Opinion ID: 526736
Heading Depth: 1
Heading Rank: 7

Heading: the admission of extrinsic gambling evidence

Text: 114 The defendants vigorously protest the district court's admission of certain evidence concerning the alleged gambling activities of Janice Sacharczyk's father, Chester Szczawinski. They assert that absent proof of Sacharczyk's knowledge of these illicit activities, they were irrelevant to any material fact at issue in this case. Moreover, they contend that even if the evidence had some slight relevancy, its probative value was greatly outweighed by the unfairly prejudicial impact its introduction probably had upon the jury. The government maintains that the evidence was relevant and highly probative of whether Sacharczyk had either a specific intent or a motive to violate the Act's reporting requirements.
115 Two witnesses testified regarding Chester Szczawinski's gambling operation. Francis Falkowski was Chester Szczawinski's nephew and a former president of St. Michael's. He resigned from the credit union in September, 1983. He testified that he believed Szczawinski had engaged in bookmaking at the credit union. He based that conclusion on the following: (1) Szczawinski spent some amount of time in the basement offices at St. Michael's; (2) Falkowski had seen brown envelopes being passed from the upstairs offices of the credit union to those on the lower level; (3) one evening, after closing, Falkowski observed Szczawinski xeroxing a number of football cards (used for gambling) on the St. Michael's copying machine. There was no evidence presented that Janice Sacharczyk was at the credit union at these times or that she observed any of the activities allegedly seen by Falkowski. 116 The second witness to testify concerning Szczawinski's gambling activity was Philip DiNatale. DiNatale testified, under a grant of immunity, to the effect that Szczawinski was a bookmaker and that he had acted as Szczawinski's agent. Two of the transactions named in the indictment involved DiNatale and allegedly were connected to Szcawinski's gambling operation. In describing those transactions, DiNatale testified that he twice went to St. Michael's to secure Treasurer's checks in order to pay a gambling debt owed by Szczawinski to a customer. DiNatale stated that he paid the debt in Treasurer's checks because the customer had requested it. DiNatale stated further that he went to St. Michael's to obtain the checks only because he had an account there; he had not been ordered to use St. Michael's for the transaction. DiNatale testified that Szczawinski did not even know he was obtaining Treasurer's checks to pay the debt. To DiNatale's knowledge, no bookmaking had ever taken place at St. Michael's. As for defendant Sacharczyk, DiNatale testified that she had nothing to do with his Treasurer's check transactions. When he was asked whether he knew Janice Sacharczyk, he responded, A little, very little.
117 In order for evidence to be admitted at trial, it must be relevant to a material fact at issue, and its probative value must not be substantially outweighed by its unfairly harmful or prejudicial effect upon the jury. See Fed.R.Evid. 401, 402 & 403; United States v. Lamberty, 778 F.2d 59, 60-62 (1st Cir.1985), United States v. Mann, 590 F.2d 361, 369-70 (1st Cir.1978). The resolution of such evidentiary questions is committed to the discretion of the district court judge, and the abuse of discretion standard guides our review. See United States v. Lynn, 856 F.2d 430, 437 (1st Cir.1988); United States v. Southard, 700 F.2d 1, 13 (1st Cir.), cert. denied, 464 U.S. 823, 104 S.Ct. 89, 78 L.Ed.2d 97 (1983); United States v. Mehtala, 578 F.2d 6, 9 (1st Cir.1978); United States v. Coast of Maine Lobster Co., 557 F.2d 905, 908 (1st Cir.), cert. denied, 434 U.S. 862, 98 S.Ct. 191, 54 L.Ed.2d 136 (1977). 118 Evidence is relevant if it has any tendency to make the existence of any fact consequential to the determination of the action more or less probable. Lamberty, 778 F.2d at 61; see Fed.R.Evid 401; C. Wright & K. Graham, Jr., Federal Practice and Procedure Sec. 5165 (1978) (collecting cases). The government asserts that evidence concerning Chester Szczawinski's alleged gambling activities 119 was highly relevant to the element of willfulness the government must prove in a 31 U.S.C. Sec. 5322 violation. Willfulness in almost every case must be proven indirectly since it is a state of mind; it is usually established by drawing reasonable inferences from the available facts. United States v. Bank of New England, 821 F.2d 844 (1st Cir.1987), cert. denied, 484 U.S. 943, 108 S.Ct. 328, 98 L.Ed.2d 356 (1987) citing to United States v. Wells, 766 F.2d 12, 20 (1st Cir.1985). [The gambling evidence] was relevant to Sacharczyk's knowledge of the use of the Credit Union's cash resources, and any motive she might have had to act willfully. 120 Brief for the government at 16. 