyk,
Circuit Judges.
Behzad Mirhashem, Federal Defender Office, for appellant.
Seth R. Aframe, Assistant United States Attorney, with whom
John P. Kacavas, United States Attorney, was on brief for appellee.
September 20, 2012
*
Of the Ninth Circuit, sitting by designation.
BOUDIN, Circuit Judge. Ramie Marston appeals her
convictions, after a jury trial, for two counts of bankruptcy
fraud. The convictions stemmed from a pro se petition for
bankruptcy that Marston filed in March 2009 under Chapter 7 of the
Bankruptcy Code, 11 U.S.C. §§ 701 et seq. (2006). The prosecution
alleged that Marston failed to include in the petition information
related to her past fraudulent use of credit cards that she
obtained under the names of two acquaintances--Susan Blake and
Kristy Kromer.
A debtor who files such a bankruptcy petition has to
identify "All Other Names used by the Debtor in the last 8 years
(include married, maiden, and trade names)." Marston wrote
"Marston, Robbi" in answer to that question, but she did not
mention the names of Susan Blake or Kristy Kromer. She then signed
under penalty of perjury that the information she provided in the
petition was "true and correct."
A debtor must also identify creditors of different
classes in separate schedules. In Schedule E, which asks for all
creditors with unsecured priority claims, Marston listed Susan
Blake as holding a $50,000 claim incurred on February 3, 2009, of
which $46,000 was entitled to priority. In Schedule F, which asks
for all creditors holding unsecured nonpriority claims, Marston
listed Susan Blake as holding a disputed $50,000 claim incurred on
September 22, 2007. Marston made no reference to the credit card
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issuers that had issued the cards in Susan Blake's name. Again,
Marston's signature under penalty of perjury represented that the
information in the schedules was "true and correct to the best of
my knowledge, information, and belief."
Eventually, the petition was dismissed on Marston's own
motion after the United States Trustee challenged her right to a
discharge. On April 27, 2011, Marston was charged with five counts
of bankruptcy fraud, 18 U.S.C. § 152, each count alleging that she
had made a false statement in her application or schedule. The two
counts ultimately submitted to the jury alleged as follows:
-- Count One: that Marston had used the names
Kristy Kromer and Susan Blake but knowingly
and fraudulently failed to disclose this as
required in the petition.
-- Court Four: that Marston knowingly and
fraudulently failed and refused to disclose
debts to Bank of America, BMW Bank of North
America, and American Express.
The government's theory as to the first count was that
Marston had used the names of her two friends, Blake and Kromer, in
credit card applications without their approval in order to secure
cards with which Marston then made unauthorized purchases in their
names; as to the fourth count, its theory was that the credit card
issuers had claims against Marston for purchases made with those
accounts. The jury convicted on both counts and Marston was
ultimately sentenced to concurrent terms of 37 months imprisonment
and three years supervised release for each count, as well as a
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statutory $100 special assessment imposed separately for each
count.
Marston now appeals, contending that the evidence was
insufficient for a reasonable jury to convict on either count. In
the course of her Rule 29 motion at trial, Marston made a general
objection to the adequacy of the evidence and also pointed to
certain specific concerns about the evidence of materiality and
mens rea.1 Following the Rule 29 motion, the district court
conducted a detailed analysis of those concerns as well as of the
evidence of falsity, and then denied the motion.
A false oath conviction under 18 U.S.C. § 152(2)
requires the government to prove (1) the existence of a bankruptcy
proceeding; (2) that the defendant made a false statement in that
proceeding under penalty of perjury; (3) that the false statement
concerned a material fact; and (4) that the defendant made the
false statement knowingly and fraudulently. United States v.
Cutter, 313 F.3d 1, 4 n.4 (1st Cir. 2002). See also Metheany v.
United States, 390 F.2d 559, 561 (9th Cir.), cert. denied, 393 U.S.
824 (1968) (same elements restated under five headings).
Although Marston now attacks the adequacy of the evidence
in several different ways, she does not deny that she fraudulently
1
Marston put on no case of her own and so no issue arises as
to the need to renew the motion after the close of all the
evidence. See United States v. Hernández, 218 F.3d 58, 63 n.3 (1st
Cir. 2000), cert. denied, 531 U.S. 1103 (2001).
