Court Opinion

ID: 3026079
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:35:02.727531+00
Date Added: 2024-06-11T11:47:50.131062
License: Public Domain

United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                     ___________

                                    No. 00-2129
                                    ___________

United States of America,                *
                                         *
      Appellee,                          *
                                         *
      v.                                 * Appeals from the United States
                                         * District Court for the District
Frederick R. Schumacher                  * of Minnesota
                                         *
      Appellant.                         *
                                    ___________

                            Submitted: December 15, 2000
                                Filed: February 9, 2001
                                    ___________

Before McMILLIAN and MURPHY, Circuit Judges, and BOGUE,1 District Judge.
                          ___________

BOGUE, District Judge.

       Frederick Schumacher appeals from his conviction in the District Court2 for mail
fraud, wire fraud, conspiracy to commit money laundering, and interstate transfer of
stolen funds. Schumacher challenges the sufficiency of the evidence against him,

      1
        The Honorable Andrew W. Bogue, Senior United States District Judge for the
District of South Dakota, sitting by designation.
      2
      The Honorable Richard H. Kyle, United States District Judge for the District
of Minnesota.
argues that the trial court erred in admitting evidence of his prior dealings with co-
defendant, John Anderson, and raises allegations of prosecutorial misconduct as the
result of statements made during closing arguments. For the following reasons, we
affirm.

        In 1995, Schumacher, an attorney, Anderson, Craig Velasco, and Sam Podany
began a venture to begin a company which would issue credit cards endorsed by
celebrities. No celebrity endorsers were ever found and no credit cards were ever
issued. Schumacher and Anderson did manage to find investors for the venture, the
largest of which was Thomas Jensen. In three separate transactions, Jensen invested
his entire inheritance, over $100,000. Jensen received a signed guarantee from
Anderson and Schumacher stating that none of the money was to be withdrawn unless
and until the company was fully funded. If the company was not fully funded, all of
Jensen’s money was to be returned with fifty percent interest. Jensen was not aware
that Anderson was personally bankrupt at the time of his investing. Schumacher
withdrew and spent over $67,000 of Jensen’s money for his personal debts and for
Anderson’s personal use.

       Jensen became increasingly worried about the progress of the venture and
requested updates from Schumacher. Several letters of assurance were sent by
Schumacher to Jensen stating his money was safe and the venture was proceeding.
Jensen’s suspicions finally led him to approach the authorities about the venture’s
actions and then it was discovered the company was essentially broke. Velasco plead
guilty to mail and wire fraud in October 1998. Anderson plead guilty soon thereafter
and testified against Schumacher at his trial. Schumacher raises three grounds for
reversal of his conviction; insufficient evidence, admission of prejudicial evidence and
prosecutorial misconduct.

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                                           I.

       Schumacher’s insufficiency claim is based upon the argument that he had a right
to spend the investors’ funds as they were earned which defeats the criminal intent
requirements of the charges. When reviewing a jury verdict for sufficiency of the
evidence, we must view the evidence in the light most favorable to the verdict and
accept all reasonable inferences supporting the conviction. United States v. Gaines, 969
F.2d 692, 696 (8th Cir. 1992); United States v. Holt, 969 F.2d 685, 687 (8th Cir.
1992). Intent to defraud may be inferred from all the facts and circumstances
surrounding the defendant's actions. United States v. Wrehe, 628 F.2d 1079, 1082 (8th
Cir. 1980).

       In this action, there was ample evidence that Schumacher knew of his agreement
with Jensen, knowingly violated that agreement, knew Anderson was bankrupt, knew
the operation was going to fail, misrepresented the status of the operation, and spent
and dispersed Jensen’s funds without his consent or knowledge. Schumacher made
essentially the identical argument at trial and it was rejected by the jury. Given the
above referenced facts, this Court cannot disturb the verdict on insufficiency grounds.

                                          II.

       Schumacher’s other claim of error is that evidence of his prior fraudulent
dealings with Anderson were admitted into evidence. “Rule 403 allows the district
court to exclude relevant evidence if its probative value is substantially outweighed by
the danger of unfair prejudice. See United States v. Guerrero-Cortez, 110 F.3d 647,
652 (8th Cir. 1997). We give deference to a district court's decision under the Rule 403
balancing test and reverse only if there was a clear abuse of discretion. Id.” United
States v. Davis, 154 F.3d 772, 780 (8th Cir. 1998), cert. denied, 525 U.S. 1169 (1999).

                                           3
        The admission of Schumcher’s other fraudulent dealings with Anderson were
relevant and probative of the intent required to prove fraud. We can find no error with
the district court’s determination that the prejudicial effect was outweighed by the
probative value of the evidence. Schumacher’s role in the prior schemes was nearly
identical to the acts at issue in this trial, therefore, there was a high degree of relevance.
The mere fact that the evidence was unfavorable, is by no means so unfairly prejudicial
as to “be misleading and not aid and assist the jury in making a material determination
in the case.” United States v. Flanagan, 34 F.3d 949, 953 (10th Cir. 1994). The district
court did not abuse its discretion in not excluding the prior bad acts of Schumacher.

                                            III.

       Finally, Schumacher made an allegation of prosecutorial misconduct resulting
from statements made during the government’s closing arguments. Schumacher failed
to object at trial to any of the comments he now raises as error. Since Schumacher
failed to timely object, this issue must be reviewed under the plain error standard.
United States v. Schmidt, 922 F.2d 1365, 1369 (8th Cir. 1991). “Under this standard,
we can only grant relief if the error ‘would result in a miscarriage of justice if left
uncorrected.’” Id. (quoting United States v. Carey, 898 F.2d 642, 644
(8th Cir. 1990) ).

       Prosecutors are entitled to argue reasonable inferences to be drawn from the
facts in evidence during closing arguments. In this action, the prosecutor merely
explained to the jury the reason Count 41 was dismissed and then referred to
Schumacher as a “bag man.” After carefully reviewing the entire record, we hold that
the comments by the prosecutor did not result in a "miscarriage of justice" nor
constitute plain error. Accordingly, we affirm the judgment of the district court.

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A true copy.

      Attest:

               CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

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