# Petition — Perkal v. United States > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_2321%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1976 - **Citation:** 429 U.S. 821 ## Text IN THE Supreme Court of the United States OcTOBER TERM, 1975 No. r 5 i5Y 4 STuaRT ALLEN PERKAL, Petitioner, Vv. UNITED STATES OF AMERICA PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT JOSEPH FORER Forer & REIN 733 Fifteenth Street, N.W. Washington, D. C. 20005 Attorneys for Petitioner Press or Byron S. ADAMS PRINTING, INC., WASHINGTON, D. C. ’ ’ ee ee ee eee ~ A ee NL in el ae he ale TABLE OF CONTENTS Page I cu divkdscedswaennnewadauss edbieeu 1 PED co douuwcduds 6c0n¥bnsendesesadheeke 2 NE TD occ esuncddnessahenabeteonkedan 2 EE I ot ds tiewacnecedakeswetanennsent ee 3 1. The Mail Fraud Statute, 18 U.S.C. § 1341 ..... 3 2. The Aider and Abettor Statute, 18 U.S.C.§2.. 3 I Oe Fe GN i 6 ows hh ahd KkdKeenescednenun 4 1. Summary of the Proceedings Below .......... 4 2. The Schemes to Defraud .................... 5 Th NE un cwiteawetudteesecadianwkaees 9 4. The Instructions to the Jury ................ 11 o. The Affirmance on Appeal .................. 13 Reasons for Allowing the Writ ..................... 14 IED os whnnns ouéus on Onneansndeeenaseeees 19 Appendices: Appendix A—Opinion Below .................. la Appendix B—Judgment Below ................ 9a Appendix C—Order Denying Petition for Rehear- Mt si06s dante eedhddeseendewenn suena 10a EL OF 6:9 sekcundusaeieanccetiesecnveeekes lla Cases CITED Abbott v. United States, 239 F.2d 310 (5th Cir. 1956).. 16 Nye & Nissen v. United States, 336 U.S. 613 (1949) ... 15 Pereira v. United States, 347 U.S. 1 (1954) ......... 14, 16 Pinkerton v. United States, 328 U.S. 640 (1946) ...... 2,15 il Table of Contents Continued Page Pritchard v. United Siates, 386 F.2d 760 (Sth Cir. 1967) 17 United States v. Greer, 467 F.2d 1064 (7th Cir. 1972).. 18 United States v. Joyce, 499 F.2d 9 (7th Cir. 1974) .... 17 United States v. Peoni, 100 F.2d 401 (2d Cir. 1938) ..17, 18 United States v. Wilson, 506 F.2d 1252 (7th Cir. 1974) 17 STATUTES ee ae se due ia 3,4 i es ln da cediu ged ak euneecueway 3, 4 en cece eteenkentestauees’ 2 IN THE Supreme Court of the United States OcTOBER TERM, 1975 No. Stuart ALLEN PerKAL, Petitioner, Vv. UNITED STATES OF AMERICA PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT Stuart Allen Perkal petitions for a writ of certiorari to review a judgment of the United States Court of Appeals for the Fourth Circuit which affirmed a judg- ment of the United States District Court for the Dis- trict of Maryland convicting petitioner of violations of the federal mail fraud statute. OPINION BELOW The opinion of the Court of Appeals has not yet been reported. It is reproduced in Appendix A hereto. 2 JURISDICTION The judgment sought to be reviewed (reproduced in Appendix B hereto) was entered on January 30, 1976. A timely petition for rehearing was denied on Mareh 1, 1976 (Appendix C hereto). On March 12, 1976, the Chief Justice ordered that the time for filing a petition for certiorari be extended to and including April 30, 1976 (No. A-773). The jurisdiction of the Court is con- ferred by 28 U.S.C. § 1254(1). QUESTIONS PRESENTED 1. Whether petitioner was properly held crimi- nally liable for substantive violations of the mail fraud statute on the basis of the derivative liability of a co- conspirator established by Pinkerton v. United States, 328 U.S. 640 (1946), even though the factual issues in- volved in the Pinkerton doctrine were not submitted to the jury. 2. Whether a participant in a multi-party scheme to defraud is ipso facto criminally liable under the mail fraud statute for a mailing done or caused by another participant in executing the scheme, even though the scheme did not require or contemplate the mailing and the accused did not direct, cause or abet the mailing. 3. Whether the trial court’s instructions errone- ously authorized the jury to convict petitioner of aid- ing and abetting mailings incident to the execution of a fraudulent scheme if it found that petitioner had aided and abetted the fraud, even though he had not aided and shetted the mailings. 4. Whet. « the record in this case supports the imposition of . riminal liability on petitioner for the mailings alieged in the indictment. Se 3 STATUTES INVOLVED 1. The Mail Fraud Statute, 18 U.S.C. § 1341 § 1341. Frauds and swindles Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, or to sell, dispose of, loan, exchange, alter, give away, distribute, supply, or fur- nish or procure for unlawful use any counterfeit or spurious coin, obligation, security, or other article, for the purpose of executing such scheme or artifice or at- tempting so to do, places in any post office or author- ized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail ae- cording to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined not more than $1,000 or imprisoned not more than five years, or both. 2. The Aider and Abettor Statute, 18 U.S.C. § 2 § 2. Principals (a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal. (b) Whoever wilfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal. 4 STATEMENT OF THE CASE 1. Summary of the Proceedings Below Petitioner was indicted in the District of Maryland in 45 counts, each alleging that in violation of the mail fraud statute, 48 U.S.C. § 1341, and the aiding and abet- ting statute, 18 U.S.C. § 2, he knowingly caused a letter to be delivered by mail for the purpose of executing a scheme to defraud insurance companies (A. 3-55).’ The first count described the alleged scheme at length (A. 3-7), and each subsequent count incorporated the de- scription by reference (A. 9-55). The essence of the alleged scheme or schemes was that attorneys repre- senting personal injury claimants in automobile acci- dents would send their clients to petitioner, a physician, with the understanding that he would furnish infiated medical bills and reports for the attorneys to use to ob- tain larger settlements from the insurance companies than were warranted by the true facts. Petitioner was tried by jury. A judgment of acquit- tal was entered on counts 12 and 38, and guilty verdicts were returned on the 46 remaining counts (A. 1, 2). Petitioner was sentenced on each of the 46 counts to the statutory maximum of five years’ imprisonment and a fine of $1,000. The imprisonment sentences were con- current, but the fines were cumulated, making an aggre- gate sentence of five years’ imprisonment and $46,000 in fines. (A. 91.) The Court of Appeals affirmed, but remanded for a correction of the judgment and sentence to eliminate 1** 4’? refers to the Appendix filed in the appeal below. ‘‘Tr.’’ refers to the trial transcript, with the immediately preceding num- ber referring to the transcript volume. The transeript as a whole is not consecutively paginated. ee eee ee 5 multiple convictions and sentences for single mailings (Appendix A, pp. 8a, 9a). If the decision of the Court of Appeals stands, petitioner will have been convicted on a total of 37 counts, involving an aggregate sentence of five years’ imprisonment and $37,000 in fines.