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secured credit cards by listing her friends, without their
permission, as the applicants or co-applicants and that she made
purchases with those accounts. The government offered substantial
evidence of the unauthorized applications, issuance of the cards,
and Marston's use of them to make purchases; and we review the
evidence in the light most favorable to the government. United
States v. Troy, 583 F.3d 20, 24 (1st Cir. 2009).
Marston apparently met Kristy Kromer while both women
were working at an insurance agency in Nevada. Kromer thereafter
discovered, among other things, that a Chase Visa card had been
taken out in her name with an address corresponding to Marston's
residence in Henderson, Nevada and that a Certegy loan credit card
had been issued under her name with Marston listed as the co-
borrower. A later search of Marston's home in New Hampshire
revealed that several other credit cards had also been opened in
Kromer's name but mailed to Marston's addresses in Nevada and New
Hampshire.
The evidence as to Susan Blake is more circumscribed
because the government, instead of presenting a full scale case,
accepted a stipulation in which Marston admitted inter alia that
she had possessed credit cards bearing the names of both Marston
and Blake, that she made purchases with those cards never
authorized by Blake, and that the "fraudulent liabilities incurred
in Blake's name by Marston totaled approximately $61,545."
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Specific credit card issuers were identified in the stipulation,
including the ones named in the indictment on Count Four.
Although appellate review of preserved sufficiency claims
is de novo, albeit taking the evidence in the light most favorable
to the verdict, the government argues that several of Marston's
objections were not specifically identified in the Rule 29 motion
so that their review should be only for "'clear and gross'
injustice." United States v. Upham, 168 F.3d 532, 537 (1st Cir.),
cert. denied, 527 U.S. 1011 (1999) (quoting United States v.
Greenleaf, 692 F.2d 182, 185 (1st Cir. 1982)). The law as to
preserving sufficiency claims differs somewhat from the
requirements for most objections.
In most circuits, the rule is that a general challenge to
the adequacy of the evidence preserves for de novo review "the full
range of challenges, whether stated or unstated," United States v.
Hammoude, 51 F.3d 288, 291 (D.C. Cir.), cert. denied, 515 U.S. 1128(1995),2 and we have suggested that the same rule applies in this
circuit as well. See Slater v. United States 562 F.2d 58, 59 (1st
Cir. 1976). By contrast, when a defendant chooses only to give
specific grounds for a Rule 29 motion, all grounds not specified
are considered waived and are reviewed under Upham's less forgiving
2
See also United States v. Chance, 306 F.3d 356, 369 (6th Cir.
2002); United States v. Hoy, 137 F.3d 726, 729 (2d Cir.), cert.
denied, 525 U.S. 850 (1998); 2A Wright & Henning, Federal Practice
and Procedure § 466, at 356 n.2 (2000). But see United States v.
McDowell, 498 F.3d 308, 312 (5th Cir. 2007).
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"clear and gross injustice" standard. See United States v. Pena-
Lora, 225 F.3d 17, 26 n.5 (1st Cir. 2000), cert. denied, 537 U.S.
877 (2002); United States v. Belardo-Quinones, 71 F.3d 941, 945
(1st Cir. 1995).
Marston's Rule 29 motion could be viewed as straddling
both of these categories. Her counsel began with what taken alone
is purely a general objection to the government's evidence:
Pursuant to Rule 29 of the Federal Rules of
Criminal Procedure, I respectively move that
Counts 1, 2, 3 and 4 be subjected to a
directed verdict of acquittal on the grounds
that the government has failed to meet its
constitutional obligation to prove each of the
essential elements beyond a reasonable doubt.
But the situation is slightly muddied because Marston's counsel
continued with specific objections relating both to scienter and
materiality without making clear that these were merely
illustrative and without mentioning the other attacks now made on
appeal:
The essential element that I submit that they
have not proved beyond a reasonable doubt, the
one I want to focus on, is the obligation that
they have first to show that my client's
conduct as alleged in each of those four
counts was knowing and fraudulent, and
secondly, their obligation to prove that the
omissions...in my client's bankruptcy petition
were material...and for those reasons I move
for directed verdict of acquittal.
Again, standing alone, this language seems to express specific
objections to the government's evidence that would constitute a
waiver of all unspecified challenges.
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There is good reason in case of doubt to treat an
ambiguous motion like this one as "general" in the sense that it
preserves all grounds. It is helpful to the trial judge to have
specific concerns explained even where a general motion is made;
and to penalize the giving of examples, which might be understood
as abandoning all other grounds, discourages defense counsel from
doing so and also creates a trap for the unwary defense lawyer.
