* District Judge of the Eastern District of Texas, sitting

by designation.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

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No. 92-7131

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UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

LANDEN MAX DULA and ACCRABOND CORPORATION,

Defendants-Appellants.

- - - - - - - - - -

Appeal from the United States District Court

for the Northern District of Mississippi

- - - - - - - - - -

April 16, 1993

Before KING and EMILIO M. GARZA, Circuit Judges, and HALL*,

District Judge.

SAM B. HALL, JR., District Judge:

Landen Max Dula and Accrabond Corporation were convicted by

a jury of wire fraud, mail fraud, and false statements. 

Defendants now appeal their convictions, alleging a Brady

violation, a comment on the failure of Dula to testify, and a

violation of Fed. R. Evid. 404(b). Defendants also allege that

the evidence was insufficient to prove Dula's intent to defraud,

and that the trial court erred in denying a motion for new trial

because the verdict was against the weight of the evidence. As
 

2 Many aerospace products carry manufacturer's lot numbers

to provide a mechanism for a manufacturer to trace and recall

defective lots. Accrabond provided its own lot numbers, or

purchased small quantities of a product in order to obtain an

authentic lot number.

2

the Brady claim is not presented in the record, it is dismissed

without prejudice to the defendants' right to raise it in an

action under 28 U.S.C. § 2255. As to all other issues, we find

no error, and affirm.

I. FACTS AND PROCEDURAL HISTORY

Landen Max Dula is the founder and president of Accrabond

Corporation, which is engaged in the sale of industrial sealants,

adhesives, coatings, and other chemical products for military,

government, and commercial aerospace use. Accrabond manufactured

its own line of products, and distributed products of other

manufacturers. 

On May 16, 1991, Dula and Accrabond were indicted in the

Northern District of Mississippi on charges of wire fraud, mail

fraud, and false statements. The 32 count indictment charged that

between January 1988 and September 1989, the defendants devised a

scheme to defraud and obtain money under false pretenses by

representing that products sold and supplied conformed to the

purchaser's specifications when they did not. Defendants were also

charged with fraudulently substituting falsely identified and

nonconforming products,2 relabeling stale, outdated, and expired

products as fresh, recently acquired products with extended shelf
 

3 Most aerospace products such as those sold by Accrabond

carry a shelf life, beyond which they must be retested to

determine whether they still meet the standards of performance

prescribed by military specifications. 

 

4 Any alteration of a product after manufacture, such as

thinning, dying, etc. may also change performance, and therefore

also requires retesting to determine if the product still meets

the military specifications.

 

5 Most of Accrabond's business was conducted by telephone

or fax transmissions, which were then entered into a computer,

which generated a sales order and a manufacturing order. The

order form also had a space for entering "blind notes," which

were used to instruct Accrabond employees on what substitute to

send for the product ordered, or what substitute had been

supplied to the customer on a previous order. The documents sent

to the customer, however, all described the product ordered, and

did not reveal that a substitute had been supplied.

 

6 The defendants were charged with illegally using wire

communications when accepting telephone purchase orders from

various customers. Further, the defendants allegedly submitted

false statements or entries by supplying fraudulent certificates

of compliance indicating that a particular product conformed to a

particular military specification.

3

life,3 coloring, thinning, and altering the appearance of products

to conform to the appearance of other products and substituting the

for other products,4 and using false labels, shipping documents,

and certificates of compliance to conceal the fraudulent

substitution of products.5

The indictment alleged eighteen instances of the use of

interstate wire communications in violation of 18 U.S.C. §§ 2,

1343, and one of the mail in violation of 18 U.S.C. §§ 2, 1341 in

execution of a scheme to defraud thirteen aerospace and defense

supply companies.6 The indictment further charged the defendants

with thirteen counts of falsely certifying products for use in

defense contracts in violation of 18 U.S.C. §§ 2, 1001.
 

7 In Brady v. Maryland, 373 U.S. 83, 87 (1963), the United

States Supreme Court held that the due process clause requires

the government to disclose all information that is favorable to

the accused and is material to either guilt or punishment. See

generally 3 Wright, Federal Practice and Procedure: Criminal 2d,

§ 557.2 (1982). The rule covers impeachment as well as

exculpatory evidence. See Giglio v. United States, 405 U.S. 150,

154 (1972).

4

After a ten day jury trial in December, 1991, Accrabond was

convicted on all but one count of wire fraud, and Dula was

convicted on six counts of wire fraud and five counts of false

statements. On February 18, 1992, Accrabond was sentenced to pay

a fine of $248,000, and restitution in the amount of $8,238.32.

