Appendix — Reicin v. United States

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In the

United States Court of Appeals

For the Seventh Circuit

September Term, 1973 September Session, 1973

No. 73-1057

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

EDWARD E. REICIN,

Pefendant-Appellant.

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 71 CR 82

Thomas R. MeMillen, Judge.

Argued September 12, 1973—Decided May 28, 1974

Before Cast_e, Senior Circuit Judge, and Famcuivp and

Petu, Circuit Judges.

Pett, Circuit Judge. An eleven-count indictment charged

appellant Edward Reicin, an attorney, with mail fraud,

18 U.S.C. $1341." Defendant and Dr. William Becker al-

1 The statute provided:

“81341. Frauds and swindles.

Whoever, having devised or intending to devise any scneme or

artifice to defraud, or for obtaining moncy or property by means of

false or fraudulent pretenses, representations, or promises, . . . for

the purpose of executing such scheme or artifice or attempting so

to do, places in any post office or authorized depository for mail

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App. 2

legedly had devised and carried out a scheme to defraud

insurance and other companies? in personal injury cases

by preparing and submitting false and exaggerated medi-

eal reports and bills to the companies and by causing

claimants ‘‘to absent themselves from employment to in-

crease their alleged damages.’’ Each count pertained to

a different personal injury case handled by the defendant

or lawyers in his office, and each count alleged a specific

mailing with regard to the claim involved in that count.’

A jury convicted Reicin on Count 9, which concerned

the mailing of a fraudulent document to the Royal Globe

Insurance Company, and acquitted him of the ten other

counts. On this appeal, defendant seeks (1) the reversal

of his conviction on the ground of insufficiency of the evi-

dence, or (2) a remand for a new trial on Count 9 because

(footnote continued)

matter, any matter or thing whatever to be sent or delivered by the

Post Office Department, or takes or receives therefrom, any such

matter or thing, or knowingly causes to be delivered by mail ac-

cording to the direction thereon, or at the place at which it is di-

rected 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 im-

prisoned not more than five years, or both.”

* Each count involved a different mailing; however, one scheme

and artifice to defraud various companies was charged, “including

but not limited to: Aetna Insurance Company, Allstate Insurance

Company, Chicago Transit Authority, The Hanover Insurance

Group, Horace Mann Insurance Group, Inter-Insurance Exchange

of the Chicago Motor Club, National Emblem Insurance Company,

Northwestern Security Insurance Company, Royal Globe Insurance

Company and Unigard Insurance Company. . . .”

% The use of the mails aspect of the case has not been challenged

on this appeal.

App. 3

of supposed procedural irregularities at trial. Reicin also

requests a remand for a hearing on his motion to quash

the indictment.

Factual Background

Count 9 concerned the claim of Philip Eauslin, a trav-

eling commission salesman, whose automobile was struck

from the rear by a truck on July 5, 1967. A few days after

the accident, Eauslin and his family drove the repaired

automobile to Florida for a previously planned vacation.

While in Florida, Eauslin felt pain in the small of his

back. He had experienced such pain sporadically for some

vears prior to the July Sth accident. As he had origi-

rally intended, Eauslin remained in Florida for two weeks,

during which time he did not seek the services of a doctor.

After returning from vacation, Eauslin mentioned the

accident to his supervisor at his place of employment.

That individual recommended that Eauslin consult the

defendant, whose firm had done some work for the com-

pany. Eauslin did so. In his conversation with Reicin, he

told him about the accident and said that, although he

had some discomfort, he probably had had the same

symptoms before the accident. He also mentioned that

he had just returned from a vacation trip to Florida.

Reicin suggested that he see a doctor: when Eauslin re-

plied that he had no family physician, defendant arranged

for him to see Dr. Becker.*

4 At the time of Reicin’s trial, Dr. Becker, the Government's pri-

mary witness, had been convicted of mail fraud. He had prepared

false medical bills and reports and had sent them to divers attor-

neys so that they could obtain inflated settlements from insurance

companies. Becker was given two years’ probation with the under-

standing that he tell the truth in any further proceedings regarding

the mail fraud cases in which he had participated.

App. 4

Eauslin testified that he visited Dr. Becker’s office only

one time and that the doctor briefly examined Eauslin’s

back but gave him no treatment or medication. He also

sent him to an X-ray clinic.

According to Dr. Becker, after Easulin had come to

his office, defendaut telephoned the doctor and requested

the card on which Becker had listed the number of visits

supposedly made by Eauslin. Reicin had stated that he

wanted the card because there was a subpoena for Beck-

er’s records and defendant wanted to make certain that

the cards ‘‘looked all right.’’ Dr. Becker’s bill for treat-

ment of Eauslin amounted to $185 and falsely indicated

that Eauslin had seen the doctor eleven times. Becker

refunded 25 percent of the bill to the defendant in cash.

Count 9, like Counts 2-8 and 10 and 11, realleged by

reference all the allegations of the first count, which de-

scribed one scheme or artifice to defraud.2 The evidence

adduced at trial established the following course of con-

duct. Dr. Becker had known the defendant since 1961,

and between 1965 and 1969, he handled approximately 83

to 90 cases with Reicin. He testified that he looked to the

defendant for payment of some of the medical bills in-

volved in the indictment. Prior to sending each of the

bills to Reicin, Dr. Becker would receive a letter from

the defendant asking for the bills. After Reicin would

pay the bills, the doctor would kick back 25 percent of

each payment to the defendant. Dr. Becker testified that

each of the bills and medical reports he had prepared

was false and exaggerated and that he had had conversa-

tions with the defendant about their inaccuracy. Reicin

had expressed concern that the fraud might be exposed:

* Prior to trial, the court struck from the indictment allegations

that defendant Reicin had submitted false automobile repair bills to

the various companies and that he had defrauded his clients.

