## Facts

- Gee and Norris participated in an aftermarket business supplying chips, modules, and modified cable converter boxes that enabled subscribers to descramble encrypted premium cable programming without authorization or payment of additional fees.
- A cooperating witness developed the technology used to modify converters; Gee obtained and distributed the work product to Norris and other dealers.
- Norris sold the chips, modules, and modified converter boxes to home viewers, facilitating unauthorized reception of cable service.
- A federal grand jury returned a 32-count indictment charging mail fraud, wire fraud, conspiracy, and (as to Norris) multiple counts of assisting unauthorized reception of cable service.
- After trial (with two counts against Norris dismissed), the jury convicted Norris of wire fraud, mail fraud, conspiracy, and both misdemeanor and felony violations of 47 U.S.C. § 553(a)(1), and convicted Gee of wire fraud and conspiracy.
- The district court sentenced Norris to 37 months of home confinement plus monetary penalties and sentenced Gee to 37 months of imprisonment plus monetary penalties.
- Defendants appealed their convictions and sentences; the government cross-appealed the sentences.

## Issues

1. Whether the mail and wire fraud convictions could stand absent proof and allegation of a material false or misleading representation as part of the scheme.
2. Whether the evidence proved a conspiracy between Gee and Norris beyond a buyer–seller relationship, and whether failure to instruct the jury on the buyer–seller distinction was reversible error.
3. Whether the evidence was sufficient to support Norris’s convictions for assisting unauthorized reception of cable service under 47 U.S.C. § 553(a)(1).
4. Whether the district court properly applied the Sentencing Guidelines, including loss calculation and the imposition of home confinement.

## Decision

- The court reversed the mail and wire fraud convictions of both Gee and Norris.
- The court reversed the conspiracy convictions of both Gee and Norris.
- The court affirmed Norris’s convictions for assisting unauthorized reception of cable service under 47 U.S.C. § 553(a)(1).
- The court vacated Norris’s sentence and remanded for resentencing consistent with the surviving convictions and correct Guidelines application.

## Legal Principles

- Mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343) require a scheme that includes a material false or misleading representation (or equivalent deceptive conduct); economic harm alone is insufficient.
- Repeated sales and ongoing commercial dealings, even with knowledge of unlawful end use, do not by themselves establish a conspiracy; the government must prove an agreement to pursue a shared criminal objective beyond the sales relationship.
- In a case where the evidence primarily supports a buyer–seller relationship, failure to instruct the jury on the buyer–seller distinction can constitute plain error affecting the fairness of the trial.
- Liability under 47 U.S.C. § 553(a)(1) may be established by providing equipment that enables unauthorized interception or reception of cable service, without requiring proof of misrepresentation.
- When convictions are reversed, sentencing must be recalculated based on the remaining counts, and Guideline determinations (including loss and departures) must conform to applicable methodology.

## Conclusion

The Seventh Circuit set aside the fraud and conspiracy convictions because the government neither alleged nor proved a material misrepresentation and did not establish a conspiratorial agreement beyond a buyer–seller relationship, but it sustained Norris’s cable-theft convictions and required resentencing under the properly limited scope of the surviving offenses.


United States v. Gee, 226 F.3d 885 (7th Cir. 2000)