121 We accept the proposition that if the evidence shows, directly or by inference, that Sacharczyk knew or must have known of Szczawinski's gambling activities, it would be relevant to establishing both her intent and her motive in failing to file the CTRs. Despite the fact that the government conceded that Sacharczyk was not a part of the gambling operation, a jury might reasonably infer willfulness or motive if they found that Sacharczyk knew of customers and relatives who had reason to keep their $10,000 transactions hidden from the IRS. 122 As there was no direct evidence that Sacharczyk knew of her father's alleged gambling activities, their relevancy is dependent upon whether the evidence reasonably supports the inference that she must have known of those activities. There are three bases for such an inference. First, Chester Szczawinski spent some time on the premises of the credit union. Second, he occasionally told the loan officers to give loans to individuals for whom he vouched. The government asserts that these loans were used to finance Szczawinski's bookmaking operation. Third, Janice Sacharczyk is Chester Szczawinski's daughter. We do not believe these facts, even giving them the greatest possible weight, support an inference that Sacharczyk must have known of her father's gambling activities. 123 The first two arguments in support of the inference are easily dispatched. The government produced no evidence that Sacharczyk ever saw bookmaking at St. Michael's. DiNatale, Szczawinski's agent, testified that Chester Szczawinski did no gambling business at St. Michael's and that he had an office elsewhere for such purposes. Falkowski's testimony concerning the xeroxing of football cards does not affect our conclusion, because he could not place Sacharczyk at the credit union on that evening. There is no basis for finding that Sacharczyk saw any alleged xeroxing. Nor is there any connection between the loan approvals and Sacharczyk. Even if it were found that Szczawinski was instrumental in getting loans approved for certain individuals, there was no evidence that Sacharczyk had knowledge of all of the loan approvals much less of their allegedly illegitimate purpose. The government's argument that she sometimes recorded new loans does not prove she knew of her father's role in the loan approvals or of their allegedly illicit purpose. 124 Nor do we believe that the daughter-father relationship between Sacharczyk and Szczawinski proves that she must have known of his alleged gambling activity. We have been able to find only one case that discusses what reasonable inferences might be drawn from a familial relationship. In United States v. Williams, 561 F.2d 859 (D.C.Cir.1977), the defendant had been convicted of armed bank robbery. The appeal questioned the admissibility into evidence of some of the money from the bank robbery, which had been found in the apartment of the defendant's sister. The sister was living with a man who was one of the bank robbers. The government produced no evidence of special rights of access by defendant to the apartment or of any conspiracy or joint venture between him and his sister's roommate. The sibling relationship was the only nexus connecting [the defendant] with the money found in the apartment.... Id. at 862. The court concluded that the defendant's blood relationship with one co-occupant of an apartment was an exceedingly thin strand to support the threshold requirement of relevance. Id. 125 In the case at bar, Szczawinski was not a charged co-conspirator, nor was Sacharczyk alleged to be part of the gambling operation. As in Williams, the main link between the alleged acts of Szczawinski and Sacharczyk's failure to file CTRs was their familial relationship. This is too weak a nexus to support the inference that Sacharczyk must have known of the gambling operation. While [t]he gods [v]isit the sins of the fathers upon the children, Euripides, Phrixus, frag. 970, in the absence of evidence, the law must not. 126 The trial judge, at least initially, was also concerned that the gambling evidence was not relevant. When first notified that the government intended to introduce evidence concerning the gambling activities of third parties, the trial judge sought assurances from the government that it was going to prove that the defendants knew of the gambling activities. The government responded in the affirmative. The evidence, however, was later admitted without the assured foundation. Despite numerous objections, side-bar conferences, and written motions by defense counsel raising the issue, the trial judge never explained his ruling. While we do not and will not require a trial judge to set forth, on the record, his/her reasoning concerning evidentiary matters, we have noted on numerous occasions that such on-the-record rationale is one indicator of a thoughtful exercise of discretion. See United States v. Mann, 590 F.2d at 369; United States v. Anzalone, 783 F.2d 10, 112-14 (1st Cir.1986); United States v. Andiarena, 823 F.2d 673, 677-78 (1st Cir.1987); United States v. Southard, 700 F.2d at 13. 127 We believe that the trial judge's original instincts were correct. Absent some nexus between Szczawinski's alleged gambling activities and the defendants in this case, the gambling evidence was irrelevant. We find, therefore, that the admission of that evidence constituted an abuse of discretion on relevancy grounds. See Fed.R.Evid. 401 & 402; United States v. Cunningham, 804 F.2d 58, 60-61 (6th Cir.1986) (evidence irrelevant where government failed to prove defendant had been aware of it); see also United States v. Rios Ruiz, 579 F.2d 670, 674-75 (1st Cir.1978) (evidence irrelevant when government failed to link it to defendants); cf. United States v. Rodriguez-Estrada, 877 F.2d 153 (1st Cir. 1989) (prior bad acts may be admissible under Rule 404(b) when they are inextricably intertwined with the instant crimes charged). 