## Facts

- Mystic Fuel, Inc., a heating-oil delivery business, operated trucks and performed deliveries under contracts with suppliers and customers.
- Mystic held a government delivery contract to transport “number four oil” from Union Petroleum Corporation to the U.S. Army installation at Fort Devens, Massachusetts.
- The government presented evidence of a scheme in which Mystic obtained oil while representing it was destined for Fort Devens, diverted oil to private customers, and obtained Fort Devens signatures on fuel tickets for deliveries that had not occurred.
- Mystic submitted documentation and claims that caused the Department of Defense to pay Mystic for undelivered oil.
- Edward A. Cincotta (treasurer and major shareholder) signed company checks and, with John Zero (major shareholder and dispatcher), made major operational decisions; Zero supervised dispatch, drivers, billing, and accounting.
- Witnesses described Cincotta’s involvement in Fort Devens-related activity, including giving driver instructions when Zero was absent and providing (or confirming) delivery-ticket information used by Fort Devens personnel to complete tickets.
- A jury convicted Cincotta, Zero, and Mystic of conspiracy to defraud the Department of Defense and related fraud offenses; defendants appealed.

## Issues

1. Whether the evidence was sufficient to prove Cincotta knowingly joined and intended the conspiracy (as opposed to being merely a corporate officer).
2. Whether the indictment and evidence were sufficient to convict Mystic Fuel, Inc., including whether corporate liability required proof of a separate corporate benefit.
3. Whether alleged prosecutorial misconduct required reversal despite trial-court corrective measures.
4. Whether admission of a contested document over hearsay objection was erroneous and, if so, whether it was harmless.
5. Whether the jury instruction on conscious avoidance (willful blindness) was proper on this record and adequate without additional limiting language.
6. Whether a trial-judge comment referencing a “great deal of evidence” against Zero created an unconstitutional presumption or shifted the burden of proof.

## Decision

- The First Circuit affirmed the convictions of Cincotta, Zero, and Mystic Fuel, Inc.
- The court held the evidence permitted a rational jury to find Cincotta knew of and participated in the fraudulent scheme, or deliberately avoided confirming it.
- The court upheld Mystic’s conviction, concluding the fraud was carried out through corporate operations and intended, at least in part, to benefit the corporation through payments made to Mystic.
- The court found any prosecutorial impropriety was adequately addressed by curative steps and did not render the trial unfair.
- The court upheld admission of the challenged document under the Federal Rules of Evidence; alternatively, any error was harmless because the evidence was cumulative and other proof was strong.
- The court approved the conscious-avoidance instruction as supported by the evidence and not misleading when read with the full charge; the absence of additional limiting language was not reversible error, particularly absent a defense request.
- The court rejected Zero’s due process claim, holding the judge’s remark did not create a mandatory presumption and the instructions as a whole left factfinding and burden of proof with the jury and the government.

## Legal Principles

- A conviction for conspiracy and fraud may rest on circumstantial evidence showing a defendant’s knowing participation, including proof drawn from managerial role, involvement in key transactions, and patterns of conduct.
- A corporation may be held criminally liable for acts of its agents when undertaken within the scope of employment and intended, at least in part, to benefit the corporation; direct receipt of fraud proceeds by the corporation supports the benefit element.
- A willful-blindness (conscious-avoidance) instruction is permissible when evidence supports an inference that the defendant deliberately avoided confirming a high probability of wrongdoing; it cannot reduce the government’s burden to prove knowledge and intent when the charge is considered as a whole.
- Prosecutorial misconduct warrants reversal only when it so infects the trial with unfairness as to deny due process; curative instructions and the overall strength of evidence are relevant to prejudice.
- Erroneous admission of evidence does not require reversal if the error is harmless in light of cumulative proof and substantial independent evidence.
- Judicial comments during instructions do not violate due process if, in context, they do not direct a verdict, create a mandatory presumption, or shift the burden of proof.

## Conclusion

The court affirmed all convictions, holding the evidence supported individual and corporate liability for the Fort Devens fuel-ticket fraud and that the trial court’s evidentiary rulings, handling of alleged misconduct, and willful-blindness instruction did not warrant reversal.


United States v. Cincotta, 689 F.2d 238 (1st Cir. 1982)