United States v. Dobson ( 2005 )

Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
8-16-2005
USA v. Dobson
Precedential or Non-Precedential: Precedential
Docket No. 04-2169
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-2169
UNITED STATES OF AMERICA
v.
MARSHA DOBSON,
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 02-cr-00616-7)
District Judge: Honorable Michael M. Baylson
Argued May 11, 2005
Before: SLOVITER, FISHER, and ALDISERT Circuit Judges.
(Filed August 16, 2005)
Sandra A. Gafni, Esq. (Argued)
Suite 433
1819 John F. Kennedy Boulevard
Philadelphia, PA l9l03
Attorney for Appellant
Anita D. Eve, Esq. (Argued)
Office of United States Attorney
Suite 1250
615 Chestnut Street
Philadelphia, PA 19106
Attorney for Appellee
OPINION OF THE COURT
SLOVITER, Circuit Judge.
We have before us the appeal of Marsha Dobson who was
convicted by a jury of three counts of mail fraud under 18 U.S.C.
§ 1341. Dobson argues, inter alia, that she is entitled to a new
trial because the District Court failed to properly charge the jury
with regard to the “culpable participation” component of the
alleged fraudulent scheme.1
I.
On September 25, 2002, a federal grand jury returned a
ninety-nine count Indictment charging Marsha Dobson and nine
other individuals--including Dobson’s husband, Larry Dobson--
with various counts of conspiracy, mail fraud, and money
laundering. Dobson was charged in that Indictment with one
count of conspiracy to commit mail fraud, three counts of
substantive mail fraud, and three counts of aiding and abetting
mail fraud.
Prior to trial, three of Dobson’s co-defendants entered
guilty pleas. In addition, the District Court severed Larry
Dobson’s case from that of his wife and the other defendants in
order to avoid forcing him to choose “between the right to testify
in one’s own defense and the right not to testify adversely
against a spouse. . . .” United States v. Dobson, No. Crim. 02-
1
The District Court had jurisdiction pursuant to 18 U.S.C.
§ 3231; this court has jurisdiction under 28 U.S.C. § 1291.
2
616-06, 2003 WL 22427984, at *2 (E.D. Pa. Aug. 18, 2003).
Dobson and her five remaining co-defendants--Thomas Massara,
Dawnell Griffith, Kimberli Lange, Karen Beam, and Alan
Schall--proceeded to jury trial on September 9, 2003.
The evidence presented at trial, viewed in the light most
favorable to the United States as the verdict winner, showed the
following: Dobson had been a salesperson for Surplus Agents of
America (“SAA”), which held itself out as being engaged in the
business of locating and reselling surplus and liquidated
merchandise, such as clothing, toiletries, and household items,
from brand-name manufacturers who were unable to sell such
goods through the regular channels of distribution. SAA located
individuals who paid a fee to become a SAA “broker” on SAA’s
representation that, as brokers, they would be able to purchase
discounted brand-name merchandise and resell it to third parties
at a substantial profit.
After SAA ceased to exist in December 1994, William
Kenneth Garrett, one of its principal managers, moved the
operation to Fort Washington, Pennsylvania and established a
similar business under the name Universal Liquidators (“UL”).
At trial, Garrett, who had previously entered a plea of guilty,
testified that due to the similarity between the UL and SAA
operations, he had hired many of SAA’s former employees,
including Dobson, to work at UL.
As a UL salesperson, Dobson attended trade shows
around the country where she marketed UL broker positions. In
her sales presentations, Dobson told potential brokers that they
could buy into UL’s brokerage opportunity for a one-time
payment of approximately $5,000.00. In return, the brokers
were promised training, the materials they would need to start
their business, and lists of manufacturers and distributors who
would allegedly sell them the brand-name merchandise at prices
substantially below market value which they could resell to the
public at a profit.
