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UNITED STATES v. HART

August 5, 1981

UNITED STATES of America
v.
Orlando HART



The opinion of the court was delivered by: GILES

MEMORANDUM

On December 13, 1980, Orlando Hart was indicted in Criminal Indictment No. 80-0380 on sixteen counts of mail fraud in violation of 18 U.S.C. § 1341 (hereinafter the Mail Fraud Act). The indictment alleges use of the mails pursuant to a scheme to defraud various insurance companies by representing that certain automobile accidents had occurred in which property damage was sustained. On January 22, 1981, Orlando Hart and six co-defendants were indicted in Criminal Indictment No. 81-19. The indictment alleges use of the mails pursuant to a scheme that defendant Hart and two co-defendants devised to defraud insurance companies by submitting fraudulent claims on automobile liability insurance policies and further alleges in Count 14, conspiracy to violate the Mail Fraud Act.

 On May 6, 1981, defendant Hart was convicted on Counts I and II of Indictment No. 81-19 and acquitted of all remaining charges contained in this Indictment. On June 26, 1981, defendant Hart brought this Motion to Dismiss Indictment No. 80-0380 based on double jeopardy and prosecutorial vindictiveness. The basis of the motion is that the "same scheme" to defraud was involved in both indictments. Defendant argues that even though the two indictments charge that different mailings were made in violation of the Mail Fraud Act, the mailings were made pursuant to a single continuous scheme. Thus, the government should be prohibited from bringing this action since defendant has already been tried for the purportedly common scheme to defraud.

 A careful examination and comparison of the Indictments in Criminal Action No. 81-0019 and in the present action, No. 80-0380 makes it patently clear that the indictments are based on two separate schemes. Indictment No. 81-19 deals with accidents occurring between February 7, 1976 and August 17, 1977. Indictment No. 80-380 deals with accidents occurring between January 1, 1979 and April 11, 1979. The accidents alleged in the two indictments are separated in time by almost two years.

 Moreover, different automobiles, different defendants and different victim insurance companies are involved. In Indictment No. 81-19, seven defendants, including Hart, are named, whereas Indictment No. 80-380 involves only Hart.

 Indictment 81-19 involves 15 victim insurance companies, whereas Indictment 80-380 involves 5 victim insurance companies. Only two of the insurance companies alleged in 80-380 were also alleged in the previous indictment.

 Most significantly, the government has represented and defendant has not disputed, that Indictment No. 81-19 involved the use of insureds' policy numbers, and involved insureds in the scheme in some way. However, Indictment No. 80-380 involves no insureds whatsoever in the scheme itself. The government has stated that in the present case, 18 different insureds will testify that they were not involved in any accident, that they did not report any accident to the insurance company, and that they did not give anyone, including Hart, their permission to report that they were involved in any accident. This differs significantly from the cases involved in Indictment No. 81-19.

 Further, unlike 81-19, all policies were written by Wilson & Wilson Agency.

 Notably, United States District Judge Daniel H. Huyett, III, who presided over the trial of Criminal No. 81-19, denied Hart's motion to reassign that prosecution to me, based on an examination of the two indictments. He determined that there were two separate schemes alleged and that joinder of the two indictments for trial would be unduly prejudicial to the other defendants in No. 81-19.

 The differences between the two schemes are so clear that defendant's double jeopardy motion must be deemed frivolous and dilatory within the meaning of United States v. Leppo, 634 F.2d 101 (3d Cir. 1980).

 In any event, even if the same scheme were involved in both indictments, defendant's constitutional right to be free from double jeopardy would not be violated. Case law and Congressional intent is clear and unambiguous, as defendant concedes, that each specific mailing is a separate offense under the Mail Fraud Statute. Defendant argues, however, based on Ashe v. Swenson, 397 U.S. 436, 90 S. Ct. 1189, 25 L. Ed. 2d 469 (1970) and Bell v. United States, 349 U.S. 81, 75 S. Ct. 620, 99 L. Ed. 905 (1955) that the "same scheme" is involved and that the proper unit of prosecution for violation of the Mail Fraud Statute, 18 U.S.C. § 1341, is the "scheme to defraud" and not each separate mailing. However, an examination of the case law and the plain language of the Mail Fraud Statute assures this court that Congress intended each specific mailing to be a separate offense. This is true even though the mailings may be made pursuant to a single scheme to defraud. Badders v. United States, 240 U.S. 391, 36 S. Ct. 367, 60 L. Ed. 706 (1916); United States v. Calvert, 523 F.2d 895, 914 (8th Cir. 1975), cert. denied 424 U.S. 911, 96 S. Ct. 1106, 47 L. Ed. 2d 314 (1976); United States v. Weatherspoon, 581 F.2d 595, 601-02 (7th Cir. 1978).

 Thus, the government is free to exercise its prosecutorial discretion to charge defendant for each mailing without violating defendant's right to be free from double jeopardy. In that sense this case resembles Ebeling v. Morgan, 237 U.S. 625, 35 S. Ct. 710, 59 L. Ed. 1151 (1915) where the Supreme Court held that a defendant who had successively torn or cut mail bags in the same transaction could be charged and punished separately for the offense as to each separate bag.

 Defendants rely upon Ashe v. Swenson, 397 U.S. 436, 90 S. Ct. 1189, 25 L. Ed. 2d 469 (1970) and Bell v. United States, 349 U.S. 81, 75 S. Ct. 620, 99 L. Ed. 905 (1955) to establish that the proper unit of prosecution under the Mail Fraud Statute is the scheme to defraud, and that since the same scheme is purportedly involved in both indictments, all of the mailings should have been charged in one indictment. Defendant's reliance upon these cases is misplaced. Defendants cite Ashe v. Swenson to support the proposition that the double jeopardy clause requires the government to join at one time all charges which flow from a single criminal episode or transaction. However, the majority in Ashe v. Swenson did not adopt the "same transaction" test suggested by Justice Brennan in his concurring opinion. To the contrary, the case holding is narrowly confined to an application of collateral estoppel principles to the Double Jeopardy Clause. In Ashe, the Court held that a defendant who has been acquitted of robbery charges on the grounds that he was not present at the scene of a robbery, cannot be subsequently tried for robbery of the other persons present at the scene. Ashe v. Swenson held that the government is collaterally estopped from raising the issue of identity at a subsequent trial. Here, ...


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