770 F.

2d 393

UNITED STATES of America, Appellee,

v.
Fred E. SNOWDEN, Appellant.
UNITED STATES of America, Appellee,
v.
Calvin D. BOATWRIGHT, Appellant.
UNITED STATES of America, Appellee,
v.
John C. BOATWRIGHT, Appellant.
Nos. 84-5061 to 84-5063.

United States Court of Appeals,

Fourth Circuit.
Argued Feb. 8, 1985.
Decided Aug. 12, 1985.
1

Daniel F. Goldstein, Baltimore, Md. (Brown & Goldstein, Baltimore, Md., on

brief), for appellant Snowden.

Alan I. Baron, Baltimore, Md. (Finley, Kumble, Wagner, Heine, Underberg &
Casey, Washington, D.C., on brief), for appellant Calvin D. Boatwright.

Thomas Dyson, Washington, D.C., for appellant John C. Boatwright.

Michael Schatzow, Asst. U.S. Atty., Baltimore, Md. (J. Frederick Motz, U.S.
Atty., Baltimore, Md., on brief), for appellee.

Before WIDENER and ERVIN, Circuit Judges, and BOYLE, * District judge.
TERRENCE WILLIAM BOYLE, District Judge:

On November 21, 1983, a jury found the three defendants guilty of various
counts of mail fraud and found the defendant Snowden guilty of three counts of
tax evasion. The charges arose from a kickback scheme in which construction
managers of a church's building project paid about $80,000 to a minister of the

church who was serving as business manager. The defendants appeal, arguing
that their gifts were love offerings to a minister and their conduct was protected
by the religion clauses of the First Amendment. They argue that there was an
insufficient nexus between the mailings and the fraud. They also allege several
evidentiary errors and raise the statute of limitations as a defense. Finding no
error, we affirm their convictions.
I.
7

In 1977 the Riverdale Baptist Church of Largo, Maryland, retained Church

Enterprises, Inc., a company then owned and operated by John C. Boatwright
and Calvin D. Boatwright, to supervise the construction of a church building.
The Boatwrights received a ten percent commission on the construction. From
1977 through 1979, while the church was under construction, the Boatwrights
paid the Reverend Fred Snowden, who served as business manager of the
church, about $80,000 in kickbacks. They drew checks from their personal
accounts and from accounts in the names of various companies they owned.
They made the checks payable to Snowden and he deposited them into his
personal checking account.

In calendar year 1977, the Boatwrights received $284,792.94 in Church funds,

and paid $47,525 to Snowden. Snowden's salary that year from the church was
$12,710.25. In 1978 the Boatwrights and their companies received $110,085.50
from the Church construction, and paid $18,905 to Snowden. Snowden's salary
in 1978 from the church was $13,000. In 1979 the Boatwrights and their
companies received $32,468.50 from the Church construction, and paid
$15,459.50 to Snowden. Snowden's salary in 1979 from the church was
$13,000. Snowden asked for at least five percent of the Boatwrights' fee to
insure his good will. He also asked for and received payments from the
Boatwrights' profits on equipment they rented to the church.

Neither Snowden nor the Boatwrights disclosed their financial relationship until
a Church investigating committee confronted them well after the completion of
the construction. There was evidence that this undisclosed relationship between
the defendants operated to the financial detriment of the church and that had
they known of the relationship, church officials would not have approved it.

10

The appellants argue that the District Court erroneously failed to dismiss the
mail fraud counts on First Amendment grounds. First, they argue that charging
Snowden with mail fraud for failing to disclose to the church the payments
from the Boatwrights poses an impermissible risk of entangling the government
in internal church affairs. Second, they argue that application of the mail fraud

statute to the defendants' conduct will chill other ministers' legitimate conduct
protected by the First Amendment. Third, they argue that absent specific
congressional intent, the statute should not be applied to internal church
matters.
11

On appeal, the defendants do not contest the jury's finding that this kickback
scheme was not a series of legitimate love offerings to a minister of the Gospel.
Indeed, the notations on the checks belie any such conclusion. The defendants
seem to argue that because the victim of this scheme was a church, the First
Amendment exempts them from criminal prosecution. This court will not
accept such argument.

12

The Free Exercise clause of the First Amendment is to be used as a shield to

protect persons in the free exercise of their religion. Here the defendants seek to
use the clause as a sword against the victim, the church. Under the defendants'
theory the church would be stripped of the law's protection.

13

The defendants rely on NLRB v. Bishop of Chicago, 440 U.S. 490, 99 S.Ct.
1313, 59 L.Ed.2d 533 (1979), but the facts of Bishop of Chicago, are quite
distinguishable from the facts of this case. The chief distinction is that the
Catholic Bishop argued that application of the NLRA to his school interfered
with his control and direction of the schools' religious teaching, whereas the
appellants here make no claim that their criminal prosecutions interfered with
the religious activities of Snowden or the Riverdale Baptist Church. While it is
true that "an Act of Congress ought not be construed to violate the Constitution
if any other possible construction remains available," id. at 500, 99 S.Ct. at
1318, application of the mail fraud statute to the conduct of these defendants
simply does not violate the Constitution.

