United States v. Josephine Virginia Gray, A/K/A Josephine Stribbling, A/K/A Josephine Mills
Docket: 02-4990
Court: Court of Appeals for the Fourth Circuit; April 29, 2005; Federal Appellate Court
Josephine Virginia Gray was indicted on multiple counts of mail and wire fraud related to insurance proceeds received after her second husband's and a former paramour's deaths. Convicted on all counts, she was sentenced to 40 years in prison, three years of supervised release, $170,000 in restitution, and an $800 special assessment. Gray challenged her conviction, claiming insufficient evidence for the charges, improper reopening of the Government's case, and improper admission of "other crimes" and hearsay evidence. The Fourth Circuit found no reversible error in her conviction, affirming it. However, the court vacated her sentence and remanded for resentencing in light of the Supreme Court’s decision in United States v. Booker.
During her friendship with Wilma Jean Wilson, Gray confessed to Wilson about murdering both her husbands, claiming self-defense against her first husband, Norman Stribbling, and implicating her cousin and boyfriend, Clarence Goode, in the murder of her second husband, William "Robert" Gray. Stribbling was found dead from a gunshot wound in 1974, shortly after which Gray collected $16,000 from his life insurance policy.
Gray was involved in an extramarital affair with Robert Gray while still married to Stribbling. In August 1975, they purchased a house in Gaithersburg, Maryland, using proceeds from Stribbling's insurance policy, and married three months later. Robert maintained a mortgage insurance policy from Minnesota Mutual Life Insurance Company, which would pay off their house mortgage upon his death, with any excess benefits going to Gray. He also had an accidental death policy from Life Insurance Company of North America (LINA) with Gray as the beneficiary.
In August 1990, Robert left the Gaithersburg house, expressing fears for his life due to Gray’s alleged attempts to harm him and her affair with Goode, who lived with them. He removed Gray as the beneficiary on two other insurance policies and sought help from friends and family to protect himself. Later that month, he filed criminal charges against Gray for an assault and against Goode for threatening him with a firearm.
On October 5, 1990, after a court appearance related to these charges, Robert encountered Gray and Goode while driving home. Goode allegedly threatened him with a gun during this encounter. A week before his trial, Robert was found dead from gunshot wounds in his apartment. Although Gray denied involvement and claimed not to own a .45 caliber handgun, evidence suggested otherwise, including witness testimonies and a bullet found in her purse.
Following Robert's death, Minnesota Mutual paid approximately $51,625 to satisfy the mortgage, expecting to pay additional benefits to Gray, but could not locate her for nearly a decade. In 2001, after federal law enforcement provided her address, Minnesota Mutual contacted Gray regarding the excess benefit, leading to a claim that resulted in a payment of over $2,400.
Gray also filed a claim under the LINA policy in May 1991. LINA initially withheld payment due to her status as a murder suspect and later filed an interpleader action to determine the rightful beneficiary after Gray refused to disclaim her interest in the benefits.
Gray counterclaimed against LINA for the full policy benefit and attorneys' fees, highlighting LINA's litigation costs exceeding the policy's value. LINA eventually paid Gray $2,000 after other beneficiaries abandoned their claims. According to Maryland law, both Minnesota Mutual and LINA denied benefits to any named beneficiaries involved in the insured's death. Investigators relied on local law enforcement to assess Gray's potential involvement in Robert Gray's death.
Gray had a contentious relationship with Goode, who was allegedly blackmailing her regarding insurance money from Robert Gray's death. Goode was later found murdered in his car, with evidence linking him to Gray, including bullets and blood found at her residence. Goode had a life insurance policy naming Gray as the beneficiary, but after an incident where Gray threatened him, he closed the premium payment account. Following his murder, Gray filed a claim with Interstate Assurance, which refused to pay due to suspicions of her involvement. An interpleader action was initiated to determine the rightful beneficiary, resulting in a settlement that paid Gray $99,990.