* 2. The Schemes To Defraud During the relevant period, Dr. Perkal was a prac- ticing physician in Baltimore. The bulk of his prac- tice consisted of persons with personal injury claims who were referred to Dr. Perkal by their lawyers (7 Tr. 72-73, 98, 149). The 37 counts jp this case grew out of 18 accidents in which seven Baltimore lawyers, representing a total of 28 claimants, negotiated claims over a three vear pe- riod* with eight insurance companies. None of the lawyers was associated or collaborated with any of the others. One lawyer (Bomstein) represented the claim- ants in nine of the accidents, resulting in 17 counts. Another lawyer (Bernard Reamer) represented the claimants in four of the aecidents, resulting in six * Under the remand, the District Court is required to reduce the convictions and sentences on thirteen of the counts to six, and to determine whether the convictions and sentences on four other counts should be reduced to two. The United States Attorney has already informed the District Court and petitioner that the government now concedes that the latter reduction should be made. Accordingly, the counts which are alive for the purpose of this petition are counts 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16 (into which 17 and 18 merge), 19, 20, 21, 22, 23, 24 (into which 26 merges), 25 (into which 27 me gen). 28 (into which 29 merges), 30 (into which 31 merges), 32 (into which 34 merges), 33 (into which 35 merges), 26, 37, 39, 40, 41, 42 (into which 44 merges), 43, 45, 46, 47, 48 * From June 9, 1971 (Count 2, A.9) through July 1, 1974 (Count 40, A.47). 6 counts. Each of the five other lawyers represented a claimant or claimants in a single accident, one resulting in four counts, the others in two counts each. (See Ap- pendix D hereto for record references. ) The record discloses the following pattern. In order to obtain a large volume of settlements, necessary to make his personal injury practice luera- tive, the lawyer hired runners to bring to him as clients persons involved in automobile accidents (8 Tr. 63-66, 69-71; 9 Tr. 10-18, 42-43, 240).* The lawyer’s fee was a contingency of one-third of the recovery (8 Tr. 67; 9 Tr. 57). By a rule of thumb, used by the insurance companies and the lawyers, personal injury cases were by and large settled for about three times the total spe- cial damages (8 Tr. 17-20, 24-26; 9 Tr. 56). In order to obtain a larger settlement than the facts warranted, the lawyer would send the claimant to a physician with whom he had an arrangement whereby the physician would supply a medical bill and report which suited the lawyer’s purpose—that is, a bill which exaggerated the medical expenses but commensurate with the nature of the accident and within practical settlement limitations, and a report of the injury and treatment which adequately rationalized the bill (8 Tr. 99-31, 42-46, 69; 9 Tr. 16-17, 37-38, 61). 4In 11 of the 18 accidents, a runner materialized at the scene of the accident and recruited the claimants before they left (5 Tr. 39-40, 65, 84-86, 195-96, 220-21, 288-90; 6 Tr. 15, 57, 138, 139, 207: G. Ex. 7). In a twelfth accident, the claimant got as far as the hospital before he was approached (6 Tr. 157-59). 5In the few instances in which a claim was made under a claimant’s own insurance policy covering him for medical ex- penses, the settlement would be equal to the amount of the medi- cal bills (8 Tr. 17, 20; 9 Tr. 55). 7 In the instances involved in the indictment, the law- yer sent the claimant or claimants to Dr. Perkal,* but sometimes the lawyer sent his clients to other physi- cians with whom he had similar arrangements (8 Tr. 91, 162, 187; 9 Tr. 34, 181). As to each count the evi- dence supports a finding, implicit in the verdict, that Dr. Perkal furnished the lawyer with an inflated medi- eal bill and report.’ In addition to the lawyer’s generalized knowledge that Dr. Perkal’s bill and report would be inflated, the lawyer sometimes knew of specific details of the falsi- fication (8 Tr. 42, 95; 9 Tr. 25-26, 70-71, 75, 100), and sometimes the lawver directed specifie falsifications, in- eluding modifications of bills after they had been sub- mitte.l and back-dating the claimant’s first visit to the physician (8 Tr. 27, 61-63; 9 Tr. 78, 119-46). Sometimes the lawyer, directly or through his runner, coached an uninjured claimant to tell Dr, Perkal that he had been injured (8 Tr. 46-50, 53-58; 9 Tr. 152-53). The lawyer sent Dr. Perkal’s medical bill and report to the insurance company along with evidence of other special damages, including bills for orthopedic devices and drugs prescribed by Dr. Perkal and the bills of °3A Tr. 203-04; 5 Tr. 16, 105, 117-18, 221, 247, 269, 291; 6 Tr. 17, 74, 117, 139, 208, 242, 254. In a few instances the runner di- rected the claimant to Dr. Perkal (5 Tr. 67-68; 6 Tr. 38, 159, 180) but this was done for the convenience and with the authorization of the lawyer (9 Tr. 43-44). In one instance a runner for lawver Butler presented to two persons involved in the same accident a list of physicians from whom the claimants could choose on the basis of proximity. One claimant selected Dr. Perkal, thereby eventually producting counts 36 and 37; the other selected an- other physician. (6 Tr. 180.) * This evidence came from testimony of the claimants. For record references see Appendix D hereto. 