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Mail Fraud is Popular Federal Charge For Federal Prosecutors – Especially Now that Financial Fraud Crimes are Big Target of Federal Attorney General Eric Holder

Mail fraud? It’s a charge that is filed against more people that many realize. In fact, Texas criminal defense lawyers who represent people facing charges in federal court are well aware that United States Attorneys and federal prosecutors are famous for using the federal mail fraud felony statute against citizens. Their attitude is explained in a 1980 law review article in an often-cited quote by a former federal fraud prosecutor, Jed Rakoff:

“To federal prosecutors of white collar crime, the mail fraud statute is our Stradivarius, our Colt .45, our Louisville Slugger, our Cuisinart–and our true love. We may flirt with RICO, show off with 10b-5, and call the conspiracy law ‘darling,’ but we always come home to the virtues of 18 U.S.C. 1341, with its simplicity, adaptability, and comfortable familiarity.”

It’s become even more popular with the Obama Administration as Attorney General Eric Holder heads up the Financial Fraud Enforcement Task Force (FFETF) which has been targeting federal financial fraud crimes since November 2009.  Heralded as “the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud,” the Task Force is a coordinated effort of all the Offices of United States Attorneys in the nation as well as 20 federal agencies (like the FBI) and various state and local law enforcement organizations.

united states postal service delivery truck public domain

What is Mail Fraud?

Essentially, “mail fraud” is defined as a felony under federal law 18 USC 1341 which makes it a crime for anyone to use mailing via the United States Postal Service or other “private or commercial interstate carrier” in a “scheme to defraud” someone. It is very similar to “wire fraud” and frequently, these two federal crimes are discussed together. However, mail fraud is a distinct federal crime involving the mails (including deliveries by companies like Federal Express and UPS as well as the U.S. Postal Service) and often, federal prosecutors will build a case solely upon mail fraud investigations.

Want to know more about the crime of mail fraud? For details, read our resource page discussing federal mail fraud charges and the defenses against them.

Two Recent Mail Fraud Cases in the Northern District of Texas

In the past two weeks, the United States Attorney for the Northern District of Texas (which serves the Dallas – Fort Worth metroplex) has won mail fraud cases against two Texans:

1. Dallas Jury Convicts Texas Insurance Agent Vincent Bazemore of Mail Fraud

Day before yesterday, a jury came back with a guilty verdict in U.S. District Judge Reed C. O’Connor’s court on all four counts of mail fraud made against Vincent Bazemore by the United States Attorney for the Northern District of Texas.

What did Vincent Bazemore do, according to the federal prosecutors (and now, the federal trial jury)?  The prosecution’s case was based upon a time period of around 1.5 years where Mr. Bazemore was working as an insurance agent.

Evidence was presented that Bazemore went to senior citizens asking them to apply for life insurance policies that would help their heirs (e.g., their kids and grandkids). There was no financial cost to them, and Bazemore would take care of the paperwork.

The government’s evidence argued that Bazemore violated the federal mail fraud law because the Texas insurance agent was really engaging in a scheme to get big money from his commissions on these life insurance companies by altering and forging the paperwork so that the elderly applicants looked like rich folk wanting more life insurance coverage as part of estate planning, while they were really of limited income and the life insurance policies were really going to be transferred to investors and not kept for these folk’s beneficiaries after their deaths. He was also shown to have submitted fraudulent paperwork to lenders so they would loan the money to pay the premiums on these policies.

Bazemore’s incentive? According to the federal prosecutors it was the 98% to 105% of the first year’s premium paid on each policy that the insurance companies paid him as his commission.

2. Texas Businessman Pleads Guilty to Mail Fraud Invoicing University Medical Center for Fake Charges

Last week, in a Lubbock federal court, a San Antonio businessman named Rodolfo Reyes (”Rudy”) Mata pled guilty to one count of mail fraud and aiding abetting brought against him by the Office of the United States Attorney for the Northern District of Texas.

According to the prosecution’s case, Mr. Mata committed mail fraud over several months (November 2010 – September 2011) when he sent invoices on his company’s invoices, ATAM Technology Solutions, to the University Medical Center. Mata was shown to have sent 15 invoices during these 9 months, using the United States Postal Service, with the understanding that the invoices would be paid by the University Medical Center. The government showed that around $54,750 was paid based upon these invoices and that ATAM Technology Solutions actually provided nothing in the way of goods or services to the University Medical Center to support these requests for payment.

ATAM Technology Solutions was shown to be the “alter ego” of Mr. Mata, and evidence demonstrated that Mr. Mata used the money for his personal use (e.g., living expenses, entertainment expenses, etc.).

What Happens Now?  The Sentencing Phase of a Federal Mail Fraud Case

Once guilt has been accepted by a federal judge in either a plea deal (like Mr.Mata’s case) or in a trial verdict (like Mr. Bazemore had), the next step in the process is for sentencing to be determined.  Each man will have a hearing before the court where the prosecution and defense will argue what is a just sentence for the individual within the federal statute parameters that apply to the case (e.g., range of years, range in fines, whether or not there should be restitution).

In the first case, involving the mailed insurance documents, Mr. Bazemore is already serving a 5 year sentence for federal securities fraud and with this verdict, and now he faces a potential sentence under federal law and the Federal Sentencing Guidelines of up to 20 years in a federal prison along with restitution on the four mail fraud counts and a fine of $250,000.

Mr. Bazemore must also defend against a penalty enhancement at the December 2013 sentencing hearing, since the jury has found that the mail fraud counts occurred while Mr. Bazemore was already facing pending securities fraud charges – and if the prosecution gets its way, he may face another 10 years incarceration running consecutive to the mail fraud sentence.

As for Mr. Mata, no hearing date has been set to determine his sentence for mail fraud after his plea deal.  Once a hearing date is set, Rudy Mata faces a possible maximum sentence under the Federal felony statutes and the federal sentencing guidelines of 20 years behind bars in a federal prison along with restitution and a $250,000 fine.

For examples of how the Opera’s not over till the Fat Lady sings, and how Texas criminal defense lawyers can achieve significant results for their clients in the sentencing phase of a criminal case, check out the Case Results section of the Dallas Justice web site.

 

 

 


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