UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-5129
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
DANNY MICHAEL HANCOCK,
Defendant - Appellant.
Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. N. Carlton Tilley,
Jr., Senior District Judge. (1:10-cr-00043-NCT-1)
Submitted: January 15, 2013 Decided: February 27, 2013
Before TRAXLER, Chief Judge, and GREGORY and SHEDD, Circuit
Judges.
Affirmed by unpublished opinion. Judge Gregory wrote the
opinion, in which Chief Judge Traxler and Judge Shedd joined.
A. Wayne Harrison, Sr., LAW OFFICES OF WAYNE HARRISON,
Greensboro, North Carolina, for Appellant. Ripley Rand, United
States Attorney, Frank J. Chut, Jr., Assistant United States
Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Greensboro,
North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
GREGORY, Circuit Judge:
Danny Michael Hancock was tried and convicted of
federal mail fraud and aggravated identity theft for
perpetrating a fraudulent motor vehicle sales scheme. A
judgment of forfeiture was also entered against him. Hancock
now challenges his mail fraud convictions, arguing that his
tangential use of the mail cannot substantiate his convictions.
In addition, he argues the resultant identity theft convictions
must also be reversed and the judgment of forfeiture entered
against him vacated. We find Hancock’s arguments unpersuasive
and therefore affirm his convictions and the judgment of
forfeiture.
I.
Since 1998, Hancock operated a License Plate Agency
(“LPA”), in Thomasville, North Carolina. LPAs privately
contract with the North Carolina Department of Motor Vehicles
(“DMV”) to process title work and renewals. Besides operating
the LPA, evidence shows that between 2004 and 2007, Hancock
operated a business called Atlantic Coast Equipment Sales and
Leasing (“ACE”), which sold motor vehicles and trailers. There
were two problems with Hancock operating ACE: (1) ACE was not a
licensed motor vehicle dealer, a class one misdemeanor under
North Carolina law; and (2) under LPA Operating Procedures, an
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LPA operator is expressly prohibited from operating a motor
vehicle dealership. 1
Using the LPA and ACE, Hancock devised a scheme to
conceal the sale of unlicensed motor vehicles. Hancock would
create falsified vehicle title applications, sale documents, and
notary verifications in order to “skip title.” To successfully
operate the scheme, Hancock used the names of persons who bought
vehicles from him and the names of local car dealers, and made
it seem as though there was a direct sales transaction between
the two parties. By “skipping title,” Hancock never showed up
as a registered owner of the vehicles in the DMV records and
therefore never had to pay the highway use taxes and title fees
due under North Carolina law. 2 To complete the fraud, Hancock
mailed the falsified title applications to the DMV for the sale
to be recorded by the state and the vehicles to be duly
registered. Such registration was required by North Carolina
law.
1
North Carolina law defines a “motor vehicle dealer” as a
person who sells or displays more than four vehicles within a
twelve-month period. N.C. Gen. Stat. Ann. § 20-286(11)(a)(1).
2
This scheme required Hancock to possess an “open title,”
which is illegal under North Carolina law. See N.C. Gen. Stat.
Ann §§ 20-72-20-75. An open title is a title where the seller’s
name is signed, but the buyer’s name is left blank.
3
On May 27, 2007, North Carolina DMV inspectors and
High Point Police Detectives executed a search warrant on ACE’s
sale lot. During the search, law enforcement found evidence of
the scheme, including title applications, titles, bills of sale,
and a ledger. The dates on the documents found during the
search revealed that the business was in operation while Hancock
operated the LPA, violating North Carolina policy.
DMV inspectors obtained and reviewed the title
histories for the vehicles listed in ACE’s ledger and other
files. Review of the records revealed that neither Hancock nor
ACE appeared as registered owners of the vehicles sold in the
official DMV records. Specifically, the investigation showed
that Hancock skipped title for a 1985 Ford truck, a 2000
Chevrolet Blazer, a 1997 Chevrolet truck, and a 1984 truck and
trailer. Thus, the investigation showed that Hancock avoided
tax and title fee liability for the vehicles and that he
operated an unlicensed motor vehicle dealership.
