Opinion ID: 572629
Heading Depth: 3
Heading Rank: 3

Heading: Count 12: The Medical Waste Disposal Scam

Text: 61 Paccione and McDonald contend that their count 12 mail fraud convictions should be set aside principally on the grounds that (1) the medical waste scheme merely deprived Environmental Contractors's customers of an intangible right, i.e., the right to the honest services of the defendants in dumping their medical waste in a permitted site listed on defendant's waste transporter permit (McDonald brief on appeal at 30), and hence was not actionable under § 1341 in light of McNally and Schwartz; (2) the mailings charged, having occurred afterward and being incidental, were not in furtherance of a scheme to defraud; and (3) there was no evidence of any intent to defraud. Their contentions are untenable. 62 Count 12 charged that these defendants used the mails in order 63 to defraud doctors, which [sic ] generated medical and infectious waste materials of money and property by charging them the high rates required for lawful transfer, storage and disposal of such waste, while actually transferring, storing and disposing of the waste at far lower rates illegally, and by exposing the generators to potential civil and criminal penalties for illegal transfer, storage and disposal of such waste. 64 That count alleged that defendants caused the mailings of letters and invoices to one Dr. Vado, who had engaged the waste disposal services of a company other than Environmental Contractors, which had in turn hired Environmental Contractors. 65 Use of the mails in furtherance of a scheme to offer services in exchange for a fee, with the intent not to perform those services, is within the reach of § 1341. See, e.g., McNally, 483 U.S. at 360, 107 S.Ct. at 2881 (fraud cognizable where alleged victim would have paid less or received better quality services absent the alleged deceit); United States v. Wallach, 935 F.2d 445, 461 (2d Cir.1991) (providing alternate services does not defeat a fraud charge [when] the [victims] did not receive the services that they believed were being provided); cf. Schwartz, 924 F.2d at 420-21 (use of wire facilities in connection with defendants' false assurances to its arms supplier that defendants were in compliance with government regulations was within reach of § 1343). 66 There is no requirement that the victim of the fraud be deceived by the very document that satisfies the statute's mailing requirement; rather, the requirement is merely that the mailing be in furtherance of the fraud. Novod, 923 F.2d at 973; United States v. Bronston, 658 F.2d at 927. Nor is there any requirement that the mailings precede the fraud. United States v. Sampson, 371 U.S. 75, 79-80, 83 S.Ct. 173, 175-76, 9 L.Ed.2d 136 (1962). The mailing of communications that are designed to lull the victims of the fraud into believing they have received the services they bought is sufficient to support a conviction under § 1341. See, e.g., United States v. Angelilli, 660 F.2d at 36-37 (fraud cognizable where mailings of payments to victimized investors lulled them into false sense of security). 67 The conduct of Paccione and McDonald fits comfortably within this framework. The fraud in obtaining permits to dispose of infectious waste was a part of the deceit employed to allow defendants to pursue a scheme that was clearly cognizable under § 1341. Environmental Contractors offered to provide doctors with infectious-waste disposal services that would be safe and adequate to relieve them of the risk of civil and criminal liability. There was no indication that any of its customers sought a lower level of service, and it was inferable that the payments of the doctors and medical facilities were to be commensurate with the high level of services promised by Environmental Contractors. Environmental Contractors mailed invoices designed to lull the customer into believing the services promised had been provided. 68 Defendants' reliance on cases such as United States v. Regent Office Supply Co., 421 F.2d 1174, 1182 (2d Cir.1970), and United States v. Starr, 816 F.2d 94, 99 (2d Cir.1987), is misplaced. In the former, though the defendants had made false representations in order to gain access to potential customers, they had not misrepresented either the quality of their merchandise or the conditions of sale. In Starr, the defendants, who operated a bulk mailing service and were indicted for defrauding their customers, charged their customers the correct price for postage but cheated the Postal Service by burying higher-rate mail in sacks being used for lower-rate mail. Because the customers received the same postal service they would have received had defendants paid the full postage, the mail fraud conviction was reversed on the ground that the customers had not been defrauded. Though the Postal Service itself had been victimized, the indictment charged only that the defendants had defrauded their customers, not that they had defrauded the Postal Service. 69 Here there is no question that Environmental Contractors's customers did not get what they paid for. Its customers were led to believe they were purchasing careful, competent, and licensed services, together with a reduction of the risk of civil and criminal penalties for improper disposal. Instead Environmental Contractors frequently and flagrantly violated numerous SDEC regulations; its customers were exposed to substantial regulatory risks, and even had those risks not come to fruition, the fraud was complete. These customers had also requested assurance at the outset that the company was in fact licensed to handle infectious medical waste; Environmental Contractors was not so licensed and responded by sending a permit it had counterfeited; and when it did acquire its own permits, it did so by means of forgery and fraud. Defendants' suggestion that there was no evidence of an intent to defraud is frivolous.