U.S. v. McConnell, 92-4028

• Citation: 988 F.2d 530
• Decision Date: 05 April 1993
• Docket Number: No. 92-4028,92-4028
• Parties: 38 Fed. R. Evid. Serv. 736 UNITED STATES of America, Plaintiff-Appellee, v. Gussie L. McCONNELL and Willie R. McConnell, Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 530

988 F.2d 530

38 Fed. R. Evid. Serv. 736

UNITED STATES of America, Plaintiff-Appellee, v. Gussie L. McCONNELL and Willie R. McConnell, Defendants-Appellants.

No. 92-4028.

United States Court of Appeals, Fifth Circuit.

April 5, 1993.

Paul Henry Kidd, Kidd & Culpepper, Monroe, LA, George M. Strickler, Jr., LeBlanc & Strickler, New Orleans, LA, for defendants-appellants.

Josette L. Cassiere, Asst. U.S. Atty., Joseph S. Cage, Jr., U.S. Atty., Joseph G. Jarzabek, Asst. U.S. Atty., Shreveport, LA, for plaintiff-appellee.

Appeal from the United States District Court for the Western District of Louisiana.

Before WISDOM and DUHE, Circuit Judges, and DOHERTY ¹, District Judge.

PER CURIAM:

Gussie L. McConnell and Willie R. McConnell appeal their conviction for conspiracy to commit mail fraud and mail fraud in furtherance of that conspiracy in violation of 18 U.S.C. §§ 371, 1341. The McConnells argue the trial court erroneously admitted a hearsay statement and evidence of coconspirators' illegal activities, as well as arguing there was insufficient evidence to support their conviction. Finding that the court below erred in admitting the challenged testimony, we REVERSE the convictions.

Appellants were indicted in May, 1988, along with twenty-two (22) other individuals, for mail fraud and conspiracy to commit mail fraud. The indictment alleged the twenty-four (24) Defendants conspired to use the United States mail for the purpose of defrauding various insurance companies "by means of false and fraudulent pretenses, representations and promises." Indictment of May 12, 1988, at 2. The indictment alleged that the essential feature of the scheme to defraud the insurance companies was that the conspirators caused their own admission into hospitals for injuries which they knew did not require hospitalization, were incurred as a result of accidents which were staged, or never occurred at all. Id. After alleging the facts regarding the conspiracy itself, the indictment went on to list the hospitalizations of all twenty-four (24) Defendants, identifying them as the "overt acts" undertaken by Defendants in furtherance of the conspiracy. Finally, the indictment proceeded to list the documents received by the Defendants through the United States mail.

All of the Defendants named in the indictment either pled guilty or were convicted after trial. Appellants were tried separately from the other Defendants who chose not to plead guilty. Trial of Appellants was had in October, 1991 and they were convicted on all counts with which they had been charged. ²

The Evidence

The government presented four (4) witnesses at Appellants' trial. The first two witnesses, Evelyn Hassen and Michael McFarland, were alleged coconspirators of Appellants; the second two were F.B.I. agents who had participated in the investigation which led to the indictment.

Ms. Evelyn Hassen had pled guilty to participating in the conspiracy and testified primarily concerning her and her husband's acts in furtherance of the conspiracy. Of vital importance to this appeal, Ms. Hassen also testified that her husband, Grady Hassen--who is related to both Appellants--had once mentioned to her that Gussie McConnell "was just in the insurance and he had helped her out with a couple of policies." (Tr. at 8.) This was the only direct evidence produced by the government at trial of a link between Appellants and the conspiracy alleged in the indictment. Counsel for both Appellants objected to admission of the statement as hearsay. The trial court overruled the objection conditioned upon a proper predicate being laid, but the record does not reflect the Court's revisiting the issue thereafter for a determination of whether the predicate had been met. The only subsequent reference to the hearsay statement made by the Court was in connection with deliberations on whether the government had proven sufficient connection between Appellants and the conspiracy to make the coconspirators' illegal activities relevant at this trial. ³

The second witness, Michael McFarland, testified exclusively about the conspiracy: how it was run and by whom, as well as his knowledge regarding Grady Hassen's connection to the conspiracy. Mr. McFarland had been convicted of participating in the conspiracy of which Appellants were alleged to be a part. He testified that he did not know the Appellants or whether they were connected to the conspiracy. Mr. McFarland testified that he had seen Grady Hassen conversing with the leader of the conspiracy, Sammy Duncan. He testified that they had been discussing the insurance business. This provided the connection between Grady Hassen and the conspiracy which, in combination with Evelyn Hassen's testimony that Grady Hassen had once mentioned Gussie McConnell, provided the link between the Duncan conspiracy and Appellants.