Dobson used UL brochures and written materials in
presenting her sales pitch about the company. Among other
things, these UL materials represented that UL had relationships
3
with various manufacturers who would supply brand-named
merchandise to UL brokers at deep discounts. In fact, as Garrett
himself testified at trial, UL had no relationships with any of the
brand-name manufacturers as claimed in its sales materials. He
also admitted that, contrary to its brochures and written
materials, UL did not actually have any mechanisms or methods
whereby it could obtain for its brokers the deeply discounted
brand-name merchandise.2
The trial evidence also showed that, in marketing the UL
“opportunity” to prospective brokers, Dobson was not always
truthful about the scope of her involvement with UL. Most
pertinently, Dobson did not tell potential brokers that she was an
employee of UL whose job it was to sell broker positions;
instead, she told them that she herself was a broker.3 Indeed,
according to the testimony of one trade-show attendee, Dobson
held herself out as a very successful UL broker who, among
other things, had made enough money to buy “a horse ranch in
Montana.” App. at 170. Dobson further regaled prospective
brokers with stories, examples, and details regarding the deals
that she had supposedly negotiated for sizeable profits. None of
this was true.
In addition to the falsehoods and misstatements made by
Dobson, she used the false and fraudulent UL brochures and
written materials in her presentation. Throughout the trial,
Dobson vigorously denied both that she knew these materials to
be untrue and that she knew of the overall fraudulent nature of
UL’s business plan.
2
Garrett also testified that he paid people, whom he called
“singers,” App. at 317, to serve as false references: potential
brokers would call these individuals who would pose as successful
brokers and give favorable reports of their experience with UL in
an attempt to persuade the potential brokers to remit payment and
join UL.
3
Garrett testified that Dobson received a commission of 25%
on her sales of brokerages.
4
The strongest evidence in the record that Dobson knew
that UL and SAA were completely fraudulent operations was
provided by Carol Brothers. Brothers testified that she had
worked for SAA, first as a salesperson and later in SAA’s
offices. She testified that she quit SAA and reported its
activities to federal law enforcement authorities when SAA’s
management “promoted me, moved me into the office and I
realized everything that I was saying in the field, all of us were
saying in the field[,] was not factual.” App. at 279. Brothers
further testified that after she had left SAA, she happened to
encounter Dobson at a trade show and took the opportunity to
tell Dobson that SAA was a scam and that what she was “saying
in the field was a lie.” App. at 283. To discredit Brothers’
testimony, Dobson’s attorneys brought out evidence during
cross-examination suggesting that Brothers believed SAA owed
her over $100,000.00 in back commissions, that she had left the
organization on poor terms, and that only after she left did she
report SAA to the authorities.
At the close of the prosecution’s case, the District Court
granted motions for judgment of acquittal under Fed. R. Crim. P.
29 on all counts pending against Griffith, Lange, Beam, and
Schall. It further entered judgments of acquittal on the
conspiracy counts pending against Massara and Dobson. In sum,
after the Fed. R. Crim. P. 29 stage, the only charges that
remained for the jury’s resolution were the substantive mail
fraud counts pending against Massara and Dobson.
Following the defense cases, jury instructions, and
deliberations, the jury convicted both Massara and Dobson.
Specifically as to Dobson, the jury convicted her of the three
mail fraud counts charged in Counts Twenty-Eight through
Thirty of the Indictment. Following this verdict, the District
Court granted Dobson’s request for the appointment of new
counsel.
Dobson’s new counsel filed post-verdict motions for
acquittal, see Fed. R. Crim. P. 29(c), and new trial, see Fed. R.
Crim. P. 33, both of which the District Court denied following
oral argument. On June 18, 2004, the District Court sentenced
5
Dobson to three concurrent terms of twenty-four months
incarceration to be followed by three years of supervised release.
The District Court further ordered Dobson to pay restitution.
Dobson filed this timely appeal in which she challenges
the District Court’s jury instruction on the elements of mail fraud
and the sufficiency of the evidence presented by the United
States to support the guilty verdict on Count Thirty. Dobson
further seeks review of her sentence in light of Blakely v.
Washington, 542 U.S. 296 (2004), a decision that the Supreme
Court of the United States returned less than a week after her
sentencing.4
II.
Dobson argues that the District Court erroneously
instructed the jury on the substantive elements of the crime of
mail fraud.5 Specifically, she argues that the District Court’s
4
The parties filed their appellate briefs before the Supreme
Court announced its decision in United States v. Booker, 543 U.S.
