United States v. Saada

212 F.3d 210 (3rd Cir. 2000)

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Nature of the Case

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Facts

Saada (D) owned and operated a business named Scrimshaw Handicrafts. D and the business were under serious financial difficulties. Ds were sued on a $6 million bank loan they had personally guaranteed and were liable for a $3.8 million settlement. In 1990, Ds contacted Ezra Rishty, for help in an insurance fraud scheme. A number of parties were enlisted to create a false insurance claim. They staged a flooding in Scrimshaw's warehouse caused by a broken sprinkler head. Ds submitted an insurance claim and proof of loss to Chubb for the merchandise damaged by the purported accident. Ds submitted forged invoices which aroused the suspicions of Chubb. Eventually, the insurance fraud ring that helped Ds was broken. The ringleaders pleaded guilty to various fraud-related offenses and entered into cooperation agreements with the government. Ds were charged with one count of conspiracy to defraud an insurance company, three counts of mail fraud, and one count of wire fraud. Ds' defense was that Rishty and Beyda were falsely implicating them in order to receive the benefit of motions for reduced sentences on the charges to which they had pled guilty. The jury convicted Ds on four counts in the indictment. Ds moved unsuccessfully for a new trial on the basis of newly discovered evidence. Ds appealed for a number of reasons and the casebook was only concerned with the improper admission of evidence.