Bannister v. United States, 23351.

• Decision Date: 18 August 1967
• Docket Number: No. 23351.,23351.
• Citation: 379 F.2d 750
• Parties: Harriette BANNISTER, Charles J. Crosby and W. C. Neal, Appellants, v. UNITED STATES of America, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

379 F.2d 750 (1967)

Harriette BANNISTER, Charles J. Crosby and W. C. Neal, Appellants, v. UNITED STATES of America, Appellee.

No. 23351.

United States Court of Appeals Fifth Circuit.

June 28, 1967.

Rehearing Denied August 18, 1967.

Albert Datz, Jacksonville, Fla., for appellants, Crosby & Bannister.

Ernest D. Jackson, Sr., Samuel S. Jacobson, Jacksonville, Fla., for appellant, Neal.

James W. Matthews, Edward A. Kaufman, Asst. U. S. Attys., William A. Meadows, Jr., U. S. Atty., Miami, Fla., for appellee.

Before MARIS,^* BROWN and THORNBERRY, Circuit Judges.

JOHN R. BROWN, Circuit Judge:

The appellants Bannister, Crosby and Neal were convicted by a jury under an indictment charging two counts of mail fraud, 18 U.S.C.A. § 1341, and one count of conspiracy to violate the mail fraud statute, 18 U.S.C.A. § 371.¹ Of the several errors asserted on this appeal, only two warrant comment — whether the evidence established that there had been use of the mails within the meaning of § 1341, and whether the District Court erred in refusing to allow Crosby or his counsel access to Crosby's pre-sentence report. We find no error and affirm.

The substance of the offenses charged in the indictment was the use of the mails in a scheme to defraud insurance companies of proceeds under life insurance policies by false and fraudulent representations. Crosby and Neal were, during the period in question, employees of Sowell Funeral Home located in Jacksonville, Florida. The evidence we summarize briefly in the light of what the jury was entitled to infer. The fraudulent scheme consisted of either submitting or inducing the submission of applications for life insurance on various named persons unrelated to appellants and in whom the appellants otherwise had no insurable interest. Premium payments on these policies were made by Crosby and Neal, apparently from funds in the Sowell Funeral Home accounts. On at least two occasions, proofs of death and insurance claim forms were knowingly submitted on deceased persons who were known not to be the persons named in the insurance policies. On another occasion, the application for insurance, prepared from information provided by Crosby, contained misrepresentations regarding the age and physical condition of the prospective insured. Bannister, a student at Edward Waters College in Jacksonville and frequent visitor to the funeral home, was named as the beneficiary in this policy and submitted the signed proofs of death to the insurer to claim the policy proceeds. Although designated in the application and policy as the niece of the insured, the testimony other than that of Bannister herself contradicted such relationship. The beneficiaries named in the policies would, after the claim for proceeds had been filed, assign the proceeds to the funeral home. The evidence, although refuted by appellants who took the stand in their own behalf, is clearly sufficient to support the jury finding that Bannister, Crosby and Neal were all active participants in the fraudulent scheme.

The appellants contend that the statutory requirement that there be a use of the mails "in execution of" the scheme has not been satisfied in this case. The mailings alleged in the indictments in support of the two substantive offenses included the application for an insurance policy on the life of Irene Sanders, and the claim and proofs of death signed by Bannister following Irene Sanders' death. The record shows that all negotiations and discussions relating to the application for insurance were conducted at the funeral home between the appellants and the local agent of the Insurer.² The completed application was delivered by hand to him at that time, as were all subsequent premium payments on the Sanders' policy. After the death of Irene Sanders, the claim and proofs of death were also delivered by hand to the agent. The mailings involved therefore were confined to the interoffice communications requesting approval of the application and payment of the claim between the Jacksonville agency and the home office in New York. On these facts appellants urge that no use of the mails attributable to them occurred in connection with these items. The appellants disclaim any knowledge or anticipation that such mailings were necessary to acquire either the policy or its proceeds, and urge alternatively that such interoffice mailings are not within the contemplation or proscription of § 1341.

It is now, and has been for years, clear that the mailing element of the offense is satisfied if the use of the mails is an incident to a material element of the scheme, Pereira v. United States, 1954, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed. 435, and if the scheme reasonably contemplated a use of the mails, Adams v. United States, 5 Cir., 1963, 312 F.2d 137; Glenn v. United States, 5 Cir., 1962, 303 F.2d 536. In Pereira the Court held that "where one does an act with knowledge that the use of the mails will follow in the ordinary course of business, or where such use can reasonably be foreseen, even though not actually intended, then he `causes' the mails to be used." 347 U.S. at 8-9, 74 S.Ct. at 363. This Court was confronted with a problem similar to the one here in Adams v. United States, supra, involving a fraudulent credit card scheme:

"The fraudulent scheme was possible only because Gulf distributors extended credit, but extension of credit presupposed that the distributors would use the mails to forward the slips to Gulf for ultimate presentation to the card-holders. Appellant\'s scheme reasonably contemplated the utilization of a commercial practice which, taken in its entirety, embraced the use of the mails; * * *." Emphasis added.

312 F.2d at 140.

And so it is here. The mailings in Adams are substantially analogous to the interoffice communications here involved. The appellants knew they were dealing with a local agent of a specified life insurance company. The claim, proof of death and related forms all expressly recited that they were prepared for submission to the home office of the Insurer in New York.³ From this evidence, the jury could conclude that the parties reasonably contemplated that use of the mails would be required as an integral part of the scheme.

The appellants' alternative assertion, that the mailings occurred subsequent to any misrepresentations they may have made to the Insurer and therefore were not incident to the execution of any essential part of the scheme but rather after the scheme had been fully executed, Kann v. United States, 1944, 323 U.S. 88, 65 S.Ct. 148, 89 L.Ed. 88, 157 A.L.R. 406; Parr v. United States, 1960, 363 U.S. 370, 80 S.Ct. 1171, 4 L.Ed.2d 1277, is patently without merit. This merely cleared the first hurdle in the inception of the scheme. The fulfillment of the fraud — acquisition of the proceeds — yet remained.

Appellants concede that...