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A conviction for inducing someone to travel between states for a fraudulent purpose can stand even if the traveler was only an agent of the injured party, not the one actually cheated, the 2nd U.S. Circuit Court of Appeals has ruled. The court upheld the conviction and prison sentence of a New York man for defrauding a Tennessee pastor and his church. It agreed with two other federal appellate courts in finding that “travel by an agent satisfies the interstate travel requirement” of 18 U.S.C. 2314. U.S. v. Thomas, 02-1029. Wade Thomas was convicted by an Eastern District jury of defrauding Pastor Dannie Holmes and his Greater Hope Baptist Church in Memphis, Tenn., in 1996. Judge Reena Raggi sentenced Thomas to 51 months in prison, fined him $75,000 and ordered him to pay $100,000 in restitution. Thomas had met Holmes through Robert Mukes, the president of a management company who helped the church with its finances. In 1996, seeking to raise $1.3 million to build a “family life center” for his parishioners, Holmes asked Mukes to secure outside financing. Mukes settled on Thomas, a self-advertised financial consultant based in New York. Thomas presented a plan that supposedly entailed no risk to the church but required $100,000 up front. Holmes provided $20,000 from offerings by the congregation and $80,000 from his own personal retirement account. Thomas, federal prosecutors alleged, promptly transferred the money to his personal account and started mailing checks to family members. On appeal, Thomas challenged whether his conviction under the travel statute could stand in a situation where only Mukes, and not the pastor, had traveled to New York to discussed the fund-raising plan. Writing for the 2nd Circuit, 8th Circuit Judge John R. Gibson, sitting by designation, said the court agreed with the government that Mr. Mukes, as an agent, met the requirements of the statute. It has two elements, he wrote: � The defendant must devise a scheme to defraud a person of at least $5,000. � As a result of the scheme, a victim was induced to travel from one state to another. “Thomas concedes that the church and Pastor Holmes are victims of his scheme, as both lost money in his fraudulent investment program,” Gibson said. “However, an organization such as the church may act only through its employees and agents … and Mukes went to New York on behalf of the church.” The judge noted that the 7th and 9th circuits “have held that when an interstate traveler is an agent of the ‘person’ defrauded, whether the ‘person’ is an entity or an individual, the victim has traveled for purposes of �2314.” “We agree with our sister circuits that travel by an agent satisfies the interstate travel requirement of �2314,” he said. And although neither the 7th nor the 9th Circuit defined exactly what constitutes an agent for purposes of the statute, Gibson said Mukes, who was an “accountant, consultant and financial advisor to the church” and was paid a salary, was clearly an agent. “It was only through Mukes’s inquiries on behalf of the church that the church came into contact with Thomas,” he said. “Moreover, because of Mukes’s relationship with the church and Pastor Holmes’s lack of training in finance, Pastor Holmes relied heavily on Mukes to handle the church’s financial matters.” Thomas had also argued that Mukes did not have the authority to bind the church while discussing the proposed investment program. “However, Thomas did not know that Mukes did not have the authority to bind the church when he induced Mukes to travel to New York,” Gibson said. “Only when Thomas wanted some documents signed did Mukes inform Thomas that he ‘did not have the final say-so.’ Thus, evidence at trial would support an inference that when Thomas induced Mukes to come to New York, he thought Mukes had the authority to bind the church.” Judges Richard J. Cardamone and Robert D. Sack joined in the opinion. William M. Bloss of Jacobs, Grudberg, Belt & Dow in New Haven, Conn., represented Thomas. Assistant U.S. attorneys Barbara Underwood, Catherine L. Youssef and Peter A. Norling represented the government.

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