Opinion ID: 561318
Heading Depth: 2
Heading Rank: 3

Heading: Customers' Failure to Invoke Civil or Administrative Remedies

Text: 27 The district court also granted the government's motion in limine to preclude the introduction of evidence concerning the failure of FCCB customers who were named in the indictment to seek remedies through civil suit or CFTC reparation proceedings. 2 Biesiadecki contends that the failure of the customers to complain is probative of whether they believed they had been defrauded and tends to prove the defense theory that the FBI employed coercive interview techniques when questioning FCCB customers. 28 If the customers had felt that they had been defrauded then they would have, in Biesiadecki's view, sought legal or administrative relief. The trial judge was unpersuaded by this reasoning and she found that Biesiadecki was again attempting to misdirect the jury's attention to the customers' conclusions as to whether they were the victims of fraud. The appropriate inquiry is whether Biesiadecki possessed the intent to defraud. Ward v. United States, 845 F.2d at 1462. Moreover, there are a variety of plausible reasons that would explain a customer's decision not to institute formal proceedings--embarrassment, lack of resources, lack of knowledge of available remedies. 29 It is tenuous at best to suggest that the absence of formal complaints by FCCB customers tends to prove that the FBI employed coercive interview techniques. Biesiadecki argues that since the customers did not file formal complaints, they did not believe that they had been defrauded until the FBI somehow convinced them that they were the victims of fraud. Even assuming we could accept this scenario, it still requires the mistaken acceptance of an underlying assumption that the customer's belief or reliance is an element of mail fraud. Therefore we cannot find that the district court abused its discretion in excluding this evidence.D. Mailings in Furtherance of the Scheme to Defraud 30 Biesiadecki attacks the sufficiency of the evidence supporting his conviction for mail fraud. In reviewing the sufficiency of the government's evidence, we review all evidence and reasonable inferences drawn therefrom in the light most favorable to the government. United States v. Mealy, 851 F.2d at 895. A verdict will not be overturned on appeal if any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in original). The elements required to support a conviction under the mail fraud statute are: (1) a scheme to defraud, and (2) use of the mail for the purpose of executing, or attempting to execute, the scheme to defraud. Schmuck v. United States, 489 U.S. 705, 721, 109 S.Ct. 1443, 1453, 103 L.Ed.2d 734 (1989). Biesiadecki's attack focuses on the second element. He argues that the application forms and account statements mailed to FCCB customers were not in furtherance of the scheme to defraud. 31 Biesiadecki asserts that the customer application forms could not have furthered the scheme to defraud because they warned prospective investors of the risks involved and therefore undermined any fraudulent representations. The Supreme Court in Schmuck rejected this view and held that a mailing may be part of the execution of the scheme to defraud even though it may have been counterproductive to the scheme. 489 U.S. at 715, 109 S.Ct. at 1449-50. Biesiadecki also argues that the mailing of the applications by FCCB to potential investors did not advance the scheme to defraud because it was actually the return of the applications to FCCB that was required to open the accounts. However, as the government aptly notes, this argument is patently illogical--the scheme required that the potential investors somehow receive the applications from FCCB in order to complete and return them. A rational jury could have concluded that the applications were in furtherance of the scheme to defraud. 32 Biesiadecki argues that the customer account statements were not essential to the scheme to defraud because they were mailed after the scheme had come to fruition. Biesiadecki incorrectly presumes that the only fraud alleged by the government involved the up-front commissions deducted from the customer accounts. In fact, the government alleged, and presented evidence of, a continuing scheme to defraud in which customers were persuaded to reinvest remaining funds and invest additional funds into per-trade commission accounts with FCCB. 33 The trial judge found that a rational jury could conclude that the mailing of the customer account statements helped to lull customers into a sense of security by furthering the impression that FCCB was a legitimate business enterprise, and that without such statements, customers might have closed their accounts sooner, discerned that they were the victims of fraud, and taken action against FCCB. This is in accord with the reasoning of Schmuck that it is sufficient for the mailing to be 'incident to an essential part of the scheme'  to satisfy the mailing element in a mail fraud conviction. 489 U.S. at 710, 711, 109 S.Ct. at 1447, 1448 (quoting Badders v. United States, 240 U.S. 391, 394, 36 S.Ct. 367, 368, 60 L.Ed. 706 (1916)). Schmuck involved a scheme to tamper with odometer readings and the Supreme Court held that title registration forms which were mailed after the fruition of the scheme to defraud, even though only tangentially related to the scheme, were sufficient to satisfy the mailing element of the mail fraud offense. 489 U.S. at 711, 109 S.Ct. at 1447-48. We find that a rational jury could have found that the scheme to defraud was advanced by the mailing of the customer account statements.