United States v. Eugene Hannigan

27 F.3d 890, 1994 U.S. App. LEXIS 15491, 1994 WL 275855

• Court: Court of Appeals for the Third Circuit
• Decided: June 23, 1994
• Docket: 93-1596
• Status: Published

Opinions

OPINION OF THE COURT

COWEN, Circuit Judge.

Eugene Hannigan appeals from his conviction for one count of mail fraud, in violation of 18 U.S.C. § 1341. Because there was insufficient evidence produced at trial that the United States mails were used to accomplish the alleged fraud, we will reverse the judgment of the district court and direct that a judgment of acquittal be entered.

I.

Hannigan was indicted on two counts of mail fraud. The jury found him guilty of Count One and not guilty of Count Two. Although Hannigan has raised numerous points on appeal, we will address only those facts and issues concerning Count One dealing with the sufficiency of evidence as to mailing.

Hannigan was the manager of an auto body shop, Park Auto Body, located in Philadelphia. Count One charged that Hannigan and David Giordano, an appraiser employed by Travelers Insurance Company (“Travelers”), submitted a fraudulent insurance claim, falsely representing that a car had been damaged by chemical emissions from a refinery, the Sun Oil Company (“Sun Oil”). The indictment charged that Giordano and Hannigan, “knowingly cause[d] to be delivered by the United States Postal Service ... a $4,001.13 check payable to. Park Auto Body on the [false] claim, from Travelers to Park Auto Body.” App. at 9.

The prosecution attempted to establish the mailing through a single witness, Cindi Skowronski, a Travelers’ claims supervisor. Since Skowronski was the only witness who testified as to the mailing, we will describe her testimony in some detail. Skowronski testified that she assisted in the processing of Sun Oil claims for Travelers, and described at trial the procedures which Travelers followed for processing these claims. She testified that after receiving notice of a claim, Travelers set up an appraisal site or sent appraisers to inspect the damage caused by emissions at the Sun Oil plant, and the appraisers brought their estimates to Travelers’ office. After Travelers set up a claim number and subfile for each claimant, it paid the claims by check, often payable to body shops or car rental companies rather than individuals.

Skowronski testified that on a daily basis, Travelers issued checks. She stated: “Within our office, there’s a person in charge of running the checks so you couldn’t input a check or — during [sic] that time. And, then once they were run off of a printer, they would then be stuffed into envelopes and mailed.” App. at 169 (emphasis added). On occasion, however, individuals would arrange to pick up a check at the Travelers office, rather than having it mailed to them. In such a situation, Ms. Skowronski testified to a different procedure:

In order for a check to be picked up at our office ... we would have to have our unit manager approve someone coming in to pick up the check for a cheek to be released to me. And, proof of that — of them approving it, would be signing the file or signing a piece of paper that was attached to the file. And, then once that was done — when you input the check on the computer, there was a little sign — a little question that said, like check attachment and you would put a yes, so that they know to give me that check. If someone came to pick it up, then I would have it already [sic] ready for them.

App. at 170.

In addition to Ms. Skowronski’s testimony — that Travelers usually mailed claim checks and that special procedures were required when someone wanted instead to pick up a cheek — the government introduced computer printouts for the Sun Oil claims. The computer printouts contained a space entitled “attachment,” in which a “Y” or “N” would be placed. Skowronski testified that a “Y” meant the check was authorized to be picked up and an “N” meant that the check was to be mailed. The computer printout for the repair claim addressed in Count One contained an “N” in the attachment column, and Skowronski testified that this indicated that the claim check was to be mailed, not picked up.

On cross examination, Hannigan’s counsel engaged in the following colloquy with Ms. Skowronski:

Q: Now, you didn’t mail the checks in this ease yourself, did you?

A: No.

Q: All right. And, you didn’t see them put into the mail yourself, did you?

A: No.

Q: And, can you tell the jury where they’re put to be mailed or who mails them?

A: No.

Q: You don’t know that?

A: I ...

