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United States v. Reicin

decided: May 28, 1974.


Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 71 CR 82 THOMAS R. MCMILLEN, Judge.

Castle, Senior Circuit Judge, and Fairchild and Pell, Circuit Judges.

Author: Pell

PELL, Circuit Judge.

An eleven-count indictment charged appellant Edward Reicin, an attorney, with mail fraud, 18 U.S.C. ยง 1341.*fn1 Defendant and Dr. William Becker allegedly had devised and carried out a scheme to defraud insurance and other companies*fn2 in personal injury cases by preparing and submitting false and exaggerated medical reports and bills to the companies and by causing claimants "to absent themselves from employment to increase their alleged damages." Each count pertained to a different personal injury case handled by the defendant or lawyers in his office, and each count alleged a specific mailing with regard to the claim involved in that count.*fn3

A jury convicted Reicin on Count 9, which concerned the mailing of a fraudulent document to the Royal Globe Insurance Company, and acquitted him of the ten other counts. On this appeal, defendant seeks (1) the reversal of his conviction on the ground of insufficiency of the evidence, or (2) a remand for a new trial on Count 9 because of supposed procedural irregularities at trial. Reicin also requests a remand for a hearing on his motion to quash the indictment.

Factual Background

Count 9 concerned the claim of Philip Eauslin, a traveling commission salesman, whose automobile was struck from the rear by a truck on July 5, 1967. A few days after the accident, Eauslin and his family drove the repaired automobile to Florida for a previously planned vacation. While in Florida, Eauslin felt pain in the small of his back. He had experienced such pain sporadically for some years prior to the July 5th accident. As he had originally intended, Eauslin remained in Florida for two weeks, during which time he did not seek the services of a doctor.

After returning from vacation, Eauslin mentioned the accident to his supervisor at his place of employment. That individual recommended that Eauslin consult the defendant, whose firm had done some work for the company. Eauslin did so. In his conversation with Reicin, he told him about the accident and said that, although he had some discomfort, he probably had had the same symptoms before the accident. He also mentioned that he had just returned from a vacation trip to Florida. Reicin suggested that he see a doctor; when Eauslin replied that he had no family physician, defendant arranged for him to see Dr. Becker.*fn4

Eauslin testified that he visited Dr. Becker's office only one time and that the doctor briefly examined Eauslin's back but gave him no treatment or medication. He also sent him to an X-ray clinic.

According to Dr. Becker, after Eauslin had come to his office, defendant telephoned the doctor and requested the card on which Becker had listed the number of visits supposedly made by Eauslin. Reicin had stated that he wanted the card because there was a subpoena for Becker's records and defendant wanted to make certain that the cards "looked all right." Dr. Becker's bill for treatment of Eauslin amounted to $185 and falsely indicated that Eauslin had seen the doctor eleven times. Becker refunded 25 percent of the bill to the defendant in cash.

Count 9, like Counts 2-8 and 10 and 11, realleged by reference all the allegations of the first count, which described one scheme or artifice to defraud.*fn5 The evidence adduced at trial established the following course of conduct. Dr. Becker had known the defendant since 1961, and between 1965 and 1969, he handled approximately 83 to 90 cases with Reicin. He testified that he looked to the defendant for payment of some of the medical bills involved in the indictment. Prior to sending each of the bills to Reicin, Dr. Becker would receive a letter from the defendant asking for the bills.

After Reicin would pay the bills, the doctor would kick back 25 percent of each payment to the defendant. Dr. Becker testified that each of the bills and medical reports he had prepared was false and exaggerated and that he had had conversations with the defendant about their inaccuracy. Reicin had expressed concern that the fraud might be exposed: "There was a lot of heat in the streets" and "[there were] investigations going on about personal injury cases."

Although Reicin voiced concern about the discrepancy between the number of visits mentioned on the bills and the actual number of visits that claimants paid Dr. Becker, he neither warned the various companies about the misinformation nor ceased sending clients to Dr. Becker for examination for insurance claim purposes. Indeed, Becker testified that in 1965, after Reicin had told the doctor that he was worried that the medical bills smacked of fraud, Reicin simply suggested that the manner of his payment be changed. Previously, Reicin would send Becker 40 to 60 percent of the amount of the bill. Reicin proposed that he would send the doctor the full amount of the bill by his, Reicin's, check and thereafter Becker would refund 25 percent of the amount in cash to Reicin. Apparently because of the increase of the percentage to the doctor, he was to pay the resultant income tax based on the full amount of the bills. Further, Dr. Becker also testified that defendant had demanded that certain claimants-patients be hospitalized.

