Opinion ID: 726757
Heading Depth: 2
Heading Rank: 1

Heading: Mailing Sufficiently Related to Scheme

Text: 15 Appellants' threshold argument is that there was no mailing to bring their conduct within the mail fraud statute. The question is whether the mailing of Arizona titles from the Department of Transportation to Arizona Checker Sales, which occurred after Defendants sold the vehicles, satisfied this mailing requirement. 16 In order for the mailing to be sufficiently closely related, it must be for the purpose of executing the scheme, or incident to an essential part of the scheme. Shryock, 537 F.2d at 209 (quoting Kann v. United States, 323 U.S. 88, 94, 65 S.Ct. 148, 150-51, 89 L.Ed. 88 (1944), and Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362-63, 98 L.Ed. 435 (1954)). Appellants argue that they did not use the U.S. mail in conducting their business or in executing the alleged fraudulent scheme. Instead, Appellants contend that they communicated with sellers and buyers of the used cars via fax, telephone, and private carriers such as Fed Ex, not through the U.S. mail. They argue that the use of the U.S. mails by the Arizona Department of Transportation to send the Arizona titles back to Arizona Checker Sales occurred after the object of the alleged scheme was completed, and that the mailing was not sufficiently closely related to the scheme. See United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974)(defendants engaged in unauthorized use of credit card; mailings of invoices to card owner for payment were not in execution of scheme because it was immaterial to defendants how the payments were obtained). 17 This argument fails under the Supreme Court case Schmuck v. United States, 489 U.S. 705, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989). Schmuck involved a similar scheme whereby Schmuck purchased used cars, rolled back their odometers, and resold the vehicles to retail dealers for artificially inflated prices based on the low-mileage odometer readings. The cars were then resold to customers. After the sale, the retail dealers would submit a title application to the Wisconsin Department of Transportation on behalf of the buyer. The receipt of the Wisconsin title was a prerequisite for the transfer of title and for the customer's acquisition of Wisconsin tags. 18 Just as Appellants do here, Schmuck argued that the submission of the title application did not satisfy the mailing element of the mail fraud statute. The Supreme Court, however, disagreed, holding: 19 To 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. 20 Id. at 710-11, 109 S.Ct. at 1447-48 (citations omitted). The Court found that Schmuck was engaged in an ongoing fraudulent venture, and held that: 21 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 Wisconsin customers. 22 Under these circumstances, we believe that a rational jury could have found that the title-registration mailings were part of the execution of the fraudulent scheme, a scheme which did not reach fruition until the retail dealers resold the cars and effected transfers of title. 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. 23 Id. at 711-12, 109 S.Ct. at 1448. Thus, the Court concluded that the mailing element of the mail fraud statute was satisfied. 24 Here, Hubbard and Lyon similarly engaged in an ongoing relationship with Arizona Checker Sales. In applying for Arizona titles, Arizona Checker Sales used the falsified mileage figures on the titles sent by Hubbard and Lyon. Although Hubbard and Lyon may not have directly used the U.S. mail to send falsified documents and titles, Arizona's mailing of new titles to Arizona Checker Sales would be sufficiently closely related to the fraudulent scheme if it was incident to an essential part of the scheme or a step in the plot. 25 The district court properly left it to the jury to determine whether the mailings were part of the execution of the fraudulent scheme--i.e., whether Defendants' scheme did not reach fruition until Arizona Checker Sales' received the Arizona titles. See Schmuck, 489 U.S. at 712, 109 S.Ct. at 1448-49. The jury decided that the scheme was dependent on the mailing of the Arizona titles to Arizona Checker Sales, and convicted Hubbard and Lyon. The evidence showed that if Arizona Checker Sales had not been able to obtain the Arizona titles, they could not have used the vehicles as taxicabs. Thus, an inability to get the Arizona titles would have put an abrupt halt to Defendants' ongoing relationship with Arizona Checker Sales. See id. 26 In sum, we conclude that the mailing of the Arizona titles from the Arizona Department of Transportation to Arizona Checker Sales is analogous to the situation in Schmuck, where the retail dealers had to acquire Wisconsin titles for their retail customers. And, as in Schmuck, we find sufficient evidence to support the jury's determination that the success of the fraudulent scheme depended on the acquisition of the Arizona titles. Thus, there is sufficient evidence that the mailing was sufficiently closely related to the scheme. 2