United States v. Santoli

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
No. 97-4290
BENJAMIN SANTOLI, JR., a/k/a Glen
Stanton, a/k/a Ben Stanton,
Defendant-Appellant.
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
No. 97-4315
SEAN ALAN NIEHLS, a/k/a John
Allen, a/k/a David Campbell,
Defendant-Appellant.
Appeals from the United States District Court
for the District of South Carolina, at Columbia.
Joseph F. Anderson, Jr., District Judge.
(CR-95-1045)
Submitted: March 17, 1998
Decided: February 12, 1999
Before WILKINS, NIEMEYER, and LUTTIG, Circuit Judges.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Henry D. McMaster, TOMPKINS & MCMASTER, Columbia, South
Carolina; Landon D. Long, Assistant Federal Public Defender,
Columbia, South Carolina, for Appellants. J. Rene Josey, United
States Attorney, Eric William Ruschky, Assistant United States Attor-
ney, Robert McCausland, Third Year Law Student, OFFICE OF THE
UNITED STATES ATTORNEY, Columbia, South Carolina, for
Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Appellants Benjamin Santoli and Sean Alan Niehls appeal their
convictions for wire fraud, mail fraud, and conspiracy in violation of
18 U.S.C. §§ 371, 1341, 1342, 1343 (1994). Finding no error, we
affirm the convictions.
I.
The Government's evidence at trial established that Santoli and
Niehls worked as telemarketers for Reliable Products and Safeway
Marketing.* The salespeople received from Reliable a list of potential
customers, typically elderly, whom they would call. The salespeople,
using aliases, used a format sales pitch called the"warehouse pitch."
The warehouse pitch stated that the customer was going to receive
"absolutely one of the nicest awards that I personally have ever given
out in the history that I've [salesperson] been with the company," and
further that the customer was receiving one of the nicest awards in the
entire "giveaway." The salesperson told the customer that Reli-
_________________________________________________________________
*Reliable Products is the predecessor company to Safeway Marketing.
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able/Safeway was "celebrating," and that he was not going to be in
any contest or lottery and that he was not competing with anyone else
for the award. The salesperson then stated that the company had
"spared no expense . . . [and] literally invested thousands and thou-
sands of dollars."
The salesperson told the customer that he needed to place an order
with the company to receive the award. If the customer balked at the
original price, the salesperson "dropped down" to alternate scripts,
simultaneously dropping the price. After a price had been agreed on,
the salesperson would tell the customer that he would not be receiving
a car or cash.
In spite of the salesperson's assertions that the customer would be
receiving one of the "nicest awards" ever in the history of the "give-
away," and that a special, valuable award had already been selected,
the award actually depended on how much money the customer sent
to Reliable. Customers were never told that the"award" was not
ordered until after they sent in money. The customers were likewise
never told that the value of the "award" was based solely on how
much money they spent. The customer typically received an award
and products worth about 20% of how much money he sent in. Only
once a check was received would Reliable order the product and
award. Salespeople typically received a 35% commission on each
sale.
Several of Reliable and Safeway's customers testified for the gov-
ernment. In each instance, the salesperson began by asking for about
$2000 to $4000. In most cases the customer hesitated to send so much
money, and the salesperson dropped the price. Most customers sent
in between $500 and $2000, but in some cases customers sent in as
much as $4000. Typically, the products the customer received were
vitamins and toiletries. The "awards" were usually acrylic statues or
Civil War memorabilia.
For example, Arthur Miller, 84 years of age, sent in $1199, and
received vitamins and a statue called the "Zephyr," which cost Reli-
able $175. Dorothy Feight, 66, sent in about $600 and received a
water treatment purifier, worth about $20, and a framed document
with a picture and two ancient coins, for which Reliable paid $50.
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Kathleen Orton sent in two checks totaling $698, and received clean-
ing products and a statue of a mother elephant with child, which cost
Reliable $163. Paul Coffey, 67, sent in $1998, and received vitamins,
mens' cosmetics, and a Civil War bullet. Leffie Popa, 73, sent in
$998, and received cosmetics and an acrylic dolphin, which cost Reli-
able a total of $143.50, or about 15% of what Popa paid.
Former Reliable/Safeway salespeople also testified for the Govern-
ment. Several of the salespeople admitted that most of the warehouse
pitch was not true. There was no "giveaway;" the owners had not
invested thousands of dollars; and the salespeople had no idea what
the "award" would be and did not personally select it. One of the
salespeople did not know exactly what product he was selling.
Another testified that the "bottom line purpose was to get money,"
and that this was done by leading the customer to"believe they were
going to get something of great value."
Santoli testified in his own defense. Santoli worked for Reliable for
ten weeks from June to September, 1993, during which time he
received about $2000 a week in commissions. When the Government
questioned Santoli about the specific statements out of the warehouse
pitch, he stated that the "manufacturer" referred to was Reliable Prod-
ucts, even though the only "manufacturing" Reliable ever did was to
add a slogan to the vitamin bottles. When asked about the phrase "one
of the nicest awards that I personally have ever given out," Santoli
admitted that he did not personally give out a single award, and did
not know what the customer was going to receive. Regarding the
assertion that the customer would receive one of the nicest awards in
the "entire celebration," Santoli admitted he had no idea what "cele-
bration" Reliable was having.
