1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-17-1994

United States of America v. Copple, et al.

Precedential or Non-Precedential:

Docket 93-3003

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UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

_________________ 

No. 93-3003 

_________________ 

UNITED STATES OF AMERICA, 

 Appellee

v. 

COPPLE, JOHN R., an individual; 

MECHEM FINANCIAL INCORPORATED, a 

corporation, 

JOHN R. COPPLE, 

 Appellant

_________________________________________________ 

On Appeal From the United States District Court 

for the Western District of Pennsylvania 

(D.C. Criminal No. 91-00026-1E) 

_________________________________________________ 

Argued: August 27, 1993 

Before: BECKER, NYGAARD and ALITO, Circuit Judges. 

(Filed: May 17, 1994) 

 LEONARD G. AMBROSE III (Argued) 

 WILLIAM P. WEICHLER 

 Ambrose, Friedman & Weichler 

 319 West 8th Street 

 Erie, PA 16502-1495 

 

 Attorneys for Appellee

 THOMAS W. CORBETT, JR. 

 United States Attorney 

 BONNIE R. SCHLUETER (Argued) 

 Assistant U.S. Attorney 

 Office of the United States 
 Attorney 

 633 U.S. Post Office and 

 Courthouse 

 Pittsburgh, PA 15219 

 Attorneys for Appellant

_________________________ 

OPINION OF THE COURT

_________________________ 

BECKER, Circuit Judge. 

 John Copple, former President of Mechem Financial, 

Inc., ("Mechem"), an investment firm specializing in the 

management of "pre-need" funeral funds, was convicted by a jury 

of mail fraud, 18 U.S.C. §§ 1341, 1342, and income tax evasion, 

26 U.S.C. § 7201. The district court sentenced him to 71 months 

imprisonment, a $100,000 fine and three years supervised release, 

and ordered him to pay over $4 million in restitution. In this 

appeal, Copple challenges both his conviction and sentence. 

 Copple challenges his conviction on two principal 

grounds. First, he argues that the government failed to comply 

with the requirements of 26 U.S.C. § 6103(h)(5) (which requires 

the IRS to report whether a prospective juror has been the 

subject of an audit or other tax investigation) when it limited 

the scope of the investigation into the jurors' tax records to 

records since 1986. According to Copple, he is entitled to a new 

trial because the district court did not strike the entire jury 

panel after the limitation on the investigation had been 

disclosed. Reading a reasonableness limitation into the statute, 

however, we conclude that the requirements of § 6103(h)(5) were 
met in this case and that the district court did not err when it 

refused to strike the jury panel. Second, Copple argues that the 

district court abused its discretion in admitting victim impact 

testimony that was irrelevant and highly prejudicial. Although 

we agree with Copple that the admission of the victim impact 

testimony was error, we believe the error was harmless given the 

overwhelming evidence of Copple's guilt. We therefore affirm the 

conviction. 

 However, we must vacate the judgment of sentence and 

remand the case for resentencing for two reasons. First, the 

district court increased Copple's offense level four levels 

because of the amount of money involved and the large number of 

victims, which, whether viewed as an enhancement under 

§2F1.1(b)(2) or as an upward departure, was improper; second, the 

court ordered Copple to pay restitution without making the 

required findings about Copple's ability to pay. On remand, the 

district court is free to reconsider alternative grounds for 

upward departure or increase in the offense level mentioned in 

the original presentence report but not factored into the 

original sentence. It also must support any order of restitution 

with factual findings about Copple's ability to pay the order, 

the financial need of his family, and the relationship between 

the loss caused and Copple's conduct. 

I. BACKGROUND 

 Over the years a practice has developed in the funeral 

home business whereby persons who wish to rest assured that their 
funeral needs are taken care of in the event of a sudden or 

unexpected death may purchase "pre-need" funeral plans with the 

funeral director of their choice. In 1986, two Pennsylvania 

funeral directors, W. James Scott and Michael Orlando, realizing 

that many funeral directors who had sold "pre-need" funeral plans 

did not have the time or expertise to manage the plan funds, or 

to deal with the tax, accounting, and disbursement problems 

associated with the funds even when they had turned the funds 

over to conventional trust management plans, conceived of a 

business idea -- a money management firm specializing in "preneed" funeral accounts. As funeral directors themselves, 

however, Scott and Orlando lacked the expertise needed to make 

such a company successful, and hence they sought the aid of 

someone with considerable experience as an insurance agent and 

financial planner, defendant Copple. 

 Copple jumped at the chance to run a money management 

business like the one Scott and Orlando proposed. He offered to 

put up $50,000 if Scott and Orlando would contribute their 

expertise in the funeral business to the venture. They agreed, 

and Mechem was formed. Copple became president, and Scott and 

Orlando became "silent partners." Copple promised to oversee the 

investment decisions himself and to invest the money in "the 

safest place."0 

 

0Soon after the company was formed, both Scott's and Orlando's 

relationship with Copple deteriorated. Copple presented Scott 

and Orlando with bills for start-up costs. Scott countered by 

suing Copple. Orlando's response was to give up his stock in the 

company in return for a fee for consulting services. As a result 

of these disputes, Scott and Orlando ceased to have meaningful 
 Copple sold funeral directors on Mechem's services with 

promises of high yields and low risk. He directed his staff to 

tell the funeral directors that Mechem invested the "pre-need" 

funds in high yield, low risk annuities and treasury bonds. 

Mechem sent letters via the United States mail stating that the 

money had been invested with reputable insurance companies like 

John Hancock, Connecticut Mutual, New England Mutual Life, and 

others. One letter told the funeral directors that "[o]ur 

investments have been made in insurance companies, annuities, Tbills, long term municipal bond funds, short-term CD's and money 

markets. Our performance has reflected our excellent investment 

posture for the last fifteen years." 

 Copple also had Mechem send out letters representing 

that it was fidelity bonded. In particular, the letters pointed 

to a policy issued by an agent named James Domino, a bond issued 

by the Maryland Casualty Insurance Company, and certain Lloyds of 

London bond certificates. In addition, Mechem issued quarterly 

statements to the funeral directors reporting the interest that 

had accrued on their "pre-need" funds. The sales technique 

worked. Eventually, about $5 million in "pre-need" account money 

from Pennsylvania funeral directors made its way into Mechem's 

 

responsibilities at Mechem. In 1987, when an accountant reviewed 

the Mechem corporate records, the officers were listed as Copple, 

his brother Charles Copple, and G. Gustave McGovern. The records 

made no mention of Scott or Orlando having any formal association 

with the company. 
coffers. Ohio and Massachusetts funeral directors deposited an 

additional $7 million.0

 Although Mechem and Copple promised the funeral 

directors high yields and low risk, they gave them neither. 

