United States v. John Gole

158 F.3d 166, 1998 U.S. App. LEXIS 26200, 1998 WL 720945

• Court: Court of Appeals for the Second Circuit
• Decided: October 16, 1998
• Docket: Docket 97-1453
• Status: Published

Opinions

MAGILL, Circuit Judge:

John Gole, a retired firefighter with the New York City Fire Department (NYCFD), filed false income reports to retain pension overpayments made by the NYCFD Pension Bureau. After Gole’s misrepresentations were discovered, Gole was charged and convicted of mail fraud under 18 U.S.C. § 1341 (1994). Gole argues that the district court erred by not allowing him to present evidence that he was actually entitled to the money he obtained by misrepresenting his income. We affirm.

I.

After sustaining a service-related disability as a firefighter, Gole retired in 1988 and began receiving disability income from the NYCFD Pension Fund. Gole was entitled to his full pension if his annual earnings remained below a certain amount (Safeguard Amount), determined by a formula set forth in the New York City Administrative Code. If his earnings exceeded the Safeguard Amount, his pension would decline accordingly. Gole received his full pension in 1991, 1993, and 1994, despite earning in excess of the Safeguard Amount. Gole did not complete annual income report forms for these years because the NYCFD Pension Bureau failed to send Gole the required forms. After receiving the forms in 1995, Gole under-reported his earnings for 1991, 1993, and 1994 to be less than the Safeguard Amount. This enabled Gole to retain the pension over-payments he had received. Gole felt he was entitled to under-report his income because he believed that the NYCFD Pension Bureau improperly calculated the Safeguard Amount by misapplying the Administrative Code formula, resulting in an inordinately low Safeguard Amount. According to Gole, his earnings did not exceed the correctly calculated Safeguard Amount in 1991, 1993, and 1994, and he should therefore have been entitled to retain his full pension.

Gole was charged with one count of mail fraud on January 13, 1997. At trial, the district court did not permit Gole to present evidence that the Safeguard Amount was incorrectly calculated. In fact, the jury was instructed that

the defense of good faith is not available to a defendant who deliberately makes a representation that he knew to be false, even if the defendant reasonably believed that he was legally entitled to the money he was seeking to obtain by such a false representation. Accordingly, it is not relevant to your consideration of the guilt or innocence of the defendant whether the formula used to determine the [Safeguard Amount] was correctly calculated, or whether the defendant believed that it was wrongly calculated.

Trial Tr. at 431, reprinted in App. at 82. Gole was convicted of mail fraud and sentenced to one year probation and 200 hours of community service. Gole appeals.

II.

The federal mail fraud statute provides that:

Whoever, having devised ... any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses ... for the purpose of executing such scheme ... places in any post office ... any matter or thing whatever to be sent or delivered by the Postal Service ... shall be fined under this title or imprisoned not more than five years, or both.

18 U.S.C. § 1341 (1994). The essential elements of a mail fraud violation are (1) use of the mails to further (2) a scheme to defraud with (3) money or property as the object of the scheme. United States v. Dinome, 86 F.3d 277, 283 (2d Cir.1996). Gole does not dispute that he used the mails to misreport his income, and it is clear that money was the object of Gole’s endeavor because he misrepresented his income to keep money he would otherwise have been obligated to return.

Gole argues, however, that he was not engaged in a scheme to defraud. In order to establish a scheme to defraud, the government must prove that Gole had a specific intent to defraud. United States v. Rodolitz, 786 F.2d 77, 80 (2d Cir.1986). Fraudulent intent is established when “ ‘some actual harm or injury was contemplated by the schemer.’ ” Dinome, 86 F.3d (quoting United States v. D'Amato, 39 F.3d 1249, 1257 (2d Cir.1994)). While Gole admits that he intentionally misrepresented his income in order to retain pension overpayments, he argues that he lacked fraudulent intent because he believed that the NYCFD Pension Bureau improperly calculated the Safeguard Amount, and, under a proper calculation of the Safeguard Amount, he would be entitled to the overpayments. Thus, according to Gole, the district court abused its discretion in excluding evidence that the NYCFD Pension Bureau improperly calculated the Safeguard Amount.