After Goode's death, Gray expressed intentions to spend insurance proceeds on a new car for her boyfriend, Andre Savoy, and sought to insure him, raising concerns about her potential intentions towards him. The indictment against Gray included charges of defrauding both Minnesota Mutual and LINA regarding Robert Gray's death and Interstate Assurance regarding Goode's death, alleging she caused their deaths and concealed her involvement while submitting claims. Gray contests her conviction, arguing that the insurance companies had no vested interest in the benefits paid under the policies.
Gray asserts that the evidence was inadequate to support her convictions on Counts One through Four, arguing that it did not demonstrate her intent to defraud Minnesota Mutual. She also contests the denial of her motion for judgment of acquittal on Counts Seven and Eight, claiming the Government failed to prove the alleged mailings necessary for these counts. Furthermore, she seeks a new trial, alleging the district court improperly admitted evidence of "other crimes" related to the Stribbling murder and hearsay testimony from Robert Gray.
Gray's primary contention is that her convictions should be vacated due to insufficient evidence proving the insurance companies had a property interest in the insurance benefits paid. The legal standard requires that a conviction be upheld if substantial evidence exists, meaning evidence a reasonable factfinder could accept as adequate to support guilt beyond a reasonable doubt. Both mail and wire fraud statutes necessitate that the victim possess an interest in the money or property involved. Gray argues that despite receiving over $150,000 from various insurance providers, that money did not belong to them.
The Supreme Court has emphasized a broad interpretation of property rights under federal fraud statutes. It is not required for the Government to show that the victim experienced a monetary loss; rather, it suffices to demonstrate that the victim was deprived of some control over its property. A property owner holds an intangible right to dictate asset disposition. The Court’s ruling in McNally suggests that a conviction could be upheld if it was established that the victim was deprived of control over its funds. Subsequent circuit court decisions have endorsed the view that fraudulent schemes infringing on victims' rights to manage their assets fall under the purview of mail and wire fraud statutes.
Insurance companies suffered monetary losses due to Gray's fraudulent actions, as the funds she received originated from their assets. Gray's payment of benefits constituted a direct loss to the insurers, who had a property interest in managing their assets according to policy terms and law. By murdering Robert Gray and Goode, Gray created the circumstances that necessitated the insurers' payments. She submitted claims for benefits without acknowledging her role in the insureds' deaths, intending to fraudulently obtain funds and impede the companies' asset management.
Gray argued that the insurance companies were merely intermediaries for the rightful beneficiaries and claimed that only the beneficiaries were victims of her fraud. However, the companies were deprived of their assets due to Gray's actions. The evidence supported the jury's conclusion that Gray intended to defraud the insurers.
Furthermore, Gray sought to vacate her conviction on counts related to the Minnesota Mutual policy, claiming insufficient evidence of her fraudulent intent. However, the court noted that common-law fraud includes acts aimed at deception, even without a fiduciary duty to disclose information. Gray's false denials and attempts to mislead investigators were seen as deceptive acts that constituted fraud. By 2001, Gray was aware that insurers could not pay benefits to murderers, and she had faced resistance from insurance companies due to suspicions regarding her involvement in the murders.
Gray contacted Minnesota Mutual to inquire about potential double-indemnity benefits following her husband Robert Gray's non-accidental death. She submitted a claim for the excess benefit without disclosing her involvement in his murder or correcting previous false statements made to the police, indicating an intention to defraud the insurance company. The evidence presented supported her conviction on multiple counts of fraud.
Gray challenged her conviction on Counts Seven and Eight, which pertained to mail fraud related to pleadings filed in an interpleader action, arguing that the district court improperly considered evidence introduced after her motion for a judgment of acquittal was made. Under the mail fraud statute, the government needed to establish that the defendant used the mails to further a fraudulent scheme. The indictment specified that two pleadings were mailed from Rockville, Maryland, to the Circuit Court in Baltimore.
During hearings, Gray's counsel contended that there was insufficient proof the pleadings were mailed. The government relied on circumstantial evidence, including service certificates, date stamps, and the location of Gray’s law firm. After the court reserved its decision on the acquittal motion, the government was allowed to present testimony from Gray's former attorney, who confirmed that he mailed the pleadings in question. The district court subsequently denied Gray's acquittal motion.
