528 F.2d 1037
UNITED STATES of America, Plaintiff-Appellee,
v.
J. L. PATTERSON, Jr., Defendant-Appellant.
No. 75--3143 Summary Calendar.*
United States Court of Appeals,
Fifth Circuit.
March 18, 1976.
Joe Doucette, Houston, Tex., Gerald M. Birnberg, Bellaire, Tex., for defendant-appellant.
John Clark, U.S. Atty., Wayne F. Speck, Asst. U.S. Atty., San Antonio, Tex., for plaintiff-appellee.
Appeal from the United States District Court for the Western District of Texas.
Before COLEMAN, GOLDBERG and GEE, Circuit Judges.
PER CURIAM:
J. L. Patterson, Jr., appeals from his conviction and sentence on three counts of violating 18 U.S.C. § 1343, fraud by wire. He assigns five separate errors on appeal. As will be discussed herein, none warrant reversal of his conviction.
This case involves the use of an electronic device commonly referred to as a 'blue box'. The device enables a person to by-pass the regular electronic circuitry used by the telephone companies for recording and billing calls for which a toll is charged. By use of a 'blue box', a person can call virtually any telephone number in the world and not be charged for the call. The devices have been a source of concern for the telephone companies and law enforcement officials, as well as the subject of recent publicity.1
NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLEOn November 5, 1974, the appellant met with Jerry Wallace, the security supervisor for Southwestern Bell Telephone Company in San Antonio, Texas. Mr. Wallace, posing as a booking agent for musical groups, pretended to be interested in purchasing several 'blue boxes' from the appellant. The meeting was arranged by James Lander, an informant, who was acquainted with the appellant in Houston, Texas. The meeting took place in San Antonio in an apartment leased by an employee of the F.B.I. While Lander was sleeping, appellant proceeded with his sales pitch to Wallace. Appellant explained that thousands of dollars could be saved by using the device. He explained to Wallace that the device was illegal and that it should be used with great caution lest someone discover it. He even cited the pertinent federal statute, 18 U.S.C., § 1343, to Wallace.
During his 'sales demonstration' appellant produced several 'blue boxes' and assured Wallace that he manufactured them and could supply any number of them to Wallace for the price of $3,000. He also demonstrated the proper use of the device by placing calls through Washington, D.C., and then to information operators in Tokyo, Japan; Tel Aviv, Israel; and Frankfurt, West Germany.2 Wallace listened as each operator answered and then hung up the phone.
Another demonstration call was made from the San Antonio apartment, through Washington, D.C., and then to Wallace's own office number in San Antonio. His secretary answered the call but did not identify the office as that of Southwestern Bell.3
After the demonstration calls, there was some haggling over the price, and Wallace agreed to purchase four 'blue boxes' from appellant. They agreed to meet again at a motel restaurant after Wallace had obtained the necessary funds. Wallace then left and reported the activities to the F.B.I.
As the demonstration calls from the apartment were being made by use of the blue box, they were recorded graphically in the telephone company's central office by a device identified as a Hekimian 51--A. The machine printed out the numbers that were dialed from the apartment telephone, indicating in red ink those that were dialed from the 'blue box'.4 The printed tape from the Hekimian 51--A5 was received into evidence, and it corroborates the testimony of Mr. Wallace.
Appellant contends that he was 'lured' into the Western District of Texas by Wallace and Lander. Wallace admitted his belief that appellant would not be adequately prosecuted in the Southern District of Texas, in his home city of Houston, because of his alleged 'strong contacts' in high official places. Wallace also stated that he had no investigatory jurisdiction in Houston and that because it was his case, he needed to complete it in San Antonio. Appellant urges this issue for the first time in appeal. He did not move for a transfer of the case from the Western District to the Southern District as he could have done under Rule 21(b), F.R.Cr.P. Nor did he request instructions to the jury on entrapment, although the trial judge specifically gave him the opportunity to do so, Rule 30, F.R.Cr.P. Since the issue was not raised below, we can notice it only if it amounts to plain error, Rule 52(b), F.R.Cr.P. The actions of Lander and Wallace were in response to appellant's desire to sell 'blue boxes'. The creativity activity necessary for entrapment is simply not present, United States v. Oquendo, 5 Cir., 1974, 490 F.2d 161; United States v. Bueno, 5 Cir., 1971, 447 F.2d 903.
Appellant claims that the use of the 'blue box' does not violate the statute because there was no evidence that the calls made with the device were part of the scheme to defraud. The evidence is contrary. The testimony of Wallace clearly indicates that appellant had formulated a plan to defraud the telephone company. His whole sales pitch was based on that scheme. By making interstate and foreign telephone calls to demonstrate his device, federal jurisdiction is invoked. Appellant's assertion that the calls were made to information operators and, therefore, not subject to tolls is of no significance. There is no necessity for the government to prove actual financial loss, Huff v. United States, 5 Cir., 1962, 301 F.2d 760, cert. denied, 371 U.S. 922, 83 S.Ct. 289, 9 L.Ed.2d 230 (1962). A scheme to defraud a telephone company of its lawful revenues is within the scope of the statute, Scott v. United States, 5 Cir., 1971, 448 F.2d 581, cert. denied,405 U.S. 921, 92 S.Ct. 955, 30 L.Ed.2d 791 (1972).
Citing United States v. Insco, 5 Cir., 1974, 496 F.2d 204, appellant contends that, even if the sale of 'blue boxes' is within the scope of 18 U.S.C., § 1343, he has not received fair notice of the application of the law to his sale of the equipment. Again the evidence is contrary. Mr. Wallace's testimony shows that the primary, if not sole, purpose of the 'blue box' enunciated by appellant during their meeting was to defraud the telephone company. Insco has no application to this case.
Appellant argues that the government's proof of the crime charged failed to prove what he contends to be an essential element, i.e., completion of the phone calls. We need not decide whether completion of the calls is necessary to establish a violation of the statute in question, since there is sufficient proof in the instant case that the calls were completed.
Mr. Wallace testified that each operator answering the overseas calls identified herself as the information operator in the respective foreign city called. There was no defense objection to this hearsay evidence, it being offered to prove that the calls were in fact made to those cities. Without objection at trial, we can only take note of plain error, Rule 52(b), F.R.Cr.P. The fact that the calls went to the cities stated in the indictment was proved by the data recorded by the Hekimian 51--A machine.
Appellant's final issue is likewise without merit. He claims that Lander, who cooperated with Wallace in arranging the sales meeting with appellant, was acting in violation of a Texas statute prohibiting unlicensed persons from acting as private investigators.6 The evidence shows that Lander cooperated with Wallace by informing him about the appellant's desire to sell 'blue boxes', and that he drove to San Antonio from Houston with the appellant. The record does not reveal any investigatory actions by Lander. We do not believe that the Texas statute was intended to inhibit private citizens from cooperating with public and private law enforcement officials.
The conviction and sentence appealed from are
Affirmed.
Rule 18, 5 Cir., see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir., 1970, 431 F.2d 409
Wall Street Journal, January 29, 1976, page 1
Counts I, II, and III of the indictment, respectively
This pre-arranged call was not charged in the indictment although interstate wire communication was used
It is not contested that the recording machine was being used with the consent of the owner of the apartment, an F.B.I. employee
Government Exhibit No. 9
Vernon's Tex.Rev. Civil Statutes, Art. 4413 (29bb)