United States v. Joseph Gelb

700 F.2d 875, 1983 U.S. App. LEXIS 30484

• Court: Court of Appeals for the Second Circuit
• Decided: February 15, 1983
• Docket: 643, 644, Dockets 82-1026, 82-1264
• Status: Published

Opinions

MESKILL, Circuit Judge:

Joseph Gelb appeals from the judgment of the United States District Court for the Eastern District of New York, Mishler, J., after a jury trial convicting him of (1) maliciously damaging and destroying his business premises by means of an “explosive,” 18 U.S.C. § 844(i) (1976); (2) using an “explosive” to commit a felony, 18 U.S.C. § 844(h) (1976); and (3) eight counts of mail fraud, 18 U.S.C. §§ 1341, 1342 (1976). Gelb raises four claims on appeal, arguing that (1) uncontained gasoline is not an “explosive” or “incendiary device” within the meaning of 18 U.S.C. § 844(j) (1976); (2) the evidence submitted at trial was insufficient as a matter of law to convict him; (3) the government failed to prove an intent to defraud under 18 U.S.C. §§ 1341, 1342 (1976); and (4) the court abused its discretion when denying his Rule 33 motion for a new trial.

We find that uncontained gasoline is not an “explosive” or “incendiary device” within the meaning of 18 U.S.C. § 844(j) (1976) and therefore reverse the convictions obtained under that statute. Because the additional claims raised by the appellant lack substantial merit, we affirm the decision of the district court on the remaining counts.

BACKGROUND

Appellant Joseph Gelb owned and operated several businesses from a commercial building located at 10-12 Franklin Place in Woodmere, New York. During the evening of April 26, 1980, the Franklin Place premises were destroyed by fire. Subsequent investigations by the Nassau County Fire Marshall’s office revealed that the fire was intentionally set by use of uncontained gasoline.

Appellant Gelb was indicted and charged with one count of maliciously damaging and destroying a business premises by means of an “explosive,” 18 U.S.C. § 844(i) (1976); one count of using an “explosive” to commit a felony, 18 U.S.C. § 844(h) (1976); and eight counts of using the mails to defraud an insurance company, 18 U.S.C. §§ 1341, 1342 (1976). At trial, the government’s case was based principally on the testimony of four expert witnesses who substantially corroborated the prosecution’s theory that the Franklin Place fire was intentionally set by means of an accelerant. Two of these experts, Thomas Russo and Michael DiMarco, testified that they removed three debris samples from the fire scene shortly after the blaze, and based upon subsequent gas chromotograph testing, they detected the presence of gasoline in two of these samples. Mr. Robert Doran, a supervising fire investigator for Nassau County, testified that he examined the scene later that night, and in his expert opinion, the fire was caused by the ignition of a volatile liquid.

Additional circumstantial evidence revealed that Gelb had more than doubled his insurance coverage approximately three weeks before the blaze and that immediately after the fire had offered to sell his business for one dollar if the prospective buyer would assume his outstanding business debts. The government also showed that Gelb entered the premises shortly before the fire and that he was observed leaving the building approximately five minutes before the blaze was reported. Finally, the evidence disclosed that the appellant grossly inflated his fire loss and fabricated some losses when submitting his insurance claim.

The trial commenced on October 19,1981, and the jury returned its verdict approximately three weeks later, on November 5, 1981, finding the defendant guilty of all charges in the indictment. Gelb was sentenced on January 18,1982, to a prison term of two years on each count, sentences to run concurrently. After trial, counsel for the appellant submitted a motion pursuant to Fed.R.Crim.P. 33 asking the court to order a new trial based upon evidence allegedly discovered after trial. The district judge denied the appellant’s Rule 33 motion, and the present appeal followed.

DISCUSSION

A. Is Uncontained Gasoline an “Explosive” Within the Meaning of 18 U.S.C. § 844(j) (1976)7

The “Explosive Control Act,” which constitutes Title XI of the Organized Crime Control Act of 1970, Pub.L. No. 91-452, Title XI, § 1102(a), 84 Stat. 922, 952 (1970) (codified at 18 U.S.C. §§ 841-48 (1976)), creates a comprehensive regulatory scheme to control the flow of “explosives” travel-ling in interstate commerce. The Act also contains a strong penal section which extends federal jurisdiction to those crimes where explosives are used to damage or destroy property or to commit a felony. See 18 U.S.C. § 844(h) & (i) (1976).

