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United States v. Schmuck

decided: January 21, 1988.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE,
v.
WAYNE T. SCHMUCK, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Western District of Wisconsin, No. 83 CR 56, Barbara B. Crabb, Judge.

En Banc. Bauer, Chief Judge, Cummings, Wood, Jr., Cudahy, Posner, Coffey, Flaum, Easterbrook, and Ripple, Circuit Judges, and Swygert*fn* and Fairchild, Senior Circuit Judges.

Author: Fairchild

FAIRCHILD, Senior Circuit Judge.

In United States v. Schmuck, 776 F.2d 1368 (7th Cir. 1985), a divided panel decided that under the facts of this mail fraud prosecution, the offense of knowing and willful odometer alteration was a lesser included offense within the charged offense of mail fraud. Defendant's conviction was reversed, therefore, because it was error to refuse an instruction under Rule 31(c), F. R. CRIM. P., on the possibility of finding defendant guilty of the odometer offense. Although odometer alteration is not a statutory element of mail fraud, the panel, relying on United States v. Whitaker, 144 U.S. App. D.C. 344, 447 F.2d 314 (D.C. Cir. 1971), held that there is an inherent relationship between mail fraud and the "fraud" that underlies the mail fraud offense. 776 F.2d at 1371. Accordingly the odometer offense proved by the evidence constituted a lesser included offense for the purpose of Rule 31(c).

The panel decision was vacated and rehearing end banc granted. United States v. Schmuck, 784 F.2d 846 (7th Cir. 1986). We now reject the Whitaker doctrine and decide that the odometer offense, though proved, was not a lesser included offense, or, as Rule 31(c) says "an offense necessarily included in the offense charged." All other significant claims raised were correctly decided adversely to defendant in Part I of Judge Swygert's opinion, 776 F.2d at 1369-70. We now adopt Part I and affirm.

I

Defendant Schmuck was convicted, after a jury trial, of 12 counts of mail fraud. Each count of the indictment alleged a scheme by Schmuck to defraud purchasers of used automobiles by representing that the automobiles had substantially less mileage than was true. Schmuck would purchase automobiles, cause their odometer readings to be altered, offer them to dealers, and provide purchasing dealers with an odometer statement reflecting the false mileage. The dealers would sell the cars to retail customers. Both the dealers and the customers would rely on the false readings and pay more than if readings had not been reduced. In order to obtain titles in the names of their customers, the dealers would mail Wisconsin title applications to the Wisconsin Department of Transportation. Each count of the indictment alleged the mailing of an application for title for an automobile by a dealer on a specified date. Five different dealers were named; three dealers made only one mailing, one made four, and one five. It was charged that Schmuck caused each mailing for the purpose of executing the scheme.

Pursuant to Rule 31(c), defendant moved prior to trial for an instruction that would have permitted the jury to convict him of odometer alteration as a lesser included offense of mail fraud, presumably on each count. That motion was denied. He was convicted and appealed.

In reversing and remanding for a new trial, the panel rejected the "traditional" definition of a lesser included offense, in favor of the "inherent relationship" approach first expounded in United States v. Whitaker, 144 U.S. App. D.C. 344, 447 F.2d 314 (D.C. Cir. 1971). The traditional (elements) test requires identity of the elements of the two offenses, such that some of the elements of the crime charged themselves comprise a separate, lesser offense; to be necessarily included, the elements of the lesser offense must be a subset of the elements of the charged offense. See Sansone v. United States, 380 U.S. 343, 349-50, 13 L. Ed. 2d 882, 85 S. Ct. 1004 (1965); Berra v. United States, 351 U.S. 131, 134, 100 L. Ed. 1013, 76 S. Ct. 685 (1956); United States v. Campbell, 652 F.2d 760, 762 (8th Cir. 1981); Government of the Virgin Islands v. Parrilla, 550 F.2d 879, 881 (3rd Cir. 1977). Thus where the lesser offense requires an element not required for the greater offense, an instruction should be refused.*fn1

Broadly speaking, there are two elements of an offense under the mail fraud statute: (1) having devised or intending to devise a scheme to defraud (or to perform specified fraudulent acts); and (2) use of mail for the purpose of executing the scheme or attempting to do so.*fn2 It is not required that any part of the contemplated scheme be performed, although in practice fraudulent conduct usually is proved in order to establish the scheme. The odometer offense consists of knowingly and willfully altering or causing alteration of an odometer with intent to change the number of miles indicated.*fn3 Each statute requires proof of facts not required by the other. The two offenses are separate. Blockburger v. United States, 284 U.S. 184, 187-88 (1957).

In determining, for this purpose, the elements of the offense charged, the ordinary focus is upon the statute defining the offense. Where the statute prescribes an element in general language, capable of wide variation in types of conduct, e.g., mail fraud, falsification (18 U.S.C. § 1001), continuing criminal enterprise (21 U.S.C. § 848), RICO (18 U.S.C. § 1963), failure to perform any of several types of statutory duty (e.g., 26 U.S.C. § 7203) there is logical appeal for the proposition that the terms of the indictment will narrow the scope of the elements to be examined. See United States v. Stavros, 597 F.2d 108, 110 (7th Cir. 1979); but see United States v. Kimberlin, 781 F.2d 1247, 1257 n.10 (7th Cir. 1985). Given the present indictment, however, alleging as one element devising a scheme to defraud purchasers of automobiles with altered odometers, knowingly and willfully causing an odometer to be altered is not identical to the element of having devised the scheme.

The District of Columbia Circuit rejected strict comparison of elements in favor of inquiry whether there was an "inherent relationship" between the crime charged and a lesser offense proved at trial. The defendant in Whitaker had been charged with first degree burglary, and his request for an instruction permitting conviction of the lesser offense of unlawful entry was denied, because the District of Columbia Code did not exclusively require unlawful entry as an element of first degree burglary, and therefore unlawful entry would not be a lesser included offense under the traditional test. However, because the proof showed that defendant had, in fact, committed the burglary by means of an unlawful entry, in reversing and remanding for a new trial, the court held that

[a] more natural, realistic and sound interpretation of the scope of "lesser included offense," in line with our own views on the subject, is that defendant is entitled to invoke Rule 31(c) when a lesser offense is established by the evidence adduced at trial in proof of the greater offense, with the caveat that there must also be an "inherent" relationship between the greater and lesser offenses, i.e., they must relate to the protection of the same interests, and must be so related that in the general nature of these crimes though not necessarily invariably, proof of the lesser offense is necessarily presented as part of the showing of the commission of the greater offense.

447 F.2d at 319.

The Whitaker court went on to note that the Constitution and the common law require that the charge in the indictment give the defendant notice that he could also be convicted of any lesser included offenses, if the evidence so warrants. The prosecution as well as the defendant may seek an instruction pursuant to Rule 31(c) under the traditional test, because all elements of the lesser included offense have, by definition, been charged. Whitaker dispensed with the mutuality requirement, because of "considerations of justice and good judicial administration. . . . [T]he defense ought not to be restricted by the stringent constitutional limits upon the prosecutor's right . ...


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