"[r]ecall the point of Griffin: a jury may be relied
on to get the facts right and avoid logical errors." Tenner, 184
F.3d at 612.
In support of his position, Stewart points to the fact that the
superseding indictment describes how he caused Parkway Life
Insurance Company and Cathedral Life Insurance Company to be
formed. Superseding Indictment at 37, ¶ 2; 25, ¶ 7. Since these
insurance companies had to obtain new state regulatory licenses,
Stewart argues that this is evidence the jury could have used to
convict him of a scheme to obtain licenses. He ignores the fact
that these formations occurred in 1989, at least three years
before any crime or scheme alleged in the superseding indictment.
The jury was specifically charged that to convict Stewart on
counts 24 through 120 they needed to find that the schemes alleged
in those counts were devised in late 1992 and early 1993.*fn11
Stewart would thus have us presume that the jury ignored this
legal instruction and also its duty as judges of the facts. Making
this presumption would be contrary to the holding of Griffin, that
"perverse factfinding should not be attributed to juries." Tenner,
184 F.3d at 612. It would also contravene "the almost invariable
assumption of the law that jurors follow their instructions."
Richardson v. Marsh, 481 U.S. 200, 206 (1987); see Francis v.
Franklin, 471 U.S. 307, 324 n. 9 (1985).
The above conclusion is supported and compelled by McNally v.
United States, 483 U.S. 350 (1987). McNally, like Cleveland,
involved a restriction of the scope of the federal mail fraud
statute. In McNally a former Kentucky public official and a
private individual were charged and convicted of violating the
federal mail fraud statute based upon the theory that they
"defrauded the citizens and government of Kentucky of certain
`intangible rights,' such as the right to have the Commonwealth's
affairs conducted honestly." Id. at 352. The Supreme Court
reversed their convictions on direct appeal, holding that § 1341
does not prohibit "schemes to defraud citizens of their intangible
rights to honest and impartial government." Id. at 355.
In restricting the reach of the mail fraud statute to exclude an
intangible rights theory, McNally overturned a "line of decisions
from the Courts of Appeals" holding the opposite. Id. Not
surprisingly, the decision resulted in a deluge of petitions from
defendants convicted under the pre-McNally interpretation of §
1341 who sought to have their convictions overturned.
case was United States v. Asher, 854 F.2d 1483 (3d Cir. 1988). In
Asher the defendant was convicted on five counts of mail fraud
due to his participation in a
scheme to accept bribes in exchange for awarding a no-bid Social
Security tax ("FICA") recovery contract to CTA Limited ("CTA"). On
appeal Asher argued that McNally, which was issued after his
conviction, mandated that his convictions be overturned.
The court examined the treatment other courts had given
post-McNally cases and found that, "those cases that have
sustained mail fraud convictions have done so where the `bottom
line' of the scheme or artifice had the inevitable result of
effecting monetary or property losses to the employer or to the
state." Id. at 1494. It explained:
Essentially, therefore, where rights are involved whose violation
would lead to no concrete economic harm, and where those rights
are the only rights involved in the case, McNally's proscriptions
would prevent upholding conviction on appeal. Where, on the other
hand, a violation of the rights involved would result in depriving
another of something of value, and the indictment, the proofs and
the instructions are based on that fact, then the presence of
intangible rights language will not prove fatal on appeal.
Id. Applying the above precepts, the court upheld Asher's mail
fraud convictions. It arrived at this result by first noting that
both the indictment and the jury instructions in the case
contained numerous references to "concrete economic or property
losses." Id. at 1495. While the jury instructions also made
references to intangible losses, this was not fatal because the
court was "satisfied that the government . . . could not have proved
a violation of intangible rights without simultaneously proving
that the Commonwealth of Pennsylvania was deprived of money as the
result of the no-bid contract awarded to CTA." Id. at 1496. Since
the jury "could not have found a fraudulent scheme that consisted
solely of depriving the citizens of their right to honest
government that did not also involve tangible losses," Asher's
conviction was allowed to stand. Id.
