U.S. v. DeCicco

• Citation: 439 F.3d 36
• Decision Date: 02 March 2006
• Docket Number: No. 05-1645.,05-1645.
• Parties: UNITED STATES of America, Appellee, v. Gary P. DeCICCO, Defendant, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

439 F.3d 36

UNITED STATES of America, Appellee, v. Gary P. DeCICCO, Defendant, Appellant.

No. 05-1645.

United States Court of Appeals, First Circuit.

Heard January 10, 2006.

Decided March 2, 2006.

COPYRIGHT MATERIAL OMITTED

Joseph S. Oteri, with whom Kimberly Homan were on brief, for appellant.

Robert E. Richardson, Assistant United States Attorney, with whom Michael J. Sullivan, United States Attorney, were on brief, for appellee.

Before TORRUELLA and LYNCH, Circuit Judges, and LASKER,^* Senior District Judge.

TORRUELLA, Circuit Judge.

On September 27, 2000, a grand jury sitting in Boston, Massachusetts returned an indictment charging Gary P. DeCicco ("appellant") with four counts of mail fraud, in violation of 18 U.S.C. § 1341, in connection with claims for insurance proceeds submitted in the wake of two 1995 fires (Counts 1-4), and two counts of use of fire to commit a felony, in violation of 18 U.S.C. §§ 844(h)(1) & (2) (Counts 5-6). Although DeCicco was eventually acquitted on the use-of-fire counts, he was convicted on the four mail fraud counts. He now appeals this conviction. After careful consideration, we affirm.

I. Background

A.

In August 1989, DeCicco bought a building located at 17 Rear Heard Street in Chelsea, Massachusetts for $60,000. Earlier that year, before buying the building, he had applied to the City of Chelsea ("Chelsea") for a permit to use the building as a warehouse for two moving companies that he owned. The building, however, was surrounded by residential buildings and had only a narrow driveway providing access. Chelsea therefore denied the appellant's application.

DeCicco nonetheless went ahead with the purchase. Although the building price was only $60,000, he obtained a loan of $104,000 from Somerset Bank, secured by a mortgage on the property. Notwithstanding the denial of the occupancy permit, DeCicco initially tried to use the building as a warehouse. He was, however, prevented from doing so by Chelsea. As a result, he ended up with a significant mortgage on a building he could not use for the purpose he desired. By August 1991, he was in arrears on the mortgage, and Somerset Bank informed him that it was intending to initiate foreclosure proceedings. Moreover, the appellant had two other obligations to Somerset Bank by this time: a $400,000 loan used to build a new warehouse in Revere, Massachusetts ("Revere"), and a short-term, $80,000 commercial loan. The appellant was falling behind on the Revere loan as well.

In October 1991, DeCicco obtained insurance on the Rear Heard Street building from the Lincoln Insurance Company ("Lincoln"). However, he misrepresented that the premises were occupied, and after this fact was discovered upon inspection, Lincoln, on March 3, 1992, sent a cancellation notice by certified mail to the appellant. The notice advised the appellant that his insurance policy would be cancelled effective March 13, 1992 at 12:01 a.m.

Just twenty-nine hours before the insurance was to lapse, a fire occurred at the Rear Heard Street building. Investigators determined that the fire was intentionally set using a liquid accelerant at the base of the support pillars in a manner designed to bring the building down. The Fire Department responded quickly, however, and such little damage occurred that the appellant did not file a claim.

Following the cancellation of the Lincoln policy, the Rear Heard Street building went for three years without insurance. At some point during this period, the appellant retained Richard Stewart ("Stewart"), an accountant, to help him prepare income tax returns for the years 1992, 1993, and 1994. In December 1994, Stewart informed the appellant that, based on the information available to him and the draft returns he had prepared, the appellant owed $1,246,298 in federal and state taxes and penalties for 1992, 1993, and 1994. The draft returns reflected some deductions for expenses, but they did not reflect deductions for such business expenses as payroll. Based on Stewart's training and experience, he estimated that the appellant's tax liability might have been reduced by as much as ninety percent if the appellant had documentation for these expenses.

Aside from his significant personal income tax liability, DeCicco also continued to have other financial issues during this period. He owed a total of $65,673.56 to Revere in property taxes. He was also in significant arrears on property taxes for the Rear Heard Street building in Chelsea. By July 1995, the amount he owed to Chelsea had ballooned to approximately $12,000. Finally, he still owed almost $95,000 to Somerset Bank in connection with the loan used to purchase the Rear Heard Street building, which was essentially vacant, and which he was expressly forbidden to use in connection with his moving companies.

