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U.S. v. Barel

filed: July 17, 1991; As Amended October 7, 1991.

UNITED STATES OF AMERICA, APPELLEE
v.
HENRICH BAREL A/K/A STEVEN KATZ, APPELLANT



Appeal from the United States District Court for the District of New Jersey; D.C. Criminal Action No. 89-00337-01.

Becker and William D. Hutchinson, Circuit Judges, and D. Brooks Smith, District Judge.*fn*

Author: Hutchinson

Opinion OF THE COURT

Henrich Barel (Barel), formerly known as Henry Shtakel, appeals from the judgment of conviction and sentence entered against him in the United States District Court for the District of New Jersey. The charges against Barel result from his having opened a number of bank accounts with a false social security number. A jury found him guilty of three counts of misuse of a social security number (the social security charges), in violation of 42 U.S.C.A. § 408(g) (West 1983), and three counts of making false entries in the records of banks insured by the Federal Deposit Insurance Corporation (FDIC) (the false entry charges), in violation of 18 U.S.C.A. § 1005 (West Supp. 1991) and 18 U.S.C.A. § 2 (West 1969). The district court sentenced Barel under the version of the Sentencing Guidelines in effect at the time of trial instead of the version in effect when he allegedly committed these acts. This appeal followed.

Section 408(g), the basis of the social security charges, makes criminal the intentional use of a false social security number "for any . . . purpose." Since Barel intentionally gave the banks a false social security number to open the accounts, we will affirm his convictions on the social security charges.*fn1 We do not believe, however, that Congress intended 18 U.S.C.A. § 1005 to impose criminal liability on bank customers, or that 18 U.S.C.A. § 2 otherwise allows affirmance of Barel's convictions, on this record, as an aider or abetter of the crime of making false entries in bank records. Thus, we will reverse his convictions on the false entry charges.*fn2 As a result, we will vacate the sentence imposed by the district court and remand for resentencing.

I.

In September, 1989, Barel was indicted on three counts of using a false social security number to open bank accounts at City Federal Savings Bank (City Federal), National State Bank (National) and Chemical Bank (Chemical), in violation of 42 U.S.C.A. § 408(g). In January, 1990, a superseding indictment was returned. It charged him with the original three counts and added three counts of causing false entries to be made in the records of the same three federally insured banks, in violation of 18 U.S.C.A. § 1005 (West 1976 & Supp. 1991) and 18 U.S.C.A. § 2 (West 1969). During pretrial proceedings Barel moved, inter alia, for dismissal of the false entry charges, contending that § 1005 does not apply to bank customers. The district court denied this motion and proceeded to trial.

The case was tried to a jury. At the close of the government's evidence, Barel moved for dismissal of the social security charges on several grounds. His contentions centered on the argument that the evidence was insufficient to show that he intended to deceive the United States by using a false social security number. The district court denied this motion to dismiss, although it instructed the jury prior to deliberations that in order to convict on the social security charges the jurors would have to agree unanimously on whether Barel intended to deceive the United States, the banks or both. Barel also renewed his motion to dismiss the false entry charges, this time advancing two grounds. He contended once again that § 1005 does not apply to bank customers and also raised the argument that the government had failed to prove the federally insured status of the banks beyond a reasonable doubt. The district court also denied this motion but expressed some doubt about the application of § 1005 to Barel's acts. Finally, Barel moved for dismissal of the social security and false entry charges that involved Chemical, arguing that the evidence showed no account was opened there. During its deliberations, the jury asked the district court whether the counts relating to Chemical were correct in charging that Barel had opened an account there. The district court advised the jury "as a matter of law . . . that the [Chemical] account was opened." Joint Appendix (App.) at 420.

Following denial of these motions to acquit, Barel called only one witness, his ex-wife's attorney. The attorney described the difficulties he had encountered in trying to collect funds that a state court had awarded Barel's ex-wife after their divorce. The attorney's testimony was brief. Neither the government nor Barel presented any further evidence. Barel did not renew his Rule 29 motion at the close of all evidence.

