Opinion
No. S3 01 Cr. 00058 (LTS)
March 18, 2003
MEMORANDUM ORDER
Defendant John Fasciana moves for a judgment of acquittal pursuant to Rule 29(a) of the Federal Rules of Criminal Procedure on Counts Two, Three, Five, Eight, Ten and Eleven of the Third Superseding Indictment (the "Indictment"). Defendant Joseph Amato moves for a judgment of acquittal with respect to Count Three of the Indictment. The Court reserved decision on the motions, which were made at the close of the Government's case and renewed at the close of all of the evidence, and submitted the entire case to the jury. The jury was thereafter discharged without returning a verdict.
Count Two of the Indictment charges Defendant Fasciana with mail fraud in connection with a letter, dated July 15, 1996, from Defendant Michael Reddy to Peter Gruenberger, Esq. Fasciana contends that there is no proof that the mails were used to transmit the July 15 letter. In addition, Fasciana argues that the Government failed to prove that EDS was the contemplated victim of the $2 million scheme to defraud charged in Count Two. Count Three charges Defendants Fasciana and Amato with mail fraud in connection with a check for $111,870 which was transmitted from EDS's office in New York to a lockbox at Wachovia Bank in North Carolina. Fasciana argues that there is no evidence that he knew that the $111,870 check had been mailed to the lockbox. Counts Five and Eleven concern charges of mail fraud and wire fraud, respectively, in connection with a scheme to defraud EDS with respect to a $5 million incentive compensation payment. Fasciana contends that there is no evidence that the transmission of certain checks with respect to Count Five, or certain documents with respect to Count Eleven, was in aid of the scheme to defraud EDS, the victim identified in the Indictment. Count Eight charges Fasciana with mail fraud in connection with certain checks allegedly mailed to Fasciana from EDS's offices. Fasciana contends that there is insufficient evidence that the mails were used to transmit the checks. Count Ten charges Fasciana with mail fraud in connection with a letter, dated December 16, 1998, demanding payment of $309,346.25 from EDS. Fasciana argues that there is no proof that the December 16, 1998 letter was transmitted through the mails.
The Court has considered thoroughly the submissions of Defendant Fasciana and the Government, and for the reasons set forth below, Defendant Fasciana's motion is granted with respect to Count Two and denied with respect to Counts Three, Five, Eight, Ten and Eleven. Defendant Amato's motion with respect to Count Three is denied.
DISCUSSION
In considering a motion for judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure, the Court views the trial evidence, as it existed at the time the motion was interposed, in the light most favorable to the Government. See United States v. Guadagna, 183 F.3d 122, 129 (2d Cir. 1999). All permissible inferences must be drawn in favor of the Government, and the Court should avoid usurping the role of the jury. Id. "[U]pon a motion for judgment of acquittal, `the Court must determine whether upon the evidence, giving full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact, a reasonable mind might fairly conclude guilt beyond a reasonable doubt.'" Id. (quotation omitted). "[I]f the court `concludes that either of the two results, a reasonable doubt or no reasonable doubt, is fairly possible, [the court] must let the jury decide the matter.'" Id. (quoting Curley v. United States, 160 F.2d 229, 233 (D.C. Cir. 1947)).
In addition, a jury is entitled to reach its verdict based "entirely on circumstantial evidence." United States v. Martinez, 54 F.3d 1040, 1042-43 (2d Cir.), cert. denied, 516 U.S. 1001 (1995). "When making a case based on circumstantial evidence, the government need not exclude every reasonable hypothesis other than that of guilt.'" United States v. Guadagna, at 130 (quoting Holland v. United States, 348 U.S. 121, 139 (1954)). A judgment of acquittal is appropriate "only if the evidence that the defendant committed the crime alleged is nonexistent or so meager that no reasonable jury could find guilt beyond a reasonable doubt.'" Guadagna, at 130 (quoting United States v. White, 673 F.2d 299, 301 (10th Cir. 1982).
In the context of a mail fraud charge, the Second Circuit articulated the Government's burden to prove that a mailing occurred in United States v. Srulowitz, 785 F.2d 382 (2d Cir. 1986) as follows:
When the government charges a defendant with mail fraud, it must at a minimum clearly and explicitly prove that the mailing occurred.' United States v. Hart, 693 F.2d 286, 289 (3d Cir. 1982). As every element of the government's case must be proven beyond a reasonable doubt, e.g., Davis v. United States, 160 U.S. 469, 487 (1895); United States v. Gjurashaj, 706 F.2d 395, 398 (2d Cir. 1983), the fact of mailing must be established beyond a mere likelihood or probability, e.g., United States v. Baker, 50 F.2d 122, 123-24 (2d Cir. 1931); United States v. Brooks, 748 F.2d 1199, 1204 (7th Cir. 1984). Use of the mail may be proven by evidence that is merely circumstantial, but only so long as the circumstances proven directly support the inference and exclude all reasonable doubt to the extent of overcoming the presumption of innocence.' Id. at 1203. The evidence of mailing may not consist merely of speculation. United States v. Scott, 730 F.2d 143, 147 (4th Cir.), cert. denied, 469 U.S. 1075 (1984); United States v. Stull, 521 F.2d 687, 690 (6th Cir. 1975), cert. denied, 423 U.S. 1059 (1976).