“Explosives” are defined in the penal section of the Act as:

(j) For the purposes of subsections (d), (e), (f), (g), (h), and (i) of this section, the term “explosive” means gunpowders, powders used for blasting, all forms of high explosives, blasting materials, fuzes (other than electric circuit breakers), detonators, and other detonating agents, smokeless powders, other explosive or incendiary devices within the meaning of paragraph (5) of section 232 of this title, and any chemical compounds, mechanical mixture, or device that contains any oxidizing and combustible units, or other ingredients, in such proportions, quantities, or packing that ignition by fire, by friction, by concussion, by percussion, or by detonation of the compound, mixture, or device or any part thereof may cause an explosion.

18 U.S.C. § 844(j) (1976). The definition in section 232(5), which is incorporated by reference in section 844(j), further defines “explosive” to include:

(5) The term “explosive or incendiary device” means (A) dynamite and all other forms of high explosives, (B) any explosive bomb, grenade, missile, or similar device, and (C) any incendiary bomb or grenade, fire bomb, or similar device, including any device which (i) consists of or includes a breakable container including a flammable liquid or compound, and a wick composed of any material which, when ignited, is capable of igniting such flammable liquid or compound, and (ii) can be carried or thrown by one individual acting alone.

18 U.S.C. § 232(5) (1976).

The indictment charged the appellant with using an “explosive” to damage and destroy a commercial building and commit a felony in violation of 18 U.S.C. §§ 844(h) & (i) (1976). The parties concede for purposes of this appeal that the Franklin Place fire was caused by use of uncontained gasoline, an accelerant frequently used in the commission of arson. Indeed, the facts presented at trial revealed a classic case of arson, but failed to disclose any evidence of an explosion or bombing. Hence, we must determine first whether Congress intended through the Explosive Control Act to extend federal jurisdiction to those crimes involving common law arson, and more particularly whether uncontained gasoline is properly included within the statutory definition of “explosive.”

The issue presented here is not easily resolved, as evidenced by the substantial division among the federal circuit courts that have considered this question. Those circuits favoring a narrow reading explain that the Act was intended to assist federal authorities in their efforts to control the rash of “political bombings” by subversive groups in the late 1960s and was never envisaged as an anti-arson bill. See United States v. Gere, 662 F.2d 1291, 1296 (9th Cir.1981); United States v. Birchfield, 486 F.Supp. 137, 138-39 (M.D.Tenn.1980). The courts favoring a broad reading of the Act to include substances like uncontained gasoline rely on the expansive definitional language in the statute and scientific evidence showing that chemical compounds such as gasoline may cause an explosion under certain atmospheric conditions. See United States v. Agrillo-Ladlad, 675 F.2d 905, 907 (7th Cir.1982); United States v. Poulos, 667 F.2d 939, 941-42 (10th Cir.1982); United States v. Hepp, 656 F.2d 350, 352-53 (8th Cir.1981).

We are persuaded by the former view. The legislative history of the Act speaks of the dangers posed by subversive groups in the society. The perceived threat lay not so much in ideology or political objective, but rather focused on the alarming trend during the late 1960s when “selective bombing” emerged as a frequent vehicle for extreme social and political protest:

Mr.. Chairman, I am pleased that today we begin hearings on several bills designed to strengthen Federal laws against the illegal use of explosives. Last year we witnessed in this country a violent and tragic increase in bombings. Radicals from the left and from the right spread their terror throughout the land, bombing police stations, college campuses, dormitories, cafeterias, ROTC offices, high schools, antiwar coffeehouses, homes of college, administrators and teachers, homes of prosecutors, theaters, public utilities, Selective Service offices, induction centers, stores, corporate headquarters, defense plants, and Federal office buildings.

