## Facts

- Renee Roger Drake served as vice president responsible for day-to-day operations of Agricultural Technology International Marketing, Inc. (ATIM).
- ATIM obtained loans from the Bank of Louisburg, which later took additional collateral including a security interest in ATIM’s accounts receivable and after-acquired receivables.
- ATIM sought additional credit from the William R. Payne Company, which relied on assurances that the bank did not have a security interest in ATIM’s receivables; the Payne Company took and filed its own security interest, with Drake signing the UCC-1.
- After the Payne Company limited credit due to nonpayment, Drake sought financing from United California Factors (UCF) through factoring arrangements tied to ATIM’s receivables.
- The government’s theory was that Drake obtained advances from UCF by concealing or misrepresenting existing security interests and the status of receivables used as collateral, and used interstate wire communications in executing the plan.
- Drake and a bank officer were tried jointly on six counts of wire fraud under 18 U.S.C. § 1343; Drake was convicted on all counts, while the codefendant’s case ended in a mistrial due to a hung jury.
- At trial, Drake testified that he lacked formal business training and claimed he held a psychology degree.
- On cross-examination, the government challenged Drake’s degree claim and questioned him about records indicating he had been dismissed from a university for falsifying facts in a disciplinary investigation; Drake objected under the Federal Rules of Evidence, but the court allowed the questioning.

## Issues

1. Whether the evidence was sufficient for a reasonable jury to find beyond a reasonable doubt that Drake participated in a scheme to defraud and used interstate wire communications to further it, as required by 18 U.S.C. § 1343.
2. Whether the district court abused its discretion, or violated the Federal Rules of Evidence, by permitting cross-examination impeaching Drake’s claimed educational credentials and questioning him about a prior dismissal for dishonesty, including the use of school records.

## Decision

- The Tenth Circuit affirmed Drake’s convictions on all six wire-fraud counts.
- The court held the evidence was sufficient for a rational jury to find a scheme to defraud by misrepresentation and use of interstate wire communications to facilitate it.
- The court held the district court did not abuse its discretion in allowing cross-examination concerning Drake’s educational background and related dishonest conduct, and any prejudice did not warrant reversal.

## Legal Principles

- Wire fraud under 18 U.S.C. § 1343 requires: (1) a scheme or artifice to defraud or obtain money by false pretenses, representations, or promises; and (2) use of interstate wire communications to facilitate that scheme.
- On sufficiency review, evidence is viewed in the light most favorable to the government; the conviction stands if any rational trier of fact could find the elements beyond a reasonable doubt.
- A scheme to defraud may be proved by circumstantial evidence, including concealment or misrepresentations material to a victim’s decision to advance funds.
- A defendant who introduces background and lack-of-sophistication testimony may open the door to cross-examination testing the truth of those assertions and impeaching credibility (Rule 611(b)).
- Under Rule 608(b), specific instances of conduct probative of truthfulness may be inquired into on cross-examination, subject to the trial court’s control and Rule 403 balancing; the trial court has substantial discretion in limiting or permitting such impeachment.
- Rule 403 permits exclusion only when probative value is substantially outweighed by unfair prejudice; appellate review is for abuse of discretion.

## Conclusion

The Tenth Circuit upheld Drake’s wire-fraud convictions because the trial evidence permitted a reasonable inference that he knowingly misrepresented or concealed encumbrances on receivables to obtain factoring advances through interstate wire communications, and because the district court acted within its discretion in allowing impeachment cross-examination after Drake made his education and claimed lack of sophistication part of his defense.


United States v. Drake, 932 F.2d 861 (10th Cir. 1991)