Court Opinion

ID: 4168464
Source: CourtListenerOpinion
Date Created: 2017-05-15 20:04:36.859049+00
Date Added: 2024-06-11T07:47:00.302348
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                       MAY 15 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                       No.    15-10155

                Plaintiff-Appellee,             D.C. No.
                                                2:12-cr-01927-NVW-4
 v.

KENNY RAY KIRBY,                                MEMORANDUM*

                Defendant-Appellant.

UNITED STATES OF AMERICA,                       No.    15-10160

                Plaintiff-Appellee,             D.C. No.
                                                2:12-cr-01927-NVW-5
 v.

DAVID P. RACHEL,

                Defendant-Appellant.

UNITED STATES OF AMERICA,                       No.    15-10178
                                                       15-10306
                Plaintiff-Appellee,
                                                D.C. No.
 v.                                             2:12-cr-01927-NVW-2

STEVEN BREWER,

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
                Defendant-Appellant.

UNITED STATES OF AMERICA,                       No.   15-10179

                Plaintiff-Appellee,             D.C. No.
                                                2:12-cr-01927-NVW-3
 v.

JOEL STEPHEN CUTULLE, AKA Joel
Cutulle,

                Defendant-Appellant.

                   Appeal from the United States District Court
                            for the District of Arizona
                     Neil V. Wake, District Judge, Presiding

                             Submitted May 11, 2017**
                               Pasadena, California

Before: O’SCANNLAIN and OWENS, Circuit Judges, and CHRISTENSEN,***
Chief District Judge.

      Defendants Kenny Ray Kirby (“Kirby”), David Paul Rachel (“Rachel”), Joel

Stephen Cutulle (“Cutulle”), and Steven Thomas Brewer (“Brewer”) appeal from

the judgment of the district court following a jury verdict finding Defendants guilty

of conspiracy, wire fraud, and money laundering. As the parties are familiar with

      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
      ***
             The Honorable Dana L. Christensen, United States Chief District
Judge for the District of Montana, sitting by designation.

                                         2
the facts, we do not recount them here. We have jurisdiction under 28 U.S.C.

§ 1291, and we affirm.

      1. The district court did not err in denying Defendants’ motions for
acquittal.

      First, contrary to Defendants’ contentions, the superseding indictment does

not tie the money laundering counts to the substantive wire fraud counts. Despite

incorporating the previous paragraphs by reference, the superseding indictment

plainly defines the “specified unlawful activity” for purposes of 18 U.S.C. § 1957

generically as wire fraud.

      Second, Rachel and Cutulle were not exposed to Double Jeopardy because

they were charged and convicted of money laundering, not the uncharged wire

fraud underlying those counts. See United States v. Rogers, 321 F.3d 1226, 1229

(9th Cir. 2003) (relying on evidence of uncharged actions relating to broader

conspiracy). For similar reasons, the money laundering counts are not duplicitous.

See United States v. Golb, 69 F.3d 1417, 1429 (9th Cir. 1995) (drug trafficking, the

specified unlawful activity, was “not part of the charged money-laundering

offense”).1

      Third, viewed in the light most favorable to the prosecution, there is

1
 Cutulle waived his merger argument under United States v. Bush, 626 F.3d 527,
535-38 (9th Cir. 2010), by failing to raise it in his opening brief. See McKay v.
Ingleson, 558 F.3d 888, 891 n.5 (9th Cir. 2009).

                                         3
sufficient evidence that Kirby knowingly participated in the conspiracy, including

his receipt and rapid withdrawal of $6.1 million in escrow deposits, the importance

depositors placed on Kirby’s status as an attorney, his signing of various escrow

agreements, and evidence that he wrote letters in furtherance of the scheme. See

United States v. Grasso, 724 F.3d 1077, 1086 (9th Cir. 2013) (circumstantial

evidence can establish a defendant’s knowing connection to a conspiracy).

Further, Kirby is criminally liable for acts that occurred after he stopped actively

participating in the scheme because he did not withdraw from the conspiracy. See

United States v. Lothian, 976 F.2d 1257, 1261 (9th Cir. 1992).

      Fourth, there is sufficient evidence that Rachel agreed to partake in the

conspiracy. From March 2010 to October 2010, Rachel received and quickly

disbursed $1.8 million in escrow deposits. There was evidence as early as March

10, 2010 that Rachel was “primed.” Rachel reassured a depositor who was wary

about the scheme, speaking with him by phone. And, even after he was no longer

the escrow agent, Rachel wrote a letter stating that funding was imminent in

August 2011.

