United States v. Jack Shaoul

Citations: 41 F.3d 811; 1994 U.S. App. LEXIS 33733; 1994 WL 677965Docket: 190

Court: Court of Appeals for the Second Circuit; December 1, 1994; Federal Appellate Court

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Jack Shaoul appeals his conviction for conspiracy and mail fraud, specifically challenging the district court's denial of his motion for a new trial and the jury instructions on unanimity. He contends that a juror's failure to disclose a familial connection to an Assistant U.S. Attorney constituted an abuse of discretion, despite the Assistant not being involved in his case. Additionally, he argues that the jury instructions erroneously allowed for a guilty verdict without juror agreement on the factual basis for each charge. The court rejects both claims and affirms the conviction. 

Shaoul, an antique dealer, was found to have defrauded two insurance companies out of approximately $1.2 million through two fraudulent schemes. The first scheme involved a false report of art theft from his car, claiming stolen items that were never actually taken and including a non-authentic painting. The second involved submitting false claims related to water damage in his antique shop, where he sought compensation for undamaged items and a deliberately damaged fake painting. Mail fraud counts were based on various fraudulent claim forms and supporting documents submitted by Shaoul. Evidence included testimony from a former employee who stated that Shaoul attempted to sell the disputed painting but failed to authenticate it and later orchestrated the false theft report to claim insurance compensation.

Purcell expressed anxiety over his involvement in concealing the Ryder painting and subsequently made an anonymous tip to the police regarding a fabricated theft. He consulted with a lawyer and on January 11, 1991, photographed the Ryder painting hidden in Shaoul's shop next to that day's New York Times, providing evidence that the painting was still there six days after Shaoul claimed it was stolen. During the trial, Purcell testified that Shaoul attempted to convince his insurance company that the "stolen" painting was a legitimate Ryder valued at $1 million. Purcell observed Shaoul ask his friend Louis Liskin to draft a back-dated letter indicating interest in purchasing the painting for over $800,000, with an offer of a ten percent cut of the insurance payout. Liskin, who testified under a nonprosecution agreement, corroborated Purcell's account but stated he believed the painting was not a genuine Ryder, despite having co-owned it with Shaoul until 1990 for about $18,000. An art appraiser testified for the government, stating that a leading Ryder expert had informed Shaoul the painting was not authentic.

In February 1991, following the alleged theft, Shaoul allegedly initiated a second fraudulent scheme related to water damage in his antique shop caused by a contractor. Neighbor Ralph Loffredo reported water in and around Shaoul's shop, prompting Shaoul to call Purcell for assistance. Upon arrival, Purcell and neighbors turned off a leaking sprinkler but observed only one wet painting, with no damaged items noted. After the neighbors left, Purcell testified that Shaoul instructed him and his brother-in-law to move numerous previously broken glass vases and lamps to the damp area to falsely claim they were damaged by the leak.

Loffredo and Purcell observed a watercolor purportedly signed by Winslow Homer, which Shaoul acquired from Liskin three years prior. An expert had informed Liskin in 1987 that the painting was not genuine, and Liskin conveyed this opinion to Shaoul before selling it to him in 1988 for $1,000. Purcell testified that he believed Shaoul was aware the painting was not authentic when he damaged it further after Loffredo and another neighbor left. Shaoul claimed the painting, valued at $125,000, was destroyed and filed a damage claim exceeding $400,000 with Greater New York Insurance Company, the contractor's insurer responsible for the initial water damage.

Shaoul submitted appraisals and invoices for damages, including a false invoice claiming he purchased the Homer watercolor from Leah's Gallery for $34,500 in 1990. Leah Kleman, the gallery owner, testified that she had never sold such a watercolor to Shaoul, although she prepared an invoice at his request months after a legitimate sale of three porcelain plaques. Both Liskin and Purcell confirmed that Shaoul obtained the artwork directly from Liskin.

Regarding jury instructions, the district court informed the jury that a conviction for conspiracy required proof of at least one overt act committed by a conspirator in the Southern District of New York, without necessitating participation in specific acts. For mail fraud, the jury was instructed to find that one or more statements were materially false to satisfy the crime's first element. The jury asked whether all overt acts needed to be proven, and the court reiterated that only one was necessary. The jury ultimately found Shaoul guilty on all counts, including conspiracy to commit mail fraud and ten counts of substantive mail fraud. Defense counsel did not object to the jury instructions or the court's responses.

After the verdict in Shaoul's trial, it was revealed that a juror was related to the wife of an Assistant United States Attorney (AUSA) in the same district, though the AUSA had no involvement in the case. The juror failed to disclose this relationship during voir dire, stating he did not recall the AUSA's position or consider how it affected his employment. The prosecution informed the court and defense counsel of this nondisclosure.

Shaoul filed a motion for a new trial, citing the juror's nondisclosure and the inadequacy of the district court's unanimity instructions. At Shaoul's sentencing hearing, the juror appeared, but defense counsel waived the opportunity to examine him, believing that subjective intent was irrelevant and citing precedent from the McDonough and Langford cases. After confirming this waiver, Judge DiCarlo excused the juror and considered the motion for a new trial based solely on the existing record.

