United States v. Decicco

United States Court of Appeals
For the First Circuit

No. 05-1645

UNITED STATES OF AMERICA,

Appellee,

v.

GARY P. DECICCO,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS

[Hon. Edward F. Harrington, U.S. District Judge]

Before

Torruella and Lynch, Circuit Judges,
and Lasker,* Senior District Judge.

Joseph S. Oteri, with whom Kimberly Homan were on brief, for
appellant.
Robert E. Richardson, Assistant United States Attorney, with
whom Michael J. Sullivan, United States Attorney, were on brief,
for appellee.

March 2, 2006

*
Of the Southern District of New York, sitting by designation.
 TORRUELLA, Circuit Judge. On September 27, 2000, a grand

jury sitting in Boston, Massachusetts returned an indictment

charging Gary P. DeCicco ("appellant") with four counts of mail

fraud, in violation of 18 U.S.C. § 1341, in connection with claims

for insurance proceeds submitted in the wake of two 1995 fires

(Counts 1-4), and two counts of use of fire to commit a felony, in

violation of 18 U.S.C. §§ 844(h)(1) & (2) (Counts 5-6). Although

DeCicco was eventually acquitted on the use-of-fire counts, he was

convicted on the four mail fraud counts. He now appeals this

conviction. After careful consideration, we affirm.

I. Background

A.

In August 1989, DeCicco bought a building located at 17

Rear Heard Street in Chelsea, Massachusetts for $60,000. Earlier

that year, before buying the building, he had applied to the City

of Chelsea ("Chelsea") for a permit to use the building as a

warehouse for two moving companies that he owned. The building,

however, was surrounded by residential buildings and had only a

narrow driveway providing access. Chelsea therefore denied the

appellant's application.

DeCicco nonetheless went ahead with the purchase.

Although the building price was only $60,000, he obtained a loan of

$104,000 from Somerset Bank, secured by a mortgage on the property.

Notwithstanding the denial of the occupancy permit, DeCicco

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initially tried to use the building as a warehouse. He was,

however, prevented from doing so by Chelsea. As a result, he ended

up with a significant mortgage on a building he could not use for

the purpose he desired. By August 1991, he was in arrears on the

mortgage, and Somerset Bank informed him that it was intending to

initiate foreclosure proceedings. Moreover, the appellant had two

other obligations to Somerset Bank by this time: a $400,000 loan

used to build a new warehouse in Revere, Massachusetts ("Revere"),

and a short-term, $80,000 commercial loan. The appellant was

falling behind on the Revere loan as well.

In October 1991, DeCicco obtained insurance on the Rear

Heard Street building from the Lincoln Insurance Company

("Lincoln"). However, he misrepresented that the premises were

occupied, and after this fact was discovered upon inspection,

Lincoln, on March 3, 1992, sent a cancellation notice by certified

mail to the appellant. The notice advised the appellant that his

insurance policy would be cancelled effective March 13, 1992 at

12:01 a.m.

Just twenty-nine hours before the insurance was to lapse,

a fire occurred at the Rear Heard Street building. Investigators

determined that the fire was intentionally set using a liquid

accelerant at the base of the support pillars in a manner designed

to bring the building down. The Fire Department responded quickly,

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however, and such little damage occurred that the appellant did not

file a claim.

Following the cancellation of the Lincoln policy, the

Rear Heard Street building went for three years without insurance.

At some point during this period, the appellant retained Richard

Stewart ("Stewart"), an accountant, to help him prepare income tax

returns for the years 1992, 1993, and 1994. In December 1994,

Stewart informed the appellant that, based on the information

available to him and the draft returns he had prepared, the

appellant owed $1,246,298 in federal and state taxes and penalties

for 1992, 1993, and 1994. The draft returns reflected some

deductions for expenses, but they did not reflect deductions for

such business expenses as payroll. Based on Stewart's training and

experience, he estimated that the appellant's tax liability might

have been reduced by as much as ninety percent if the appellant had

documentation for these expenses.

Aside from his significant personal income tax liability,

DeCicco also continued to have other financial issues during this

period. He owed a total of $65,673.56 to Revere in property taxes.

He was also in significant arrears on property taxes for the Rear

Heard Street building in Chelsea. By July 1995, the amount he owed

to Chelsea had ballooned to approximately $12,000. Finally, he

still owed almost $95,000 to Somerset Bank in connection with the

loan used to purchase the Rear Heard Street building, which was

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essentially vacant, and which he was expressly forbidden to use in

connection with his moving companies.

In May 1995, facing all of these financial pressures,

DeCicco once again attempted to obtain insurance on the Rear Heard

Street building. On May 17, 1995, the Scottsdale Insurance Company

("Scottsdale") issued the appellant an insurance policy providing

coverage of up to $125,000 for the building.

Less than two months later, on July 9, 1995, the building

was intentionally set on fire for a second time, with at least four

separate fires started on the second floor of the warehouse. The

Fire Department again responded quickly, and the fires were

extinguished. However, twelve days later, on July 21, 1995, a

third fire was intentionally set in the building in the early

morning hours. This was a multiple-alarm fire, requiring Chelsea

to call for aid from Revere, Everett, and Boston to fight the fire.