Q: After they’re stuffed in an envelope, you don’t know where the envelope goes?

A: To our mail department.

Q: Your mail department. And where is your mail department?

A: At that time, it was on, like — I think we were on the seventh floor and that was, like, on the fifth floor.

Q: The fifth floor. So, you never saw them actually put in the mail or picked up in the mail, is that right?

A: No.

Q: And, someone could go to the mail department and pick one up and you would never know it even though there was supposed to be a procedure, is that correct?

A: That’s correct.

App. at 179-80. The government did not conduct redirect examination of Ms. Skow-ronski.

II.

In reviewing the verdict of the jury, we view the evidence in the light most favorable to the government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942). If there is substantial evidence to support the jury’s determination, we do not disturb the verdict although on that evidence we might not have made the same decision. Id.

Hannigan contends that his conviction cannot stand because the above evidence presented at trial was insufficient for the jury to conclude that the United States mails were used to accomplish the alleged fraud. The essential elements of an offense under 18 U.S.C. § 1341 are (1) the existence of a scheme to defraud; (2) the participation by the defendant in the particular scheme charged with the specific intent¹ to defraud; and (3) the use of the United States mails in furtherance of the fraudulent scheme. E.g., United States v. Burks, 867 F.2d 795, 797 (3d Cir.1989). In this appeal, we address only whether sufficient evidence was presented to prove the third element.

It is well-established that evidence of business practice or office custom supports a finding of the mailing element of § 1341.² Once evidence concerning office custom of mailing is presented, the prosecution need not affirmatively disprove every conceivable alternative theory as to how the specific correspondence was delivered. E.g., United States v. Matzker, 473 F.2d 408, 411 (8th Cir.1973). While the element of mailing may be proven through such circumstantial evidence, we have held that to convict under § 1341, some reference to the correspondence in question is required. Burks, 867 F.2d at 797 (“Although circumstantial evidence may be used to prove the element of mailing ... under § 1341, reliance upon inferences drawn from evidence of standard business practice without specific reference to the mailing in question is insufficient.”).

In this ease, ironically, the government met the specific reference requirement of Burks, but failed to establish that as a routine practice, the United States mails were used by Travelers. The evidence in the record provided a reference to the correspondence in question: Skowronski testified that the “N” in the attachment column of the computer printout for the repair claim addressed in Count One meant that the claim check was to be sent to the mail room. This case is therefore distinguishable from Burks, in which “no evidence was presented concerning the [relevant] correspondence specifically,” 867 F.2d at 797.³

Had the government presented some competent evidence that as a routine practice the mail room sent claims checks through the United States mail, the verdict would be sustained. However, the direct and cross examination of Skowronski reveals that she had no personal knowledge that the routine practice of Travelers was to use the United States mails. Skowronski only testified that she knew that the envelopes stuffed with the claims checks would go to the mail room. Neither she nor anyone else established what the business practice was once the envelopes went to the mail room.

The government contends that Ms. Skowronski’s testimony is adequate because it is not necessary to produce a witness who personally deposited the correspondence with the United States mails, nor is it required to have a person who was actually employed in the mail room testify as to the business custom and practice of using the United States mails. The government is correct that “[m]ailing can be prove[n] by office custom without producing as a witness the person who personally placed the letter in [the United States mails].” United States v. Joyce, 499 F.2d 9, 17 (7th Cir.), cert. denied, 419 U.S. 1031, 95 S.Ct. 512, 42 L.Ed.2d 306 (1974). The government is also right that the business practice may be established by the testimony of anyone with personal knowledge of the business custom and practice; it is not necessary that someone actually employed in the mail room establish this fact. See, e.g., id. at 15-16; Matzker, 473 F.2d at 411; 2 Jack B. Weinstein, Weinstein’s Evidence § 406[03], at 406-19 (1993) (“Proof of custom may ... be utilized even when the person who engaged in the routine practices is unavailable to testify. In cases of mailing, the absence of a requirement that the mailing clerk himself testify obviously accords with business realities.”). Nevertheless, Ms. Skowronski’s testimony indicates that she had no personal knowledge concerning the routine mailing practices of the mail room, or how mail once delivered to the mail room was thereafter forwarded to the United States mails. In fact, not a single witness with personal knowledge testified that it was the routine practice of Travelers to use the. United States mails.