___, 125 S. Ct. 738 (2005), extending the Blakely holding to the
United States Sentencing Guidelines.
5
In pertinent part, the mail fraud statute reads:
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 . . . for the
purpose of executing such scheme or artifice or
attempting so to do, places in any post office or
authorized depository for mail matter, any matter or
thing whatever to be sent or delivered by the Postal
Service, or deposits or causes to be deposited any
matter or thing whatever to be sent or delivered by
any private or commercial interstate carrier, or takes
or receives therefrom, any such matter or thing . . .
shall be fined under this title or imprisoned not more
than 20 years, or both.
6
instruction failed to include the “culpable participation”
requirement for mail fraud as enunciated in this court’s
decisional law.
Although “[w]e generally review jury instructions for
abuse of discretion,” see Walden v. Georgia-Pacific Corp., 126
F.3d 506, 513 (3d Cir. 1997), our review “is plenary when the
question is whether a district court’s instructions misstated the
law.” United States v. McLaughlin, 386 F.3d 547, 552 (3d Cir.
2004). There is some record evidence that Dobson’s trial
counsel brought the issue of culpable participation to the
attention of the District Court, but Dobson concedes that trial
counsel did not properly preserve the issue and that, as a result,
this court’s review is limited to plain error. See Fed. R. Crim. P.
52(b). But see United States v. Russell, 134 F.3d 171, 178-79
(3d Cir. 1998).
Under the plain error standard, before an appellate court
can correct an error not raised at trial, it must find: (1) an error;
(2) that is plain; and (3) that affected substantial rights. United
States v. Olano, 507 U.S. 725, 733-35 (1993); United States v.
Davis, 407 F.3d 162, 164 (3d Cir. 2005) (en banc); United States
v. Syme, 276 F.3d 131, 143 n.4 (3d Cir. 2002). If all three
conditions are met, an appellate court may in its discretion grant
relief, but only if “‘the error seriously affects the fairness,
integrity, or public reputation of [the] judicial proceedings.’”
United States v. Haywood, 363 F.3d 200, 206-07 (3d Cir. 2004)
(quoting Johnson v. United States, 520 U.S. 461, 467 (1997)).
Under the requisite Fed. R. Crim. P. 52(b) analysis, we
must first determine whether the District Court’s instruction on
the elements of mail fraud constituted legal error--a necessary
predicate of plain error. The substantive elements of mail fraud
under 18 U.S.C. § 1341 are: (1) the existence of a scheme to
defraud; (2) the use of the mails--whether the United States
Postal Service or a private carrier--in furtherance of the
fraudulent scheme; and (3) culpable participation by the
18 U.S.C. § 1341.
7
defendant, that is, participation by the defendant with specific
intent to defraud. United States v. Copple, 24 F.3d 535, 544 (3d
Cir. 1994); United States v. Pearlstein, 576 F.2d 531, 534 (3d
Cir. 1978). The District Court charged the jury as follows:
Now, what are the essential elements of the charge
of mail fraud.
They are as follows:
You must find that the Government has
proved each one of these elements beyond a
reasonable doubt . . . .
One, the defendant knowingly
devised or participated in a scheme
to defraud, or to obtain money or
property by materially false or
fraudulent[] pretenses,
misrepresentations, or promises.
Two, the defendant acted with
specific intent to defraud;
And, three, in advancing, furthering,
or carrying out the scheme, the
defendant used the mails or [a]
private or commercial interstate
carrier, or caused the mails for
private or commercial interstate
carrier to be used.
App. at 472.
Dobson argues that this instruction failed to articulate the
“culpable participation” requirement needed to support a mail
fraud conviction. In so arguing, she relies heavily on our
decision in United States v. Pearlstein, 576 F.2d 531 (3d Cir.
1978).