The entire trial lasted only two days, and on January 31, 1990 the jury convicted Barel on all counts. Before sentencing, the government, for the first time, submitted documentary evidence in support of its contention that Barel's real purpose in using the false social security number was to deceive the United States government. Armed with this evidence, the government argued that Barel engaged in a scheme to evade approximately $740,000.00 in state and federal excise taxes on the sale of gasoline.*fn3

At a hearing held on May 23, 1990, Barel disputed the government's sentencing claims as to his criminal purpose and the amount of money he owed for excise taxes. The only witness to testify was an accountant Barel called to the stand. The accountant told the district court that he had examined invoices and other documents concerning Barel's business and concluded that Barel's company had paid money to the suppliers of gasoline sufficient to cover any back taxes due. The accountant estimated the gross taxes due at about $767,000.00. Barel sought to convince the district court that he did not owe any back taxes and that even if some taxes remained outstanding, it was the fault of the gasoline suppliers. The district court rejected Barel's arguments and found by a preponderance of the evidence that he had engaged in a scheme to evade excise taxes on gasoline, resulting in a loss to the state and federal governments of as much as $767,000.00. The district court then sentenced Barel to concurrent thirty-three month terms of imprisonment and also imposed a three hundred dollar special assessment against him. It followed the sentencing guidelines in effect at the time of sentencing instead of the more lenient ones in effect at the time Barel allegedly committed these offenses. On the sentencing determination, Barel questions the district court's use of the later version of the guidelines. The government has consented to application of the earlier guidelines and agrees to remand of this matter to the district court for resentencing under the earlier guidelines. Barel does not challenge the findings of fact the district court made at the sentencing hearing.

II.

Barel, a wholesale gasoline broker, obtained a social security card and other false identification bearing the name of Steven Katz. In mid-1989, Barel used the Katz name, identification and social security number to open accounts at several New Jersey banks.

In July, Barel went to City Federal and filled out an application for a business checking account in the name of Steven Katz, doing business as Enron Oil Company. Barel used the Katz social security number to open this account. He later opened a personal account at City Federal, again using the Katz name and number.

In mid-August, Barel filled out forms and opened a business checking account at National in the name of Steven Katz, doing business as Bowman Oil Company. At the end of August, Barel went to Chemical to open a business account in the name of Steven Katz, doing business as Progress Oil Company. Barel again used Katz's social security number as part of the false identity he gave to the bank. He also made an opening deposit of $100.00 cash. Chemical officials decided to verify the information Barel provided and found that he had given a false address and telephone number. Chemical then notified Barel by mail that it would not accept his account. The bank returned his one hundred dollar "opening deposit" and followed through by refusing to accept a wire transfer from Barel's National account several days later. Chemical notified National of its problems with Barel and told local law enforcement authorities about his use of the false social security number. The security office at National contacted the Federal Bureau of Investigation (FBI). On August 29, 1989, while at National, Barel was arrested. At the time of his arrest, he was in possession of a social security card bearing the name of Steven Katz, as well as other forms of identification bearing that name.

III.

Barel appeals from a final judgment of conviction and sentence entered in the United States District Court for the District of New Jersey on May 25, 1990. The district court had jurisdiction pursuant to 18 U.S.C.A. § 3231 (West 1985). We have jurisdiction over this appeal pursuant to 18 U.S.C.A. § 3742(a) (West 1985 & Supp. 1991) and 28 U.S.C.A. § 1291 (West Supp. 1991).

IV.