Gray contended that the district court should not have considered her attorney's testimony, citing Rule 29(b) which states that if a court reserves ruling on a motion for acquittal, it must decide based on the evidence at the time of the ruling. This rule is designed to prevent a scenario where a defendant's own evidence could be used against them after reserving a decision on their motion for acquittal.
The district court reserved judgment on Wahl's motion at the end of the government's case, meaning any ruling should be based solely on the government's evidence. The mailings in Counts Seven and Eight were exclusively supported by this evidence, not by Gray's. Gray argues that the district court wrongly considered government evidence presented after it initially rested, claiming that reserving a ruling on a Rule 29 motion effectively seals the evidentiary record, preventing the government from reopening its case. The court disagrees, stating that Rule 29 allows for a judgment of acquittal only after the government closes its evidence. If the court permits the government to reopen its case-in-chief, it cannot be said that the evidence is closed until the case is fully concluded, meaning the district court can consider all evidence, both before and after reopening, when ruling on the Rule 29 motion.
The court allowed the government to reopen its case to present Kudel's testimony, which was relevant and admissible, and Gray had the opportunity to cross-examine him. Thus, there was no abuse of discretion in permitting this reopening, and Kudel's testimony was appropriately considered in denying Gray's Rule 29 motion.
Gray also seeks a new trial based on the admission of testimony regarding her involvement in the 1974 murder of her first husband, Stribbling, and Robert Gray's fears for his safety. The court reviews evidentiary rulings for abuse of discretion. Over Gray's objection, the court admitted evidence related to Stribbling's murder, including crime scene details, autopsy results, and testimonies suggesting Gray solicited others to kill him and had admitted to shooting him. The jury was instructed to consider this evidence only concerning Gray's motivations relevant to the current case. Gray contends this evidence should be excluded under Fed. R. Evid. 404(b), which prohibits using other crimes to prove character but allows for admissibility for motives, intent, or other specified purposes.
Rule 404(b) permits the admission of evidence regarding other crimes or acts if it does not solely demonstrate a defendant's criminal disposition. For such evidence to be admissible, it must meet four criteria: (1) relevance to an issue, such as an element of the offense, without solely establishing the defendant's general character; (2) necessity in proving an essential claim; (3) reliability; and (4) the probative value must not be substantially outweighed by potential confusion or unfair prejudice. In the case of Gray, all conditions were met as the evidence showed her intentional killing of Robert Gray and her prior involvement in the Stribbling murder, countering the defense's claim that she was a passive beneficiary. The evidence was crucial for establishing Gray's intent to commit murder and defraud the insurance companies, particularly since a conviction for mail fraud requires proof of intent. The reliability of the evidence was supported by testimony from witnesses, including Gray's confessor and police officers, all of whom were subject to cross-examination. Furthermore, the probative value of the evidence was not significantly overshadowed by prejudicial implications, as the district court limited the scope of the evidence and instructed the jury on its appropriate consideration. Thus, the district court acted within its discretion in admitting the testimony related to the Stribbling murder.
The district court admitted several out-of-court statements made by Robert Gray prior to his murder, including his criminal complaints against Goode and statements to individuals claiming assault and threats involving a firearm. Typically, out-of-court statements are not admissible to prove their truth; however, the doctrine of forfeiture by wrongdoing allows such statements to be admitted when the defendant's actions have made the declarant unavailable for trial. This principle, established in Reynolds v. United States, affirms that a defendant cannot object to the admission of evidence if their misconduct caused a witness's absence. By 1996, all circuits recognized this doctrine, and it was codified in 1997 under Fed. R. Evid. 804(b)(6), which allows the admission of statements when a party has engaged in wrongdoing that intended to procure the declarant's unavailability. To apply this exception, the court must find, based on a preponderance of the evidence, that the defendant's actions were intended to render the declarant unavailable and succeeded in doing so. The court does not need an independent evidentiary hearing if sufficient evidence is available during the trial. Gray argued against the application of Rule 804(b)(6), claiming she did not intend to make Robert Gray unavailable. However, the language of the rule indicates that it applies if the defendant intended to render the declarant unavailable as a witness, without requiring that the declarant would have been a witness in the specific trial. Thus, Rule 804(b)(6) applies when the defendant's wrongdoing was aimed at making the declarant unavailable, regardless of the trial's subject matter.