8
In Pearlstein, we held that in a mail fraud case it is not
sufficient for the United States to prove merely that a defendant
participated in a fraudulent scheme; rather, it must show that the
defendant did so knowingly and “in furtherance of the illicit
enterprise.” Id. at 545; see also Genty v. Resolution Trust Corp.,
937 F.2d 899, 908-09 (3d Cir. 1991) (“When . . . liability is
premised on violations of the federal mail fraud statute, 18
U.S.C. § 1341, the defendants must have knowledge of the illicit
objectives of the fraudulent scheme and willfully intend that
those larger objectives be achieved.”). Unwitting participation
in a fraudulent scheme is not criminal under § 1341. Moreover,
the relevant inquiry is not whether the defendant acted
knowingly in making any misstatement, but whether she did so
with respect to the overarching fraudulent scheme--that is, the
particular “illicit enterprise” charged in the indictment. 576 F.2d
at 537.6 As we stated in Pearlstein:
At one time or another, all the defendants
exaggerated their role in the . . . operation and
made false statements concerning their own
business backgrounds. However, such
6
Although it was presented in a different posture, Pearlstein
involved a mail fraud issue strikingly similar to the one presently
at bar. The defendants in Pearlstein were salespeople for G. Martin
Frank, Ltd. (“GMF”), a fraudulently conceived business entity that
sold worthless pen distributorships. Pearlstein, 576 F.2d at 537-38.
GMF hired the defendants to sell the distributorships to
unsuspecting customers, but the defendants contended that they did
not know that they were actually effecting a dupe on their
employer’s behalf. Id. at 545. However, the defendants had, at
various times and in various ways, crossed the line from mere
puffery to outright deception. Id. at 544-45. The prosecution
marshaled much evidence of the defendants’ misrepresentations to
potential distributors, but none that would have allowed a jury to
conclude that the defendants knew that the overarching GMF
enterprise was a fraud. Id. at 545. Accordingly, we reversed their
convictions for want of sufficient evidence of “their knowing
participation in the overall fraudulent scheme.” Id. at 545-46.
9
misrepresentations did not relate to the essential
feature of their presentations[,]the sale of . . . [the
bogus] distributorships[,]and can hardly be
construed as fraudulent.
576 F.2d at 544. Thus, the controlling question is whether the
District Court’s jury instruction required a determination of
whether Dobson knowingly participated in UL’s broader scheme
to defraud.
The charge did not convey this essential aspect of the
knowledge element of the fraud charged in the Indictment. The
District Court’s instruction nowhere advised the jury that it could
convict only on finding that Dobson in fact knew of UL’s
fraudulent scheme. It directed the jury to determine “whether
the defendant knowingly devised or participated in a scheme to
defraud.” App. at 472. This could have referred either to
culpable participation in UL’s fraudulent scheme (i.e., the selling
of brokerages that she knew to be worthless) or to Dobson’s
questionable sales tactics (e.g., her claim that the UL opportunity
allowed her to buy “a horse ranch in Montana”). Stated
otherwise, the language of the charge easily, but erroneously,
encompassed the possibility that Dobson’s own
misrepresentations, without knowledge of UL’s broader illicit
purpose, could constitute her creation of, or participation “in a
scheme to defraud, or to obtain money or property by materially
false or fraudulent[] pretenses, misrepresentations, or promises,”
App. at 472, and hence guilt under 18 U.S.C. § 1341 as charged
in the Indictment.
As in Pearlstein, this case presents two layers of potential
fraud or misrepresentation that do not necessarily interconnect:
(1) Dobson’s dubious sales presentations; and (2) the fraudulent
UL scheme charged in the Indictment. Pearlstein is clear in
teaching that proof of Dobson’s participation in the latter is
necessary to the prosecution’s case and that proof of the former
is only relevant to the extent it may constitute circumstantial
evidence of the latter. See Pearlstein, 576 F.2d at 544. The
District Court’s instruction failed to make the necessary legal
distinction between the two and thus entirely omitted the
10
prosecution’s obligation to show that Dobson knowingly devised
or participated in the broader UL scheme as charged in the
Indictment.7
The United States raises several arguments in an attempt
to show that the District Court’s charge was not in error. First,
the United States points to this court’s formulation of the
elements of mail fraud in two post-Pearlstein cases, United
States v. Pharis, 298 F.3d 228 (3d Cir. 2002) (en banc), and
United States v. Hannigan, 27 F.3d 890 (3d Cir. 1994), and
argues that this Court has retreated from the culpable
participation requirement of Pearlstein.