Copple did not invest any of the money he received for Mechem in 

annuities, treasury bills or any similar investments. Mechem had 

never purchased any fidelity bond. The Maryland Casualty Bond, 

for example, was actually a general liability policy that a 

salesman had altered, at Copple's direction, to make it look like 

a fidelity or surety bond. And the quarterly reports of interest 

earned were complete fabrications. 

 Copple actually used most of the money for speculative 

investments and conspicuous personal consumption. During the 

three year life of Mechem corporation, Copple bought $5.7 million 

of rare coins, used $2.8 million to run Mechem, applied $1 

million to pay death claims, and spent about $2.5 million on 

himself. His personal expenses during the time he was running 

Mechem were lavish to say the least. They included: $228,000 for 

a building project on his home, $196,334 for furniture, $62,081 

for jewelry from Les Crago, $70,279 for jewelry from Fortunoff's, 

$398,000 for jewelry from Neiman-Marcus, $48,712 for a sable 

 

0Copple did not spend his entire time operating Mechem. He also 

acted as a financial advisor to a number of individuals. The 

three relevant to this case include: Audrey Garfield Woo, a widow 

who gave Copple $55,000 that she had inherited from her husband 

to invest for her grandchildren's education, Patrick Mastrian who 

gave Copple $50,000, and Virginia Sczepanski who gave him 

$25,000. All of this money was commingled with the Mechem "preneed" trust money. 
coat, $480,000 for gifts to his family, and a host of similar 

purchases. 

 The inevitable occurred in 1989. After rumors surfaced 

that Mechem could no longer pay the funeral expenses for the 

"pre-need" accounts and that Copple had invested all of the money 

in rare coins, the funeral directors made a run on Mechem. Many 

of the funeral directors asked Mechem to "roll-over" their funds 

into other money management companies, but Mechem no longer had 

the money to meet these demands. It filed for bankruptcy in 

1990. 

 While administering the bankruptcy, the trustee 

discovered Copple's serious mishandling of the Mechem "pre-need" 

account funds. He discovered that all but $250,000 of the 

individual "pre-need" account money that had been initially 

placed in the Mechem investment account had been transferred to 

the John R. Copple account, from which both business and personal 

disbursements were made. Some of the assets were still in 

Copple's hands. Copple turned over to the trustee the rare 

coins, which were sold at auction for $209,045. The trustee took 

control of four bank accounts which contained $68,875.73 and an 

escrow account containing $210,480.78. He also secured the 

return of a $110,000 deposit that Copple had placed at NeimanMarcus for the purchase of a 38.33 carat diamond. Most of the 

money, however, was gone. At last count, the creditors, 

including the funeral directors, will recoup about twelve cents 
on the dollar.0 The total amount of money lost by the victims 

relevant to this criminal case was $4,257,940.45. 

 On October 17, 1991 a grand jury in the Western 

District of Pennsylvania returned a 37-count indictment charging 

Copple and Mechem with mail fraud and tax evasion. Counts 1-16, 

18-27, 29-32, and 34 charged Copple and Mechem with mail fraud of 

the funeral directors. Counts 17, 28, and 33 charged Copple and 

Mechem with mail fraud of individual investors.0 Counts 35-37 

charged Copple with income tax evasion for failing to file 

returns for 1986, 1987 and 1988.0 

 After a trial lasting about a month, the jury found 

Copple guilty on all counts. On December 18, 1992, the district 

court sentenced Copple on the counts covered by the Sentencing 

Guidelines (the "Guidelines") to 71 months imprisonment, a 

$100,000 fine, and three years supervised release. He also 

ordered Copple to pay $4,257,940.45 in restitution to be made 

through the bankruptcy trustee. On the counts not covered by the 

Guidelines, the court sentenced Copple to five years imprisonment 

to be served concurrently with the Guidelines sentence. Copple 

 

0The Pennsylvania Board of Funeral Directors and the Pennsylvania 

Attorney General required the funeral directors, as a condition 

of keeping their licenses, to replace the money that had been 

taken from the "pre-need" trusts. 

0At trial, the district court granted a motion to dismiss Mechem 

from the indictment because the corporation was defunct. 

0During the three years he ran Mechem, Copple did not file any 

personal tax returns. At trial, the IRS estimated Copple's total 

tax liability to be $753,323; minus withholdings and credits, the 

IRS claimed that Copple owed taxes of $665,859 for the three 

years. 
has filed a timely appeal challenging both his conviction and 

sentence. 

II. COPPLE'S CHALLENGES TO HIS CONVICTION 

A. The 26 U.S.C. § 6103(h)(5) Claim

 The first issue we address is Copple's claim that we 

should reverse his conviction because the requirements of 

§6103(h)(5) were not met.0 Section 6103(h)(5) provides in 

relevant part: 

in connection with any judicial proceeding [related to 

tax administration] to which the United States is a 

party, the Secretary shall respond to a written inquiry 

from . . . any person (or his legal representative) who 

is a party to such proceeding as to whether an 

individual who is a prospective juror in such 

proceeding has or has not been the subject of any audit 

or other tax investigation by the Internal Revenue 

Service. The Secretary shall limit such response to an 

affirmative or negative reply to such an inquiry. 

26. U.S.C. § 6103(h)(5). 

 On July 27, 1992, about a month before jury selection, 

Copple moved pursuant to § 6103(h)(5) for disclosure of tax 

background information of prospective jurors. In its response to 

Copple's motion, the government agreed to provide the 

information, but stated that it would be virtually impossible to 

obtain tax audit information from prior to 1986. The district 

court granted Copple's motion for the § 6103(h)(5) investigation, 

 

0Our review of this issue is plenary since it requires the 

interpretation of a federal statute. See Air Courier 

Conference/Int'l Comm. v. U.S. Postal Serv., 959 F.2d 1213, 1217 

(3d Cir. 1992). 
but did not mention whether the IRS was to investigate the tax 

records of the prospective jurors for the years preceding 1986. 

