## Facts

- Seven defendants participated in an insurance-fraud scheme involving staged or fabricated automobile accidents and repeated hospitalizations designed to trigger fixed daily hospitalization benefits.
- The defendants purchased numerous hospitalization insurance policies that paid a predetermined sum per day hospitalized, regardless of other coverage.
- Conspirators sought hospital admissions after reporting accidents that did not occur or after staging collisions, including planned crashes with a vehicle intentionally swerving into another car.
- Samuel Duncan, Jr. and Grace Duncan, described as leaders of the scheme, were each hospitalized more than twenty times and each collected more than $300,000 in insurance proceeds, paid by checks sent through the mail.
- Gay Nell Duncan was hospitalized three times in seven months and collected more than $50,000.
- Four other defendants, friends or relatives of the Duncans, were hospitalized between ten and nineteen times over five years and each collected more than $75,000, also via mailed checks.
- The government relied heavily on insurance-company claim files that included hospital billing and medical records; the government offered these files under the business-records exception.
- In the Western District of Louisiana, a jury convicted all defendants of mail fraud and conspiracy after a two-week trial.

## Issues

1. Whether the district court abused its discretion by denying an intradistrict transfer request from the Monroe Division to the Alexandria Division.
2. Whether insurance-company records containing hospital records were admissible under Federal Rule of Evidence 803(6) through insurance-company custodians.
3. Whether a trial-judge comment required a mistrial.
4. Whether the district court erred in refusing certain defense-requested jury instructions.
5. Whether the evidence was sufficient to support convictions for mail fraud and conspiracy.
6. Whether the sentences imposed were excessive.

## Decision

- The Fifth Circuit affirmed all convictions and sentences.
- The court held there was no abuse of discretion in denying intradistrict transfer because defendants had no constitutional right to trial in a particular division and did not show prejudice.
- The court upheld admission of the insurance-company files, including incorporated hospital records, as business records under Rule 803(6).
- The court found the judge’s comment did not deprive defendants of a fair trial and denial of a mistrial was not an abuse of discretion.
- The court held the jury charge, viewed as a whole, correctly stated the law and fairly covered the issues; the court was not required to use defendants’ preferred wording.
- The court held the evidence, viewed in the light most favorable to the verdict, permitted a rational jury to find guilt beyond a reasonable doubt.
- The court rejected sentencing challenges because the sentences were within statutory limits and supported by the record.

## Legal Principles

- A defendant has a constitutional right to trial in the proper district, but not to trial in a particular division within that district; intradistrict transfer decisions are reviewed for abuse of discretion and require a showing of prejudice.
- Under Federal Rule of Evidence 803(6), a business may introduce records kept in the ordinary course of its operations through a qualified witness when making or keeping such records is a regular practice and circumstances indicate reliability.
- Records received from third parties may be admissible as part of the recipient business’s records when the recipient regularly receives, relies on, and maintains those materials in its ordinary course of business, and the Rule 803(6) trustworthiness requirement is satisfied.
- Denial of a mistrial based on a judge’s comment is reviewed for abuse of discretion and turns on whether the remark deprived defendants of a fair trial in context and in light of curative instructions or the overall charge.
- A trial court’s refusal to give a requested instruction is not reversible error if the instructions as a whole correctly state the law and fairly present the issues.
- Sufficiency review asks whether, taking the evidence in the light most favorable to the verdict, any rational trier of fact could find guilt beyond a reasonable doubt.

## Conclusion

The Fifth Circuit affirmed the mail-fraud and conspiracy convictions and sentences arising from a staged-accident and hospitalization insurance scheme, holding in particular that insurers’ claim files—including embedded hospital records—were properly admitted under Rule 803(6) through insurance-company custodians where the insurers regularly relied on and maintained those records in the ordinary course of business.


United States v. Duncan, 919 F.2d 981 (5th Cir. 1990)