Opinion ID: 64228
Heading Depth: 3
Heading Rank: 2

Heading: Counts 2-5: Mailings

Text: Next, Arledge contends there was insufficient evidence that the mailings underlying counts 2-5 were directly related to the execution of the scheme to defraud. A conviction for mail fraud under 18 U.S.C. § 1341 requires proof of (1) a scheme to defraud; (2) the use of the mails to execute the scheme; and (3) the specific intent to defraud. United States v. Bieganowski, 313 F.3d 264, 275 (5th Cir.2002). The government based the mail fraud charges on four checks for attorneys' fees sent through the mail to Arledge. Each check contained fees stemming from Arledge's representation of Fen Phen claimants. The government has not identified specific instances of fraud that resulted in the attorneys' fees contained in the checks, acknowledging that each check contained fees stemming from legitimate claims. Arledge argues that the government failed to prove the second element of the mail fraud statutethe use of mails to execute the schemeand that the government's failure to provide a clear nexus between the fees received and the fraudulent claims is fatal to the government's case. In support, Arledge principally relies upon United States v. Tencer, 107 F.3d 1120 (5th Cir. 1997), in which an owner of a chiropractic clinic was convicted of multiple counts of mail fraud after filing fraudulent claims for services never rendered, id. at 1126-27. In Tencer, we specifically decline[d] to endorse a broad reading of § 1341's mailing requirement that would relieve the government of the burden of proving that mailings underlying mail fraud counts are related to the fraud being perpetrated. Id. at 1126. We held that the government's failure to produce any evidence that connected the specific checks, upon which the convictions were based, to the fraudulent claims was fatal to the government's case. Id. at 1126-27. In addition, the government, in that case, had failed to explain how the payment of legitimate claims had furthered the scheme to defraud. Id. at 1126 n. 1. Thus, we held that a rational trier of fact could not have found Tencer guilty without evidence that the checks underlying the mail fraud counts contained fraudulent proceeds. Id. at 1127. Despite this strong language, the Tencer court also noted that `innocent' mailings can sometimes support mail fraud convictions. Id. (citing Schmuck v. United States, 489 U.S. 705, 714-15, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989)). In Schmuck, the Supreme Court found that innocent mailings could supply the mailing element for mail fraud and held that [t]he relevant question at all times is whether the mailing is part of the execution of the scheme as conceived by the perpetrator at the time. Schmuck, 489 U.S. at 715, 109 S.Ct. 1443. Thus, the government need only provide sufficient evidence that the innocent or legitimate claims were incidental to an essential part of the scheme to defraud. See id. at 710-11, 109 S.Ct. 1443 (It is sufficient for the mailing to be incident to an essential part of the scheme, or a step in [the] plot. (internal quotation marks and citation omitted)). Here the government presented sufficient evidence for the jury to conclude that all claims Arledge submitted were part of the scheme to defraud, because the legitimate claims were used as a smoke screen to conceal the fraudulent ones. The evidence showed that the fraudulent claims were easily identified if laid next to one another. The district court noted that the method of falsifying the documents was a rather artless and somewhat simpleminded and easily detectable matter of falsifying prescriptions and medical records by the use of a computer and a copy machine. All you had to do was look at it and see the same form was used time and time and time and time again. By mixing the nearly identical fraudulent claims with the legitimate ones, Arledge was able to drastically lower the chances of detection. In fact, the sheer number of claims aided the fraud because the chances of success were increased by virtue of the number of claims that had to be processed. A rational trier of fact could have concluded that the fraud was possible because the legitimate claims hid the clearly fabricated prescriptions. The scheme to defraud also depended upon the maintenance of a harmonious relationship between Arledge, Gallagher, and the Settlement Fund. We have held that mailings pursuant to a scheme to defraud, which extends over a long period of time and depends upon a good relationship between the victim and the defendant, are often incidental to an essential part of the scheme, thus satisfying the mailing element of the mail fraud offense. See United States v. Mills, 199 F.3d 184, 189-90 (5th Cir.1999) (holding that a scheme involving the issuance of numerous fraudulent checks over the course of thirteen months was not a one-shot operation and that the success of the venture depended upon the continued harmonious relationship with the victims of the fraud); see also Schmuck, 489 U.S. at 711-12, 109 S.Ct. 1443 (upholding a jury verdict because a rational jury could have concluded that the success of the [defendant's] venture depended upon his continued harmonious relations with, and good reputation among, [the victims]). A rational trier of fact could have concluded that the concealment of the fraudulent claims allowed Arledge to continue to submit additional fraudulent and legitimate claims. There was testimony from Gallagher that, had he been aware that Arledge was filing false claims, he would not have allowed Arledge to continue to receive any attorneys' fees. Thus, the success of the ongoing fraudulent venture depended upon continued harmonious relations between Arledge and Gallagher. Cf. Schmuck, 489 U.S. at 711-12, 109 S.Ct. 1443; United States v. Strong, 371 F.3d 225, 230-31 (5th Cir.2004) (recognizing that mailings which lull the victims of fraud have been found to fall under 18 U.S.C. § 1341the mail fraud statute). For these reasons, a rational trier of fact could have found that Arledge used the innocent mailings to conceal the easily detectable fraud and the mailings were incidental to the scheme to defraud. The government did not have to establish that the checks contained attorneys' fees for fraudulent claims; all of the mailings were essential to the fraud. Accordingly, we hold that there was sufficient evidence to support the mail fraud convictions.