United States v. G. Martin Wynn ( 2012 )


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  •                        PUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    UNITED STATES OF AMERICA,             
    Plaintiff-Appellee,
    v.                         No. 11-4859
    G. MARTIN WYNN,
    Defendant-Appellant.
    
    Appeal from the United States District Court
    for the District of South Carolina, at Anderson.
    G. Ross Anderson, Jr., Senior District Judge.
    (8:10-cr-01026-GRA-1)
    Argued: May 15, 2012
    Decided: June 29, 2012
    Before NIEMEYER, MOTZ, and FLOYD, Circuit Judges.
    Affirmed by published opinion. Judge Niemeyer wrote the
    opinion, in which Judge Motz and Judge Floyd joined.
    COUNSEL
    ARGUED: Shimica D. Gaskins, COVINGTON & BURL-
    ING, LLP, Washington, D.C., for Appellant. Jeffrey Bryan
    Wall, UNITED STATES DEPARTMENT OF JUSTICE,
    Washington, D.C., for Appellee. ON BRIEF: Catherine C.
    Stern, COVINGTON & BURLING, LLP, Washington, D.C.,
    2                   UNITED STATES v. WYNN
    for Appellant. William N. Nettles, United States Attorney,
    Winston D. Holliday, Jr., Assistant United States Attorney,
    OFFICE OF THE UNITED STATES ATTORNEY, Colum-
    bia, South Carolina, for Appellee.
    OPINION
    NIEMEYER, Circuit Judge:
    G. Martin Wynn, a professional engineer with the engineer-
    ing firm of Talbert & Bright, Inc., was convicted of mail fraud
    and wire fraud, in violation of 
    18 U.S.C. §§ 1341
     and 1343,
    based on his performance of services to Oconee County,
    South Carolina, in connection with its project to extend the
    runway at the Oconee County Regional Airport. Instead of
    procuring a required permit for the runway extension project
    from the South Carolina Department of Health and Environ-
    mental Control ("DHEC"), Wynn cut a valid permit off of an
    older set of plans prepared for a previous airport project and
    fraudulently attached that permit to the plans for the runway
    extension. He then mailed the fraudulently permitted plans to
    Oconee County and later emailed them to the DHEC. Follow-
    ing his conviction, the district court sentenced Wynn to 12
    months and 1 day in prison and ordered him to pay Oconee
    County $118,000 in restitution.
    On appeal, Wynn contends that the district court erred in
    instructing the jury on the mail fraud and wire fraud statutes
    and that the evidence was insufficient to convict him on the
    offenses had they been properly presented to the jury. He also
    challenges the district court’s calculation of the amount of
    loss found for purposes of sentencing and ordering restitution.
    For the reasons that follow, we affirm.
    I
    Oconee County contracted with Talbert & Bright, an engi-
    neering firm specializing in airports and aviation consulting,
    UNITED STATES v. WYNN                      3
    to prepare site plans and obtain the necessary permits from the
    DHEC to execute its project to extend its runway at the Oco-
    nee County Regional Airport. Talbert & Bright employees,
    notably Al Smith (the project director) and Wynn, were
    responsible for preparing the construction plans and obtaining
    the necessary permits for the project.
    In April 2009, Wynn drafted a 48-acre storm water and ero-
    sion plan for the runway extension. After Al Smith signed off
    on the plans, Wynn sent them to Oconee County for approval.
    Oconee County approved the plans by issuing a Notice of
    Intent ("NOI") to proceed with construction. The normal pro-
    tocol thereafter would have been for Talbert & Bright to sub-
    mit the plans, together with the County’s NOI, to the DHEC
    to obtain the required permit. Although Wynn was charged
    with this task, he never completed it.
    Several months later, in October 2009, Oconee County
    adjusted the airport runway project slightly to include an addi-
    tional 12 acres in the erosion plan, for a total of 60 acres. This
    adjustment required adding two pages to the back of the origi-
    nal 48-acre plans, which had been 62 pages.
    In November 2009, Smith requested that Wynn send Oco-
    nee County a copy of the 48-acre plans stamped with the per-
    mit seal from the DHEC. Because Wynn had never procured
    a permit for the plans, however, he could not fulfill the
    request. Instead of acknowledging this failure, he cut a DHEC
    seal off of a set of properly permitted plans that Talbert &
    Bright had procured for Oconee County to undertake a previ-
    ous project at the airport to improve visibility on the runway.
