United States v. Wilford R. Gibson

Wilford R. Gibson was found guilty of violating 18 U.S.C. §§ 1341 , 1343 and 2314 (1976) — respectively, mail fraud, wire fraud, and inducing people to travel in interstate commerce for purposes of fraud. He asserts various errors. We affirm his conviction.

Background and Proceedings

In 1973, defendant incorporated Gibson Marketing International, Inc. (GMI), named himself president and chairman of that entity, and retained its entire capital stock. From its Phoenix, Arizona headquarters, GMI began a business of selling franchises and franchise distributorship rights (“area distributorships”) to fast food restaurants which it called either “Burgher Haus” or “Kelly’s Basket.”

GMI’s selling procedure was as follows. The company placed advertisements in newspapers and certain circulars for single unit franchises. Prospective investors dialed the toll free number printed in the ads and received an invitation to come to the Phoenix headquarters for a “personal interview.” At these “personal interviews,” GMI salesmen, sometimes including Gibson, urged investors to purchase “area distributorships” rather than the less expensive, single unit franchises. GMI personnel also outlined the…