Dula was sentenced to a term of imprisonment of thirty-six months

on each count, to be served concurrently, as well as a fine of

$27,500. The defendants filed a notice of appeal February 24,

1992, from the judgments entered by U.S. District Judge Neal B.

Biggers, Jr., and the court stayed execution of the judgment

pending appeal.

II. ANALYSISA. BRADY VIOLATION

Defendants contend that the government violated the disclosure

requirements of Brady v. Maryland, 373 U.S. 83 (1963), by failing

to reveal test results showing that the product sold by Accrabond

performed as well as was required.7 Defendants claim that the

government was in possession of numerous reports of such tests,

which it failed to disclose despite repeated requests prior to

trial. Specifically, Defendants pointed to inspection and testing

done by Martin-Marietta, as stated by a company spokesman the day

after the convictions. See Northeast Mississippi Daily Journal,
 

8 In closing argument, counsel for the Defendants argued

that while the government had alleged that faulty products sold

by Accrabond had endangered the performance of weapons such as

the cruise missile, the demonstration of the effectiveness of our

country's military technology in the Persian Gulf War, including

missiles made with materials sold by Accrabond, showed that the

products were not deficient. (Tr. 1755). In response, the

prosecutor stated in rebuttal that only an inspection of the

materials could have revealed what problems there might have been

with Accrabond products, and asserted that such an inspection

would have been impossible. (Tr. 1775-1776).

 

9 Brady does not oblige the Government to provide

defendants with evidence that they could obtain from other

sources by exercising reasonable diligence. When evidence is

available equally to the defense and the prosecution, the

defendants must bear the responsibility for their failure to

diligently seek its discovery." See, e.g., United States v.

McKenzie, 768 F.2d 602, 608 (5th Cir. 1985), cert. denied, 474

U.S. 1086 (1986) 

 

10 A defendant must establish that withheld evidence

favorable to the accused is "material" in order to succeed on a

Brady claim. See United States v. Ellender, 947 F.2d 748, 756

(5th Cir. 1991). Suppressed evidence is material only if "there

is a reasonable probability that, had the evidence been disclosed

to the defense, the result of the proceeding would have been

different. A 'reasonable probability' is a probability

sufficient to undermine confidence in the outcome." United

States v. Bagley, 473 U.S. 667, 682 (1985)."

In this case, the government argues that whether or not some

of Accrabond's products were not fraudulent or nonconforming was

not at issue, and is in fact irrelevant. Rather, the issue was

whether the products were falsely represented and certified. 

See, e.g., United States v. Grimm, 568 F.2d 1136, 1138 (5th Cir.

5

Sunday, December 15, 1991. Defendants allege that this violation

prejudiced them by denying them exculpatory materials in trial

preparation and presentation, and by permitting the prosecutor to

make false statements in closing argument regarding the

impossibility of inspecting the products supplied by Accrabond.8

The government argues that it has not violated the

requirements of Brady since the information was equally available

to the Defendants,9 and the information is not material.10 We
1978) (evidence of noncriminal conduct to negate the inference of

criminal conduct is generally irrelevant); United States v.

Marrero, 904 F.2d 251, 260-261 (5th Cir. 1990), reh. denied, 909

F.2d 1479, cert. denied, 498 U.S. 1000.

 

11 This is similar to our procedure for ineffective

assistance of counsel claims. Where such claims are not raised

before the trial court, they cannot be resolved on direct appeal

since the district court has had no opportunity to develop the

record as to the merits of the allegations. See, e.g., United

States v. Higdon, 832 F.2d 312, 313-314 (5th Cir. 1987), cert.

denied, 484 U.S. 1075 (1988); United States v. Bounds, 943 F.2d

541 (5th Cir. 1991).

6

decline to address these arguments at this time because, as

indicated by oral argument, there is no evidence in the record

concerning the test results that the government is alleged to have

withheld in violation of Brady. In the absence of a record, we

cannot fairly evaluate the merits of the defendants' claim. We

therefore dismiss the defendants' Brady claim without prejudice to

their right to raise the issue in a proceeding under 28 U.S.C. §

2255.11 See 3 Wright, Federal Practice and Procedure: Criminal 2d

§ 594 p. 453.

B. COMMENT ON DULA'S FAILURE TO TESTIFY

Dula also contends that the trial court erred when it denied

a motion for mistrial following a statement by the prosecutor in

closing argument that it claims called the jury's attention to the

fact that the Dula had elected not to testify. Dula argues that

the failure of the trial court to declare a mistrial, or at least

give a curative instruction, denied him his Fifth Amendment rights.