It took approximately four hours to extinguish the blaze. In the

end, the building was completely destroyed. The fire also damaged

a neighboring garage; melted the siding on a nearby building; and

destroyed the kitchen, bathroom, and pantry on the third floor of

another building.

Given the extensive damage, Chelsea ordered the appellant

to demolish what was left of the building. The appellant asked

Kevin Mahoney ("Mahoney") to perform the work. Mahoney discussed

the matter with his cousin, Randy Adamson, and then agreed to

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demolish the building for $13,800, a price that the appellant

accepted. Mahoney and Adamson, using helpers and equipment,

demolished the building and removed the rubble in approximately six

days. The appellant paid Mahoney with an initial check of $4,000

and then later paid the remaining $9,800.

DeCicco then sought the assistance of a public claims

adjustor, Terence Lynn ("Lynn"), to assist in filing his claim with

Scottsdale, to recover pursuant to the insurance policy for the

destruction of the building. However, almost immediately a number

of points of contention arose between the appellant and Scottsdale.

In early September 1995, in a communication between Lynn and

Scottsdale regarding the appellant's claim, an issue arose

regarding whether the building was vacant at the time of the fire.

This was important, because according to the terms of the

Scottsdale policy, recovery for a fire loss could be reduced by

fifteen percent if the building was vacant when the fire occurred.

On September 19, 1995, as this issue regarding vacancy was pending,

the appellant's insurance broker, Justin Kaan, faxed to Lynn a

document signed by the appellant and purporting to set forth

certain items that were in the warehouse at the time of the fire,

including dollies, a piano, a desk, chairs, and a couch.

Scottsdale's fire investigator, however, saw no evidence of dollies

or a piano when he examined the remains of the building after the

fire.

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 There were other controversies as well. On September 20,

1995, Lynn sent a letter to Scottsdale's representative, John

Bottini ("Bottini"). Lynn wrote that "I have enclosed a copy of

the wrecking bill in the amount of $23,681, which was performed as

a result of an emergency raze or repair order issued by the

municipality shortly after the occurrence of the loss." The

enclosed demolition bill purported to bear the signature of Arthur

Adamson. However, according to Mahoney, who actually did the

demolition work with Randy Adamson, DeCicco only paid $13,800, the

agreed-upon price for the work. Furthermore, both Randy Adamson

and his mother stated that the signature on the demolition bill

submitted to Bottini was not that of Arthur Adamson (who died in

1997), nor was the bill on his letterhead.

On October 17, 1995, Lynn mailed to Bottini another

letter in which he again mentioned the $23,681 demolition bill.

Included with this letter was the partial sworn statement in proof

of loss referenced in Count 1 of the indictment and a request for

an advance payment of $25,000. In an attempt to get Scottsdale to

issue this advance payment, Lynn's letter stated, among other

things: "We both know that Massachusetts is a so-called broad

evidence rule state. The disagreements as to value and loss are

still subject to indemnification of the insured whose indebtedness

to the mortgagee as of this date of loss was $97,016.29 and who has

incurred a wrecking bill of $23,681." Scottsdale thereafter

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forwarded Lynn a $25,000 check -- the Count 2 mailing -- which Lynn

sent to Somerset Bank, which was named as a loss payee because of

its mortgage on the property.

On January 2, 1996, Lynn sent a letter to Bottini

enclosing a proposed sworn statement in proof of loss seeking to

achieve a final settlement of the losses and again noting, among

other things, that "the incurred cost of wrecking the structure was

$23,681 . . . ." Lynn also claimed in this letter that the

appellant had made extensive renovations to the building, including

installation of a hot air heating system, an electrical system, a

two-piece bath, a new roof, skylights, and a $10,000 power lift.

However, the appellant had told Bottini shortly after the fire that

the warehouse had had neither heat nor electricity. Furthermore,

Scottsdale's fire investigator saw no evidence of a power lift and

noted that neither the heating system nor the electrical system had

been operational at the time of the fire. Bottini was never

provided with any documentation to support DeCicco's claimed

improvements. He rejected the proposed proof of loss.

Bottini and Lynn eventually negotiated a settlement, and

on February 7, 1996, Lynn sent Bottini a letter -- the Count 3

mailing -- containing a sworn proof of loss reflecting the

settlement figures of $95,283 for the building and $23,681 for the

demolition, for a total of $118,964. Bottini states that had he

known that the actual cost of the demolition was less than $23,681,

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he would not have agreed to the final settlement amount, and had

Scottsdale been aware that the actual amount incurred was less, it

would not have paid that amount. Bottini, however, acknowledged

that $23,681 was a fair figure for the demolition, given the

building's size.

On February 27, 1996, Scottsdale sent a check to Lynn in

the amount of $91,964 -- the Count 4 mailing -- the settlement

amount minus two $1,000 deductibles and the $25,000 advance

payment. That check listed as payees DeCicco, Lynn, Somerset Bank,

and Chelsea.1 DeCicco took the check to a bank and deposited it.