Thus, the jury could only speculate what-normally happened to correspondence brought to the mail room. For example, it is quite possible that the mail room used a personal messenger or private delivery service to deliver the type of correspondence at issue here. In United States v. Hart, 693 F.2d 286 (3d Cir.1982), we found that testimony that correspondence had been “sent” was insufficient to support a mail fraud conviction, for the very reason that the word “sent” encompasses means of delivery other than United States mails. Id. at 289. Ms. Skowronski’s testimony that the envelope in question went to the mail room was tantamount to her saying that the envelope had been “sent,” because there was no testimony that the mail room as a routine practice used the United States mails for delivery, and how that was accomplished. Our holding in Hart is controlling, and we therefore conclude that the evidence is insufficient to support the verdict of conviction.

The government argues that there is other evidence in the record to support a finding that the United States mails were used. Giordano testified at trial that Hannigan informed him that Hannigan had received the check in question. The government contends that Hannigan’s statement that he received the check is evidence that it was sent through the United States mails. This argument is without merit. The government’s argument rests on the unstated false premise that if someone receives something, he must have received it through the United States mails. According to Giordano’s testimony, Hannigan never stated that he received the check in the mail — Hannigan merely stated that he received it. Since there are numerous ways to receive correspondence other than through the United States mails, Hannigan’s statement that he received the check does not support a finding of the element of mailing to convict under 18 U.S.C. § 1341.

In United States v. Dondich, 506 F.2d 1009 (9th Cir.1974), a § 1341 case with a similar factual setting to the matter presently before the court, the government argued that since most business letters in general are sent through United States mails, a trier of fact could infer that the United States mails were used, even if the prosecution presented no evidence of the custom of the particular business. Id. at 1010. The Court of Appeals for the Ninth Circuit disagreed. It held that where no evidence of custom and usage of mailing practices was presented to the trier' of fact, a conviction under § -1341 could not stand. Id.

We agree with the reasoning of the Don-dich court. Because the government presented no evidence concerning the custom and practice of Travelers in the use of the United States mails, there is a void in the government’s proof on the element of. mailing.⁴ Since there was insufficient evidence presented at trial, a retrial is precluded by the Double Jeopardy Clause of the Fifth Amendment. E.g., Burks v. United States, 437 U.S. 1, 10-18, 98 S.Ct. 2141, 2147-51, 57 L.Ed.2d 1 (1978). Accordingly, we will reverse the judgment of conviction and sentence, and remand this matter to the district court with a direction that a judgment of acquittal be entered.

1 . The specific intent element may be found from a material misstatement of fact made with reckless disregard for the truth. United States v. Boyer, 694 F.2d 58, 59-60 (3d Cir.1982).

