Of the Eighth Circuit, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 08-1539

UNITED STATES OF AMERICA,

Appellee,

v.

MICHAEL WYATT,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. Paul Barbadoro, U.S. District Judge]

Before

 Boudin, John R. Gibson, and Howard, *

Circuit Judges.

Susan E. Taylor for appellant.

Donald Feith, Assistant United States Attorney with whom

Thomas P Colantuono, United States Attorney, was on brief, for

appellee.

March 26, 2009
 Because these facts bear on Wyatt's sufficiency of the evidence 1

claim, we relate the facts in the light most favorable to the

jury's verdict. United States v. Cruz-Diaz, 550 F.3d 169, 171 (1st

Cir. 2008). We will further augment our overview of the case, as

necessary, in our discussion.

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HOWARD, Circuit Judge. Michael Wyatt (Wyatt) appeals his

conviction of one count of conspiracy to commit wire fraud, in

violation of 18 U.S.C. §§ 1343, 1349, claiming (1) that he was the

recipient of ineffective assistance of counsel, (2) that the

district judge improperly granted a motion in limine requesting

admission of inappropriate character evidence, and (3) that there

was insufficient evidence to support the jury's finding of intent

and consequently, the district court erred in denying his motion

for acquittal. We affirm.

I. Background

Wyatt was, for a time, a residential loan officer, who

eventually went into business as a broker for commercial and

venture capital lending. Early 2003 proved to be a fateful time 1

for Wyatt's new business venture. Around that time, he met

Virginia Moate (Moate), an escrow agent in New Jersey, as well as

Larry Stallings and his son, Christopher Stallings (the Stallings),

Wyatt's soon-to-be business partners and co-conspirators. Acting

on Wyatt's instructions, Moate opened an escrow account for Wyatt's

new venture.

With these preparations laid, Wyatt was able to engage in

the transactions that gave rise to the indictment. These
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transactions involved seeking high-risk borrowers and offering to

facilitate sizable loans, on the order of several million dollars.

As part of these loans, Wyatt would insist on substantial initial

payments, which would, at closing, be used to procure an "insurance

binder" to protect the lender(s) against default. The loan

documents made clear that these initial payments were to be held in

escrow (in the account created by Moate) until closing. And should

the transaction fail to close, these payments were to be fully

refundable.

Wyatt pitched and negotiated three such transactions.

One was with Beaconvision, a software development company located

in Nashua, NH, in the amount of two million dollars, with advance

fee payments totaling $200,000. The second was with InCiti

Apparel, a clothing company, in the amount of one million dollars

with an advance fee payment of $100,000. The third such

transaction, with Market and Match, a Nevada entity specializing in

fertilizer and municipal waste, was in the amount of two million

dollars with advance fees of $200,000. The evidence showed,

despite contrary promises to his clients, that Wyatt directed Moate

to disburse the purportedly escrowed advance fee payments to

himself and his co-conspirators, including the Stallings. All

told, Wyatt directed that approximately $98,000 of the $500,000

total advance fee payments be disbursed to him. None of these

loans ever closed, and no part of the advance fee payments --
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including the portions that Wyatt ordered disbursed to himself --

were refunded to any of the victims.

After trial, the jury found the defendant guilty on the

sole count of conspiracy to commit wire fraud, and the district

court sentenced Wyatt to fifty months incarceration followed by

three years of supervised release. This appeal timely followed.

II. Ineffective Assistance of Counsel

Wyatt's primary contention, made for the first time on

appeal, is that he received ineffective assistance of counsel at

trial. He notes that, in his opening statement, his trial counsel

repeatedly promised the jury that Wyatt would testify in his own

defense, but, when the time came, advised him not to testify.

Wyatt, acting on this advice, chose not to testify. He claims that

this turn of events cost him in the eyes of the jury. See Ouber v.

Guarino, 293 F.3d 19, 28 (1st Cir. 2002) (affirming decision

granting petition for writ of habeas corpus based on ineffective

assistance of counsel where in opening statement, defense counsel

promised jury that defendant would testify, counsel structured

entire defense around defendant's testimony, yet on advice of

counsel, defendant ultimately did not testify).

We have consistently maintained that ineffective

assistance of counsel claims should ordinarily be litigated in the

first instance in district court. United States v. Hicks, 531 F.3d

49, 55 (1st Cir.), cert denied, 129 S. Ct. 590 (2008) (citing
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Massaro v. United States, 538 U.S. 500, 505 (2003)); United States

v. Griffin, 524 F.3d 71, 75 n.1 (1st Cir. 2008). 

