Summary
This Second Circuit opinion affirms the mail and wire fraud convictions of Patrice Runner, who operated a decades-long mass-mailing scheme selling fake psychic services and supernatural objects. Relying on the Supreme Court’s recent decision in Kousisis v. United States, the court rejects Runner’s argument that the government must prove an intent to cause actual economic harm, holding instead that fraudulent inducement to part with money satisfies the statutory requirements. The court also finds any sentencing error regarding loss calculation harmless.
Topics
Practice areas
Questions Presented
- Whether the indictment adequately alleged mail- and wire-fraud offenses without alleging an intent to cause net economic loss or the former Second Circuit intent-to-harm requirement.
- Whether the trial evidence was sufficient to establish fraudulent intent and support Runner's mail- and wire-fraud convictions.
- Whether the district court's jury instructions adequately conveyed the fraudulent-intent requirement and whether the court erred by omitting Runner's requested instructions.
- Whether the district court's calculation of more than $150 million in loss under the Sentencing Guidelines required reversal or resentencing.
- Whether the money-laundering conspiracy conviction should be reversed because it depended on the fraud convictions.
Holdings
- An indictment charging mail or wire fraud is sufficient when it alleges that the defendant used material misrepresentations to induce victims to surrender money or property; the indictment need not allege an intent to cause net economic loss.
- The evidence was sufficient to support Runner's fraud convictions because the Government proved that he intentionally advertised goods and services he did not plan to deliver and used false statements about the products, their provenance, and their purported psychic sources to induce customers to pay.
- The jury instructions adequately conveyed the fraudulent-intent requirement, and the district court did not commit reversible error by omitting Runner's requested instructions.
- Any error in the district court's calculation of the Guidelines loss was harmless and did not warrant resentencing.
- The challenge to the money-laundering conspiracy conviction failed because Runner's challenge to that conviction depended entirely on his unsuccessful challenge to the fraud convictions.
Key quotations
“Thus, contrary to cases in which we have said otherwise, “a defendant commits federal fraud whenever he uses a material misstatement to trick a victim into a contract that requires handing over her money or property.”” (at 153-54)
“Whatever one might say about advertising and offering the supernatural and whether that could constitute a fraud, a jury could easily conclude that what was advertised and sold here was intentionally false.” (at 161)
Factual background
Runner operated a mass-mailing enterprise through Direct Marketing Concepts and successor entities from the 1990s through the 2010s. The enterprise sent millions of dollars' worth of mailings falsely purporting to come from psychics and offering personalized psychic services or rare, supernatural, and valuable objects. Customers instead received generic services, no services, or inexpensive mass-produced trinkets, while the enterprise generated more than $150 million. Runner was convicted after a jury trial.
Procedural history
A grand jury indicted Runner in the Eastern District of New York. The district court denied his motion to dismiss the indictment, and a jury convicted him on fourteen counts while acquitting him on four mail-fraud counts. The district court denied his posttrial motion for acquittal or a new trial, calculated a Guidelines loss exceeding $150 million, and sentenced Runner to ten years' imprisonment followed by three years of supervised release. Runner appealed, challenging the fraud theory, the indictment, the sufficiency of the evidence, the jury instructions, and the sentencing loss calculation.