Opinion ID: 2994243
Heading Depth: 2
Heading Rank: 1

Heading: The Admissibility of Ryan’s Failure to Report

Text: His Kickback Payments Ryan contends that the court abused its discretion when it admitted evidence that established his failure to report on his tax returns the $136,000.00 he received from Notaro for his assistance in securing financing for STC. We review a trial judge’s evidentiary ruling for abuse of discretion. See United States v. York, 933 F.2d 1343, 1348 (7th Cir. 1991). Indeed, we afford great deference to the trial court’s determination of the admissibility of evidence because of the trial judge’s first-hand exposure to the witnesses and the evidence as a whole, and because of the judge’s familiarity with the case and ability to gauge the impact of the evidence in the context of the entire proceeding. United States v. Van Dreel, 155 F.3d 902, 905 (7th Cir. 1998). Ryan argues that this evidence was excludable as other bad acts evidence under Federal Rule of Evidence 404(b). We see no need to engage in Rule 404(b) analysis, however, because it is clear from the record that this evidence was intricately related to the bank fraud offense charged in the indictment. [T]his [C]ircuit has a well-established line of precedent which allows evidence of uncharged acts to be introduced if the evidence is ’intricately related’ to the acts charged in the indictment. United States v. Gibson, 170 F.3d 673, 680 (7th Cir. 1999). Under the intricately related doctrine, the admissibility of Ryan’s failure to disclose the $136,000.00 as income on his tax returns turns on: whether the evidence is properly admitted to provide the jury with a complete story of the crime on trial, whether its absence would create a chronological or conceptual void in the story of the crime or whether it is so blended or connected that it incidentally involves, explains the circumstances surrounding, or tends to prove any element of, the charged crime. United States v. Ramirez, 45 F.3d 1096, 1102 (7th Cir. 1995) (alterations and citations omitted) (emphasis added). The trial judge concluded and we agree that the crime that Ryan was charged with in Count one (bank fraud under 18 U.S.C. sec. 1344) is a specific intent crime. The judge found that the evidence of his failure to report the kickbacks in his tax returns is evidence of a cover-up, attempted cover-up, which has generally been held to be admissible as far as casting some reflection on how the defendant evaluated his own conduct. The judge further concluded that the probative value of the evidence outweighed its prejudice because it tended to prove [the bank fraud] by acts [committed] afterwards. Indeed, [a] conviction for bank fraud under 18 U.S.C. sec. 1344 requires proof that the defendant acted ’willfully and with specific intent to deceive or cheat, usually for the purpose of getting financial gain for one’s self or causing financial loss to another.’ United States v. Pribble, 127 F.3d 583, 592 (7th Cir. 1997) (quoting United States v. Moede, 48 F.3d 238, 241 (7th Cir. 1995)). Further, [i]ntent to defraud must be proven to obtain a conviction for bank fraud. Howard, 30 F.3d at 874; United States v. LeDonne, 21 F.3d 1418, 1426 (7th Cir. 1994). We have defined intent to defraud as acting willfully and with specific intent to deceive or cheat, usually for the purpose of getting financial gain for one’s self or causing financial loss to another. United States v. Sims, 895 F.2d 326, 329 (7th Cir. 1990). Intent to defraud can be proven by circumstantial evidence and by inferences drawn from the scheme itself. Howard, 30 F.3d at 874; LeDonne, 21 F.3d at 1426. Circumstantial evidence of intent to defraud includes such conduct as knowingly depositing a forged check, knowingly depositing an NSF check, knowingly writing checks on an inadequate account balance, violating bank rules, and providing falsified information on loan documents. See, e.g., Howard, 30 F.3d at 874; LeDonne, 21 F.3d at 1427-28; Hammen, 977 F.2d at 384; United States v. Ragosta, 970 F.2d 1085, 1090-91 (2nd Cir. 1992), cert. denied, 506 U.S. 1002, 113 S.Ct. 608, 121 L. Ed. 2d 543 (1992). Moede, 48 F.3d at 241-42 (emphasis added). Thus, Ryan’s efforts to conceal his participation in the bank fraud scheme by failing to report the some $136,000.00 in kickbacks and commissions received from Notaro, constituted [c]ircumstantial evidence of intent to defraud. See id. The tax-return evidence also tended to cast doubt on the credibility of his defense that he advanced at trial--that he was ignorant of the fraudulent aspects of the transactions. See Gatineau v. Fleet Mortgage Corp., 137 F.3d 490, 495-96 (7th Cir. 1998). Because this evidence was highly probative of his specific intent to commit bank fraud and rebutted his ignorance defense, we conclude that the trial judge did not abuse his discretion in admitting evidence of his failure to report his kickbacks and commissions received from Notaro on his tax returns.