Opinion ID: 767766
Heading Depth: 2
Heading Rank: 2

Heading: The CDG Scheme

Text: 18 Montani next challenges the district court's decision to allow evidence of the CDG scheme under Rule 404(b) of the Federal Rules of Evidence. Rule 404 prohibits the use of character evidence for the purpose of proving that a defendant acted in conformity with his character on a particular occasion. Fed. R. Evid. 404. Montani admits that under Rule 404(b), evidence of other crimes, wrongs, or acts may be admitted for purposes other than to prove the defendant's bad character, such as to prove the defendant's motive, intent or knowledge or a common scheme or plan. Fed. R. Evid. 404(b). However, Montani contends that the facts of the CDG and D&M plans were too dissimilar to be relevant to guilt and therefore were merely prejudicial. 19 As a preliminary matter, the parties dispute whether Montani waived or forfeited his objection to the use of the similar acts evidence by broaching the topic before the government did. We resolved this issue in Wilson v. Williams, 182 F.3d 562, 566 (7th Cir. 1999), in which we held that a preemptive use of evidence does not waive an established objection. In Wilson, the plaintiff lost a pretrial effort to exclude evidence of his conviction but then introduced the topic in his opening statement. In the same vein, Montani questioned Israel about the CDG enterprise on cross-examination in the government's case, even though the government, which had sought before trial the right to bring the evidence in, had not used it. However, the trial court's ruling on the matter was definitive, and Montani was entitled to the anticipatory use of the evidence. We held in Wilson that a party is not required to object at trial to a definitive pretrial ruling. See id. at 565-66. Montani adequately preserved the issue for appeal, but this victory is a hollow one. 20 In United States v. Shackleford, 738 F.2d 776, 779 (7th Cir. 1984) (modified on other grounds by Huddleston v. United States, 485 U.S. 681, 685 (1988)), we recognized a four-part test for admissibility of Rule 404(b) evidence requiring, among other things, that the prior act be similar enough to the matter at issue to be relevant. In United States v. Lloyd, 71 F.3d 1256, 1264-65 (7th Cir. 1995), we held that the test need not be unduly rigid and the prior and instant acts need only be sufficiently alike to support an inference of criminal intent. The two acts must share common characteristics relevant to the purpose for which they are introduced. See United States v. Long, 86 F.3d 81, 84 (7th Cir. 1996) (citing United States v. Torres, 977 F.2d 321, 326 (7th Cir. 1992)). Thus, the term similarity has been loosely interpreted and loosely applied. See, e.g., Lloyd, 71 F.3d at 1263-66 (holding that evidence of the defendant's gang affiliations and activities were relevant to the defendant's possession of a firearm); Torres, 977 F.2d at 327-28 (allowing evidence of the defendant's involvement in two unrelated, violent retaliatory incidents in prosecution for retaliation against a federal witness). 21 The facts of CDG require much less of a comparative leap to establish relevance to the D&M scheme. In CDG, the defendant used his position of trust and influence as a Sears employee to rig a self-dealing arrangement that funneled company resources to an entity in which he had a secret interest. Montani created the alias Robert Allyn for Israel to conceal Israel's involvement and used a post office box to hide where the checks were going. Montani needed to avoid detection for violating the company's ethical code, which prohibited an employee from having any personal financial dealings with any individual or business organization . . . which is a supplier to Sears of merchandise, supplies, property, or services. Montani contends that the CDG scam--like the D&M scam--did not actually harm Sears because Sears got the best price the market would bear. However, he fundamentally misunderstands why his actions constituted an illegal bribery scheme: Sears was entitled to the best efforts of its employee without paying a premium in the form of secret profits. The district court held that the CDG deal was sufficiently similar to the charged crime and not unduly prejudicial. Based on the overwhelming similarity, we cannot call the court's ruling an abuse of discretion. 22 Montani also contends that the district court erred in permitting testimony regarding the CDG venture under Rule 608(b), which permits inquiry on cross-examination into specific instances of a witness's conduct only to impeach a witness's character for truthfulness. Fed. R. Evid. 608(b); see United States v. Smith, 80 F.3d 1188, 1192 (7th Cir. 1996). Montani again contends that because Sears benefitted from the CDG deal, the deal could not be fraud and therefore could not be probative of his character for truthfulness. Considering Montani's extensive efforts to hide the involvement of his wife, Israel and himself, it is difficult to understand his argument that the CDG issue is not probative of his character for truthfulness. Moreover, we point again to the underlying rationale behind commercial bribery laws: Sears paid Montani a salary which entitled it to his best efforts without being undermined by kickbacks, side payments or bribes. The fact that he would participate in the secret CDG scheme is highly probative of his lack of character for truthfulness.