App. 5

‘‘[T here was a lot of heat in the streets’’ and ‘‘[there

were] investigations going on about personal injury

cases.’’

Although Reicin voiced concern about the discrepancy

between the number of visits mentioned on the bills and

the actual number of visits that claimants paid Dr. Becker,

he neither warned the various companies about the mis-

information nor ceased sending clients to Dr. Becker for

examination for insurance claim purposes. Indeed, Becker

testified that in 1965, after Reicin had told the doctor that

he was worried that the medical bills smacked of fraud,

Reicin simply suggested that the manner of his payment

be changed. Previously, Reicin would send Becker 40 to 60

percent of the amount of the bill. Reicin proposed that

he would send the doctor the full amount of the bill by his,

Reicin’s, check and thereafter Becker would refund 25

percent of the amount in cash to Reicin. Apparently be-

cause of the increase of the percentage to the doctor, he

was to pay the resultant income tax based on the full

amount of the bills. Further, Dr. Becker also testified

that the defendant had demanded that certain claimants-

patients be hospitalized.

Former clients of Reicin, claimants, corroborated much

of Becker’s testimony about Reicin’s pattern of behavior

and his knowledge that the reports submitted to the vari-

ous companies contained misrepresentations. For exam-

ple, client Carolyn Lovell stated that she had told Reicin

that if she went to the hospital she might lose her job.

Reicin replied that she was ‘‘working for peanuts any-

how’’ and that she should go to the hospital. He tele-

phoned a Dr. Villate and told him to ‘‘throw Mrs. Lovell

in the hospital.’’ After Reicin gave Mrs. Lovell her settle-

ment, he warned: ‘‘[N]jot a word of this to anyone. If

anything happens, come to me.’’ When claimant Carrara,

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App. 6

after signing the settlement agreement, questioned the

amount of the doctor’s fees, defendant replied that it was

normal for ten or twelve visits. Carrara stated that he

had visited Becker only once or twice. Reicin then re-

sponded that, nevertheless, ‘‘that is what we used in the

settlement.’’

At the close of the Government’s case, the trial court

struck paragraph 10, concerning ‘‘lost time,’’ from Counts

3, 4, 5, 6, and 10. However, the court denied the defen-

dant’s motion for judgment of acquittal on Count 9 or, in

the alternative, that paragraph 10 be stricken in relation

to Count 9.

Sufficiency of the Evidence

Claimed Total Failure of Proof

Reicin first contends that the Government produced no

evidence, direct or indirect, that he was aware that Dr.

Becker’s report and bill on claimant Eauslin were fraudu-

lent. He further maintains, contrary to the district court’s

position in its post-trial memorandum opinicn, that the

evidence pertaining to the counts on which he was acquit-

ted may not be the basis for inferences against him on

Count 9.

Second, Reicin asserts that the Government failed to

prove another clement of the scheme as described in the

indictment, namely, that Becker and the defendant caused

clients, including Eauslin, to absent themselves from em-

ployment to increase their alleged damages. The prosecu-

tor, Reicin declares, recognized the weakness of his case

in this respect and therefore in his closing argument in-

jected the ‘‘new and different [lost time] theory’’ that,

without Eauslin’s knowledge, the defendant and Eauslin’s

employer, Mr. Brill, submitted a letter to the Royal Globe

—-

App. 7

Insurance Company indicating that the claimant had taken

off more time than he in fact had. This supposedly ma-

terial alteration of the indictment assertedly was improper

and its substance unproved.

This assault by defendant on his conviction stems pri-

marily from his aarrow view of a mail fraud charge, a

view which we do not share.

‘*The defendants’ arguments [in this mail fraud

case} as to sufficiency of the evidence on the sub-

stantive counts attack the credibility of witnesses, dis-

regard the fact that guilt can be proven by cireum-

stantial evidence, ... and generally ignore the func-

tion of the jury in criminal trials. Defendants do

not, in their briefs, look at the evidence as a whole,

or in the light most favorable to the Government, but

rather isolate various bits of testimony and argue

that each was insufficient to support the verdicts.

However, the evidence presented concerning the vari-

ous accidents overlaps and cannot be viewed in a

vacuum.’’ United States v. Hutul, 416 F.2d 607, 617

(7th Cir. 1969), cert. denied, 396 U.S. 1012 (1970).

The jury’s acquittal of defendant of ten of the eleven

counts charged does not justify the conclusion, as Reicin

implies, that the jury perceived no overall scheme but

nevertheless irrationally convicted defendant on Count 9.

In finding Reicin guilty on that count, the jury, we are

persuaded, did look at all the evidence, the approach the

Government had adopted at trial. In his closing argu-

ment in particular, the prosecutor had developed the

theme that Reicin and Dr. Becker had devised a successful

formula for defrauding companies in accident cases by

inflating the ‘‘specials’’ and that they had employed this

preconceived plan repeatedly, only varying it slightly

once or twice as the circumstances required. In his analy-

sis of the verdict, the defendant fails to take into account

;

App. 8

the possibility that the jury might have been exercising

‘tits historic power of lenity,’’ United States v. Carbone,

378 F.2d 420, 423 (2d Cir. 1967), cert. denied, 389 U.S.

914. In United States v. Fox, 433 F.2d 1235, 1238 n. 22

(D.C. Cir. 1970), the court pointed out ‘‘the judicially rec-

ognized fact that juries frequently convict on some counts

but aequit on others, not because they are unconvinced

of guilt, but simply because of compassion or compro-

mise.’* ®

Count 1, which each subsequent count of the indictment

realleged, described one scheme or artifice to defraud.

