United States v. Manfred Otto Simon

FILED
NOT FOR PUBLICATION MAY 26 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 09-30128
Plaintiff - Appellee, D.C. No. 2:07-CR-00087-WFN-2
v.
MEMORANDUM *
MANFRED OTTO SIMON,
Defendant - Appellant.
UNITED STATES OF AMERICA, No. 09-30132
Plaintiff - Appellee, D.C. No. 2:07-CR-00087-WFN-1
v.
FREDERICK MANFRED SIMON,
Defendant - Appellant.
Appeal from the United States District Court
for the Eastern District of Washington
William Fremming Nielsen, Senior District Judge, Presiding
Argued and Submitted May 3, 2010
Seattle, Washington
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: HALL, WARDLAW and GOULD, Circuit Judges.
Frederick Manfred Simon (“Frederick”) appeals his convictions of one count
of conspiracy to commit mail and wire fraud in violation of 18 U.S.C. § 371, eight
counts of mail fraud in violation of 18 U.S.C. § 1341, and eleven counts of wire
fraud in violation of 18 U.S.C. § 1343, arguing that the convictions were not
supported by sufficient evidence. Frederick also contends that the district court
erred in admitting evidence of uncharged conduct, and that his sentence is
substantively unreasonable. Manfred Otto Simon (“Manfred”) appeals the denial
of his motion for judgment of acquittal under Federal Rule of Criminal Procedure
29. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
1. Sufficiency of the evidence of a conspiracy
Frederick and Manfred challenge the sufficiency of the evidence of their
conspiracy convictions, arguing that there was no evidence of an agreement to
defraud the customers and suppliers of their railway components business, Railway
Logistics International (“RLI”). The government, however, introduced sufficient
circumstantial evidence that Frederick and Manfred acted with a common goal to
defraud RLI’s customers and suppliers, from which the jury could find an
agreement. See United States v. Corona-Verbera, 509 F.3d 1105, 1117 (9th Cir.
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2007) (“[C]ircumstantial evidence that the defendants acted with a common goal is
sufficient . . . to prove agreement, and agreement may be inferred from
conduct . . . .”); United States v. Iriarte-Ortega, 113 F.3d 1022, 1024 (9th Cir.
1997). The evidence showed that Frederick repeatedly defrauded RLI’s customers
and suppliers by placing and receiving orders for railway components without
paying for the orders placed or shipping the orders received. The evidence also
showed that Manfred facilitated these transactions by arranging for RLI wire
transfers, providing false excuses to suppliers concerning outstanding payments,
signing RLI payroll checks, and acting as RLI’s vice president and chief financial
officer. In addition, the government introduced evidence of Manfred’s and
Frederick’s 1997 conspiracy convictions for a virtually identical scheme to defraud
purchasers and suppliers of railway components. Viewing this evidence in the
light most favorable to the government, a rational juror could have concluded that
Frederick and Manfred acted with the common goal of defrauding the businesses
with which RLI transacted. See Jackson v. Virginia, 443 U.S. 307, 319 (1979);
Corona-Verbera, 509 F.3d at 1117.
2. Sufficiency of the evidence of Frederick’s mail and wire fraud convictions
The government introduced sufficient circumstantial evidence of Frederick’s
intent to defraud RLI’s customers and suppliers. See United States v. Rogers, 321
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F.3d 1226, 1230 (9th Cir. 2003) (“It is settled law that intent to defraud may be
established by circumstantial evidence.”); United States v. Sullivan, 522 F.3d 967,
974 (9th Cir. 2008) (“Intent may be inferred from misrepresentations made by the
defendants, and the scheme itself may be probative circumstantial evidence of an
intent to defraud.” (citations omitted)). The evidence showed that Frederick
routinely took customer orders, demanded immediate cash payment, and would not
ship anything once payment was received. When customers followed up,
Frederick would provide a litany of excuses, including that he shipped the goods
(but then he would refuse to provide tracking numbers or would provide incorrect
tracking numbers); and that the goods were in a warehouse ready to ship (but then
he would refuse to allow customers to inspect the parts prior to shipment or would
send customers to warehouses not belonging to RLI). Frederick also refused to
allow customers to personally pick up orders. When customers demanded delivery
or a refund, Frederick cut off all communications.