Based on this information, on January 26, 2010, a
federal grand jury returned a multiple-count indictment against
Hancock alleging numerous violations of 18 U.S.C. § 1341 (mail
fraud) and 18 U.S.C. § 1028A (aggravated identity theft).
Hancock pled not guilty to the indictment. A jury trial
commenced on October 19, 2010. On October 25, 2010, at the
close of trial, the jury found Hancock guilty of four counts of
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mail fraud and three counts of aggravated identity theft. On
October 6, 2011, Hancock was sentenced to 45 months’
imprisonment followed by 3 years of supervised release; a
special assessment of $700 was also assessed. A final order of
forfeiture was entered against Hancock in the amount of
$607,517.32.
Hancock timely appealed.
II.
Hancock now argues that there was insufficient
evidence for the jury to find him guilty of mail fraud. When we
review a sufficiency of the evidence claim, we ask whether,
construing the evidence in the light most favorable to the
government, any reasonable trier of fact could have found
Hancock guilty beyond a reasonable doubt of the charges of which
he was convicted. United States v. Tresvant, 677 F.2d 1018,
1021 (4th Cir. 1982).
To be found guilty of mail fraud under 18 U.S.C.
§ 1341, the government must prove that the defendant “(1)
devised or intended to devise a scheme to defraud and (2) used
the mail . . . in furtherance of the scheme.” United States v.
Wynn, 684 F.3d 473, 477 (4th Cir. 2012) (citing United States v.
Jefferson, 674 F.3d 332, 366 (4th Cir. 2012)). Hancock does not
argue that the government failed to establish the first element;
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he readily admits he created a fraudulent scheme. Instead,
Hancock’s appeal rests on his contention that the government
cannot prove the second element -- raising a number of arguments
as to why there was insufficient evidence to satisfy the use of
mails element. We address the arguments seriatim.
A.
In Parr v. United States, the Supreme Court espoused
that “‘[t]he federal mail fraud statute does not purport to
reach all frauds, but only those limited instances in which the
use of the mails is a part of the execution of the fraud
. . . .” 363 U.S. 370, 389-90 (1960) (quoting Kann v. United
States, 323 U.S. 88, 95 (1944)). Hancock argues the scheme in
question ended at the sale of the vehicles, and the mailing of
the title application was a mere formality required by state
law, thus failing to satisfy the use of mails element required
for a federal mail fraud conviction.
Although the language of Parr arguably supports
Hancock’s position, the Court in Schmuck v. United States, 489
U.S. 705 (1989), affirmed a mail fraud conviction for a
fraudulent scheme directly analogous to the one before us. In
Schmuck, the defendant purchased used cars, rolled back the
odometers, and sold them to dealers at prices artificially
inflated by the low-mileage readings. Id. at 707. The dealers
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consummated the transactions by mailing title-application forms
to the state DMV on behalf of the buyers. Id. The defendant
tried to argue, relying on Kann and Parr, that “mail fraud can
be predicated only on a mailing that affirmatively assists the
perpetrator in carrying out his fraudulent scheme.” Id. at 711.
The Court rejected this argument, finding that “although the
registration-form mailings may not have contributed directly to
the duping of either the retail dealers or the customers, they
were necessary to the passage of title, which in turn was
essential to the perpetuation of Schmuck’s scheme.” Id. at 712.
All that matters, therefore, is that the mailings are
“incidental to an essential part of the scheme.” Id. at 712
(quoting Pereira v. United States, 347 U.S. 1, 8 (1954)).
The reasoning of Schmuck clearly extends to the
fraudulent scheme devised by Hancock. The purpose of Hancock’s
scheme was to sell vehicles without paying the requisite taxes
and fees to the DMV. These taxes and fees were assessed upon
receipt of the title application. Thus, the falsified and
factually incorrect title applications that were sent via mail
were an essential part of the scheme in question — “they were
necessary to the passage of title.” See Schmuck, 489 U.S. at
712; United States v. Locklear, 829 F.2d 1314, 1318 (4th Cir.
1987) (per curiam) (finding the use of mails element is
satisfied when the defendant knows “the use of the mails will
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follow in the ordinary course of business”). It is clear that
mailing the title documents was essential to Hancock’s scheme.
B.