8 consulting physicians (see Appendix D). The lawyer then settled the claim with the insurance company, venerally in line with the three-times special formula mentioned above. From the proceeds of the settlement the lawver would pay Dr. Perkal’s bill at a substantial discount, the amount of the payment being in the law- ver’s diseretion or at a flat rate (8 Tr. 77-80, 87-88 ; 9 Tr. 104-05). In addition to his one-third contingent fee, the lawyer would often keep for himself the differ- ence between the face amount of Dr, Perkal’s bill ani the amount actually paid in satisfaction of the bill. Thereby the lawyer considered that he was reimbursing himself for his expenses for runners and other illegiti- mate disbursements. (8 Tr. 67, 87; 9 Tr. 212.) The lawyer also promoted fraudulent settlements by bribing insurance company adjusters and lawyers (8 Tr. 174; 9 Tr. 213-39), and one lawyer threw an annual swimming party for 500 to 600 adjusters at which he would have 25 to 30 nude women (8 Tr. 177-78). The indictment (A. 3-48) can readily be read as al- leging that all the counts involved a single, over-all scheme to defraud insurance companies, participated in by Dr. Perkal and the various lawyers. The jury ver- dict does not, however, imply a finding of such a single scheme, * and the evidence shows that there were several schemes. The lawyers were competitors, not collabo- rators, and their business rivalry extended to obtaining satisfactory physicians (& Tr. 86; 9 Tr. 180-81). The only rational view of the evidence which we have just recapitulated is that each lawyer independently devised ‘The jury was instructed to consider each count separately (A. 19, 28), that each separate use of the mails in furtherance of a scheme to defraud is a separate offense (A. 25), and that Dr. Perkal could be found guilty as an aider and abettor (A. 26-27). eens ee ed 9 and operated a scheme or schemes to defraud, and that Dr. Perkal aided or abetted each lawyer ia the fraud by supplying him with inflated medica] bills and reports. The lawyer got the claimants by runners whom he paid. The lawyer decided what physician to use; the physi- cian did not select the lawyer. The physician produced the kind of bill and report that the lawyer wanted, and the lawyer sometimes gave specific directions respecting the bill and report. The lawyer negotiated the settle- ment without consulting the physician. The lawyer de- cided how much the physician should be paid, not the other way around. The lawyer accomplished the frauds not only by using inflated medical bills and reports but by bribing insurance adjusters and lawyers and by throwing wild parties. The scheme was structured so that the lawyer was the primary beneficiary of the scheme, and he always received more than the physi- cian, Under the conventional settlement formula of three times the special damages (of which Dr, Perkal’s bill was only part), the lawyer’s one-third contingent fee increased in direct proportion to the extent of the fraud ; in addition the lawyer would generally keep for himself the amount he deducted from the physician’s bill. Accordingly, this case involves either seven or 18 sep- arate, though similar, schemes to defrand, there being either one scheme per lawyer or one scheme. per acci- dent. 3. The Mailings The letters which were mailed in execution of the schemes to defraud fall into two classes. In class 1, re- flected in 21 counts, ® were letters from the lawyers to * Counts 1, 2, 3, 5, 6, 7, 9, 14, 16, 20, 22, 24, 28, 32, 36, 37, 39, 41, 43, 45, 47. 10 the insurance companies which enclosed, along with other documentation of special damages, Dr. Perkal s itemized medical bills and reports relating to the claim- ants.” In class 2, accounting for 16 counts, the letters consisted of drafts in settlen.ent of the claims sent by the insurance companies to the lawyers.’* The government conceded throughout the trial ane appeal that Dr. Perka! did not mail any of the letters referred to in the indictment. Nor does the indictment allege any mailing from Dr. Perkal toa lawyer or from a lawyer to Dr. Perkal. The lawyers usually transmitted medical bills and re- ports to the insurance companies by mail and the com- panies usually transmitted settlement drafts to the at- tornevs by mail. However, the uncontradicted evi- dence, supplied by government witnesses, was that it was not uncommon for the bills, reports and settlement drafts to be delivered by hand.“ There is no evidence 1 Sometimes the same bills and medical reports were sent to two insurance companies, as When one company Was a liability insurer and the other a medical loss insurer, or when two potential de- fendants were insured by different companies. 11 Counts 4, 8 10, 11, 13, 15, 19, 21, 23, 25, 30, 33, 40, 42, 46, 48, 12 Both types of letters were contained in the insurance com- panies’ case files, introduced in evidence as government exhibits. See Exhibit D for the exhibit references. 13 One insurance company employee testified that lawyers fre- quently came to the company’s office to pick up settlement cag oh (3A Tr. 127). Another adjuster testified that . metimes he har hand delivered settlement checks and sometimes the lawyers = sonally picked up the checks. He also testified that the — s transmitted by the lawyers ‘‘normally’’ came in by mail. (3 r. 44). One lawyer testified that mail was the “‘customary " means for transmittal of the medical bills and reports and the settle- ah 11 that Dr. Perkal ever directed or requested the use of the mails, that it made any difference to him whether the documents were delivered by mail or otherwise, or that he knew about the method of delivery in any par- ticular case."* 4. The Instructions to the Jury Under the trial court’s instructions, the jury could have found Dr. Perkal guilty as being either the prin- cipal or an aider and abettor. The trial court did not instruct the jury regarding the derivative liability of a conspirator for substantative offenses committed by a co-conspirator in furtherance and as part of the con- spiracy (A. 56-89), The trial court charged the jury that there were two essential elements of the offenses, as follows (A. 73-74) : Two essential elements are required to be proved in order to establish each of the offenses cha reed in the indictment: ment drafts (8 Tr. 76-77). Bomstein, the lawyer involved in half of the accidents and a large plurality of the counts, testified that he sometimes delivered medical reports to insurance com- pany adjusters by hand and that settlement drafts were some- times delivered to him by hand (9 Tr. 83, 84, 90) "The Court of Appeals cited testimony of a lawyer (Bomstein) ‘‘to the effect that the defendant’s purpose in submitting to him [the lawyer] the bills and report was ‘so that I could mail them to the insurance companies to discuss settlement.’ ”’ (Appendix A, p. 5a). This is a misleading excerpt from Bomstein’s testimony on the subject which reads as follows: ‘*Q. Did Mr. Perkal know that you were mailing these bills and reports to insurance com- panies? A, Yes. Q. How do you know he knew? A. We dis- cussed it. We discussed that sometimes the adjuster came in and I would give them the reports and most times they were mailed out. That was the purpose of his sending me the reports and bills, so that I could mail them to the insurance companies to discuss settlement.’’ (9 Tr. 93.) 12 First: The act or acts of having devised, or hav- ing intended to devise, a scheme or artifice with the specific intent to defraud, or to attempt to defraud certain insurance companies, associations and cor- porations out of money or property by means of false or fraudulent representations as to bills or medical reports, as charged in the indictment. And the second essential element: The act or acts of knowingly and willfully causing to be delivered by mail, according to the direction thereon, certain letters, documents or other material to carry out some essential step in the execution of said scheme or artifice to defraud, or to attempt to do so, as charged in the indictment.”’ On aiding and abetting the trial court instructed the jury as follows (A, 80-81) : The guilt of a Defendant may be established without proof that the accused personally did every act constituting the offense charged. ‘Title 18 of the United States Code, Section 2 provides, and I quote: ‘Whoever commits an offense against the United States, or aids, abets, counsels, commands, induces, or procures its commission, is punishable as a principal.’ ‘Whoever willfully causes an act to be done, which if directly performed by him or another would be an offense against the United States, is punishable as a principal.’ In other words, every person who willfully par- ticipates in the commission of a crime against the laws. or under the laws of the United States may be found guilty of that offense. In order to aid and abet another to commit a crime it is necessary that the aecused willfully as- sociate himself in some way with the criminal ven- ture, and willfully participate in it as he would in something he wishes to bring about; that is to ie ND pee. net E athe 13 say, that he willfully seeks by some act or omis- sion on his part to m imi ure ake the crim ‘ roel inal vent * 7 * * m You of course may not find any Defendant guilty unless you find beyond reasonable doubt that eve : element of the offense, as I have defined those ele- ments in these instructions, was committed by some person or persons, and that the Defendant partici- pated in the commission of that crime. 5. The Affirmance on Appeal The Court of Appeals held that the evidence sup- ported the conviction on the ground that, ‘‘It has td been settled, contrary to the defendant 's snattmaiies of the statute, that anyone who ‘knowingly and inten- tionally’ participates in the execution of the fraudulent scheme comes within the prohibition of the statute and this is true whether the indictment charges a con- spiracy or not”’ (Appendix A, pp. 3a-4a, footnotes omit- ted). It noted authority in other Circuits for “opnlving conspiracy principles to a multi-member mail fraud scheme’ ’’ (Appendix A, p. 4a, n. 5). Thus the court be- low affirmed the conviction on the one possible theor which had not been submitted to the jury, the Poaarat tive liability of a conspirator for a substantive ollenes committed by a co-conspirator in furtherance and - part of the conspiracy. The court ignored sutitidner's arguments that this theory was not available because the fact issues it involved had not been submitted to the jury and because the evidence could not support a finding that petitioner was a member of a conspirac to violate the mail fraud statute as distinguished reiki a conspiracy merely to commit a local fraud." 15 ¢* ‘ , ; i : Contrary to the impression conveyed by the opinion below oie ad never claimed that conspiracy principles could not be utilized unless the indictment contained a conspiracy count 14 Petitioner had also argued below that the trial court’s instruction on aiding and abetting erroneously author- ized the jury to convict merely by finding that taveneet er had abetted the fraud rather than a principa “ use of the mails to defraud. The Court of Agyee - merely replied, ‘‘We have examined the charge an find no error therein” (Appendix A, p. 7a). Of — this conclusion inevitably follows from the prece - holding that any one who knowingly and oe participated in any way in the execution of 4 frav ; ulent scheme was ipso facto a violator of the mal fraud statute.” REASONS FOR ALLOWING THE WRIT 1. The mail fraud statute prohibits using the — “for the purpose of executing”’ a scheme to a The mailing need only be ‘‘incident to an essentia pe of the scheme’? and need not be contemplated by 1€ scheme nor essential to its execution, Pereira V. United States, 347 U.S. 1, 8 (1954). It is ~-snenee the statute, therefore, that a prosecution pager er may, and usually does, center on a purely local : — the perpetration of a private fraud. The noe nexus, an incidental use of the mails, is often a casual happen- stance. 16'The Court of Appeals made certain other he Al : i sntions never advanced by peti ; orted refutation of contentions neé -d aitenae did not, of course, argue paseo Fg Agee er i ae ‘‘eulpable under the s iginators of the scheme’ can be eu nf hameaiiie A, p. 3a) or that he ‘‘did not violate the sag because he did not himself make the mail deposits sang 4 - 4a). Petitioner did argue below that his conviction coulc 7 “ affirmed on the ground that he was the principal viper e did not originate the scheme and did not do or cause the mat “~* Petitioner then went on to argue that for different ——s is conviction should not be affirmed on the other two wen my : of liability—aiding and abetting or the derivative lability conspirator. eh OSE eee 15 The court below, following the lead of a number of other circuits, has extended this federal excursion into the area of local crimes far beyond the bounds of the statute and so as virtually to eliminate any demareca- tion between federal and state jurisdiction in fraud cases. This result follows from the court’s holding that ‘anyone who ‘knowingly and intentionally’ partici- pates in the execution of the fraudulent scheme comes within the prohibition of the [mail fraud] statute’’ (Appendix A, p. 3a). By this theory the statute ap- plies, and it was so applied in this case, to an accessory to a local fraud even though he is not an aider and abettor of, or a co-conspirator in, the federal offense of using the mails to execute the fraud. Under the court’s theory, the mail fraud statute would also apply to such other abettors of the local frauds in this case as the lawyers’ runners and, in many instances, the claimants whom the lawyers represented. 