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Evidence was sufficient to support a mail fraud conviction but cross examination was improper; United States v. Schmitz

Schmitz was an Alabama State legislator convicted of the Federal crime of mail fraud and theft of federal funds. The mail fraud statute (Title 18 USC §1341) makes it a crime to use the mail to advance a fraud. The theft statute (Title 18 USC §666) makes it a crime to embezzle, steal, or otherwise obtain federal funds by fraud. The government presented evidence that Schmitz used her state legislator position to obtain a job with a federally funded program for at-risk youth (“Program”) and performed little or no work during her employment. To conceal this scheme, she wrote letters to obtain a flexible work schedule, submitted false statements about the number of hours she worked and the volume and nature of her work.

The Eleventh Circuit Court of Appeals found this white collar defendant used her position as a legislator to have he job specifically created for her, rarely showed up a the office, and failed to complete tasks given her. She wrote a letter requesting a flexible work schedule allowing her to work from remote locations and preventing her supervisor from knowing how little she was doing. She submitted fraudulent reports about her work hours and work activity. The court found she never intended to work at the program and used her political connection to keep the pay for no work scheme going.

The indictment charging theft of federal funds was insufficient to put defendant on notice of the offense. The court found the allegations in the indictment were legally insufficient because they simply alleged that she was an agent of the Program which received federal funds and that she knowingly and willfully embezzled, stole, obtained funds by fraud without any factual allegations of the fraud. It failed to incorporate or re-alleged the mail fraud counts. The court found the counts were insufficient because they provided “absolutely no factual detail regarding the scheme to defraud the Program.” The verdict was thrown out because the jury relied on a legally insufficient allegation to convict the defendant.

Cross examination by prosecutor pressing the defendant to give her opinion of whether other witnesses who gave inconsistent testimony were lying was error. The defendant took the stand. On cross the prosecutor pointed out that her testimony conflicted with several of the government’s witnesses and pressed her to answer his question “were they lying?” In closing the prosecutor continued to refer to the list of lying witnesses. The Eleventh Circuit found it was error to ask the questions for these reasons:

• the Federal Rules of Evidence do not allow for a witness to say another witness was lying in another occasion,
• it invades the province of the jury to decide this issue,
• the question ignore the other possible explanations for inconsistent testimony – memory loss, difference in perceptions, genuine misunderstandings that have nothing to do with a deliberate intent to deceive.

The Swartz Law Firm has nearly three decades of experience in the federal criminal field, particularly in charges involving fraud and economic offenses. Contact an attorney to find out how the firm can assist you.