It is true that we make an exception for cases in which

trial counsel's ineffectiveness is manifestly apparent from the

record, Hicks, 531 F.3d at 55, but this is not such a case. The

record is devoid of trial counsel's response to Wyatt's claim of

ineffectiveness, including the circumstances that prompted him to

make the promise to the jury, as well as the motivation for, and

substance of, his alleged advice to Wyatt regarding the possibility

of Wyatt testifying. These are precisely the kinds of issues that

should be ventilated in a trial court in the first instance. See

Hicks, 531 F.3d at 56; United States v. Torres-Rosario, 447 F.3d

61, 64-65 (1st Cir. 2006). Consequently, Wyatt's claim for

ineffective assistance of counsel cannot be sustained on direct

appeal, and this claim instead must be remitted to a petition for

collateral relief pursuant to 28 U.S.C. § 2255.

III. Evidentiary Objection

Wyatt next takes issue with the district court's

tentative decision to deny his motion in limine and tentative

decision to permit the government to cross-examine Wyatt regarding

a similar transaction to prove Wyatt's intent, knowledge, and

absence of mistake pursuant to Federal Rule of Evidence 404(b). 

Further background frames the tentative ruling more

clearly. Well in advance of trial, Wyatt filed a motion to
 The government conceded that it could not prove direct 2

conversations between Diaz-Sanchez and Wyatt, and it was unable to

determine whether the intermediary through whom the loan was

negotiated, a woman named Carmen, was associated with Wyatt's

company, Weller Financial.

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"suppress" evidence regarding a similar transaction between himself

and Pedro Diaz-Sanchez (Diaz-Sanchez), which did not involve the

Stallings. The district court denied the motion without prejudice,

and the government revived the controversy when it filed a motion

in limine seeking to introduce the same evidence pursuant to

Federal Rule of Evidence 404(b). The government, however, agreed

not to introduce any such evidence in its case-in-chief, and

apparently without objection from Wyatt, the district court took

the government's motion under advisement.

At the close of the government's case-in-chief, Wyatt

sought the district court's ruling on the government's motion in

limine if he were to testify. At the court's request, the

government proffered evidence suggesting that Wyatt engaged in a

similar transaction with Diaz-Sanchez in which he received a fully

refundable commitment fee of $25,000 to secure a loan of eight

million dollars. Within days of receiving the fee, Wyatt withdrew

$20,000 of the fee in cash, the loan never closed, and Wyatt never

refunded the fee. The district court suggested that this evidence,

despite some weaknesses, was highly probative of Wyatt's intent. 2

Nevertheless, the district judge made clear that he had

not made up his mind, and needed to hear additional information
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before reaching a conclusion. Consequently, he reserved judgment

until after he heard Wyatt's testimony, and explicitly instructed

the government to approach the bench before introducing the

evidence so that he could confer with counsel, and confirm his

tentative ruling. Ultimately, evidence of the Diaz-Sanchez

transaction was never introduced.

Nonetheless, Wyatt claims that the court's tentative

ruling prejudiced him because the court's tentative ruling

dissuaded him from testifying. Further, Wyatt claims that the

district court's tentative conclusion was erroneous because the

evidence amounted to impermissible character evidence under Rule

404.

Although we have long required that evidence admitted

pursuant to Rule 404(b) have "some special relevance" other than to

prove that the defendant had a propensity to commit the crime in

question, United States v. Jiminez, 507 F.3d 13, 17 (1st Cir.

2007), cert. denied, 128 S. Ct. 1321 (2008), this standard is not

"particularly demanding." Id. Thus, a district court's decision

under Rule 404(b) is accorded deference. United States v. LandrauLopez, 444 F.3d 19, 23 (1st Cir.), cert. denied, 549 U.S. 873

(2006) (citing United States v. Williams, 985 F.2d 634, 637 (1st

Cir. 1993)).

In this case, the district court did not abuse its

discretion by preliminarily ruling that evidence of the Diaz-
 In his brief, Wyatt claims that the district court's tentative 3

decision was an improper balancing of the potential prejudice of

the evidence against its potential probative value under Rule 403.

