U.S. v. Peters, 83-1471

• Decision Date: 23 April 1984
• Docket Number: No. 83-1471,83-1471
• Citation: 732 F.2d 1004
• Parties: 15 Fed. R. Evid. Serv. 1254 UNITED STATES of America, Appellee, v. William PETERS, Richard F. Ellis, and Peters Fabrics, Inc., Defendants, Appellants.
• Court: U.S. Court of Appeals — First Circuit

Page 1004

732 F.2d 1004

15 Fed. R. Evid. Serv. 1254

UNITED STATES of America, Appellee, v. William PETERS, Richard F. Ellis, and Peters Fabrics, Inc. Defendants, Appellants.

No. 83-1471.

United States Court of Appeals First Circuit.

Argued Feb. 9, 1984.

Decided April 23, 1984.

R. Robert Popeo, Steven J. Brooks, and John M. Connolly, Boston, Mass., with whom John Foskett, Deutsch, Glass & Brooks, Paul D. Wilson, and Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, Boston, Mass., were on brief, for Peters Fabrics, Inc., Richard F. Ellis, and William Peters.

Maurice R. Flynn, III, Asst. U.S. Atty., Boston, Mass., with whom William F. Weld, U.S. Atty., Boston, Mass., was on brief, for appellee.

Before COFFIN and ALDRICH, Circuit Judges, and GIGNOUX, ^* Senior District Judge.

COFFIN, Circuit Judge.

Defendants Peters Fabrics, Inc., its president, William Peters, and its vice president, Richard Ellis, appeal from convictions for mail fraud, 18 U.S.C. Sec. 1341, and conspiracy, 18 U.S.C. Sec. 371, arising out of a scheme to defraud their insurance company by claiming property loss due to fire and theft. The jury convicted all defendants on two counts of mail fraud and one count of conspiracy. Prior to sentencing, the district court granted Ellis's motion for judgment of acquittal on one of the mail fraud counts. Defendants challenge the sufficiency of the evidence, the government's belated disclosure of Brady material, and the district court's order barring defendants from cross-examining the key government witness regarding his psychiatric history. We affirm.

I. Sufficiency of the Evidence

The following outline of the evidence (and reasonable inferences drawn therefrom), which we must view in the light most favorable to the government, demonstrates that a jury could have found guilt beyond a reasonable doubt as to each conviction.

Defendants sought insurance payments of nearly $1 million for damages resulting from a fire at a leased warehouse on Sleeper Street in Boston and from a theft of merchandise alleged to have occurred at the warehouse before the fire. Peters Fabrics, Inc., a buyer and seller of wholesale and retail fabrics, leased the Sleeper Street warehouse on a month-to-month basis in the spring of 1977 in the course of moving from its main warehouse on Congress Street in Boston to Dedham, Massachusetts. ¹ Peters Fabrics obtained fire and theft insurance for the Sleeper Street warehouse. The insurance terms required the company to install a burglar alarm at the newly leased warehouse. Unbeknownst to the defendants, the alarm system automatically recorded the times of any openings or closings of the two doors and two elevators leading into the warehouse.

Defendants directed the transfer of more than 20 shipments of fabric to the warehouse in late May and early June, 1977. Edward Fallon, Jr., the company's warehouse manager and an unindicted co-conspirator, testified under a grant of immunity that many of the goods shipped were a pigmented denim material, which he described as "unmerchantable" "junk". Testimony of other witnesses showed that the company had been unable to sell the material, the value of which was then in a depressed state. Fallon testified that some goods were falsely labeled so as to appear to be of high quality, and that some rolls of fabric were wrapped in paper, which required more time and effort than the usual practice of wrapping the fabric in plastic bags. Fallon testified that when he asked Ellis why the goods were being wrapped in paper and wondered aloud whether the company was planning a fire, Ellis "got very upset and said something to the effect, shut the so and so up or you will end up in the F'ing unemployment office".

On June 23, 1977, an arson fire occurred at the Sleeper Street warehouse. When the fire department responded to the alarm, the door leading into the warehouse was locked. Various Peters Fabrics employees had access to the key to that door. The fire had been set by unknown persons using Coleman fuel at six separate locations in the warehouse. Fallon testified that sometime during the afternoon of the fire defendant Ellis had told Fallon that Ellis would secure the Sleeper Street warehouse that day.

Months later, Peters Fabrics' insurance company received in the mail insurance claims for material damaged by fire and for material lost due to theft before the fire. This mailing gave rise to Count One of the indictment. After the insurance company rejected both claims, Peters Fabrics brought suit against the company. On October 27, 1978, Peters Fabrics' attorney mailed William Peter's interrogatory answers to the insurance company's attorney. This mailing gave rise to Count Two of the indictment.