Explosives Control: Hearings on H.R. 17154, HR. 16699, H.R. 18573 Before Sub-comm. No. 5 of the House Comm, on the Judiciary (Hearings), 91st Cong., 2d Sess. 33 (1970) (remarks of Rep. McCulloch); see id. at 83 (remarks of Eugene Rossides, Asst. Sec. of Treasury), 288 (remarks of Rep. Goldwater), 296 (remarks of Rep. Wylie— “The alarming increase in the use of bombs as weapons of terror, intimidation, destruction and death is a threat to social decorum and innocent law-abiding citizens that this society can no longer tolerate.”).

As often occurs in the legislative forum, the Act appears to have been adopted specifically in response to an emerging social concern, in this case the tragedy of lost lives and damage to property caused by the bombings. See, e.g., Hearings, supra, at 129 (remarks of Hollis Dole, Asst. Sec. of Interior), 282 (remarks of Rep. Brotzman), 296 (remarks of Rep. Wylie); see also H.R. Rep. No. 1549, 91st Cong., 2d Sess. 6 (1970) (House Report), reprinted in 1970 U.S.Code Cong. & Ad.News, 4007, 4013 (“Bombings and the threat of bombings have become an ugly, recurrent incident of life in cities and on campuses throughout our Nation. The absence of any effective State or local controls clearly attest to the urgent need to enact strengthened Federal regulation of explosives.”).

The above-cited history strongly supports the view that the Act was envisaged as anti-bombing, not anti-arson, legislation. We find nothing in the language or legislative history of the Act to challenge this conclusion. Moreover, responsibility for the investigation and prosecution of crimes involving common law arson has traditionally been left to the states, and we are reminded that: “[Ujnless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance.” United States v. Bass, 404 U.S. 336, 349, 92 S.Ct. 515, 523, 30 L.Ed.2d 488 (1971).

The government would have us view the expansive language in 18 U.S.C. § 844(j) (1976) as a clear manifestation of congressional intent to include uncontained gasoline within the statutory definition of “explosive.” “Explosive” is defined in that section to include, inter alia:

[A]ny chemical compounds, mechanical mixture, or device that contains any oxidizing and combustible units, or other ingredients, in such proportions, quantities, or packing that ignition by fire, by friction, by concussion, by percussion, or by detonation of the compound, mixture, or device or any part thereof may cause an explosion.

We find this language, at best, ambiguous. The House Report provides some guidance by explaining that the section 844(j) penal definition of “explosive” was “broadened to include incendiary devices such as ‘Molotov cocktails.’ ”¹ House Report, supra, reprinted in U.S.Code Cong. & Ad.News at 4011. There is, of course, a serious qualitative difference between bombings caused by use of Molotov cocktails and the typical arson that was perpetrated here. We will not read a general anti-arson intent into legislation that was designed to eradicate the threat of bombings by subversive groups.

Finally, we take judicial notice that Congress has recently enacted legislation to meet the arson threat. See Anti-Arson Act of 1982, Pub.L. No. 97-298, 96 Stat. 1319 (1982) (Anti-Arson Act). In the Anti-Arson Act, Congress has stated unequivocally that federal authorities will henceforth share responsibility with state officials to investigate and prosecute arson crimes. See 128 Cong.Rec. 4957 (1982) (remarks of Rep. Hughes); 4958 (remarks of Rep. McClory). Congress could have accomplished this objective twelve years earlier when enacting the Explosive Control Act, but chose instead to focus on the more imminent problem of terrorist bombings. We defer to the lawmaking wisdom of the national legislature.

The convictions obtained under the Explosive Control Act, specifically counts one and five in the indictment, are hereby reversed.

B. Sufficiency of the Evidence

The appellant claims that the evidence presented at trial was insufficient as a mattér of law to sustain his convictions. Gelb specifically asserts that the' government failed to prove that he in fact set the Franklin Place fire. In view of our disposition of the preceding issue, we need not decide this question. Gelb’s claim, even if we were to consider it favorably, is relevant only insofar as it challenges the evidence relating to the “explosives” counts. The mail fraud convictions were sustained by evidence wholly independent from those facts proving the arson.