    He then photocopied that seal onto the runway extension proj-
    ect plans and sent the fraudulently permitted 48-acre plans to
    Oconee County by mail. Kevin Short, the Airport Director
    who received Wynn’s submission, understood that the County
    needed an adjusted permit for the revised 60-acre plans and
    could not simply rely on the original 48-acre plans, even if
    they had been properly permitted. But he testified that he did
    4                   UNITED STATES v. WYNN
    not realize that the ostensibly permitted plans that he had
    received from Wynn were the unrevised, 48-acre version of
    the plans. He stated that he conducted only a cursory review
    of the plans because "we were paying Talbert & Bright a lot
    of money to take care of these things for us," and he "trusted
    them."
    In early February 2010, severe rains at the airport caused
    extensive runoff of orange-colored water onto adjoining prop-
    erties, generating complaints from the airport’s neighbors.
    When Airport Director Short inquired of Talbert & Bright
    about the problem, three of their officials—Smith, Wynn, and
    Jay Talbert—assured Short that the plans were "okay" and
    that "the DHEC ha[d] signed off on the plans." But in
    response to the complaints, DHEC inspectors also visited the
    site, and they asked to see Oconee County’s construction
    plans. Oconee County provided the DHEC with the plans
    delivered to it by Wynn, which included the fraudulent seal.
    Because DHEC only had in its files the plans from the earlier
    project to improve visibility at the airport, which did not
    match the runway extension work, it decided to investigate
    further. When the DHEC asked Wynn to provide a copy of
    the plans, he emailed the agency the same fraudulently per-
    mitted plans that he had previously mailed to Oconee County.
    Discovering the invalid permit, the DHEC forced Oconee
    County to cease construction of the runway extension project
    until the County acquired a valid permit. This took six
    months. Once the permit for the full 60-acre project was
    obtained, the County resumed construction of the project.
    Based on Wynn’s transmission of the fraudulently permit-
    ted plans to Oconee County by mail in November 2009 and
    to the DHEC by email in February 2010, Wynn was indicted
    and convicted for mail fraud and wire fraud, in violation of 
    18 U.S.C. §§ 1341
     and 1343. At sentencing, the district court
    accepted the government’s submission that the amount of loss
    to be used in calculating Wynn’s Sentencing Guidelines range
    and restitution amount was $118,000, representing the amount
    UNITED STATES v. WYNN                      5
    of money Oconee County paid to Talbert & Bright in fees
    between November 2009, when Wynn submitted the fraudu-
    lently permitted plans, and February 2010, when the DHEC
    forced Oconee County to stop work on the project. The dis-
    trict court sentenced Wynn to 12 months and 1 day in prison
    and ordered him to pay $118,000 in restitution.
    From the judgment of conviction, dated August 19, 2011,
    Wynn filed this appeal.
    II
    For his principal argument, Wynn contends that a convic-
    tion under the mail fraud and wire fraud statutes, 
    18 U.S.C. §§ 1341
     and 1343, requires that the government show that
    Wynn "intended to harm Oconee County," and that the gov-
    ernment failed to prove that Wynn "contemplated or intended
    to harm Oconee County." He claims that there was no evi-
    dence that he intended "to induce Oconee County to part with
    property or undertake some action that it would not otherwise
    do absent his misrepresentation or omission." He argues fur-
    ther that the district court compounded the problem by
    instructing the jury that "intent to defraud" requires a "specific
    intent to deceive or cheat someone, usually for personal finan-
    cial gain or to cause financial loss to someone else." Focusing
    on the court’s use of the word "usually" in connection with
    "personal financial gain," he maintains that the district court
    allowed his conviction without requiring proof of intent to
    harm. Without any proof of intent to harm, Wynn reasons, all
    the government was required to show was some form of
    deception, and he asserts that clearly the government must
    prove more than "mere deception."
    As we show, however, the district court properly instructed
    the jury on the elements of the mail fraud and wire fraud
    offenses, and the evidence that the government presented at
    trial was sufficient for the jury to convict.
    6                   UNITED STATES v. WYNN
    Sections 1341 and 1343 of Title 18 punish anyone who,
    "having devised or intending to devise any scheme or artifice
    to defraud, or for obtaining money or property by means of
    false or fraudulent pretenses, representations, or promises,"
    uses the mails or electronic wires "for the purpose of execut-
    ing such scheme or artifice." 
