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United States v. Gray - 405 F.3d 227 (4th Cir. 2005)


Even in the absence of a fiduciary, statutory, or other independent legal duty to disclose material information, common-law fraud includes acts taken to conceal, create a false impression, mislead, or otherwise deceive in order to prevent the other party from acquiring material information. Although simple nondisclosure generally is not sufficient to constitute fraud, mere silence is quite different from concealment, and in some cases a suppression of the truth may amount to a suggestion of falsehood. Thus, deceptive acts or contrivances intended to hide information, mislead, avoid suspicion, or prevent further inquiry into a material matter may constitute fraud.


A grand jury indicted defendant Josephine Gray on five counts of mail fraud and three counts of wire fraud relating to her receipt of insurance proceeds following the deaths of her second husband and a former paramour. Gray was convicted on all counts in federal district court, and she was sentenced to 40 years' imprisonment, three years of supervised release, restitution in the amount of $ 170,000, and a special assessment of $ 800. Gray appealed, arguing, inter alia, that the evidence was insufficient to prove the elements of the charged offenses.


Was the evidence sufficient to prove the elements of mail fraud and wire fraud?




The appellate court affirmed the district court's judgments of conviction court, vacated the sentence imposed by the district court and remanded for resentencing. The court first ruled that, as to all counts, the evidence supported the jury's finding that Gray intended to deprive the insurance companies of their "money" and "property" by means of a fraudulent scheme. Second, it determined that the evidence was sufficient to prove that she intended to defraud an insurer. Third, it held that the district court did not abuse its discretion in permitting the Government to reopen its case-in-chief for the limited purpose of presenting testimony from a witness establishing that he mailed the pleadings specified in the counts alleging a scheme to defraud. Fourth, the district court did not abuse its discretion in admitting testimony regarding Gray's involvement with one insured's murder and evidence of the other insured's fear for his safety. Finally, the court ruled that Gray's sentence was increased based upon the district's court's factual finding that Gray's schemes to defraud involved two premeditated murders, which was a fact not found by the jury. As such, the district court committed an error that was plain and that affected Gray's substantial rights.

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