The Defendants requested a jury instruction on "puffing." The pro-
posed instruction stated that an "unspecific and false statement of
opinion such as occurs in `puffing' cannot ordinarily constitute
fraud;" that "puffing" is an exaggeration by "a salesperson concerning
the quality of goods, which is not considered a legally binding prom-
ise;" and that representations about a company's products as being
"among the finest . . . in the world" at worst was only "puffing" and
not cognizable under the federal mail fraud statute. The trial judge
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declined to give the proposed instructions. However, the trial judge
did give a good faith instruction, stating in part:
[G]ood faith on the part of the defendant is a complete
defense to a charge of mail or wire fraud. A defendant, how-
ever, has no burden to establish a defense of good faith. The
burden is on [the] government to prove fraudulent intent and
the consequent lack of good faith beyond a reasonable
doubt. Under the mail fraud statute, false representations or
statements or omissions of material facts do not amount to
a fraud unless done with fraudulent intent. However mis-
leading or deceptive a plan may be, it is not fraudulent if it
was devised or carried out in good faith. An honest belief
in the truth of the representations made by a defendant is a
good defense, however inaccurate the statement may turn
out to be. . . . [T]he government must establish beyond a
reasonable doubt that [the defendant] knew that his conduct
as a participant in the scheme was calculated to deceive and
nonetheless he associated himself with the alleged fraudu-
lent scheme for the purpose of causing some loss to another.
On appeal, Appellants contend that there was insufficient evidence
of a scheme to defraud to sustain the guilty verdicts, and that the trial
court abused its discretion in not charging the jury regarding "puff-
ing."
II.
The standard of review for sufficiency of the evidence is whether,
viewing the evidence in the light most favorable to the government,
any rational trier of fact could have found the defendants guilty
beyond a reasonable doubt. See United States v. Banks, 10 F.3d 1044,
1051 (4th Cir. 1993); United States v. Jackson , 863 F.2d 1168, 1173
(4th Cir. 1989). Here, there was sufficient evidence from which a
rational jury could find the Defendants guilty.
Defendants contend essentially that, even if some of the statements
made to customers were not true, at most they were"puffing" and not
criminal conduct. However, the Defendants misrepresented to cus-
tomers that they had been entered in "the manufacturer's giant give-
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away," when in fact there was no manufacturer and there was no giant
giveaway. The Defendants stated that the customer would be receiv-
ing a nice prize because "we pulled a few strings around here," when
in fact, there was no attempt to "pull strings" or make any extra effort
for that particular customer to receive a nice prize. Rather, the value
of the prize simply depended on how much money the customer sent
in.
Defendants misrepresented that the prize would be"one of the nic-
est awards that I personally have ever given out," when in fact the
caller had no idea what the prize would be, nor had the caller ever
personally given out any prizes for Reliable/Safeway. Defendants also
misrepresented that the company had invested thousands and thou-
sands of dollars on the non-existent "giveaway," hyping the products
and awards, when in fact no money was invested in the products or
awards until after the customer sent in a check. Defendants further
concealed the fact that the award had not actually been selected yet.
See United States v. Sneed, 63 F.3d 381, 387 (5th Cir. 1995). Accord-
ingly, there was sufficient evidence from which a jury could find the
existence of a scheme to defraud. See Carpenter v. United States, 484
U.S. 19, 27 (1987); United States v. Locklear , 829 F.2d 1314, 1318
(4th Cir. 1987); Lustiger v. United States, 386 F.2d 132, 138 (9th Cir.
1968).
III.
The decision of whether or not to give a particular jury instruction
is reviewed for abuse of discretion. See United States v. Whittington,
26 F.3d 456, 462 (4th Cir. 1994).
Here, because the court instructed the jury on the issue of good
faith as a defense to a crime requiring fraudulent intent, the jury was
adequately instructed about the "gist of a `puffing' defense." United
States v. Amlani, 111 F.3d 705, 717-18 (9th Cir. 1997); see United
States v. Cain, 128 F.3d 1249, 1252 (8th Cir. 1997); United States v.
Shelton, 669 F.2d 446, 465 (7th Cir. 1982). Accordingly, a separate
"puffing" instruction was unnecessary, and the district court did not
abuse its discretion in declining to give the Defendants' proposed
instructions. See Amlani, 111 F.3d at 718; United States v. Thaw, 353
F.2d 581, 584-85 (4th Cir. 1965) (holding that when substance of
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requested puffing charge covered in instructions actually given, fail-
ure to give puffing instruction not error).
We therefore affirm Appellants' convictions. We dispense with
oral argument because the facts and legal contentions are adequately
presented in the materials before the court and argument would not
aid the decisional process.
AFFIRMED
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