United States v. McDonald

Opinions of the United
2003 Decisions States Court of Appeals
for the Third Circuit
6-4-2003
USA v. McDonald
Precedential or Non-Precedential: Non-Precedential
Docket No. 02-3446
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-3446
UNITED STATES OF AMERICA
v.
JOHN L. MCDONALD,
Appellant.
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Crim. No. 01-125)
District Judge: The Honorable Gustave Diamond
Submitted under Third Circuit LAR 34.1(a)
Thursday, May 15, 2003
Before: RENDELL, SMITH and ALDISERT, Circuit Judges.
(Filed June 4, 2003)
OPINION OF THE COURT
ALDISERT, Circuit Judge.
John L. McDonald appeals a conviction and sentence on a 20-count indictment.
Counts 1-18 charged him with making false or fraudulent statements in order to obtain
federal workers’ compensation in violation of 18 U.S.C. § 1920. These counts alleged
that McDonald stated on a Department of Labor form CA-7 that he did not work outside
his federal job during the period for which he claimed compensation, when in fact he
operated a business buying and selling antiques and collectibles. Counts 19-22 charged
him with mail fraud in violation of 18 U.S.C. § 1341, alleging that he caused to be
delivered through the mail checks paid in response to the fraudulent claims described in
counts 1-18. A jury convicted him on all 22 counts.
Because we write only for the parties who are familiar with the facts and the
proceedings at trial, we will address the contentions in summary form.
Appellant argues (1) that his repeated false statements were not material and as a
result of their immateriality the evidence to sustain convictions under 18 U.S.C. §§ 1920and 1341 was insufficient; (2) that the district court erred in refusing to charge the jury
that he had no obligation to report any work outside of his federal job if the work
constituted “investment activity” or prior concurrent employment; and (3) that he could
not be guilty of the mail fraud counts because the evidence of mailing was insufficiently
dependant upon a hearsay document.
I.
All CA-7 forms contain a section that advises the signer that there are penalties for
fraud or false statement. McDonald completed a series of CA-7 forms containing the
following question regarding outside employment: “Have you worked outside your
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federal job during the period(s) claimed in section 2? (Include salaried, self employed,
commissioned, volunteer, etc.).” McDonald answered “no” to these questions on 18
different forms.
During the period of alleged disability when he received workers’ compensation,
McDonald had signed a lease for a booth at a mall for the display of antiques for sale. In
addition to his work at the mall, he conducted antique sales via the Internet using online
auctions through the e-mail address of mailman@pathway.net. Thereafter, he listed the
gross sales from his antique businesses on schedule C of his IRS form 1040, classified
25% of his home as used for his business, took business expense deductions for the
depreciation of his home and for the payment of his real estate taxes and utilities, claimed
a qualified business use of his truck and claimed deductions for its mileage and
depreciation. All the while, McDonald received net tax-free workers’ compensation
benefits of $17,778.96.
Appellant argues that the evidence was insufficient to establish his workers’
compensation fraud and mail fraud convictions because the omissions of income from
his so-called “antique hobby” were immaterial and had no effect upon his entitlement to
or amount of workers’ compensation. Aside from the fact that a “hobby” fails to
constitute a “qualified business use” under the Tax Code, Appellant misstates the issue.
The question on the form does not ask whether he earned income, but instead asks if he
worked outside of his federal job. McDonald was instructed to include self-employment
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and volunteer work. We are satisfied that his answer was materially false and we are
therefore satisfied that the workers’ compensation fraud and mail fraud convictions were
supported by sufficient evidence. See United States . v. Henry 164 F.4d 1304, 1307-
1308 (10th Cir. 1999) (rejecting the argument that the answer to the question of whether
the claimant has outside work is immaterial if the work would not have affected the
amount of benefits), United States v. Harrod, 981 F.2d 1171, 1176 (10th Cir. 1992)
(same), United States v. Grillo, 160 F.3d 149, 150 (2d Cir. 1998) (holding that
government need not establish amount of benefits falsely obtained as an element of the
offense).
II.
The court did not err in refusing to charge the jury with respect to McDonald’s
theory of defense. Set forth in detail in the Appellee’s brief, these instructions, numbers
17 and 18, single-spaced, occupy four-and-a-half pages. We have carefully examined
these instructions and agree with the district court that “the proposed charges are
confusing and misleading, and in some respects legally inaccurate” and “should not be
given to the jury.” App. at 17.
The district court relied on the teachings of United States v. Johnstone, 107 F.3d
200 (3d Cir. 1997) in stating that a proper charge “must clearly articulate the relevant
legal standard.” App. at 17. The proposed instructions failed to do so. We have
examined the court’s resolution of the issue and conclude that the instructions utilized
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fairly incorporated Appellant’s theory of defense without calling upon the jurors to
undertake confusing and misleading legal matters outside the province of the factfinder.
We are satisfied that they — viewed as a whole and in light of the evidence — “fairly
and adequately submitted th[e] issue[s] to the jury.” United States v. Parise, 159 F.3d
790, 798 (3d. Cir. 1998).
III.
The government presented sufficient evidence to sustain the mail fraud
convictions regardless of the evidentiary objections.
To prove the actual “mailing” through circumstantial evidence, the government
must prove that it was standard business practice to mail the benefit checks and that the
particular checks in questions were sent in accordance with that practice. United States
v. Hannigan, 27 F.3d 890, 892-893 (3d Cir. 1994).
Special Agent Tracy Hapeman testified that claimants who are paid by the
Department of Labor elect either to receive payments by electric transfer to a bank
account or by treasury check. Hapeman testified that McDonald chose to receive
treasury checks and that all of the checks were sent by United States mail. Defense
counsel did not object to her testimony.
Hapeman’s testimony was based upon her own investigation of the matter and a
sealed certificate of mailing executed by the records custodian at the United States
Department of the Treasury. The certification was accompanied by business records
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from the Pacer system, business records on Department of Treasury forms and copies of
the negotiated checks.
We are satisfied that the evidence was admissible under either the public records
exception, Federal Rule of Evidence 803(8), or the business records exception, 803(6), to
the hearsay rule.
*****
We have considered all contentions raised by the parties and conclude that no
further discussion is necessary.
The judgment of the district court will be affirmed.
/s/ Ruggero J. Aldisert
Circuit Judge
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