Its separate paragraphs were enumerations of certain il-

lustrative elements or characteristic patterns of the

scheme. (Count 1 and Count 9 are set out in the Appendix

to our opinion.) Count 9 specified one instance of the

perpetration of the continuing plan. Dr. Becker’s testi-

mony, which Reicin does not credit but which the jury

® While we decline to speculate as to the reason the jury selected

the indictment count involving the Eauslin incident for its sole con-

viction, we do note certain significance given to this count in the

final argument of counsel for Reicin:

“Mr. Hoffman, who is a very fine lawyer and does a good job

for the government, he points out to you that the Hernandez

incident put Reicin on notice, that there is something wrong

with Becker’s bills. But he still continued to send clients to

Becker.

“Do you know how many of these cases went to Dr. Becker

after the Hernandez incident, ladies and gentlemen? One.

O-n-e, one, the Eauslin case, where Eauslin came in and he

practically fought with him about whether he had a family

doctor and Reicin said. ‘Go see your family doctor.’ And

eventually Reicin sent Eauslin to Becker. One case involved

here in which Reicin sent a client to Becker after the Her-

nandez incident. as you will see when you examine these pieces

of paper. ”

App. 9

apparently did find persuasive, indicated that the defen-

dant knew that the doctor was regularly falsifying the

bills of Reicin’s accident clients, including those for Eaus-

lin. His protestations notwithstanding, Reicin continued

to refer persons to Becker and to share the monies re-

sulting from that consultation. Reicin’s primary concern

was that the misrepresentations would be discovered.

Becker’s testimony and that of the various clients pro-

vided an adequate basis for the conclusion that Reicin

knew of the misrepresentations, that he and Becker had

developed a unitary scheme and had participated in that

scheme, and that the two had handled the Eauslin claim

in accordance with the established scheme. 5

Although we find no merit to the claim that there was

no continuing, overarching scheme or that Reicin did not

participate knowiagly in it, we do agree that the Govern-

ment’s inability to establish that the defendant and Becker

caused Eauslin to take unnecessary time off from his job

weakened the Government’s case. The issue is whether

the lack of such proof, despite the presence of the other

elements of the scheme as alleged in the indictment,

vitiates the conviction on Count 9.

We hold that it does not. ‘‘[I]n most mail fraud prose-

cutions, there are numerous instances of allegedly illicit

conduct, all of which need not be proved to sustain a con-

viction.’’ Anderson v. United States, 369 F.2d 11, 15 (8th

Cir. 1966). Cf. Martin y. United States, 404 F.2d 640, 643

(10th Cir. 1968). As the district court stated in its post-

trial opinion, ‘‘{a]s in a conspiracy case, it is necessary

to prove at least one but not necessarily each of the specific

acts to sustain each count.’’ This is not a case of a crucial,

substantial, prejudicial variation between indictment and

proof; defendant and Becker handled the Eauslin claim

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App. 10

substantially as they had the other claims, although per-

haps their pecuniary goal was a trifle more modest this

time.

In regard to Reicin’s related contention, that the prose-

cutor in his closing argument substituted a ‘‘different

lost time theory,’’ we place a different construction on

the prosecutor’s remarks. Eauslin did not have an ex-

haustive recollection of his conversations with the defen-

dant or of his work schedule following the accident, but

his testimony was sufficiently definite to permit the prose-

cutor to argue that certain inferences could be drawn

from the seeming discrepancy hetween that testimony and

the Eauslin lost-time exhibits. The Government was not

limited to proving only those details of the scheme al-

leged in the paragraphs of Count 1 but could also draw

additional inferences from the evidence relevant to the

defendant’s criminal intent. The jury heard the somewhat

equivocal evidence on this point and was free to disregard

the prosecutor’s assessment of it. We note that Reicin

did not object to the argument at the time and that the

trial judge instructed the jury that counsel’s comments

were not evidence.

Claimed Partial Failure of Proof

Reicin interprets the charge against him as consisting

of two ‘‘branches’’: (1) the knowing submission to the

Royal Globe Insurance Company of a false medical report

and a false bill for the Eauslin claim, and (2) causing

Eauslin to be absent from his job in order to inflate his

damages. Under this construction of the case, the defen-

dant asserts, in an alternative argument, that if the evi-

dence was sufficient to prove only one ‘‘branch,’’ then

he is at the very least entitled to a new trial. More spe-

cifically, Reicin’s argument is as follows: (a) Count 9

App. 11

was submitted to the jury on alternative grounds (1) and

(2), and the jury was instructed that it could convict

defendant under either ‘‘branch’’;* (b) the Government

failed to adduce suflicient evidence against the defendant,

the inadequacy particularly apparent as to the lost-time

ground; therefore, (c) the general verdict of guilty cannot

stand because the jury may have based its verdict on the

‘‘obviously’’ unproven ground.

While what we have already said on the nature of a

mail fraud case is probably sufficient to dispose of this

secondary argument, we will consider the authorities to

which our attention has been directed by Reicin.

He claims to find support in Stromberg v. California,

283 U.S. 359 (1931), and Luited States v. Baranski, 484

F.2d 556 (7th Cir. 1973). However, those cases involved

a special statutory problem not present here. In each ease,

there was a basis for helief that the convictions could

have rested on statutory sections or clauses which the

respective reviewing courts held to be constitutionally in-

7 The instruction to which Reicin refers (No. 39) provided:

“A scheme to defraud under the Mail Fraud statute means

some plan to procure money or property by means of false

pretenses or representations calculated to deceive persons of

ordinary prudence. It is not necessary, however, that any in-

surance company was actually defrauded by the scheme. Nor

is it necessary that the Government prove every one of the

pretenses, representations and acts charged in the indictment.