In May 1995, facing all of these financial pressures, DeCicco once again attempted to obtain insurance on the Rear Heard Street building. On May 17, 1995, the Scottsdale Insurance Company ("Scottsdale") issued the appellant an insurance policy providing coverage of up to $125,000 for the building.

Less than two months later, on July 9, 1995, the building was intentionally set on fire for a second time, with at least four separate fires started on the second floor of the warehouse. The Fire Department again responded quickly, and the fires were extinguished. However, twelve days later, on July 21, 1995, a third fire was intentionally set in the building in the early morning hours. This was a multiple-alarm fire, requiring Chelsea to call for aid from Revere, Everett, and Boston to fight the fire. It took approximately four hours to extinguish the blaze. In the end, the building was completely destroyed. The fire also damaged a neighboring garage; melted the siding on a nearby building; and destroyed the kitchen, bathroom, and pantry on the third floor of another building.

Given the extensive damage, Chelsea ordered the appellant to demolish what was left of the building. The appellant asked Kevin Mahoney ("Mahoney") to perform the work. Mahoney discussed the matter with his cousin, Randy Adamson, and then agreed to demolish the building for $13,800, a price that the appellant accepted. Mahoney and Adamson, using helpers and equipment, demolished the building and removed the rubble in approximately six days. The appellant paid Mahoney with an initial check of $4,000 and then later paid the remaining $9,800.

DeCicco then sought the assistance of a public claims adjustor, Terence Lynn ("Lynn"), to assist in filing his claim with Scottsdale, to recover pursuant to the insurance policy for the destruction of the building. However, almost immediately a number of points of contention arose between the appellant and Scottsdale. In early September 1995, in a communication between Lynn and Scottsdale regarding the appellant's claim, an issue arose regarding whether the building was vacant at the time of the fire. This was important, because according to the terms of the Scottsdale policy, recovery for a fire loss could be reduced by fifteen percent if the building was vacant when the fire occurred. On September 19, 1995, as this issue regarding vacancy was pending, the appellant's insurance broker, Justin Kaan, faxed to Lynn a document signed by the appellant and purporting to set forth certain items that were in the warehouse at the time of the fire, including dollies, a piano, a desk, chairs, and a couch. Scottsdale's fire investigator, however, saw no evidence of dollies or a piano when he examined the remains of the building after the fire.

There were other controversies as well. On September 20, 1995, Lynn sent a letter to Scottsdale's representative, John Bottini ("Bottini"). Lynn wrote that "I have enclosed a copy of the wrecking bill in the amount of $23,681, which was performed as a result of an emergency raze or repair order issued by the municipality shortly after the occurrence of the loss." The enclosed demolition bill purported to bear the signature of Arthur Adamson. However, according to Mahoney, who actually did the demolition work with Randy Adamson, DeCicco only paid $13,800, the agreed-upon price for the work. Furthermore, both Randy Adamson and his mother stated that the signature on the demolition bill submitted to Bottini was not that of Arthur Adamson (who died in 1997), nor was the bill on his letterhead.

On October 17, 1995, Lynn mailed to Bottini another letter in which he again mentioned the $23,681 demolition bill. Included with this letter was the partial sworn statement in proof of loss referenced in Count 1 of the indictment and a request for an advance payment of $25,000. In an attempt to get Scottsdale to issue this advance payment, Lynn's letter stated, among other things: "We both know that Massachusetts is a so-called broad evidence rule state. The disagreements as to value and loss are still subject to indemnification of the insured whose indebtedness to the mortgagee as of this date of loss was $97,016.29 and who has incurred a wrecking bill of $23,681." Scottsdale thereafter forwarded Lynn a $25,000 check — the Count 2 mailing — which Lynn sent to Somerset Bank, which was named as a loss payee because of its mortgage on the property.

On January 2, 1996, Lynn sent a letter to Bottini enclosing a proposed sworn statement in proof of loss seeking to achieve a final settlement of the losses and again noting, among other things, that "the incurred cost of wrecking the structure was $23,681. . . ." Lynn also claimed in this letter that the appellant had made extensive renovations to the building, including installation of a hot air heating system, an electrical system, a two-piece bath, a new roof, skylights, and a $10,000 power lift. However, the appellant had told Bottini shortly after the fire that the warehouse had had neither heat nor electricity. Furthermore, Scottsdale's fire investigator saw no evidence of a power lift and...