2 . Every court of appeals to have considered the question has held that the mailing element of 18 U.S.C. § 1341 can be proven circumstantially by introducing evidence of business practice or office custom. E.g., United States v. Kelley, 929 F.2d 582, 584 (10th Cir.), cert. denied, — U.S. -, 112 S.Ct. 341, 116 L.Ed.2d 280 (1991); United States v. Metallo, 908 F.2d 795, 798 (11th Cir.1990), cert. denied, — U.S. -, 112 S.Ct. 1483, 117 L.Ed.2d 625 (1992); United States v. Doherty, 867 F.2d 47, 65 (1st Cir.), cert. denied, 492 U.S. 918, 109 S.Ct. 3243, 106 L.Ed.2d 590 (1989); United States v. Sumnicht, 823 F.2d 13, 14-15 (2d Cir.1987); United States v. Bowman, 783 F.2d 1192, 1197 (5th Cir.1986); United States v. Scott, 730 F.2d 143, 146-47 (4th Cir.), cert. denied, 469 U.S. 1075, 105 S.Ct. 572, 83 L.Ed.2d 512 (1984); United States v. Scott, 668 F.2d 384, 388 (8th Cir.1981); United States v. Dondich, 506 F.2d 1009, 1010 (9th Cir.1974); United States v. Shavin, 287 F.2d 647, 652 (7th Cir.1961); see United States v. Diggs, 613 F.2d 988, 999 & n. 59 (D.C.Cir.1979), cert. denied, 446 U.S. 982, 100 S.Ct. 2961, 64 L.Ed.2d 838 (1980); United States v. Davidson, 760 F.2d 97, 98-99 (6th Cir.1985); United States v. Stull, 521 F.2d 687, 689-90 (6th Cir.1975), cert. denied, 423 U.S. 1059, 96 S.Ct. 794, 46 L.Ed.2d 649 (1976).

3 . We have determined that this case is distinguishable from the holding in Burks, 867 F.2d 795. However, we note that the holding in Burks may have been effectively overruled by subsequent Supreme Court authority. Cf. Victor v. Nebraska, - U.S. -, -, 114 S.Ct. 1239, 1247, 127 L.Ed.2d 583 (1994). In Burks, we found that there was insufficient evidence to support the mailing element of 18 U.S.C. § 1341. We so held even though a witness testified at trial that the business entity in question used the United States mails “99 percent” of the time. 867 F.2d at 797. Despite the testimony of a 99% probability that the correspondence had been mailed, we held that without a "specific reference to the mailing in question," id., such testimony "establishes nothing more than a probability that the mails had been used,” id. (emphasis added), and we reversed the conviction. The Supreme Court's holding in Victor suggests that our holding in Burks was erroneous. In Victor, the Supreme Court held:

[T]he beyond a reasonable doubt standard is itself probabilistic. In a judicial proceeding in which there is a dispute about the facts of some earlier event, the factfinder cannot acquire unassailably accurate knowledge of what happened. Instead, all the factfinder can acquire is a belief of what probably happened.

- U.S. at -, 114 S.Ct. at 1247 (internal quotations and citation omitted) (emphasis added). Our holding in Burks also would appear to be in conflict with Supreme Court authority existing at the time Burks was decided. Cf. Turner v. United States, 396 U.S. 398, 415-17, 90 S.Ct. 642, 652, 24 L.Ed.2d 610 (1970) (holding that although some heroin is produced in this country, the vast majority of heroin is imported and hence even when judged by the beyond a reasonable doubt standard, a jury may "infer that heroin possessed in this country is a smuggled drug”); Holland v. United States, 348 U.S. 121, 140, 75 S.Ct. 127, 137-38, 99 L.Ed. 150 (1954) ("Admittedly, circumstantial evidence may in some cases point to a wholly incorrect result. Yet this is equally true of testimonial evidence. In both instances, a jury is asked to weigh the chances that the evidence correctly points to guilt against the possibility of inaccuracy or ambiguous inference. In both, the jury must use its experience with people and events in weighing the probabilities. If the jury is convinced beyond a reasonable doubt, we can require no more.” (emphasis added)). See also, e.g., United States v. Keplinger, 776 F.2d 678, 691 (7th Cir.1985) ("Since the government is under no duty, to negate all possible innocent inferences from a set of circumstantial facts, it should not be required to present proof that the custom is 'invariable.' Instead, it is sufficient to prove that mailing is the sender's regular business practice.” (citation omitted)), cert. denied, 476 U.S. 1183, 106 S.Ct. 2919, 91 L.Ed.2d 548 (1986); United States v. Miller, 676 F.2d 359, 362 (9th Cir.) (where an employee testified that all hand-delivered documents were marked "delivered,” but admitted to some exceptions, evidence that a letter was not marked "delivered” was sufficient proof that the letter had been mailed), cert. denied, 459 U.S. 856, 103 S.Ct. 126, 74 L.Ed.2d 109 (1982). In light of the above-cited authority of the Supreme Court and our sister courts of appeals, we believe it was incorrect for us in Buries to suggest that the government must prove that a business used the United States mails 100% of the time (or greater than 99% of the time) in order to establish the mailing element of 18 U.S.C. § 1341.