We review the district court’s evi-dentiary rulings for an abuse of discretion. Malek v. Federal Ins. Co., 994 F.2d 49, 54 (2d Cir.1993). However, it is well established that “[t]he legal sufficiency of a proffered defense is a question of law and therefore is reviewed de novo.” United States v. Santiago-Godinez, 12 F.3d 722, 726 (7th Cir.1993). Gole argues that he did not intend to harm the NYCFD Pension Fund because he had a claim-of-right to the pension overpayments. Although a claim-of-right to money obtained through deception was a defense to the traditional common law crime of false pretenses, the mail fraud statute does not mention this as a defense, see 18 U.S.C. § 1341, and the Supreme Court long ago rejected the argument that the mail fraud statute ‘“reaches only such cases as, at common law, would come within the definition of false pre-tences.’” McNally v. United States, 483 U.S. 350, 356-57, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987) (quoting Durland v. United States, 161 U.S. 306, 312, 16 S.Ct. 508, 40 L.Ed. 709 (1896)) (other quotations omitted). Moreover, courts have uniformly held that a claim-of-right is not a defense to mail fraud. See United States v. Casey, 951 F.2d 892, 894 (8th Cir.1991) (victim’s debt to defendant in excess of the amount obtained by defendant through fraud is irrelevant to mail fraud liability); United States v. Rickman, 944 F.2d 323, 330 (7th Cir.1991) (“mail fraud does not include a requirement that the defendant receive or intend to receive money or property in excess of an amount he was entitled to receive” (quotations and alterations omitted)); cf. United States v. Agnes, 753 F.2d 293, 299 (3d Cir.1985) (no claim-of-right defense to extortion under the Hobbs Act); United States v. Pignatelli, 125 F.2d 643, 646 (2d Cir.1942) (rejecting claim-of-right defense for extortion, and explaining that “[t]hreats to damage another’s reputation are no proper means for determining a controversy. It may be adjusted either by suit or by compromise but settlement must not be effected by using defamation as a club”).

In addition, common sense commands us to reject the purported defense. If Gole’s theory of self-help were the law, anyone who believed that he was legally entitled to benefits from a pension plan, or an insurance policy, or a government program, but who was concerned that he or she might nevertheless be denied such benefits, would be given carte blanche simply to lie to obtain those benefits. Such a course of action would often be much easier than pursuing legal remedies through civil actions in court, and would guarantee success as long as the misrepresentation remained undiscovered. We will not encourage people to lie to obtain benefits rather than pursue their rights in civil actions. Such controversies may be resolved by civil suit or settlement, but cannot be won by using lies and deception.

Gole argues that this Court’s recent decision in United States v. Rossomando, 144 F.3d 197 (2d Cir.1998), requires that his conviction be reversed. We disagree. Although Rossomando arose in nearly identical circumstances concerning income forms completed by another disabled fireman, that case turned on the defendant’s knowledge of the immateriality of the false statements he made. In Rossomando, “the essence of Ros-somando’s defense was not that he thought the [NYCFD] Pension Fund would not ‘ultimately’ lose money, but that he thought it was never going to lose money because his income was well below the level at which the false information he provided would become relevant.” 144 F.3d at 202 (emphasis added). This Court found reversible error in the trial court’s instruction to the jury to convict Ros-somando even if the jury thought Rossoman-do honestly believed his misreported income would not affect the NYCFD Pension Fund’s calculation of his pension. In contrast, Gole admitted to knowing that lying on his income report would affect the NYCFD Pension Fund’s calculation of his pension. We therefore find Rossomando distinguishable, and reject Gole’s argument that Rossomando requires reversal in this case.

Accordingly, we affirm the judgment of the district court.¹

1 . Gole also argues that the jury was incorrectly charged and that the government prejudiced him by changing its theory of criminal liability. We disagree. Because Gole was guilty of mail fraud even if the Safeguard Amount was incorrectly calculated, the jury was correctly charged. Because the government's theory of prosecution never required it to prove that the NYCFD Pension Bureau had correctly calculated the Safeguard Amount, its theory of prosecution did not change. Thus, Gole’s remaining claims are mer-itless.