Although it appeared that the check had been endorsed by each of

the payees, the endorsements of both Joseph Bianco on behalf of

Somerset Bank and Alicia Silverberg on behalf of Chelsea were

forged; indeed, no one named Alicia Silverberg had ever worked for

the Chelsea City Treasurer's Office. Somerset Bank did ultimately

receive insurance proceeds in the form of a Bank of Boston check

from the appellant in the amount of $92,500, which satisfied the

mortgage on the Rear Heard Street building in full. Bianco

understood that this payment represented the Scottsdale insurance

proceeds. Chelsea, however, never received payment for the real

estate taxes.

1
At the time of the fire, Chelsea was owed between $12,000 and
$16,000 in real estate taxes. It had priority of payment from the
insurance proceeds.

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 B.

On September 27, 2000, the grand jury sitting in Boston

returned its indictment, charging the appellant with four counts of

mail fraud, and two counts of use of fire to commit a felony. With

respect to the four mail fraud counts, the indictment alleged in

one paragraph (paragraph 5) that DeCicco caused the destruction of

the warehouse by fire. It alleged in a separate paragraph

(paragraph 4) that "following the damage by fire . . . [DeCicco]

would and did cause the submission . . . of false and fraudulent

claims for building loss insurance proceeds." The language of

paragraph 4 does not make the alleged falsity of DeCicco's claims

conditional upon any other acts on his part, nor does it specify

that the claims were false for a certain reason. Paragraph 4 is

therefore broad enough to support not just the theory that

DeCicco's claims were fraudulent because he caused the fire, but

also the theory that his claims were fraudulent for independent

reasons, regardless of how the fire may have started. The other

two counts, regarding use of fire to commit a felony, charged the

appellant with violations of 18 U.S.C. §§ 844(h)(1) & (2) based on

the fires that occurred at the Rear Heard Street building on

July 9, 1995 and July 21, 1995.

On April 14, 2003, prior to trial, the district court

granted the appellant's motion to exclude evidence, pursuant to

Fed. R. Evid. 403 and 404(b), regarding (1) the March 1992 fire

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that occurred at the same property involved in the indicted counts,

and (2) testimony of Stewart, DeCicco's accountant, regarding

DeCicco's income tax liabilities. The government appealed from

this ruling, and this Court reversed the district court's exclusion

of the evidence. See United States v. DeCicco, 370 F.3d 206 (1st

Cir. 2004) ("DeCicco I").

The case proceeded to trial on November 8, 2004. One of

the government's key witnesses was the accountant Stewart, who

testified not only about the amount of DeCicco's tax liability --

the issue before this Court on the prior appeal -- but also about

the fact that Stewart had sought additional documentation from

DeCicco to support claimed deductions which would have reduced

DeCicco's tax liability. DeCicco objected to this additional

testimony by Stewart. The district court, however, ruled that the

testimony was admissible.

At the conclusion of the government's evidence, DeCicco

made a motion, pursuant to Fed. R. Crim. P. 29, that there was

insufficient evidence for a reasonable jury to find him guilty

beyond a reasonable doubt, particularly as to the use-of-fire

counts. The district court granted the appellant's motion for a

required finding of not guilty as to one of the counts charging the

appellant with use of fire to commit a felony but denied the motion

as to the mail fraud counts and the other count charging use of

fire to commit a felony.

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 When the appellant put on his case, he called several

witnesses, including Terence Lynn, the public claims adjustor, and

Lawrence Maddeford, who lived next to the Rear Heard Street

building. Maddeford observed that kids would hang out at the

building all the time, breaking through the boarded-up windows to

gain access. Despite Maddeford registering numerous complaints

with the police, the building essentially became a clubhouse for

the kids for several years. After the fire destroyed the building,

that was the end of the clubhouse.

At the conclusion of DeCicco's case, he renewed his Rule

29 motion. The district court entertained argument on the issue

again, noting that although it had denied the motion with respect

to Count Six (the remaining use-of-fire count), it would "like the

government's argument, in view of the fact there appears to be a

witness [Maddeford] -- seems to me a very credible witness -- who

raised a great doubt as to whether or not these what you call

vagrants or kids constituted a nuisance did, in fact, cause the

fire." After argument, the district court granted the appellant's

motion for a required finding of not guilty as to the other count

charging use of fire to commit a felony. The court also issued an

order to the parties that they were not to argue to the jury during

closing arguments that the appellant was, or was not, responsible

for the fires.

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 On November 17, 2004, the jury found the appellant guilty

on all four remaining mail fraud counts. The district court

sentenced DeCicco to two years of probation, a $7,500 fine, and

restitution of $9,881. It is this conviction that he appeals here.