It is true that in Pharis we did not explicitly articulate a
culpable participation requirement but there was no need to do
so in that case. There was only one “layer” of potentially
misleading or fraudulent activity to be concerned with--that of
the overarching scheme. Indeed, the prosecution’s theory in
Pharis was that the defendants themselves directly devised the
fraudulent scheme at issue. Pharis, 298 F.3d at 230-31.
Furthermore, contrary to the United States’ interpretation of
Hannigan, we did impose a culpable participation requirement in
that case. Specifically, we noted that the prosecution in a mail
fraud case must establish “the participation by the defendant in
the particular scheme charged with the specific intent to
defraud.” Hannigan, 27 F.3d at 892.8 The United States’
7
Brothers’ testimony (albeit impeached to some effect on
cross-examination) that she told Dobson about the fraudulent
nature of the SAA scheme provided evidence from which the jury
could have found that Dobson knew of, and nonetheless continued
to participate in, the overall fraudulent scheme. There is also
evidence to show that Dobson engaged in her own dishonesty
simply for the purpose of increasing her sales. Under the District
Court’s instructions, the jury could have erroneously viewed
Dobson’s individual malfeasance to be sufficient to support the 18
U.S.C. § 1341 charges levied in the Indictment.
8
Moreover, subsequent to Pearlstein we have made other
more explicit references to the culpable participation requirement.
11
characterization of our decisional law, therefore, is not
persuasive.
Next, the United States reminds us that we must consider
the jury instructions as a whole and argues that the District
Court’s instructions respecting the meaning of a scheme to
defraud and intent to defraud required the jury to make a finding
of culpable participation in order to return a guilty verdict. We
agree that “a single instruction to a jury may not be judged in
artificial isolation, but must be viewed in the context of the
overall charge.” Cupp v. Naughten, 414 U.S. 141, 146-47
(1973). The District Court’s definition of a scheme to defraud
stated that such a scheme must involve “a departure from
fundamental honesty, moral uprightedness, or fair play and
candid dealings in the general light of the community,” and that
it excludes mere puffery. App. at 472. This instruction, correct
as given, see Pearlstein, 576 F.2d at 544, did not mention the
need for culpable participation in the charged UL scheme;
indeed, without any instruction on culpable participation, this
instruction actually increased the likelihood of the jury
convicting on the basis of Dobson’s misleading sales practices
because her practices could easily be viewed as falling within
that description. Similarly, the instruction on the meaning of
intent to defraud, again correct as far as it went, failed to inform
the jury that a guilty conviction required culpable participation.
Cf. Arthur Anderson, LLP v. United States, __ U.S.__, __, 125
S. Ct. 2129, 2136 (2005). Thus, even when we consider the
instructions holistically, Cupp, 414 U.S. at 147, the District
Court’s instructions failed to include the necessary element of
culpable participation.
In sum, we conclude that the District Court’s instruction
was in error. We must nonetheless determine whether this error
For instance, in Genty v. Resolution Trust Corp., 937 F.2d 899 (3d
Cir. 1991), we cited Pearlstein for the proposition that “defendants
must have knowledge of the illicit objectives of the fraudulent
scheme and willfully intend that those larger objectives be
achieved.” 937 F.3d at 908-09 (emphasis added).
12
was “plain.” Haywood, 363 F.3d at 207; Syme, 276 F.3d at 143
n.4.
In order to be “plain” an error must be “clear” or
“obvious.” Olano, 507 U.S. at 731. Here, we have no difficulty
in concluding the District Court’s error was plain: Pearlstein
was on the books well before the inception of the trial, our
subsequent decisional law demonstrates its continued validity in
this Circuit, and its applicability to the case at hand is obvious.
See generally Johnson v. United States, 520 U.S. 461, 468
(1997).