    18 U.S.C. §§ 1341
     (mail fraud),
    1343 (wire fraud). Thus, to convict a person of mail fraud or
    wire fraud, the government must show that the defendant (1)
    devised or intended to devise a scheme to defraud and (2)
    used the mail or wire communications in furtherance of the
    scheme. See United States v. Jefferson, 
    674 F.3d 332
    , 366
    (4th Cir. 2012). And the element "to defraud" has "the com-
    mon understanding of wronging one in his property rights by
    dishonest methods or schemes and usually signify[ing] the
    deprivation of something of value by trick, deceit, chicane, or
    overreaching." Carpenter v. United States, 
    484 U.S. 19
    , 27
    (1987) (internal quotation marks omitted); see also United
    States v. Treadwell, 
    593 F.3d 990
    , 996 (9th Cir. 2010) ("The
    common understanding of the verb ‘to deprive’ is to take
    away something, such as property, from another"). To estab-
    lish a scheme to defraud, "the government must prove that the
    defendant[ ] acted with the specific intent to defraud." United
    States v. Godwin, 
    272 F.3d 659
    , 666 (4th Cir. 2001) (empha-
    sis added).
    Thus, the mail fraud and wire fraud statutes have as an ele-
    ment the specific intent to deprive one of something of value
    through a misrepresentation or other similar dishonest
    method, which indeed would cause him harm. In this way,
    Wynn is correct to assume that to convict a person of defraud-
    ing another, more must be shown than simply an intent to lie
    to the victim or to make a false statement to him. See United
    States v. D’Amato, 
    39 F.3d 1249
    , 1257 (2d Cir. 1994)
    ("[M]isrepresentations amounting only to a deceit are insuffi-
    cient to maintain a mail or wire fraud prosecution" (internal
    quotation marks and alteration omitted)). To be convicted of
    mail fraud or wire fraud, a defendant must specifically intend
    to lie or cheat or misrepresent with the design of depriving the
    UNITED STATES v. WYNN                     7
    victim of something of value. This specific intent to defraud
    is the only mens rea requirement for mail fraud and wire
    fraud.
    In this case the district court followed these principles in
    instructing the jury. The court stated:
    The defendant can only be found guilty of this crime
    only if the following facts are proved beyond a rea-
    sonable doubt. First, the defendant knowingly
    devised or intended to devise a scheme to defraud or
    to obtain money or property by use of false or fraud-
    ulent pretenses, representations or promises. Second,
    the false or fraudulent pretenses, representations or
    promises were about a material fact. Three, the
    defendant acted with the intent to defraud. And
    fourth, in advancing, furthering, or carrying out the
    scheme to defraud or to obtain money or property by
    means of false or fraudulent pretenses, representa-
    tions or promises, the defendant used [the mails or
    electronic communications].
    Now, the scheme to defraud includes any plans or
    course of action intended to deceive or cheat some-
    one out of money or property using false or fraudu-
    lent pretenses, representations or promises.
    ***
    The intent to defraud is the specific intent to deceive
    or cheat someone, usually for personal financial gain
    or to cause financial loss to someone else.
    Thus, the district court did not allow the jury to find that
    Wynn would be guilty of mail fraud and wire fraud by finding
    merely that he lied or made a false statement; rather, the court
    required that the government prove that the scheme to defraud
    "intended to deceive or cheat someone out of money or prop-
    8                   UNITED STATES v. WYNN
    erty." In telling the jury that the specific intent to defraud or
    cheat was "usually for personal financial gain or to cause
    financial loss to someone else," the court was merely explain-
    ing what motivates an intent to defraud in the usual case. But
    this explanation did not withdraw the instruction to the jury
    that the scheme to defraud must "include a plan or course of
    action intended to deceive or cheat someone out of money or
    property," which obviously includes an intent to harm in some
    sense. See Treadwell, 
    593 F.3d at 997
     ("The intent to induce
    one’s victim to give up his or her property on the basis of an
    intentional misrepresentation causes ‘harm’ by depriving the
    victim of the opportunity to weigh the true benefits and risks
    of the transaction, regardless of whether or not the victim will
    suffer the permanent loss of money or property").
    Deliberating under these instructions, the jury reasonably
    found Wynn guilty based on the evidence presented at trial,
    which at this stage we take in the light most favorable to the
    government. See United States v. Kelly, 
    510 F.3d 433
    , 440
    (4th Cir. 2007). Wynn admits that the evidence shows that he
    intentionally cut a DHEC permit from a properly permitted
    set of plans and fraudulently pasted it onto the non-permitted
    plans he sent to Oconee Airport (by mail) and to the DHEC
    (by electronic means). The explanation for such conduct
    offered by the government at trial was that Wynn intended to
    deceive Oconee County and the DHEC into believing that the
    plans had been properly permitted so that the DHEC would
    not interfere with construction and the County would continue
    construction and continue to pay Talbert & Bright’s fees. The
    evidence established that Wynn knew that the plans for the
    runway project required a permit; that Oconee County was
    expecting his company to procure the proper permits for the
    plans; that Oconee County was paying Talbert & Bright to
    perform these services; and that his fraudulent seal would
    likely mislead Oconee County and the DHEC into believing
    that his plans had been legitimately permitted. Thus, the evi-
    dence established that Wynn had a specific intent to deprive
    Oconee Airport of money and to alter the decisionmaking by
    UNITED STATES v. WYNN                      9
    Oconee County and the DHEC about the project by depriving
    them of the knowledge that Wynn had failed to procure a
    proper permit for the project.
