U.S. v. Dray

• Decision Date: 12 January 1990
• Docket Number: No. 89-1024,89-1024
• Parties: 30 Fed. R. Evid. Serv. 312 UNITED STATES of America, Appellee, v. Richard M. DRAY, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1132

901 F.2d 1132

30 Fed. R. Evid. Serv. 312

UNITED STATES of America, Appellee, v. Richard M. DRAY, Defendant, Appellant.

No. 89-1024.

United States Court of Appeals First Circuit.

Heard Jan. 12, 1990.

Decided March 28, 1990.

Opinion on Denial of Rehearing

April 20, 1990.

William P. Homans, Jr., with whom Homans, Hamilton & Dahmen, Boston, Mass., was on brief, for defendant, appellant.

F. Dennis Saylor, IV, Asst. U.S. Atty., with whom Wayne A. Budd, U.S. Atty., Boston, Mass., was on brief, for the U.S.

Before SELYA, ALDRICH and CYR, Circuit Judges.

SELYA, Circuit Judge.

Like a phoenix, this case arises for a second time, but with all the ascendant vigor of its first incarnation. And, like its legendary avine counterpart, this bird, too, turns to ashes. The tale follows.

I. BACKGROUND

In February 1987, defendant-appellant Richard Dray, along with Paul Ochs, was convicted of conspiracy to commit mail fraud. 18 U.S.C. Secs. 371, 1341 (1982). At the same trial, Dray and Ochs were acquitted on five substantive mail fraud counts. In the aftermath of the Court's opinion in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), we vacated the convictions and remanded for retrial of the conspiracy count. See United States v. Ochs, 842 F.2d 515 (1st Cir.1988). At the new trial, the defendants were again convicted on the conspiracy charge. Dray appeals, giving wing to several new arguments and necessitating that we revisit the matter from quite a different direction.

A

We recount the facts necessary to an understanding of this appeal in the light most congenial to the prosecution, as precedent requires, see, e.g., United States v. Tierney, 760 F.2d 382, 384 (1st Cir.), cert. denied, 474 U.S. 843, 106 S.Ct. 131, 88 L.Ed.2d 108 (1985), referring the motivated reader to our earlier opinion for a more exegetic narration. See Ochs, 842 F.2d at 517-19.

This prosecution arose out of the renovation of the Kresge Building in downtown Boston by Temple Place Associates (TPA), a Philadelphia-based limited partnership. TPA contracted with a local firm, Stanhope Development Company (Stanhope), to represent it and oversee the rehabilitation. Stanhope, like TPA, was formed exclusively for the Kresge project. One of Stanhope's duties was to assist in obtaining municipal permits. Mirabassi Associates, Inc. (Mirabassi), the general contractor and construction manager, was obligated to pay the fees for such permits. Ochs was a Stanhope partner. At his urging, TPA hired Dray, a well-connected Boston attorney, to handle permit-related legal matters.

Among his other attributes, Dray had known Douglas Robinson, an official of the city's Department of Inspectional Services, for some fifteen years. Ochs and Dray planned to bribe Robinson so that he would place the city's imprimatur upon a fraudulent application containing a gross understatement of project-related costs. Because the construction permit fee was calculated according to such estimates, "lowballing" the costs would effectuate a savings.

The evidence showed that Mirabassi calculated the real cost of the work to be $2,425,000. If submitted to the city, that estimate would have produced a permit fee of $23,950. When a Mirabassi engineer told Dray that the application was ready, Dray replied that the price tag was too grand. Dray directed that an application be prepared which falsely reflected $1,200,000 as the projected cost. Dray delivered the fraudulent application; Robinson processed and approved it. Because of the arithmetical fiction, the permit fee was reduced to $11,750. Mirabassi paid this bargain price and received the nihil obstat.

Of course, these machinations resulted in a windfall to Mirabassi--but the wind did not blow in that direction for long. To capture it, Dray and Ochs breezily embarked on a program of creative invoicing. First, Dray billed TPA $1,687.50 for conferring with Ochs and preparing and filing the permit application. Ochs transmitted this bill to TPA, which paid it. The next day, Dray billed Mirabassi $5,975 (roughly half the savings) for preparing and filing the same permit application. Although Mirabassi had not retained Dray and was not contractually bound to honor his invoice, Ochs hand-delivered it and directed Mirabassi to effect payment. Presumably because Mirabassi, having saved over $12,000, was well ahead of the game financially, it made the requested payment. In short order, Dray wrote a check to Ochs for $3,000 and gave Robinson approximately $400 in cash. ¹

Not content with the profit in hand, appellant sent another bill to TPA almost a year later. This statement asked $30,000 for legal services, again including the permit-related work. When Ochs protested, for TPA, that the charges were inordinate, Dray wrote back reminding him of the importance of Dray's political connections to the rehabilitation project. Ochs convinced TPA to pay the full $30,000.