II. Constructive amendment and material variance claims

DeCicco's first claim is that there was a constructive

amendment of his indictment, or alternatively, that there was a

material variance between the indictment and proof that affected

his substantial rights. In United States v. Fisher, 3 F.3d 456

(1st Cir. 1993), we described the difference between a

"constructive amendment" and a "material variance":

A constructive amendment occurs when the
charging terms of the indictment are altered,
either literally or in effect, by prosecution
or court after the grand jury has last passed
upon them. A variance occurs when the
charging terms remain unchanged but when the
facts proved at trial are different from those
alleged in the indictment. A constructive
amendment is considered prejudicial per se and
grounds for reversal of a conviction.
Variance is grounds for reversal only if it
affected the defendant's "substantial rights"
-- i.e., the rights to have sufficient
knowledge of the charge against him in order
to prepare an effective defense and avoid
surprise at trial, and to prevent a second
prosecution for the same offense.

Id. at 462-63 (internal quotation marks and citations omitted); see

also United States v. Arcadipane, 41 F.3d 1, 6 (1st Cir. 1994)

(variance requires reversal of a conviction "if it is both material

and prejudicial").

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 A. Standard of review

In assessing DeCicco's "constructive amendment" and

"material variance" claims, we must first determine the appropriate

standard of review. The appellant claims that because these issues

were preserved through his objections at trial, de novo review is

appropriate. The government argues in opposition that the

appellant made no such objections; as a result, we should review

for "plain error." See United States v. Olano, 507 U.S. 725, 731

(1993).2

In the district court, DeCicco twice moved for judgments

of acquittal, arguing that there was insufficient evidence that he

was responsible for the fires to permit the use-of-fire counts to

go to the jury and that "the other counts are conditioned upon a

finding of guilt on Counts 5 and 6 [the use-of-fire counts] in

terms of using the fire to actually commit the . . . mail fraud

counts . . . ." At two different points -- both after the

conclusion of the government's case and after the conclusion of the

appellant's case -- the district court made apparent its

disagreement with such a proposition, based on its assessment that

DeCicco could be guilty of mail fraud, even if he were not

responsible for the fires, if he simply took advantage of the fires

by submitting an inflated bill for the demolition costs.

2
The appellant does concede that if de novo review does not
apply, "plain error" is the proper standard of review.

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Nevertheless, DeCicco argues here that these motions sufficed to

preserve his objection that the district court would be

constructively amending the indictment if it allowed him to be

tried for a scheme to defraud other than the one charged in the

indictment, namely, a scheme to cause the destruction of the Rear

Heard Street building by fire in order to fraudulently claim

insurance proceeds for the loss of the building. He also states

that these motions were sufficient to preserve his objection that

the district court was effecting a material variance between

indictment and proof that affected his substantial rights.

We fail to see, however, how the motions cited by DeCicco

can be deemed "constructive amendment" or "material variance"

objections. Despite his attempt to spin them that way, the

arguments he made in support of his motions were merely an

articulation of his view that no charges would survive if the

district court granted the motions, particularly with regard to the

use-of-fire counts. Moreover, after the district court clearly

stated its belief -- twice -- that the indictment comprehended the

theory that the appellant had taken advantage of the fires by

submitting false insurance claims, the appellant interposed no

objection or argument that this would constitute a "constructive

amendment" of the indictment or a "material variance" between

indictment and proof. Under Fed. R. Crim. P. 51(b), a party may

preserve a claim of error by informing the court -- when the court

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ruling or order is made or sought -- of the party's objection to

the court's action and the grounds for that objection. Here,

however, the appellant took no such action.3

In light of these facts, we believe that DeCicco did not

preserve his objections and that the "plain error" test should

apply in this instance. Under this standard, there must have been

an error, the error must have been "plain," and the error must have

affected the substantial rights of the appellant. See Olano, 507

U.S. at 732. If all three elements are satisfied, we have the

authority to order correction of the error, but we are not required

to do so. Id. at 735. We exercise this discretion only where the

plain error "seriously affect[s] the fairness, integrity or public

reputation of judicial proceedings." Id. at 736 (internal citation

and quotation marks omitted).

B. Constructive amendment

The appellant makes two separate "constructive amendment"

claims. First, he reads the indictment to include one theory and

one theory only: that he had devised a scheme to submit insurance

3
In his reply brief, the appellant admits as much. He concedes
that his trial counsel did not use the term "constructive
amendment." He also notes that when he responded "Okay" after the
district court had handed down its ruling that there could still be
a mail fraud even absent the use-of-fire counts, he was simply
acknowledging the court's position, not acquiescing in its
correctness. This may be true, but however he characterizes his
response, it was not sufficient to preserve his claim of error
under the standard in Fed. R. Crim. P. 51(b). In the end, as we
shall discuss, even had counsel preserved the objection, there was
no error.

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claims to Scottsdale which were false and fraudulent because he

caused the fires (i.e., as the one who started the fires, he was

not entitled to any recovery). However, he notes that after the

district court ruled that the government had presented insufficient

evidence that DeCicco was responsible for the fires, the government

shifted its theory in its closing arguments to discuss how the

appellant had devised a scheme to submit insurance claims to

Scottsdale which were false and fraudulent for reasons entirely

independent of whether he caused the fires. When the government

made this shift, he argues, it impermissibly broadened the possible

bases for conviction beyond those set forth in the indictment

returned by the grand jury. This shift in theory, from one in

which DeCicco's responsibility for the fires was an essential

component of the fraudulent scheme to one in which it was

unnecessary, constituted a constructive amendment of the indictment

in violation of the Fifth Amendment Grand Jury clause. This shift

broadened the scheme charged in the indictment because it permitted

his conviction to rest on claims for insurance proceeds which were

fraudulent for any reason, not just because DeCicco was responsible

for the fires.