The evidence also showed that Frederick would submit orders to suppliers
for purchase on credit. After suppliers shipped the goods, Frederick would not pay
them. When they demanded payment, Frederick would provide inconsistent stories
about why he could not pay, including the assertion that he was awaiting payment
from the U.S. government on a contract to deliver goods to Iraq. In addition, the
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government introduced Frederick’s 1997 conviction for conspiracy to commit mail
and wire fraud based on virtually identical circumstances. Therefore, it would not
have been irrational for a juror to conclude that Frederick had the specific intent to
defraud RLI’s customers and suppliers. See Jackson, 443 U.S. at 319.
3. Sufficiency of the evidence of Manfred’s mail fraud convictions
Manfred contends his mail fraud convictions were not supported by
sufficient evidence because Frederick was the moving force behind the specific
acts of mail fraud while Manfred’s connection to each act was slight. However,
the jury was specifically instructed on the Pinkerton theory of conspiracy liability,
under which Manfred is liable as a co-conspirator for all of Frederick’s crimes that
were reasonably foreseeable and in furtherance of the conspiracy. Pinkerton v.
United States, 328 U.S. 640, 647-48 (1946). Because each of Frederick’s mail
fraud convictions involved precisely what the conspiracy charged—defrauding
sellers and purchasers of locomotive and rail components by obtaining parts from
the sellers without paying them, and accepting payments from purchasers without
delivering the ordered parts—they were all reasonably foreseeable and in
furtherance of the conspiracy. Accordingly, Manfred is liable for those crimes to
the same extent as Frederick. See United States v. Long, 301 F.3d 1095, 1103 (9th
Cir. 2002).
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4. Admissibility of uncharged conduct
The district court correctly concluded that the evidence concerning the
uncharged acts and the evidence concerning the crime were “inextricably
intertwined,” and therefore not evidence of “other acts” inadmissible under Federal
Rule of Evidence 404(b). See United States v. Williams, 989 F.2d 1061, 1070 (9th
Cir. 1993) (“The policies underlying rule 404(b) are inapplicable when offenses
committed as part of a single criminal episode become other acts simply because
the defendant is indicted for less than all of his actions.”). Frederick contracted
with the U.S. government to deliver railway parts to Iraq, but never delivered the
requested parts. Although it was Frederick, not the U.S. government, who failed to
perform on the contract, Frederick would often misrepresent to his customers and
suppliers that the U.S. government had not paid him for parts he delivered to Iraq,
and that he could not perform on his other contracts until the U.S. government paid
him. Had this evidence not been presented, the jury might have believed
Frederick’s excuse for his nonperformance was legitimate. Therefore, the evidence
of Frederick’s dealings in Iraq were inextricably intertwined with the charged
conduct. See id.Frederick’s procurement of a motorcycle by false pretenses, however, was
not inextricably intertwined with the charged conduct and, therefore, should have
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been excluded under Rule 404(b). However, the admission of this evidence was
harmless error. United States v. Romero, 282 F.3d 683, 688 (9th Cir. 2002) (“If we
conclude that a Rule 404(b) violation occurred, we reverse only if the error was not
harmless.”). The government provided a significant amount of evidence of intent
to defraud, including the testimony of sixty witnesses in a trial lasting
approximately three weeks. Given the substantial evidence adduced at trial, any
error in admitting the motorcycle evidence was harmless.
5. Sentencing
The district court did not abuse its discretion in imposing the maximum
within-Guidelines sentence of 125 months upon Frederick. United States v. Carty,
520 F.3d 984, 993 (9th Cir. 2008) (en banc). “Appellate review is to determine
whether the sentence is reasonable; only a procedurally erroneous or substantively
unreasonable sentence will be set aside.” Id. Frederick does not argue that the
district court committed procedural error; he argues only that his sentence is
substantively unreasonable. “In determining substantive reasonableness, we are to
consider the totality of the circumstances . . . .” Id. We note, however, that
Frederick received a within-Guidelines sentence, which “‘will usually be
reasonable.’” Id. at 994 (quoting Rita v. United States, 551 U.S. 338, 351 (2007)).
In imposing the maximum sentence, the district court considered the 18 U.S.C.
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§ 3553(a) factors and explained the important needs for deterrence and protection
of the public given Frederick’s prior conviction of a conspiracy involving a scheme
of identical design, his high degree of culpability, the extent of the harm to
numerous victims, and the loss of hundreds of thousands of dollars. Therefore,
considering the totality of the circumstances, the district court did not abuse its
discretion in imposing the maximum sentence. See id.
AFFIRMED.
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