The same result was reached in United States v. Osser,
864 F.2d 1056 (3d Cir. 1988), in a collateral attack filed after the
defendant's conviction was final and after the Supreme Court
decided McNally. Osser, a City Commissioner of Philadelphia, was
found guilty of seven counts of mail fraud in 1973. The jurors in
Osser's case were instructed that they could find a violation of §
1341 on several different theories. One theory involved a kickback
scheme in which Osser participated. That theory was still valid
after McNally. The other involved his deprivation of the citizens
of Philadelphia of his honest and impartial services through a bid
rigging scheme, an invalid theory after McNally.
Osser argued that his convictions must be vacated "because the
issue of guilt was submitted to the jury on two theories, one of
which was invalid," essentially the same argument Stewart is
making under Yates. Osser, 864 F.2d at 1058. After analyzing
Asher, the court disagreed, reasoning that once the jury "found
that Osser had participated in the bid rigging, [it] could not
escape finding financial loss as part of the scheme." Id. at 1063.
Since Osser's actions unquestionably "resulted in a substantial
monetary detriment to the City, and no rational juror could
conclude otherwise," the court refused to vacate Osser's
convictions and affirmed the district court's denial of his coram
We see no practical distinction between Asher and Osser and
Stewart's case. Cleveland, like McNally, restricted the scope of
the federal mail fraud statute by holding that state issued
licenses were not property for its purposes. Stewart, like Asher
and Osser, was convicted by a jury that heard references to what
turned out to be an invalid legal theory in the indictment and the
charge. Like the courts in Asher and Osser, we conclude that the
mere presence of the invalid license theory does not mandate that
Stewart's conviction be vacated. We do so because there is no way
the jury could have found that Stewart committed mail fraud by
devising a scheme to obtain or retain licenses and not have found
he devised a scheme to obtain other money and property as well.
See Asher, 854 F.2d at 1496. Even if the jury were to have found
a scheme to obtain licenses, the ultimate purpose of such a scheme
necessarily would have been to enable Stewart to obtain money and
property in the form of premiums from policyholders and customers,
dividends, consulting and management fees, and the inflated sales
price for Summit. Since "the `bottom line' of the scheme or
artifice had the inevitable result of effecting monetary or
property losses," Stewart's mail and wire fraud convictions will
not be vacated because of any reference in the charge to licenses.
Id. at 1494.
Stewart also argues in his § 2255 motion that the superseding
indictment was defective because it failed to allege explicitly
that he made "material" misrepresentations in furtherance of his
schemes. This argument was not raised previously. Subsequent to
Stewart's indictment and conviction the Supreme Court held in
Neder v. United States, 527 U.S. 1, 25 (1999) that "materiality
of falsehood is an element of the federal mail fraud, wire fraud,
and bank fraud statutes." Because the word "material" does not
appear in the superseding indictment's allegations of mail and
wire fraud, Stewart argues that the superseding indictment is
fatally deficient and his convictions must be vacated.
An indictment must set forth all of the elements of an offense,
and if it does not do so, it is fundamentally flawed. United
States v. Spinner, 180 F.3d 514, 515-16 (3d Cir. 1999). When a
challenge to the indictment's sufficiency is raised for the first
time after trial, as is the case here, we are to "construe the
indictment liberally in favor of validity." United States v.
Cefaratti, 221 F.3d 502, 507 (3d Cir. 2000). Even assuming that
Stewart's contention is not procedurally defaulted, we conclude
that it is without merit.
An indictment satisfies the requirements of the Fifth and Sixth
Amendments "if it, first, contains the elements of the offense
charged and fairly informs a defendant of the charge against which
he must defend, and, second, enables him to plead an acquittal or
conviction in bar of future prosecutions for the same offense."
Hamling v. United States, 418 U.S. 87, 117 (1974). Although it is
vital for an indictment to include all elements of a charged
offense, "the law does not compel a ritual of words" when
determining if an indictment is sufficient.
United States v.
Wilson, 884 F.2d 174, 179 (5th Cir. 1989); see United States v.
DeVegter, 198 F.3d 1324, 1330 (11th Cir. 1999). Our Court of
Appeals has instructed:
[A]n indictment may set forth the offense in the words of the
statute itself, as long as those words of themselves fully,
directly, and expressly, without any uncertainty or ambiguity, set
forth all the elements necessary to constitute the offence
intended to be punished. Furthermore, an indictment that charges a
legal term of art sufficiently charges the component parts of the
Cefaratti, 221 F.3d at 507 (internal quotations and citations