Former clients of Reicin, claimants, corroborated much of Becker's testimony about Reicin's pattern of behavior and his knowledge that the reports submitted to the various companies contained misrepresentations. For example, client Carolyn Lovell stated that she had told Reicin that if she went to the hospital she might lose her job. Reicin replied that she was "working for peanuts anyhow" and that she should go to the hospital. He telephoned a Dr. Villate and told him to "throw Mrs. Lovell in the hospital." After Reicin gave Mrs. Lovell her settlement, he warned: "Not a word of this to anyone. If anything happens, come to me." When claimant Carrara, after signing the settlement agreement, questioned the amount of the doctor's fees, defendant replied that it was normal for ten or twelve visits. Carrara stated that he had visited Becker only once or twice. Reicin then responded that, nevertheless, "that is what we used in the settlement."

At the close of the Government's case, the trial court struck paragraph 10, concerning "lost time," from Counts 3, 4, 5, 6, and 10. However, the court denied the defendant's motion for judgment of acquittal on Count 9 or, in the alternative, that paragraph 10 be stricken in relation to Count 9.

Sufficiency of the Evidence

Claimed Total Failure of Proof

Reicin first contends that the Government produced no evidence, direct or indirect, that he was aware that Dr. Becker's report and bill on claimant Eauslin were fraudulent. He further maintains, contrary to the district court's position in its post-trial memorandum opinion, that the evidence pertaining to the counts on which he was acquitted may not be the basis for inferences against him on Count 9.

Second, Reicin asserts that the Government failed to prove another element of the scheme as described in the indictment, namely, that Becker and the defendant caused clients, including Eauslin, to absent themselves from employment to increase their alleged damages. The prosecutor, Reicin declares, recognized the weakness of his case in this respect and therefore in his closing argument injected the "new and different [lost time] theory" that, without Eauslin's knowledge, the defendant and Eauslin's employer, Mr. Brill, submitted a letter to the Royal Globe Insurance Company indicating that the claimant had taken off more time than he in fact had. This supposedly material alteration of the indictment assertedly was improper and its substance unproved.

This assault by defendant on his conviction stems primarily from his narrow view of a mail fraud charge, a view which we do not share.

"The defendants' arguments [in this mail fraud case] as to sufficiency of the evidence on the substantive counts attack the credibility of witnesses, disregard the fact that guilt can be proven by circumstantial evidence, . . . and generally ignore the function of the jury in criminal trials. Defendants do not, in their briefs, look at the evidence as a whole, or in the light most favorable to the Government, but rather isolate various bits of testimony and argue that each was insufficient to support the verdicts. However, the evidence presented concerning the various accidents overlaps and cannot be viewed in a vacuum." United States v. Hutul, 416 F.2d 607, 617 (7th Cir. 1969), cert. denied, 396 U.S. 1012, 90 S. Ct. 573, 24 L. Ed. 2d 504 (1970).

The jury's acquittal of defendant of ten of the eleven counts charged does not justify the conclusion, as Reicin implies, that the jury perceived no overall scheme but nevertheless irrationally convicted defendant on Count 9. In finding Reicin guilty on that count, the jury, we are persuaded, did look at all the evidence, the approach the Government had adopted at trial. In his closing argument in particular, the prosecutor had developed the theme that Reicin and Dr. Becker had devised a successful formula for defrauding companies in accident cases by inflating the "specials" and that they had employed this preconceived plan repeatedly, only varying it slightly once or twice as the circumstances required. In his analysis of the verdict, the defendant fails to take into account the possibility that the jury might have been exercising "its historic power of lenity," United States v. Carbone, 378 F.2d 420, 423 (2d Cir.1967), cert. denied, 389 U.S. 914, 19 L. Ed. 2d 262, 88 S. Ct. 242. In United States v. Fox, 140 U.S. App. D.C. 129, 433 F.2d 1235, 1238 n. 22 (1970), the court pointed out "the judicially recognized fact that juries frequently convict on some counts but acquit on others, not because they are unconvinced of guilt, but simply because of compassion or compromise."*fn6

Count 1, which each subsequent count of the indictment realleged, described one scheme or artifice to defraud. Its separate paragraphs were enumerations of certain illustrative elements or characteristic patterns of the scheme. (Count 1 and Count 9 are set out in the Appendix to our opinion.) Count 9 specified one instance of the perpetration of the continuing plan. Dr. Becker's testimony, which Reicin does not credit but which the jury apparently did find persuasive, indicated that the defendant knew that the doctor was regularly falsifying the bills of Reicin's accident clients, including those for Eauslin. His protestations notwithstanding, Reicin continued to refer persons to Becker and to share the monies resulting from that consultation. Reicin's primary concern was that the misrepresentations would be discovered. Becker's testimony and that of the various clients provided an adequate basis for the ...

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