The appellant, however, misreads the indictment. He is

incorrect in maintaining that the indictment did not encompass

claims for insurance proceeds that were fraudulent for reasons

other than that he had caused the fires. The indictment alleged,

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in two separate and distinct paragraphs, two separate and distinct

ways in which the appellant perpetrated mail fraud: (1) by causing

the submission to Scottsdale of false and fraudulent claims for

building loss insurance proceeds, and (2) by actually causing the

damage to and destruction of the Rear Heard Street building by

fire. In other words, the indictment contained two completely

separate theories. In the first theory, DeCicco committed mail

fraud because he submitted false and fraudulent claims for

insurance proceeds after the fire, however it may have started. In

the second theory, the appellant committed mail fraud for a

different reason. The claims that he submitted were false and

fraudulent because he caused the fire (and therefore was not

entitled to any recovery).

Accordingly, the mail fraud counts of the indictment were

not dependent on the theory that the appellant had caused the

fires. Instead, they were so fashioned as to comprehend that one

could take advantage of a fire and commit mail fraud even without

having caused the fire. In other words, the appellant's

misrepresentations -- for example, in the fraudulent demolition

bill or in the phony list of property in the warehouse at the time

of the fire or in the letter sent by Lynn to Bottini listing

improvements made to the property by DeCicco -- could be used to

show he committed mail fraud, regardless of whether he started the

fires. As such, when the government made the shift complained of

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by the appellant, the government was not exceeding the scope of the

indictment but was merely operating with its confines.

Both parties point to the Supreme Court's decision in

United States v. Miller, 471 U.S. 130 (1985), to support their

respective positions. We think Miller clearly shows that there was

no "constructive amendment" in this case. In Miller, the defendant

was convicted of two counts of mail fraud, in violation of 18

U.S.C. § 1341. The indictment in the case alleged a scheme to

defraud with two distinct components; specifically, the indictment

alleged both that the defendant had defrauded his insurer by

consenting to a burglary in advance and by then lying to the

insurer regarding the amount of copper wire which was stolen during

that burglary. The trial evidence, however, went only to the

allegation that the defendant had lied regarding his copper-wire

claim. The government moved to strike the portion of the

indictment that alleged the defendant's pre-knowledge of the

burglary, but, when the defendant opposed that motion, the entire

indictment went to the jury. The defendant was convicted, and on

appeal, complained that both prongs of his indictment were not

satisfied.

The Supreme Court affirmed Miller's conviction, finding

that the pre-knowledge of the burglary in Miller's indictment

constituted a segregable component of the charged scheme to

defraud, and that the evidence presented regarding the inflated

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copper-wire claim was sufficient to support a conviction. The

Court noted that nothing new was added to the grand jury's

indictment and that "Miller was tried on an indictment that clearly

set out the offense for which he was ultimately convicted."

Miller, 471 U.S. at 140.

In the present case, the indictment similarly contains

two distinct and segregable components. As we have demonstrated

above, and contrary to the appellant's assertion that the

indictment in this case "did not specify any separable,

independently fraudulent scheme on which conviction based on a

narrower scheme than that charged in the indictment might validly

rest," the indictment at issue here alleged two separate and

distinct ways in which the appellant perpetrated mail fraud,

neither of which was dependent on the other. And just as in

Miller, where the removal of the allegation of complicity in the

burglary resulted in a permissible narrowing of the indictment,

leaving intact the theory that the defendant had submitted inflated

insurance claims, so too could the deletion of the allegation of

complicity in the fires here result in a permissible narrowing of

the indictment, leaving intact the separate theory that the

appellant had submitted claims that were false and fraudulent for

reasons unrelated to whether he had started the fires.

DeCicco's second "constructive amendment" claim is as

follows: The indictment charged him with submitting false and

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fraudulent claims for building loss insurance proceeds, but the

centerpiece of the government's argument to the jury urging it to

convict DeCicco of mail fraud was not a false and fraudulent claim

for building loss insurance proceeds at all -- it was a claim for

reimbursement for demolition expenses which the government

contended was falsely inflated. DeCicco supports his argument by

pointing to how the Scottsdale insurance settlement had two

independent components: one amount for the loss of the building,

and another amount for the demolition costs. The two were

completely separate. He similarly notes how the Scottsdale policy

expressly differentiates between building loss and debris removal.

In his eyes, the government's reliance on the demolition bill

created the strong possibility that he was convicted of an offense

other than that charged by the grand jury. This, therefore,

constituted a constructive amendment of the indictment.