 The government provided Copple with the IRS review 

indicating that none of the prospective jurors had been audited 

or investigated from 1986 to 1991, the years for which the IRS' 

records were computerized. At a hearing the day before 

commencement of trial, Copple claimed that he was entitled to the 

tax information without any limitation as to time period. The 

government responded that checking records of possible audits 

occurring before 1986 would require a manual search, which would 

take weeks, even a month, to complete. 

 Copple then claimed that he was entitled to ask on voir 

dire whether any of the prospective jurors had ever been audited 

by the IRS or whether any of the prospective jurors had ever been 

the subject of a civil or criminal tax investigation; he also 

argued that he was entitled to have the IRS verify the answers 

the jurors gave. The district court granted Copple's request for 

voir dire but declined to order the IRS to verify the jurors' 

answers. 

 On voir dire, the district court asked the prospective 

jurors: "Have you or any member of your immediate family ever 

been audited by the Internal Revenue Service?" In response to 

this question, Juror Number 7, Art Borczon stated that he had 

been audited during 1988 and 1989 (the audit for 1989 had not yet 

been resolved), that he had paid a deficiency, and that he had 

"never [been] satisfied with that." He also represented, 

however, that he could be a fair and impartial juror. Juror 
Number 45, James Henderson, also stated that he had been audited 

about 35 years earlier, but he too testified that he could be 

fair and impartial. A few other jurors responded that they had 

not been audited personally, but that members of their families 

had been.0 

 Copple did not ask that Borczon, Henderson or the other 

jurors be dismissed; instead he moved to have the entire panel 

rejected because the government had failed to comply with 

§6103(h)(5). He provided two bases for his motion. First, 

Copple argued that the investigation was inadequate because it 

only went back five years. Second, Copple argued that the 

investigation of all of the jurors was demonstrably unreliable 

because it had failed to disclose Borczon's audits occurring 

within the five year period. 

 The district court, however, denied the motion. Copple 

submits that this was error and that his conviction therefore 

should be reversed and the case remanded for a new trial. The 

government responds that such a ruling was not error because the 

district court properly found that ordering the IRS to supply 

such information would have unduly delayed the trial and that, 

even if it was error, such error was harmless and any prejudice 

 

0Juror Number 44, Lisa Hayes stated that her father-in-law had 

been audited. Juror Number 75, John Moore responded that his 

father had been audited. Juror Number 43, Jim Harry, stated that 

a company for which he had worked had gotten into trouble with 

the IRS and had gone out of business. As a result, Harry had 

lost his job. He said that he could not be impartial and he was 

dismissed. 
was cured by asking the prospective jurors about their tax 

histories. 

 The question whether Copple is entitled to a new trial 

because the tax investigation was limited to the jurors' records 

since 1986 requires us to determine the requirements of 

§6103(h)(5), something we have not had occasion to do until now. 

Although the statute explicitly provides a defendant with a right 

to require that the Treasury provide an affirmative or negative 

response as to whether a prospective juror has been audited,0 it 

is silent on the appropriate time period covered by the 

investigation. In addition, the statute does not specify the 

procedures that a district court must follow to carry out the 

purposes of the provision, and it is silent on the consequences, 

if any, for noncompliance. 

1. The Requirements of § 6103(h)(5). 

 Copple argues that the statute's lack of any limitation 

on the appropriate time period covered by the investigation 

implies that the investigation can have no time limitation and 

that the government violated the statute when it limited the 

investigation to the preceding five years. In addition to 

relying on the statutory language, Copple relies on a Ninth 

Circuit opinion, United States v. Sinigaglio, 925 F.2d 339, 

amended, 942 F.2d 581 (9th Cir. 1991), which held that where the 

defendant makes a timely motion for a § 6103(h)(5) investigation, 

 

0The explanation for this provision apparently is that a juror 

who has been audited might either be 1) antagonistic to the 

government or 2) fear retaliation from the government and convict 

the defendant to curry favor. 
the investigation must cover all of the years the prospective 

jurors paid taxes. Id. at 341. Copple urges this Court to adopt 

the Sinigaglio view of § 6103(h)(5). 

 The government counters with United States v. Spine, 

945 F.2d 143 (6th Cir. 1991), in which the Sixth Circuit stated 

that § 6103(h)(5) does not require an investigation extending to 

all of the years the prospective jurors paid taxes. Spine held 

that the requirements of § 6103(h)(5) are met as long as the 

court orders an investigation and, if the IRS cannot locate all 

of jurors' histories from the time they began paying taxes by the 

time of trial, the district court obtains such information on 

voir dire. Id. at 148. Spine reached this result by reading a 

reasonableness limitation into § 6103(h)(5). According to Spine, 

§ 6103(h)(5) merely required the district court to order an 

investigation which would be appropriate under the circumstances, 

one which would take into account both the cost and inconvenience 

of the investigation and the ability to get the same information 

on voir dire. 

 The Sixth Circuit's interpretation of the statutory 

language is informed by practical considerations. Allowing a 

defendant to request an investigation of all of the potential 

jurors' tax information from the time they began paying taxes 

could take months, indeed, even as much as a year. See United 

States v. Johnson, 762 F. Supp. 275, 277 & n.1 (C.D. Cal. 1991), 

rev'd on other grounds, 991 F.2d 569 (9th Cir. 1993). Scheduling 

criminal cases, which is already difficult enough, would be made 

even more difficult since a trial with a current jury pool would 
have to be postponed for months while the IRS completed an 

investigation. See Spine, 945 F.2d at 148.0 This might also 

cause serious inconvenience to prospective jurors.0 In addition, 

strict compliance with § 6103(h)(5) would also impose substantial 

costs on the IRS since defendants would routinely request 

information requiring the IRS to conduct manual searches of 

noncomputerized records. 

 Interpreting § 6103(h)(5) to require tax investigations 

stretching back twenty or thirty years would transform 

§6103(h)(5) into a significant practical bar to tax prosecutions. 

It potentially would permit a defendant in a tax case to postpone 

a trial indefinitely by continually requesting potential jurors' 

tax information. Spine, 945 F.2d at 148. Indeed, interpreting 

§6103(h)(5) to require such an extensive search might make tax 

prosecutions so expensive that the government would be reluctant 

to bring them. See United States v. Nielsen, 1 F.3d 855, 858 

(9th Cir. 1993), cert. denied, 1994 U.S. LEXIS 2762 (1994). 