2. The court below based its holding on principles of conspiracy law. Of course, a multi-party scheme to de- fraud is obviously a conspiracy to defraud. And it is settled that a conspirator is derivatively liable for sub- stantive offenses committed by a co-conspirator in fur- therance of and as part of the conspiracy. Pinkerton v. United States, 382 U.S. 640 (1946). There are, however, limitations on the application of the Pinkerton doctrine, and these the court below jet- tisoned. The doctrine can be used to affirm a conviction only if the factual issues involved were submitted to the jury. The Court said in Nye & Nissen v. United States, 336 U.S. 613, 618 (1949) (emphasis supplied) : “We held [in Pinkerton v. United States] that a conspirator could be held guilty of the substan- tive offense even though he did no more than join the conspiracy, provided that the substantive of- 16 fense was committed in furtherance of the conspi- racy and as part of it. A verdict on that theory requires submission of those fact issues to the jury.” This prerequisite to Pinkerton was specifically held applicable to mail fraud cases in Pereira v. United States, supra. There the Court stated (347 U.S. at 10, n. 1, emphasis supplied) : The Government argues that Brading’s convie- tion on the substantive offenses can be affirmed on the basis of Pinkerton v. United States, 328 U.S. 640, 90 L. ed. 1489, 66 S. Ct. 1180, since the record demonstrates that he conspired to defraud Mrs. Joyce and the acts charged in the substantive offenses were acts in furtherance of that design. The Pinkerton case, however, is inapplicable here since the jury was not instructed in terms of that theory. Nye & Nissen v. United States, 336 U.S. 613, 93 L. ed. 919, 69 S. Ct. 766. In the instant case, as we have seen, the jury was not instructed in terms of the Pinkerton theory. More- over, the evidence could not support a finding, essential to invoking Pinkerton, that petitioner was a member of a conspiracy to violate the mail fraud statute. As Pereira pointed out (347 U.S. at 11): “The essence of the conspiracy charge [in a mail fraud case] is an agreement to use the mails to defraud .... In con- trast, the scheme to defraud required for the sub- stantive offense need not contemplate use of the mails.”’ See also Abbott v. United States, 239 F.2d 310, 314 (5th Cir. 1956). Petitioner was not a party to such an agreement because it was of no consequence to him whether the lawyer used the mails or other methods to correspond with the insurance companies; the use of the mails for the type of correspondence involved was neither inevitable nor universal; and he did not Met ot ee 17 authorize, write or participate in the mail uses. See ante, pp. 10-11. Cf, United States y. Peoni, 100 F.2d 401 (2d Cir. 1938). It has become a commonplace in mail fraud eases for courts of appeal to disregard the instructional prere- quisite to the invocation of the Pinkerton doctrine, See cases cited in the opinion below, Appendix A, pp. 3a-4a, n. 4 and n. 5, conspicuously including United States v. Joyce, 499 F.2d 9, 16-17 (7th Cir. 1974) ; United States v. Wilson, 506 F.2d 1252, 1257 (7th Cir. 1974); and Pritchard vy, United States, 386 F.2d 760, 764 ( Sth Cir 1967). It is important that this Court rectify this spreading error at the earliest feasible occasion, and that occasion is presented by this case. 3. The court below also distorted the principles gov- erning the liability of aiders and abettors, and this dis- tortion creates another avenue for an extraordinary ex- tension of the mail fraud statute. , The evidence sustained a finding that petitioner aided and abetted the frauds perpetrated by the lawyers." '' Petitioner could not be a principal in the violations charged for two reasons, nor did the court below hold that he was a principal. Under the statute, the principal is the one who. having devised a scheme to defraud, does or causes a mailing in execu- tion of the scheme. As shown in our Statement of the Case the record would not support a finding (1) that petitioner devised the schemes or (2) that he did or caused the mailings alleg ad in the indictment. The mailings were done or caused by ‘the guilty lawyers. Pereira held that where a guilty person induces a mail- ing by an innocent person, he causes the use of the ma‘'s. But that principle does not apply where the mailing was done or caused by a guilty person without the direction of the aceused Pereira obviously did not intend to provide a novel basis of Tia- bility for an aider and abettor, and Pereira itself used orthodox aider and abettor principles when dealing with Percira’s accessory Braden. 18 But it does not necessarily follow that thereby he aided and abetted the mailings perpetrated by the lawyers in execution of the fraud. This is shown by the discussion in the majority and minority opinions in Pereira Vv. l'nited States, supra, respecting Pereira’s co-defend- ant, Brading. See also United States v. Greer, 467 F.2d 1064 (7th Cir. 1972), holding that the aider and abettor of a theft was not ipso facto an accessory to the inter- state transportation of the stolen property. For pe- titioner to be an aider and abettor of the mail frauds, he would have to have a ‘‘purposive attitude’’ toward the illegal mailings; that is, he must have ‘‘wished to bring about’’ the mailings. And the fact that the mail- ing was a natural and probable consequence of his an- tecedent participation in a local fraud would not be enough to establish these prerequisites so long as he did not know that the mails would actually be used in the particular instance instead of some other method of transmission and so long as the use of the mails was not inevitable. Cf. United States v. Peoni, supra; United States v. Greer, supra. For the same reasons that pe- titioner was not a member of a conspiracy to violate the mail fraud statute (ante, pp. 16-17), he was not an aider and abettor of the violations. The trial court’s instructions to the jury (ante, pp. 11-13) unmistakably authorized the return of a guilty verdict on a finding that petitioner participated in, had a purposive attitude toward, and sought to make sue- ceed the fraud, so long as somebody else wilfully did or caused