We, however, do not find this argument convincing. The

indictment is not tied to any particular provision of the

settlement agreement or the Scottsdale policy. As a result, we

believe that the grand jury, when issuing its indictment, was

speaking generically about "building loss" and was not using the

specific definition of that phrase as provided for in the

settlement agreement or the Scottsdale policy. We also think it

inconceivable that the grand jury in this instance would issue an

indictment limited only to "building loss" proceeds, as that term

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was used in the settlement agreement or the Scottsdale policy, when

there was ample evidence that the appellant had also submitted

false and fraudulent claims relating to "demolition" or "debris

removal" expenses, as those terms were used in the settlement

agreement and the Scottsdale policy.

We find, therefore, that there was no "constructive

amendment" of the indictment in this instance. Since there was no

error, appellant cannot possibly satisfy the "plain error"

standard.

C. Material variance

Even if there was no constructive amendment, the

appellant argues that there was, at a minimum, a material variance

between indictment and proof. In this iteration of his argument,

appellant concedes that the charging terms of the indictment are

not in dispute. However, he claims that the facts proved at trial

were different from those alleged in the indictment. In his view,

the indictment alleged facts relating to one theory -- namely, that

his insurance claims were false and fraudulent because he had

caused the fires to occur. The facts presented at trial, however,

related to another theory -- that his insurance claims were false

and fraudulent because he had submitted false documentation in

support of his claims. This was a variance, and it was one that

affected his "substantial rights" in two ways: 1) he had

insufficient notice to be able to prepare an effective defense to

-22-
the new theory which the government argued to the jury; and 2) he

was prejudiced by the continuing use of evidence which had been

admitted solely because it was relevant to the use-of-fire counts.4

This claim, however, fails at its foundation. Once

again, the appellant misconstrues the indictment. As we related

above, the indictment clearly comprehended the theory that

DeCicco's insurance claims were false and fraudulent for reasons

unrelated to whether he had caused the fires. In particular, they

were false and fraudulent because he had submitted false

documentation in support of his claims. The sworn statements in

proof of loss and the insurance settlement checks discussed in the

indictment clearly related to this theory. Moreover, the facts

that were presented at trial related to this theory. For example,

facts were presented that he had provided a false demolition bill,

that he had provided a phony list of property in the warehouse at

the time of the fire, and that he had falsely listed improvements

made to the property in the letter sent to Bottini. These

falsities all led to the fraudulent sworn statements in proof of

4
As the government correctly points out, this second argument is
not an argument that the appellant purportedly was prejudiced by a
variance, but rather an argument that he was prejudiced by the
admission of certain evidence. However, prejudice resulting from
the admission of certain evidence is not what was meant by
compromising "substantial rights" in the "material variance"
context. See United States v. Tormos-Vega, 959 F.2d 1103, 1115
(1st Cir. 1992) ("Substantial rights" refers to the rights of a
defendant to "have sufficient knowledge of the charge against him
in order to prepare an effective defense and avoid surprise at
trial, and to prevent a second prosecution for the same offense.").

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loss referenced in the indictment and were what prompted the

insurance settlement checks sent by Scottsdale that were also

referenced in the indictment. Thus, the facts proved at trial were

not different from those alleged in the indictment, and there was

no variance. Since there was no variance, we do not reach the

question of whether such an alleged variance was material or

whether the appellant's substantial rights were affected.

III. Potential violation of the district court's order

The appellant next argues that the government committed

reversible misconduct in its closing arguments to the jury. Before

the closing arguments commenced, the district court instructed the

parties that they were not to argue to the jury that DeCicco was,

or was not, responsible for the fires. The appellant here argues

that the government violated this order when it explicitly argued

to the jury that DeCicco had a motive to want the building gone.

Such an argument, contends the appellant, the jury could only have

interpreted as suggesting DeCicco's responsibility for the fires.

Appellant, in particular, points to the following statements by the

government during closing arguments:

Now finally, there was this argument that the
defendant got nothing out of this. I suggest
to you, just use your common sense. You've
got a building that's useless. You've got a
building that people are chasing you after.
You've got a building where your tax
liabilities for the property are ballooning as
time goes on. And you owe the bank a lot of
money. . . .

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 This defendant had every incentive to want
that building gone, to be rid of that
building. And by getting [Scottsdale] to get
him off the hook and basically pay the entire
mortgage, everything that was due and owing to
the bank on that, as well as everything he had
to pay to Kevin Mahoney and Randy Adamson to
take the building down, you can't say that the
defendant got nothing. He got the entire
benefit of that. He got completely free and
clear of that horrible investment that he made
for whatever reason back in 1989.

Trial Tr. 5-93-94 (emphasis added). This argument, the appellant

argues, was highly prejudicial and warrants reversal of his

conviction.

On this issue, the appropriate standard of review is

clear. Because DeCicco did not object to the government's closing

arguments, we review for plain error. See Olano, 507 U.S. at 732.

After reviewing the record, we do not believe that the

government violated the district court's order when it stated that

the appellant "had every incentive to want that building gone, to

be rid of that building." For several reasons, we think that in

making such a statement, the government was addressing the

appellant's desire to have the building gone in an economic sense

(as in "gone from his portfolio"). We also think this is how a

jury would have understood such a statement.

