Modified, from a Ninth Circuit brief, March 1996.|
THERE WAS SUFFICIENT EVIDENCE FOR THE JURY TO CONCLUDE THAT ______
AND ___ KNEW THAT THE MAILS WOULD BE USED
At trial, the government's proof showed an agreement that
encompassed the two elements of a violation of the mail fraud
statute: "(1) existence of a scheme to defraud, and (2) 'using or
causing the use of the mails in furtherance of the scheme.'"
United States v. Stein, 37 F.3d 1407, 1408-09 (9th Cir.
1994) (quoting United States v. Lothian, 976 F.2d 1257, 1262
(9th Cir. 1992)), cert. denied, 115 S. Ct. 1170
(1995). XXXXXXX contends that there was insufficient evidence that
he and XXXX agreed to enter a scheme to defraud involving the
mails. XXXXXXX Brief at 13-17.
Nevertheless, as demonstrated above, Argument Section I, an
agreement satisfying the first element was shown. There was ample
evidence for the jury to conclude that XXXXXXX and XXXX agreed to
a scheme to defraud prospective used car purchasers such as ACS by
misrepresenting the actual mileage and value of vehicles.
Accordingly, the first element, a scheme to defraud, exists.
See United States v. Shryock, 537 F.2d 207, 209 (5th
Cir. 1976), cert. denied, 429 U.S. 1100 (1977)
(evidence in mail fraud prosecution sufficient to conclude that
manager of car dealership was engaged in scheme to deceive
prospective purchasers as to actual mileage of previously leased
To establish an agreement on the second element, that the
mails were used as part of the execution of the fraud, the
government need only establish that the mailing was "incident to an
essential part of the scheme . . . or a step in the plot."
Schmuck v. United States, 489 U.S. 705, 710-11 (1989)
(quotations omitted). The government need not establish that the
defendant himself actually made the mailing. See
id., 489 U.S. at 712; Stein, 37 F.3d at 1409.
Instead, the government satisfies its burden if it shows that the
defendant caused mailings for the purpose of executing the scheme.
Pereira v. United States, 347 U.S. 1, 8 (1954).
. . .
Both XXXXXXX and XXXX contend that the government failed to
show that any foreseeable mailing furthered the conspiracy. XXXX
argues that mailings of new titles by Arizona's DOT to ACS did not
further the scheme, because they did not affect payment for the
cars. XXXX Brief at 19-20. XXXXXXX argues that nothing was
mailed, XXXXXXX Brief at 16 and 17, and that the defendants did not
know that any mailing would occur, XXXXXXX Brief at 13. However,
these arguments must fail.
1. There was sufficient evidence for the
jury to conclude that it was reasonably foreseeable that the mails
would be used.
A defendant causes the mails to be used when he "does an act
with knowledge that the use of the mails will follow in the
ordinary course of business, or where such use can reasonably be
foreseen, even though not actually intended . . . ." United
States v. Bernhardt, 840 F.2d 1441, 1447 (9th Cir.) (quoting
Pereira, 347 U.S. at 8-9), cert. denied, 488
U.S. 954 (1988). "It is well settled . . . that so long as one
participant in a fraudulent scheme causes a use of the mails in
execution of the fraud, all other knowing participants in the
scheme are legally liable for that use of the mails.'" United
States v. Dadanian, 818 F.2d 1443, 1446 (9th Cir. 1987),
opinion modified on other grounds, 856 F.2d 1391 (9th Cir.
1988) (quoting United States v. Toney, 598 F.2d 1349, 1355
(5th Cir. 1979), cert. denied, 444 U.S. 1033 (1980)).
XXXXXXX was an experienced player in the used car industry.
He had worked in that industry for at least the five years that
Valley Motors' O'Neill had done business with him, and since he
acquired the "Discount" name in 1987 (GX 1/GER 168-76). During
this time he purchased and sold hundreds of cars (pp. 7-8,
supra). Discount sold at least 70 cars to ACS during the
period that XXXX negotiated sales with ACS (p. 14, supra).
Further, the court took judicial notice of XXXXXXX's June 1990
guilty plea to odometer tampering related charges, showing he had
been in the business before that time. (RT 662-63/GER 151-52).
XXXXXXX and XXXX were in the used car business and intimately
familiar with paperwork generated by used car purchases and sales.