The issues Barel raises on appeal concerning his guilt can be grouped into two basic categories. First, he asks us to determine whether 42 U.S.C.A. § 408(g) applies to the use of a false social security number, without intent to obtain something of pecuniary value, in a transaction with a private, non-governmental, entity. In this context, he claims the jury verdict is not demonstrably unanimous in finding that he had the "intent to deceive" any one of the parties specified in the indictment. Second, he urges the reversal of his convictions under 18 U.S.C.A. § 1005, either for lack of evidence or because § 1005 applies only to bank insiders. If either of his convictions can stand, the government urges application of the concurrent sentence doctrine and asks us to exercise the discretion that doctrine provides to forego review of Barel's other conviction.*fn4

V.

Ordinarily, when the proper procedural mechanisms are invoked and the issue of sufficiency of the evidence is raised on appeal following conviction, all credibility issues subject to jury determination must be viewed in the light most favorable to the government. See Government of Virgin Islands v. Williams, 739 F.2d 936, 940 (3d Cir. 1984); see also Glasser v. United States, 315 U.S. 60, 80, 86 L. Ed. 680, 62 S. Ct. 457 (1942). We thus will affirm a conviction if it is supported by substantial evidence under which a rational trier of fact could have found the defendant guilty beyond a reasonable doubt. United States v. Kapp, 781 F.2d 1008, 1009 (3d Cir.), cert. denied, 479 U.S. 821, 93 L. Ed. 2d 40, 107 S. Ct. 87 (1986); United States v. Dickens, 695 F.2d 765, 779 (3d Cir. 1982), cert. denied, 460 U.S. 1092, 76 L. Ed. 2d 359, 103 S. Ct. 1792 (1983). The evidence "does not need to be inconsistent with every conclusion save that of guilt," United States v. Allard, 240 F.2d 840, 841 (3d Cir.), cert. denied, 353 U.S. 939, 1 L. Ed. 2d 761, 77 S. Ct. 814 (1957), to sustain the jury's verdict, id. Accord Williams, 739 F.2d at 940 (noting that, to be upheld, a jury finding of guilt beyond a reasonable doubt must be supported by substantial evidence when viewed in the light most favorable to the government).

Here, however, the government claims our review is even more restricted. It says Barel waived the usual appellate review of his sufficiency objections by failing to renew his Rule 29 motion for judgment of acquittal at the close of all evidence. Barel did fail to renew his motion; however, such a failure did not completely waive his right to review on sufficiency grounds. We may still reverse if we determine the evidence presented was so insufficient that for us to uphold his conviction would result in a miscarriage of justice or be fundamentally wrong. See United States v. Wright-Barker, 784 F.2d 161, 170-71 (3d Cir. 1986); see also Fed. R. Crim. P. 52(b) (preserving appellate review to prevent "plain error or defects affecting substantial rights"); United States v. Santos, 932 F.2d 244, 250 (3d Cir. 1991) (explaining the plain error rule); United States v. Manos, 340 F.2d 534, 537 (3d Cir. 1965) (same).

We exercise plenary review over the district court's rulings on statutory construction. See United States v. Preston, 910 F.2d 81, 84 (3d Cir. 1990), cert. denied, 112 L. Ed. 2d 1085, 111 S. Ct. 1002 (1991). These rulings include the district court's holding that § 1005 can be applied to someone who is not an insider at a bank and its holding that § 408(g) prohibited Barel's conduct. Our review of the jury's verdict for an alleged fatal ambiguity under United States v. Dansker, 537 F.2d 40 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977) is plenary, see United States v. Boffa, 688 F.2d 919, 933 (3d Cir. 1981) (treating question of verdict ambiguity as issue of law), cert. denied, 460 U.S. 1022, 75 L. Ed. 2d 494, 103 S. Ct. 1272 (1983), but we determine the existence of ambiguity on the basis of the evidence presented to the jury, resolving all conflicts in favor of the government and giving it the benefit of all inferences. We review any jury instruction designed to insure unanimity for abuse of discretion. See United States v. Beros, 833 F.2d 455, 458 n.3 (3d Cir. 1987). Finally, since the government agrees for purposes of this appeal that Barel should have been sentenced under the more lenient guidelines in effect at the time these crimes were alleged to have occurred, we need not discuss the standard of review of the sentencing issue Barel raises on appeal.

