Saturday, February 20, 2016

Case o' The Week: En Banc Wail from Mail Travail - Eglash and Mail Fraud Elements

“You’ve got mail.”

   (Now go to jail).
United States v. Cory Eglash, No. 14-30132 (9th Cir. Feb. 17, 2016), decision available here.

Players: Decision by Judge Christen, concurrence by Judge Kleinfeld, partial concurrence and partial dissent by Judge Wallace.

Facts: Eglash and his girlfriend, Hayes, ran a coffee shop. Id. at 4. Hayes applied for disability payments: Eglash confirmed he was her caregiver. Id. After Hayes was awarded benefits, Eglash also applied for disability. Id. at 5. 

An investigation revealed Eglash was in fact quite active and very much not disabled (the same was true for Hayes). Id. at 6. 

They were charged and tried for, among other things, mail fraud. Id. One count alleged mail fraud based on a notice of disability award that the SSA sent Hayes. Id. Another count alleged mail fraud based on the summary of statements Eglash made when he talked to the SSA in support of his disability application. Id. 

During trial Eglash move for judgment of acquittal, alleging the government failed to prove the mailings furthered a fraudulent scheme. Id. at 7. The motion was denied: Eglash appealed.

Issue(s): “Eglash claims the district court erred by denying his motion for judgment of acquittal on mail fraud Counts 4 and 6 because the underlying mailings were not shown to further a fraudulent scheme to receive disability benefits.” Id. at 7.

Held: “[T]he notice of disability award marked the last step before Hayes would receive disability benefit payments, the goal of her fraudulent plan with Eglash. Although the Government, not the defendant, mailed the . . . notice of disability award here, each mailing was a contemplated, necessary step in its respective scheme. [T]he notice of award was the golden ring in Eglash’s plot and incident to an essential part of the scheme. We therefore affirm the district court’s judgment on Count 4.” Id. at 9 (quotations and citations omitted) (emphasis added). 

“The summary may have been a predictable consequence of Eglash’s fraudulent application, but the fraud he envisioned was neither dependent upon nor furthered by the Government’s decision to transcribe, in summary form, the fraudulent statements he made when he talked to SSA . . . .Because the underlying mailing was not part of the execution of the scheme as conceived by the perpetrator at the time, . . . and because it did nothing to further the scheme, we reverse Eglash’s mail fraud conviction on Count 6.” Id. at 10 (quotations and citations omitted) (emphasis added).

Of Note: Judge Kleinfeld concedes that upholding the conviction as to the “notice of disability” mailing is required by the Ninth’s decision in Brown, 771 F.3d 1149, 1158 (9th Cir. 2014). Id. at 11 (Kleinfeld, J., concurring). He makes a compelling argument, however, that Brown was wrongly decided, is inconsistent with the Supreme’s fraud decision in Schmuck, and that Brown should go en banc. Id. Judge Kleinfeld asks how a government mailing confirming the success of a scheme can be deemed a mailing executed by the defendant (as required by the mail fraud statute?) Id. at 13. 

Judge Kleinfeld is right – Brown should go en banc.

How to Use: Eglash was enough of a crook without counts 4 and 6 to make these two counts superfluous. . . . The hardest part of this case to understand is why the government turned an easy and obvious conviction into a difficult appellate case and fractured opinion by overcharging [Eglash].Id. at 15 (Kleinfeld, J. concurring). 

With no disrespect to Mr. Eglash, Judge Kleinfeld is right -- it makes no sense for an AUSA to hopelessly muddy a record with this charging stretch. Nonetheless, expect government mailings to still show up in mail fraud counts. Preserve your objections: Brown may someday be revisited by the en banc court.
For Further Reading: How many Supreme Court crim pro decisions swung on Justice Scalia’s vote? Twenty, during the Roberts Court. For a fascinating graphic and article on the stakes for this now-vacant seat, see, Adam Liptak and Quoctrung Bui, Supreme Court Precedents that May be at Risk, available here

Steven Kalar, Federal Public Defender Northern District of California


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