United States v. Frank Runnels (86-1923) and Arnold Shapero (86-1922)

833 F.2d 1183, 126 L.R.R.M. (BNA) 2789
CourtCourt of Appeals for the Sixth Circuit
DecidedOctober 19, 1987
Docket86-1922, 86-1923
StatusPublished
Cited by66 cases

This text of 833 F.2d 1183 (United States v. Frank Runnels (86-1923) and Arnold Shapero (86-1922)) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Frank Runnels (86-1923) and Arnold Shapero (86-1922), 833 F.2d 1183, 126 L.R.R.M. (BNA) 2789 (6th Cir. 1987).

Opinions

BOGGS, Circuit Judge.

Frank Runnels (Runnels), former president of Local 22 of the United Automobile Workers (UAW) and Arnold Shapero (Shapero), an attorney, appeal their convictions for mail fraud and conspiracy to commit mail fraud. Runnels was charged with committing mail fraud by obtaining money through false and fraudulent pretenses and by depriving the members of Local 22 of his fair and honest services. Shapero was charged with conspiring to commit mail fraud by bribing Runnels and by defrauding the members of Local 22 of their intangible right to fair and honest union representation. The doctrine that mail fraud could include deprivation of “intangible rights” was struck down by the Supreme Court after the convictions of Runnels and Shapero. However, as we hold that the jury necessarily found that Runnels, in breaching his fiduciary duty to Local 22 by taking a bribe, violated 18 U.S.C. § 1341 by depriving Local 22 of an economic benefit which properly belonged to it, we affirm these convictions.

I

In May or June of 1979, Andrew Schlesinger (Schlesinger) arranged for Shapero to pay Runnels $10,000 immediately and $1,700 per month thereafter in return for referring workers’ compensation cases to Shapero’s law firm. An attorney from Shapero’s firm would attend retirees’ meetings, at which Runnels would discuss retirees’ rights in general and workers’ compensation in specific, and refer the members to the attorney. After prospective clients were signed up at retirees’ meetings, workers’ compensation claims were mailed to Lansing, Michigan. As part of the agreement, Schlesinger was placed on the firm's payroll. However, in June 1980, Shapero told Schlesinger that the arrangement had changed and that Schlesinger was to stay away from Runnels and Local 22, but would continue to draw a salary. [1185]*1185At trial, Shapero testified that Runnels caused this change, in the belief that Schlesinger was not conveying the full $1,700 per month. Runnels asked for $2,000 per month in cash, to be paid directly to him.

According to Shapero, Runnels missed a number of retirees’ meetings due to illness in 1980-1981, causing a drop in the number of applicants for workers’ compensation. Shapero told Runnels that he would receive his $2,000 only for those months when he addressed the retirees’ meeting. In 1988, Runnels left Local 22 to become a UAW regional director, at which point the payments stopped.

In January 1986, Runnels was charged with violating 18 U.S.C. § 371 (conspiracy) and 18 U.S.C. § 1341 (mail fraud). Following a jury trial, he was found guilty. He appeals that verdict.

Shapero was charged with conspiracy to commit mail fraud, in violation of 18 U.S.C. § 371 and § 1341. He pled guilty pursuant to a plea agreement under Rule 11, Fed.R. Crim.P., which provided for a maximum eighteen month prison term. As part of the agreement, Shapero cooperated with the government and testified at Runnels’s trial.

Shapero moved to set aside his plea, on the grounds that the information failed to state a cause of action, and that the factual basis of the guilty plea was insufficient. The district court denied his motion and sentenced Shapero to eighteen months of imprisonment with all but the first six months suspended, and two years of probation.

II

The relevant portion of 18 U.S.C. § 1341 bans “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations or promises_” The Supreme Court has stated that “[t]he elements of the offense of mail fraud under 18 U.S.C. ... § 1341 are (1) a scheme to defraud, and (2) the mailing of a letter, etc., for the purpose of executing the scheme.” Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362, 98 L.Ed. 435 (1954). See also United States v. Street, 529 F.2d 226, 228 (6th Cir.1976).

The mail fraud statute has been applied to a range of circumstances. For instance, the scheme need not have been actually successful in order for a mail fraud violation to have occurred. See, e.g., Erwin v. United States, 242 F.2d 336 (6th Cir.1957); Gridley v. United States, 44 F.2d 716 (6th Cir.1930), cert. denied, 283 U.S. 827, 51 S.Ct. 351, 75 L.Ed. 1441 (1931). Criminal liability for false pretenses, which the mail fraud statute was intended to reach, was consistently predicated upon the defendant’s taking or attempted taking of some economic benefit from the scheme’s victim, during the period of the mail fraud statute’s enactment and amendment, 1870 to 1909. See 35 C.J.S. False Pretenses §§ 6, 26 (1960), and cases cited therein. Decisions permitting convictions despite the absence of economic loss still required that the defendant deprive the victim of some economic benefit. See generally, Comment, The Intangible-Rights Doctrine and Political-Corruption Prosecutions Under the Federal Mail Fraud Statute, 47 U.Chi.L.Rev. 562, 572-78 (1980), and cases listed at 572-78.

Thus, cases decided under 18 U.S.C. § 1341 prior to 1973 involved some transfer or planned transfer of economic value to the defrauder from the victim. See Parr v. United States, 363 U.S. 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277 (1960); United States v. Beitscher, 467 F.2d 269 (10th Cir.1972); United States v. Randle, 39 F.Supp. 759, 760 (W.D.La.1941). After 1973, courts began to permit conviction of corrupt politicians, without finding a direct transfer of economic value to the politician from the populace, by finding that the citizens had been defrauded of their intangible right to fair and honest government.1 See United States v. Mandel, 591 F.2d 1347, 1359-60, on reh’g, 602 F.2d 653 (4th Cir.1979), cert. [1186]*1186denied, 445 U.S. 961, 100 S.Ct. 1647, 64 L.Ed.2d 236 (1980); United States v. Keane, 522 F.2d 534 (7th Cir.1975), cert. denied, 424 U.S. 976, 96 S.Ct. 1481, 47 L.Ed.2d 746 (1976). Courts have also applied the intangible rights doctrine in corporate and labor cases. See United States v. Barta, 635 F.2d 999, 1005-07 (2d Cir.1980), cert. denied, 450 U.S. 998, 101 S.Ct. 1703, 68 L.Ed.2d 199 (1981) (corporate); United States v. Bohonus, 628 F.2d 1167 (9th Cir.), cert. denied, 447 U.S. 928, 100 S.Ct. 3026, 65 L.Ed.2d 1122 (1980) (same); United States v. Price, 788 F.2d 234 (4th Cir.1986), vacated, — U.S. —, 107 S.Ct. 3254, 97 L.Ed.2d 754 (1987) (in light of McNally v. United States, 483 U.S. —, 107 S.Ct.

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Bluebook (online)
833 F.2d 1183, 126 L.R.R.M. (BNA) 2789, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-frank-runnels-86-1923-and-arnold-shapero-86-1922-ca6-1987.