United States v. Johnnie Traxler ( 2014 )

Case: 13-30681 Document: 00512750231 Page: 1 Date Filed: 08/28/2014
REVISED AUGUST 28, 2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 13-30681 FILED
August 22, 2014
Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
JOHNNIE TRAXLER,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of Louisiana
Before DAVIS, ELROD, and COSTA *, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
Defendant Johnnie Traxler pleaded guilty to one count of mail fraud in
violation of 18 U.S.C. § 1341 for making unauthorized purchases on her
employer’s credit cards. Traxler now appeals the district court’s denial of her
motion to dismiss the indictment for lack of jurisdiction, which she preserved.
* Judge Costa participated by designation in the oral argument of this case as a United
States District Judge for the Southern District of Texas. Since that time he has been
appointed as a Fifth Circuit Judge.
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Because the government provided sufficient evidence that Traxler used the
mails in executing her ongoing fraudulent scheme, we AFFIRM.
I.
Traxler worked as an association executive for the Northeast Louisiana
Association of Realtors (“NLAR”) from August 2008 until October 2010.
Beginning in the summer of 2009, Traxler and another employee began making
personal purchases with the NLAR’s credit cards, and opened up additional
unauthorized accounts. The NLAR apparently did not notice their activities,
and continued to receive and pay its credit card bill during this time. According
to the government, the bulk of the losses resulted from their fraudulent activity
on the NLAR’s Visa card, Sam’s Club account, and an unauthorized Home
Depot account. The government estimated that Traxler was responsible for
$66,966.25 in total losses, including a $32,585.00 loss to NLAR. At some point,
her activities were reported to the NLAR Board, which initiated an audit,
discovered the fraud, and then fired Traxler.
Traxler was charged with mail fraud in violation of 18 U.S.C. § 1341.
The indictment alleged that Traxler’s unauthorized purchases caused a Visa
card statement to be sent to the NLAR address that included a $101.43 charge
to Dish Network for service at Traxler’s residence. Traxler moved to dismiss
the indictment for lack of jurisdiction, arguing that there was no federal
jurisdiction because the mailing alleged in the indictment was a routine
statement from the credit card company and did not satisfy the 18 U.S.C.
§ 1341 mailing requirement.
The district court denied her motion, finding that the mailing alleged in
the indictment satisfied the jurisdictional requirement to support the charge
under 18 U.S.C. § 1341. Traxler then conditionally pleaded guilty to the mail
fraud count, preserving her right to appeal the denial of her motion to dismiss
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the indictment. The district court accepted Traxler’s guilty plea and sentenced
her to 15 months in prison, to be followed by a three-year term of supervised
release. Traxler was also ordered to pay $40,000 in stipulated restitution. On
appeal, Traxler challenges the district court’s denial of her motion to dismiss.
II.
Traxler argues that the district court lacked jurisdiction because she did
not use the mails to further a scheme to defraud the NLAR. See United States
v. Pepper, 51 F.3d 469, 474 (5th Cir. 1995) (explaining that “this element is the
basis of federal jurisdiction”). We review jurisdictional questions de novo.
United States v. Mills, 199 F.3d 184, 188 (5th Cir. 1999) (citing United States
v. Becerra, 155 F.3d 740, 756 (5th Cir. 1998)).
III.
To prove mail fraud under 18 U.S.C. § 1341, the government must show:
(1) a scheme to defraud; (2) the use of the mails to execute the scheme; and (3)
the specific intent to defraud. United States v. Bieganowski, 313 F.3d 264, 275
(5th Cir. 2002) (citing United States v. Peterson, 244 F.3d 385, 389 (5th Cir.
2001)). Traxler does not challenge the existence of a scheme or her intent to
commit fraud. Instead, she argues that she did not use the mails to execute
the scheme. We disagree.
In order to meet 18 U.S.C. § 1341’s jurisdictional requirement, use of the
mails “need not be an essential element of the scheme.” Schmuck v. United
States, 489 U.S. 705, 710 (1989) (citing Pereira v. United States, 347 U.S. 1, 8
(1954)). It will suffice if the mails are merely “incident to an essential part of
the scheme.” Id. The use of the mails may also be merely “a step in [the] plot.”