 

0In United States v. Huguenin, 950 F.2d 23, 30 (1st Cir. 1991), 

for example, the IRS took nineteen days to complete a manual 

search of the jurors' tax histories. All of the jurors in that 

case had filed their tax returns at a single IRS Regional Service 

Center for all of the years they paid taxes. Had any of the 

jurors lived outside the region at any other time they were 

paying taxes, the search time would have been considerably 

longer. 

0Moreover, it is not clear that all the checks can be completed 

within a fixed window between identification of the panel and the 

time for its appearance in court. Further complicating the 

administration of the jury panel is that when the period between 

identification and appearance is increased, continuances become 

more likely. 
 We should not interpret the language of § 6103(h)(5) to 

create such an absurd result absent a clear direction from 

Congress, see Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 

575, 102 S. Ct. 3245, 3252, 73 L. Ed. 2d 973 (1982), United 

States v. Schneider, 14 F.3d 876, 880 (3d Cir. 1994), and there 

is no such clear direction in either the language or the 

legislative history of the provision. As has been mentioned, the 

language of § 6103(h)(5) is silent on whether the IRS must search 

the tax records for all of the time the jurors began paying 

taxes. And the legislative history of § 6103(h)(5) demonstrates 

that Congress' principal concern in enacting the provision was 

merely to ensure that the government and the defendant would have 

access to the same information -- not that the information had 

such intrinsic worth that Congress meant to bring prosecutions to 

a standstill while the IRS conducted an investigation.0 Spine, 

945 F.2d at 147. There is simply no suggestion that § 6103(h)(5) 

was meant to create the significant practical barrier to tax 

prosecutions that would result if we were to accept Copple's 

interpretation. See, United States v. Lussier, 929 F.2d 25, 30 

 

0Before Congress enacted § 6103(h)(5), the procedure for 

inquiring into tax records of potential jurors was governed by 

Treasury Regulation § 301.6103(a)-1(h). This regulation 

authorized the government to inquire of the IRS whether a 

prospective juror had been investigated by the IRS. Criminal 

defendants, however, had no similar right to inquire. When 

deciding whether to incorporate this regulation into the Tax 

Reform Act of 1976, Congress decided to allow such disclosures as 

long as the taxpayer had the same access to the information. 

Spine, 945 F.2d at 147 (quoting Senate Committee on Finance, 94th 

Cong., 2d Sess., June 4, 1976, Press Release (1976) reprinted in

Tax Magmt. (BNA), Primary Sources, Series II, § 6103 (1976), at 

40 (Nov. 1, 1977)). 
(1st Cir. 1991) (per curiam) ("The statute itself makes no 

provision for such an extreme alteration of normal trial 

arrangements."). 

 We therefore adopt the Sixth Circuit's approach and 

conclude that § 6103(h)(5) requires only that the investigation 

into the tax records of potential jurors meet the standard of 

reasonableness.0 Specifically, upon timely request by the 

 

0Nearly every case considering § 6103(h)(5) has cited Spine

favorably and has held that a limitation on the time period 

covered by the IRS investigation is not reversible error. Nearly 

all of those cases, however, have analyzed limitations on the 

time period covered by a § 6103(h)(5) investigation under the 

rubric of harmless error. See, e.g., United States v. Axmear, 

964 F.2d 792, 793 (8th Cir. 1992), cert. denied, 113 S. Ct. 963, 

122 L. Ed. 2d 120 (1993); United States v. Droge, 961 F.2d 1030, 

1034 (2d Cir.), cert. denied, 113 S. Ct. 609, 121 L. Ed. 2d 544 

(1992); Huguenin, 950 F.2d at 29-30; United States v. Schandl, 

947 F.2d 462, 469 (11th Cir. 1991), cert. denied, 112 S. Ct. 

2946, 119 L. Ed. 2d 569 (1992); United States v. Hardy, 941 F.2d 

893, 896 (9th Cir. 1991); United States v. Masat, 896 F.2d 88, 95 

(5th Cir. 1990), cert. denied, 113 S. Ct. 108, 121 L. Ed. 2d 66 

(1992). But see, Nielsen, 1 F.3d at 858 (where there is 

substantial disclosure of the information about the persons 

audited or investigated, voir dire supplements the information, 

and there is no palpable suggestion of prejudice, § 6103(h)(5) 

was not violated). 

 While the harmless error approach has a certain appeal, 

we believe that its use to cure the perceived deficiency in the 

statutory language is highly questionable and ultimately flawed. 

Harmless error analysis is typically a retrospective analysis, 

one that requires the reviewing court to make a considered 

judgment about the impact an error had on a particular 

conviction. See Kotteakos v. United States, 328 U.S. 750, 66 S. 

Ct. 1239, 90 L. Ed. 1557 (1946) (discussing the theory behind 

harmless error). Courts that have used harmless error analysis 

to cure the purported "error" of limiting a tax record 

investigation to six years have used the doctrine in quite a 

different sense. Rather than using harmless error to consider 

the particular circumstances of a given case, these courts have 

used it to prescribe a course of action a district court may take 

to insulate its "noncompliance" with the statute from challenge 

on appeal. E.g., Droge, 961 F.2d at 1032-35. When used this 

way, harmless error analysis becomes a surrogate for 
defendant, the district court must grant a reasonable period of 

time for the IRS to complete a search of the potential jurors' 

tax records for the time period requested by the defendant. If 

the district court only allows the defendant enough time for the 

IRS to conduct a search of the computerized records and not a 

search of the noncomputerized records,0 the grant of time will be 

reasonable as long as the computer search is made, and the court 

elicits on voir dire information about the jurors' tax histories 

for the period of time not covered by the investigation.0 We add 

only that Congress might be well advised to revisit the provision 

 

interpretation of the statutory requirements in the first 

instance, but this is not the function of the harmless error 

doctrine. 

0As has been mentioned, the records are computerized for the 

years following 1986 and the IRS can retrieve the information 

without too much difficulty. The likelihood that a juror who had 

been audited before 1986 would be biased and would refuse to 

mention that bias on voir dire seems quite small, so that the 

costs of a manual investigation prior to 1986 might not be 

justifiable. At all events, as 1986 recedes, the number of 

jurors who potentially will have had an audit or other 

investigation which is not recorded on computer will diminish 

and, eventually, the problem will disappear. 

