U.S. v. Brooks, 84-1337

• Decision Date: 03 December 1984
• Docket Number: No. 84-1337,84-1337
• Citation: 748 F.2d 1199
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Nathaniel BROOKS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1199

748 F.2d 1199

UNITED STATES of America, Plaintiff-Appellee, v. Nathaniel BROOKS, Defendant-Appellant.

No. 84-1337.

United States Court of Appeals Seventh Circuit.

Argued Sept. 26, 1984.

Decided Dec. 3, 1984.

Scott King, Asst. U.S. Atty., R. Lawrence Steele, Jr., U.S. Atty., John F. Hoehner, Asst. U.S. Atty., Hammond, Ind., for plaintiff-appellee.

Itsia D. Rivera, East Chicago, Ind., for defendant-appellant.

Before CUMMINGS, Chief Judge, and POSNER and FLAUM, Circuit Judges.

FLAUM, Circuit Judge.

This is an appeal from a conviction following a bench trial in which the defendant was found guilty on two counts of mail fraud. The defendant argues that there was insufficient evidence produced at trial to prove beyond a reasonable doubt that he used or caused someone to use the United States mails pursuant to a scheme to defraud his insurance company. For the reasons stated below, we reverse the conviction on both counts.

I.

In May 1979, defendant Nathaniel Brooks obtained car insurance with the Dairyland Insurance Company through an independent insurance agent, Gary Greenbaum, in Merrillville, Indiana. The expiration date on the policy was February 25, 1980. On February 20, 1980, Brooks reported to the Michigan City, Indiana police department that his 1977 Mercury had been stolen. Brooks also notified his insurance agent about the alleged theft loss. Greenbaum proceeded to complete a theft report form and sent this form with a copy of the police report to Sentry Insurance, the owner of Dairyland Insurance, in Lansing, Michigan.

Following receipt of the theft report form, Sentry notified the National Automobile Theft Bureau ("NATB") of the alleged theft and sent a letter to Brooks on February 26, 1980, which explained the procedure to be followed in making a theft claim. ¹ Shortly after sending this letter, Sentry sent a report of theft loss form (Government Exhibit 4) to Brooks. A claims examiner with Sentry, Taffy Grometer, testified that Sentry received the completed theft loss form on March 13, 1980, in the United States mail. Tr. I at 34. When questioned as to how she knew that the form was received in the mail, Grometer explained that she knew this fact because the form was date-stamped by the claims clerical department. Tr. I at 34, 41. This testimony was corroborated by Phillip Dimitrijevic, the Sentry claims examiner assigned to Brooks' claim, who stated that he knew the theft loss form was returned by United States mail because it was date-stamped when it was received by the company's mail department. Tr. I at 51.

In response to notification by Sentry, NATB mailed an owner's report of stolen vehicle form to Brooks on March 5, 1980, in order to obtain more information on the alleged theft. An assistant manager for NATB's Western Division, Michael Buchanan, testified that NATB received the completed form (Government Exhibit 9) on March 10, 1980, in the United States mails. Buchanan indicated that it was NATB's usual business practice to mail this form to a theft victim and that in the normal course of business, these forms would be returned in the United States mails. Tr. I at 118-20.

On March 25, 1980, Sentry issued a claim check payable to Nathaniel Brooks and Ford Motor Credit Company, the first lienholder, for $3,900. The check was applied to Ford Motor Credit's loan to Brooks, with Brooks paying to Ford Motor Credit the remaining balance of $417. Brooks replaced his 1977 Mercury with a 1975 Mercury.

Approximately two years after the alleged theft, a patrolman with the Lake County, Indiana police department spotted Brooks driving a 1977 Mercury matching the description of the stolen car. When he could not locate the Federal Environmental Protection Agency sticker containing the car's vehicle identification number, the patrolman suspected that the car might have been retagged and ordered it impounded. A subsequent investigation revealed that the car had been retagged by replacing the dashboard from the 1977 Mercury with the dashboard from the 1975 Mercury.