The Government must prove that defendant knowingly partic-

ipated in such plan, and that such representations were made by

him, or his agents, knowing they were false, and with intent to

defraud.”

Defendant finds the next-to-last sentence of this instruction im-

proper. He had unsuccessfully opposed the giving of the instruc-

tion at trial.

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App. 12

valid. Because the trial courts had instructed the juries

that they could convict on the basis of any one of the

several statutory bases involved and the juries had re-

turned general verdicts, the grounds for the convictions

were unclear; the juries might have convicted under the

parts of the statutes which infringed First Amendment

rights. In the case at bar, there is no danger that the

defendant might have been found guilty for having en-

gaged in conduct that the Government cannot constitution-

ally prohibit. Further, the challenged portion of this in-

dictment was merely an illustrative aspect of an overall

scheme and did not constitute per se a separate offense

or separate legal theory.

The defendant also relies on United States v. Groves,

122 F.2d 87 (2d Cir. 1941), cert denied, 341 U.S. 670,

which he characterizes as the ‘‘closest [case] on the facts.’’

In Groves, supra at 89, the court stated that ‘‘[e]ach

count of the indictment set forth three separate frauds,

alleged to have been practiced on G.I.C. pursuant to the

scheme.’’ The court affirmed the conviction of one of the

two appellants, but reversed and remanded the case against

the second appellant. It ruled that there had been no

evidence of that defendant’s participation in the second

and third frauds. Furthermore, the court disapproved

of the use against the defendant of certain ‘‘extremely

prejudicial’? hearsay testimony, upon which, the court

noted, the jury might have based its finding of guilt.

We do not find Groves persuasive here. If it stands for

the broad proposition that each act constituting a part

or detail of the scheme charged in a mail fraud indict-

ment, but not essential to the existence of the scheme,

must be proved or the entire prosecution fails, then we

reject that viewpoint. Whatever the factual situation in

App. 13

Groves, the present case consists not of a series of dis-

connected swindles or of frauds that may have had merely

a common actor or stage but of a continuing, unitary

scheme wherein each participant generally adhered to a

certain course of conduct in regard to the various victims.

Cf. United States v. Sheehan, 428 F.2d 67 (8th Cir. 1970),

cert. denied, 400 U.S. 853; Bliss v. United States, 354 F.2d

456 (8th Cir. 1966), cert. denied, 384 U.S. 963. In sum, we

do not share Reicin’s interpretation of the prosecution’s

case. The Government argued to the jury that Reicin and

Becker had concocted one basic scheme; what Reicin labels

as ‘‘alternative theories’’ are specifications of the par-

ticipants’ fundamental modus operandi, which they modi-

fied somewhat as circumstances warranted.

Notwithstanding defendant’s argument to which we have

adverted, Reicin agrees in his brief ‘‘that it was not nec-

essary for the Government to prove each of the various

fraudulent acts alleged in the indictment.’’

Our conclusion is not changed by the fact that the trial

judge declined to strike Paragraph 10 from Count 9,

which paragraph was incorporated by reference from

Count 1 and which dealt with that part of the general

scheme whereby the allegedly injured person absented

himeslf from his place of employment. The trial judge

did strike this reference-incorporated paragraph from five

other counts. Because it was not necessary for the Gov-

ernment to prove each of the fraudulent acts constitut- .

ing the scheme to defraud, the striking of the paragraph

from some of the counts was an unnecessary action, be-

ing nothing more than a judicial comment on factual proof

and has no other significance in this particular case. We

will not assume that the jury based a verdict on non-

existent proof, if, as defendant contends, there was no

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App. 14

proof; rather, we conclude that the jury did decide that

there was sufficient evidentiary proof that the defendant

and Dr. Becker had engaged in a scheme to defraud. We

cannot say that the jury was incorrect in its decision.

Alleged Trial Errors '

The Doctors’ Testimony

Reicin maintains that the trial judge committed preju-

dicial error (1) by refusing to strike Dr. Becker’s ‘‘fabri-

cated direct testimony about ¢éonversations with defen-

dant,’’ and (2) by refusing to allow Dr. Gerald Atlas, whom

defendant wished to call as an expert witness, to testify.

As to each of the counts in which the client involved was

hospitalized, Dr. Becker testified to conversations he had

had with defendant Reicin wherein Reicin advised him ‘to

hospitalize the client. The defendant contends that cross-

examination of Dr. Becker revealed that, in each instance,

either the doctor had no present recollection of the par-

ticular conversation and his files contained no notes con-

cerning such conversation or that, where Becker did have

pertinent notes, he simply relied ca what was stated in

those notes without having any present recollection at all.

In both kinds of situations, Dr. Becker assertedly fabricat-

ed or, at least, embellished a substantial part of the sup-

posed conversations he had had with Reicin.

The notes on which Dr. Becker relied at trial had been

' admitted into evidence as business records and as past

recollection recorded. Reicin claims that ‘‘[a]lthough the

notes remained admissible . . ., the oral testimony should

have been stricken. . . . [T]here was no evidentiary basis

for (Dr. Becker’s] testimony.’’

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App. 15

The defendant relies heavily on Dr. Becker’s responses

to questions on cross-examination about his recollection

of particular conversations with Reicin. The exchanges

between defense counsel and Dr. Becker are ambiguous.