Id. at 386-87.
Count Two
The Government asserts in respect of Court Two, that there is sufficient circumstantial evidence in the record showing that, the letter dated July 15, 1996 from Michael Reddy to Peter Gruenberger, Esq. was mailed. Copies of the July 15, 1996 letter were found in EDS's files (Government Ex. 302(A)) and in the files of Mr. Gruenberger's firm, Weil, Gotshal Manges. (Government Ex. 302(B).) The July 15, 1996 letter is addressed to Mr. Gruenberger and includes his postal address and zip code. There is no evidence in the record indicating the manner of delivery of the July 15, 1996 letter.
Evidence that a copy of the letter was found in the respective files of EDS and Mr. Gruenberger's firm and evidence that the letter contains Mr. Gruenberger's postal address and zip code, without more, is insufficient circumstantial evidence to directly support the inference that the letter was delivered by mail where, as here, the originating location and the recipient's office are very close to one another. In Srulowitz, the Second Circuit overturned a mail fraud conviction where the letter at issue was found in the files of someone other than the addressee and that person asserted that he might have received the letter from the addressee, who, in turn asserted that if the letter had been in his files it would have arrived by mail. See United States v. Srulowitz, 785 F.2d at 387. There was no envelope, date stamp or testimony concerning the handling of the mail in Srulowitz. Id. Here, the Government has provided no envelope, date stamp, or other indication indicating how such mail was handled. The Government contends that there is no indication that the letter was delivered by messenger, but such a negative inference does not directly support an inference that the letter was mailed. See Srulowitz at 386-87. Accordingly, the Court finds that the circumstantial evidence relied on by the Government is legally insufficient to prove that the July 15, 1996 letter was mailed, and Defendant Fasciana's motion will be granted as to Count Two.
Count Three
Evidence was presented at trial showing that the $111,870 check at issue in Count Three was mailed to the lockbox in at Wachovia Bank in North Carolina. The Government and Defendants stipulated that, "[i]n the regular course of business, EDS maintains a lockbox at Wachovia Bank in North Carolina, for the purpose of receiving payments from clients for services provided by EDS." (Tr. 943.) Mr. Manupelli testified that a lockbox is "a post office box basically controlled by a bank." (Tr. 882.) He also testified that EDS had rules concerning where clients should send funds constituting payments to EDS. (Id.) Mr. Manupelli testified that business people involved in a particular transaction "were never supposed to have a check" and that "the money was sent to a lockbox in North Carolina." (Id.) When asked if he ever sent checks to the lockbox by hand delivery, Mr. Manupelli testified that "unless I am wrong and the rules changed, I think the only way you can go to a post office box is through the US mail." (Tr. 1064.) There was also testimony from which the jury could have found that Fasciana was involved in meetings concerning the receipt and handling of such payments and that Fasciana was familiar with the relevant business operations. (See Tr. 982-986, 1142-1143.) The Court finds that this circumstantial evidence is sufficient to directly support the inference that the $111,870 check was mailed to the lockbox and that it was EDS practice to send all client checks to the lockbox and persons involved in a transaction were not supposed to have checks. See United States v. Huber, 603 F.2d 387, 399 (2d Cir. 1979) (evidence of routine practice legally sufficient).
Viewing the evidence in favor of the Government and drawing all inferences in favor of the Government, the Court finds that a rational juror could conclude beyond a reasonable doubt that Defendant Fasciana knew that the mails would be used to transmit the $111,870 check to the lockbox at Wachovia Bank.
Counts Five and Eleven
The evidence presented at trial concerning the alleged fraudulent booking of claims relating to Cigna and Prudential was sufficient for a rational juror to conclude that EDS was a contemplated victim of the alleged fraud. The evidence presented included testimony and documentary evidence regarding orders from Michael Reddy to commit the fraud and subsequently to cover up the fraud (Government Exs. 138, 181), testimony by Mr. Close that fraudulent claims were printed on Cigna letterhead and signed in order to be booked, but that the claims were never sent to custodial banks. (Tr. 2402-2409.) Mr. Close also testified that Defendant's co-conspirators set a deadline established for filing fraudulent claims (Tr. 2404), and claim letters were faxed to EDS's representative on January 6, 1998, before any such claims had been submitted to any claims paying entity in order to be booked as income for 1997. (Tr. 2408-09.) The foregoing is sufficient to provide a basis for a rational juror to conclude beyond a reasonable doubt that Defendants and their alleged co-conspirators intended to defraud EDS into making the $5 million performance payment for work done on behalf of Cigna and Prudential and that EDS, rather than CIGNA, Prudential or the states to which the money should have been escheated, was the intended victim of the scheme charged in Counts Five and Eleven. See Guadagna, at 129 ("[i]ntent may be proved through circumstantial evidence").