VI.

With this background in mind, we pass to a more detailed consideration of the merits of Barel's issues. We begin with his argument on the construction of 42 U.S.C.§ 408(g). Barel concedes, in his brief on appeal, that 42 U.S.C.A. § 408(g) outlaws the use of a false social security number with the intent to deceive the government. See Brief for Appellant at 36-37. Barel also concedes that § 408(g) prohibits the use of a false social security number in a private transaction where the user of the false number sought or received something of pecuniary value. See Brief for Appellant at 38-39. However, Barel argues that we must reverse his conviction because substantial evidence does not exist to support either the proposition that he used Steven Katz's social security number with the intent to deceive the government or that he used the number to obtain, or in fact received, anything of pecuniary value.

Barel recognizes that the present version of 42 U.S.C.A. § 408(g), on its face, might seem to proscribe his actions but argues literal application would give the statute a much broader scope than Congress intended. He styles his misuse of Steven Katz's social security number as a transaction between private parties in which he neither sought nor received pecuniary gain. Building on this definition, he points out that neither he nor the government has been able to find a single case in which § 408(g) was invoked to reach the use of a false social security number in the circumstances peculiar to this case. Since criminal statutes should be read narrowly, he says his convictions on the social security offense cannot be sustained without proof of his intent to deceive the government or, at least, intent to secure pecuniary gain from the banks themselves.

From these premises, he goes on to argue that there is insufficient evidence to support a finding that he intended to deceive the United States and so, even if the evidence supports a finding of pecuniary gain, his social security offense convictions cannot stand under Dansker because the district court did not require a special verdict to show if the jury based its determination of guilt on the unsupported theory of intentional deceit of the United States or the theory of intentional deceit of the banks that the evidence does support.

Based on the language of the statute and its legislative history, we conclude that Congress intended § 408(g) to apply to the use of false social security numbers under the circumstances presented here. The government did not need to prove pecuniary gain in order to achieve a valid conviction.*fn5 Furthermore, we reject Barel's contention that the verdict was fatally ambiguous. If any juror voted to convict upon the finding that Barel deceived the government, that juror had to make the predicate finding that Barel deceived the banks. Thus, the jury had to be unanimous in its finding that Barel deceived the banks. Barel concedes that sufficient evidence was presented to permit a rational jury to find that he intended to deceive the banks when he gave a false social security number to them. We will thus affirm Barel's conviction on the social security charges. A more detailed analysis follows.

A.

1.

Barel insists the government had the obligation to link his deceptive use of the social security numbers to attempted or actual pecuniary gain. To reach this conclusion he takes two logical leaps. First, he reads the statute to proscribe use of a false social security number only for the purpose of obtaining something of "value." He then limits the definition of "value" to pecuniary gain.

Barel styles his own use of the false social security number as a transaction between private parties in which he did not seek pecuniary gain. As a result, he argues that his convictions for use of a false social security number cannot stand. We reject this argument for two reasons. First, it fails at once on the facts. The record shows Barel used the false number to gain something of pecuniary value. He sought to avoid support payments. Avoiding payments of support to his wife and children certainly had pecuniary value to him. His acts therefore fall within even his restricted definition and are covered by the statutory proscription against deceptive use of a social security number "for the purpose of obtaining anything of value from any person." 42 U.S.C.A. § 408(g). Had Barel's deception been successful, he would have been spared the cost of payments he was otherwise obliged to make. Therefore, we cannot characterize his use of Steven Katz's social security card as "a transaction between private parties" in which a defendant "neither obtains, nor intends to obtain, anything of pecuniary value by use of the false number." Brief for Appellant at 33.

Moreover, nothing in the legislative history of § 408(g) indicates that use of a false social security card for private purposes is excused if no money or thing of value is involved. The statute reaches misuse "for any. . . purpose." 42 U.S.C.A. § 408(g) ...


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