Opinion ID: 3010345
Heading Depth: 1
Heading Rank: 3

Heading: Mail Fraud Conspiracy

Text: The defendants were convicted of a conspiracy that contemplated using the United States mail to deprive the Commonwealth of Pennsylvania and its citizens of the honest services of public employees. The indictment alleges that this agreement contemplated that the defendants would cause the following documents to be sent through the United States mail by the Statutory Appeals Court to the parties and the Department of Transportation (DOT): (1) notices of dismissals, (2) notices of convictions, and (3) notices of favorable disposition. App. at 42, 51, 53. The government insists that the defendants contemplated that these documents would be sent through the mail in 9 furtherance of their conspiracy. While we agree that the record will support an inference that the defendants expected these notices to be dispatched by mail, we cannot uphold the defendants' mail fraud convictions on this basis. Because mailing of these notices was required by law as an integral and necessary part of the court's adjudication of cases, and because any deprivation of the honest services of public employees had been completed in each instance before the notice of disposition was mailed, the mailings of notices of case disposition as a matter of law were not in furtherance of the alleged conspiracy. The mail fraud statute does not purport to reach all frauds, but only those limited instances in which the use of the mails is part of the execution of the fraud. Kann v. United States, 323 U.S. 88, 95 (1944). As we explained in United States v. Tarnopol, 561 F.2d 466, 471-72 (3d Cir. 1977) (internal citations omitted): In each case the question is whether or not the mailings were sufficiently closely related to respondent's scheme to bring his conduct within the statute. Moreover . . . the close relation of the mailings to the scheme does not turn on time or space, but on the dependence in some way of the completion of the scheme or the prevention of its detection on the mailings in question. Thus, mailings taking place after the object of the scheme has been accomplished, or before its accomplishment has begun, are not sufficiently closely related to the scheme to support a mail fraud prosecution. Nor are routine mailings required by law which are themselves intrinsically innocent even though they take place during the course of carrying out a fraudulent scheme, the objective of which is the embezzlement of funds received in response to the mailings. We derived these governing principles in Tarnopol in large part from Parr v. United States, 363 U.S. 370 (1960), a case factually similar to that before us. The defendants in Parr were charged with a scheme to embezzle funds from a public school district in Texas. The mailings alleged to have been in furtherance of their conspiracy included notices of tax assessments dispatched by the district to local 10 residents and the tax payments sent to it in response. Incoming tax revenue was either immediately converted by the defendants or deposited in the district's account, on which the defendants issued and cashed checks payable to fictitious persons or in consideration of fictitious goods and services. The scheme also allegedly included the defendants' securing gasoline and other products and services with school district credit cards, with the knowledge that the mails would be used to collect from school funds. Although the Court acknowledged this brazen scheme to defraud, it explained that the offenses described were essentially state crimes, and they would constitute federal mail fraud only if the mailings charged in the indictment were made  `for the purpose of executing such scheme.'  Parr, 363 U.S. at 385 (quoting 18 U.S.C. S 1341). Because the district was legally compelled to assess and collect taxes for school purposes, and the taxpayers were legally obliged to respond, the Court held that the mailings in connection with the collection of revenue could not support a mail fraud conviction even though the scheme to embezzle could not have succeeded without tax revenue. Rejecting the government's arguments that the mailings, even if innocent in themselves, were steps in a plot, the Court remarked that no case had ever held that a thing which the law required to be mailed may be regarded as mailed for the purpose of executing a plot or scheme to defraud. Id. at 390. The Court stressed that: (1) the district was legally required to assess and collect taxes; (2) the indictment did not charge and the evidence did not prove that the taxes assessed exceeded the district's legitimate needs or that they were in any way unlawful; and (3) in fulfilling its legal duty to collect and report the receipt of taxes, the district was practically obliged to permit taxpayers to use the mail. Id. at 391. In a passage of central importance to this appeal, the Court summarized its holding with respect to the tax collection mailings as