Because the error was plain, we must next decide whether
it affected Dobson’s substantial rights. Fed. R. Crim. P. 52(b);
see also Olano, 507 U.S. at 734. In order to “affec[t] substantial
rights,” an error must have been prejudicial. Olano, 507 U.S. at
734. In undertaking this prejudice analysis in the context of an
erroneous jury instruction, we must determine whether Dobson
has carried her burden to show that there is a “reasonable
likelihood” that the jury prejudiced her by applying the
challenged instruction in an impermissible manner. Gov’t of
V.I. v. Rosa, 399 F.3d 283, 295 (3d Cir. 2005); see also
Haywood, 363 F.3d at 207 (“[T]he relevant inquiry . . . is
whether, in light of the evidence presented at trial, the failure to
instruct had a prejudicial impact on the jury’s deliberations.”)
(internal citation and quotations omitted); United States v.
Xavier, 2 F.3d 1281, 1287 (3d Cir. 1993).
It is settled that due process requires the prosecution to
prove beyond a reasonable doubt every fact necessary to
establish the offense as charged against the defendant. In re
Winship, 397 U.S. 358, 364 (1970); Haywood, 363 F.3d at 207.
Indeed, consistent with In re Winship and its progeny, we have
noted that, although it is not a per se rule, “‘the omission of an
essential element of an offense [in a jury instruction] ordinarily
constitutes plain error.’” Haywood, 363 F.3d at 207 (quoting
Xavier, 2 F.3d at 1287.
As propounded by the District Court, however, the
instructions at issue made it possible for the jury to have
convicted Dobson without finding beyond a reasonable doubt
13
that she culpably participated in the UL scheme. To be sure, the
Government presented evidence from which the jury could have
concluded that Dobson knew of the fraudulent nature of the UL
scheme. However, this does not preclude a finding of prejudice
for purposes of plain error. See Xavier, 2 F.3d at 1287(“Although the government presented evidence from which a
jury could have inferred defendant’s knowledge . . . the relevant
inquiry in this case is whether, in light of the evidence presented
at trial, the failure to instruct had a prejudicial impact on the
jury’s deliberations.”) (internal citation, quotations, and
alterations omitted).
We conclude that the error trenched on Dobson’s
substantial rights because there is a “reasonable likelihood” that
the jury applied it in a manner that resulted in an unconstitutional
conviction. See Rosa, 399 F.3d at 295; cf. Davis, 407 F.3d at
164 (“[A]n error will affect substantial rights where it is
prejudicial and affected the outcome of the district court
proceedings.”) (internal citation and quotations omitted).9
9
This case, therefore, is unlike our recent decision in Rosa
where we determined that the trial court’s jury instruction,
although amounting to plain error, did not have a deleterious effect
upon the defendant’s substantial rights. 399 F.3d at 297. In Rosa,
the trial court instructed the jury that it could convict the defendant
of first-degree murder if it found that he acted with “‘an intent to
kill or inflict serious bodily harm against a human being.’” Id. at
287 (quoting jury instruction, emphasis added). The latter half of
this formulation of first-degree murder was plainly erroneous.
However, because the trial court’s other instructions (in particular,
its instruction on premeditation), correctly imposed a “specific
intent to kill” requirement, we concluded that the trial court’s
plainly erroneous first-degree murder instruction did not prejudice
the defendant. Id. at 296. Moreover, “[t]he jury’s differential
treatment of the two defendants” charged in that joint trial
convinced us that the jury was cognizant of the fact “that the
government had the burden to prove that a defendant had the intent
to kill if it was to convict him of first-degree murder.” Id. As
discussed above with respect to the instant case, however, neither
14
Of course, even when an error is plain and injurious to
substantial rights, we should nonetheless decline to correct it
unless “the error ‘seriously affect[ed] the fairness, integrity or
public reputation of [the] judicial proceedings.’” Olano, 507
U.S. at 732 (quoting United States v. Atkinson, 297 U.S. 157(1936)). Under this last portion of the plain error test, the
question is not merely whether the failure to instruct on culpable
participation had an effect upon the jury’s deliberations and thus
enured to Dobson’s detriment, but whether such an outcome can
be said to have affected the fairness, integrity, or public
reputation of the judicial proceedings. Xavier, 2 F.3d at 1287.
