Court Opinion

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Date Created: 2015-10-13 22:04:37.227695+00
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Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-27-2004

USA v. Medrala
Precedential or Non-Precedential: Non-Precedential

Docket No. 02-3926

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Recommended Citation
"USA v. Medrala" (2004). 2004 Decisions. Paper 973.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/973

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                                                       NOT PRECEDENTIAL

                  IN THE UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT

                                     No. 02-3926
                                  ________________

                           UNITED STATES OF AMERICA

                                          v.

                                  ROBERT A. MEDRALA,
                                            Appellant

                      ____________________________________

                    On Appeal From the United States District Court
                        For the Eastern District of Pennsylvania
                                 (D.C. No. 01-cr-00657)
                      District Judge: Honorable Berle M. Schiller
                    _______________________________________

                           Submitted February 26, 2004
              Before: RENDELL, BARRY, and BECKER, Circuit Judges.

                               (Filed February 27, 2004)

                              _______________________

                                     OPINION
                              _______________________

BECKER, Circuit Judge.

      Robert A. Medrala appeals from the judgment of conviction, following a jury trial,

on eleven counts of mail and wire fraud. Medrala was charged with masterminding a

fraudulent scheme whereby the company of which he was a principal, Esprit Systems

Consulting, Inc., which sold computer software, development training and consulting to
large corporations and government agencies, overcharged its customers for travel costs.

Although Esprit’s agreements with the customers were that it would charge them only for

travel costs actually incurred, it obtained discount airline tickets (back to back tickets) and

charged its customers the higher priced standard coach “Y fare,” deceiving the customers

as to the prices.

       Medrala raises four contentions on appeal: (1) that there was insufficient evidence

to support the jury’s verdict of guilty on the charges; (2) that the District Court committed

clear error when it found that the loss for sentencing guideline purposes was the amount

of money Medrala fraudulently obtained from his victims; (3) that the District Court erred

when it found that Medrala was an organizer or leader of an “extensive” fraudulent

scheme, thus increasing his offense level by four levels, pursuant to U.S.S.G. § 3B1.1(a);

and (4) that the District Court erred in imposing restitution of $131,622.86 which was the

amount that Medrala fraudulently obtained from his victims. The facts are quite detailed

but they are well known to the parties hence we need not repeat them here. Rather we

will set forth enough facts to elucidate our ratio decidendi. For the reasons that follow,

we affirm.

       Under the applicable standard of review we must consider the evidence in the light

most favorable to the government, and draw all reasonable inferences from the evidence

in the government’s favor. See, e.g. United States v. Anderskow, 88 F.3d 245, 251 (3d

Cir. 1996).

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                                              I.

       There is no real dispute that Medrala used false documents that represented that

Esprit incurred a much higher airfare than it actually spent and that Medrala hid this

scheme from his clients and others. Some 274 bills of this character were introduced.

Medrala concedes that he over-billed his clients and that the mails and interstate wires

were used in furtherance of this over-billing. Medrala’s in-house accountants, Anne

Marie Gray and Christina Feng, testified that they prepared these false Esprit bills at

Medrala’s instruction using false invoices, and that they sent the Esprit bills to clients

along with the false travel agency invoices. Office manager Sandra Essig testified that

she had obtained the false travel agency invoices from Medrala or Janice Fahey of

Downingtown Travel, Esprit’s travel agent. Gray, Feng, and Essig all testified that the

airfare on the bill to the Client was the more expensive fare, known as a “Y-fare,” and

was not actually the one that Esprit incurred. A specific intent to defraud is easily

inferrable from the evidence.

       Medrala attempts to counter with three arguments. First, he submits he lacked

intent because he told employees who questioned his use of the false invoice to over-bill

his clients that the scheme was legal. This argument is patently without merit. Second,

Medrala contends that the 274 travel agency invoices he submitted to his clients between

1992 and 1998 did not represent or purport to be a “receipt” or suggest that he had

                                              3
actually incurred the amount listed in the invoice, even though he never disclosed to his

clients that this receipt was false. This argument too is patently without merit. Finally,

Medrala argues that his arrangements with his clients did not limit him to reimbursement

of his “actual” travel expenses. But the record completely undermines this argument, for

the trial record contains numerous contracts, purchase orders, and even Esprit records

which provided that Esprit could be reimbursed only for its “actual” expenses. Moreover

several Esprit clients testified that they permitted Esprit to be reimbursed for “actual”

expenses only. Finally, Medrala argues that he had no intent to defraud because his

clients would have paid the higher charge if he had actually incurred it. But this is no

defense and does not negate Medrala’s intent. In short there is more than enough

evidence to support the conviction for mail and wire fraud.

                                              II.

       Under § 3B1.1(a) of the sentencing guidelines,

       If the defendant was an organizer or leader of a criminal activity that
       involved five or more participants or was otherwise extensive, increase [the
       guideline offense level] by 4 levels.

Medrala does not deny that he was an organizer or leader; rather, he submits that there

were no other criminally culpable participants in the scheme and that it was not

“extensive”. This argument too fails.

       The evidence at trial established that there were at least six criminally responsible

participants in the fraud scheme (including Medrala), and that Medrala was in charge of

                                              4
Esprit’s finances and developed and implemented the scheme in which the others assisted.

Indeed, at one meeting, in Medrala’s presence, his colleague and co-owner Rebecca

Winant instructed employees that they were not to tell Esprit customers that the company

was using false airline receipts to bill its clients.

       It is also clear that the scheme was otherwise extensive. The scheme spanned

seven years, from 1992 through 1998, and involved dozens of Esprit clients all over the

United States. It involved not only Medrala’s own employees, who knowingly prepared

hundreds of false bills, but a travel agency who supplied hundreds of false airline receipts,

and many others. In United States v. Antico, 275 F.3d 245, 268-69 (3d Cir. 2001), a

fraud that involved only three participants but used the unknowing services of many

outsiders, was nonetheless considered extensive. The District Court’s finding that

Medrala was an organizer or leader was not clearly erroneous.

                                                III.

       We take up together Medrala’s claim about the calculation of the amount of loss

and the amount of restitution. Essentially, Medrala claims that his gain in the fraud

scheme should be used to calculate the loss (and restitution) and that this gain is

calculated by subtracting from this loss figure several Esprit expenses for which Medrala

was not permitted to bill his clients, including the costs of executing the scheme. We

disagree.

       Medrala offers a number of items that he says should have been offset, such as per

                                                 5
diem costs for the travel of Esprit’s consultants; providing coffee and snacks for the class

of students; the cost of additional training supplies, overhead transparencies, and other

items which were billed to Esprit by the consultants but which were not billed to the

clients; shipping costs which were billable but were not in fact billed: the interest costs of

carrying tickets purchased with credit cards for three or four months before the tickets

were used; the costs of extra consultants for “team teaches;” and the internal costs of

administration of the Esprit programs and the discount ticket programs. This claim is

utterly baseless. Medrala’s agreements with his clients did not permit much less compel

him to deduct any such expenses, and the notion that he could claim credit for expenses

incurred in defrauding the clients is well beyond the pale.

       Therefore, the District Court did not err much less clearly err in calculating loss.

Neither did it err in calculating restitution; Medrala makes the same argument about

deducting expenses but it is equally unmeritorious in the context of restitution.

       The judgment of the District Court will be affirmed.

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