Fallon testified that bills of lading and shipment records that accompanied the insurance claim forms had been falsified to exaggerate the amount and quality of fabric the warehouse had contained before the fire. Fallon testified that the fabrics remaining after the fire were the only fabrics to have been shipped there.

The alarm records corroborate Fallon's testimony that no theft occurred at the warehouse. Alarm record times contradict delivery times indicated on some of the bills of lading. For instance, on some days on which the alarm records indicate no entrances into the warehouse, bills of lading indicate the delivery of goods. Defendants claimed that the last delivery to the warehouse was made on June 21, 1977, and that the claimed theft of more than 230,000 yards of material occurred between then and the fire on June 23 at 4:18 p.m. The alarm records for June 22 indicate only an opening and closing of the door at 4:12 p.m., followed immediately by another opening and closing. On June 23, the day of the fire, the alarm records show only a single entry at 3:36 p.m., less than an hour before the fire alarm sounded.

Michael Mantuck, vice president of the salvage company that removed fire- and water-damaged goods from the warehouse, testified that the claimed theft of 230,000 yards of fabric would have required at least 150-160 man-hours, or two full days' work by a ten-man crew. The alarm records show that such work could not have been performed. Mantuck also testified that after the fire approximately 75 per cent of the storage space in the warehouse was filled with fabrics (170,000 yards), and that, in his opinion, another 230,000 yards of material (claimed to have been stolen) would not have fit in the warehouse.

The above recitation of facts forecloses any argument that the jury could not reasonably have inferred that the defendants had devised a "scheme or artifice to defraud", 18 U.S.C. Sec. 1341, and had evidenced a specific intent to do so. We also consider the jury fully justified in finding that defendants had caused the mails to be used, within the meaning of the mail fraud statute. See United States v. Maze, 414 U.S. 395, 399, 94 S.Ct. 645, 648, 38 L.Ed.2d 603 (1974); Pereira v. United States, 347 U.S. 1, 8-9, 74 S.Ct. 358, 362-363, 98 L.Ed. 435 (1954); United States v. Martin, 694 F.2d 885, 889-90 (1st Cir.1982). The jury could have found that the defendants could reasonably have foreseen that their attorneys would send the insurance claim forms and interrogatory answers through the mail or that the defendants knew that these mailings would follow in the ordinary course of business. Each set of mailed documents clearly furthered the fraudulent scheme. ²

The facts outlined above also provide more than enough evidence to support the conspiracy convictions. The jury did not have to make a leap of faith to find that defendants had committed mail fraud offenses pursuant to a mutual understanding or agreement. As we have stated before, " '[p]articipation in a criminal conspiracy need not be proved by direct evidence; a common purpose and plan may be inferred from a "development and a collocation of circumstances." ' " United States v. Cincotta, 689 F.2d 238, 241 (1st Cir.) (quoting Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942)), cert. denied, --- U.S. ----, 103 S.Ct. 347, 74 L.Ed.2d 387 (1982); accord United States v. Bithoney, 631 F.2d 1, 5 (1st Cir.1980), cert. denied, 449 U.S. 1083, 101 S.Ct. 869, 66 L.Ed.2d 808 (1981). Peters and Ellis each performed some tasks that were essential to the execution of the scheme and were consistent with their participation in an agreed upon plan. The jury could reasonably have disbelieved that Peters and Ellis, as cousins and as president and vice president, respectively, of a relatively small company, ³ acted entirely independently of one another and of other company employees who furthered the scheme in performing actions that support the convictions of Ellis and Peters for the underlying substantive offense, mail fraud. Defendants strain credulity in suggesting that Ellis did not know that the company had insured the Sleeper Street premises, that Ellis may have falsified internal company documents after the fire and alleged theft for reasons unrelated to the fraudulent scheme, and that Peters was so unfamiliar with the contents of the Sleeper Street warehouse that he could have signed the insurance claim form and the interrogatory answers alleging theft without knowing those statements to be false. ⁴

Defendants argue that they may not properly be convicted of conspiracy, asserting that the evidence does not indicate that Peters and Ellis conspired together and that they may not be convicted for conspiring separately with the corporation, Peters Fabrics, Inc. Defendants essentially argue that a purported conspiracy between an individual and a fictional entity--a corporation--cannot exist.

The evidence suggests that Peters and Ellis conspired together, performing acts--completing bills of lading, signing insurance claim forms and interrogatory answers--that they were authorized to perform and that they performed with an intent to benefit the corporation. ⁵ See ...