Statements implicating a defendant in a plot to kill the declarant may be admissible under the forfeiture-by-wrongdoing exception in Rule 804(b)(6). This exception aims to deter criminal behavior that undermines the justice system, as noted in the advisory committee's comments. Federal courts emphasize that wrongdoers should not benefit from their misconduct, with precedents affirming that a defendant waives the right to confront a witness if their absence results from the defendant's actions. The courts have broadly interpreted the elements necessary for this exception's application, allowing for the admission of statements from potential witnesses and cases involving conspiracies to silence individuals. The wrongdoing must be intended to render the declarant unavailable, but the intent can be partial. Ultimately, a defendant who wrongfully makes a declarant unavailable forfeits the right to exclude that declarant's statements on hearsay grounds in any related proceedings.
The district court's admission of hearsay testimony regarding witness tampering and an underlying drug conspiracy was upheld. A defendant who causes a witness's absence forfeits the right to confront that witness. The court found that Robert Gray's killing, occurring before his scheduled court appearance, indicated an intent to prevent his testimony, thus justifying the application of Rule 804(b)(6). The court's findings were deemed sufficient to support this rule's application, and no abuse of discretion occurred in admitting Robert Gray's out-of-court statements.
Additionally, Gray challenged her sentence based on the Supreme Court's ruling in United States v. Booker, seeking to vacate it due to a lack of objection at the district court level, which necessitated plain error review. For an error to be corrected, it must be both plain and affect substantial rights, with the appellate court holding discretion over whether to address the error based on its impact on judicial integrity.
The district court calculated Gray's sentence using two methods: first, referencing the first-degree murder guideline, which required a finding of premeditated murder, resulting in a base offense level of 43; second, starting from the base offense level for mail fraud while applying enhancements for multiple victims and firearm possession, also leading to an adjusted offense level of 43. Both calculations increased her sentence based on the premeditated nature of the murders, a fact not determined by the jury. This situation mirrored the case of United States v. Hughes, where a sentence was vacated and remanded for resentencing due to reliance on judge-found facts for sentencing enhancements, constituting a plain error.
The defendant, Gray, received a sentence longer than the Sentencing Guidelines permitted due to improper consideration by the district court, which affected her substantial rights. Following the precedent set in Hughes, the court identified this as plain error and opted to remand for resentencing in accordance with Booker. Gray’s conviction for mail fraud and wire fraud was affirmed, supported by sufficient evidence for all offense elements and correct evidentiary rulings by the district court. However, the sentence was vacated and remanded for resentencing.
Gray contested the sufficiency of evidence supporting her conviction, but the court viewed the evidence favorably towards the government, referencing similar cases where defendants were convicted after creating conditions for fraudulent claims. Gray also argued that the evidence did not demonstrate her fraud against Minnesota Mutual regarding a mortgage payoff in 1991. The court clarified that while the evidence regarding the mortgage payoff provided context, it was not necessary for conviction on other counts related to her claims in 2001. Sufficient evidence established that Gray’s actions, including the murder of Robert Gray, were part of a scheme to defraud Minnesota Mutual of insurance benefits.
Evidence supporting the claim that the defendant killed Robert Gray to obtain insurance benefits remains intact despite procedural motions. A district court may permit the Government to reopen its case even after a defendant files a Rule 29 motion, as established in several case precedents. These cases affirm that the Government can present additional evidence to address omitted proof and that the defendant cannot challenge the reopening if within the court’s discretion. The forfeiture-by-wrongdoing doctrine retains its validity, requiring proof of intent to render a witness unavailable for its application. The Fifth Circuit mandates clear and convincing evidence for predicate facts under this doctrine. Sentencing courts must consult the Sentencing Guidelines, even though they are no longer mandatory, and consider factors under 18 U.S.C. § 3553(a) before imposing a sentence. If the sentence deviates from the Guidelines range, the court is required to explain the rationale for the departure, ensuring the sentence remains within statutory limits and is reasonable.