Id. at 711 (quoting Badders v. United States, 240 U.S. 391, 394 (1916)). In
addition, the defendant need not personally effect the mailing. It is sufficient
that the defendant “cause” the mailing, or “act with knowledge that the use of
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the mails will follow in the ordinary course of business, or where such use can
reasonably be foreseen, even though not actually intended.” Pereira, 347 U.S.
at 8–9 (quoting United States v. Kenofskey, 243 U.S. 440 (1917)).
In support of her position, Traxler relies heavily on the Supreme Court’s
decision in Parr v. United States, 363 U.S. 370 (1960). In Parr, the defendants
were school district employees who made unauthorized gasoline and oil
purchases on credit cards. Id. at 381–82. To support the mail fraud charge,
the government relied on the fact that the oil companies mailed invoices for
these unauthorized purchases to the school district, and the school district paid
the invoices by mailing checks. Id. at 382. The Supreme Court concluded that
the fraudulent scheme reached its fruition at the time the defendants received
the gasoline and other service items, and was therefore already complete before
the invoices were ever sent through the mail. Id. at 392–93. As a result, the
Supreme Court held that the mailing requirement was not met and that there
was no jurisdiction over the scheme. Traxler contents that her fraud likewise
reached its fruition at the time that she made her unauthorized purchases, and
that her scheme was therefore finished by the time the NLAR received the
credit card bills for those purchases. We recognize that there are a number of
similarities between this case and Parr. However, Parr was not the Supreme
Court’s last word on this topic.
Since Parr, the Supreme Court has addressed this jurisdictional
question several times. See Schmuck, 489 U.S. 705 (jurisdictional element
satisfied when defendant car dealer used the mails to complete the sale of
vehicles by transferring title after turning back odometers); United States v.
Maze, 414 U.S. 395 (1974) (no jurisdiction when defendant fraudulently used
credit card for food and lodging); United States v. Sampson, 371 U.S. 75 (1962)
(jurisdictional element satisfied when defendants used letter to mislead fraud
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victims into believing that their applications for loans had been accepted). Our
circuit has subsequently applied the analysis laid down in these cases in a
number of circumstances. See, e.g., United States v. Arledge, 553 F.3d 881, 891
(5th Cir. 2008); Bieganowski, 313 F.3d at 275; Mills, 199 F.3d 184; United
States v. Evans, 148 F.3d 477, 480 (5th Cir. 1998); United States v. Vonsteen,
872 F.2d 626, 627 (5th Cir. 1989), superseded on other grounds, 950 F.2d 1086
(5th Cir. 1992) (en banc).
Rather than deciding this question based solely on Parr, we must look to
our Fifth Circuit precedent interpreting Parr and the subsequent Supreme
Court cases. “It is a well-settled Fifth Circuit rule of orderliness that one panel
of our court may not overturn another panel’s decision, absent an intervening
change in the law, such as by a statutory amendment, or the Supreme Court,
or our en banc court.” Jacobs v. Nat’l Drug Intelligence Ctr., 548 F.3d 375, 378
(5th Cir. 2008) (citation omitted). “Indeed, even if a panel’s interpretation of
the law appears flawed, the rule of orderliness prevents a subsequent panel
from declaring it void.” Id.; see also McClain v. Lufkin Indus., 649 F.3d 374,
385 (5th Cir. 2011) (“This court’s rule of orderliness prevents one panel from
overruling the decision of a prior panel.”); Barber v. Johnson, 145 F.3d 234, 237
(5th Cir. 1998) (“Even if persuaded that [our prior panel opinion] is
inconsistent with [an earlier Supreme Court opinion], we may not ignore the
decision, for in this circuit one panel may not overrule the decision of a prior
panel.”); Wilson v. Taylor, 658 F.2d 1021, 1034 (5th Cir. 1981) (“It is the firm
rule of this circuit that we cannot disregard the precedent set by a prior panel,
even though we perceive error in the precedent.”). Indeed, in Jacobs, we
specifically rejected the idea that later Supreme Court and other decisions that
were not directly on point could alter the binding nature of our prior precedent.