It is not clear that the witness understood counsel’s ques-

tions about his ‘‘actual recollection’’ ‘‘as you sit there ,

now.’’ He rather clearly did not have recollection of many

of the incidents independently of his recorded memoranda,

but, after looking at these memoranda, he did testify as

to the incidents. Because of the combination of ‘‘past

recollection’’ and ‘‘recollection refreshed,’’ the trial judge

would not have been justified in striking Dr. Becker’s

testimony. See generally C. McCormick, Evivence, ch. 30

(2d ed. 1972). It was appropriate for the jury to determine

Dr. Becker’s credibility and the weight to be given to his

testimony, which pertained to a few of several thousand

patients he had seen several years before. Although it

seems unlikely that Dr. Becker would have had an inde-

pendent recollection, doctors customarily depend upon

notes made during patient contacts for the purpose of

refreshing their recollections concerning the patient. From

hearing and observing the witness, the jury could decide

whether he was fabricating or whether he was testifying

with recollection refreshed.

Dr. Becker’s testimony on direct examination that in

his medical opinion none of the patients had required

hospitalization and that he would not have hospitalized

them absent Reicin’s requests undoubtedly helped the

Government’s case. The defendant wished to counteract

this deleterious evidence through the expert testimony of

Dr. Gerald Atlas, to whom the defendant had shown the

hospital records of each hospitalized claimant. In an offer

of proof, counsel indicated that Dr. Atlas would have

App. 16

stated, if he had been allowed to testify, that, based upon

a reasonable degree of medical certainty, he would have

hospitalized those persons if they had been his patients.

This counter testimony, Reicin argues, would have (1)

impeached Dr. Becker’s credibility, (2) undermined the

basis for an inference of fraud upon the companies in-

volved, and (3) circumstantially shown Reicin’s good faith.

The trial court had refused to permit Dr. Atlas to testi-

fy on the ground that the proposed testimony was irrele-

vant. We, too, conclude that this supposed ‘‘rebuttal’’

testimony went to collateral matters. The district court

exercised its discretion properly.

his case is not a personal injury action. The primary

question at trial was whether Reicin had knowingly par-

ticipated in a scheme to misrepresent information to and

defraud insurance and other companies through use of

the mail. Consequently, the schemers’ intent at the time

they acted was crucial. Dr. Becker testified that but for

Reicin’s insistence he would not have hospitalized certain

of the clients. The record does not show that Reicin, a

lawyer, was competent to contradict Dr. Becker’s judg-

ment on medical grounds. Nor was there evidence that

the defendant consulted other doctors on the question of

hospitalization. Yet Reicin insisted on hospitalization. His

intent to defraud does not turn on whether some of the

clients ‘‘actually’’ needed such treatment; it is enough that

the defendant thought at the time that they did not or

that he made the decision to hospitalize for the purpose

of making a better case without regard to whether there

was need therefor. ‘‘One who acts with reckless indif-

ference as to whether a representation is true or false is

chargeable as if he had knowledge of its falsity.’’ Irwin

v. United States, 338 F.2d 770, 774 (9th Cir. 1964), cert.

denied, 381 U.S. 911 (1965).

App. 17

Further, the success of a scheme to defraud, that is,

whether the victim lost money because of it, is not a pre-

requisite to a conviction for mail fraud. United States v.

George, 477 F.2d 508 (7th Cir. 1973), cert. denied, 414

U.S. 827; Blachly v. United States, 380 F.2d 665, 672-73

(5th Cir. 1967).

In sum, Dr. Atlas’s proposed testimony would not serve

to negate the existence of this part of the scheme. The

existence of the scheme is the relevant proof requirement.

Cf. United States v. Joyce, ........ | eee , Nos. 73-1014,

73-1015, 73-1016 (7th Cir., May 9, 1974), slip op. at 18.

The Prosecutor’s Closing Argument

The defendant next asserts that he was denied a fair

trial because the prosecutor during closing argument sup-

posedly (1) commented, albeit indirectly, on Reicin’s fail-

ure to take the stand, (2) accused a witness of perjury

and Reicin of suborning that perjury, and (3) inflamed

the jury against the defendant.

We have examined the prosecutor’s closing argument,

paying particular attention to those passages to which

the defendant has cited us. Final arguments in this case,

occupying in excess of 150 pages of the transcript, can

scarcely be labeled as laconic. The particular phrases

which the defendant now attacks as being comments on

the defendant’s failure to take the witness stand were

typified by: ‘‘Reicin says, through other witnesses, . . .’’

and ‘‘for some reason that only Reicin knows. ...’’ While

the first of these was used on several occasions and per-

haps is an inartful locution for a prosecutor who should

not only refrain from commenting on the failure of a

defendant to take the witness stand but should guard

against the appearance of doing so, nevertheless, in the

Rae ED

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App. 18

context of the extensive argument in this case we do not

read in these introductory remarks the illative meaning

that the defendant finds.

The first phrase was used in reference to that to which

the defendant’s witnesses testified, and the second phrase

taken in context referred to defendant’s intent in effecting

a change of modus operandi. We cannot say from the

record that the ‘‘language used was manifestly intended

to be or was of such a character that the jury would

naturally and necessarily take it to be comment on the

defendant’s failure to testify.’’ United States v. Lyon, 397

F.2d 505, 509 (7th Cir. 1968), cert. denied, 393 U.S. 846.

Further, not only did the trial court instruct the jury

on the matter, but Reicin’s counsel in his final argument

said, ‘‘You will also be told that you must not and you

may not discuss or consider the fact that the defendant

did not testify in this case.’’ The fact that he did not

testify was no secret. Impropriety would only arise from

the suggestion that the failure somehow should be con-

strued against the defendant.

Finally, as in Lyon, there was no objection to the use

of these statements. We are not unmindful of the dis-

advantages of interrupting opposing counsel’s argument,

but we are of the opinion that if the claimed transgression

was so egregious as to constitute plain error it well should

have, and probably would have, triggered an interruptive

objection.

The prosecutor’s remarks about perjury related to the

testimony of defense witness Philip Wertz, an attorney

employed by the defendant’s firm from 1966 to 1968.

