United States v. Zandford ( 1997 )

Filed: May 5, 1997
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 95-5816
(CR-94-165-WMN)
United States of America,
Plaintiff - Appellee,
versus
Charles Zandford,
Defendant - Appellant.
O R D E R
The Court amends its opinion filed April 3, 1997, as follows:
On page 2, first paragraph of the opinion, line 1 -- "53
months" is corrected to read "5 2 months."
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 95-5816
CHARLES ZANDFORD,
Defendant-Appellant.
Appeal from the United States District Court
for the District of Maryland, at Baltimore.
William M. Nickerson, District Judge.
(CR-94-165-WMN)
Argued: January 30, 1997
Decided: April 3, 1997
Before RUSSELL and WILKINS, Circuit Judges, and HERLONG,
United States District Judge for the District of South Carolina,
sitting by designation.
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Affirmed by unpublished per curiam opinion.
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COUNSEL
ARGUED: Deborah C. Wyatt, WYATT & CARTER, Charlottes-
ville, Virginia, for Appellant. Thomas Michael DiBiagio, Assistant
United States Attorney, Baltimore, Maryland, for Appellee. ON
BRIEF: Lynne A. Battaglia, United States Attorney, Baltimore,
Maryland, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
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OPINION
PER CURIAM:
Charles Zandford appeals his conviction and sentence of 52 months
imprisonment for committing thirteen counts of wire fraud. Zandford
contends the Government failed to present sufficient evidence of wire
fraud to sustain his convictions; and that the district court erred in
admitting the testimony of four Government witnesses. Because each
of Zandford's grounds for appeal is meritless, we affirm.
I.
Charles Zandford worked as a stockbroker for a brokerage firm,
which had offices in Bethesda, Maryland, and New York, New York,
from May 1987 through February 1991. He met William Wood in
November 1987, and solicited Wood to invest with him. Wood, 71
years old at the time, opened a joint investment account with Zand-
ford. The account was titled in Wood's name and that of his daughter,
Diane Okstulski, who suffered from a multiple personalities disorder.
Within four months after their first meeting, Zandford persuaded
Wood to entrust him with $419,255 to "conservatively invest." Nine-
teen months later, all of Wood's money was gone.
In January 1991, the National Association of Security Dealers
("NASD") inadvertently discovered that Zandford had systematically
transferred money on over twenty-six separate occasions from
Wood's and Diane's investment account to accounts either controlled
by Zandford or in Zandford's name. When confronted about the trans-
fers one month later, Zandford acknowledged that Wood and Okstul-
ski (hereinafter "the Woods") had transferred money to him. He
explained that pursuant to three agreements he had entered into with
the Woods in 1988 and 1989, they gave him: $100,000 under a per-
sonal services agreement for services he rendered to them as an over-
seer of their personal and medical needs; $150,000 to invest in and
2
operate a vintage car restoration business; and $140,000 as an unse-
cured personal loan for reasons undisclosed. The remaining money he
allegedly spent on behalf of the Woods. Mr. Wood died in 1991.
In April 1995, a federal grand jury issued a superseding indictment
against Zandford for thirteen counts of wire fraud in violation of 18
U.S.C. § 1343. The first count related to money Zandford obtained
from selling the Woods' shares in a mutual fund. The remaining
counts related to twelve separate withdrawals Zandford made from
the Woods' joint investment account. After a three-week trial, a jury
convicted Zandford on all counts. He received a sentence of 52
months imprisonment.
II.
Zandford contends that the evidence is insufficient to support his
wire fraud convictions. When reviewing challenges to sufficiency of
the evidence, we determine whether any rational trier of fact could
have found the essential elements of the charged offenses beyond a
reasonable doubt.1 Assuming the jury weighed the evidence, resolved
all conflicts in the testimony, and drew all reasonable inferences from
the facts, we consider all of the evidence in the light most favorable
to the government.2
To prove Zandford violated the wire fraud statute, the Government
had to establish: (1) the existence of a scheme to defraud and (2) use
of interstate wire communications to facilitate the scheme.3
First, Zandford contends there was insufficient evidence to find
that he had engaged in a scheme to defraud. He claims the Woods
willfully transferred their money to him via three lawfully-executed
agreements. He also maintains that the Government's case against
him was flawed because it failed to use relevant contract law to inval-
idate the agreements. The Government's burden, however, was not to
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1 Jackson v. Virginia, 443 U.S. 307, 319 (1979).
2 Id.3 18 U.S.C.A. § 1343 (West Supp. 1997); United States v. ReBrook, 58
F.3d 961, 966 (4th Cir. 1995) (citation omitted).
3
disprove Zandford's defense. Rather the Government's obligation was
to place enough evidence before the jury to prove beyond a reason-
able doubt that Zandford engaged in a scheme to defraud the Woods.