B

A federal grand jury thereafter handed up a six count indictment against Dray and Ochs. Count 1 charged the defendants with conspiring to use the mails in furtherance of a scheme to defraud the city, Mirabassi, and TPA. The remaining counts charged them with substantive violations of the mail fraud statute, 18 U.S.C. Sec. 1341. When trial began, the government introduced evidence of where the contracting parties were located (Boston and Philadelphia) and showed that the mails were frequently used to transmit papers between them. The government also introduced seven specific documents which paralleled the five substantive offenses charged in the indictment (two documents related to count 4 and two to count 6). These papers were introduced through J.W. Smith, a ranking TPA employee. According to Smith, it was the customary practice of TPA and Mirabassi to send written materials back and forth either by mail or Federal Express, depending on time constraints. Smith could not recall specifically whether the seven documents in question were mailed or transmitted in some other fashion. The government attempted to fill this gap by resort to circumstantial evidence. For instance, by comparing a document's internal date with the date of its apparent receipt, one might infer whether it had been mailed or had been delivered overnight. The rest of the prosecution's case was rock solid; turned sovereign's evidence under a grant of immunity, Robinson was the star witness.

While Federal Express is a useful intercommunicative device when celerity enters into the equation, cf., e.g., United States v. LaFrance, 879 F.2d 1, 2 (1st Cir.1989) (discussing service's utility "[w]hen contraband absolutely, positively has to get there overnight"), it is a form of delivery which falls beyond the reach of the federal mail fraud statutes. See United States v. Massey, 827 F.2d 995, 1000 (5th Cir.1987); United States v. Wosepka, 757 F.2d 1006, 1010 (9th Cir.1985). At the close of the case in chief, the district court (Woodlock, J.), while acknowledging "a possibility that the mails were used," ruled that the proof of mailing as to three specific offense counts was too exiguous to warrant consideration by the jury. The court stressed the likelihood that "Federal Express was used" for some (or all) of the materials transmitted. Accordingly, judgments of acquittal were directed as to counts 2, 3, and 5. The case went to the jury on the remaining charges (conspiracy, count 1; and two specific offenses, counts 4 and 6). The jury convicted both defendants of conspiracy, but otherwise acquitted them.

While the defendants' appeals were pending, the Supreme Court ruled that the mail fraud statute did not extend to deprivations of intangible rights. McNally, 483 U.S. at 356, 107 S.Ct. at 2879-80. Because Judge Woodlock, in full accord with prior precedent, had instructed the jury on several alternative theories of mail fraud, including the theory that mail fraud could encompass a scheme to defraud the public of an "intangible political or civil right," we overturned the convictions and remanded for a new trial. See Ochs, 842 F.2d at 521-27.

C

Dray and Ochs were retried before a different judge (Mazzone, J.) under a redacted indictment limited to the conspiracy count. Before trial, Dray filed a motion in limine to bar reference to either the seven documents or the mailing thereof. ² He argued that because those documents comprised the evidence against him on the mail fraud charges of which he stood acquitted, principles of collateral estoppel precluded their use at the conspiracy count's retrial. The district court denied the motion, ruling that the documents themselves, and the associated evidence, could be introduced. The judge simultaneously rebuffed appellant's request for limiting instructions.

At the second trial, substantially the same testimony emerged as at the earlier trial. The seven documents were again admitted as full exhibits. After unsuccessfully moving for judgment of acquittal, Dray was found guilty (as was Ochs). It is against this backdrop that we view Dray's legal arguments, referring from time to time, for ease in reference, to the earlier trial as "Trial No. 1" and to the replay as "Trial No. 2."

II. PRINCIPLES OF COLLATERAL ESTOPPEL

Collateral estoppel is not only a principle of substantive federal law. In the criminal context, it is imbued with constitutional dimensions. Ashe v. Swenson, 397 U.S. 436, 445, 90 S.Ct. 1189, 1195, 25 L.Ed.2d 469 (1970); United States v. Gonzalez-Sanchez, 825 F.2d 572, 584 (1st Cir.), cert. denied, 484 U.S. 989, 108 S.Ct. 510, 98 L.Ed.2d 508 (1987). In certain respects, the doctrine stands as a sentinel safeguarding the Double Jeopardy Clause of the fifth amendment.

We are fortunate that on the eve of oral argument herein the Court restated its views on collateral estoppel in Dowling v. United States, --- U.S. ----, 110 S.Ct. 668, 107 L.Ed.2d 708 (1990). Dowling involved a prosecution for bank robbery. Although defendant had...