United States v. Sloan

492 F.3d 884, 2007 U.S. App. LEXIS 16176, 2007 WL 1966012
CourtCourt of Appeals for the Seventh Circuit
DecidedJuly 9, 2007
Docket06-2392
StatusPublished
Cited by34 cases

This text of 492 F.3d 884 (United States v. Sloan) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh 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. Sloan, 492 F.3d 884, 2007 U.S. App. LEXIS 16176, 2007 WL 1966012 (7th Cir. 2007).

Opinions

BAUER, Circuit Judge.

A jury convicted James L. Sloan of six counts of mail fraud and 26 counts of wire fraud in violation of 18 U.S.C. §§ 1341 and 1343. The district court sentenced Sloan to 18 months of incarceration, followed by two years of supervised release, and ordered him to pay $19,654.60 in restitution. Sloan now appeals his judgment of conviction and sentence. We affirm.

I. Background

With an offer of “Free Electricity for Life! Plus—the opportunity to make $492,000.00 per year” and other similar offers, Sloan enticed at least ninety individuals to join his organization, the Christian Freedom Foundation. To take advantage of these offers advertised in the March, April, July, and August 2001 editions of Sloan’s Christian Freedom Chronicle, these individuals were required to join the Christian Freedom Foundation.

A new member would join the Christian Freedom Foundation by sending his or her application and payment of $498.75, or up to four multiples thereof, to a post office box located in New Trenton, Indiana, of which Sloan was the signatory, or to a fax number subscribed to Sloan at his residence. A new member also could join the organization by submitting an application and a check for $49.95, one month’s payment, which would allow Sloan to withdraw membership fees on a monthly basis from that person’s bank account.

[887]*887Unfortunately, the offers of free electricity and the chance to make hundreds of thousands of dollars were too good to be true; none of the new members of the Christian Freedom Foundation received free electricity or any payments in excess of what they had paid to the organization.

Sloan operated the Christian Freedom Foundation from his home in Lawrence-burg, Indiana. He ran a different enterprise, Christian Singles International, from an office in Cincinnati, Ohio. Christian Singles International published “Christian Singles News and Contacts,” which was included as an insert in each issue of the Christian Freedom Chronicle and of which Sloan was the editor.

A.The March 2001 Advertisement

The advertisement on the back page of the March 2001 issue of the Christian Freedom Chronicle stated that by joining the Christian Freedom Foundation at a cost of $498.75 per year, new members would receive a subscription to the Christian Freedom Chronicle, a Free Electricity Certificate, and the opportunity to participate in the Christian Freedom Foundation’s “network marketing program.” It specified that the new member would receive “a Free Electricity Certificate issued by the United Community Services Association (UCSA) in conjunction with the International Tesla Electric Company (ITEC).” The new member also would have use of a 26,000 kilowatt per year generator, when such units became available, that would be set up on his or her property at no additional cost. According to the advertisement, there was a waiting list for these units and “[f]irst come, first served.”

The advertisement also described the network marketing program. New members of the Christian Freedom Foundation would be entered into a “3x8 Forced Matrix.” When the new member’s matrix became full, which would require an additional 9,840 people to join the organization, he or she would receive $40 for each new member of the matrix, totaling $393,600. Even better, the advertisement claimed that members did not have to wait for their matrix to become full before they would receive payments. Additionally, members had the opportunity to earn up to $492,000 per year by bringing just three other people into the Christian Freedom Foundation because he or she would receive $50 for each person in the matrix.

In smaller type, the advertisement stated that the free electricity offer was for residential use and property owners only. Tenants and commercial establishments, however, were eligible to participate in the Christian Freedom Foundation, including the business opportunity.

B. The April 2001 Advertisement

The April 2001 .edition of the Christian Freedom Chronicle ran a similar advertisement on its back page but with minor adjustments to its offer. In this offer, members of the Christian Freedom Foundation “have a chance” to get free electricity for life and that “[i]f and when” the new member’s generator is available, it would be set up on his or her property at no cost.

C. The July 2001 and August 2001 Advertisement

The July 2001 and August 2001 editions contained additional, significant changes. Like the April 2001 advertisement, these idéntieal advertisements gave new members of the Christian Freedom Foundation “a chance” to get free electricity for life by paying to join the Christian Freedom Foundation. They also offered the opportunity to make $472,320 per year and contained a photograph of the generator. Rather than merely joining a 3x8 forced matrix, however, new members would be entered twice into a “Double Flip-Flop 3x8 forced matrix.” The advertisements stat[888]*888ed that new members “will get commissions from the first matrix on the 10th of the month, and from the second one on the 25th of the month. The payments will be $2.00 each for every person who has joined after you—up to five levels (863 positions)—twice a month. That totals $1452.00 per month.” The advertisements claimed that new members who recruited additional members would have even greater earning potential. These advertisements also contained a chart that showed how the Double Flip-Flop 3x8 matrix purportedly operated and offered various “quick start bonuses,” including a bonus of $15 for each person introduced by the new member to the Christian Freedom Foundation.

These solicitations even asked the attractive question, “Finally, how about if we GUARANTEE your income? Guarantee that you will make at least 20% more than you paid to join CFF? We will!” (Emphasis in original.) Readers were asked to call a telephone number for an explanation as to how the guarantee works.

In a smaller typeface, the advertisements hedged on the guarantee, stating,

Caveat on all the numbers in this article: No one knows for sure what anyone else’s future earnings will be. The figures in the article and on the chart are projections only of what is possible. What your actual earnings will be is determined by your own efforts and the rest of your team—those people who are above and below you in your matrix, eight levels each way.

In an about-face, the advertisements continued: “Having said that, there WILL BE spillover. It is a forced matrix. You benefit from everyone else in your matrix—above and below you.” They directed the readers to rush to submit their applications to the Christian Freedom Foundation by exclaiming, “First come; first served!” Because applications were time and date stamped, the advertisements explained, two applications received ten minutes apart could mean that the first person would make money sooner than the second person as a result of their different placements in the Double Flip-Flop 3x8 forced matrix.

D. Sloan’s Use of the Mails and Wires

In December of 1993, Sloan hired Marcia Harting at Christian Singles International.

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Bluebook (online)
492 F.3d 884, 2007 U.S. App. LEXIS 16176, 2007 WL 1966012, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-sloan-ca7-2007.