The term "scheme to defraud" means "any scheme to deprive
another of money or property by means of false or fraudulent pre-
tenses, representations or promises."4 It includes fraudulent schemes
based on false statements or factual misrepresentations.5 Thus, with
respect to the alleged agreements, it was sufficient for the Govern-
ment to cast doubt upon the validity of the agreements or demonstrate
that the agreements themselves manifested the scheme by which
Zandford tried to "legitimize" the wholesale theft of the Woods'
money.
The Government presented ample direct and circumstantial evi-
dence showing that Zandford had engaged in a scheme to defraud the
Woods. It showed that: (1) Zandford had systematically transferred
large sums of money from the Woods' account to his own accounts
over a nineteen month period; (2) prior to November 1987, the
Woods had no relationship with Zandford; (3) Zandford, and not the
Woods, benefitted from the money transfers; (4) the Woods were
vulnerable victims due to their physical and mental limitations;
(5) the personal services agreement, the loan, and the vintage car res-
toration business were not only contrary to the Woods' stated invest-
ment objectives, but they violated the rules of NASD and those of
Zandford's employer that prohibited brokers from engaging in such
arrangements; and (6) vehicles owned as part of the vintage car resto-
ration business were titled in the name of Zandford's girlfriend as
opposed to the Woods' names. Additional evidence showing a
scheme to defraud included Zandford's failure to disclose to his
employer the existence of the agreements and personal loans; his fail-
ure to report on his taxes or bank loan applications that he received
income from acting as the Woods' personal representative; and his
failure to disclose on his taxes his involvement in a vintage car resto-
ration business. Zandford's contention that there is insufficient evi-
dence supporting that he had engaged in a scheme to defraud the
Woods is meritless.
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4 Carpenter v. United States, 484 U.S. 19, 27 (1987).
5 See, McNally v. United States, 483 U.S. 350, 359 (1987).
4
Zandford also contends that there was insufficient evidence to find
that he used wire transfers in furtherance of a scheme to defraud. This
contention is also without merit. On behalf of the Government, the
branch manager and the compliance officer of the brokerage firm tes-
tified that every time money was withdrawn from the Woods' account
a wire communication was used between the branch office in
Bethesda, Maryland, where Zandford worked, and New York, New
York, to verify the availability of funds and permit the transfer. Addi-
tionally, computer-monitored money line documents showed that
Zandford used a wire communication between Maryland and New
York for nine of the thirteen withdrawals he made from the Woods'
joint account.
Given the foregoing evidence, we hold that any rational trier of fact
could have found the essential elements of wire fraud beyond a rea-
sonable doubt. We affirm Zandford's thirteen convictions for wire
fraud.
III.
Next, Zandford contends the district court erred in admitting the
testimony of four government witnesses. We review evidentiary rul-
ings for abuse of discretion.6
First, Zandford contends that the Government used the hearsay tes-
timony of two doctors and a nurse in order to establish Mr. Wood's
incompetence during the time period in which Zandford entered into
the agreements with the Woods. The record reveals both doctors testi-
fied as expert witnesses and treating physicians. A neurologist testi-
fied that Mr. Wood was his patient during 1988-91 and was virtually
blind, completely incompetent, and medically disabled. The other
doctor, a general physician, corroborated much of the neurologist's
testimony, and stated that from January 1989 to February 1990, Mr.
Wood suffered from dementia. The doctors' proffered testimony as to
Mr. Wood's medical condition during the relevant time period was
admissible under Federal Rule of Evidence 703, "Bases of Opinion
Testimony by Experts," and under a hearsay exception, Federal Rule
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6 United States v. Heater, 63 F.3d 311, 320 (4th Cir. 1995).
5
of Evidence 803(4), "Statements for purposes of medical diagnosis or
treatment."
Zandford also contends that the district court erred in allowing the
Government to admit into evidence the nursing notes of the nurse
assigned to care for Mr. Wood in a nursing home from January 1990
to June 1991. The notes characterized Mr. Wood's medical condition
as "senile dementia," and the nurse testified that her observations of
Mr. Wood were consistent with that characterization. Pursuant to Fed-
eral Rule of Evidence 803(6), "Records of regularly conducted activ-
ity," these notes were properly admitted as they were kept in the
regular course of business by the nursing staff at the nursing home.
Second, Zandford contends that the district court erred in allowing
a psychologist to testify regarding Okstulski's mental capacity during
the relevant time period. This testimony was also properly admitted
under Federal Rules of Evidence 703 and 803(4) as discussed above.
The district court did not abuse its discretion in admitting the testi-
mony of the doctors, the psychologist, or the nurse's notes.7
IV.
For the foregoing reasons Zandford's conviction and sentence for
thirteen counts of wire fraud is
AFFIRMED.
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7 Zandford raises numerous other issues which we hold to be meritless.
6