## Facts

- Jack Ferranti owned and operated a retail clothing store (“Today’s Styles”) on the ground floor of a three-story mixed-use building in Queens that also contained four occupied residential apartments.
- Ferranti’s business was financially failing, including declining sales, arrears on rent, and a dishonored rent check.
- The store’s fire insurance had lapsed and was reinstated shortly before the fire; Ferranti did not maintain similar fire insurance on his other store.
- A nighttime fire engulfed the building, destroyed the structure and tenants’ possessions, displaced residents, and caused damage to neighboring property.
- During firefighting efforts, Lieutenant Williams fell from a second-floor window and died; residents and firefighters also suffered other injuries.
- The government’s theory was that Ferranti arranged for associates to set the fire to obtain insurance proceeds.
- After the fire, Ferranti pursued insurance claims and used the mails in connection with the claims, forming the basis for multiple mail-fraud counts.
- Evidence also supported that Ferranti lied to investigators and attempted to manipulate or intimidate witnesses, supporting witness-tampering and sentencing consequences.

## Issues

1. Whether the federal arson statute, 18 U.S.C. § 844(i), applied to the burned building and business based on the statute’s interstate-commerce requirement.
2. Whether the insurance-claim mailings were sufficiently connected to a scheme to defraud to support federal mail-fraud convictions.
3. How to apply statutory sentencing provisions and the Sentencing Guidelines, including ex post facto limits, grouping, and statutory maximums, to the combined convictions.
4. Whether, and to whom, restitution, fines, and costs of imprisonment could be imposed, including classification of victims and compensable losses.

## Decision

- The court denied Ferranti’s post-trial motions to dismiss the arson and mail-fraud counts and left the convictions intact.
- The court held the premises had a sufficient interstate-commerce nexus under § 844(i) because the property was used for commercial retail activity involving interstate commerce.
- The court held the insurance-related mailings were in furtherance of the fraudulent insurance scheme and within the federal mail-fraud statute.
- The court imposed an aggregate prison sentence effectively amounting to the remainder of Ferranti’s expected natural life, structured to comply with statutory maximums and ex post facto constraints.
- The court imposed substantial financial penalties, including fines, costs of imprisonment, and detailed restitution to victims, including displaced tenants and other entities harmed by the offenses.

## Legal Principles

- Under 18 U.S.C. § 844(i), federal arson jurisdiction requires proof that the damaged property was used in interstate or foreign commerce, or in an activity affecting such commerce; commercial use of premises can satisfy this element.
- Mail fraud requires a scheme to defraud and use of the mails for the purpose of executing or attempting to execute the scheme; mailings connected to processing or obtaining insurance proceeds may qualify when part of the plan.
- Sentencing must comply with statutory maximum penalties and the Ex Post Facto Clause; courts may not apply later, harsher guideline provisions retroactively.
- Guideline calculations may treat arson resulting in death by reference to homicide-related provisions and may include adjustments for obstruction-related conduct, including witness tampering.
- Restitution may be ordered for documented losses directly and foreseeably caused by the offenses, with courts distinguishing direct victims of the criminal conduct from more remote or derivative claimants, consistent with governing restitution statutes.

## Conclusion

The district court upheld Ferranti’s federal arson and mail-fraud convictions by finding a sufficient interstate-commerce connection and mailings in furtherance of an insurance scheme, then imposed a near-life term of imprisonment along with significant fines, costs, and restitution to those harmed by the fire and related fraud.


United States v. Ferranti, 928 F. Supp. 206 (E.D.N.Y. 1996)