Both of them filled in title paperwork and reassigned ownership to
vehicles (pp. 9-10, supra). The government introduced a
wealth of certificates of title, reassignments, and applications
for duplicate titles pertaining to the indictment cars. XXXXXXX
and XXXX completed such documents for each car to obtain new, clean
titles to carry out their scheme. Some of those documents made it
clear that DMVs would mail titles.[FN1] The government also
introduced copies of the Arizona certificates of title which call
for the "mailing address" of the owner (e.g., GX 206/GER
227), and which XXX testified Arizona had mailed to him (RT 203/GER
FN1. For example, GX 104/GER 206, a California
Application for Original Registration, asks for a "Mailing Address"
and requires certification that the "mailing address" is a "valid"
and "accurate mailing address". In addition, GX 504, 804, and
904/GER 248, 291, 309, Texas Applications for a Certified Copy of
a Texas Certificate of Title, require different fees if a title is
to be "mailed" or picked up, and note that "If the title is to be
mailed, please indicate a "CURRENT" mailing address"
(emphasis in original).
XXXXXXX and XXXX not only worked in the used car industry, but
knew which states (California and Texas) would provide titles that
not show mileage. Given their experience in the industry, and their
intimate familiarity with its paperwork, a reasonable jury could
conclude that XXXXXXX and XXXX knew that a DMV mailing would
occur as a result of their scheme when a consumer (here, ACS)
car in its home state.
Several cases have held that the foreseeability requirement
was satisfied under circumstances remarkably similar to those here.
Shryock, 537 F.2d at 209 (defendant in mail fraud
prosecution stemming from odometer rollback claimed that he did not
mail anything and that "he did not know that" state DMV would mail
anything -- defense unavailing because defendant had been in the
business for years and could reasonably foresee that mails would be
used at some point in title transfer process); United States v.
Locklear, 829 F.2d 1314, 1318 (4th Cir. 1987) (evidence that
defendant was veteran of used car business and well-acquainted with
paperwork generated by automobile sales made it reasonably
foreseeable to him that DMV would mail titles to downstream
purchaser of vehicle with rolled odometer, so defendant caused
mailing as required for mail fraud conviction); United States v.
Galloway, 664 F.2d 161, 163-65 and n.6 (7th Cir. 1981)
(reasonably foreseeable to used car wholesaler in odometer rollback
scheme that mail would be used to obtain new titles after he sold
cars with altered odometers, so title-related mailings satisfied
mail fraud element), cert. denied, 456 U.S. 1006
(1982). The Supreme Court cited all three of these cases with
approval in Schmuck, 489 U.S. at 712 (holding that mailing
by defendant's customer of title application to DMV in odometer
fraud scheme satisfied the mailing requirement). See
also United States v. Waldrop, 786 F. Supp. 1194,
1202 (M.D. Pa. 1991) (jury could find title mailings were
foreseeable to defendants who were experienced in selling used
cars), aff'd 983 F.2d 1054 (3d Cir. 1992), cert.
denied, 113 S. Ct. 2440 (1993).[FN2]
FN2. XXXXXXX relies upon United States v.
Smith, 934 F.2d 270, 273 (11th Cir. 1991), where the mailing
was not foreseeable because the company's practice of mailing
copies of its accounting drafts was "not common knowledge." But in
reaching this conclusion, the court considered a host of factors
quite different from those in this and other odometer-fraud cases.
Smith relied on testimony from the insurance agent who did
not tell the defendant that any kind of information would be sent
through the mails, the fact that the defendant was not familiar
with the operating procedures of insurance companies, trial
testimony showing that the defendant could not read, and the fact
that the government never contended that the defendant had any part
in coordinating the scheme. Id. at 272-73. Unlike the
defendant in Smith, the defendants here were familiar with
the used car industry and the paperwork associated with
Nonetheless, XXXXXXX and XXXX contend that a mailing was not
foreseeable, claiming that mailings were not feasible in their
because the mail was too slow. They point to testimony that dealers
selling vehicles used express services so that titles would change
quickly, which was a prerequisite to being paid for a car. However,
neither defendant points to a shred of evidence that any state DMV
routinely sent documents via private courier. Thus, this evidence
bearing on whether or not they could have foreseen that a consumer
obtain title via the mail, or that Arizona would mail titles to
While the defendants wanted to get titles to cars they
purchased immediately so that they could resell the vehicles and
pass title to the buyer and get paid, ACS had no similar motivation
to pay the cost of express shipments. Thus it was foreseeable that
ACS would do what it did, which is apply for Arizona titles and
simply wait for the new titles to arrive in the mail.