The tendency would be to encourage general objections without
examples.
This situation arises only because general objections are
permissible on Rule 29 motions. Ordinarily, the law calls on
counsel to make specific objections which state the grounds for or
scope of the objection, e.g., objections to evidence or
instructions, in order to aid the trial judge and avoid unnecessary
retrials. But the practice of allowing general Rule 29 objections
is well accepted and the retrial problem does not arise if the
motion is granted.
As it happens, the judge in this case seemingly
understood Marston's challenge as a general one. After Marston's
counsel announced his Rule 29 motion in the language quoted above,
the judge replied:
I guess I have a more fundamental question,
which is have they proved even...falsity to
the alleged portions of the bankruptcy
filings. So let's start with that and then
let's move on to -- what I hear you saying is
I'm challenging mens rea and materiality.
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Before you even get to mens rea and
materiality you have to demonstrate falsity,
and I want to be clear as to what counts
falsity has been sufficiently demonstrated and
then go on and ask whether there's evidence of
materiality and mens rea.
He then went on to examine the sufficiency of the government's
evidence as to each element of the four remaining counts. That the
trial judge considered such a ground would alone justify review,
"as if such a motion had been made." United States v. Moynagh, 566
F.2d 799, 802 (1st Cir. 1977), abrogated on other grounds by United
States v. Nieves-Burgos, 62 F.3d 431, 436 (1st Cir. 1995).
With respect to Count One, Marston's attack is several-
fold: even positing that Marston had fraudulently applied for and
also used credit cards in the names of her two friends, she argues
that (1) this did not call for the listing of such names as ones
"used by" Marston; (2) the omissions were immaterial since they
would not have lead to discovery of assets relevant in bankruptcy;
and (3) the evidence of fraudulent intent in omitting the names
was insufficient.
The first objection rests on the view that the language
of the petition did not call for Marston to reveal other people's
names that she had entered on fraudulent credit card applications
and then presented as her own when using the cards she received or,
at least, that the question in the bankruptcy application was
wholly unclear as to whether such a deployment of another's name
was "use." In our view, both branches of this attack fail: the
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language did call for Blake and Kromer's names and it was in no way
fatally ambiguous.
True, "use" is a word that has various layers of meaning,
but certainly an individual literally "uses" another person's name
by entering it on a credit card application or presenting it as
one's own in making purchases. This is not so different than using
another person's name as a trade name--say, the deceased founder of
one's company--save that this "use" is fraudulent and that one
permissible. The parenthetical's reference to trade names,
however, is neither necessary to our conclusion nor helpful to
Marston although she urges the contrary.
Marston argues that the parenthetical references to
"married, maiden, and trade names" confine the meaning of "use"
under the ejusdem generis canon; but the canon is weakest, and only
dubiously applicable, where as here the general term comes first.
Compare American Sur. Co. of N.Y. v. Marotta, 287 U.S. 513, 517
(1933) with United States v. McKelvey, 203 F.3d 66, 71 (1st Cir.
2000). Indeed, as already noted, the more specific examples in the
question can be used effectively against Marston herself by way of
analogy to trade names.
Neither is Marston's proposed interpretation saved by her
argument that the petition only asked for names "used by the Debtor
in the last 8 years," and that it therefore could be read only to
include the names under which she might have previously filed for
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bankruptcy, as a means to enforce the prohibition on successive
discharges. See 11 U.S.C. § 727(a)(8). Obviously the requirement
for listing alias names has various uses in bankruptcy, including
the tracing of assets obtained or concealed under other names.
Anyway, the question literally called for her to disclose Blake and
Kromer's names without limiting it to names used in bankruptcy
petitions.
There is an outer limit to confusing or misleading
questions and courts do regard some questions as so inherently
ambiguous as to defeat a false statement prosecution without regard
to the defendant's state of mind. One formulation distinguishes
ordinary ambiguity from "fundamental ambiguity," the latter barring
conviction outright;3 we have also said a conviction is improper if
the answer given is literally correct even if it could be regarded
as misleading. United States v. Rowe, 144 F.3d 15, 21 (1st Cir.
1998).