    We conclude that this provided ample evidence from which
    a reasonable jury could conclude, beyond a reasonable doubt,
    that Wynn intended to devise a scheme to defraud the County
    and the DHEC, in violation of the mail fraud and wire fraud
    statutes.
    III
    Wynn next contends that the evidence was insufficient to
    support a finding that his misrepresentation of the plans was
    a material misrepresentation because "Oconee County had
    already begun construction pursuant to a set of subsequently
    developed plans [for the 60-acre project]." Thus, according to
    Wynn, "the outdated and superseded plans [for the 48-acre
    project] that included the false seal . . . could not have been
    a material falsehood." Moreover, Wynn asserts that even if
    Oconee County did rely on his fraudulently permitted plans
    [for the 48-acre project], it did so unreasonably. In short,
    Wynn argues that his misrepresentation was not material and
    that it was not reasonably relied on.
    The test for materiality of a false statement is whether the
    statement "has a natural tendency to influence, or is capable
    of influencing" its target. Neder v. United States, 
    527 U.S. 1
    ,
    16 (1999) (internal quotation marks and alteration omitted);
    see also United States v. Sarihifard, 
    155 F.3d 301
    , 307 (4th
    Cir. 1998) (restating the test as whether the misrepresentation
    "might have influenced [the target’s] decision" (emphasis
    added)). Of course this "test is unquestionably satisfied when
    . . . the defendant’s falsehoods did in fact influence [their tar-
    get]," because "[a]ctually influencing [the target] is proof pos-
    itive that a statement is capable of influencing [the target] to
    act." United States v. Garcia-Ochoa, 
    607 F.3d 371
    , 378 (4th
    Cir. 2010).
    10                  UNITED STATES v. WYNN
    The evidence in this case overwhelmingly supports the con-
    clusion that Oconee County actually relied on Wynn’s mis-
    representation. The County authorized construction of the
    project on the belief that Talbert & Bright had obtained or
    was obtaining the necessary permit, a belief that was con-
    firmed when, in November 2009, it received the permitted
    plans from Wynn. It is true that the contractor had been work-
    ing with plans that had been provided to it earlier, as approved
    by the County in April 2009 and as had been later amended
    by change order to add the 12 acres. But its authorization to
    work was based on the County’s belief that proper permitting
    was not an issue. Airport Director Short testified that upon
    receiving the permitted plans in November, he conducted only
    a cursory review of them and did not realize the discrepancy
    of the two omitted additional pages in the 62-page document
    —the only difference between the original 48-acre plans and
    the revised 60-acre plans. He explained in his testimony that
    he did not feel a need to review the plans because he trusted
    that Talbert & Bright had performed its job competently and
    that its job included obtaining the permits for the project. We
    readily conclude that these facts showing the County’s actual
    reliance on Wynn’s misrepresentations of necessity allowed
    the jury reasonably to conclude that Wynn’s misrepresenta-
    tions had a "natural tendency to influence" or were "capable
    of influencing" Oconee County into believing that it had a set
    of validly permitted plans with which to proceed with con-
    struction of its runway extension project, thus satisfying the
    materiality test.
    Wynn’s argument that the County’s reliance on the repre-
    sentations was unreasonable is trumped by the established test
    for materiality, which inquires only whether the representa-
    tions had a natural tendency to influence or was capable of
    influencing its target. Neder, 
    527 U.S. at 16
    . The Supreme
    Court has been clear that "the common law requirement of
    ‘justifiable reliance’ . . . plainly has no place in the federal
    fraud statutes." 
    Id. at 24-25
    .
    UNITED STATES v. WYNN                     11
    IV
    Wynn next contends, with respect to his wire fraud convic-
    tion, that the government "failed to prove that [he] used inter-
    state wires to deceive Oconee County, the alleged victim,"
    because he "emailed the 48-acre plan to DHEC, not Oconee
    County." He concludes that the government’s evidence as to
    wire fraud thus "lacks convergence."
    Because Wynn never advanced this argument in the district
    court, we review it for plain error. See Fed. R. Crim. P. 52(b);
    United States v. Claridy, 
    601 F.3d 276
    , 285 (4th Cir. 2010).
