Opinion ID: 561889
Heading Depth: 2
Heading Rank: 1

Heading: Dependence Upon the Mails

Text: 6 Whether Smith's fraud depended upon the mails is a difficult question. The Supreme Court has held that [t]o be part of the execution of the fraud, ... the use of the mails need not be an essential element of the scheme. It is sufficient for the mailing to be 'incident to an essential part of the scheme,' or 'a step in [the] plot.'  4 In this case, Smith obtained the claims draft by hand-delivery and then deposited the draft in his bank account. Although the government claimed the draft would not be paid until State Farm's bank received confirmation as a result of the mailing of the accounting copy, the evidence is unclear as to whether the amount of the draft was immediately credited to Smith's account or was held pending notification from State Farm's bank that the funds should be released. 5 The State Farm agent testified that Smith's bank could have credited Smith's account prior to receiving confirmation of the draft's authenticity, although Smith's bank would have been responsible for any losses caused by the premature acceptance. 6 7 The cases indicate that, if a defendant has been able to take possession of the object of the fraud and if the fraud is then at an end, further mailings involve[ ] little more than post-fraud accounting among the potential victims of the various schemes, and the long-term success of the fraud [does] not turn on which of the potential victims [bears] the ultimate loss. 7 We similarly find it immaterial whether State Farm or Smith's bank bore the loss as a result of the fraud. 8 Although it may have been the case that Smith's bank did not credit Smith's account until the accounting copy of the draft passed through the mails and State Farm's bank released the funds, the government failed to introduce evidence showing beyond a reasonable doubt that Smith could not have taken possession of the money before State Farm's bank released the funds as a result of its receipt of the accounting copy of the draft. Smith's conviction for the substantive violation of the mail fraud statute must be reversed, because the mailing was not proven to be necessarily  'incident to an essential part of the scheme,' or 'a step in [the] plot.'  8