14

A second difference is that the church in Bishop of Chicago objected to the

governmental interference. In this case the church welcomed the protection of
the government's investigation.

15

In fact the defendants do not argue that application of the statute to these
defendants infringed their free exercise rights or entangled the government in
the internal affairs of this church. Instead, they argue that application of the
statute here poses a substantial risk of excessive entanglement and a potential
for chilling legitimate, protected church administrative decisions.

16

The First Amendment rights of these defendants are not involved in this case,
and this court will not address the effect of this statute on the rights of potential

litigants. Nor can these defendants assert the rights of Riverdale Baptist Church.
Constitutional rights are not fungible commodities to be bartered among
interested bystanders, United States v. Raines, 362 U.S. 17, 80 S.Ct. 519, 4
L.Ed.2d 524 (1960).
II.
17

The defendant Snowden asked that if his mail fraud convictions were
overturned on First Amendment grounds, his tax evasion convictions be
overturned on that basis, too. Since this court has determined that the First
Amendment is not involved in this case, this argument needs no attention.

III.
18

An officer of the bank providing construction financing for the church testified
that about one million dollars was missing from the construction funds. The
testimony was unexpected and following it the judge excused the jury from the
courtroom.

19

When the jury returned, the judge ordered the testimony stricken and instructed
the jury to disregard it because the witness did not have "sufficient
[information] to enable him to make those statements and those opinions."
Defense counsel did not object to this instruction or request any additional
instruction.

20

The defendants argue that the testimony, in effect, charged them with
embezzling one million dollars, an act not charged in the indictment.

21

Assuming arguendo that the testimony was not proper, when it is considered in
light of all the surrounding circumstances, including the fact that it was stricken
and the jury was instructed to disregard it, it did not result in any impermissible
prejudice to the defendants and its treatment by the trial court was not
reversible error. This series of events did not warrant a mistrial.

IV.
22

Snowden next assigns as error the exclusion of statements of other ministers

about money offerings by John Boatwright to them. The largest was $2450
under materially different circumstances. The judge properly excluded this
testimony which was offered under Rule 404(b) Fed.R.Evid. It fails, if for no
other reason, on relevance.

V.
23

The government introduced the workpapers for Calvin Boatwright's 1977 tax
return and John Boatwright's 1976, 1977, 1978 and 1979 returns. Those
workpapers, in conjunction with the testimony of the tax return preparers,
revealed that every relevant check to Snowden, except one, was claimed by the
Boatwrights as a business expense deduction and not as a charitable
contribution. The witness who prepared John Boatwright's returns had never
heard the term "love offering" until moments before entering the courtroom on
the day she testified. Counsel for Snowden did not object to its admission or to
the limiting instruction given by the court. Admission of the returns was not
plain error.

VI.
24

When the Church began to receive funds from its construction lender in early
1978, Snowden and the Boatwrights prepared a monthly certificate and
application for payments. These documents reflected the status of performance
on the construction project and were used by the architect, the engineer, the
lender and others to gauge the progress of the work. The defendants prepared
these documents and intended that the construction lender rely on them to
advance money for the project. The defendants knew that these documents
would be transmitted by mail. Based on these documents the construction
lender advanced funds for the project.

25

The defendants moved for judgment of acquittal claiming there was an

insufficient nexus between the mailings and the scheme. The Supreme Court
has stated that the mail fraud statute was not designed to reach all frauds "but
only those limited instances in which the use of the mails is a part of the
execution of the fraud, leaving all other cases to be dealt with by appropriate
state law." Kann v. United States, 323 U.S. 88, 94, 65 S.Ct. 148, 150, 89 L.Ed.
88 (1944). Again, in United States v. Maze, 414 U.S. 395, 402, 405, 94 S.Ct.
645, 649, 651, 38 L.Ed.2d 603 (1974) the Court stated:

26

Congress could have drafted the mail fraud statute so as to require only that the
mails be in fact used as a result of the fraudulent scheme. But it did not do this;
instead it required that the use of the mails be "for the purpose of executing
such scheme or artifice...."