We conclude that such a miscarriage has taken place in
the present case. We have no means of knowing on what basis
the jury convicted Dobson of mail fraud: it could have done so
properly on the basis of some direct or circumstantial evidence
that Dobson knew and participated in the overall fraudulent UL
scheme (e.g., Brothers’ testimony), or it could have done so on
the basis of the abundant evidence of Dobson’s dubious sales
presentations that, while no doubt unsavory, are insufficient to
support the mail fraud charges alleged in the Indictment.
Because a conviction based on an incomplete charge taints the
reputation of the judicial process, we will vacate Dobson’s
conviction and remand the matter for a new trial.10
the instructions considered in toto, the particular facts of this case,
or the jury’s verdict negated the “reasonable likelihood” that the
jury convicted Dobson on a constitutionally impermissible basis.
10
The United States emphasizes Brothers’ testimony that
she told Dobson that SAA was a fraudulent operation. We agree
that this can be viewed as evidence of Dobson’s knowledge of the
overall fraudulent nature of the scheme. On the other hand, there
is evidence of Dobson’s own fraudulent sales practices. The jury
instruction permitted the jury to convict based on a finding of
Dobson’s isolated misstatements alone. The fact that defense
counsel was able to impeach Brothers serves to heighten the
possibility that the jury disbelieved her testimony and convicted on
an impermissible basis.
15
III.
As noted above, Dobson has also challenged the
sufficiency of the evidence with respect to her conviction for
Count Thirty of the Indictment. Although we will reverse
Dobson’s conviction due to the jury instruction error, we must
resolve this issue so that the parties know on which counts they
may proceed at retrial.
The evidence at trial showed that, throughout her tenure
at UL, Dobson corresponded with UL’s home office and
otherwise conducted her business through the United States mail
and private carriers. Count Thirty references “[a] Federal
Express package, shipped from . . . Cordova, TN . . . from
Marsha Dobson, Universal Liquidators . . . to Kelly, Universal
Liquidators . . . Fort Washington, PA.” App. at 115. Dobson
argues that because the prosecution introduced no evidence with
regard to the contents of this mailing, it presented insufficient
evidence to support the conviction on Count Thirty.
We find Dobson’s argument unconvincing. The jury was
presented with evidence that UL was, through-and-through, a
completely fraudulent enterprise. Once the United States shows
a fraudulent scheme, the mailing requirement of 18 U.S.C. §
1341 is satisfied by a showing that the defendant used the mail in
furtherance of that scheme. Stated otherwise, in order for a
particular mailing to support a mail fraud conviction, all that is
necessary is that such a mailing have been incidental to a
necessary aspect of the scheme or have been “sufficiently closely
related to the scheme.” United States v. Tiller, 302 F.3d 98,
101-02 (3d Cir. 2002) (internal citations and quotations
omitted).11 And--setting aside for the moment any difficulty
11
Indeed, the Supreme Court has noted that even “‘innocent’
mailings--ones that contain no false information--may supply the
mailing element.” Schmuck v. United States, 489 U.S. 705, 715
(1989).
16
created by the jury instruction issue discussed above in Section
II--considering the evidence tending to show that UL was
entirely fraudulent, combined with the fact that the mailing
alleged in Count Thirty was from Dobson qua UL to “Kelly” in
her capacity with UL, the jury could have reasonably inferred
that the mailing in Count Thirty was sufficiently closely related
to UL’s fraudulent activities to support a conviction. See
generally United States v. Serafini, 233 F.3d 758, 770 (3d Cir.
2000); United States v. Carr, 25 F.3d 1194, 1201 (3d Cir. 1994).
We thus reject Dobson’s sufficiency of the evidence argument
respecting Count Thirty; and, as a result, the United States may
again seek a conviction on that charge on remand.
IV.
For the reasons set forth, we will reverse Dobson’s
convictions and remand to the District Court for additional
proceedings consistent with this opinion.12
12
Due to this outcome, we need not address Dobson’s
arguments with regard to sentencing. Of course, if Dobson is
convicted again on remand, the District Court will apply the
Sentencing Guidelines and Sentencing Reform Act of 1984 as
interpreted in and modified by Booker. See generally United States
v. Ordaz, 398 F.3d 236, 238-39 (3d Cir. 2005).
17