0Although some cases might be read to require that the responses 

of the jurors on voir dire should be verified, see, e.g., 

Huguenin, 950 F.2d at 29, and Lussier, 929 F.2d at 30, we believe 

there is no need to verify the answers given by the jurors on 

voir dire because jurors are presumed to respond truthfully to 

such questions, see Masat, 896 F.2d at 95. Although some 

prospective jurors might be reluctant to answer such questions 

truthfully, "veniremen are often asked sensitive and potentially 

embarrassing questions, including inquiries into their 

involvement in criminal activity or the involvement of family or 

friends in criminal activity, their religious or philosophical 

beliefs, and other matters of a personal nature." Id. We see no 

reason to depart from the presumption that the potential jurors 

will respond truthfully. 

 
and specify more clearly the intent behind it and its 

requirements. 

2. Did the district court comply with § 6103(h)(5)? 

 Under our reading of § 6103(h)(5), the district court's 

failure to order a complete search of the jurors' past history 

was not error. First, after Copple requested the § 6103(h)(5) 

inquiry, the district court ordered the clerk to provide a list 

of jurors in the case along with other relevant information to 

the United States Attorney so that the IRS could conduct the 

investigation. This occurred about twelve days before the trial 

and it gave the IRS enough time to search the computerized 

records and get information about the potential jurors' tax 

histories for the period from 1986 to 1991. 

 Second, the district court conducted an extensive voir 

dire about the potential jurors' tax histories and experience 

with the IRS including whether they or any member of their family 

had been audited. The questioning covered all of the period for 

which the jurors had paid taxes. Moreover, the voir dire worked. 

It identified a juror who was outside the scope of the IRS audit 

(Henderson) and a juror who the IRS for some reason simply missed 

(Borczon).0 Borczon, for example, indicated that he had been 

unhappy with the audit results but also stated that he could 

still be fair and impartial. Apparently, his answers were 

satisfactory since Copple did not even move to strike him. In a 

sense, then, Copple had access to more accurate information than 

 

0We do not believe that the fact that the IRS missed Borczon 

necessarily means that the computerized search was inadequate. 
he would otherwise have received had the inquiry been limited to 

a full IRS investigation. 

 For all the foregoing reasons, we hold that the 

district court complied with § 6103(h)(5). 

B. The Victim Impact Evidence

1. Relevance and Prejudice. 

 During its case in chief, the government called to the 

stand a number of the funeral directors who had put their money 

in Copple's hands. They testified about their losses, and about 

the impact of those losses on their lives. Copple argues that 

evidence about the victims' losses was irrelevant under Federal 

Rule of Evidence 401, and that the testimony about the impact of 

the losses was both irrelevant (or at least of negligible 

probative worth) and also unfairly prejudicial, and hence 

excludable under Federal Rules of Evidence 401 and 403. Our 

review of these challenges to the conviction is for abuse of 

discretion. See United States v. Versaint, 849 F.2d 827, 831 (3d 

Cir. 1988). 

 With respect to the testimony about the financial 

losses, Copple properly argues that the government does not have 

to show that the victims actually suffered a loss to satisfy the 

elements of the mail fraud statute. The essential elements of 

the crime of mail fraud are 1) a scheme or artifice to defraud; 

2) participation by the defendant with specific intent to 

defraud; and 3) use of the mail in furtherance of the scheme. 18 

U.S.C. § 1341; see United States v. Burks, 867 F.2d 795 (3d Cir. 
1989). Proof of actual loss by the intended victim is not 

necessary. See United States v. Kelley, 929 F.2d 582, 585 (10th 

Cir.), cert. denied, 112 S. Ct. 341, 116 L. Ed. 2d 280 (1991); 

United States v. King, 860 F.2d 54, 55 (2d Cir. 1988), cert. 

denied, 490 U.S. 1065, 109 S. Ct. 2062, 104 L. Ed. 2d 628 (1989). 

 But that does not mean that evidence of loss was 

irrelevant. Proving specific intent in mail fraud cases is 

difficult, and, as a result, a liberal policy has developed to 

allow the government to introduce evidence that even peripherally 

bears on the question of intent. See United States v. Foshee, 

606 F.2d 111, 113 (5th Cir. 1979), cert. denied, 444 U.S. 1082, 

100 S. Ct. 1036, 62 L. Ed. 2d 766 (1980).0 Proof that someone 

was victimized by the fraud is thus treated as some evidence of 

the schemer's intent. See, United States v. Heimann, 705 F.2d 

662, 669 (2d Cir. 1983) ("While technically the success or 

failure of a scheme to defraud is irrelevant in a mail fraud 

case, realistically, when the contested issue is intent, whether 

or not victims lost money can be a substantial factor in a jury's 

determination of guilt or innocence." (citation omitted)). Also 

relevant is the defendant's failure to take any steps to 

ameliorate the loss. See Anderson v. United States, 369 F.2d 11, 

15 (8th Cir. 1966), cert. denied, 386 U.S. 976, 87 S. Ct. 1171, 

18 L. Ed. 2d 136 (1967). The government submits that the 

evidence about the victims' losses and Copple's refusal to make 

 

0This policy extends in the other direction as well, and allows 

the defendant to introduce testimony of collateral transactions 

that tend to negate the requisite intent. See Id. 
good those losses was relevant to show Copple's specific intent 

to defraud. We agree, with the qualification that district 

judges should exercise their wise discretion in imposing limits 

on such testimony. The following discussion is a case in point. 

 Copple's defense was that he had simply made a bad 

business decision when he, as trustee, had relied on the advice 

of experts to invest in rare coins. Yet the funeral directors 

had to pay for their losses out of their own pockets, while he 

refused to part with any of the luxuries he had purchased with 

the Mechem "pre-need" funds. The evidence of Copple's refusal to 

part with the property under such circumstances was, we believe, 

evidence of Copple's fraudulent intent. It tended to show that 

Copple intended to convert the Mechem "pre-need" money to his own 

personal use, something he had no right to do. 

 In addition, the testimony about the funeral directors' 

losses also corroborated the testimony of insurance agent James 

Domino, who said that he had never issued a surety bond to Mechem 

despite Copple's requests. Yet a few of the funeral directors 

testified that they had received a letter on Domino's stationary 

stating that the surety bond had been issued, and that letter was 

offered into evidence. Thus the fact that the funeral directors 

had to pay the losses out of their own pockets corroborated 

Domino's testimony that no such bond was issued and showed 

Copple's intent to mislead the funeral directors with the letter. 