First, and most importantly, we look at the context in

which these words were uttered. At the time the government made

the statement at issue here, it was discussing the nature of

appellant's investments, tax liabilities, and mortgages. The

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government was not discussing any allegations that the appellant

was responsible for the fires. The context of the government's

statement leads us to believe that the government desired only to

discuss how the appellant sought to maximize his recovery from

Scottsdale and rid himself entirely of a horrible investment

through the submission of false claims. See Whitman v. Am.

Trucking Ass'ns, 531 U.S. 457, 466 (2001) ("Words that can have

more than one meaning are given content, however, by their

surroundings."); California v. Brown, 479 U.S. 538, 543 (1987)

(discussing the relevance of the noscitur a sociis canon -- which

literally means "it is known from its associates" and instructs

that "the meaning of an unclear word or phrase should be determined

by the words immediately surrounding it" -- in assessing the

validity of a jury instruction); Neal v. Clark, 95 U.S. 704, 708-09

(1878) ("copulatio verborum indicat acceptationem in eodem sensu --

the coupling of words together shows that they are to be understood

in the same sense. And where the meaning of any particular word is

doubtful or obscure, . . . the intention of the party who has made

use of it may frequently be ascertained and carried unto effect by

looking at the adjoining words." (citing Broom's Legal Maxims, p.

450)).

We also read the government's statement as a response to

the appellant's earlier comment that he had gained nothing from the

alleged fraud. Appellant's counsel had stated:

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 I just want to point out to you again what
I've said all along. When you're out there
deliberating, remember, Gary got nothing out
of this. It cost Gary money out of his
pocket. Gary lost an asset, a building, that
although it was tough to get to, was described
as the triple-thick walls, huge beams, a good,
solid building he had and he lost. Gary had
no reason -- there was no rhyme, no reason for
Gary to do anything.

Trial Tr. 5-89. The government's statement was an attempt to

address this argument. In stating that the appellant "had every

incentive to want that building gone, to be rid of that building,"

the government was attempting to counter the appellant's argument

and show that the appellant did indeed reap a benefit from the

alleged mail fraud. The complained-of statement addressed the

appellant's motive in committing the fraud -- namely his desire to

have a troublesome financial investment removed from his portfolio

by having Scottsdale pay off his mortgage and the entire cost of

demolition.

We therefore find that the government did not violate the

district court's order to refrain from discussing the appellant's

responsibility for the fires. Once again, the appellant fails to

show the error required under the "plain error" test.

IV. The accountant's testimony

DeCicco's final argument is that the district court erred

in admitting the testimony of his accountant Stewart regarding his

(DeCicco's) missing expense documentation. We review the admission

of evidence under Fed. R. Evid. 404(b) for abuse of discretion.

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United States v. Smith, 292 F.3d 90, 98 (1st Cir. 2002). "[A]n

abuse of discretion occurs when a relevant factor deserving

significant weight is overlooked, or when an improper factor is

accorded significant weight, or when the court considers the

appropriate mix of factors, but commits a palpable error of

judgment in calibrating the decisional scales." United States v.

Gilbert, 229 F.3d 15, 21 (1st Cir. 2000) (citing United States v.

Roberts, 978 F.2d 17, 21 (1st Cir. 1992) (internal quotation marks

omitted)).

In DeCicco I, we held that the district court abused its

discretion in excluding the testimony of DeCicco's accountant,

Richard Stewart, regarding DeCicco's outstanding income tax

liabilities, concluding that it was relevant to DeCicco's motive to

commit arson and mail fraud and, hence, admissible under Fed. R.

Evid. 404(b). We also found that the evidence was not excludable

under Fed. R. Evid. 403, because "when offered for the limited

purpose of showing motive, and viewed in the context of the

government's charges, any danger of unfair prejudice in this case

is minimal." DeCicco, 370 F.3d at 214.

When Stewart's testimony was offered at trial, the

government informed the district court that it intended to elicit

from Stewart not just the amount of tax liability which he had

calculated -- the issue before this Court in DeCicco I -- but also

that Stewart had sought additional documentation from DeCicco to

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support claimed deductions which would have reduced DeCicco's tax

liability to about ten percent of what Stewart had calculated. The

appellant objected to this additional testimony by Stewart. The

district court, however, ruled that the testimony was admissible

because this Court said that it was.

Appellant contests this ruling, noting that although this

Court has ruled that Stewart's testimony regarding DeCicco's tax

liabilities was admissible under Fed. R. Evid. 404(b), the question

of Stewart's testimony regarding DeCicco's failure to provide him

with documentation supporting expenses he claimed as deductions was

not before the Court. Contrary to the district court's position,

appellant argues that this Court's decision in DeCicco I did not

require it to admit this portion of Stewart's testimony.

We believe that the district court made the correct

decision in admitting the evidence. Federal Rule of Evidence

404(b) provides that:

Evidence of other crimes, wrongs or acts is
not admissible to prove the character of a
person in order to show action in conformity
therewith. It may, however, be admissible for
other purposes, such as proof of motive,
opportunity, intent, preparation, plan,
knowledge, identity or absence of mistake
. . . .

