The opinion of the court was delivered by: Brody, J.
Tiller was charged under an indictment stating that, "[f]rom on or
about February 21, 1994 to on or about November 6, 1995, defendant FREDA
TILLER devised and intended to devise a scheme and artifice to defraud
[Philadelphia Housing Authority] and to obtain money and property by
means of false and fraudulent pretenses, representations and promises."
Indictment at 3, ¶ 10. During the 21 month period covered by the
indictment, Tiller was employed as a managed care caseworker at Villanova
Rehabilitation Consultants, Inc. (VRC). VRC is a medical managed care
consulting firm, offering the service of monitoring the medical care
provided under insurance policies, to ensure that the medical care being
received is appropriate and necessary.
VRC contracted to provide this service to Philadelphia Housing
Authority (PHA), to monitor the medical treatments covered by PHA's
workers' compensation insurance policies. The essence of the service
being provided by VRC to PHA is in-person, on-site monitoring of the
medical care administered by health care providers to PHA employees
("claimants") who are receiving treatment for on-the-job injuries.
Individual PHA claimants are assigned to caseworkers employed by VRC.
Caseworkers meet with the claimants at the offices of doctors and
therapists and then prepare a detailed written report describing the
condition of the claimant, the course and propriety of the medical care
being provided, and the prognosis for the claimant's return to work.
VRC bills PHA for its services on a per-visit basis. When a caseworker
submits a report, VRC prepares an invoice from the report. The invoice
parses the activity for which PHA is being charged, including travel
time, time spent with the doctors, therapists, and claimants, and any
incidental expenses such as telephone calls. VRC then sends the invoice
to Crawford and Company ("Crawford"), the third party administrator for
the PHA workers' compensation policy. Crawford mails payment to VRC based
on the invoice.
VRC caseworkers are paid, above and beyond their salary, on an
incentive basis, $40 for every visit made and reported in excess of six
visits per week. In addition to the report for each visit, caseworkers
are also required to document their activities on VRC records known as
Weekly Activity Summaries and Expense Reports. The Weekly Activity
Summaries track the number of visits the caseworker made for each
two-week pay period. Caseworkers receive bi-weekly pay checks that
include any incentive bonuses.
At trial, the government introduced into evidence copies of Tiller's
reports, Weekly Activity Summaries, and invoices prepared by VRC. Tiller
testified at trial that she is aware that all companies use the mails as
part of their business.
• Rule 29(c) Motion for Judgement of Acquittal
Federal Rule of Criminal Procedure Rule 29(c) provides that "if the
jury returns a verdict of guilty," the court may on such motion set aside
the verdict and enter judgement of acquittal." The only basis for a
judgement of acquittal is insufficiency of the evidence at trial to
sustain conviction. See United States v. Clemons, 658 F. Supp. 1116
(W.D.Pa. 1987), aff'd, 843 F.2d 741 (3rd Cir. 1988), cert. denied,
488 U.S. 835 (1988). "When the sufficiency of the evidence at trial is
challenged," a court must view the evidence "in the light most favorable
to the government." United States v. Coyle, 63 F.3d 1239, 1243 (3rd Cir.
1995) (citing Glasser v. United States, 315 U.S. 60 (1942)). A court must
affirm the convictions, "if a rational trier of fact could have found
defendant guilty beyond a reasonable doubt, and the verdict is supported
by substantial evidence." Id.
The defendant moves pursuant to Federal Rule of Criminal Procedure
29(c) for a judgement of acquittal on the ground that the government
failed to establish the mailing element of federal mail fraud as required
under 18 U.S.C. § 1341. There are two prongs to the mailing element.
The statute provides in relevant part:
"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 to do so . . . knowingly causes to be
delivered by mail . . . any such matter or thing,
shall be [guilty of the offense]."
18 U.S.C. § 1341. Based on the statute, the defendant must "cause"
the mails to be used "for the purpose of executing" the scheme of fraud.
Id. Federal mail fraud reaches "only those limited instances in which the
use of the mails is part of the execution of the fraud." Kann v. United
States, 323 U.S. 88, 95 (1944). Causation is satisfied "where one does an
act with knowledge that the use of the mails will follow in the ordinary
course of business, or where such use can reasonably be foreseen, even
though not actually intended." Pereira v. United States, 347 U.S. 1, 8-9
(1954). Thus, the mailing element is satisfied if: (1) the mailings were
part of the execution of the fraud; and (2) either (a) the defendant had
knowledge that use of the mails would follow in the ordinary course of
business or (b) it was reasonably foreseeable that the mails would be
As the defendant correctly states, the government is required to prove
the mailing element as set forth in the indictment. See United States v.
Lebovitz, 669 F.2d 894, 896 (3rd Cir. 1982) ("The completion of the
scheme must depend in some way on the mailings charged"). See also,
United States v. Smith, 934 F.2d 270, 273 (11th Cir. 1991) ("We do not
believe the bare fact that large organizations mail communications
between offices brings every fraud against such entities within the
federal mail fraud statute"); United States v. Walters, 997 F.2d 1219
(7th Cir. 1993). The indictment in this case charged that the relevant
mailings were the "[c]hecks mailed by Crawford, which included fees
charged by VRC for visits claimed to have been made by defendant FREDA
TILLER, which visits defendant FREDA TILLER had not made." Indictment at
5, ¶ 19. Thus, the government was required to prove that the mailing
of these checks by Crawford to VRC was both part of the execution of the
scheme of fraud and reasonably foreseeable. The defendant asserts that
the evidence produced at trial is insufficient on both grounds.
The defendant first argues that the mailing element was not satisfied
because the evidence was insufficient for the jury to find that the
charged mailings were part of the execution of the scheme of fraud. The
defendant contends that the scheme of fraud was successfully completed
prior to any mailing and that the mailings charged involved merely
post-fraud accounting among potential victims of the scheme. See
Defendant, Freda Tiller's Omnibus Memorandum ...