follows: [I]t cannot be said that mailings made for or caused to be made under the imperative command of duty imposed by state law are criminal under the federal 11 mail fraud statute, even though some of those who are so required to do the mailing . . . plan to steal . . . some indefinite part of [the district's] moneys. Id. The Court also held that the mailings required to collect for the credit card purchases would not support a mail fraud conviction. The scheme in each case had reached fruition when [the defendants] received the goods and services . . . . It was immaterial . . . to any consummation of the scheme, how the [oil company] . . . would collect from the [District]. Id. at 393 (quoting Kann v. United States, 323 U.S. 88, 94 (1944)) (internal quotation mark omitted). Accordingly, it could not be said that the mailings in question were for the purpose of executing the scheme, as the statute requires. Id. Parr's holding with respect to the credit card portion of the scheme was followed in United States v. Maze, 414 U.S. 395 (1974). Maze also involved credit card fraud. The Court held that mailings of credit card invoices from a motel to a bank for the purpose of securing reimbursement for the goods and services supplied to Maze by the motel were not for the purpose of executing [the defendant's] scheme. Id. at 405. The Court pointed out that Maze's scheme reached fruition when he checked out of the motel. Id. at 414. In reaching its conclusion, the Court distinguished United States v. Sampson, 371 U.S. 75 (1962), on the ground that, while Maze had received no benefit from the mailings, the mailings in the Sampson scheme were designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely than if no mailings had taken place. Id. at 403. We find this case indistinguishable from Parr. The Statutory Appeals Court was charged by law with adjudicating specified cases, just as the school district in Parr was charged with running a school system. Its mailings to the parties and the DOT, like the tax mailing in Parr, were required by law as a part of the court's exercise of its responsibilities. See Pa. R. Crim. P. 58(b)(2), 63(b)(2), 68(b)(2), 80, 9024, 9025; Pa. R. Civ. P. 236(a)(2); Pa. Stat. 12 Ann. tit. 75, S 6323 (West 1996). Given the volume of business that the court conducted, it had little choice but to transmit these required notifications by mail. The notices of dispositions dispatched by the court, like the tax mailings in Parr, performed precisely the function they were intended by law to perform: they faithfully reported the court's disposition of the case. As in Parr, the relevant mailings would, of necessity, have been made whether or not the conspiracy existed, and they would have performed precisely the same function in the absence of the conspiracy that they performed during its continuance. We also find an analogy between this case and the credit card aspects of Parr and of Maze. The objective of this conspiracy was to deprive citizens of the honest services of public employees charged with processing and adjudicating cases. That objective would reach fruition when the defendants' efforts caused a different disposition by the court than would otherwise have been made. In short, all that the conspirators needed to fix in order to achieve the object of their agreement was the disposition of a case. While routine mailings to the parties and the DOT and between the DOT and the parties could reasonably have been expected to follow in the ordinary execution of duties imposed by law, by the time notices of dispositions were dispatched, the conspiracy had either succeeded or failed, the legal consequences of an acquittal or conviction had been established, and the routine reporting of the dispositions simply was not a part of the conspirators' execution of their scheme. Nor did that routine reporting have the effect of lulling anyone into a false sense of security or otherwise making the conspirators' apprehension less likely.4 _________________________________________________________________ 4. Schmuck v. United States, 489 U.S. 705 (1989), a case relied upon heavily by the government, appears to us to support the position of the defendants. In Schmuck, a used car distributor was charged with devising and executing a scheme to defraud retail automobile customers by rolling back the odometers and inflating the prices he charged to dealers based on the lower mileage readings. The Court held that the mailing requirement was satisfied by the dealers' mailings of the title application forms. The Court distinguished Parr on the basis that the annual tax mailings in Parr continued regularly regardless of the 13 The scope of the federal mail fraud statute is limited. The Supreme Court has clearly held that legally required mailings in circumstances like those in this case cannot be deemed to have been made for the purpose of executing a fraudulent scheme. We therefore reverse the mail fraud conspiracy convictions.5