Jacobs, 548 F.3d at 378.
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Under our post-Parr precedent, the critical question is whether Traxler’s
fraud was completed prior to the transmission of documents through the mails,
or if use of the mails was part of an ongoing scheme. While the exact
delineation between these cases remains murky, we have drawn a line between
cases involving a “one-shot” operation and “ongoing venture[s].” See id. at 189
(internal quotation marks omitted). 1 Thus, in Mills we held that the
jurisdictional requirement was met because the defendant’s scheme to
embezzle funds from his employer “involved numerous checks totaling at least
$125,000 and extended over at least thirteen months.” Id. at 189–90. We also
noted that the mail was integral to the “success of the ongoing fraudulent
venture” because it “depended upon continued harmonious relations among
Mills’s personal banks, [other financial institutions, and his employer].
Otherwise, future fraudulent checks issued pursuant to the scheme would be
dishonored and not credited to Mills’s accounts.” Id. at 190. As a result, “Mills
was not indifferent as to when the scheme was discovered or who bore the loss
because the continuation of the scheme depended upon the successful
deception of the intermediate parties.” Id.
Likewise, the indictment here charges Traxler with repeatedly making
unauthorized use of her employer’s credit cards over the course of more than a
year. The PSR estimated that Traxler’s scheme caused a loss of $66,966.25,
including a loss of $32,585.00 to her employer. Traxler did not make all of
these expenditures at once. Instead, she was able to gradually steal from the
NLAR by making multiple purchases over time. Traxler would not have been
able to continue to defraud the NLAR if her employer had not received, and
1 Although Mills addressed a wire fraud charge, we noted that “[t]he Supreme Court
has said that because the mail and wire fraud statutes share the same language in relevant
part, the same analysis applies to each” and accordingly analyzed the case under the same
case law relevant here. Mills, 199 F.3d at 188.
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paid the credit card bills. The PSR notes four separate occasions when those
bills were sent to her employer through the mail. Just as in Mills, Traxler’s
continued fraud thus depended on her employer receiving and paying the
credit card bills through the mails, so that the credit card company would not
become aware of her fraud or decline her subsequent purchases. As a result,
Traxler likewise used the mails to execute her fraud. See 18 U.S.C. § 1341.
In Mills we also distinguished cases, like the one at issue here, from
those where we have determined that the use of mails was insufficient to confer
federal jurisdiction. We explained that in Kann v. United States, 323 U.S. 88
(1944),
the Supreme Court held that where the mail fraud defendants
cashed fraudulently obtained checks and received the moneys
contemplated by the scheme such that the scheme reached fruition
before the checks were placed into the mails for collection, it was
“immaterial” to the defendants how the banks that paid or credited
the checks would collect from the drawee banks and “[i]t cannot be
said that the mailings in question were for the purpose of executing
the scheme, as the statute requires.”
Mills, 199 F.3d at 188–89 (quoting Kann, 323 U.S. at 94). Likewise, we
explained that the defendants in Maze, Parr, Evens, and Vontsteen were
unconcerned with whether anyone ever paid their unauthorized charges. Id.
at 189. By contrast, it was material to both Mills and Traxler that their
employers continue to make payments in order for their ongoing schemes to
continue. See id. at 190. Unlike the “one-off” charges in Kann, Maze, Parr,
Evens, and Vontsteen, Mills and Traxler were able to continue to take
advantage of their employers only because their unauthorized bills were
received and paid. See id. at 188–90 (distinguishing Kann, Maze, Parr, Evens,
and Vontsteen).
As the Supreme Court has noted, “[t]o be part of the execution of the
fraud, . . . the use of the mails need not be an essential element of the scheme.
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It is sufficient for the mailing to be incident to an essential part of the scheme,
or a step in [the] plot.” Schmuck, 489 U.S. at 710–11 (internal quotation marks
and citations omitted). Based on our decision in Mills, the use of the mails was
a step in Traxler’s plot to defraud her employer. Because we are bound by that
precedent, we hold that there is jurisdiction here.
IV.
Accordingly, we AFFIRM the district court.
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