Given our generally deferential review of a district court's

balancing of prejudice, see United States v. Morales-Aldahondo, 524

F.3d 115, 119-120 (1st Cir.), cert. denied, 129 S. Ct. 512 (2008),

this objection must fail for the same reasons as Wyatt's Rule

404(b) objection.

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Sanchez transaction would be admissible to show Wyatt's intent,

knowledge, and absence of mistake. Even though it was not

identical to the transactions that Wyatt participated in with the

Stallings, the Diaz-Sanchez transaction bore enough indicia of

similarity that the District Court did not abuse its discretion

when it concluded that evidence of the transaction would assist the

jury in determining whether Wyatt was "duped" by the Stallings, or

whether Wyatt fully understood the fraudulent nature of the charged

transactions. Such a conclusion is in harmony with our

understanding of Rule 404(b). Landrau-Lopez, 444 F.3d at 24

(citing United States v. Spinosa, 982 F.3d 620, 628 (1st Cir. 1992)

(other bad act need not be identical to crime charged so long as it

is sufficiently similar to permit juror to draw reasonable

inference probative of knowledge or intent).3

IV. Sufficiency of the Evidence

Wyatt concludes his appeal with a challenge to the

sufficiency of the evidence. His sufficiency argument is limited

to a claim that the district court erred in denying his motion for

an acquittal pursuant to Federal Rule of Criminal Procedure 29
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because there was insufficient evidence as to his intent. Where a

defendant has moved for a judgment of acquittal on sufficiency

grounds, our review is de novo. United States v. Cruz-Rodriguez,

541 F.3d 19, 26 (1st Cir. 2008), cert. denied, 129 S. Ct. 1017

(2009). Nevertheless, in assessing the sufficiency of the

evidence, we examine the evidence -- direct and circumstantial --

as well as all plausible inferences drawn therefrom, in the light

most favorable to the verdict, and determine whether a rational

fact finder could conclude beyond a reasonable doubt that the

defendant committed the charged crime. Id. 

To sustain a conspiracy conviction, the government must

adduce proof beyond a reasonable doubt (1) that an agreement

existed to commit the particular crime; (2) that the defendant knew

of the agreement; and (3) that he voluntarily participated in it.

Id. In other words, the government must prove that the defendant

joined and participated in the conspiracy with the knowledge of,

and the intent to further, its unlawful objective. 1 Sand et al.,

Modern Federal Jury Instructions, Instruction 19-3S (2005). It is

important to note, however, that such proof may consist of

circumstantial evidence, such as acts committed by the defendant

that further the conspiracy's purpose. Id. 

On this standard, it is plain to us that a reasonable

fact finder could conclude beyond a reasonable doubt that Wyatt

possessed the requisite intent. Wyatt took several steps, the
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facts of which are undisputed, that a reasonable fact finder could

believe served to further the goals of the conspiracy. He made

presentations to several counterparties to induce them to wire

money for the scheme. He ordered the withdrawal of monies from an

escrow account, and disbursement of the funds not only to the

Stallings, but also to himself. Finally, Wyatt retained the

roughly $100,000 that was disbursed to his own account and appears

to have made no effort to return these funds when it became clear

that the loans at issue would not close. From these facts, a

rational fact finder could indeed conclude that Wyatt intended to

agree with his co-conspirators to engage in a scheme to harvest

loan advance fees from unsuspecting borrowers, and that Wyatt, who

did not return any funds that were disbursed to him, intended to

commit the underlying offense. 

Wyatt does not dispute the character and nature of this

evidence. Rather he argues, based on other evidence such as the

testimony of Moate, that he believed the Stallings had the capacity

and intent to engage in the lending transactions. Wyatt further

argues that if sophisticated business owners could fall prey to the

scam, so could he. Finally, Wyatt argues that his disassociation

from the Stallings, while they were engaging in further

transactions and well in advance of their arrest, is also

indicative of his innocence. 
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Although the jury was free to credit this evidence if it

so chose, we cannot conclude that a rational fact finder must

credit the evidence Wyatt cites over the government's powerful

evidence indicating intent: namely, that Wyatt actively solicited

victims, induced them to send him large amounts of money, which he,

along with others, retained, and made no effort to disgorge. 

As intent was the only element to which Wyatt has lodged

a sufficiency objection, we cannot conclude that the jury reached

a conclusion that the evidence would not support.

V. Conclusion

All of Wyatt's arguments having proven unavailing, his

conviction is affirmed in all respects.

It is so ordered.