Opposition Brief — United States v. Lane

& ~ Supreme +“ US.

(y) FILED

No. 84-963 DEC 27 1984

apexes i. STEVAS.

In the Supreme Court of the Hnited ls om ee

OCTOBER TERM, 1984

JAMES C. LANE AND DENNIS R. LANE,

CROSS-PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON CROSS-PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES IN OPPOSITION

Rex E. Lee

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2217

TABLE OF AUTHORITIES

Page

Cases:

United States v. Ashdown, 509 F.2d 793,

SS ED cn ccccccccecscececs 4

United States v. Ledesma,

DEY SokbadeGnctnsecdconncececes 3, 4, 5

United States v. McClain, 501 F.2d 1006 ........ 5

United States v. Maze, 414 U.S. 395 ......... 3,4

United States v. Miles, 483 F.2d 1372 .......... 4

United States v. Sampson, 371 U.S.75 ......... 4

United States v. Strauss, 452 F.2d 375,

cost. demoed, 405 U.S. SOD. ...cccccccccccccccess 4

Statutes and rule:

Federal Youth Corrections Act:

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SP citienckkGnoee phdavecnssveuesas l

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Pe Gs GED o.n0005.000006000 6600005060 1

(1)

Iu the Supreme Court of the Hnited States

) OCTOBER TERM, 1984

No. 84-963

JAMES C. LANE AND DENNIS R. LANE,

CROSS-PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON CROSS-PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES IN OPPOSITION

Cross-petitioners contend that there was insufficient evi-

dence to support their convictions for mail fraud.

1. After a jury trial in the United States District Court for

the Northern District of Texas, cross-petitioner James C.

(J.C.) Lane was convicted on four counts of mail fraud, in

violation of 18 U.S.C. 1341, and one count of conspiracy, in

violation of 18 U.S.C. 371. He was sentenced to a total of

seven years’ imprisonment and fined $9,000. His son, cross-

petitioner Dennis Lane, was convicted on three counts of

mail fraud, one count of conspiracy, and one count of

perjury, in violation of 18 U.S.C. 1623. He was sentenced to

custody under the Federal Youth Corrections Act, 18

U.S.C. 4216, 5010(b).

The court of appeals reversed on all counts (Pet. App.

la-20a), ruling that count | of the indictment was improp-

erly joined under Fed. R. Crim. P. 8(b) with the other five

(1)

2

counts (Pet. App. 9a-13a). The court also ruled (id. at

13a-18a) that the evidence was sufficient to support the

convictions, concluding that the charged “mailings were for

the purpose of executing the fraudulent scheme” (id. at

18a).

The United States has filed a certiorari petition, now

pending before the Court, presenting the question whether

the court of appeals erred in reversing the convictions on the

basis of misjoinder without determining whether the error

was harmless. United States v. Lane, No. 84-744. J.C. and

Dennis Lane, respondents in No. 84-744, seek review in this

cross-petition of the court of appeals’ determination that

there was sufficient evidence of mailings in furtherance of a

fraudulent scheme to support their convictions on counts 2

through 4. That factbound contention, which is wholly

independent of the issue raised by our petition, does not

merit this Court’s review.

2. The facts are set forth in our petition in No. 84-744 (at

2-5) and in the opinion of the court of appeals (Pet. App.

2a-7a). Briefly, counts 2 through 4 charged cross-petitioners

with mail fraud in connection with a 1980 fire in a duplex i

Amarillo, Texas. After arranging for the duplex to be

burned, the Lanes obtained over $24,000 from their insurer

for losses and purported repairs made to the building. Den-

nis Lane submitted fraudulent proof-of-loss forms and

materials invoices to an insurance adjustor, who issued

drafts to Lane in payment on the policy. Shorily after

issuing each draft, the adjustor mailed the form or invoices

submitted by Lane to the insurance company’s headquar-

ters. These mailings formed the basis for the relevant counts

of the indictment. Pet. App. 3a-Sa, 15a-l6a & n.10.

The court of appeals rejected the Lanes’ argument that

the mailings could not have been in furtherance of their

fraudulent scheme because they took place in each case

3

after the relevant payment had been made (Pet. App. 15a-

18a). The court noted that the jury had been instructed that

“mailings ‘which facilitate concealment of the scheme are

mailings in furtherance of the scheme’ ” (id. at 17a n.11). .