Fed. R. Evid. 404(b). Therefore, as we noted in DeCicco I, "mere

propensity evidence is never admissible solely to show a character

inclined towards unlawful behavior. The same evidence may be

admissible, however, even if it may be construed as propensity

-29-
evidence, if it is used to show any of the other elements set out

in the rule." DeCicco, 370 F.3d at 210-11 (citations omitted).

We use a two-part test to evaluate the admissibility of

evidence under Rule 404(b). First, we must determine whether the

evidence in question has any "special relevance" exclusive of

defendant's character or propensity. See United States v.

Sebaggala, 256 F.3d 59, 67 (1st Cir. 2001) (the proffered evidence

"must not merely show a defendant's reprehensible character or

predisposition toward knavery . . . ."). Second, even if some

"special relevance" is found, the evidence must nonetheless be

excluded if its probative value is substantially outweighed by the

danger of unfair prejudice. "Rule 404(b) incorporates sub silentio

the prophylaxis of Federal Rule of Evidence 403." Id.

Regarding the first prong of the test, the appellant

argues that "Stewart's testimony regarding DeCicco's failure to

provide him with the documentation necessary to reduce his tax

liability by 90% was not relevant to the question of DeCicco's

motive to commit arson or mail fraud, nor did the government ever

articulate a basis for its admissibility under Rule 404(b)." He

states that this was evidence which the jury would have used purely

for propensity purposes. In his eyes, the jury would draw only two

conclusions from this evidence: (1) that DeCicco had misrepresented

his business expenses to Stewart in hopes of limiting his tax

liability, and (2) that his businesses must have been conducted

-30-
dishonestly if he could not produce even something so routine as

payroll records. Thus, the jury would have reasoned that because

DeCicco had attempted to defraud the federal and state taxing

authorities and because he must have been conducting his businesses

in a dishonest manner, as evidenced by the lack of even the most

routine recordkeeping, he was more likely to have perpetrated a

fraud on Scottsdale. As such, he argues, this evidence was pure

propensity evidence and should not have been admitted under the

first prong of Rule 404(b).

We, however, believe that Stewart's testimony relating to

the missing expense documentation contained a "special relevance"

exclusive of DeCicco's character and propensity. In particular,

such testimony was relevant to DeCicco's motive for committing the

charged mail fraud offenses.

In DeCicco I, we came to a similar conclusion when we

stated that Stewart's testimony relating to DeCicco's tax

liabilities could be used "in order to show for what purpose the

fraudulently obtained insurance proceeds were intended" -- i.e., to

show that the money obtained from Scottsdale would be used to

defray DeCicco's tax liabilities. DeCicco, 370 F.3d at 214. In

this appeal, we find that Stewart's testimony relating to the

missing expense documentation also related to DeCicco's motive, but

in a different way. In his opening, DeCicco had argued that he had

to have been making a lot of money to generate such large tax

-31-
liabilities and therefore had no motive to commit the charged

fraud. Stewart's testimony relating to the missing expense

documentation helped provide a response to this contention. It was

used to show that the appellant's net income was likely

significantly less than the available documentation suggested and

that the appellant likely did not have money on hand to pay what he

owed. Thus, Stewart's testimony helped the government demonstrate

that DeCicco did indeed have a motive to fraudulently obtain

insurance proceeds from Scottsdale -- i.e., the alleged mail fraud

provided him with the funds he needed to pay his debts.5

The appellant also argues that Stewart's testimony should

be excluded under Fed. R. Evid. 403, which is incorporated into the

second prong of the Rule 404(b) test, because any probative value

which Stewart's testimony had was substantially outweighed by the

effect of unfair prejudice. However, this argument fails as well,

because, as we stated in DeCicco I, "we are of the view that, when

5
In other words, Stewart's testimony about DeCicco's missing
expense documentation was used to show that DeCicco was not as
wealthy as he claimed. The fact that DeCicco could not produce
documentation to support some of his claimed expenses could lead
one to believe that perhaps DeCicco had expenses that were "off the
books." For example, perhaps he paid certain employees with cash
in order to avoid payroll taxes. If this was the case and DeCicco
did in fact have a number of additional expenses beyond those that
were covered in his documentation, his net income would have been
less than he had claimed it was. And if his net income was less
than he claimed it was, he would have had difficulty paying off his
debts. Thus, DeCicco did indeed have a motive to commit mail
fraud. Such a fraud would have provided him with extra funds to
pay off his income taxes, his property taxes, and his mortgages and
commercial loans.

-32-
offered for the limited purpose of showing motive, and viewed in

the context of the government's charges, any danger of unfair

prejudice in this case is minimal." DeCicco, 370 F.3d at 214. We

continue to hold this belief, and it is fatal to DeCicco's claim

here. Accordingly, we find that the district court did not abuse

its discretion in admitting Stewart's testimony about DeCicco's

missing expense documentation.

V. Conclusion

For the reasons stated above, we affirm the judgment of

the district court.

Affirmed.

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