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United States v. Stoneman

filed as amended april 12 1989.: March 13, 1989.

UNITED STATES OF AMERICA, APPELLEE
v.
ALAN R. STONEMAN, APPELLANT



On Appeal from the United States District Court for the Middle District of Pennsylvania, Criminal Action No. 84-00156-05.

Becker, Hutchinson and Scirica, Circuit Judges.

Author: Hutchinson

Opinion OF THE COURT*fn*

HUTCHINSON, Circuit Judge

I.

Appellant Alan R. Stoneman appeals from the United States District Court for the Middle District of Pennsylvania's order denying his petition for a writ of error coram nobis. Stoneman seeks to vacate his conviction for conspiracy under 18 U.S.C.A. § 371 (West 1966) to violate the mail fraud statute, 18 U.S.C.A. § 1341 (West 1984) and to utilize a facility of interstate commerce in violation of the Interstate Travel in Aid of Racketeering Act (Travel Act), 18 U.S.C.A. § 1952 (West 1984), based on the United States Supreme Court's recent decision in McNally v. United States,483 U.S. 350, 107 S. Ct. 2875, 97 L. Ed. 2d 292 (1987). I conclude in Part V that the district court's charge on mail fraud only required the jury to find a loss of intangible rights in order to convict, and therefore, in light of McNally, was error. However, a majority of the panel believes that, under the evidence, just as in the companion case of United States v. Asher, 854 F.2d 1483 (3d Cir. 1988), the loss of money was implicit in the intangible rights scheme. More specifically, the majority is unable to hypothesize a set of circumstances under which the jury could have found Stoneman guilty of depriving the citizens of the Commonwealth of Pennsylvania of their right to honest government (an impermissible intangible right under McNally) without also having found that Stoneman was involved in a scheme the sole purpose of which was to insure that a company known as CTA obtained a no-bid FICA recovery contract at a substantially greater cost to the Commonwealth of Pennsylvania than a contract obtained through traditional competitive bidding. The majority believes that the indictment, evidence and jury charge in this case are essentially the same as Asher, and that on the authority of Asher the conviction must be affirmed.

II.

Stoneman and others were indicted in October of 1984 by a federal grand jury and charged with conspiracy, 18 U.S.C.A. § 371, violations of the Interstate Transportation and Aid of Racketeering Act, 18 U.S.C.A. § 1952(a)(3), and mail fraud, 18 U.S.C.A. § 1341. The indictment alleged a scheme to obtain Federal Insurance Contribution Act (FICA) recovery contracts from state and local entities by bribing public officials.*fn1 Stoneman and co-defendant William T. Smith, Jr. pled not guilty and were tried before a jury. After a lengthy trial, the jury found Smith guilty of conspiracy, four counts of mail fraud and four counts of utilizing a facility of interstate commerce in aid of racketeering. The jury convicted Stoneman only of conspiracy. Both defendants were sentenced to prison terms and fined.

Smith and Stoneman appealed their convictions on numerous grounds. They did not, however, argue that the indictment or jury instructions relied on an intangible rights theory and were therefore invalid under the mail fraud statute. We affirmed their convictions in United States v. Smith, 789 F.2d 196 (3d Cir. 1986). Both defendants petitioned the Supreme Court for certiorari, which was denied. Smith v. United States, 497 U.S. 1017 (1986); Stoneman v. United States, 479 U.S. 1017, 107 S. Ct. 668(1986). After an unsuccessful motion before the district court for a new trial based on newly discovered evidence, Stoneman served his four month prison sentence and paid his $10,000 fine.

On June 24, 1987, the Supreme Court held in McNally that the mail fraud statute did not encompass a scheme to defraud which deprived the victims of their intangible right to good and honest government.*fn2 In November of 1987 Stoneman petitioned the district court for a writ of error coram nobis to vacate his conviction based on McNally. The district court denied Stoneman's petition, concluding that McNally did not apply to collateral attacks on final decisions.*fn3 In the alternative, the district court reviewed the indictment, the evidence introduced at trial and the jury instructions and concluded that the conviction was valid under McNally and our application of McNally in United States v. Piccolo, 835 F.2d 517 (3d Cir. 1987), cert. denied, 486 U.S. 1032, 108 S. Ct. 2014, 100 L. Ed. 2d 602 (1988). Stoneman now appeals.

III.

The question before us is not whether McNally is retroactive. This Court recently held that McNally applies on a collateral attack of a final conviction in United States v. Osser, 864 F.2d 1056 (3d Cir. 1988).*fn4 As in Osser, the question here is whether an error in jury instructions under McNally is a fundamental error justifying vacation of a final conviction on collateral review by issuance of a writ of error coram nobis.*fn5

Those substantive errors which result in a person's charge and conviction for something not a crime are fundamental. In determining what is not a crime, authoritative Supreme Court cases are as much a part of the law as the statute itself. Hence, when the Supreme Court decided in McNally that the statute punished only persons who caused tangible loss to victims, that requirement became a part of the definition of the crime. A person charged in an indictment that did not include a loss of tangible rights or convicted by evidence that did not show a violation is punished for something not a crime and is entitled to collateral review. If a defendant were convicted and punished "for an act that the law does not make criminal, there can be no room for doubt that such a circumstance 'inherently results in a complete miscarriage of justice' and 'present[s] exceptional circumstances' ...


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