459 F.Supp.3d 819
S.D. Tex.2020Background
- Simone Swenson ran an adoption agency and was indicted for defrauding prospective adoptive parents by "double matching" birth mothers and keeping up-front payments after adoptions failed; the indictment included wire- and mail-fraud counts.
- A jury acquitted Swenson on two wire-fraud counts but convicted her on two mail-fraud counts arising from a September 2013 alleged double match involving birth mother Ashley Smolt.
- Count 3 charged that a June 5, 2013 mailing (a $13,400 payment from Daniel Cuschieri for a match with a different birth mother, Miggie) was used to further the fraud; that payment was later applied to the Smolt match after the Miggie match failed.
- Key trial testimony: Cuschieri (payer) described the June payment and its rollover; Smolt said Swenson misrepresented which family would adopt; Katie Kelley (former employee) and a state licensing investigator reported troubling business practices and double-matching after June 2013.
- Swenson argued the June 2013 mailing was tied to the Miggie match months before Swenson first contacted Smolt, so there was no evidence she intended that mailing to further a later fraud; the government relied on the rollover practice and general business-practice evidence to show a "broad scheme."
- The court granted Swenson’s motion for judgment of acquittal as to Count 3, holding the government failed to prove beyond a reasonable doubt that the June 2013 mailing was intended to further a scheme to defraud at the time it was sent; the Count 4 conviction and the September-2013 allegations remain undisturbed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the June 5, 2013 mailing was "in furtherance" of a mail-fraud scheme | The June payment was part of Swenson's practice of obtaining large upfront fees and "rolling over" funds, which lulled families into staying and thus furthered a fraud | The June payment was for a separate Miggie match months before Swenson knew Smolt; no evidence Swenson intended the June mailing to further any later scheme | Judgment of acquittal on Count 3: insufficient evidence that the June 2013 mailing was intended to further the scheme at the time it was sent |
| Whether evidence of Swenson's later business practices can supply intent for the earlier mailing | General pattern of double-matching and poor practices shows a broad scheme and supports inference that the June mailing furthered fraud | Post-mailing misconduct cannot retroactively establish intent for a mailing months earlier | Court held that evidence of a general scheme after June 2013 was insufficient to prove intent for the June mailing |
Key Cases Cited
- Jackson v. Virginia, 443 U.S. 307 (U.S. 1979) (standard for reviewing sufficiency of the evidence)
- Strong v. United States, 371 F.3d 225 (5th Cir. 2004) (mailing must contribute to scheme and be intended by defendant)
- Schmuck v. United States, 489 U.S. 705 (U.S. 1989) (mailing need not be essential but must be part of execution as conceived at the time)
- United States v. Ashdown, 509 F.2d 793 (5th Cir. 1975) (mailings that lull victims can be in furtherance of a scheme)
- United States v. Tencer, 107 F.3d 1120 (5th Cir. 1997) (government must link specific mailings to the scheme)
- United States v. Evans, 148 F.3d 477 (5th Cir. 1998) (nexus between scheme and mails is basis for federal jurisdiction)
- Neder v. United States, 527 U.S. 1 (U.S. 1999) (materiality standard for false statements)