Opinion ID: 735400
Heading Depth: 2
Heading Rank: 2

Heading: The In Furtherance Requirement

Text: 13 Slevin next contends that the government failed to establish that there were any mailings in furtherance of his fraudulent scheme. He points out that the proven mailings, of checks by contract obligees sent as reimbursement to contractors for the bond premiums that contractors had paid to Slevin's shell companies, occurred after Slevin had received payment for the bonds from the contractors. He argues, relying on United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974), Kann v. United States, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88 (1944), and United States v. Altman, 48 F.3d 96, that since the mailings occurred after he had received payments, the mailings could not have been in furtherance of the fraud. We disagree. 14 In order to convict Slevin of mail fraud, the government was required to show 1) a scheme or artifice to defraud 2) for the purpose of obtaining money or property ... and 3) use of the mails in furtherance of the scheme. Altman, 48 F.3d at 101. The mailings do not need to be done by the defendant personally; rather, the government need show only (1) that the defendant[ ] 'caused' the mailing, namely that [he] must have acted 'with knowledge that the use of the mails w[ould] follow in the ordinary course of business, or where such use c[ould] reasonably be foreseen, even though not actually intended,' ... and (2) that the mailing was ... 'incidental to an essential part of the scheme.'  United States v. Bortnovsky, 879 F.2d 30, 36 (2d Cir.1989) (quoting Pereira v. United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 363, 98 L.Ed. 435 (1954)). 15 There is no requirement that the mailings precede the fraud. See, e.g., Schmuck v. United States, 489 U.S. 705, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989); United States v. Sampson, 371 U.S. 75, 79-80, 83 S.Ct. 173, 175-76, 9 L.Ed.2d 136 (1962). Where the frauds are not isolated or unrelated swindles, postfraud mailing of invoices, checks, or receipts may further the scheme by, for example, lulling the victims into believing they received the services fraudulently promised, see, e.g., United States v. Paccione, 949 F.2d 1183, 1196 (2d Cir.1991), cert. denied, 505 U.S. 1220, 112 S.Ct. 3029, 120 L.Ed.2d 900 (1992); United States v. Angelilli, 660 F.2d 23, 36-37 (2d Cir.1981), cert. denied, 455 U.S. 910, 945, 102 S.Ct. 1258, 1442, 71 L.Ed.2d 449, 657 (1982), or by helping to keep the scheme in operation by preserving a needed business relationship between a fraud victim and the defendant, see Schmuck v. United States, 489 U.S. at 711-12, 109 S.Ct. at 1448-49. 16 In Schmuck, the defendant was a used car wholesaler who fraudulently rolled back odometers on cars that he sold to retailers. When the retailers resold the cars, they mailed title application forms for the vehicles to the state. These mailings, although occurring long after the wholesaler had been paid for the tampered-with vehicles, served as the predicates for his mail fraud conviction. The Supreme Court affirmed the conviction, rejecting the contention that the eventual title application mailings were not in furtherance of his scheme to defraud. The Court began by noting that Schmuck's fraudulent venture was a not a 'one-shot' operation in which he sold a single car to an isolated dealer. Id. at 711, 109 S.Ct. at 1448. His was an ongoing, large-scale operation, in which he dealt with some retailers on a consistent basis for some 15 years. Id. The Court reasoned that 17 [a] rational jury could have concluded that the success of Schmuck's venture depended upon his continued harmonious relations with, and good reputation among, retail dealers, which in turn required the smooth flow of cars from the dealers to their ... customers. 18 .... Schmuck's scheme would have come to an abrupt halt if the dealers either had lost faith in Schmuck or had not been able to resell the cars obtained from him. These resales and Schmuck's relationships with the retail dealers naturally depended upon the successful passage of title among the various parties. Thus, although the registration-form mailings may not have contributed directly to the duping of either the retail dealers or the customers, they were necessary to the passage of title, which in turn was essential to the perpetuation of Schmuck's scheme. 19 Id. at 711-12, 109 S.Ct. at 1448. In sum, while Schmuck had already profited from the sale of the altered vehicles, the resale transactions that prompted the mailings--which were essential to the retailers' conduct of their own business--were also essential to Schmuck's scheme, since it was important to his long-term success to retain the custom and confidence of the retailers. In this sense, the Supreme Court concluded, the mailings could be found essential to and in furtherance of Schmuck's scheme to defraud. 20 Both Kann and Maze, relied on here by Slevin, were distinguished by the Supreme Court in Schmuck on the basis that the defendants in those cases had no interest in whether their fraud victims transmitted any information to third parties or escaped losses as a result of the frauds, see 489 U.S. at 713-15, 109 S.Ct. at 1449-50. In Kann, the defendants had fraudulently obtained two checks and cashed them. The Kann Court held that the cashing bank's mailing of the checks to the drawee bank was not in furtherance of the fraud because the defendants had no interest in whether the former collected from the latter:  'It was immaterial to them....'  Schmuck, 489 U.S. at 713, 109 S.Ct. at 1449 (quoting Kann, 323 U.S. at 94, 65 S.Ct. at 151). In Maze, which involved the defendant's theft and fraudulent use of his roommate's credit card, the Court held that mailings of merchant invoices and bills to the card owner were not in furtherance of the fraud because there was no indication that the success of [the] scheme depended in any way on which of his victims ultimately bore the loss. Indeed, from his point of view, he probably would have preferred to have the invoices ... never mailed at all, 414 U.S. at 402, 94 S.Ct. at 649 (footnote omitted), for the mailings increased the probability that respondent would be detected and apprehended, id. at 404, 94 S.Ct. at 650. See also Wallach, 935 F.2d at 465 (noting that in Maze, the alleged perpetrators had no intention of continuing to communicate with the victims of their fraud). 21 Kann and Maze are similarly distinguishable from the present case. Here, as in Schmuck, the fraudulent venture was not an isolated swindle but rather was an ongoing operation in which Slevin sought to provide contractors, who could not obtain bonds from Treasury-listed companies, with bonds for all of their construction jobs. For example, Slevin informed one insurance broker, who provided a principal outlet for Slevin's bonds, that a contractor could obtain assurance of a continuing source of bonding from Slevin by paying him an up-front fee of $500 and providing him with financial statements and a list of the contracts for which the contractor required bonding. As Slevin envisioned his scheme, therefore, it was in his interest that any contractor who paid him a premium be reimbursed by the obligee for that premium; otherwise, the contractor would not continue to obtain its bonding from Slevin.  22 Slevin's reliance on this Court's decision in Altman, 48 F.3d 96, is also misplaced. That case involved an attorney who embezzled funds he held as a fiduciary. The mailings--of a referee's report, bank statements, and other documentation of the frauds themselves--were made by third parties long after the defendant had depleted those funds. We held that the mailings were not in furtherance of the fraud because the frauds were complete, not continuing, and the mailings were not necessary to avoid jeopardizing a 'relationship of trust and good will' as was the case in Schmuck. Id. at 103-04. The circumstances in Altman were thus significantly different from those in the present case, in which the mailings of the premium reimbursement checks from the obligees to the contractors were important to the preservation of Slevin's relationship with the contractors and hence were necessary to the continuation of Slevin's fraudulent scheme. 23 We conclude that the jury was entitled to find that the mailings were in furtherance of Slevin's fraudulent scheme. 24