U.S. v. Miller, 82-1670

• Decision Date: 13 September 1983
• Docket Number: No. 82-1670,82-1670
• Citation: 715 F.2d 1360
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. James Rual MILLER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1360

715 F.2d 1360

UNITED STATES of America, Plaintiff-Appellee, v. James Rual MILLER, Defendant-Appellant.

No. 82-1670.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted May 13, 1983.

Decided Sept. 13, 1983.

Sandra Teters, Peter Robinson, San Francisco, Cal., for plaintiff-appellee.

Jerrold M. Ladar, San Francisco, Cal., for defendant-appellant.

Appeal from the United States District Court for the Northern District of California.

Before PECK ^*, FLETCHER and PREGERSON, Circuit Judges.

JOHN W. PECK, Circuit Judge:

A three-count indictment issued in the Northern District of California against James Rual Miller on June 30, 1982, charging Miller with mail fraud in violation of 18 U.S.C. § 1341. ¹ Central to each count of the indictment was the allegation that Miller devised a scheme and artifice to defraud Aetna Insurance Company by making a fraudulent insurance claim for a loss arising from an alleged burglary committed with Miller's knowledge and consent. The issue raised by Miller in this appeal is whether his jury conviction on the first two counts may be sustained where the government failed to prove that he procured, consented to or knew of the burglary, even though it did prove the allegation that Miller inflated the amount of his claimed loss. Because we conclude that the government failed to prove the scheme pleaded in the indictment, we reverse Miller's conviction.

The parties have stipulated to the following facts. Miller was the owner of San Francisco Scrap Metals, Inc., a company that regularly purchased scrap wire, and stripped, baled and resold it. On July 2, 1981, Miller increased his company's insurance coverage from $50,000 to $150,000 for a two-week period ending July 15, 1981. On the morning of July 15, 1981, Miller reported that his business had been burglarized the previous evening and that two trucks and 201,000 pounds of copper wire had been stolen. On July 20, 1981, Miller reported to the insurance adjuster that the missing copper had been purchased from L.K. Comstock, Inc. and Kingston Electric. Kingston Electric had sold a quantity of copper to San Francisco Scrap Metals but a similar quantity had been resold to Battery Salvage Company. Miller claimed that the copper sold to Battery Salvage had been purchased from Brayer Electric. Neither Brayer Electric nor L.K. Comstock sold San Francisco Scrap Metals the copper claimed to have been purchased. Miller sent his proof of loss to Aetna through the United States Mail. Miller received $100,000. One $50,000 check was sent by Aetna to Miller through the mail.

The scheme and artifice alleged in each count of the indictment is set forth in paragraphs one through seven of the first count. Those paragraphs read as follows:

1. Beginning on or about July 2, 1981 and continuing to on or about October 26, 1981, in the City and County of San Francisco, in the State and Northern District of California,

JAMES RUAL MILLER,

defendant herein, being the President of San Francisco Scrap Metal, Inc., did devise and intend to devise a scheme and artifice to defraud and to obtain money by means of false and fraudulent pretenses and representations from Aetna Insurance Company by making a fraudulent insurance claim for a loss due to an alleged burglary at San Francisco Scrap Metal.

2. At the time such pretenses and representations were made, defendant well knew them to be false. The scheme, so devised and intended to be devised, was implemented in substance as follows:

3. It was a part of the scheme that on or about July 2, 1981, defendant would and did increase his insurance policy coverage from $50,000 to $150,000 to be in effect for a two week period ending July 15, 1981.

4. It was a further part of the scheme that on or about July 15, 1981, defendant would and did report that a burglary had occurred at San Francisco Scrap Metal during the evening of July 14, 1981.

5. It was a further part of the scheme that defendant would and did claim to have lost 210,170 pounds of copper wire, worth $123,500 and two trucks during the alleged burglary.

6. It was a further part of the scheme that defendant well knew that the alleged burglary was committed with his knowledge and consent for the purpose of obtaining the insurance proceeds.

7. It was a further part of the scheme that defendant well knew that the amount of copper claimed to have been taken during the alleged burglary was grossly inflated for the purpose of fraudulently obtaining $150,000 from Aetna Insurance Company.

Count one alleged a violation of § 1341 by Miller's placement of the "proof of loss" in the mail. Count two alleged a violation of § 1341 by his "knowingly and wilfully caus[ing] to be placed in an authorized depository for mail matter of the United States Postal Service an envelope containing a check for $50,000 from Aetna Insurance Company." Count three was dismissed upon the government's motion prior to trial.

Miller was tried before a jury in August 1982. The government did not introduce any evidence that Miller knew of or consented to the July 14, 1981 burglary. At the close of the government's case, the government moved to strike paragraph six of the indictment, i.e., the "false burglary" allegation. Defense counsel opposed the motion on the ground that the "false burglary" was part of the scheme alleged in the indictment. The court denied the government's motion as well as a motion for acquittal made by the defense counsel. The jury rendered a guilty verdict on each of the two remaining counts. The trial court denied defense counsel's post-verdict motion for acquittal. Miller was sentenced to concurrent terms of two years imprisonment on each count.

Miller filed a timely appeal of the judgment. On appeal, Miller contends that in the indictment the government pleaded a single, unitary scheme to defraud involving a false burglary which it failed to prove. Miller further contends, and the government does not dispute, that at most the evidence established that Miller had fraudulently inflated his claim. Miller then concludes that the government failed to prove the offense as charged in the indictment and that to the extent the...