128 Even were we to afford some minimal probative significance to the gambling evidence, we would still find its admission to be an abuse of discretion because its probative value (if any) is substantially outweighed by the danger of unfair prejudice.... United States v. Koger, 646 F.2d 1194, 1198 (7th Cir.1981); see Fed.R.Evid. 403. Evidence is unfairly prejudicial if it might cause the jury to base its decision on something other than the established propositions in the case. J. Weinstein & M. Berger, Weinstein's Evidence, p 403, at 403-39 (1988); see Advisory Committee Note to Rule 403 (an undue tendency to suggest decision on an improper basis....); United States v. Figueroa, 618 F.2d 934, 943 (2d Cir.1980) (defining prejudice similarly). The prejudicial danger in the instant action was that the jury may have convicted Sacharczyk on a theory of guilt by association. See United States v. Flynn, 852 F.2d 1045, 1054 (8th Cir.), cert. denied, --- U.S. ----, 109 S.Ct. 511, 102 L.Ed.2d 546 (1988); United States v. Cunningham, 804 F.2d 58, 60 (6th Cir.1986), cert. denied, 481 U.S. 1037, 107 S.Ct. 1972, 95 L.Ed.2d 813 (1987); United States v. DeCicco, 435 F.2d 478, 483 (2d Cir.1970). Throughout most of the trial there was no mention of any illicit activity connected with the failure to file CTRs. The final two government witnesses, however, introduced an invidious criminal element into the case, in the person of Sacharczyk's father. Despite the fact that the government conceded that Sacharczyk was not involved in the gambling operation, and there was no connection between that operation and her, we believe the testimony implicitly and impermissibly linked the two together. This unsubstantiated and unwarranted connection was highly prejudicial to the defendants' case. Because the evidence's significant potential for prejudice greatly outweighed its minimal probativeness, we find that its admission constituted an abuse of discretion on the ground of unfair prejudice. See Fed.R.Evid. 403. 129 These findings, however, do not end our inquiry. Although not addressed by the government, we must determine whether in light of the entire record the erroneous admission of the gambling evidence could be found harmless error beyond a reasonable doubt. See Lamberty, 778 F.2d at 62; Mann, 590 F.2d at 370-71. The path of our inquiry is well laid out. 130 To answer this question, we have reviewed the entire record; we have considered the likely impact of the error on the minds of the jurors, Kotteakos v. United States, 328 U.S. 750, 763-64, 66 S.Ct. 1239, 1247, 90 L.Ed. 1557 (1946); and we have asked ourselves whether we can say with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the [juror's] judgment was not substantially swayed by the error, id. at 765, 66 S.Ct. at 1248, accord United States v. Pisari, 636 F.2d 855, 859 (1st Cir.1981); see Fed.R.Crim.P. 52(a) (error harmless if it does not affect substantial rights). Compare Chapman v. California, 386 U.S. 18, 24, 87 S.Ct. 824, 828, 17 L.Ed.2d 705 (1967) (higher standard for federal constitutional error). 131 United States v. Mazza, 792 F.2d 1210, 1216, 17 (1st Cir.1986), cert. denied, 479 U.S. 1086, 107 S.Ct. 1290, 94 L.Ed.2d 147 (1987). We have analyzed the record as required and cannot say with any sanguinity that the jury's verdict would have been the same absent the tainted evidence. This was a very close case. The evidence was barely sufficient to support the charges and the theories advanced by the prosecution. The trial judge indicated as much: 132 Now, I have got to say something, perfectly honestly, because I think it would be dishonest of me if I did not say so. There is a very thin thread here and I'm going to listen very closely, depending upon the testimony of the next two witness's, to motions for directed--for judgments of acquittal. I'm going to listen very closely to them. Because I think that this is a very thin case, this case, these women. I have got to tell you my honest feeling about it. I dislike taking matters away from a jury because if a jury goes in the direction in which the Judge happens to be tending it saves the Judge a problem. Do you know what I mean? 133 So in civil cases, at any rate, ordinarily, what I do is let the jury decide it. They can always take the verdict away. 134 In criminal cases, it's a different story, if the jury should convict. So I'm going to study these motions for directed findings of not guilty closely. And I think it's only fair for me to tell the government that. 135 We believe the prosecution overreached by introducing evidence of Szczawinski's gambling activities without connecting them to the defendants. Because this error may well have swayed the jury's ultimate determinations of guilt, we have no choice but to remand for a new trial. 136 Since we vacate the defendants' convictions, we have no need to reach defendants' final argument that the prosecution's closing argument prejudiced their right to a fair trial. We note only that defendants' argument is based, in part, on the claim that the prosecution implicitly linked many of the transactions named in the indictment to Szczawinski's bookmaking. The prosecution's closing argument thus underscores and heightens the likelihood that the prejudicial impact of the admission of evidence concerning Szczawinski's gambling activities affected the jury's verdict.