Opinion ID: 386853
Heading Depth: 2
Heading Rank: 4

Heading: Evidentiary Points

Text: 26 Reed claims that the trial court erred in permitting the Government to introduce evidence of contemporaneous stock transactions at Janney Montgomery Scott Inc. (Janney), evidence indicating that Reed was also purchasing securities at Janney with checks drawn on bank accounts having insufficient funds. The evidence was offered to prove intent, knowledge, or plan under Federal Rule of Evidence 404(b). Appellants claim that intent to defraud was not an issue. Yet when Government counsel offered to forego introduction of the evidence if Reed's counsel were willing to stipulate to Reed's knowledge and intent, his counsel declined to do so, stating, I think that's what this whole case is about. Thus, appellants did not take this issue sufficiently out of dispute so as to bar use of the similar act evidence. See, e. g., United States v. Figueroa, 618 F.2d 934, 941-42 (2d Cir. 1980); United States v. Mohel, 604 F.2d 748, 753-54 (2d Cir. 1979); United States v. Williams, 577 F.2d 188, 191 (2d Cir.), cert. denied, 439 U.S. 868, 99 S.Ct. 196, 58 L.Ed.2d 179 (1978). 27 The evidence of the Janney transactions was also admissible to show a common scheme or plan. See, e. g., United States v. Wexler, 621 F.2d 1218, 1225-1226 (2d Cir. 1980), cert. denied, --- U.S. ----, 101 S.Ct. 119, 66 L.Ed.2d 48 (1980); United States v. Arroyo-Angulo, 580 F.2d 1137, 1149 (2d Cir.), cert. denied, 439 U.S. 913, 99 S.Ct. 618, 58 L.Ed.2d 260 (1978). Reed, while trading at Shearson, opened an account at Janney in the same name as that of one of his Shearson accounts, the Universal Gym Equipment Corporation; he purchased stock for which he never paid, by writing bad checks on foreign-based bank accounts to ensure delay in detection; he even used one of the same banks, the Banco de Commerciale in Puerto Rico. To be sure, the trial court admitted this evidence at the conclusion of the Government's case, rather than waiting for the defense to present its case. This was proper, however, not only because evidence of a common scheme or plan served to prove the doing of the criminal act by Reed, see United States v. Danzey, 594 F.2d 905, 912-14 (2d Cir.), cert. denied, 441 U.S. 951, 99 S.Ct. 2179, 60 L.Ed.2d 1056 (1979), but also because it was already apparent that the issue of whether Reed had intended to execute a scheme to defraud would be contested. Hence the policy behind postponing introduction of similar act evidence on the issue of intent until the defense has presented its case to avoid prejudice to the defendant if he never really disputes the issue, see Figueroa, 618 F.2d at 939-42 was no longer relevant here. 28 In addition, Doyle and Ryan each argue that they were the victims of prejudicial spillover from the introduction of testimony regarding Reed's activities at Janney. But the court carefully gave cautionary instructions which, in light of the fact that no claim was made that Doyle and Ryan had any connection with the similar conduct, we think were adequate to safeguard against impermissible prejudice. See United States v. DiGeronimo, 598 F.2d 746, 754 (2d Cir.), cert. denied, 444 U.S. 886, 100 S.Ct. 180, 62 L.Ed.2d 117 (1979); United States v. Rosenwasser, 550 F.2d 806, 808-09 (2d Cir.), cert. denied, 434 U.S. 825, 98 S.Ct. 73, 54 L.Ed.2d 83 (1977). Indeed, Ryan's counsel argued in summation that the Janney evidence supported Ryan's position that he was the victim of a con artist, for the broker at Janney acted in the same way that Ryan did. 29 Doyle claims that the court improperly admitted into evidence a letter from a bank addressed to him and his wife, which was found in his desk as a result of an office search by one of his superiors at Shearson. The letter stated that the Doyles were eight months behind in their mortgage payments and threatened foreclosure proceedings. Doyle objected to the introduction of the letter on hearsay and relevance grounds. However, the letter was admitted for the purpose of showing Doyle's mental state and his motivation for not abiding by Shearson's rules. It was not admitted to establish that he was in fact eight payments behind in his mortgage but rather to show that he believed he was in financial difficulty and thus had a reason for participating in Reed's scheme. As such the letter was not hearsay; it was not offered to prove the truth of the matter asserted. See Fed.R.Evid. 801(c). 30 Moreover, the court specifically considered the danger of unfair prejudice, see Fed.R.Evid. 403, and quite properly found the letter both relevant, because a defendant's belief that he is in financial difficulty is admissible to show motive, and not unduly prejudicial. See United States v. Polansky, 418 F.2d 444, 448 (2d Cir. 1969); United States v. Caci, 401 F.2d 664, 670 (2d Cir. 1968), cert. denied, 394 U.S. 917, 931, 89 S.Ct. 1188, 1201, 22 L.Ed.2d 450, 461 (1969). Doyle relies on United States v. Mullings, 364 F.2d 173 (2d Cir. 1966), a case in which the defendant was charged with theft of property, and evidence that he used narcotics and that his take home pay was under $65 per week was offered to show motive. The court there held that though a lack of money may be admissible to prove motive, this particular evidence was inadmissible because the chain of inferences with respect to the defendant's need for funds was too speculative, id. at 175, and was outweighed by the prejudicial effect of the evidence of his narcotics addiction, id. at 176. Here, in contrast, Doyle was made aware of a specific and serious financial problem, and there is nothing inherently prejudicial about being behind in one's mortgage payments. Therefore the district court properly admitted the letter as evidence of Doyle's motive. 31 Doyle also argues that the court should have excluded certain testimony concerning the meeting he and Reed had with the chairman of the board of Allied Leisure, a Florida concern engaged in the manufacture of coin-operated amusement machines. Reed introduced Doyle as a future controller of Allied Leisure if Reed were to obtain a controlling interest in the company; and Doyle, in fact, inspected Allied Leisure's books on that occasion. While Doyle now claims that this was hearsay evidence, he did not specifically make this objection at trial, as he should have. See Fed.R.Evid. 103(a)(1); United States v. Hutcher, 622 F.2d 1083, 1087 (2d Cir. 1980), cert. denied --- U.S. ----, 101 S.Ct. 218, 66 L.Ed.2d 96 (1980). But even if the objection had properly been made, the testimony was offered not for the truth of the fact that Doyle was going to be a controller but rather to establish Doyle's state of mind and his close relationship with Reed. In other words, if Doyle thought that he might be controller, then he would have a motive for cooperating with Reed. And the evidence showed that Doyle was in Florida with Reed even while he was telling people at Shearson that he was elsewhere, this just at the time when the Shearson lawyer Kujawski was making his investigation. Thus the testimony in question went to Doyle's motive and was not hearsay. 32 Any other contentions of the parties are not worthy of further commentary. Judgment affirmed.