Wertz’s account of certain aspects of the Hernandez trans-

a

App. 19

action differed from that of Government witness Thomas

Fahey, an insurance adjuster. In summarizing Wertz’s

testimony, the prosecutor stated:

‘Now I haven’t the slighest idea, but I have got

a good imagination and maybe I] can conjure some-

thing up in my mind to that effect—but nonetheless,

I don’t really know what inducements Reicin could

have used to prevail upon Wertz to engage in that

incredible state of perjury.’’

The prosecutor continued :

‘‘But today, for fear that maybe some future em-

ployer might not believe him, he has got to go back

and do for you in front of you today Mr. Reicin’s

bidding, and that bidding, unfortunately, includes and

encompasses what I consider to be some pretty severe

perjury.

‘‘Let’s take another example about Mr. Wertz, a

man who I really feel sorry for because I am sure

until he had to appear in this courtroom he was a

relatively clean individual.’’

While it may be playing with words and while, despite

the native intelligence of jurors, they might have difficulty

in distinguishing between a forthright statement in argu-

ment that a witness has committed perjury and an as-

sertion such as the one made by Reicin’s counsel, ‘‘ Now

I am not saying these people are guilty of deliberate

perjury,’’ nevertheless, the courts have viewed the direct

accusation of the crime of perjury with considerable dis-

favor. See, e.g., Weathers v. United States, 117 F.2d 585

(5th Cir. 1941).

Again, however, we do-not look at the statement in a

vacuum but in the context of the particular trial. We

have already adverted to the extensive nature of the

final argument. We do not mean to suggest that a three-

App. 20

week trial would have called for a shortened summation,

but we do find some significance in the relationship of the

size of the craft to the body of the water it occupies.

Secondly, on the first reference to perjury there was no

objection but the prosecutor continued reviewing the ques-

tioned testimony. Three pages later in the transcript

we find the second use of the word ‘‘perjury.’’ Again

there was no objection, and it was not until the end of

the last paragraph quoted above that there was an objec-

tion. Even then the primary thrust of the objection was

that the prosecutor had misstated the testimony. The

trial judge responded that the jury would have to decide

what the facts were. Again, counsel referred to the mis-

statement and finally said, ‘‘He is also accusing Mr. Wertz

of perjury just because he doesn’t agree with Mr. Fahey.”’’

After further reference by the court to the jury determin-

ing the facts, defense counsel stated, ‘‘I do object to the

prosecutor misstating the testimony.’’ There was neither

a motion to admonish nor a motion for a mistrial. Further,

there was no objection to the intimation that defendant

had suborned perjury. In its instructions, the court did

advise the jury that ‘‘arguments of counsel are not evi-

dence.’’

From the record it is clear that Reicin’s counsel com-

petently, effectively, and vigorously represented him. Yet

he now seeks to have us reverse the judgment of conviction

on a basis that he barely recognized during the course of

the trial.

We have little difficulty in discerning the probable cause

of the minimal nature of the objection. The closing argu-

ments had few anacreontic attributes. In less formal terms,

the arguments of both counsel were free-swinging and

hard-hitting. In the final argument of defense counsel,

o-

App. 21

we note the following references to the verity of Govern-

ment witnesses:

‘*We agree that Dr. Becker was engaged in a scheme,

a fraud. We agree that Dr. Becker is a liar, a cheat,

a charlatan. . . . Because Dr. Becker hasn’t got the

slightest—not the slightest concern for the truth... .

Dr. Becker himself, the great witness, the govern-

ment’s puppet... . Now Dr. Becker, he is paying

his debt to the government. ... Now I am not saying

these people [witnesses other than Dr. Becker] are

guilty of deliberate perjury. ... That man came into

this court and took that stand with one purpose in

mind, to hurt Ed Reicin. . . . I will tell you I don’t

believe Becker. Becker deliberately pretended actual

recollection of an event that never happened, never

happened, to hurt Ed Reicin, for the government.

. Another deliberate lie—this is a little thing, but

it goes to show you the nature of the man you are

dealing with. ... Now Fahey says he didn’t tell about

that. And I find that hard to believe. ...’’

In addition, while not directly accusing the Government

of suborning perjury, defense counsel made several refer-

ences to the method in which the investigating agents

called in Reicin’s clients and to false statements clients

had signed by the time they had left the governmental of-

fices.

We decline under the circumstances here involved to

find that the two references to perjury are sufficient to

mandate a reversal.

Finally, the defendant complains that by the following

comments during rebuttal the prosecutor overstepped the

permissible bounds of advocacy:

“Once we are talking about the fraud and who

pays for it, don’t go back into the jury room and

feel that the victims are the insurance companies,

because I assure you, whatever the insurance com-

App. 22

panies pay out, they get right back again through

premiums from you, from me and from anybody else

who has to pay for automobile insurance and for the

risks that you take under that particular premium.

And one of the risks that I don’t want to have to take

and that any driver who has to pay automobile premi-

ums wouldn’t want to take, are the risks of fraud that

people like Mr. Reicin perpetrate against the insurance

companies that you and I have to pay for. That is

one point,

‘‘The type of law that Mr. Reicin was practicing

during 1965, during 1966, ’67 and 68, you have got

a chance to stop today. Because if anybody else is

doing it, if you tell they can’t do it as loudly ard

as thoroughly as you can eleven times over, ladies

and gentlemen, somehow it is going to stop.’’

After this last comment, counsel objected ‘‘to this line of

argument.’’ The court sustained the objection and de-

clared that it would ‘‘instruct [the jury] to follow the

law ... and decide the case solely upon the evidence that

they have heard here in open court.’’ As we have men-

tioned hereinbefore, the court did so instruct the jury.