27

Since the jury convicted the defendants of mail fraud, this court must consider
the evidence in the light most favorable to the government. Jackson v. Virginia,

443 U.S. 307, 399, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979). The question
is whether the jury could have reasonably concluded that the mailings were for
the purpose of executing the scheme.
28

The court is satisfied that these mailings furthered the scheme. The mails were
"used prior to, and as one step toward, the receipt of the fruits of the fraud."
Kann v. United States, 323 U.S. 88, 94, 65 S.Ct. 148, 150, 89 L.Ed. 88 (1944).
It is not necessary that the scheme contemplate the use of mails as an essential
element. United States v. Young, 232 U.S. 155, 34 S.Ct. 303, 58 L.Ed. 548
(1914); Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362, 98 L.Ed. 435
(1954).

29

The court is also satisfied that the defendants "caused" the mailing. "Where one
does an act with knowledge that the use of the mails will follow in the ordinary
course of business, or where such use can reasonably be foreseen, even though
not actually intended then he 'causes' the mails to be used." Pereira, 347 U.S. at
8-9, 74 S.Ct. at 362-363. The mailing of these reports form the basis for counts
one through six of the indictment. The court finds a sufficient nexus between
the mailings and the fraud.

30

Counts 7 and 8 involve a scheme by the defendants to swindle $64,000 from a

businessman under the guise of borrowing this money as a part of the church
construction financing. The defendant Snowden altered a resolution of the
church trustees and mailed the businessman copies of fictitious letters
concerning the permanent lender's escrow requirements. A portion of the
money, thus obtained, was paid out among the defendants. The evidence was
ample to support conviction on these counts.

31

Lulling letters sent to innocent victims for the purpose of advancing a

fraudulent and criminal scheme are sufficient to charge mail fraud, even where
the letters follow the acquisition of the money in question. United States v.
Sampson, 371 U.S. 75, 83 S.Ct. 173, 9 L.Ed.2d 136 (1962); United States v.
Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974).

VII.
32

The defendants argue that the first three counts of the superseding indictment
allege charges barred by the five-year statute of limitations. The superseding
indictment deleted the title "Rev." from the defendant Snowden's name (at the
defendants' request) and included the word "undisclosed" to describe the
relationship between the defendants. These changes are trivial or innocuous and

the superseding indictment relates back to the date of original indictment.

United States v. Grady, 544 F.2d 598 (2nd Cir.1976); United States v.
Friedman, 649 F.2d 199 (3rd Cir.1981).
33

Because the defendants' trial was without prejudicial error, the judgment of the
district court is AFFIRMED.
ERVIN, Circuit Judge, concurring:

34

While I agree with the result reached by the majority opinion and accept much
of its reasoning, I write separately to voice my view that the majority is
incorrect in stating that the appellants' first amendment rights are not implicated
on the facts in this case. Instead, I believe that these first amendment rights are
involved, but have not been violated here.

35

The Supreme Court has long held that the freedom of one's beliefs is absolutely
protected by the first amendment. Cantwell v. Connecticut, 310 U.S. 296, 303,
60 S.Ct. 900, 903, 84 L.Ed. 1213 (1940). However, the Court has also
recognized that "however free the exercise of religion may be, it must be
subordinate to the criminal laws of [our] country." Davis v. Beason, 133 U.S.
333, 342-343, 10 S.Ct. 299, 300-301, 33 L.Ed. 637 (1890). Consequently, "the
First Amendment does not insulate a church or its members from judicial
inquiry when a charge is made that their activities violate a penal statute."
United States v. Moon, 718 F.2d 1210, 1227 (2d Cir.1983), cert. denied, --U.S. ----, 104 S.Ct. 2344, 80 L.Ed.2d 818 (1984).

36

To convict Snowden and and the Boatwrights of mail fraud in this case, the
jury had to conclude that these appellants possessed the specific intent to
defraud the church congregation. To this end, the district court properly
permitted the jury to determine whether Snowden and the Boatwrights intended
their payments to be as "love offerings" under Baptist church doctrine or as
"kickbacks" in a scheme to defraud the church. Such an inquiry is proper under
first amendment analysis since, "although the validity of religious beliefs
cannot be questioned, the sincerity of the person claiming to hold such beliefs
can be examined." United States v. Rasheed, 663 F.2d 843, 847 (9th Cir.1981),
cert. denied, 454 U.S. 1157, 102 S.Ct. 1031, 71 L.Ed.2d 315 (1982); see United
States v. Seeger, 380 U.S. 163, 85 S.Ct. 850, 13 L.Ed.2d 733 (1965). Since the
jury concluded that these payments were "kickbacks" and not "love offerings",
the mail fraud convictions of Snowden and the Boatwrights were proper and
did not violate the first amendment.

37

Unlike the majority, however, it is my view that such a first amendment

analysis is the most appropriate method of resolving this case. Otherwise, I
agree with the majority that fraudulent activity performed in the name of
religion cannot be protected by the first amendment. Cantwell, 310 U.S. at 306,
60 S.Ct. at 904.

Honorable Terrence W. Boyle, United States District Judge for the Eastern
District of North Carolina, sitting by designation