Since the evidence about the extensive losses suffered by the 

funeral directors was relevant to show Copple's failure to repay 
and his intent to defraud, the evidence was admissible under the 

low threshold of Rule 401. 

 When the district court ruled on the admissibility of 

the testimony about the funeral directors' losses, however, its 

ruling encouraged the government to introduce a wide range of 

victim impact testimony in addition to the testimony about the 

size of the losses. Some of the victim impact testimony went 

beyond anything that was reasonable to prove Copple's specific 

intent to defraud. 

 A number of the funeral directors testified that the 

money they had used to pay back the losses came from money they 

had saved for their children's college educations. Others 

testified that paying back the money had affected their health, 

or had been taken from savings dedicated to other special 

purposes. For example, in response to the question of what 

effect the loss of money had on his business, Frank Mihalcik 

answered: "[w]ell, the situation . . . . has affected my health. 

I have lost over 60 pounds, and I am currently under a doctor's 

care." Terry Starr testified that he had to use every bit of 

personal savings he had in order to retrust the lost money. He 

then stated that, in order to obtain the money, he and his wife 

were forced to break a contract to purchase a home and to use the 

down payment money to retrust the money they had lost. 

 Testimony such as this had either no, or very little, 

probative value and was unfairly prejudicial. We believe that it 

was irrelevant either for the purposes of proving that Copple had 

failed to make up the loss to the funeral directors or for any 
other reason. Even if there had been some marginal relevance to 

the testimony about the particular personal or professional 

impact the losses had on the funeral directors, its principal 

effect, by far, was to highlight the personal tragedy they had 

suffered as victims of the scheme. The testimony was designed to 

generate feelings of sympathy for the victims and outrage toward 

Copple for reasons not relevant to the charges Copple faced. It 

arguably created a significant risk that the jury would be swayed 

to convict Copple as a way of compensating these victims wholly 

without regard to evidence of Copple's guilt. 

 In short, we believe that the probative value of the 

victim impact testimony was outweighed by unfair prejudice, and 

that such testimony should have been excluded under Federal Rule 

of Evidence 403. 

2. Harmless Error. 

 Although the district court abused its discretion by 

allowing all of the victim impact testimony into evidence, we 

need not reverse if that error was harmless. Trial error is 

harmless if it is highly probable that the error did not affect 

the judgment. United States v. Simon, 995 F.2d 1236, 1244 (3d 

Cir. 1993). High probability exists if the court has a "sure 

conviction that the error did not prejudice the defendant." Id.

at 1244 (internal quotations omitted). There is no need to 

disprove "every reasonable possibility of prejudice." Id. at 

1244 (internal quotations omitted). We believe that the error of 

admitting the victim impact statements was harmless because of 
the overwhelming evidence of both the scheme to defraud and 

Copple's specific intent. 

 First, Copple's claim that he had bought the rare coins 

in order to get a higher return for Mechem was refuted by the 

bankruptcy trustee's testimony that Copple had sold $877,000 

worth of the coins just before declaring bankruptcy and had made 

the checks from the coin companies payable to himself -- not 

Mechem. Although $450,000 of that money was eventually 

transferred to Mechem, Copple could not remember where the other 

$427,000 of the proceeds from the sale went. 

 Second, Copple spent immense amounts of money for 

personal use while he was drawing money from the Mechem account. 

Copple's personal spending during the three-year life of Mechem 

included the following purchases: 

$228,000 Home improvement, Sesler Builders 

 196,334 Furniture, Russell's Country Manor 

 67,694 Home improvement, Kitchens by Meade 

 70,000 Home improvement, architects and 

contractors. 

 62,081 Jewelry, Les Crago 

 70,279 Jewelry, Fortunoff's 

 398,000 Jewelry, Neiman-Marcus 

 48,712 Sable coat 

 11,000 Other fur coats 

 480,000 Gifts for family members 

 230,000 Payments to other Copple-owned 

businesses 

 61,000 Automobiles 

 6,000 Country club fees 

 3,000 Gambling, Caesar's Palace 

At the time of the bankruptcy, Copple had also just put a 

$110,000 deposit down on a $450,000 diamond from Neiman-Marcus 

that weighed 38.33 carats. Nearly all of the money for these 
expenditures came from money in the "pre-need" accounts that 

Copple had transferred to himself. 

 Third, the evidence was overwhelming that Copple had 

prepared wholly fictitious reports about how Mechem was investing 

the money, about the interest earned on the investments, and 

about fidelity or surety bonding. Particularly incriminating is 

the false letter Copple caused to be sent from Mechem to its 

investors six months after it was incorporated stating that 

Mechem's "investments have been made in insurance companies, 

annuities, T-bills, long-term municipal bond funds, short-term 

CD's and money markets," and that Mechem's "performance has 

reflected our excellent investment posture for the last fifteen 

years." Also highly probative of both the scheme to defraud and 

Copple's fraudulent intent was the evidence that funeral 

directors were sent fabricated quarterly reports showing the 

interest that had accrued on the trust investments, and the 

evidence that Copple had ordered a salesman to alter a general 

liability policy to make it look like a fidelity or surety bond. 

 We believe that all of this evidence overwhelmingly 

indicates that Copple knowingly devised or participated in a 

scheme to defraud and did so with the specific intent to defraud 

the funeral directors and others who had invested in Mechem. We 

are satisfied that it was highly probable Copple would have been 

convicted for violating the mail fraud statute even if the victim 
impact testimony had been excluded. For these reasons, we hold 

that the error was harmless.0

 III. SENTENCING ISSUES 

A. The Upward Departure

 At the sentencing hearing the district court stated 

that "an upward departure of two levels is appropriate based on 

the large number of victims and the amount of monetary loss 

involved as provided in section 2F1.1(b)(2)(B) of the 

Guidelines." Copple contends that this departure was improper 

because the Guidelines adequately take into consideration both 

the amount of money involved in the offense (in § 2F1.1(b)(1)) 

and the number of victims of the fraud (in § 2F1.1(b)(2)(B)).0 We 

 

