U.S. v. Hannigan

Decision Date23 June 1994
Docket NumberNo. 93-1596,93-1596
Citation27 F.3d 890
PartiesUNITED STATES of America v. Eugene HANNIGAN, Appellant.
CourtU.S. Court of Appeals — Third Circuit

Anna M. Durbin (argued), Law Office of Peter Goldberger, Philadelphia, PA, for appellant Eugene Hannigan.

Lee J. Dobkin (argued), Office of U.S. Atty., Philadelphia, PA, for appellee U.S.

Before: BECKER, HUTCHINSON and COWEN, Circuit Judges.

OPINION OF THE COURT

COWEN, Circuit Judge.

Eugene Hannigan appeals from his conviction for one count of mail fraud, in violation of 18 U.S.C. Sec. 1341. Because there was insufficient evidence produced at trial that the United States mails were used to accomplish the alleged fraud, we will reverse the judgment of the district court and direct that a judgment of acquittal be entered.

I.

Hannigan was indicted on two counts of mail fraud. The jury found him guilty of Count One and not guilty of Count Two. Although Hannigan has raised numerous points on appeal, we will address only those facts and issues concerning Count One dealing with the sufficiency of evidence as to mailing.

Hannigan was the manager of an auto body shop, Park Auto Body, located in Philadelphia. Count One charged that Hannigan and David Giordano, an appraiser employed by Travelers Insurance Company ("Travelers"), submitted a fraudulent insurance claim, falsely representing that a car had been damaged by chemical emissions from a refinery, the Sun Oil Company ("Sun Oil"). The indictment charged that Giordano and Hannigan, "knowingly cause[d] to be delivered by the United States Postal Service ... a $4,001.13 check payable to Park Auto Body on the [false] claim, from Travelers to Park Auto Body." App. at 9.

The prosecution attempted to establish the mailing through a single witness, Cindi Skowronski, a Travelers' claims supervisor. Since Skowronski was the only witness who testified as to the mailing, we will describe her testimony in some detail. Skowronski testified that she assisted in the processing of Sun Oil claims for Travelers, and described at trial the procedures which Travelers followed for processing these claims. She testified that after receiving notice of a claim, Travelers set up an appraisal site or sent appraisers to inspect the damage caused by emissions at the Sun Oil plant, and the appraisers brought their estimates to Travelers' office. After Travelers set up a claim number and subfile for each claimant, it paid the claims by check, often payable to body shops or car rental companies rather than individuals.

Skowronski testified that on a daily basis, Travelers issued checks. She stated: "Within our office, there's a person in charge of running the checks so you couldn't input a check or--during [sic] that time. And, then once they were run off of a printer, they would then be stuffed into envelopes and mailed." App. at 169 (emphasis added). On occasion, however, individuals would arrange to pick up a check at the Travelers office, rather than having it mailed to them. In such a situation, Ms. Skowronski testified to a different procedure:

In order for a check to be picked up at our office ... we would have to have our unit manager approve someone coming in to pick up the check for a check to be released to me. And, proof of that--of them approving it, would be signing the file or signing a piece of paper that was attached to the file. And, then once that was done--when you input the check on the computer, there was a little sign--a little question that said, like check attachment and you would put a yes, so that they know to give me that check. If someone came to pick it up, then I would have it already [sic] ready for them.

App. at 170.

In addition to Ms. Skowronski's testimony--that Travelers usually mailed claim checks and that special procedures were required when someone wanted instead to pick up a check--the government introduced computer printouts for the Sun Oil claims. The computer printouts contained a space entitled "attachment," in which a "Y" or "N" would be placed. Skowronski testified that a "Y" meant the check was authorized to be picked up and an "N" meant that the check was to be mailed. The computer printout for the repair claim addressed in Count One contained an "N" in the attachment column, and Skowronski testified that this indicated that the claim check was to be mailed, not picked up.

On cross examination, Hannigan's counsel engaged in the following colloquy with Ms. Skowronski:

Q: Now, you didn't mail the checks in this case yourself, did you?

A: No.

Q: All right. And, you didn't see them put into the mail yourself, did you?

A: No.

Q: And, can you tell the jury where they're put to be mailed or who mails them?

