Opinion ID: 760199
Heading Depth: 2
Heading Rank: 1

Heading: Admission Of Evidence Relating To Wells' Prior Bad Acts

Text: 25 Wells contends that the admission of evidence of his participation in a tobacco fraud and tax evasion scheme several years prior to the events giving rise to the charges in the instant case violated Rules 404(b), 402 and 403 of the Federal Rules of Evidence. Rule 404(b) of the Federal Rules prohibits the admission of evidence relating to other crimes, wrongs or acts if the purpose of the admission is to prove that the person acted in conformity with his character. Id. However, the evidence is admissible to prove other things, such as motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident. Id. The trial court's decisions to admit or exclude evidence are reviewed for abuse of discretion. See United States v. Queen, 132 F.3d 991 (4th Cir.1997). 26 During the trial, the government introduced evidence tending to show that Wells had engaged in tobacco fraud and tax evasion between 1988 and 1993. Wells argues that the bank fraud and interference with tax officials charges in the instant case occurred three years after the other alleged activities, and are distinct from them. Therefore, he has urged they can have no relevance or purpose to the current allegations except to establish that he has a proclivity to commit crime. He cites several cases as support for that proposition, including United States v. Hernandez, 975 F.2d 1035, 1040 (4th Cir.1992), United States v. Sanders, 964 F.2d 295 (4th Cir.1992), and United States v. Tate, 715 F.2d 864 (4th Cir.1983). 27 Evidence that is (1) relevant to an issue other than character; (2) necessary; and (3) reliable is admissible under Rule 404(b). United States v. Rawle, 845 F.2d 1244, 1247 (4th Cir.1988). Thus the evidence in question must meet this test to be admissible. 28 The evidence is clear that Wells' acts toward the IRS directly resulted from the fraudulent tobacco scheme and tax evasion. Margaret Davis, a former IRS agent, testified that she audited Wells' returns for the years 1988-91 and determined that Wells owed taxes for unreported income earned from the tobacco scheme. 29 As a result, she referred his report to the IRS criminal division. Because of the audit, the IRS made a $1.8 million assessment against Wells and began attempts to enforce it through liens. 30 Wells responded to the liens two years later by sending the threatening letters that formed the basis of the indictment on Counts 1, 4 and 5. Some of the letters even referenced the specific dollar amount--$1,852,929--of the liens. Moreover, Wells presented a $3.7 million comptroller warrant--the subject of the bank fraud charges in Counts 3 and 11--to pay his tax bill--the $1,852,929 tax bill. 31 As is shown above, the evidence is relevant to show intent, motive, knowledge, and absence of mistake, which are proper bases under Rule 404(b). Moreover, it is also necessary. Evidence is necessary when it furnishes part of the context of the crime. Rawle, 845 F.2d at 1247, n. 4 (citation omitted). The evidence above certainly provides context for the crimes. Finally, Wells has not challenged the reliability of the evidence. Thus, the evidence is admissible under Rule 404(b). 32 The other bad act evidence challenged by Wells is also admissible under 404(b). The government introduced evidence regarding transactions with Prajesh Patel, one of Wells' associates. Patel testified about the manner in which he and Wells transferred the money from the tobacco scheme. As Wells' behavior in the instant case is very similar, the evidence may properly be introduced to show absence of mistake. It also provides context for the crimes here. As such, the district court did not abuse its discretion by admitting the evidence.
33 Evidence that is admissible under Rule 404(b) may still be excluded under Rule 403 if its probative value is substantially outweighed by the possibility of unfair prejudice. See Fed.R.Evid. 403. We generally favor admissibility, and will find undue prejudice only if there is a genuine risk that the emotions of a jury will be excited to irrational behavior, and this risk is disproportionate to the probative value of the offered evidence. United States v. Bailey, 990 F.2d 119, 123 (4th Cir.1993). 34 Wells' arguments are unavailing. He argues that since he stipulated to the tax assessment, proof of it was not very probative. Furthermore, even if it were, the underlying conduct leading to the assessment had no relevance to any issue in the case. However, as the evidence shows that warrants and letters were sent because of the outstanding tax lien, the probative value of the evidence outweighs any prejudice that might have existed. Furthermore, the court gave a limiting instruction. The evidence as to Wells' interaction with Patel is admissible for similar reasons. 35