0Copple has also argued that the cumulative effect of six trial 

errors in addition to the admission of the victim impact 

testimony denied him a fair trial. A new trial is required on 

this basis only when "'the[] errors, when combined, so infected 

the jury's deliberations that they had a substantial influence on 

the outcome of the trial.'" United States v. Thornton, 1 F.3d 

149, 156 (3d Cir.), cert. denied, 114 S. Ct. 483, 126 L. Ed. 2d 

433 (1993) (quoting United States v. Hill, 976 F.2d 132, 145 (3d 

Cir. 1992)). The six asserted errors include a prosecutor's 

allegedly improper remark during the opening statement, three 

allegedly improper statements by witnesses, the admission of 

testimony summarizing the testimony of other witnesses, and the 

showing of a video tape of Copple's home. We have examined the 

six asserted grounds for error and believe that they were at most 

nothing more than minor aberrations in a long trial, and did not 

consist of cumulative evidence indicating a proceeding dominated 

by passion and prejudice. To the extent any of the incidents 

constituted error, we believe that in light of the overwhelming 

evidence of guilt, the errors were harmless and did not deprive 

Copple of a fundamentally fair trial. 

0Copple argues alternatively that the district court did not 

really depart upwards but instead gave a four level increase 

pursuant to § 2F1.1(b)(2) because the offense involved both more 

than minimal planning and more than one victim. Copple points 

out that although at sentencing the district court stated that it 
must therefore consider whether Copple's crime fell outside the 

"heartland" of cases which are described in the Guidelines 

because either the amount of monetary loss or the number of 

victims swindled was so high that the guidelines which 

"linguistically apply" significantly understate Copple's 

culpability. See U.S.S.G. Ch.1 Pt.A(4)(b) (policy statement).0

We believe that neither ground articulated by the district court 

is a valid basis for departure in this case. 

 To begin with, the amount of monetary loss falls well 

within the range of monetary loss explicitly considered in the 

Guidelines. Section 2F1.1(b)(1) gives the district court 

authority to increase the offense level incrementally according 

to the amount of loss. See U.S.S.G. § 2F1.1(b)(1)(A)-(S). The 

$4.9 million loss in this case fits squarely within the loss 

table's range of $2000 to $80 million. See U.S.S.G. 

§2F1.1(b)(1)(N). This is not a case in which the amount of loss 

 

was departing upward, the court checked the box in the judgment 

that stated "[t]he sentence is within the guidelines range." 

Copple correctly argues that § 2F1.1(b)(2) allows for a two level 

increase if the offense involves either more than minimal 

planning or more than one victim, and that a district court may 

not impose a four level increase under § 2F1.1(b)(2) if the 

offense involved both more than minimal planning and a scheme to 

defraud more than one victim. United States v. Astorri, 923 F.2d 

1052, 1057 (3d Cir. 1991). Thus to the extent that the district 

court did not depart upwards, but rather gave a four level 

enhancement because the crime involved both more than minimal 

planning and more than one victim, we hold alternatively that the 

increase was improper on such a basis. 

0Our review of this issue is plenary. See United States v. 

Kikumura, 918 F.2d 1084, 1098, 1110 (3d Cir. 1990) (review of 

upward departure is plenary on whether the increase was 

permissible and for abuse of discretion on whether the degree of 

the increase was reasonable). 
exceeds the highest amount accounted for in the loss table. Since 

the Guidelines appear to take into account adequately the amount 

of monetary loss in this case, this factor was an invalid basis 

for departure. See United States v. Davidson, 984 F.2d 651, 654 

(5th Cir. 1993) (upward departure on the basis of amount of money 

in a fraud impermissible where $800,000 fraud fell within range 

of former Guidelines which had a ceiling of $5 million). 

 We also believe that the Guidelines adequately 

calibrate the offense level to take account of the number of 

victims in this case. The loss fell directly on thirty-one 

funeral directors, who had to make good for their "pre-need" 

customers by agreeing to retrust the money out of their own 

pockets and to perform "pre-need" funerals without compensation. 

Although thirty-one victims is far more than necessary to trigger 

the two level enhancement pursuant to § 2F1.1(b)(2)(B) for 

conducting a scheme to defraud more than one victim, thirty one 

is not so extraordinarily large a number in a case of this type 

that it falls outside the heartland of the fraud provisions. See, 

e.g., United States v. Boula, 932 F.2d 651, 656-57 (7th Cir. 

1991) (upward departure due to the number of victims in case 

involving 3000 victims was not permissible because such a scheme 

was not outside the heartland of the number of victims 

contemplated by the Guidelines). Cf. United States v. Benskin, 

926 F.2d 562, 564-65 (6th Cir. 1991) (relying on the pre-November 

1989 Guidelines, the court upheld an upward departure involving 

600 victims); Davidson, 984 F.2d at 654 (extraordinarily large 

number of victims required for upward departure). In our view, 
the Guidelines, through both the loss table in § 2F1.1(b)(1) and 

§ 2F1.1(b)(2)(B), adequately account for frauds involving the 

number of victims in this case. 

 Schemes involving large numbers of victims raise two 

principal considerations. First, schemes involving large numbers 

of victims tend to impose much greater losses. Second, schemes 

involving numerous victims tend to be more systematic, and losses 

actually caused by such schemes may underrepresent the amount of 

losses the defendant intended. See U.S.S.G. § 2F1.1, background 

(justifying the enhancement for schemes involving more than one 

victim in 2F1.1(b)(2)(B)). In this case, the first consideration 

seems to be adequately taken into account by the loss table in 

§2F1.1(b)(1), for Copple's offense level was increased to reflect 

the total loss in increments that the Sentencing Commission 

deemed appropriate. Similarly, the second consideration 

generally is adequately taken into account by giving Copple a 

one-time enhancement pursuant to § 2F1.1(b)(2)(B) for involving 

more than one victim. Although there may be cases in which the 

loss table in § 2F1.1(b)(1) disproportionately underrepresents 

the amount of intended loss that does not appear to be the case 

here. 

 Moreover, Ponzi schemes, major securities frauds and 

other similar frauds involving thousands of victims have been 

around since the early twentieth century, and the Commission was 

certainly aware of them when drafting the Guidelines. Indeed 

such awareness seems implicit in the $80 million ceiling in the 

loss table. Frauds of $80 million will almost certainly involve 
numbers of victims far in excess of the thirty-one involved 

here.0 Given the structure of the Guidelines and the interplay 

between the loss table and the "more than one victim" 

enhancement, the fraud in this case does not appear to involve a 

number of victims that is outside the "heartland," and hence a 

departure was impermissible. Accordingly the sentence must be 

vacated and reconsidered. 