C. Mail Fraud Counts

To prove mail fraud under 18 U.S.C. §§ 1341,1342 (1976), the prosecution must show that the defendant (1) participated in a scheme to defraud; and (2) knowingly used the mails to further the scheme. See United States v. Corey, 566 F.2d 429, 430 n.2 (2d Cir.1977); United States v. Cyphers, 556 F.2d 630, 632 (2d Cir.), cert. denied, 431 U.S. 972, 97 S.Ct. 2937, 53 L.Ed.2d 1070 (1977). Proof of a fraudulent scheme requires evidence showing a specific intent to defraud. See United States v. Widgery, 636 F.2d 200, 202 (8th Cir.1980); United States v. Beecroft, 608 F.2d 753, 756-57 (9th Cir.1979).

The appellant claims that his mail fraud convictions should be reversed because the government failed to prove an intent to defraud. Gelb’s argument appears to be that even if he were to concede intentional misrepresentations in his insurance claim, no intent to defraud is shown unless the government specifically proves that his actual losses were less than the amounts to which he was lawfully entitled under the terms of his insurance policies. Gelb points out that his proof of loss claim detailed $684,000 in damages due to the fire, which was $184,000 more than his $500,000 insurance coverage. He would have us rule that unless the government proves more than $184,000 in falsely-stated losses, no conviction may be obtained under the mail fraud statute.

There is no requirement under 18 U.S.C. §§ 1341,1342 (1976) that the government prove a specific amount defrauded— the proof need only be sufficient to establish a specific intent. Moreover, specific intent need not necessarily be proved by direct evidence, but may also be inferred from the defendant’s actions and other circumstantial evidence. See United States v. Widgery, 636 F.2d at 202; United States v. Beecroft, 608 F.2d at 757. We must view the evidence in the light most favorable to the government. See Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); United States v. Candeda, 487 F.2d 1223, 1228 (2d Cir.1973), cert. denied, 415 U.S. 977, 94 S.Ct. 1563, 39 L.Ed.2d 872 (1974). On this record the jury could find that the appellant intended to defraud his insurer. The trial testimony revealed that Gelb grossly inflated losses and asked his employees to verify proof of loss forms which were wholly inaccurate. The evidence is sufficient to sustain a conviction under the mail fraud statute.

D. Rule 33 Motion

Gelb finally contends that the district court committed reversible error under Fed. R.Crim.P. 33 when it denied his motion for a new .trial. He contends that evidence discovered after trial would have substantially contributed to his defense if presented to the jury and cites four examples of this “newly discovered” evidence:

1. That Fire Investigator Robert Doran committed perjury when he testified at trial that he did not retrieve sam-

ples of debris from the fire site. The claim of perjury is that the next morning on April 27, Doran obtained such samples which “it must be presumed, upon analysis revealed no presence of gasoline.” (Aff. H 15(b)).

2. The first fireman to arrive at the premises did not detect an odor of gasoline. Doran testified that he detected an odor of gasoline some six hours after the fire started.

3. Firefighters used a power saw on the roof fueled by gasoline which could have been the source of the gasoline odor.

4. “Unassailable scientific proof, based on a recently performed series of novel experiments, that the wood debris samples recovered by insurance company investigators ... were, in fact, contaminated with gasoline at some ' point after the fire.” (Aff. $ 15(a)).

See United States v. Gelb, CR 81-00349, slip op. 1, 3-4 (E.D.N.Y. July 2, 1982) (Memorandum of Decision and Order), reprinted in Br. of Appellee, Ex. B, at 3-4.

The evidence cited by Gelb is probative, if at all, only insofar as it relates to the “explosives” charges. The mail fraud convictions were proved by evidence that is independent of the specific facts offered by Gelb. Accordingly, because we are reversing the convictions obtained under the Explosive Control Act on other grounds, there is no need to consider this Rule 33 claim.

The judgment of the district court is reversed on counts one and five. We affirm the district court’s judgment on the remaining eight counts in the indictment.

1 . Actually Molotov cocktails were already included in the definition of “explosive,” albeit by incorporation of section 232(5) by reference. The report might well have cited a better example of incendiary devices included.