In an interview with United States Postal Inspector Fred Flynn and NATB manager Buchanan on April 8, 1983, Brooks admitted that the vehicle stopped by the Lake County patrolman was the same car that he had reported stolen in 1980. ² Brooks explained that he had observed an unknown male driving the 1977 Mercury several weeks before he was stopped by the patrolman. Brooks pulled the driver over and, after an argument, allowed the driver to remove his personal belongings and the vehicle's dashboard. Brooks proceeded to place the 1975 Mercury dashboard in the 1977 Mercury. ³

Following this investigation, Brooks was indicted and charged with five counts of mail fraud on November 10, 1983, pursuant to 18 U.S.C. Sec. 1341 (1982). Brooks was found not guilty on Counts I, II, and IV, which involved mailings from the insurance agent, insurance company, and NATB to either the company or Brooks. Brooks was found guilty on Count III for the theft report form that Brooks mailed back to Sentry and on Count V for the owner's report of stolen vehicle form that Brooks mailed back to NATB. Brooks was sentenced to one year and four years probation and was ordered to make restitution of $1,400 to the insurance company.

On appeal, Brooks claims that the government offered insufficient evidence to prove that he used the United States mails on two occasions to transmit false theft reports to his insurance carrier and the NATB. ⁴ Brooks argues that because the government's witnesses could not definitively establish that the forms had been sent by United States mail rather than by a private mailing service, his conviction should be reversed. ⁵

II.

In order to convict an individual of mail fraud under 18 U.S.C. Sec. 1341 (1982), ⁶ the prosecution must establish beyond a reasonable doubt that: (1) the defendant has participated in a scheme to defraud and (2) the defendant has mailed or has knowingly caused another to mail a letter or other matter for the purpose of executing the scheme. Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362, 98 L.Ed. 435 (1954); United States v. Clark, 649 F.2d 534, 540 (7th Cir.1981). The mail fraud statute was not intended to reach all frauds, but only those involving the use of the mails, which is the gist or corpus of the crime. Kann v. United States, 323 U.S. 88, 95, 65 S.Ct. 148, 151, 89 L.Ed. 88 (1944); Mackett v. United States, 90 F.2d 462, 464 (7th Cir.1937). When the defendant questions the sufficiency of the evidence underlying his criminal conviction, it is a well-established principle of federal law that the appellate court will view the facts in the light most favorable to the government. Glasser v. United States, 315 U.S. 60, 80, 62 S.Ct. 457, 469, 86 L.Ed. 680 (1942); United States v. Clark, 649 F.2d at 537. Upon a challenge to the sufficiency of the evidence, the standard of review is whether a rational trier of fact could have found from the evidence and inferences drawn therefrom that the defendant was guilty beyond a reasonable doubt. United States v. Roya, 574 F.2d 386, 394 (7th Cir.), cert. denied, 439 U.S. 857, 99 S.Ct. 172, 58 L.Ed.2d 165 (1978).

The use of the mails element of mail fraud may be proved by direct or circumstantial evidence. Whealton v. United States, 113 F.2d 710, 713 (3d Cir.1940). The introduction of the envelope in which the correspondence was mailed would constitute strong direct evidence of the use of the mails. United States v. Ledesma, 632 F.2d 670, 675 (7th Cir.), cert. denied, 449 U.S. 998, 101 S.Ct. 539, 66 L.Ed.2d 296 (1980). Proof of the use of the mails can also be circumstantial, such as testimony regarding office practice, so long as the circumstances proven directly support the inference and exclude all reasonable doubt to the extent of overcoming the presumption of innocence. United States v. Ledesma, 632 F.2d at 675; Whealton v. United States, 113 F.2d at 713.

In the present case, proof of the use of the mails had to be by circumstantial evidence on both Counts III (Sentry's report of theft loss form) and Count V (NATB's owner's report of stolen vehicle form) since no witnesses testified that they had seen the stamped envelopes and the stamped envelopes were not introduced at trial. When the government questioned Grometer, the Sentry claims examiner, she stated that Sentry had received the report of theft loss form in the mail. She emphasized that she knew the form had been received in the mail because it had been date-stamped. The claims department had affixed the date-stamp to reflect that the correspondence had been received on a specific date. Tr. I at 37. On cross-examination, however, Grometer admitted that both correspondence sent in the United States mails and correspondence sent by private mailing agencies were date-stamped, so that she would have no way of knowing if the report of theft loss form had come through the United States mails by merely looking at the date-stamp. Id. at 42. ⁷

Similar to the testimony of Grometer, Buchanan, the NATB manager, testified that the owner's report of stolen vehicle form involved in Count V was sent through the United States mails. When questioned as to how he knew that the form was returned in the mails, Buchanan replied that returning such forms in the United States mails was the normal business practice. Buchanan never stated that he either saw the return envelope or that only matter coming through the United States mails was date-stamped.

We hold that there was insufficient evidence produced at trial to prove beyond a reasonable doubt that Brooks mailed Sentry's report of theft loss form or NATB's owner's report of stolen vehicle form. Courts have...