A: No.

Q: You don't know that?

A: I ...

Q: After they're stuffed in an envelope, you don't know where the envelope goes?

A: To our mail department.

Q: Your mail department. And where is your mail department?

A: At that time, it was on, like--I think we were on the seventh floor and that was, like, on the fifth floor.

Q: The fifth floor. So, you never saw them actually put in the mail or picked up in the mail, is that right?

A: No.

Q: And, someone could go to the mail department and pick one up and you would never know it even though there was supposed to be a procedure, is that correct?

A: That's correct.

App. at 179-80. The government did not conduct redirect examination of Ms. Skowronski.

II.

In reviewing the verdict of the jury, we view the evidence 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). If there is substantial evidence to support the jury's determination, we do not disturb the verdict although on that evidence we might not have made the same decision. Id.

Hannigan contends that his conviction cannot stand because the above evidence presented at trial was insufficient for the jury to conclude that the United States mails were used to accomplish the alleged fraud. The essential elements of an offense under 18 U.S.C. Sec. 1341 are (1) the existence of a scheme to defraud; (2) the participation by the defendant in the particular scheme charged with the specific intent 1 to defraud; and (3) the use of the United States mails in furtherance of the fraudulent scheme. E.g., United States v. Burks, 867 F.2d 795, 797 (3d Cir.1989). In this appeal, we address only whether sufficient evidence was presented to prove the third element.

It is well-established that evidence of business practice or office custom supports a finding of the mailing element of Sec. 1341. 2 Once evidence concerning office custom of mailing is presented, the prosecution need not affirmatively disprove every conceivable alternative theory as to how the specific correspondence was delivered. E.g., United States v. Matzker, 473 F.2d 408, 411 (8th Cir.1973). While the element of mailing may be proven through such circumstantial evidence, we have held that to convict under Sec. 1341, some reference to the correspondence in question is required. Burks, 867 F.2d at 797 ("Although circumstantial evidence may be used to prove the element of mailing ... under Sec. 1341, reliance upon inferences drawn from evidence of standard business practice without specific reference to the mailing in question is insufficient.").

In this case, ironically, the government met the specific reference requirement of Burks, but failed to establish that as a routine practice, the United States mails were used by Travelers. The evidence in the record provided a reference to the correspondence in question: Skowronski testified that the "N" in the attachment column of the computer printout for the repair claim addressed in Count One meant that the claim check was to be sent to the mail room. This case is therefore distinguishable from Burks, in which "no evidence was presented concerning the [relevant] correspondence specifically," 867 F.2d at 797. 3

Had the government presented some competent evidence that as a routine practice the mail room sent claims checks through the United States mail, the verdict would be sustained. However, the direct and cross examination of Skowronski reveals that she had no personal knowledge that the routine practice of Travelers was to use the United States mails. Skowronski only testified that she knew that the envelopes stuffed with the claims checks would go to the mail room. Neither she nor anyone else established what the business practice was once the envelopes went to the mail room.

The government contends that Ms. Skowronski's testimony is adequate because it is not necessary to produce a witness who personally deposited the correspondence with the United States mails, nor is it required to have a person who was actually employed in the mail room testify as to the business custom and practice of using the United States mails. The government is correct that "[m]ailing can be prove[n] by office custom without producing as a witness the person who personally placed the letter in [the United States mails]." United States v. Joyce, 499 F.2d 9, 17 (7th Cir.), cert. denied, 419 U.S. 1031, 95 S.Ct. 512, 42 L.Ed.2d 306 (1974). The government is also right that the business practice may be established by the testimony of anyone with personal knowledge of the business custom and practice; it is not necessary that someone actually employed in the mail room establish this fact. See, e.g., id. at 15-16; Matzker, 473 F.2d at 411; 2 Jack B. Weinstein, Weinstein's Evidence Sec. 406, at 406-19 (1993) ("Proof of custom may ... be utilized even when the person who engaged in the routine practices is unavailable to testify. In cases of mailing, the absence of a requirement that the mailing clerk himself testify obviously accords with business realities."). Nevertheless, Ms. Skowronski's testimony indicates that she had no personal knowledge concerning the routine mailing practices of the mail room, or how...

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