The courts generally and properly disapprove of ap-

peals to jurors’ pecuniary interests. United States v. Tru

tenko, 490 F.2d 678 (7th Cir. 1973). However, such re-

marks, although improper, do not necessarily constitute

reversible error. They must be considered in the context

of the entire trial. Cf. Epperson v. United States, 490 F.2d

98 (7th Cir. 1973); United States v. Mendansky, 486 F.2d

807, 815 (7th Cir. 1973) ; cert. denied, ........ SS estieass (1974).

Similarly, prosecutorial comment about the salutary ef-

fect on society of a particular conviction must be evalu-

ated in light of the entire closing argument and of the

trial as a whole. What we have said heretofore about the

nature of the argument, of course, is applicable here.

ed EME LOE DEED

App. 23

Also, the court sustained the defendant’s objection and

included a cautionary instruction in its charge. More sig-

nificantly, ‘‘inflamed passions’’ and the abandonment of

reasoned scrutiny rather obviously do not explain the

jury’s verdict. Indeed, Reicin in another portion of his

brief implicitly concedes this: ‘‘. . . the meager evidence

introduced by the government, . . . evidenced by the fact

that the jury acquitted on 10 of 11 counts... .’?

We hold therefore that the prosecutor’s argument does

not require reversal.

The Refusal to Quash the Indictment

Prior to irial, Reicin moved to quash the indictment on

the grounds that (1) the Government had ‘‘systematically

abused the grand jury process,’’ and (2) the indictment

was hased almost entirely on hearsay evidence. The court

denied this motion and subsequent motions based on these

grounds. Reicin claims that the district court abused its

discretion in so ruling and that it, at least, should have

granted him a hearing on the motions.

Although arguably the procedure utilized might harbor

a potential for abuse, we find no inherent prejudice to a

defendant where Government agents interview witnesses

who have been subpoenaed by the grand jury. And, after

examining the pertient portions of the record in the

present case, we conclude that the district judge acted

properly and within the scope of his discretion in refusing

to quash the indictment or to arrest judgment, drastic

remedies. Further, the materials submited with the vari-

ous motions were not sufficient to require the judge to hold

a hearing.

|

RS Se EN bes

Se ep way.

~ CRIED. Mtn + 20.4

App. 24

We do not understand that merely because persons have

been subpoenaed by the grand jury the Government should

be barred from continuing with its investigation and from

conducting interviews with those prospective witnesses. In

the present case, all but two of the witnesses so interviewed

did testify at the trial. Their credibility was subject to

examination by the trial jury. Any claimed governmental

coercion was also subject to being brought out before the

trial jury.

As to the related hearsay contention, United States v.

Holmes, 452 F.2d 249, 274 (7th Cir. 1971), cert. denied,

405 U.S. 1016 (1972), and United States v. Daddano, 432

F.2d 1119, 1125 (7th Cir. 1970), cert. denied, 402 U.S. 905

(1971), establish the governing rule in the Seventh Cir-

cuit. We decline Reicin’s suggestion that we overrule

these precedents,

Other points raised by the defendant upon this appeal

are ancillary to those discussed herein. Finding no basis

for reversal, we affirm the judgment of conviction.

AFFIRMED.

Appenpix To Tue Covurt’s Opinion

The JUNE 1970 GRAND JURY charges:

1. That beginning in or about January 1965, and con-

tinuing to on or about date of the filing of this indictment,

at Chicago, in the Northern District of Illinois, Eastern

Division, and in divers other places to the Grand Jury

unknown,

EDWARD E. REICIN

defendant herein, and WILLIAM BECKER, not a defen-

dant herein, devised and intended to devise a scheme and

artifice to defraud and to obtain money and property by

means of false and fraudulent pretenses, representations

© AL MAPOS OO LEE SAI

App. 25

and promises from insurance firms, companies, associa-

tions and corporations, including but not limited to: Aetna

Insurance Cempany, Allstate Insurance Company, Chi-

cago Transit Authority, The Hanover Insurance Group,

Horace Mann Insurance Group, Inter-Insurance Exchange

of the Chicago Motor Club, National Emblem Insurance

Company, Northwestern Security Insurance Company,

Royal Globe Insurance Company and Unigard Insurance

Company and various persons who were clients of said

defendant EDWARD E. REICIN, an attorney, well know-

ing at the time that the pretenses, representations, and

promises would be and were false when made; and which

said scheme and artifice to defraud so devised and intended

to be devised by the said defendant was in substance as

follows:

2. It was part of the said scheme and artifice to de-

fraud that WILLIAM BECKER, a duly licensed physi-

cian authorized to practice medicine in the State of Illi-

nois, would and did examine persons involved in automo-

bile accidents within the State of Illinois.

3. It was a further part of the said scheme and artifice

to defraud that the defendant, EDWARD E. REICIN,

duly licensed attorney authorized to practice law in the

State of Illinois would and did represent persons involved

in automobile accidents within the State of Illinois.

4. It was a further part of the said scheme and artifice

to defraud that the defendant would and did prepare and

cause to be prepared medical bills and accident reports,

which bills and reports contained false and fraudulent

pretenses and representations,

5. It was a further part of the said scheme and artifice

to defraud that the defendant, EDWARD E. REICIN,

App. 26

would and did cause his clients to be sent to WILLIAM

BECKER, after the clients had been involved in accidents.

6. It was a further part of the said scheme and artifice

to defraud that WILLIAM BECKER would and did

cause to be furnished to defendant EDWARD E. REICIN,

medica] bills and reports for the said clients of the defen-

dant, EDWARD E. REICIN, and said medical bills and

reports contained false and fraudulent pretenses and rep-

resentations, in that said bills were rendered in amounts

far in excess of the amounts actually due and owing, said

reports were rendered reflecting nonexistent injuries and

damages.