a mailing in execution of the fraud. The in- structions did not require, and the evidence would not have permitted, a finding that petitioner had a pur- posive attitude toward the use of the mails. By affirm- ing this instruction the Court of Appeals approved an- POM Re RIO SE Titel! CR as SON Es 19 other way of convicting an accused for violating the mail fraud statute solely on the basis of an antecedent participation in a local fraud. CONCLUSION Certiorari should be granted and the jud t should be reversed. spigot Respectfully submitted, JOSEPH ForER Forer & Rein 733 Fifteenth Street, N.W. Washington, D. C. 20005 Attorneys for Petitioner April, 1976 APPENDIX shai dy SA ooh Sere arc si aia la APPENDIX A Opinion Below (Filed Jan. 30, 1976) UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 75-1435 Unrrep States or America, Appellee, -versus- Sruart Auten Perxar, Appellant. Appeal from the United States District Court for the District of Maryland, at Baltimore. C. Stanley Blair, District Judge. Argued: December 1, 1975. Decided: Jan. 30, 1976 Before Russe.x, Fietp and Wmener, Circuii Judges. Joseph Forer for Appellant; James M. Kramon, Special Assistant United States Attorney (Jervis S, Finney, United States Attorney, and Parker B. Smith, Assist- ant United States Attorney, on brief) for Appellee. Russet, Circuit Judge: Convicted of violation of the federal mail fraud statute,' and of aiding and abetting the violation thereof,” the de- fendant has appealed. In essence, he contests the suffi- ciency of the evidence. We find the evidence sufficient to support the conviction and affirm, except for correction of sentence, as hereinafter provided for. 118 U.S.C. § 1341 (1970). 218 U.S.C. § 2 (1970). 2a The defendant does not deny the existence of a fraud- ulent scheme and practice or his participation in it. It is his contention on appeal that his connection with the scheme was not such as to bring his conduct within the mail fraud statute. The object of the scheme was the bilking of lia- bility insurance carriers through the submission of inflated and false claims of disability and medical expense on be- half of personal injury claims arising out of automobile accidents. These claims were used as a basis for making settlements with the insurance carriers. Normally, it seems to have been the practice in the Baltimore area to base such settlements on a multiple of the medical bills as submitted. Accordingly, by inflating the medical bills with statements of fictitious or exaggerated services the parties to the scheme inflated the settlement. The execution of the scheme involved three parties: The ‘“runner’? who contacted the injured party and_ steered him to either the doctor or the lawyer; the doctor who examined the claimant, prepared a report of the claimant’s alleged injuries and submitted a bill for medical Services ; and the lawyer, who represented as attorney the claimant, submitted to the insurance carriers the exaggerated med- ical bills and reports, made scttlement on the basis of such inflated bills and reports, and then divided the proceeds among the claimants and the three parties to the scheme. All the participants, including the defendant, depended on the receipt of the settlement drafts for their profit from the scheme and all, in their separate roles, were vital and essential cogs in the conduct of the fraudulent scheme. As we have already indicated, the defendant admits that the scheme was a fraudulent one which fleeced the insu- anee companies of substantial sums and furnished him in turn with a handsome income, It is his contention, how- ever, that despite his participation and profit from the fraudulent scheme, he was immune from prosecution under the mail fraud statute either as principal or as an aider and abettor. We disagree. oe ee ne nen 3a ‘§ 1341, 18 U.S.C., declares that ‘‘{[W]hoever having de- vised or intending to devise any scheme or artifice to de- fraud,’’ uses the mails ‘‘for the purpose of executing such scheme or artifice’’ violates such statute. While conced- ing that the elements of a mail fraud violation of the stat- ute are (1) a fraudulent scheme and (2) the use e* the mails in furtherance of that scheme,’ the defendant asserts that the statute limits its application to “ [ W ]hoever, hav- ing devised or intending to devise’’ the fraudulent scheme and by so doing makes only the actual originator of the scheme culpable under the statute. Assuming this con- struction, he contends that the lawyer in the scheme in- volved here, and not the defendant, was the obvieuas orig- inator of the scheme. Under this theory, the defendant even though an essential and active participant in the f rand. ulent scheme, it is argued, would not be punishable under the statute. Without deciding whether the record will justify the defendant’s assumption that the lawyer was the originator of the scheme, it is clear that the defendant’s contention as to the scope of the statute is erroneous. It has long been settled, contrary to the defendant’s construe- tion of the statute, that anyone who ‘‘knowingly and in- tentionally’’ participates in the execution of the fraudulent scheme comes within the prohibition of the statute* and this is true whether the indictment charges a conspiracy or *United States v. Grow (4th Cir. 1968) 394 P2 — cert. denied 393 U.S. 840 (1968). ) 2d 182, 205, * United States v. Wilson (7th Cir. 1974) 506 F.2d 1252. 1257: U nited States v. Joyce (7th Cir. 1974) 499 F.2d 9 16-17 cort. denied 419 U.S. 1031 (1974); Pritchard y. United States (8th Cir. 1967) 386 F.2d 760, 764, eert. denied 390 U.S. 1004 (1968) ; Babson v. United States (9th Cir. 1964) 330 F.2d 662. 665 cert. denied 377 US. 993 (1964) ; Issacs v. United States (8th Cir, 1962) 301 F.2d 706, 726, cert. denied 371 U.S. 818 (1962) ; United States v. Dukow (W.D. Pa. 1971) 330 F. Supp. 360, 364, aff. 465 F.2d 688; Utd States v. Schall (W.D. Pa. 1974) 371 F. Supp. 912 928, aff. 503 F.2d 1400, cert. denied 420 U.S. 9! 4), reh. den. 481 US. 978 (1975). 