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United States v. McMahill

October 30, 2009


The opinion of the court was delivered by: Conti, District Judge


Pending before the court is a motion for judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29(a) submitted orally by defendant Claudele*fn1 McMahill ("defendant" or "McMahill"). After considering the submissions of the parties, the court will deny McMahill's motion because the government introduced sufficient evidence for the jury to return a verdict of guilty.

I. Background

In June 2006, McMahill was indicted on nine counts of mail fraud for fraudulently receiving unemployment compensation from the Pennsylvania Department of Labor & Industry, in violation of 18 U.S.C. § 1341. (Docket No. 1.) The first of two superseding indictments was filed in January 2007, charging defendant with the same nine counts of mail fraud and an additional count of conspiracy to commit mail fraud between April 2004 and December 2004, in violation of 18 U.S.C. § 371. (Docket No. 74.) The second superseding indictment was filed on September 16, 2008, charging McMahill with similar charges of mail fraud and conspiracy to commit mail fraud during the time period spanning April 2004 to December 2004. (Docket No. 232.) In October 2008, the charges against McMahill were tried before a jury. (Docket No. 232.) At the close of the government's case-in-chief, on October 16, 2008, McMahill moved orally for judgment of acquittal with respect to the conspiracy charge under Federal Rule of Criminal Procedure 29(a) ("Rule 29"), alleging that the government did not prove beyond a reasonable doubt that McMahill knowingly participated in a conspiracy to commit mail fraud. The court reserved decision on the motion pursuant to Federal Rule of Criminal Procedure 29(b) and submitted the case to the jury.*fn2 On October 29, 2008, McMahill was convicted by a jury of all counts, i.e., nine counts of mail fraud and one count of conspiracy. (Docket No. 249.) The present motion only challenges the conspiracy conviction.

II. Factual Background

A. Evidence Produced by the Government with Respect to the Mail Fraud Charges

The government introduced evidence of the following facts: In January 2004, McMahill was hired to work at Acme Building Services Co., Inc. ("Acme"). Shortly thereafter Acme's business was sold to Lacy Tilley ("Tilley"), McMahill's co-defendant, who continued Acme's operations through United Building Maintenance, Inc. ("UBM"). Following Tilley's acquisition of Acme's business, Tilley instructed four employees, Robert Best ("Best"), Aaron Brown ("Brown"), Jeffrey Kifer ("Kifer"), and Treasa Likert ("Likert"), to apply for unemployment benefits. Rather than terminate the employees, Tilley continued their employment by UBM and provided supplemental payments in an amount equal to the difference between their former salaries and their unemployment benefits. McMahill also received unemployment benefits on various dates relating to the charges of mail fraud while working for UBM, and resided with Tilley during the time of the conspiracy.

B. Evidence Presented to the Jury in the Government's Case-in-Chief with Respect to McMahill's Participation in a Conspiracy to Commit Mail Fraud

Four UBM employees testified that Tilley directed them to apply for unemployment benefits. Best testif`ied about his recollections of conversations with Tilley with respect to UBM's pecuniary troubles and the decision to have employees apply for unemployment:

(Best): When they took over the company, I had took the payroll in, and [Tilley] says, well, how am I going to pay this? I don't have -- there's not enough money here to pay this out. And you got to figure out how we're going to pay this.... And so, the next day when I come in, he says, don't worry. I got it figured out.

Trial Tr. Docket No. 297, 150:6-12 (Oct. 14, 2008). In a subsequent conversation, Tilley instructed Best to apply for unemployment benefits, and told Best that the remainder of his salary would be paid under the table. Best testified:

(Best): As far as I can remember, it was just Lacy and myself, and it was just brought up that, that if they wanted to keep the jobs there, because they didn't have enough money to pay us what we were making, that we could apply for -- we would have to apply for unemployment, and they would pay us the rest of our salary under the table.

Id. at 151:11-16. With respect to his compensation, Best testified "at Acme I was making like $600.00 a week, and on unemployment, I was getting $337.00. And they made -- I was getting like $300.00 a week under the table,"which he received in the form of a check. Id. at 151:20-25. Brown also provided testimony about Tilley's instructions to apply for unemployment. Brown testified:

(Brown): What I can recall, [Tilley] had mentioned to me that being that Acme had been sold, that I might be able to get unemployment, and telling [the unemployment office] that the new company wasn't hiring me, or I would be laid off.

Trial Tr. Docket No. 298, 38:18-21 (Oct. 15, 2008). Brown testified that he observed McMahill coming to work at UBM and that she had an office with a desk which she frequently used. Id. at 45:11-22.

Kifer provided similar testimony about a conversation with Tilley, stating, "[t]he conversation [with Tilley] was, with the start-up of the new company, there would not be moneys available to pay us managers. We were instructed to sign up for unemployment." Trial Tr. Docket No. 299, 4:20-22 (Oct. 16, 2008). Kifer explained Tilley's plan for paying him, testifying:

(Kifer): Um, how I was to be paid would be, um, the unemployment payments, and they would compensate between, the difference between what I was making at Acme and what I was receiving from unemployment, I would be paid -- the remainder would be paid by check.

Id. at 5:14-18. Kifer recalled that because he became UBM's director of sales and marketing, he had to train McMahill to take over the day-to-day operations of UBM. Id. at 6:19-7:6.

Likert testified about a meeting she had with Tilley about applying for unemployment benefits. Likert testified:

(Likert): We had a, a meeting with Lacy Tilley. He explained that he could not afford to keep us on the payroll as it was being provided to us from Acme Building Services; that if we wanted to keep our job, we would have to collect unemployment. He would pay the difference of whatever our unemployment was bi-weekly. He would ...

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