Hancock also argues the use of mails element was not
proven because the mailings were required by North Carolina law.
This argument is derived from Parr, in which the Court found the
“use of the mails” element was not met in part because the
mailings were “legally compelled.” 363 U.S. at 391 (finding
that a tax assessment sent by mail as required by law could not
support a federal mail fraud conviction). The idea that
“legally compelled” mailings cannot be used to prove federal
mail fraud was clarified in Schmuck. In Schmuck, the Court held
that mailings are not “legally compelled” when they are made in
compliance with a state registration statute, as these mailings
would not have been made “regardless of the defendants’
fraudulent scheme.” 489 U.S. at 713 n.7. The Court found that
mailings compelled by fraud, such that it is the fraudulent act
that triggers a state mailing requirement, can be used to prove
the “use of mails” element of the federal mail fraud statute.
Id. Under Schmuck, therefore, it does not matter if a mailing
is “legally compelled” if the legal requirement is brought about
by the defendant’s fraud, necessarily foreclosing Hancock’s
argument.
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C.
Hancock raises one last claim as to why his mail fraud
convictions must be reversed, arguing there was no victim in
this case, and that without a victim, there is no fraud.
This argument is fatuous. Hancock is correct in that
mail fraud requires the specific intent to deprive someone of
something of value. See Wynn, 684 F.3d at 478. And while he
may not have deprived the people to whom he sold vehicles
anything of value, Hancock did intentionally deprive North
Carolina of taxes and title fees due under law – the state of
North Carolina is the victim of the fraud here.
D.
Hancock finally proclaims that “[o]f course he could
have been prosecuted in state court for violations of the
several state statues referenced in the indictment herein; but
that is a different story than an attempt to cast a federal net
over his actions.” Appellant’s Br. 16. Contrary to Hancock’s
assertion, the federal mail fraud statute does cast a net over
his actions because as noted by the Supreme Court, “[t]he fact
that a scheme may violate state laws does not exclude it from
the proscriptions of the federal mail fraud statute, for
Congress ‘may forbid any (mailings) in furtherance of a scheme
that it regards as contrary to public policy whether it can
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forbid the scheme or not.’” Parr, 363 U.S. at 389 (quoting
Badders v. United States, 240 U.S. 391, 393 (1916)) (alteration
in the original). The federal mail fraud statute is
comprehensive in scope. That Hancock violated a number of state
laws does not obviate his violations of the federal mail fraud
statute.
A quote from Schmuck sums up our response to Hancock’s
appeal well: “Under these circumstances we believe a rational
jury could have found that title-registration mailings were part
of the execution of the fraudulent scheme, a scheme which did
not reach fruition until [ACE and Hancock] resold the cars and
effected transfer of title.” 489 U.S. at 712. No matter how
Hancock frames the way in which he used the mail, Supreme Court
precedent clearly supports his convictions. Correspondingly,
Hancock’s mail fraud convictions are affirmed.
III.
Hancock next challenges his aggravated identity theft
convictions. He does not attack the sufficiency of the evidence
presented to the jury on the identity theft charges. He simply
argues that since his mail fraud convictions must be reversed,
his aggravated identity theft convictions should also be set
aside.
10
Mail fraud is a predicate offense to being found
guilty of aggravated identity theft. 18 U.S.C. § 1028A(c)(7);
see also United States v. Valerio, 676 F.3d 237, 244 (1st Cir.
2012). Because the mail fraud convictions are supported by
substantial evidence, and because Hancock does not independently
attack the sufficiency of the identity theft evidence put forth
to the jury, the aggravated identity theft convictions must
stand.
IV.
Hancock finally argues that the judgment of forfeiture
must be vacated due to the fact that the federal offenses of
which he was convicted should be reversed. A judgment of
forfeiture requires a requisite underlying conviction. 18 U.S.C.
§ 982(a)(3)(E); see also United States v. Cherry, 330 F.3d 658,
670 (4th Cir. 2003). As explained above, we affirm Hancock’s
convictions and therefore uphold the judgment of forfeiture
entered against him.
V.
For the reasons detailed in this opinion, Hancock’s
convictions and the judgment of forfeiture entered against him
are affirmed.
AFFIRMED
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