United States v. Jackson

546 F.3d 801, 2008 U.S. App. LEXIS 21503, 2008 WL 4553061
Court of Appeals for the Seventh Circuit·Decided October 14, 2008·No. 07-1449, 07-1577·Published·Cited by 30 cases

Opinion

ROVNER, Circuit Judge.

Defendants-appellants Essie Jackson and Joe Jackson were convicted of mail fraud and conspiring to commit mail fraud along with their co-defendant, Angela Blackwell Jackson, who is not a party to this appeal. They appeal their convictions on a variety of grounds. Finding no merit in any of their challenges, we affirm.

I.

The defendants were convicted of engaging in a conspiracy to defraud insurance companies by submitting inflated claims in connection with three different motor vehicles that were stolen or damaged. In each instance, Angela Jackson (“Angela”) was the claimant as the owner of the vehicle and the insured. And in each instance, Angela represented that she had purchased the vehicle from Essie Jackson (“Essie”) and was still indebted to her for the purchase. Angela married Joe Jackson (“Joe”), Essie’s son, during the course of the conspiracy. Joe participated in the scheme by acquiring each of the vehicles in Essie’s name; Essie then sold them to Angela. Joe also supplied the receipts in support of a claim for custom rims, tires, and electronic equipment reported damaged or stolen from one of the vehicles.

The first of the three vehicles was a 1999 Ford Expedition sport utility vehicle (“SUV”). Joe Jackson purchased that vehicle on his mother’s behalf from Morgan’s Auto in Paoli, Indiana. The vehicle had been involved in an accident and was a salvage vehicle. Generally speaking, a salvage vehicle is one that previously has been damaged so extensively that it has been declared a “total loss” for insurance purposes, because the cost of repair is too high in relation to the value of the vehicle — usually around 75% or more of the vehicle’s worth — to justify paying for the *806 necessary repairs. Joe paid approximately $6,800 for the Expedition.

Following the purchase, Jeff Lee restored the vehicle with parts purchased by Joe. Lee testified that he was paid between $3,000 and $4,000 for his work, but that if the repairs had been performed in a body shop, they would have cost about $10,000. Joe testified that he put a total of $13,000 to $14,000 into the restoration of the SUV using money that his mother had given him — presumably, $10,000 for the necessary parts plus the $3,000 to $4,000 that Lee said he was paid for his labor. However, when Lee filled out the Affidavit of Restoration for a Salvage Motor Vehicle that the Indiana Bureau of Motor Vehicles (“BMV”) requires for issuance of a new title, he reported using parts worth only about $1,100. Lee testified that the rebuilt Expedition could have been worth between $18,000 and $19,000.

Essie Jackson drove the restored Expedition for one week, and then she agreed to sell the vehicle to her future daughter-in-law, purportedly for the rather substantial price of $33,000. Essie would later testify that this was a non-negotiable, “take it or leave it” price (Tr. 567) that Angela had accepted, making a down payment of $3,000 and agreeing to make monthly payments of $400 thereafter. The purchase price was close to what the Expedition would have been worth as a new and undamaged vehicle. “That was my price,” Essie testified. Tr. 588. But Terry Morgan, the salvage dealer who sold the damaged Expedition to Joe Jackson, testified that a restored salvage vehicle is typically worth 35 percent less than a comparable vehicle that was never damaged. Essie and Angela did not enter into a written purchase agreement, and Angela made the monthly payments to Essie in cash. Notably, the application for title that Angela submitted to the Indiana BMV, rather than reflecting a purchase price of $33,000, indicated that Essie had gifted the car to Angela. Angela insured the car through GoAmerica Auto Insurance (“GoAmerica”).

On September 29, 2001, Angela Jackson reported to GoAmerica that the Expedition had been stolen from a Days Inn in Hazle-wood, Missouri, near St. Louis. Angela subsequently completed an affidavit of vehicle theft indicating that she had purchased the vehicle from Essie for $33,000, had made a down payment of $3,000, was making monthly payments of $400, and that she still owed Essie $28,000 for the vehicle. In the affidavit, Angela also represented that certain electronic equipment, along with custom rims and tires, had been installed on the vehicle. She claimed a total loss in the amount of $32,750 for the stolen Expedition.

GoAmerica claims adjuster Marc Eiche-nauer handled Angela’s claim for the 1999 Expedition. On investigating the theft of the SUV, Eichenauer learned that it had been a salvage vehicle. Eichenauer subsequently took a recorded statement from Angela in which she disclaimed any knowledge at the time she purchased the vehicle from Essie that it previously had been involved in an accident.

Eichenauer also spoke with Essie Jackson about the Expedition on several occasions. Essie made slightly different statements about the vehicle on each occasion. Essie at first claimed that the Expedition had been purchased at auction for $10,500 and was in “great” condition. Tr. 164. When Eichenauer asked her whether she had bought the vehicle as a wreck, she said no, although she allowed that she had put a lot of money into the vehicle. Eiche-nauer asked Essie to provide receipts for the work she had done on the SUV along with documentation of the title transfer. But Essie told him that she could give him *807 nothing because all of the paperwork had been inside the Expedition when it was stolen. When Eichenauer spoke with Essie a second time, she said that she had paid between $15,000 and $16,000 for the SUV and had paid additional sums to have it fixed but could not recall how much.

At this point, Eichenauer, his suspicions aroused, turned the claim over to GoAmer-ica’s fraud unit. An attorney for GoAmeri-ca took a sworn statement from Angela on December 13, 2001. In her statement, Angela again represented that she had purchased the Expedition from Essie for a total of $33,000. She again indicated that she had made a down payment of $3,000 on the vehicle and had been making monthly payments to Essie on the remainder. She added that she had made both the down payment and her monthly installment payments in cash, as she did not have a checking account at that time. Angela acknowledged that at the time she acquired the Expedition from Essie, she learned that it previously had been damaged. She did not know what Essie had paid for the vehicle. Angela reported that she worked for Liberty Mutual Insurance as a customer service representative and earned approximately $700 for each two-week pay period.

The Expedition was never recovered, and GoAmerica ultimately paid Angela $21,511.25 for the loss, which it deemed to represent the fair market value of the vehicle. The company paid nothing for the electronic equipment or the custom tires and rims, as Angela lacked the requisite supplemental coverage for such items. Essie Jackson released her lien on the Expedition, and GoAmerica mailed the settlement check to Angela Jackson.

Joe Jackson used the proceeds of this check to purchase a 1999 GMC Suburban on June 13, 2002 at the Greater Kalamazoo (Michigan) Auto Auction. He paid $13,920 in cash for the vehicle, to Azteca Auto Sales. The sales invoice identified Essie Jackson as the purchaser. But Essie immediately re-sold the vehicle to Angela. This time, the two women entered into a form contract memorializing Angela’s purchase of the vehicle.

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United States v. Jackson, 546 F.3d 801, 2008 U.S. App. LEXIS 21503, 2008 WL 4553061 (7th Cir. 2008).

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