The opinion of the court was delivered by: BECHTLE
Presently before the Court is the post-trial motion of defendant Barry Bickman ("Bickman") for a new trial or judgment of acquittal, raised pursuant to Fed.R.Crim.P. 29 and 33. For the following reasons, the Court, by Order dated November 6, 1980, denied the defendant's motion.
This case comes from an indictment charging violations of 18 U.S.C. §§ 1341 and 2 and consisting of eight counts of mail fraud and aiding and abetting. Those charges arose out of a series of events concerning the intentional watering-down of merchandise of the Arbill Industries, Inc. ("Arbill"), located in Philadelphia on April 14, 1975, in order to present fraudulent claims totaling approximately $ 64,000 to eight insurance carriers. Bickman was president of Arbill during all pertinent times and was charged with intentionally ordering other employees of Arbill to water-down Arbill goods that were not damaged by fire or water after a fire that occurred at a warehouse in Philadelphia because the goods were stored in other parts of the building. This was done to make it appear that the goods were actually damaged by the fire and would, therefore, justify, in the eyes of the insurance companies involved, the payment of the claims intended to be filed. Such claims were subsequently filed by Bickman through the use of the mails.
The case was tried before a jury commencing July 21, 1980, lasting five days and involving the presentation of several witnesses and the introduction of numerous exhibits. After deliberations, the jury returned a verdict of guilty against Bickman on all counts.
Bickman's recollection of the Court's charge is inaccurate. The Court did not instruct the jury that in order to find Bickman innocent they had to find that the damage to the goods was caused by the fire, thereby precluding Bickman of the defense that the goods were instead damaged by a sprinkler system breakdown in the warehouse shortly after the fire occurred. If the charge is examined carefully, it plainly and repeatedly shows that the jury was given, as an option to consider in arriving at its verdict, the defendant's theory. Relevant excerpts from the Court's charge to the jury that bear on the present issue are as follows:
And the reason the indictment is prepared this way is that the Government's contentions are that there was one scheme to defraud and that was the plan, alleges the Government, developed around the relocation of this merchandise and the intentional wetting it down so that then the gloves could be represented as having been damaged by reason of this fire.
And as we know, if there's a fire, most policies cover for water damage. These weren't burnt; it had to do with water damage. That's the principal plan.
And the defendant is charged with having (caused insurance proceeds checks based on proofs of loss to be mailed), with knowing that such proofs of loss were false and fraudulent when made, in that the proofs of loss stated that the loss for water damage was caused by a fire and not caused by the defendants and the other operating you have heard the testimony in the way that they did, and that it is also charged that the defendant knew that the others, Riley, MacClain and the other defendants named in this indictment, caused the insured merchandise to be water-damaged and it wasn't as a result of the fire.
First, whether there was an artifice or scheme to defraud intentionally formed and as alleged in this indictment to deceive insurance companies of money by means of a false and fraudulent misrepresentation as to how this merchandise became water-damaged.
N.T. 5-18 (emphasis supplied).
It will be up to you to determine because a claim was made by reason of that merchandise it will be up to you to determine whether or not the Government has shown beyond a reasonable doubt that this defendant, Barry Bickman, did willfully and knowingly associate himself and participate as a knowing actor in the scheme that brought about the presentation of the claims and the payment of the funds from the insurance company which can only be found if you find that in fact the merchandise was purposefully and intentionally wet-down as alleged by the Government.
N.T. 5-21 (emphasis supplied).
The law was not violated if the proofs of loss were not false in some substantial manner at the time of the mailing of the insurance proceeds check. So the key is, it seems to me from an evidentiary viewpoint, you will have to determine how did the merchandise get wet ? If it was intentional and purposeful as outlined by the Government's witnesses, then that would be the beginning of the presentation of a false claim; if not, if the evidence doesn't support that the goods were wet in that manner beyond a reasonable doubt, the defendant is entitled to be acquitted because if the goods presumably ...