Opinion ID: 623036
Heading Depth: 2
Heading Rank: 2

Heading: Trial: Evidentiary Arguments

Text: Hsu also challenges the admission at trial of evidence relating to his Ponzi scheme and California convictions. Because Hsu did not raise this objection before the trial court, we review it for plain error. See United States v. Edwards, 342 F.3d 168, 179 (2d Cir.2003). This standard gives us discretion to correct an error not raised at trial only where the appellant demonstrates that (1) there is an error; (2) the error is clear or obvious, rather than subject to reasonable dispute; (3) the error affected the appellant's substantial rights, which in the ordinary case means it affected the outcome of the district court proceedings; and (4) the error seriously affects the fairness, integrity or public reputation of judicial proceedings. United States v. Marcus, ___ U.S. ___, 130 S.Ct. 2159, 2164, 176 L.Ed.2d 1012 (2010) (internal quotation marks and brackets omitted). Hsu's argument fails to satisfy this standard. The admission of the challenged evidence, if error at all, was certainly not plain error affecting [Hsu's] substantial right[s]. Fed.R.Evid. 103(e). Under Federal Rule of Evidence 404(b)(1), evidence of a defendant's crime[s], wrong[s], or other act[s] is not admissible to prove a person's character in order to show that on a particular occasion the person acted in accordance with the character. In other words, evidence that a defendant committed crimes beyond those presented to the jury is not admissible to show that the defendant is a bad person who is therefore likely to be guilty of the crimes charged. But the Rule does not flatly prohibit the admission of such evidence. To the contrary, the Rule expressly allows the receipt of evidence of other crimes for a variety of other purposes. See Fed. R.Evid. 404(b)(2) (making such evidence admissible for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident). We have previously adopted the inclusionary rule that other crimes evidence is admissible for any purpose for which it is relevant, except to support the prohibited inferences of bad character or propensity to commit crimes. See, e.g., United States v. LaFlam, 369 F.3d 153, 156 (2d Cir.2004). Moreover, we have emphasized that evidence of criminal behavior may be admissible as direct evidence of the crime charged if it arose out of the same transaction or series of transactions as the charged offense, if it is inextricably intertwined with the evidence regarding the charged offense, or if it is necessary to complete the story of the crime on trial. United States v. Carboni, 204 F.3d 39, 44 (2d Cir.2000) (internal quotation marks omitted). Here, the government offered a legitimate rationale for the relevance of the evidence of Hsu's Ponzi scheme at the trial of the campaign finance fraud charges. The government argued that the evidence was admissible because Hsu's schemes were connected: the evidence could be read by a jury as suggesting that Hsu used his Ponzi investors as a source of campaign contributions, and used the connections to politicians to burnish his reputation for respectability so as to recruit and reassure potential investors. While not every witness who testified about how her investment was directly linked to the campaign finance scheme, several of them expressly noted these connections. There is thus no question that the evidence was relevant. Mere relevance, however, is not sufficient to guarantee admissibility of evidence of a defendant's other bad actsor indeed, of any evidence. Even relevant evidence may be excluded, subject to the discretion of the district court, when its probative value is substantially outweighed by a danger of . . . unfair prejudice, Fed.R.Evid. 403, which is particularly important in connection with evidence of other crimes. Hsu argues that the volume of Ponzi-scheme evidence admitted at his trial was excessive, resulting in disproportionate prejudice. The district court's handling of the evidence here, however, cannot be held to have been plainly erroneous. District courts have broad discretion to balance probative value against possible prejudice, and we will not disturb that balancing unless there is a clear showing of abuse of discretion. United States v. Bermudez, 529 F.3d 158, 161 (2d Cir.2008) (internal citation and quotation marks omitted). It is especially difficult to fault a district court's balancing when the party appealing the admission of the evidence never sought a ruling that would have made the court's balancing process explicit. Here, the record shows that the district judge was alert to the risks of unfair prejudice. Before the trial began, the government noted its intent to call some witnesses who would describe Hsu's Ponzi scheme. Unprompted by any objection from the defendant, the judge raised a question as to how many witnesses the government could legitimately use for the purposes of 404(b) evidence, and stated his inclination at the moment [] to say that . . . more than a couple, a handful, [] may be excessive. Defense counsel then noted that he agreed that some testimony relating to the Ponzi scheme was relevant as it relates to why contributions were made, but that he would object [to Ponzi-scheme testimony] if it has no bearing on the issue of the political contributions. The district court then again emphasized that while the testimony was indeed relevant, its extent was in question. The judge later returned to this issue, emphasizing again that while there was not much dispute or difficulty about the relevance of the evidence, highly emotional victim testimony could be prejudicial. The district court was thus attuned to the need to make a proper balance. That sensitivity continued during the trial. When the government called the witnesses in question, defense counselwho had earlier stated an intent to object when such evidence went beyond the agreed boundslodged no objection, evidently concluding that the government had not exceeded the point when prejudice began to outweigh relevance. It was the district judge who sua sponte raised a question as to whether the government's evidence was sufficiently linked to the campaign finance scheme, or whether it was beginning to be cumulative, effectively halting the presentation save for one final witness, Chorvat, whose testimony did directly connect the two schemes. Under the circumstances, we cannot say that the district court's decision regarding where to draw the line was an abuse of discretion, let alone plain error. The evidence was clearly relevant, as Hsu acknowledges; the sole question was where to draw the line so that its acknowledged relevance would not be swamped by the prejudice that could result if the trial's focus shifted from the campaign finance counts which were on trial, to the Ponzi counts, which were not. We cannot say that the particular place at which the judge chose to draw that line, unaided by any objection or argument from the defense, was plainly erroneous. Admission of testimony regarding the California conviction and arrest was also appropriate. The reaction to Hsu's arrest on the California warrant was the precipitating factor in the collapse of his Ponzi scheme and the discovery of his frauds; testimony about the arrest, to which Hsu had stipulated, therefore bore a relevant connection to the violations of campaign finance laws that were the basis for his trial. For these reasons, Hsu's evidentiary challenges are unavailing.