    Under the plain error standard, we must find, among other
    things, that there was error and that the error was plain. In the
    circumstances here, we can find neither. Our court has never
    addressed the convergence argument, and the other circuits
    are split on the issue. Compare, e.g., United States v. McMil-
    lan, 
    600 F.3d 434
    , 450 (5th Cir. 2010) ("[T]he deception of
    regulatory agencies for the purpose of allowing victimization
    of third parties is a cognizable mail fraud offense"), with
    United States v. Evans, 
    844 F.2d 36
    , 39 (2d Cir. 1988) ("If a
    scheme to defraud must involve the deceptive obtaining of
    property, the conclusion seems logical that the deceived party
    must lose some money or property"). It is therefore apparent
    that the issue has not been resolved plainly.
    Moreover, on the facts of this case we do not even find
    error. There was ample evidence to support the conclusion
    that Wynn’s transmission of the fraudulently permitted plans
    by wire to the DHEC was an attempt to lull state regulators
    into ignoring his fraud and to forestall the agency’s discovery
    of it by Oconee County. This type of deception of the State
    easily fits within the scope of a scheme to defraud the County.
    See United States v. Painter, 
    314 F.2d 939
    , 943 (4th Cir.
    1963) ("[C]ommunications having a propensity to lull and
    forestall action on the part of the victims may form an integral
    part of the overall scheme to defraud"). By wiring the fraudu-
    lently permitted plans to the DHEC, Wynn intended to
    12                  UNITED STATES v. WYNN
    accomplish, and did accomplish, his scheme to have the proj-
    ect continue, the same objective furthered by his mailing of
    the fraudulently permitted plans to Oconee County. Thus,
    both the mailing and the wiring of the plans were undertaken
    with the ultimate goal of continuing to deceive Oconee
    County and to have the project go forward with the resulting
    payment of fees to Talbert & Bright.
    V
    Finally, Wynn contends that the district court improperly
    calculated the loss amount used to determine his sentence,
    both with respect to calculating the appropriate Sentencing
    Guidelines range and the amount of loss for restitution.
    The district court found that the amount of loss resulting
    from Wynn’s scheme was $118,000, the amount of invoices
    paid by Oconee County to Talbert & Bright during the period
    when the project continued as a result of the fraud—between
    November 2009 (the month in which Wynn sent the fraudu-
    lent permit to Oconee County) and February 2010 (the month
    in which Wynn’s fraud was discovered). We review the
    court’s finding for clear error. See United States v. Mehta, 
    594 F.3d 277
    , 281 (4th Cir. 2010).
    Wynn argues that the amount is "grossly" exaggerated
    because "only $11,640 of the invoices [during that period]
    relate to ‘Plan Revisions, Coordination, and Permit
    Modifications’—the subject of the fraud—whereas the
    remainder can be attributed to other tasks undertaken by Tal-
    bert & Bright, including construction administration and grant
    management."
    The district court agreed with the government’s position
    that the full amount Oconee County paid on the contract from
    the beginning of the fraud until its discovery should be
    restored because it was Wynn’s fraud that led Oconee County
    to continue paying Talbert & Bright and to proceed with all
    UNITED STATES v. WYNN                     13
    aspects of the work. Moreover, the amount may have been
    conservative because, by depriving Oconee County of a valid
    permit—and lying about it—Wynn effectively deprived the
    County of many further benefits from the related construction
    and grant work. Moreover, once Oconee County discovered
    the invalidity of the permit, it was forced to discontinue con-
    struction of its project for months.
    We conclude that the district court did not clearly err in its
    factual finding. The loss caused to Oconee County by Wynn’s
    fraudulent conduct cannot be restricted to money paid specifi-
    cally for permitting services and isolated from the other
    aspects of the work performed by Talbert & Bright under the
    contract. In claiming total expenditures made in reliance on
    the fraudulent approval, it is notable that the government did
    not attempt to claim other losses to Wynn arising out of the
    six-month shutdown of the construction project, the ensuing
    litigation, or the losses arising from the later permitting work,
    all of which arguably resulted from the discovery of Wynn’s
    fraud. The district court "need only make a reasonable esti-
    mate of the loss," U.S.S.G. § 2B1.1 cmt. n.3(C), and its award
    of the full amount invoiced by Talbert & Bright and paid by
    Oconee County during the period of Wynn’s fraud, i.e.,
    between November 2009 and February 2010, was a reason-
    able estimate of the loss attributable to the fraud.
    ***
    The judgment of the district court is accordingly
    AFFIRMED.