Appeal from the United States District Court for the Western District of Pennsylvania, D.C. Crim. No. 87-00207-01.
Mansmann, Scirica and Seitz, Circuit Judges.
Defendant Richard Ruuska was charged in an eleven count indictment. After a jury trial, Ruuska was convicted and sentenced on three counts of wire fraud in violation of 18 U.S.C. § 1343 (Counts 1, 2 and 5), and six counts of mail fraud in violation of 18 U.S.C. § 1341 (Counts 6, 7, 8, 9, 10 and 11). The district court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction over Ruuska's appeal by virtue of 28 U.S.C. § 1291.
Sufficiency of the Evidence
We first address defendant Ruuska's contention that the district court erred in denying his motion for acquittal on Counts 8, 9, 10 and 11. Ruuska argues that the evidence was insufficient to support his conviction on these Counts. We will only reverse a conviction where the evidence, viewed in the light most favorable to the government, could not support a finding of the essential elements of the crime beyond a reasonable doubt by any rational trier of fact. Jackson v. Virginia, 443 U.S. 307, 319, 61 L. Ed. 2d 560, 99 S. Ct. 2781 (1979).
In relevant part, the indictment in this case alleged a scheme and artifice to defraud in which defendant Ruuska received the money of, among others, retiree John Drozd, his sister, and his then 73-year old girlfriend Grace Roth, as investments in three companies, Companie Belga Caribe Internacional, S.A. ("Cobeca"), purportedly a cantaloupe growing business, PENSYS, an air purification company, and Lady Mayfair Salon, a health club company. Evidence at trial permitted the jury to conclude that Ruuska made material misrepresentations to potential investors about himself and these investments, and that he converted investment monies to his personal use.
Ruuska contends that the evidence was insufficient to support his conviction of mail fraud on counts 8, 9, 10 and 11. He argues that the evidence was insufficient to support a conclusion that the mailings on which the government relied in each of those counts were "for the purpose of executing" the alleged scheme to defraud, as required by 18 U.S.C. § 1341. The basis for Ruuska's argument is that the mailings charged in counts 8 through 11 were sent after April, 1985, when Drozd's attorney and accountant raised questions with Ruuska, had him sign promissory notes in the full amount of the investments, and first suggested to Drozd that he had been "scammed."
The mail fraud statute prohibits the use of the mails "for the purpose of executing" a scheme to defraud. 18 U.S.C. § 1341. To support a mail fraud conviction, a mailing must further the scheme to defraud or be incident to an essential part of that scheme. See, e.g., United States v. Otto, 742 F.2d 104 (3d Cir. 1984), cert. denied, 469 U.S. 1196, 83 L. Ed. 2d 980, 105 S. Ct. 978 (1985). A mailing sent after the object of a scheme has been accomplished is not sufficiently closely related to the scheme to support a mail fraud conviction. United States v. Lebovitz, 669 F.2d 894, 896 (3d Cir.), cert. denied, 456 U.S. 929, 72 L. Ed. 2d 446, 102 S. Ct. 1979 (1982). "However, the object of a scheme is not necessarily accomplished at the moment when the perpetrator of the scheme receives the fruits of the scheme." Id. As Ruuska recognizes, subsequent mailings may be "for the purpose of executing" the scheme if they were, for example, "designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely than if no mailings had taken place." United States v. Lane, 474 U.S. 438, 452-53, 88 L. Ed. 2d 814, 106 S. Ct. 725 (1986) (quoting United States v. Maze, 414 U.S. 395, 403, 38 L. Ed. 2d 603, 94 S. Ct. 645 (1974)). In one instance, the Supreme Court has upheld mail fraud counts based on mailings that "[attempted] to convince the victims that they had not been defrauded and that the defendants were performing meaningful services on their behalves," after the money had actually been given over by the victims to the defendants. See United States v. Sampson, 371 U.S. 75, 80-81, 9 L. Ed. 2d 136, 83 S. Ct. 173 (1962).
The mailings charged in Counts 8 and 9 are identical letters on Cobeca stationery dated July 4, 1985, and sent to John Drozd and Grace Roth. These letters read:
We wish to inform our Joint Venture relationships of the present situation concerning the Cantaloupe projects in the Dominican Republic.
This brief informative letter should have been sent at least sixty days ago. We regret the delay, but it was unavoidable. Innuendo and conjecture were initiated without warrant against the organization, personnel and projects. Thus, we chose to delay communication until we developed a true picture of the situation. Therefore, at this time we've been able to completely dispel these negative forces.
The U.S. Embassy in Santo Domingo, Dominican Republic and the U.S. Department of Commerce have provided assistance to help us remedy the situation.
Transportation problems evolved into substantial insurance claims, with possible lawsuits being initiated to recover the losses sustained over the project duration. This has been the primary cause of the delay in any monetary return from the Joint Venture.
The financial aspects of the projects are being determined by the present negotiations and litigation, with reference to monetary return and time of such receipt.
Additional support documents have been sent to Mr. Drozd.
Thank you for your cooperation and patience in this vital matter of extreme importance to yourself.
Ruuska argues that these letters "did not seek to create a false sense of security." He argues further that he was "incapable of lulling Drozd at that point." Our inquiry, of course, is not whether the defendant was likely to succeed in lulling the recipients into a false sense of security, but rather whether these letters were designed so to do. Again, in examining the sufficiency of the evidence to support these convictions, we must view it in the light most favorable to the government, United States v. Lebovitz, 669 F.2d at 896-97.
These letters stated that the "primary cause of the delay in any monetary return" from the cantaloupe venture had been "transportation problems" that "evolved into substantial insurance claims, with possible lawsuits being initiated to recover the losses sustained over the project duration." The letters stated that "the financial aspects of the projects are being determined by the present negotiations and litigation, with reference to monetary return and time of such receipt," and thanked Drozd and Roth for their "cooperation and patience."
Such letters support an inference by the jury that they "were mailed by the defendants to the victims for the purpose of lulling them by assurances that the promised services would be performed." United States v. Sampson, 371 U.S. at 81. We therefore have no difficulty in concluding that there was evidence sufficient to support a mail fraud conviction on counts 8 and 9.
The mailing charged in Count 10 is a letter from Ruuska to Drozd dated September 16, 1985. This letter states that
I sincerely regret the past and present circumstances surrounding your joint venture relationship with Cobeca. I assure you that not one dollar will be lost, but earn you the return you deserve.
I'm aware of the innuendo and conjecture statements made by several individuals . . . . None of which can be substantiated, because no one had knowledge. I do not discuss my business with anyone outside the business. In the very near future, ...