## Facts

- James W. DeCastris, a Chicago police officer, concurrently held a full-time management job at Zenith Electronics for several years, earning more than his police salary.
- Zenith prohibited employees from holding two full-time jobs; after Zenith learned of his police employment, it required him to quit one position.
- DeCastris left the police department on disability, making him eligible for disability payments from the Policemen’s Annuity and Benefit Fund.
- Illinois law reduced disability payments when a disabled officer worked for compensation, dollar-for-dollar above a threshold tied to the officer’s former salary.
- While earning more than $2,500 per month at Zenith, DeCastris mailed monthly affidavits to the disability authorities for over two years stating he had not resumed compensated employment while receiving benefits.
- The disability board did not learn of his Zenith employment until after he had received 27 months of benefits; the board’s administrator testified that disclosure of those earnings would have resulted in no benefits.

## Issues

1. Whether the evidence was sufficient to prove a “scheme to defraud” under 18 U.S.C. § 1341 where the alleged fraud was concealment of employment and income in mailed affidavits.
2. Whether arguable ambiguity in the statutory/form language (“assumes” or “resumes” employment) barred conviction absent proof that DeCastris knew disclosure was required and intended to mislead.
3. Whether evidence of prior misstatements or omissions in related documents was admissible to prove intent or knowledge rather than improper propensity evidence under Federal Rule of Evidence 404(b).

## Decision

- The Seventh Circuit affirmed the conviction and sentence.
- The court held the evidence permitted the jury to find that DeCastris knowingly and intentionally concealed material employment and earnings information to obtain benefits.
- The court rejected the claim that linguistic ambiguity in the benefit provisions or affidavit language foreclosed liability, because the jury was instructed to convict only if it found knowing deception and intent to defraud.
- The court upheld the use of other-act evidence as relevant to intent/knowledge and absence of mistake, not merely character.

## Legal Principles

- Mail fraud requires a scheme to defraud and use of the mails; the mailing may be routine or legally required if it helps execute or conceal the scheme.
- Deliberate concealment of information known to be important to an agency’s decisionmaking can constitute a fraudulent scheme.
- Alleged ambiguity in regulatory or form language does not preclude a fraud conviction where the government proves beyond a reasonable doubt that the defendant knew disclosure was required and intentionally misled the decisionmaker.
- Other-act evidence may be admitted under Rule 404(b) to show intent, knowledge, plan, or absence of mistake when used for those purposes rather than to show propensity.

## Conclusion

The court affirmed DeCastris’s mail-fraud conviction because the jury could reasonably find that he knowingly used mailed affidavits to conceal ongoing compensated employment and earnings material to disability eligibility, and that any ambiguity in the governing language did not negate criminal intent where the instructions required proof of knowing and intentional deception.


United States v. DeCastris, 798 F.2d 261 (7th Cir. 1986)