United States v. Michael E. Thomas

Michael Thomas appeals his conviction and sentence for twenty counts of mail fraud in violation of 18 U.S.C. §§ 371 and 1341. The alleged fraud occurred when the defendant reported false prices to his customers in the course of his produce marketing operations. We reverse and remand for a new trial, because we find that the district court erred in limiting the evidence that defendant was permitted to introduce on the key issue of intent to defraud.

I. BACKGROUND

In 1987 and 1988, Thomas was the marketing coordinator of a produce packing and marketing company that brokered sales of fruit between fruit growers and retail merchants. His company, Christian Salvesen Packing and Marketing (“CSPM”) endeavored to obtain the highest possible price for growers’ fruit, and then remitted the proceeds to the growers after deducting its own percentage commission and other fixed costs.

In early July 1987, Thomas implemented what he termed an “averaging scheme” on behalf of CSPM. When fruit prices were low, CSPM would report an artificially high price to the growers, and contribute its own money to make up the difference. When prices were high, on the other hand, CSPM would report an…