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United States v. Bruchhausen

United States Court of Appeals for the Ninth Circuit

March 6, 1992 1 , Submitted, Pasadena, California; October 5, 1992, Filed

No. 87-5143

Opinion

 [*466]  OPINION

CANBY, Circuit Judge:

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 [**2]  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 to freight forwarders and to United States Customs. Bruchhausen believed that this method would reduce the likelihood that officials would search the crates.

In addition, agents mischaracterized the shipments when preparing Shipper's Export Declarations. For example, they would label shipments of computers and military communications equipment as "electrical" or "meters." Further, Bruchhausen instructed them not to apply for export licenses in order to limit Customs' control over the shipments. Throughout the deception, Bruchhausen relied on telex machines to communicate with these agents.

On August 19, 1981,  [**3]  a federal grand jury indicted Bruchhausen and his confederates for offenses ranging from tax evasion to export violations. During the next four years, Bruchhausen eluded authorities. On May 8, 1985, however, British authorities apprehended him. He was extradited to the United States.

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977 F.2d 464 *; 1992 U.S. App. LEXIS 24725 **; 92 Cal. Daily Op. Service 8273; 92 Daily Journal DAR 13601

United States of America, Plaintiff-Appellee, v. Werner Bruchhausen, Defendant-Appellant.

Prior History:  [**1]  Appeal from the United States District Court for the Central District of California. D.C. No. CR-85-0562-AHS. Alicemarie H. Stotler, District Judge, Presiding.

CORE TERMS

manufacturers, wire fraud, products, defrauded, indictment, intangible, fair market value, mail fraud, rights

Criminal Law & Procedure, Fraud, Wire Fraud, Elements, General Overview, Accessories, Aiding & Abetting, Acts & Mental States, Mens Rea, Willfulness, Fraud Against the Government, Mail Fraud