The answer here was not literally correct nor was the
question fundamentally ambiguous. This follows from the commonly
understood breadth of the term "use," only slightly narrower than
words like "do" or "make," combined with the fact that using the
name of another on a credit card application or making purchases
3
United States v. Mubayyid, 658 F.3d 35, 61 (1st Cir. 2011),
cert. denied, 132 S. Ct. 2378 (2012); United States v. Boskic, 545
F.3d 69, 89-90 (1st Cir. 2008), cert. denied, 555 U.S. 1175 (2009);
United States v. Richardson, 421 F.3d 17, 33 (1st Cir. 2005), cert.
denied, 547 U.S. 1162 (2006).
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with the resulting credit card is plainly portraying oneself as
that other person. True, even a reasonably clear question can be
innocently misunderstood; but no conviction for making a false
statement is complete without a finding of scienter.
The remaining wrinkle is, as Marston points out, that
some of the cards bore her own name in addition to those of Kromer
or Blake, but this also is of no help to her. Whether or not one
could distinguish dubitante between using another's name without
more and using it fraudulently along with one's own, the evidence
includes correspondence seized from Marston's home that clearly
supported the inference that at least some of the cards Marston
secured and used bore only the names "Kristy Kromer" or "Susan
Blake."
Marston also suggests that her answer, true or false, was
immaterial. As the bankruptcy trustee in this case explained at
trial, finding all names used by the debtor in any capacity in the
last eight years serves as a tool for locating additional assets to
distribute to the debtor's creditors. That the particular
appropriation of Kristy Kromer and Susan Blake's names here would
have lead rather to more claims against the estate than to more
assets matters not. United States v. Edgar, 82 F.3d 499, 510 (1st
Cir.), cert. denied, 519 U.S. 870 (1996); United States v. Grant,
971 F.2d 799, 809 n.18 (1st Cir. 1992).
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Finally, the evidence was sufficient for the jury to
conclude that Marston's failure to reveal the aliases she had used
was done with the kind of dishonest or fraudulent awareness
required by the statute. The language reasonably called for
disclosure of Blake and Kromer's names as ones previously assumed
by Marston in credit card applications, and Marston had an
affirmative motive to falsify her answers by omitting their names.
Cf. United States v. Shadduck, 112 F.3d 523, 525-27 (1st Cir.
1997).
The first point is covered by our earlier discussion.
The second is obvious: to reveal her use of the names would have
pointed directly to Marston as the perpetrator of credit card
fraud. She responds that investigators were already looking into
the matter; but it is one thing to be subject to suspicion and
another to make admissions that would go far toward conviction. Of
course, Marston did not have to make any such admissions; but once
she chose to file for bankruptcy she could not then represent under
penalty of perjury that she had accurately answered the questions
on her petition.
Turning to Count Four, Marston contends that no
reasonable jury could have concluded that she made a false
statement by omitting the debts she had incurred under Blake's name
to Bank of America, BMW Bank of North America, and American
Express, because it was an "objectively reasonable interpretation"
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of the bankruptcy form that it did not call on her to include that
information. Rowe, 144 F.3d at 21. The section of the petition at
issue read:
"SCHEDULE F - CREDITORS HOLDING UNSECURED
NONPRIORITY CLAIMS...State the name, mailing
address, including zip code, and last four
digits of any account number, of all entities
holding unsecured claims without priority
against the debtor or the property of the
debtor, as of the date of filing of the
petition."
Marston's stipulation conceded that "[f]raudulent
liabilities incurred in Blake's name totaled approximately $61,545"
and that this was corroborated by records of the named creditors.
But Marston argues to us that she reasonably understood the
question to exclude claims against her by the creditors identified
in the count because the debts she ran up on the credit cards
created claims against Blake, not against her.
It is not clear that the banks held claims against Blake
if the cards were obtained solely by Marston's fraud, but that
hardly matters. As a result of Marston's actions, the banks almost
certainly held contract, fraud or restitution claims against
Marston for merchandise or services that she secured through her
use of the cards that she had procured using Blake's name. See
generally Restatement (Second) of Torts § 525 (1977); Restatement
(Third) of Restitution & Unjust Enrichment § 41 (2011).