7. It was a further part of the said scheme and artifice

to defraud that the defendant EDWARD E. REICIN

would and did send and cause to be sent to the said in-

surance firms, companies, associations and corporations

the said medical bills of WILLIAM BECKER and acci-

dent reports, knowing that the said medical bills and acci-

dent reports contained false and fraudulent pretenses and

representations.

8. It was a further part of the said scheme and artifice

to defraud that the defendant EDWARD E. REICIN

would and did deduct the full amounts of the excessive

and fraudulently inflated medical bills from the settlements

to his various clients.

9. It was a further part of the said scheme and artifice

to defraud that the defendant EDWARD E. REICIN

would and did divide between himself and WILLIAM

BECKER the amounts of the excessive and fraudulently

inflated medical bills deducted from the settlements due

his various clients.

App. 27

10. It was a further part of the said scheme and artifice

to defraud that the defendant EDWARD E. REICIN

and WILLIAM BECKER would and did cause clients of

EDWARD E. REICIN to absent themselves from employ-

ment to increase their alleged damages.

11: It was a further part of the said scheme and artifice

to defraud that the defendant EDWARD E. REICIN

would and did engage various individuals, whose names

are unknown to the Grand Jury, to refer accident victims

to him.

12. It was a further part of the said scheme and artifice

to defraud that the deféndant, EDWARD E. REICIN

would and did cause clients to obtain automobile repair

estimates which estimates were excessively and fraudu-

lently inflated.

13. It wasa further part of the said scheme and artifice

to defraud that the defendant, EDWARD E. REICIN:

would and did send and cause to be sent to the said in-

surance firms, companies, associations and corporations

the said excessively and fraudulently inflated automobile

repair estimates knowing that the said automobile re-

pair estimates contained false and fraudulent pretenses

and representations.

14.

COUNT Ix

1. The June 1970 GRAND JURY realleges all of the

allegations of the First Count of this indictment except

those contained in paragraph 14 thereof.

Tee iia

Be APR SAO RNA as. age ea aN gS AS

= = —

| cc — ee Ree ee

*

7

%

App. 28

2. The June 1970 GRAND JURY further charges that

vn or about September 25, 1967, at Chicago, in the North-

ern District of Illinois, Eastern ‘Division, the defendant

EDWARD E. REICIN, for the purpose of‘ executing the

aforesaid scheme and artifice to defraud and attempting

to do so, did knowingly cause to be delivered by the Post

Office Department of the United States, according to the

directions thereon, a letter addressed to:

Royal Globe Insurance

175 West Jackson Boulevard

Chicago, Illinois

Attention: Mr. Raymond J. Muselon

in violation of Title 18, United States Code, Section 1341.

A true Copy:

Teste:

Clerk of the United States Court of

Appeals for the Seventh Circuit.

App. 29

GOVERNMENT CLOSING ARGUMENT REGARDING

COUNT 9

Phillip Eauslin, He is the restaurant supply salesman.

fife is the man who went to FYorida a hait' a week atter the

accident and took a dunk in the pool. He enjoyed himself

for two weeks. He drove to Florida in the same car that

had been in the accident and he drove back with his wife

and kids from Florida in the same car that had been in

the accident. While he was in Florida for two weeks he

doesn’t go to a doctor. He didn’t have to go to a doctor

because the pain he had went away. He said he had pain

but it went away. And when he comes back he talks to his

boss, a Mr. David Brill. And Brill says, ‘Go see Mr.

Reicin.’’ And he goes to see Reicin and Reicin says, ‘‘Go

see Dr. Becker.’’ Now in that one visit there is no conver-

sation with Mr. Reicin about taking time off from work

except for the two weeks he had already been in Florida,

and there are no conversations with Mr. Eauslin and Mr.

Reicin that he is going to take off additional time. So

what does Reicin do? He writes a letter and requests from

Mr. Brill, Eauslin’s employer, a time-lost statement, and

he gets one for four weeks. And Eauslin testified that he

didn’t take off four weeks. He took off two wecks and a

couple of days sometime during the next two weeks, but

he didn’t take off no four weeks.

And this Mr. Brill is the person who recommended Mr.

Eauslin to Mr. Reicin in the first place, and was the same

person who had been a lawyer for Mr. Brill hefore. Reicin

and Brill’s relationship goes back, way back, before Eaus-

lin and Reicin’s relationship,

Mr. Eauslin’s testimony o> the subject matter of the

time-lost statement, Governr ent’s Exhibit 1-4. (Read-

ing :)

App. 30

‘*Q. Now, sir, I am going to hand you what has

been marked as Government Exhibit I-4.’’ I said that

to him.

‘‘Have you ever seen that document before other

than here today in this courtroom or in my office?

A. No.

Q. To whom is that document addressed?

A. Mr. Reicin.

Q. Do you recognize the signature at the bottom

of that letter?

A. Yes,

Q. Have you ever seen that signature before?

A. I am sure I have.

Q. Whose signature do you recognize that to be,

assuming you recognize it to be anybody’s?

A. David Brill’s.

Q. Now, did you ever tell Mr. Brill about a docu-

ment such as I-4?

A. Did I ever tell him?

Q. Yes. Did you tell him to prepare it?

A. No.

Q. Did you ever discuss it with Mr. Brill at any

time?

A. No.

Q. Did you obtain it from him?

A. No.

Q. Did you request it?

A. No.”

So what does he do this time? He changes the operation

a little bit and goes right to Mr. Brill—I’m talking about

Reicin now—and gets from Mr. Brill himself a phony

time-lost statement on behalf of Mr. Eauslin. And, again,

he accomplishes the overall purpose. Again he blows the

special damages out of the legal legitimate proportion.