The Fifth Amendment prohibits a prosecutor from commenting

directly or indirectly on a defendant's failure to testify.

Griffin v. California, 380 U.S. 609 (1965); United States v.
7

Borchardt, 809 F.2d 1115 (5th Cir. 1987). In deciding whether a

comment made by the government in its closing argument is a comment

on the defendant's failure to testify, a court must determine if

"the prosecutor's manifest intention was to comment on the

accused's failure to testify [or] was... of such character that the

jury would naturally and necessarily take it to be a comment on the

failure of the accused to testify." United States v. Smith, 890

F.2d 711, 717 (5th Cir. 1989). 

However, the comments complained of must be viewed within the

context of the trial in which they are made. United States v.

Bright, 630 F.2d 804, 826 (5th Cir. 1980). In this case, one of

the defenses set forth by Dula and Accrabond was that the

prosecution was instigated and directed by a rival, Products

Research Chemical Corporation (PRC), to carry out the "corporate

murder" of Accrabond in order to take over its market. Against

this background, Government counsel stated in closing argument:

Well, let me talk about PRC just a minute. There's

been nobody on this witness stand that really knows about

what happened between PRC and Accrabond Corporation.

(Tr. 1784). The government argues that the context makes clear

that the intent of the argument was not to comment on Dula's

failure to testify, but to make the point that none of the

witnesses who had testified about the existence of a lawsuit by PRC

against Accrabond actually knew anything about it.

It is not error to comment on the defendant's failure to

produce evidence on a phase of the defense upon which he seeks to

rely. See, e.g., United States v. Bright, 630 F.2d 804, 825 (5th
 

12 Federal Rule of Evidence 404(b) provides:

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 or accident, provided that upon request by the

accused, the prosecution in a criminal case shall provide

reasonable notice in advance of trial, or during trial if

the court excuses pretrial notice on good cause shown, of

the general nature of any such evidence it intends to

introduce at trial.

8

Cir. 1980). Thus, the government's argument to the jury that "no

one has given you any reasonable explanation" in response to the

defendant's contentions is not error. See United States v. Warren,

550 F.2d 219, 227 (5th Cir. 1977), cert. denied, 434 U.S. 1016

(1978).

In any case, the district court's instructions to the jury

emphasized that the defendant need not testify, and that no

inference could be drawn from his failure to testify. (Tr. 1082).

Therefore, even if there was harm created by counsel's comments, it

was offset by the court's instructions. See, e.g., United States

v. Smith, 890 F.2d 711, 716 (5th Cir. 1989)

C. VIOLATION OF FED. R. EVID. 404(B)

Defendants next contend that the trial court violated Fed. R.

Evid. 404(b)12 by permitting the introduction of testimony

concerning an alleged prior bad act of Dula and Accrabond which was

not charged in the indictment. During the trial, the government

elicited testimony regarding a sale of materials by Accrabond to

Pan Metals, a Korean corporation. Rick Drexler, a former

laboratory manager at Accrabond, told the jury that Pan Metals had
 

13 Federal Rule of Evidence 403 states:

Although relevant, evidence may be excluded if its probative

value is substantially outweighed by the danger of unfair

prejudice, confusion of the issues, or misleading the jury,

or by considerations of undue delay, waste of time, or

needless presentation of cumulative evidence.

9

ordered a Dow Corning adhesive, but had been sent a substitute

product, which "did not get by" Pan Metals. (Tr. 969-971). This

transaction was not among those alleged in the indictment.

This court has set forth a two-part test for determining the

propriety of admitting evidence of "bad acts" not alleged in the

indictment. United States v. Beechum, 582 F.2d 898, 911 (5th Cir.

1978), reh. granted, 563 F.2d 1782, opinion superseded, 582 F.2d

898, cert. denied, 440 U.S. 920 (1979). First, it must be

determined that the extrinsic offense evidence is relevant to an

issue other than the defendant's character. Second, the evidence

must possess probative value that is not substantially outweighed

by its undue prejudice and must meet the other requirements of rule

403.13 Id.

Evidence of an uncharged offense arising out of the same

transaction or series of transactions as the charged offense is not

an "extrinsic" offense within the meaning of Rule 404(b), and is

therefore not barred by the rule. See, e.g., United States v.

Simpson, 709 F.2d 903, 907 (5th Cir. 1983), cert. denied, 464 U.S.

942. The defendants were charged with conducting a continuing

scheme to defraud, characterized by the substitution of products,

and it was necessary for the government to prove that the

defendants had intentionally devised a scheme and artifice to
10

defraud. In developing proof of intent and motive, the prosecution

may offer all of the surrounding circumstances that were relevant.