Mr. McFarland then went on to explain the way that the conspiracy worked. He testified that he took instructions from Sammy Duncan, who would direct him regarding the type of accidents to claim and to which hospitals and doctors to present himself for admission. Duncan also did the paperwork necessary to obtain insurance coverage for McFarland and, at times, completed the necessary papers to make claims to the insurance companies. Further, Mr. McFarland would endorse the insurance checks over to Duncan, who would cash them and return some part of the money to Mr. McFarland.

The third witness who testified for the government was F.B.I. agent Kenneth R. Klocke, who participated in the investigation of the Duncan conspiracy. Agent Klocke testified to the mileage distances between Appellants' home and the various hospitals to which they presented themselves for admission during the course of their alleged association with the Duncan conspiracy. The closest hospital was Jackson Parish Hospital, 8.2 miles from Appellants' home; the farthest hospital was LaSalle General Hospital in Jena, Louisiana, 73.8 miles from Appellants' home.

The fourth and final witness who testified at Appellants' trial on the government's behalf was F.B.I. agent Jerry L. Richardson, who investigated the conspiracy in connection with the indictment. Agent Richardson's testimony was by far the longest at trial. Agent Richardson was the only witness who testified regarding acts of Appellants themselves and his testimony consisted of information about the insurance applications and claim forms which the government contended were filed by Appellants with false and/or incomplete information.

Mr. Richardson testified that Willie McConnell had been in the hospital twice; once after a claimed motor vehicle accident and once 18 months later when he claimed to have fallen in the attic of his home. Both hospitalizations were for contusions and sprains, both at the Jackson Parish Hospital eight (8) miles from his home. Six insurance companies paid on the hospital indemnity policies for the first accident and eleven (11) insurance companies paid on policies for the second accident. Payments on the claims had been mailed to Willie McConnell after both claims. Agent Richardson testified that many of the claim forms were incomplete because they did not acknowledge that Mr. McConnell had ever suffered any similar condition before and because they did not acknowledge the existence of other insurance policies. Mr. Richardson gave no testimony that Willie McConnell knew or coordinated his activities with Duncan or anyone involved in the conspiracy.

Mr. Richardson testified that Gussie McConnell had been in the hospital seven times between April, 1980 and May, 1984. Agent Richardson testified that Gussie McConnell was hospitalized for lumbar injury and gastritis, for contusions to her left shoulder and rib cage, for lumbar and sacroiliac strain, for trauma to her right hip, for trauma to her right shoulder, for acute lumbar strain, and, finally, for injury to her low back, right leg, and hip. Claims under multiple indemnity insurance policies were made in connection with each of these hospitalizations: three policies for the first hospitalization and an increasing number for subsequent hospitalizations culminating with 18 policies for the seventh hospitalization. Mr. Richardson testified that claims made in connection with each hospitalization were incomplete for failure to reference the existence of other insurance policies in nearly every instance and, in many instances, for failure to reference previous similar injuries and/or physical conditions.

Finally, Agent Richardson testified regarding applications for many of these insurance policies which Appellants owned during the relevant time period. Again, many applications did not acknowledge that Appellants owned other insurance policies, indemnity or otherwise, and some applications did not acknowledge prior treatment for certain specified injuries or illnesses or prior hospitalizations within a particular time frame.

The government's theory of this case is as follows. The Duncan conspiracy, the workings of which Mr. McFarland and Ms. Hassen described, was proven to have existed. Mr. McFarland testified to the connection of Grady Hassen to the conspiracy. Ms. Hassen testified to the connection between Grady Hassen and Gussie McConnell. Gussie McConnell was married to Willie McConnell and Gussie and Willie McConnell were both related to Grady Hassen. The similarity in the pattern of types of accidents, types of injuries, and travel to distant hospitals, between the McConnells' behavior and that of the admitted or convicted conspirators, the government contends, along with the proven connection between the conspiracy and the McConnells, proves the Appellants' guilt of participation in the conspiracy.

Hearsay

Appellants' first challenge is to the trial court's ruling allowing into evidence Evelyn Hassen's testimony regarding her husband's out-of-court statement. ⁴ Appellants argue the statement is inadmissible hearsay....