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U.S. v. Bentz

filed: April 11, 1994.



Before: Mansmann and Nygaard, Circuit Judges and Weis, Senior Circuit Judge.

Author: Nygaard


NYGAARD, Circuit Judge.

Ronald T. Ross entered a conditional guilty plea to one count of wire fraud in violation of 18 U.S.C. §§ 2 and 1343. In doing so, however, he preserved his challenge to the wire transmission element of § 1343. The government argues that Ross waived this issue as it relates to causation. We conclude that Ross did not waive the issue and, moreover, that he did not cause use of the wire in violation of § 1343. Therefore, we will reverse the judgment of conviction against Ross and remand the cause with instructions to dismiss the indictment.

The district court had jurisdiction under 18 U.S.C. § 3231 and we exercise jurisdiction under 28 U.S.C. § 1291. Whether Ross waived the use of the wire argument is determined by Ross's conditional plea agreement, because a defendant who enters a conditional plea can only appeal issues that have been preserved for review. See Fed. R. Crim. P. 11(a)(2); United States v. Markling, 7 F.3d 1309, 1313 (7th Cir. 1993) (requiring that conditional plea "precisely identify which pretrial issues the defendant wishes to preserve for review"); United States v. Wiley, 997 F.2d 378, 385 (8th Cir.) (declining to address claim that defendant entering conditional plea had failed to preserve), cert. denied, 126 L. Ed. 2d 565, 114 S. Ct. 600 (1993). Since our inquiry into the terms of Ross's plea agreement raises questions of law, our review is plenary. See United States v. Moscahlaidis, 868 F.2d 1357, 1360 (3d Cir. 1989) (applying plenary review over legal question of whether the government violated a plea agreement). Our standard for reviewing the statutory construction of 18 U.S.C. § 1343 (the wire transmission element) is also plenary. United States v. Barel, 939 F.2d 26, 31 (3d Cir. 1991).


Ross was indicted for defrauding Vac Air Alloys Corporation, a scrap metals broker, by representing that the metal he sold to Vac Air was stainless steel when it was not. He charged Vac Air for stainless steel but actually delivered metal worth considerably less. Ross unloaded his deliveries at Vac Air's storage facility in Pennsylvania and he was paid by checks generated through Vac Air's mainframe computer in New York. The check amounts were based on information sent by computer from Pennsylvania to New York. Thus, Ross's actions were alleged to have caused a wire transmission in interstate commerce for the purpose of executing his scheme to defraud.

Ross entered a plea of not guilty and moved to dismiss the indictment. His written motion raised three arguments: (1) the prosecution was time-barred; (2) the wire transmissions were not for the purpose of executing a fraudulent scheme; and, (3) the indictment erroneously charged attempt which is not illegal under the wire fraud statute. The district court held a hearing on this motion and heard testimony from Ross, Robert Bentz, a co-defendant, and Amy Fleissner, a Vac Air employee.*fn1

Following this testimony, Ross's attorney elaborated on his wire transmission argument:

Your Honor, we believe the evidence shows here that no real evidence, no real information was generated from New York to Pittsburgh, to authorize the payments of these checks. The law is that one causes the mail to be used when he acts with knowledge that the use of the wire will follow in the ordinary course of business, or where such use can reasonably be foreseen even though not actually intended.

As far as Mr. Ross is concerned, there is no evidence here that would indicate to him that any information was relayed from New York to Pittsburgh to authorize the payment of these checks. Therefore, the issue of whether the wire has been -- whether the defendants have caused the issuance and use of the wire, I don't think has been anywhere nearly established.

As a matter of fact, I think it is established that they did not know that the wire information would be used in this case. Therefore, on that element, the law would say that they cannot be found guilty of this charge, where there is no information that either Mr. Ross or Mr. Bentz had any idea that this information was being relayed to New York and then relayed back to Pittsburgh.

The district court denied Ross's motion to dismiss on the ground that "the preliminary evidence shows that the defendants used interstate wires in furtherance of the alleged fraudulent scheme ...

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