United States v. Werner Bruchhausen

977 F.2d 464 UNITED STATES of America, Plaintiff-Appellee, v. Werner BRUCHHAUSEN, Defendant-Appellant. No. 87-5143. United States Court of Appeals, Ninth Circuit. Submitted March 6, 1992. * Decided Oct. 5, 1992. Werner J. Bruchhausen, in pro. per. William F. Fahey, Asst. U.S. Atty., Los Angeles, Cal., for plaintiff-appellee. Appeal from the United States District Court for the Central District of California. Before CANBY, KOZINSKI and FERNANDEZ, Circuit Judges. CANBY, Circuit Judge: 1 Werner J. Bruchhausen appeals his conviction for wire fraud in violation of 18 U.S.C. § 1343 and 18 U.S.C. § 2 (b). We reverse. BACKGROUND 2 This case arises out of a scheme to smuggle American technology to Soviet Bloc countries. Bruchhausen, a German citizen, engineered the effort by deceiving the United States government and manufacturers. The deception spanned more than ten years and led to the diversion of millions of dollars in equipment. 3 Bruchhausen often relied on his American agents to deal directly with the manufacturers. With Bruchhausen's blessing, these agents assured company representatives that all equipment would be used in the United States. No manufacturer was told that…

Werner J. Bruchhausen appeals his conviction for wire fraud in violation of 18 U.S.C. § 1343 and 18 U.S.C. § 2 (b). We reverse.

BACKGROUND

This case arises out of a scheme to smuggle American technology to Soviet Bloc countries. Bruchhausen, a German citizen, engineered the effort by deceiving the United States government and manufacturers. The deception spanned more than ten years and led to the diversion of millions of dollars in equipment.

Bruchhausen often relied on his American agents to deal directly with the manufacturers. With Bruchhausen’s blessing, these agents assured company representatives that all equipment would be used in the United States. No manufacturer was told that the equipment actually was going to West Germany and then on to the Soviet Bloc. Representatives from these companies testified that they would never have sold to Bruchhausen had they known the truth.

The deception also took other forms. Bruchhausen’s agents prepared two sets of invoices: one stating the shipment’s true value, and a second reflecting only ten percent of this amount. The first invoice was sent to Bruchhausen in Germany. Meanwhile, the second invoice would accompany the delivery…

concurring:

I agree with the majority that the United States was not defrauded of its property within the meaning of McNally v. United States, 483 U.S. 350 , 107 S.Ct. 2875 , 97 L.Ed.2d 292 (1987). I also agree that the right of manufacturers to make decisions based on truthful information is far too ethereal to be a property right for the purposes of the wire fraud statute. See Carpenter v. United States, 484 U.S. 19, 25 , 108 S.Ct. 316, 320 , 98 L.Ed.2d 275 (1987).

However, I do not agree that a person has not been defrauded of his property when he is induced by fraudulent representations to transfer that property to another. In reaching the contrary conclusion, the majority puts far too much weight on the fact that the defrauded companies received a monetary payment equal to the fair market value of the property.

In my opinion, at the very least ownership of a tangible object, whether it is a pen, a desk, or a piece of equipment, includes the right to retain that object and to refuse to transfer it to others. The right persists even if others are willing to pay fair market value for the object. Were it otherwise, everyone would have a private right of condemnation over the…

concurring:

Because the majority opinion and Judge Fernandez’s concurrence are entirely consistent, and each interprets the applicable law correctly, I join both.