Shryock, 537 F.2d at 209; Locklear, 829 F.2d at 1318
Galloway, 664 F.2d at 165, n.6.
XXXXXXX argues that "the government did not introduce evidence
of even one mailed document." XXXXXXX Brief at 14. The government
introduced evidence of not one, but at least ten mailed
documents. XXX, who ran ACS, testified that he received
certificates of title from Arizona in the mail. (RT 202-03/GER
74-75). The government also introduced the ten Arizona
certificates of title XXX received. Each of these exhibits (GX
107, 206, 306, 406, 506, 606, 706, 806, 906, 1006/GER 221, 227,
234, 241, 258, 267, 283, 302, 319, 326) states: "MAILING ADDRESS"
followed by the mailing address for Arizona Checker Leasing
Corporation. Use of the mails is properly established by such
proof of mailing. See United States v. Brackenridge,
590 F.2d 810, 811 (9th Cir.), cert. denied, 440 U.S.
985 (1979); Bolen v. United States, 303 F.2d 870, 875 (9th
Cir. 1962); United States v. Metallo, 908 F.2d 795, 798
(11th Cir. 1990), cert. denied, 503 U.S. 940
FN3. Defendants mix apples and oranges in dealing
with the issue of proof of mailing through testimony of customary
mailings. XXXX cites United States v. Waymer, 55 F.3d 564,
571 (11th Cir. 1995), petition for cert. filed, 64 U.S.L.W.
3428 (U.S. Dec. 5, 1995), which quotes United States v.
Moody, 903 F.2d 321, 332 (5th Cir. 1990), (XXXX Brief at 21;
compare XXXXXXX Brief at 15) for the proposition that proof
of mailing by reference to a "usual business practice" can be cast
into doubt by testimony that the usual business practice includes
frequent use of private couriers. This is apples in a discussion
of oranges, because XXX was unequivocal in saying that Arizona
mailed him titles, and the Arizona certificates of title themselves
indicate that they were mailed. The fact that other private
entities use Federal Express has nothing to do with the usual
practice of the State of Arizona.
2. The mailings which the government relied
upon are sufficiently related to XXXXXXX's and XXXX's
Arizona mailed titles with low mileage to XXX. XXXX argues
that these mailings were not "incident to an essential part of the
scheme." XXXX Brief at 20. According to XXXX, the "scheme was
complete upon [XXXXXXX's] receipt of the payment for the delivered
cars, and XXXXXXX's receipt of the titles by Federal Express."
Id. XXXX's argument is unavailing.
The controlling case law runs squarely against XXXX's
contention. Time and again the Supreme Court and the Ninth Circuit
have rejected the proposition that the chronology of the mailings
vis-a-vis the receipt of money is the determinative factor as to
whether a mailing was in furtherance of a scheme to defraud.
See, e.g., United States v. Lane, 474 U.S.
438, 451-52 (1986); United States v. Sampson, 371 U.S. 75,
83 (1962); Stein, 37 F.3d at 1408-09; United States v.
Feldman, 853 F.2d 648, 655 (9th Cir. 1988), cert.
denied, 489 U.S. 1030 (1989); United States v.
Brutzman, 731 F.2d 1449, 1454 (9th Cir. 1984); United States
v. Miller, 676 F.2d 359, 362 (9th Cir.), cert.
denied, 459 U.S. 856 (1982); United States v. Price,
623 F.2d 587, 593 (9th Cir.), cert. denied, 449 U.S.
1016 (1980); United States v. Love, 535 F.2d 1152, 1159 (9th
Cir.), cert. denied, 429 U.S. 847 (1976). As the
Ninth Circuit observed in Love:
'[I]t is a well established principle of mail fraud law
that use of the mails after the money is obtained may nevertheless
be for the purpose of executing the fraud . . . .' There is no
rule that money must change hands after the mailing.
535 F.2d at 1159-60 (quoting United States v. Ashdown, 509
F.2d 793, 799 (5th Cir. 1975)) (internal quotation omitted).