The term "claim" easily comprehends claims of the issuers
against Marston. The bankruptcy statute defines a "claim" as a
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"right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured." 11 U.S.C. § 101(5)(A). See also Johnson v. Home State
Bank, 501 U.S. 78, 83 (1991) ("Congress intended by this language
to adopt the broadest available definition of 'claim.'").4
The problem for the government on Count Four has nothing
to do with ambiguity nor with the other elements (assuming
falsity). If there were falsity, that and her motive to lie would
permit an inference of scienter; and the materiality requirement is
easily satisfied: a listing of claims can identify debts including
funds supplied to the debtor, which in turn may lead the trustee or
creditors to savings or other assets. And Marston does not dispute
that the cards were fraudulently used for purchases and so
presumptively created claims against her by the issuing banks.
Instead, the missing element is proof that at the time
that the bankruptcy petition was filed, there were still extant
claims against Marston. The stipulation quoted above was enough to
prove beyond a reasonable doubt that claims against Marston had
arisen when the unauthorized purchases were made; but the
4
Although both the statute and the bankruptcy form use the
word "claim," the indictment in this case used the term "debt"
which, if applied to an unliquidated fraud claim, must be an
unusual usage; but presumably the drafter assumed that Marston, if
she ordered goods using a false name, had contracted a debt for
which she was liable.
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prosecutor accepted a stipulation that nowhere said that these
claims remained unpaid at the time Marston filled out the
bankruptcy forms.
The stipulation, it appears, was drafted by defense
counsel and gives every evidence of soft-pedaling concessions and
confusing matters; the district judge cautioned the prosecutor
against accepting it. Quite apart from the failure to make clear
that the bank claims endured, the stipulation seems so
disadvantageous to the prosecutor as to remain a mystery, although
there are sometimes practical reasons for trial-counsel choices
that remain invisible to the appellate court.
Likely the stipulation's failure to nail down the
duration of the claims was not a deliberate tactic by defense
counsel, for he argued in his closing to the jury that the amounts
that the government claimed to be owed to the card issuers were in
fact expressly disclosed on the petition as debts Marston herself
owed to Blake. That closing argument more or less suggests that
Marston's disclosure as to Blake comprehended whatever was owed to
the card issuers.
The latter claim could easily have been rejected by the
jury: the amounts owed to Blake directly did not correspond to what
was owed to the issuers and there was evidence of other debts owed
by Marston to Blake to which the listings on Marston's schedules
better corresponded. But it is pretty clear that defense counsel
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made no effort to argue either on the Rule 29 motion or to the jury
the defect now sought to be raised on appeal, namely, that the
debts were not shown to persist at the time the bankruptcy petition
was filed.
But, for reasons already explained, a general objection
under Rule 29 preserves just such previously unmentioned defects.
Contrary to the government's rescue effort on appeal, there is no
way to read the stipulation to say that the claims remained
outstanding at the time Marston filed her bankruptcy petition. And
while we would hardly expect Marston to have paid those claims in
the interim (and in fact we now know that she did not5), the
government bore the burden of proof at trial and it ultimately
failed to establish the element of falsity.
A slightly better argument, advanced as an alternative by
the government, is that defense counsel in closing conceded that
the claims remained unpaid. In a civil case, counsel's concession
of a factual point in argument is usually sufficient without any
need for formal proof, e.g., Butynski v. Springfield Terminal R.
Co., 592 F.3d 272, 277 (1st Cir. 2010); and several circuits have
applied the same rule to criminal cases. See, e.g., United States
v. Rusan, 460 F.3d 989, 993-94 (8th Cir. 2006), cert. denied, 549
5
Shortly after filing for bankruptcy, Marston was convicted of
identity, social security, and access device fraud for illegally
securing the credit cards; the judgment of conviction included
restitution orders in favor of the card issuers, but the jury in
this case had no knowledge of that proceeding.
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U.S. 1312 (2007). But while we might well follow this course
ourselves, a requisite would be a reasonably clear concession.
Defense counsel did not contest in his closing the
government's implicit assumption that the card issuers' claims
against Marston were outstanding at the time she signed the
bankruptcy forms; but this is not an explicit concession. Whatever
else one makes of defense counsel's gambit of conflating the
disclosed debts to Blake with any possible card issuer claims
against Marston, it simply does not address the question of whether
the issuers' claims existed at the time Marston filed for
bankruptcy.
The result is that Count Four fails for lack of proof and
the judgment on Count Four is reversed. The conviction on Count
One is affirmed; the sentence on Count One was not independently
challenged on appeal but the district court has leave to re-
sentence on Count One if the present sentence on that count was in
any way affected by the conviction on Count Four.
It is so ordered.
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