 Nevertheless, our holding does not preclude the 

district court from making an upward departure. At the time it 

granted the departure in this case, the district court did not 

take cognizance of two bases for increasing the offense level 

suggested in the presentence report.0 Although the district 

 

0Indeed two circuits, the Second and the Eleventh, seem to have 

imposed a categorical bar on departures based on the number of 

people involved. See United States v. Mandel, 991 F.2d 55, 58 

(2d Cir. 1993); Alpert, 989 F.2d at 459. 

0The presentence report stated: 

92. . . . Approximately thirty additional directors 

and their clients were excluded because the losses were 

less than $30,000 per funeral director. Also, the mail 

fraud perpetrated by the defendant involved not only 

Mechem Financial, Inc., but also Mechem Financial of 

Ohio as evidenced by the results of the civil 

investigation conducted by the Ohio Attorney General's 

Office. If the losses suffered by that affiliate were 

added to the fraud that occurred in this district, the 

total loss to the funeral directors would exceed $11 

million, and under the provisions of § 2F1.1(b)(1), the 

offense level would increase by an additional 2 levels. 

93. Section 4A1.3 provides that the court may consider 

imposing a sentence departing from the otherwise 

applicable guideline range if reliable information 

indicates that the criminal history does not adequately 

reflect the seriousness of the defendant's past 

criminal conduct. A factor that may be considered is 

prior similar adult criminal conduct not resulting in a 

criminal conviction. (Section 4A1.3(e)). Paragraph 59 
court implicitly rejected these grounds for departure by imposing 

the departure in the way it did, nothing prevents the district 

court from reconsidering them on remand.0

B. The Restitution Order

 We must also vacate the portion of the judgment of 

sentence ordering Copple to pay $4,257,940.45 in restitution.0

The Victim and Witness Protection Act ("VWPA") allows the 

district court to order restitution as part of a sentence. 18 

U.S.C. § 3663(a)(1). Section 3664(a) of the VWPA provides the 

procedures the district court must employ in ordering the 

restitution: 

 

of this report deals with fraudulent transactions 

involving over $100,000 for which the defendant was not 

criminally prosecuted. This conduct began in December 

1984 but was not discovered for several years. The 

victim was reimbursed by the defendant's former 

employer, and criminal charges were not pursued. This 

conduct is similar to what occurred in the cases of 

Patrick Mastrian, Audrey Garfield Woo, and Virginia 

Sczepanski. 

Of course we express no opinion on the appropriateness of these 

bases for increasing the offense level, preferring to leave that 

determination in the first instance to the district court. 

0 On remand, a district court can consider matters not explicitly 

or implicitly part of the decision in the appellate court. See

United States v. Uccio, 940 F.2d 753, 758-59 (2d Cir. 1991); cf., 

United States v. Kikumura, 947 F.2d 72, 76 (3d Cir. 1991) (law of 

the case prevented the district court from reconsidering issue 

explicitly decided by the appellate court). As long as the 

district court gives Copple adequate notice that it might 

reconsider these bases for departure and affords an adequate 

hearing to allow the parties an opportunity to elaborate on their 

position, see Burns v. United States, 501 U.S. 129, 111 S. Ct. 

2182, 2187, 115 L. Ed. 2d 123 (1991), the court may reconsider 

them. 

0Our review of the restitution issue is plenary. See Air Courier

Conference, 959 F.2d at 1217. 
The court, in determining whether to order restitution 

under section 3663 of this title and the amount of such 

restitution, shall consider the amount of the loss 

sustained by any victim as a result of the offense, the 

financial resources of the defendant, the financial 

needs and earning ability of the defendant and the 

defendant's dependents, and such other factors as the 

court deems appropriate. 

18 U.S.C. § 3664(a) (emphasis supplied). This Court has required 

the district courts "'to make specific findings as to the factual 

issues that are relevant to the application of the restitution 

provisions of the VWPA.'" United States v. Logar, 975 F.2d 958, 

961 (3d Cir. 1992) (quoting United States v. Palma, 760 F.2d 475, 

480 (3d Cir. 1985)). 

 In Logar, we identified the factual findings the 

district court must make before ordering restitution: 1) the 

amount of loss, 2) the defendant's ability to pay and the 

financial need of the defendant and the defendant's dependents, 

and 3) the relationship between the restitution imposed and the 

loss caused by the defendant's conduct. 975 F.2d at 961. We 

also held that, notwithstanding estimates of loss in a 

presentence report, the district judge must point to the evidence 

in the record supporting the calculation of loss to the victims. 

Id. at 961-62. The district court in this case failed to follow 

these procedures. 

 At the sentencing hearing, the district court ordered 

restitution on the following basis: 

We accept as factual the report in the presentence 

report concerning money due victims, and this amount of 

money, of course, is difficult to ascertain without

having a hearing that might go on for days, but we do 

accept as fact those findings in the presentence report 
and order that the defendant shall make restitution in 

the amount of $4,257,940.45 through the Trustee of the 

United States Bankruptcy Court for the Western District 

of Pennsylvania who will make the distribution to the 

victims listed in the indictment. It is further 

ordered that the defendant shall pay to the United 

States a fine of $100,000 and the costs of prosecution. 

This fine shall be subject to the rights of creditors. 

(emphasis in the original). The district court also stated that 

the bankruptcy court should monitor the restitution ("we feel 

that the bankruptcy court is better able than this Court to 

determine who owes what to whom"). 

 The district court made no findings about Copple's 

ability to pay the restitution. The court also made no findings 

about Copple's financial needs, or his ability to support himself 

and his wife and two children (after his release from jail). We 

will therefore remand for the district court to make the factual 

findings necessary to support such order of restitution as it may 

make. We note in this regard that the district court is not at 

liberty to delegate its role with respect to restitution to the 

bankruptcy court or the bankruptcy trustee. 

IV. CONCLUSION 

 The judgment of the district court with respect to the 

conviction will be affirmed. However, the judgment with respect 

to the sentence will be reversed and the case remanded for 

further proceedings consistent with this opinion.