There was ample evidence that the charged mailings did help

to conceal the Lanes’ fraud (id. at 18a):

The Proofs of Loss declared that the “loss did not

originate by any act, design or procurement on the part

of [the] insured” and that ro attempt had been made to

decieve [sic] the insurance company. [The company]

required the insured to submit the forms; any failure to

comply might have alerted [it] to the possibility of a

fraud.

The jury could infer, the court concluded, “that the mailings

were intended to and did have a lulling effect” on the com-

pany (id. at 17a) — a deviation from the standard practice of

submitting the proof-of-loss forms and invoices might have

prevented further payments or given rise to an investigation

or an attempt to recoup the payments. The court of appeals

therefore distinguished United States v. Maze, 414 U.S. 395

(1974), where this Court held that mailings were not in

furtherance of a fraudulent scheme where they could not

have enhanced, and probably reduced, the probability that

the scheme would be successful.

3. Cross-petitioners renew their contention that the evi-

dence was insufficient to support their convictions on

counts 2 through 4, arguing that the decision below con-

flicts with United States v. Ledesma, 632 F.2d 670 (7th Cir.

1980), and United States v. Maze, supra. There is no con-

flict. Cross-petitioners’ factbound claim does not warrant

further review.

In United States v. Maze, this Court reversed a mail-

fraud conviction based on the mailings from merchants to a

bank of sales slips for purchases made with a stolen credit

4

card (414 U.S. at 396-397). The Court reasoned that these

mailings “increased the probability that [the defendant]

would be detected and apprehended” (id. at 403). The

Court expressly distinguished the situation where mailings

are “designed to lull the victims into a false sense of security,

postpone their ultimate complaint to the authorities, and

therefore make the apprehension of the defendants less

likely than if no mailings had taken place” (ibid.). See Uni-

ted States v. Sampson, 371 U.S. 75 (1962) (mailings made

after money was obtained were in furtherance of fraudulent

scheme).

The decision below plainly is consistent with Maze. Far

from increasing the likelihood that the Lanes would be

apprehended, the mailings of their proof-of-loss forms and

invoices to the insurance company helped to conceal their

fraudulent scheme. Moreover, as Sampson makes clear,

there is no per se rule that mailings taking place after money

is obtained cannot violate the mail fraud statute.’ Nor is

there a conflict with United States «. Ledesma, supra.

There, the court reversed one of the defendant’s mail fraud

convictions because the scheme had already “reached its

fruition” by the time the charged mailing took place (632

F.2d at 678). The court noted, however, that mailings that

facilitate concealment of a fraudulent scheme do violate the

statute (id. at 677 n.11). The jury here was instructed in

accordance with this rule, and the court of appeals correctly

reasoned that the charged mailings did help to conceal the

fraud.

'See also, e.g., United States v. Ashdown, 509 F.2d 793, 800 (Sth

Cir.), cert. denied, 423 U.S. 829 (1975); United States v. Miles, 483 F.2d

1372 (8th Cir. 1973); United States v. Strauss, 452 F.2d 375, 380 (7th

Cir. 1971), cert. denied, 405 U.S. 989 (1972).

§

In any event, this is not a case in which the proceeds of the

fraud were fully secured by the defendants priot to the

mailings; the payment drafts issued to the Lanes were sub-

ject to approval by the insurance company’s headquarters,

and payment could have been stopped had the forms and

invoices mailed to the company not been in order (Tr.

208-218). See United States v. MacClain, 501 F.2d 1006,

1012 (10th Cir. 1974).? This fact clearly distinguishes

Ledesma, where the court did not point to any evidence that

payment might have been halted at the time the mailing took

place (see 632 F.2d at 677-678).

It is therefore respectfully submitted that the cross-

petition for a writ of certiorari should be denied.

Rex E. Lee

Solicitor General

DECEMBER 1984

2Even after the funds had been drawn on by the Lanes, a stop-

payment order would have resulted in the amounts being charged

against their own bank account as overdrafts, rather than against the

company’s account (Tr. 377-397). Moreover, the mailings charged in

counts 2 and 3 occurred before the final draft was issued; the scheme

indisputably had not come to an end when those mailings took place.

DOJ-198412