Rather than looking to the mere chronology of when money
changed hands, the courts instead have focused upon the
relationship of the mailings to a defendant's scheme. This
approach is proper, for there is little question that mailings
occurring subsequent to a defendant's receipt of money can be as
integral to the success of the defendant's fraudulent scheme as
those that occur prior to the receipt of money. See
Sampson, 371 U.S. at 76; Feldman, 853 F.2d at 655;
Brutzman, 731 F.2d at 1454. Indeed, mailings occurring
after the receipt of goods or money may be especially pernicious
due to their potential "to lull the victims into a false sense of
security, postpone their ultimate complaint to the authorities, and
therefore make the apprehension of the defendants less likely than
if no mailings had taken place." Lane, 474 U.S. at 451-52
(quoting United States v. Maze, 414 U.S. 395, 403 (1974));
*; United States v. Jones, 712 F.2d 1316, 1320-21 (9th
Cir.), cert. denied, 464 U.S. 986 (1983) (routine
bank mailings made long after execution of fraudulent transactions
satisfied mailing element because they are designed to "reassure
the victim that all is well, discouraging him from investigating
and uncovering the fraud.").
In determining whether the mailings in question are "for the
purpose of executing the scheme," the Court examines the
relationship of the mailings to the defendant's scheme. See
Schmuck, 489 U.S. at 711-12 ("[t]he relevant question at all
times is whether the mailing is part of the execution of the scheme
as conceived by the perpetrator at the time"). So long as those
mailings can be considered to be at all related to the success of
the defendant's scheme, then the mailing is a proper predicate for
a charge of mail fraud. See Maze, 414 U.S.
401-02.Despite XXXX's arguments to the contrary, Schmuck is
controlling here. In Schmuck, the defendant was charged
with executing an odometer-fraud scheme to cheat Wisconsin retail
automobile customers who, in part, based decisions to purchase
vehicles on false low-mileage readings on odometers. Id. at
711. Schmuck sold these false, low-mileage cars to several dealers
on a consistent basis over a number of years. Id. Because
Schmuck had an on-going fraudulent venture, the Court found that a
rational jury could have concluded that the success of Schmuck's
venture depended upon his continued good reputation and relations
with the dealers. Id. at 711-12. This harmony would have
been broken if titles to the vehicles were not successfully passed
because it was discovered that the titles contained false
[W]e believe that a rational jury could have found that
the title-registration mailings were part of the execution of the
fraudulent scheme, a scheme which did not reach fruition until the
retail dealers resold the cars and effected the transfers of title.
Schmuck's scheme would have come to an abrupt halt if the dealers
either had lost faith in Schmuck or had not been able to resell the
cars obtained from him. These resales and Schmuck's relationships
with the retail dealers naturally depended on the successful
passage of title among the various parties. Thus, although the
registration-form mailings may not have contributed directly to the
duping of either the retail dealers or the customers, they were
necessary to the passage of title, which in turn was essential to
the perpetuation of Schmuck's scheme.
Id. at 712.
The facts in Schmuck are similar to those in the
instant case. XXX testified that the mileage on cars and the
titles to the cars were important to his business (RT 205-07/GER
76-78). He conducted numerous transactions with Discount,
acquiring over 70 vehicles from XXXXXXX and XXXX. (RT 251-52/GER
111-12). The harmonious relationship XXXXXXX and XXXX had with XXX
would have ended quickly if the latter knew about the fraudulent
title registration mailings. See also
Galloway, 664 F.2d at 164-65; Shryock, 537 F.2d at
XXXX attempts to distinguish Schmuck, as here ACS used
the vehicles for cabs rather than resale. This distinction is not
controlling. When XXX purchased the cars from XXXXXXX and XXXX, he
did not know that the odometers had been altered, that they
contained false low mileage, or that the titles contained false
information. He was the end-user, the unsuspecting consumer. If
he had known that the cars he was purchasing from XXXXXXX and XXXX
had altered odometers and that the titles reflected false, low
mileages, the relationship would have come to an abrupt halt. Just
as the dealers in Schmuck, XXX would have lost faith in
XXXXXXX and XXXX, and would have looked elsewhere to purchase
As the Supreme Court held in Schmuck, the mailings of
the title registration forms were essential to the continuation of
the scheme. Here, the mailings from Arizona DOT to XXX were
essential to the scheme. The titles were not useless pieces of
paper, but represented ACS's ownership of vehicles. These mailings
were sufficiently related to XXXXXXX's and XXXX's scheme.
[cited in USAM 4-8.310]