Opinion ID: 536999
Heading Depth: 1
Heading Rank: 7

Heading: joinder of mail fraud counts with tax count

Text: 116 Judge Bryan denied the defendants' motion for severance of the tax count from the mail fraud counts. He reasoned that because much of LaRouche's unreported income was derived from the alleged mail fraud, and the expenditures on LaRouche's personal needs related to the tax count as well as to the loan fraud, a sufficient nexus warranted the joinder. He also reasoned that the joinder was not sufficiently prejudicial to warrant severance. 117 The defendants contest the judge's finding, arguing that the prejudice resulting to the defendants was substantial because a large amount of evidence introduced at the trial would not have been admissible in both trials had there been separate trials. 118 Rule 8 permits joinder of offenses if they are similar in character, are based on the same act or transaction or series of transactions, or constitute parts of a common scheme. To the extent that the proceeds from the loans, fraudulently applied to maintain LaRouche's lifestyle, also were not reported to the IRS, initial joinder was proper under Rule 8. 5 119 Rule 14 of the Federal Rules of Criminal Procedure provides that a court may grant a severance from a prejudicial joinder. A trial court's decision not to sever is reviewed under the abuse of discretion standard. United States v. Lane, 474 U.S. 438, 449 n. 12, 106 S.Ct. 725, 732 n. 12, 88 L.Ed.2d 814 (1986); Person v. Miller, 854 F.2d 656, 665 (4th Cir.1988) (abuse of discretion only found when trial court's decision to deny severance results in miscarriage of justice), cert. denied, --- U.S. ----, 109 S.Ct. 1119, 103 L.Ed.2d 182 (1989). 120 Whether Judge Bryan abused his discretion in denying the defendants' motion for a severance and concluding that there was not significant prejudice to warrant separate trials on the mail fraud and tax fraud counts must be evaluated as follows: 121 The trial court must weigh the inconvenience and expense to the government and witnesses of separate trials against the prejudice to the defendants inherent in a joint trial, and its determination will not be disturbed unless the denial of a severance deprives the movant a fair trial and results in a miscarriage of justice. The movant must show something more than merely a better chance of acquittal and must overcome the burden imposed by a stringent standard of review. 122 United States v. Santoni, 585 F.2d 667, 674 (4th Cir.1978) (citations omitted), cert. denied, 440 U.S. 910, 99 S.Ct. 1221, 59 L.Ed.2d 459 (1979). We have also made clear that curative instructions given to the jury by the district court go a long way in eliminating any prejudice resulting from the spillover effects of joinder. See United States v. Porter, 821 F.2d 968, 972 (4th Cir.1987), cert. denied, 485 U.S. 934, 108 S.Ct. 1108, 99 L.Ed.2d 269 (1988). 123 There was substantial overlap between the mail fraud and tax charges: (1) at least 50% of LaRouche's unreported personal income stemmed from mail fraud; (2) the need to prove the LaRouche Organization's structure and control was present in both cases; and (3) expenditures made on LaRouche's behalf helped prove both that lenders were not truthfully told about the availability of funds and that LaRouche indeed had personal taxable income. Furthermore, 11 of 30 government witnesses testified as to both charges. 124 In addition, the judge on numerous occasions cautioned the jurors about the different counts and what evidence they were to consider. Because of the substantial overlap in cases and the cautionary instructions issued by the court, we conclude that there was not a miscarriage of justice and that Judge Bryan did not abuse his discretion. 6 Accord United States v. Murphy, 836 F.2d 248, 255-56 (6th Cir.) (no prejudicial spillover effect when obstruction of justice and perjury charges joined with mail fraud charges), cert. denied, --- U.S. ----, 109 S.Ct. 307, 102 L.Ed.2d 325 (1988); United States v. Kopituk, 690 F.2d 1289, 1318 (11th Cir.1982) (RICO offenses not prejudicially joined with tax offenses, particularly because of policy in favor of joint trials in conspiracy cases), cert. denied, 463 U.S. 1209, 103 S.Ct. 3542, 77 L.Ed.2d 1391 (1983).