Although courts should carefully determine the validity of probabilistic evidence to be submitted to a jury, "overtly probabilistic evidence is no less probative of legally material facts than other types of evidence." Jonathan J. Koehler & Daniel Shaviro, Veridical Verdicts: Increasing Verdict Accuracy Through the Use of Overtly Probabilistic Evidence and Methods, 75 Cornell L.Rev. 247, 248 (1990). See, e.g., United States v. Bonds, 12 F.3d 540, 551-68 (6th Cir.1993) (allowing overtly probabilistic evidence concerning DNA profiles to be submitted to the jury); see also United States v. Chaidez, 919 F.2d 1193, 1200 (7th Cir.1990) ("All inferential processes are probabilistic.... Acknowledging the statistical nature of inferential processes may well make them more accurate."), cert. denied, 501 U.S. 1234, 111 S.Ct. 2861, 115 L.Ed.2d 1028 (1991); Branion v. Gramly, 855 F.2d 1256, 1263-64 (7th Cir.1988) ("Statistical methods, properly employed, have substantial value.... Take fingerprints[,] ... [pjroof based on genetic markers ... [and] evidence that ... the defendant’s hair matched hair found at the scene of the crime. None of these techniques leads to inaccurate verdicts or calls into question the ability of the jury to make an independent decision. Nothing about the nature of litigation in general, or the criminal process in particular, makes anathema of additional information, whether or not that knowledge has numbers attached. After all, even eyewitnesses are testifying only to probabilities (though they obscure the methods by which they generate those probabilities) — often rather lower probabilities than statistical work insists on.” (citations omitted)), cert. denied, 490 U.S. 1008, 109 S.Ct. 1645, 104 L.Ed.2d 160 (1989); see generally D.H. Kaye, The Admissibility of “Probability Evidence" in Criminal Trials — Part I, 26 Jurimetrics J. 343 (1986); D.H. Kaye, The Admissibility of “Probability Evidence" in Criminal Trials — Part II, 27 Jurimetrics J. 160 (1987). In a case such as Buries, where the testimony of “99 percent” probability posed no danger of confusing the jury with difficult probability determinations, the testimony that the U.S. mails were used "99 percent” of the time was properly submitted to the jury, the jury could have inferred a mailing from such evidence, and the conviction should have been upheld.

The fact is that the “beyond a reasonable doubt” standard does not require 100% probability (or greater than 99% probability) of guilt in order to sustain a conviction. Since unassailably accurate knowledge of any past event is impossible, requiring absolute certainty to meet the beyond a reasonable doubt standard would mean that no one could ever be convicted of any crime. In his treatment of the subject, Judge Jack Wein-stein concluded that the beyond a reasonable doubt standard most likely requires between 95-99% probability, not 100% probability. United States v. Fatico, 458 F.Supp. 388, 406, 411 (E.D.N.Y.1978), aff'd, 603 F.2d 1053 (2d Cir.1979), cert. denied, 444 U.S. 1073, 100 S.Ct. 1018 (1980). The Court of Appeals for the Seventh Circuit has suggested that beyond a reasonable doubt standard is met by 90% probability or better. Brown v. Bowen, 847 F.2d 342, 345-46 (7th Cir.1988). And Judge Richard Posner has wisely cautioned against attempting to attach any specific percentage of probability as meeting the beyond a reasonable doubt standard. United States v. Hall, 854 F.2d 1036, 1044-45 (7th Cir.1988) (Posner, J., concurring).

4 . Of course, evidence concerning the business custom of an office is not required where the government presents direct evidence that the specific article was deposited with the United States mails.