20 U.S. 993 (1974), reh. den. 4a not.» This is made plain in Reistroffer v. United States (Sth Cir. 1958) 258 F.2d 379, 395, cert. denied 308 U.S. 927 (1959), reh. denied 361 U.S. 856 (1959), and has often been reiterated in subsequent cases. In answering an argu- ment similar to that advanced by the defendant, the Court in Reistroffer said: ‘The members of this Court are unanimously of the opinion that the evidence adduced against defendant Norris was sufficient to constitute a prima facie case and to support the verdict and judgment against him. If believed, it established that the gist of the scheme to defraud was brought to his knowledge and that he joined in with the principal schemers to accomplish their purposes. It is not necessary for the govern- ment to prove that he was one of those who originally devised the scheme. When he joined in the selling and the misrepresentations and deceptions, although in comparatively few instances, he brought himself with- in the provisions of the statute.” The defendant urges that, though he may have been a participant in the scheme, he did not place in any post office or authorized depository for mail matter the fraud- ulent doctors’ bills and reports in execution of the scheme and thus did not violate the statute. However, it was o- elared years ago by Judge Learned Hand the terms ‘* place - United States vy. Grow, supra, 394 F.2d at 203; United States v. Wilson, supra, 506 F.2d at 1257; United States v. Joyce, supra, 499 F.2d at 17. In United States v. Wilson, supra, the Court said: “Tt is not essential that the indictment contain a separate count charging conspiracy in order to take advantage 0: the doctrines peculiar to conspiracy.” Again, in United States v. Joyce, supre it 1s stated : <#* * * We therefore have no hesitation in joining at least six other circuits in applying conspiracy principles to a multi-member mail fraud scheme. The nature of .~ —. activity is the same whether or not a conspiracy is charged. See! ee 4 . j i eee da and ‘‘cause to be placed’’ in the statute did not mean that a defendant, to violate the statute, must personally deposit the critical matter in the mails or ‘‘must specifically au- thorize its deposit, it is enough if he knows that in the exe- cution of the scheme letters are likely to be mailed, and if in fact they are mailed.’’ United States v. Cohen (2d Cir. 1944) 145 F.2d 82, 90, cert. denied 323 U.S. 799 (1944). This construction has recently been restated in United States v. Shepherd (5th Cir, 1975) 511 F.2d 119, 121, where the Court said that ‘‘it is not necessary that the defendant himself place the matter into a mail depository, only that he have a reasonable basis to foresee that the mails will be used ;’’ it is, also, in conformity with the rulings of the Supreme Court in both Pereira v. United States ( 1954) 347 U.S. 1, 8-9, and United States v. Maze (1974) 414 U.S. 395, 399. There was testimony in this case from a lawyer associated in the scheme with the defendant to the effect that the de- fendant’s purpose in submitting to him [the lawyer] the bills and reports was ‘‘so I could mail them to the insurance companies to discuss settlement.’? It cannot be gain said, in the light of this testimony, that the defendant knew that the fraudulent bills and reports were likely to be mailed and that the use of the mails in the submission of those bills and reports could ‘‘reasonably be foreseen.’’* It is of no moment that in some instances other than those in- cluded in the separate counts of the indictment the bills may have been handed directly to the insurance adjuster and not mailed or that, as the defendant argues, all the bills and reports could have been so handed without the use of the mails. The fact of the matter is that the mails were normally used in the execution of the scheme and were admittedly used in all the cases specified in the indict- ment. That is sufficient to bring ‘‘the activity in question within federal criminal jurisdiction.’’ See United States ® See United States v. Maze, supra, 414 U.S. at 399. 6a v. Flaxman (7th Cir. 1974) 495 F.2d 344, 348, cert. denied 419 U.S. 1031 (1974). Of course, it is true, that the mailings must be ‘‘suffi- ciently closely related’’* to, or ‘‘inecident to an essential part of the scheme’’ * in order to bring the case within the statute. But there can be no question in this case that the mailings were crucial to the execution of the fraud. The material ineluded in the mailings represented the essential basis on which the parties rested their fraudulent claim and ‘‘played a significant part in enabling the defendant’’ and his fellow participants to execute their scheme.” The mailings preceded and were essential to the true object of the scheme, i.e., the settlement of the inflated claim. As the Court said in United States v. Kenofskey (1917) 243 US. 440, 443, when these mailings were made, ‘*{T]he most vital element in the transaction * * * remained yet to become an actuality, i.e., the payment and receipt of the money.’’ This case is quite different from Kann v. United States (1944) 323 U.S. 88, Parr v. United States (1960) 363 U.S. 970 and United States v. Maze, supra, in which the mail- ings occurred after the object of the fraud had been ac- complished and were ‘‘irrelevant to the scheme.’’ See United States v. Kelem (9th Cir. 1969) 416 F.2d 346, 349- 50, 9 A.L.R. Fed. 885, 890-1, cert. denied 397 U.S. 952 (1969) ; United States v. Sampson (1962) 371 U.S. 75, 80. Factually, this case is similar to United States v. Reicin (7th Cir. 1974) 497 F.2d 563, at 565, cert. denied 419 US. 996 (1974) and United States v. Sternback (7th Cir. 1968) 402 F.2d 353, cert. denied 393 U.S. 1082 (1968). Like the situation here, both of those cases involved schemes, par- ticipated in by lawyers and doctors, ‘‘to defraud insurance and other companies in personal injury cases by preparing 7 United States v. Maze, supra, 414 US. at 399. 8 Pereira ¥. United States, supra, 347 U.S. at 8. ® See United States v. Mace, supra, 414 U.S. at 401. © Ewe a ah eR ett aie 7a and submitting false and exaggerated medical reports and bills i ti © In Sternback, it was the doctor whe had been indicted and convicted under the mail fraud warare and in Reicin, it was the lawyer. The defendant would dis- tinguish Sternback because, as he contends, the lawyer wh submitted the bills there was an innocent ntoareagd ‘the scheme, whereas, in this case, the lawyer was an to a knowing participant. We do not read Sternback as sue- gesting-that the lawyer who submitted the bills was on in nocent participant in the scheme; indeed. we think the CO trary to be the necessary inference from the opinion Tn any event, we do not see why the fact that both the law er and the doctor in this case were knowing partici sung the fraudulent scheme should provide in Gectaptiendions with immunity. So far as Reicin is concerned. the defend ant dismisses it as disclosing ‘‘no perceptible velovene od the issues in this case,’’ even though it involved a recs tion of one of the participants in a scheme similar in ove ' respect to that presented by the facts in this ease. al The defendant, also, claims error in the trial court’s in- struction. We have examined the charge and find no eveer therein. There is, however, merit in his contention that certain of the counts in the indictment, on which the de- fendant was convicted, ‘‘merged because of there being only one mailing.’’ In fact, the Government concedes tind as to counts 16, 17, and 18, counts 24 and 26, counts 25 and 27, counts 28 and 29, counts 32 and 34 and counts 42 and 44. In addition, counsel for the defendant takes the posi- tion that counts 30 and 31 and counts 33 and 35 merged because they concerned one and the same mailing. This additional claim of the defendant presents no contest be- tween the parties on the applicable legal principle ; the par- 497 F.2d at 565. , See, also, United States v. Bornstcin (7th Cir. 1971) 447 F.2a sor Ag denied 404 U.S. 851 (1971), which involved a scheme etween an automobile garageman and an insurance adjuster to defraud the insurance carrier by inflated repair bills. le ceed eel Sa ties agree as to this. Their difference principally is a fac- tual one and the District Court is in better position to re- solve that factual issue than we are. We accordingly re- mand the cause to the District Court for correction of the judgment and sentence, and appropriate remission of fines so as to give effect to the merger of such counts of the ‘ndictment as covered one and the same mailing as agreed on by the parties and for resolution of the issue whether there was a merger of counts 30 and 31, and counts 33 and 35. Except for remand for this purpose, the judgment of conviction is affirmed. Spat ne Re Daath, AID ih haa ee A as en ee ee eee ee 9a APPENDIX B Judgment Below UNI if r TED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 75-1435 (Filed January 30, 1976) Unirep Sra TATES OF AmeERicA, Appellee, vs. STUART J IN PER RT ALLEN Perkat, Appellant. Judgment Appeal from the United S 5 tent PP | t District of Maryland. ates District Court for the Thi 8 cause came on to be heard on the record from the United States District C ourt for the Distri j and was argued by counsel. f e District of Maryland, PP Pane anprig whereof, It is now here ordered and pa ay | 118 “igs that the judgment of the said Dis- is hereby > i aa say ae cause, be, and the same rere Acer . he case is remanded to the United Relelenene ourt for the District of Maryland, at cael dee r correction of the judgment and sentence nsistent with the opinion of this Court filed hencotth ’ /s/ Wittt1aM K, Starr, II Clerk A TESS 10a APPENDIX C Order Denying Rehearing No. 75-1435 (Filed March 1, 1976) Uxitep StaTES OF AMERICA, Appellee, —versus— SruarT ALLEN PERKAL, Appellant. Order r active service having requested a wring en bane is denied. etition for rehearing No judge in regula poll of the court, reheé 1 has considered the P n it is without merit. nee of Judge Field and Judge The pane and is of opin1o With the concurre For the Court: ‘'s3/ DONALD RvussELL United States Circuit Judge Widener. lla APPENDIX D This Appendix groups the indictment transactions by the accidents. Each accident is given an arbitrary letter. There is shown the relevant counts, the lawyer involved, the insurance company and the exhibit number for its pertinent file, the personal injury claimant, and the tran- script reference to the beginning of the claimant’s testi- mony. , The insusance company files contain the docu- ments which were mailed as alleged in the indictment. Accident A Counts 1 and 2. Lawyer, Stanley J. Bomstein Insurance Co. file, G. Ex. 18 (Nationwide). Claimants, Madeline Giles, 5 Tr. 149; Eugene Evans, 6 Tr. 12. Accident B Counts 3 and 4. Lawyer, Bomstein Insurance Co. file, G. Ex. 19 (Nationwide). Claimant, Muriel Campbell, Jr., 6 Tr. 136. Accident C Count 5. Lawyer, Bomstein Insurance Co. file, G. Ex. 2 (Allstate). Claimants, Nellie Smith, 5 Tr. 172; Larry Smith, 6 Tr. 36. Accident D Count 6. Lawyer, Bomstein Insurance Co. file, G. Ex. 3 (Allstate). Claimants, Pauline Brown, 6 Tr. 54; James Browne, 6 Tr. 89. 12a Accident E Counts 7 and 8. Lawyer, Bomstein Insurance Co. file, G. ios. 4 (Geico). Claimant, Stanley Smith, 5 Tr. 63. Accident F Counts 20 and 21. Insurance Co. file, G. Fix. 20 (Nationwide). Lawyer, Bomstein Claimants, Luther Wagner, 5 Tr. 38; Colleen Hack, 5 Tr. 132. Accident G Counts 39 and 40. Insurance Co. file, G. Ex. 7 (Geico). Lawyer, Bomstein Claimant, Lee Davis, did not testify. Accident H Counts 41, 42 (merged with 44), 43. Insurance Co. files, G. Ex. 8 (Criterion), G. Ex. 21 (Na- tionwide). Claimant, Floyd M ack, 3A Tr. 142. Accident I Lawyer, Bomstein Counts 45 and 46. Insurance Co. file, G. Ex. 1 (Md. Blue Cross & Blue Shield). Claimant, Michael F. Paul, 6 Tr. 72. Accident J Count 16 (merged with 17 and 18). Lawyer, Bomstem Lawyer, Bernard Reamer Insurance Co. file, G. Ex. 15 (State Farm). Claimants, Gregory Oliver, 5 Tr. 216; Roddie Wood, 5 Tr. 286; Richard Gordon, 6 Tr. 2. 13a Accident K Count 19. Lawyer, Bernard Reamer nsurance Co. file, G. Ex. 16 (State Farm) Claimant, Nora Brown, 6 Tr. 205. Accident L Counts Z s 22 and 23. Lawyer, Bernard Reamer Insurance Co. file, G. Ex. 10 (Aetna) Claimants, Lucille F 4 ille Harp, 5 Tr. 193; James Harp, 5 Tr Accident M Counts 32 (merged with 34), 33 (merged with 35) Lawyer, Bernard Reamer Insurance Co. file, G. Ex. 5 (Geico). Claimants, Tvrone Jenki -. 7 : ns, 3 Tr. 88; Ruby -_ ™ Tr, 103; Bryant Waller, 6 Tr. 112. saieiiieniieda Accident N C ( ounts 9, 10, 11, 13. Lawyer, Howard Reamer Insurance Co. files, G. E raed , G. Ex. 9 (Aetna), G. Ex. 22 (Royal Claimants, Irving Owens ee ee ee es SNe ee Accident O Counts 4 s 47 and 48. Lawyer, Morris S. Berman Insurance Co. file, G. Ex. 13 (Aetna) Claimant, Gilland McGuire, 5 Tr. 245. l4a Accident P Counts 24 (merged with 26), 25 (merged with 27), 28 (merged with 29), 30 (merged with 31). Lawyer, Maurice Siegel Insurance Co. files, G. Ex. 11 (Aetna), G. Ex. 17 (State Farm). Claimants, Vera Palmer, 6 Tr. 222; Muriel Young, 6 Tr. 186. Accident Q Counts 14 and 15. Lawyer, Joseph Askin Insurance Co. file, G. Ex. 14 (State Farm). Claimant, Ella Cunningham, 6 Tr. 239. Accident R Counts 36 and 37. Attorney, Richard Butler Insurance Co, files, G. Ex. 6 (Geico), G. Mx, 12 (Aetna). Claimant, James C. Hill, 6 Tr. 155. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385003_2321%3A1. Public record. Not legal advice.