Appeal from the United States District Court for the Central District of California. D.C. No. CR 90-16-JSL. J. Spencer Letts, District Judge, Presiding.
Before: J. Clifford Wallace, Chief Judge, James R. Browning, Circuit Judge, and Robert E. Jones*fn**, District Judge. Opinion by Judge Jones.
Marshall and Linda Peters appeal from the ruling of the United States District Court for the Central District of California. Marshall Peters appeals from his sentence following convictions for ten counts of mail fraud, 18 U.S.C. § 1341, and one count of using a fictitious name to carry out a scheme to defraud, 18 U.S.C. § 1342. Linda Peters appeals from her convictions of five counts of mail fraud, and from her sentence resulting from those convictions. The Peters were indicted and tried before a jury together. Their appeals are consolidated before this court.
In 1987, Marshall Peters contrived a scheme to defraud members of the public by soliciting funds for "pre-approved" credit cards from individuals having poor credit histories. In early 1988, Marshall Peters and his wife, Linda Peters, began doing business under the fictitious business name of "Credit America."
The Peters operated Credit America from their home. To facilitate the scheme, Credit America purchased a mailing list from a mailing list brokerage firm. The list was called "Credit Problem Names" and gave the names and addresses of approximately 40,000 individuals having credit difficulties. Credit America then sent solicitation letters to at least 30,000 of the individuals on the list.
The solicitation letters represented, in relevant part, the following:
CONGRATULATIONS! You have been pre-approved to receive your very own CREDIT AMERICA MasterCard. . . . We have a MasterCard reserved for you right now, but you have to . . . [complete] the enclosed pre-approved CREDIT AMERICA application, and [mail] it back to us with your annual $35.00 membership fee . . . you cannot be turned down, because you are already pre-approved. . . . There is NO CATCH! CREDIT AMERICA has made special arrangements for group approval with VISA and MasterCard, . . . Your membership is backed by a 100% MONEY BACK SATISFACTION GUARANTEE, . . . your have nothing to lose, and everything to gain. To receive your CREDIT AMERICA MasterCard with NO CREDIT CHECK and NO SECURITY DEPOSIT, your pre-approved application and $35.00 annual membership fee must be received by CREDIT AMERICA within the next 30 days.
The letter was signed by "Preston Roberts, Vice- President, New Accounts," and displayed the VISA and MasterCard logos. In fact, there was no "Preston Roberts," or special arrangement with either MasterCard or VISA, nor were there any pre-approved bank cards. Credit America was not authorized to use the VISA and MasterCard logos, the Credit America address was a rented mailbox, and Preston Roberts was a fictitious name conjured up by Marshall Peters. In addition, the Credit America telephone number listed on the solicitations was connected only to an answering machine.
The Peters intended the solicitation to cause the targeted individuals to send in $35.00 to join Credit America in return for the promise of a pre-approved credit card. The scheme was a success in that over 5,500 such individuals responded to the solicitations, each of them sending in $35.00 and expecting a credit card. Although some individuals received an "acknowledgment" postcard or a "Membership Handbook" from Credit America, none of the recipients of the solicitation ever received a credit card.
The Peters, however, received in excess of $200,000 from the scheme before United States Postal Service Inspectors searched their home in October of 1988. The search resulted in the seizure of approximately 3,750 opened envelopes containing credit card applications from which the $35.00 application fee had been removed. The search also produced approximately 150 unopened complaint letters, approximately 700 opened complaint letters, and several handwritten notes recording card applicants' complaints left on the answering machine.
A federal grand jury indicted the Peters in May of 1990. The indictment charged Marshall Peters and Linda Peters with fourteen counts of mail fraud and Marshall Peters with one count of using a fictitious name to carry out a scheme to defraud. Subsequently, the government filed a redacted indictment removing four counts of mail fraud from the indictment.
The Peters pled not guilty and a jury trial commenced on October 16, 1990. The jury returned a verdict convicting Marshall Peters of ten counts of mail fraud and one count of using a fictitious name to carry out a scheme to defraud. The jury convicted Linda Peters of five counts of mail fraud, while acquitting her on five counts.
The district court Judge sentenced the Peters as follows:
1) Marshall Peters to 46 months imprisonment, followed by three years of supervised release, based on the following:
a) Base offense level for crimes
of fraud and deceit, § 2F1.1(a) 6
b) Amount of loss between $200,001 and
$500,000, § 2F1.1(b)(1)(H)
c) Offense involved more than minimal
planning and/or more than one victim,
d) Defendant knew or should ...