The district court determined that the juror's relationship to the uninvolved AUSA was insufficient grounds for a challenge for cause, even if it had been disclosed. Additionally, the court found no error in the unanimity instructions provided to the jury. Consequently, Shaoul's motion for a new trial was denied.

Following this, the district court sentenced Shaoul to forty months of imprisonment on each count, to run concurrently, along with two years of supervised release, a $50,000 fine, and restitution of $13,356.90. Shaoul subsequently appealed the decision.

In his appeal, Shaoul contends that the district court should have granted a new trial, arguing that the juror's undisclosed relationship to an AUSA would have justified a challenge for cause if disclosed. The parties agree that this nondisclosure issue is governed by the precedent set in McDonough Power Equipment, Inc. v. Greenwood, which holds that to obtain a new trial based on a juror's mistaken response, a party must show that the juror failed to answer a material question honestly, and that a truthful answer would have warranted a challenge for cause.

A two-part test established in McDonough requires a showing of juror dishonesty and a basis for a challenge for cause to obtain a new trial. In the referenced case, the Court determined that a juror's mistaken failure to respond did not meet the initial requirement of dishonesty, negating the need to assess the second prong. Shaoul, while acknowledging the applicability of the McDonough test, contended that he deserved a new trial even without proving the juror's dishonesty, misinterpreting precedents that suggest deliberate misstatements warrant challenges for cause. However, the court clarified that such interpretations would bypass the necessary threshold of juror dishonesty. 

During Shaoul's sentencing, his defense waived the right to an evidentiary hearing and conceded the juror's good faith, leading the district judge to conclude that Shaoul did not meet the requirement for dishonest answers. Furthermore, Shaoul could not demonstrate that the juror was challengeable for cause based solely on familial ties to a prosecutor not involved in the case. The court rejected Shaoul's reliance on prior cases, specifically noting that existing jurisprudence does not support automatic disqualification of jurors related to prosecutors not engaged in the specific trial.

Shaoul has acknowledged the absence of deliberate juror misconduct in this case, yet most cases he cited involved such misconduct. In contrast, the government referenced cases where jurors' inadvertent nondisclosures were excused. The district court primarily relied on Garland v. United States, which stated that familial relationships with a prosecuting attorney do not disqualify a juror. However, the current court finds Garland overly broad, as it fails to differentiate between the involvement of the prosecutor in the specific case and a juror's familial ties. The court prefers the more nuanced approach of Colombo v. United States, which makes this critical distinction.

Regarding jury instructions, Shaoul, raising objections for the first time on appeal, claims that the instructions lacked clarity, particularly concerning the need for jury unanimity on specific overt acts in the conspiracy and the materially false misrepresentations in the mail fraud charges. He argues the instructions could confuse the jury, increasing the risk of a non-unanimous verdict. The district court had provided a general instruction stating that a verdict must be unanimous.

The district court was only required to provide a general instruction on jury unanimity, which suffices to ensure a unanimous verdict, unless evidence complexity or other factors create a risk of confusion. Although specific unanimity instructions could be given, their absence does not constitute error, as established in case law (e.g., United States v. Harris, United States v. Schiff). The general charge provided in this case was similar to that in Harris, affirming that the jury's verdict must be unanimous. Furthermore, Shaoul's argument regarding a juror's failure to disclose a familial connection to a prosecutor was undermined by his concession of the juror's good faith, failing to meet the first prong of the McDonough test. Therefore, the jury charge included a general unanimity instruction, which did not result in error.

The district court's denial of Shaoul's motion for a new trial is affirmed. The indictment against Shaoul included nineteen counts: one for conspiracy to commit mail fraud and eighteen for substantive mail and wire fraud. Prior to trial, the court dismissed one mail fraud count and all seven wire fraud counts at the Government's request. Shaoul's appeal included two challenges regarding jury instructions, both deemed without merit. 

Firstly, Shaoul argued that the jury charge differed from the indictment regarding the number of misrepresentations in the schemes, claiming discrepancies between the two. However, the court found that the jury instructions provided greater specificity without significant variance from the indictment. 

Secondly, Shaoul contended that the jury received ambiguous instructions about the mailing element of the charged offenses. The court had accurately stated that the fact of each mailing was undisputed. Shaoul argued this implied the jury did not need to find that each mailing was necessary for the conspiracy, but the court concluded that the overall context of the jury charge did not support this interpretation. Additionally, a juror's inquiry during deliberations did not indicate confusion about the elements of the counts. 

Ultimately, Shaoul did not demonstrate any error in the jury instructions, affirming the correctness of the lower court's rulings. The passage also mentions the requirement for jury unanimity regarding the factual basis of the charges, highlighting that agreement on one of multiple ways to prove the crime suffices for a guilty verdict, as outlined in a relevant jury instruction.