Count Eight
Mr. Manupelli testified that he "generally used the U.S. mail" to deliver checks to Defendant Fasciana. (Tr. 1040.) He did not testify that he used alternative means of delivery in connection with this type of correspondence. The Court finds that Mr. Manupelli's testimony is sufficient to support a jury finding beyond a reasonable doubt that the checks were mailed. See United States v. Huber, 603 F.2d 387, 399 (2d Cir. 1979) (evidence that some items were hand delivered pertained to items that were not subject to the items specified in the counts at issue, thus testimony concerning ordinary practice sufficient); United States v. Fassoulis, 445 F.2d 13, 17 (2d Cir. 1971) (evidence showing that subject letters were typed in New York and received in Philadelphia, that an envelope attached to a letter indicated a private postage meter mark, and the scheme at issue involved application for fraudulent loans around the country, could lead to inference that mails were used).
Mr. Famiglietti's testimony that checks were sometimes delivered to Defendant Fasciana by courier (Tr. 1678), does not defeat Mr. Manupelli's testimony on this issue. Viewing the evidence in the light most favorable to the Government, a jury could credit Mr. Manupelli's testimony over Mr. Famiglietti's. See Guadagna, 183 F.3d at 130 ("[I]f the court `concludes that either of the two results, a reasonable doubt or no reasonable doubt, is fairly possible, [the court] must let the jury decide the matter.'"). In addition, Mr. Manupelli's testimony that he only sent checks to the lockbox by mail is consistent with his testimony that he generally sent checks to Defendant Fasciana by mail.
The cases cited by Defendants in support of their argument that there is insufficient evidence of mailing in respect of Count Eight are distinguishable on their facts from the circumstances here. In United States v. LaBarbara, 129 F.3d 81 (2d Cir. 1997), there was no evidence of general practices as to mailing the type of document in question. In United States v. Hannigan, 27 F.3d 890 (2d Cir. 1994), a witness had no knowledge of whether the items were actually mailed or the routine practice of the company from which the items in question allegedly had been mailed and thus there was no testimony that the mails were routinely used as a method of delivery. In United States v. Srulowitz, 785 F.2d 382, the court found that evidence of the mailing was based on speculation that if the document was found in the files of the recipient, than it must have been mailed. In United States v. Baker, 50 F.2d 122, there was no basis for the witnesses' testimony that he interpreted an in-stamp as indicative of a mailing where the trial included evidence that both mailed and hand-delivered mail was so stamped. In United States v. Brooks, 748 F.2d 1199, a witness who testified to reliance on a date-stamp for establishing an inference of mailing admitted that both the postal service and privately received items were stamped the same way so that the witness could not determine whether an item was mailed by looking solely at the date stamp. In this case, the Court finds that there is sufficient circumstantial evidence, viewing the evidence in the light most favorable to the Government, for a rational jury to conclude beyond a reasonable doubt that the checks which are the subject of the mail fraud charge in Count Eight were mailed.
Count Ten
Defendant Fasciana argues that, because the copy of the December 16, 1998 letter demanding payment from EDS of $309,346.25 that was received in evidence includes a hand-written note from the addressee reflecting that he received the letter on the same day as the letter was dated, it could not have been mailed. There is sufficient evidence in the record, however, for a rational juror to conclude that the December 16, 1998 letter was delivered through the mails even if it was also delivered by other means. The December 16, 1998 letter includes a reference to the Stock Purchase Agreement (Government Ex. 1), which provides that notice should be sent by mail or fax, but the letter lists fax numbers only for carbon copy recipients, not the addressee of the letter. The addressee's mailing address is listed, there is no indication that the letter itself was delivered by hand, and the letter indicates that a previous request for payment was delivered by both fax and mail. (Government Ex. 8.) With respect to Count Ten, the Court finds that there is insufficient evidence of alternative methods of delivery to foreclose a conviction based on the circumstantial evidence of mailing. Cf. United States v. LaBarbara, Jr., 129 F.3d at 84-85. Thus, viewing the evidence in the Government's favor and drawing all inferences in the Government's favor, the Court finds that a rational juror could conclude that the letter at issue in Count Ten was delivered through the mails. See Guadagna, 183 F.3d at 130 ("[I]f the court `concludes that either of the two results, a reasonable doubt or no reasonable doubt, is fairly possible, [the court] must let the jury decide the matter.'").
CONCLUSION
For the foregoing reasons, Defendant Fasciana's motion for a judgment of acquittal on Count Two of the Indictment is granted and Count Two is dismissed, Defendant Fasciana's motion for a judgment of acquittal on Counts Three, Five, Eight, Ten and Eleven of the Indictment is denied, and Defendant Amato's motion for a judgment of acquittal on Count Three of the Indictment is denied.
SO ORDERED.