See, e.g., United States v. Mancuso, 444 F.2d 691, 695 (5th Cir.

1971) (other transactions connected with the offenses charged have

long been used to show a general pattern, the necessary criminal

intent, or the guilty knowledge of the defendant).

In this case, the existence of a scheme to defraud is an

element of the offense of wire fraud under 18 U.S.C. § 1343.

Although Pan Metals' order was not one of those charged in the

indictment, it was relevant to the existence of a scheme and

therefore was independently admissible as direct proof of the

scheme charged. United States v. Santagata, 924 F.2d 391, 393-394

(1st Cir. 1991). In addition, the admission of the testimony did

not violate Rule 403, which allows a trial judge to exclude

probative evidence that is substantially outweighed by its

prejudicial effect. The balancing of probative value against

prejudicial effect is committed to the sound discretion of the

trial judge, a decision that is final in the absence of abuse of

discretion. United States v. Maceo, 947 F.2d 1191 (5th Cir. 1991)

(citations omitted). We find no such abuse here.

D. SUFFICIENCY OF THE EVIDENCE OF DULA'S INTENT TO DEFRAUD

Dula also argues that a review of the trial demonstrates that

the government failed to establish its wire fraud allegations

because it introduced no evidence that the use of the wires was

preceded by an intent to defraud. 

To obtain Dula's convictions for the crimes of wire fraud
11

alleged in the indictment, the government was required to prove

beyond a reasonable doubt that he aided and abetted the use of the

wires in furtherance of a scheme to defraud. United States v.

Shively, 927 F.2d 804 (5th Cir. 1991), cert. denied sub nom Johnson

v. United States, 111 S.Ct. 2806 (to obtain mail fraud conviction,

government must prove scheme or artifice to defraud, specific

intent to defraud, and use of mails for purpose of executing

scheme); United States v. Shaw, 555 F.2d 1295 (5th Cir. 1977) (same

elements as to wire fraud). Dula argues that the proof adduced by

the Government at trial that the orders were taken by phone, and

following these orders a decision may have been made to substitute

an alternative product, is inadequate.

The above proof is sufficient, even standing alone, because

the sequence and timing of the phone calls is immaterial. Once

membership in a scheme to defraud is established, a knowing

participant is liable for any wire communication which subsequently

takes place or which previously took place in connection with the

scheme. See United States v. Westbo, 746 F.2d 1022, 1025 (5th Cir.

1984). The crime of wire fraud did not terminate with the

telephone call, and acts occurring after the use of the wires can

be evidence "from which a jury could infer participation of the

scheme to defraud." Id.; see also United States v. McDonald, 837

F.2d 1287, 1293 (5th Cir. 1988) (intent can be proven by the scheme

to defraud, and may be inferred from other facts).

E. VERDICT AGAINST THE WEIGHT OF THE EVIDENCE

Finally, appellants contend that the trial court abused its
12

discretion by denying a motion for new trial which asserted that

the weight of the evidence supported the defendants' acquittal. 

The decision to grant or deny a motion for new trial based on

the weight of the evidence is within the sound discretion of the

trial court. An appellate court may reverse only if it finds the

decision to be a "clear abuse of discretion." United States v.

Martinez, 763 F.2d 1297, 1312 (11th Cir. 1985). Where the defense

has had an opportunity to question witnesses as to their biases,

and the jury has concluded that the witnesses are credible, the

trial court has broad discretion. "It is the sole province of the

jury, and not within the power of this Court, to weigh conflicting

evidence and evaluate the credibility of witnesses." United States

v. Ivey, 949 F.2d 759, 767 (5th Cir. 1991), cert. denied sub nom

Wallace v. United States, 113 S.Ct. 64 (1992). "This court's

review does not encompass weighing the evidence or judging the

credibility of witnesses.... [This court] must affirm the

conviction if a rational jury could have found the essential

elements of the crimes beyond a reasonable doubt." United States

v. Thorn, 917 F.2d 170, 173 (5th Cir. 1990).

Defendants argue that the Government's witnesses were not

credible witnesses because they were disgruntled former employees

of the defendants. However, as stated above, that credibility

determination is best left for the jury. The district court did

not abuse its discretion in accepting the jury's assessment of the

credibility of the witnesses and denying a motion for new trial on

the ground that the verdict was against the weight of the evidence.
13

III. CONCLUSION

For the foregoing reasons, we AFFIRM the judgments of the

district court, but DISMISS the defendants' Brady claims, without

prejudice to their right to raise them in an action under 28 U.S.C.

§ 2255.