      In sum, the district court did not err in denying Defendants’ motions for

acquittal.

      2. The district court did not abuse its discretion in conducting voir dire.

      Although a prospective juror made a biased remark against criminals and

                                          4
inmates before the venire panel, this remark did not taint the jury. In contrast to

Mach v. Stewart, 137 F.3d 630, 633 (9th Cir. 1997), here the prospective juror

made a single statement before the venire panel and the statement was unrelated to

the criminal charges at issue.2 To the extent that Brewer was subsequently

impeached with his prior conviction, this occurred on the twelfth day of trial after

the jury had heard ample evidence of the scheme. In addition, in light of the

“broad discretion” judges enjoy over voir dire, the district court did not abuse its

discretion in declining to conduct individual voir dire or to issue a limiting

instruction. See Paine v. City of Lompoc, 160 F.3d 562, 564 (9th Cir. 1998).

     3. The district court did not abuse its discretion in allowing the
government to impeach Brewer with his prior conviction.

      While Federal Rule of Evidence 609(b) limits a party’s ability to impeach a

witness for truthfulness with a criminal conviction over ten years old, there was no

abuse of discretion here given (1) the nature and importance of Brewer’s

testimony; (2) the high probative value of Brewer’s prior fraud conviction; (3) the

centrality of Brewer’s credibility; and (4) the fact that the district court gave

Brewer advanced notice of the potential impeachment prior to testifying, and

warned his counsel to make “strategic judgments” about how to conduct Brewer’s

2
  The prospective juror’s statement also did not raise any Confrontation Clause
issues. Cf. Jeffries v. Wood, 114 F.3d 1484, 1490 (9th Cir. 1997) (where juror had
prior knowledge of the defendant’s criminal history).

                                           5
direct examination. See United States v. Hursh, 217 F.3d 761, 768 (9th Cir. 2000).

    4. The district court did not abuse its discretion in admitting the
summary charts.

      The summary charts were admissible under Federal Rule of Evidence 1006.

To the extent that they contained evidence of uncharged acts that were part of the

conspiracy, it is well-established that “the government in a conspiracy case may

submit proof on the full scope of the conspiracy; it is not limited in its proof to the

overt acts alleged in the indictment.” United States v. Rizk, 660 F.3d 1125, 1131

(9th Cir. 2011).3

      5. The district court did not plainly err in questioning witnesses.

      The district court’s questioning of witnesses, including Brewer, did not give

“an appearance of advocacy or partiality.” United States v. Scott, 642 F.3d 791,

799 (9th Cir. 2011). The judge’s questions appear designed to clarify the murky

financial concepts discussed by the witnesses, and to manage the trial. Further, the

judge gave three separate curative instructions ordering the jury not to interpret his

questions as evincing disbelief in any witness’s testimony. Accordingly, the

judge’s questioning did not constitute plain error. See United States v. Morgan,

376 F.3d 1002, 1008 (9th Cir. 2004) (“Even in cases where a judge’s participation

in a trial is ‘extreme,’ that participation generally does not warrant reversal if a

3
 Moreover, the evidence of the full scope of the conspiracy contained in the charts
did not implicate the Confrontation Clause.

                                           6
later curative instruction is given.”).

      6. The district court’s Pinkerton4 liability instruction did not constitute
plain error.

        The district court instructed the jury on Pinkerton liability using Ninth

Circuit Model Criminal Jury Instruction 8.25, an instruction that this court has

repeatedly held accurately states the law. See United States v. Alvarez-Valenzuela,

231 F.3d 1198, 1203 (9th Cir. 2000) (describing instruction with identical language

to instruction 8.25); United States v. Gadson 763 F.3d 1189, 1215 (9th Cir. 2014)

(holding that instruction 8.25 “directly tracks the language of Pinkerton”).

        Defendants also contend that instruction 8.25 did not require the jury to

unanimously determine which defendant committed the underlying act that gave

rise to Pinkerton liability. This was unnecessary because, as here, “[w]hen an

indictment includes a single conspiracy count conjunctively alleging multiple

offenses, a jury may convict by finding a conspiracy to commit any or all of the

conjunctive acts alleged.” United States v. Castro, 887 F.2d 988, 993 (9th Cir.

1989). Accordingly, there was no plain error.

      7. The district court’s money laundering instruction did not constitute
plain error.

        As explained above, the superseding indictment does not tether the money

laundering counts to the substantive wire fraud counts. Accordingly, the district

4
    Pinkerton v. United States, 328 U.S. 640 (1946).

                                            7
court’s money laundering instruction did not constitute plain error.

     8. The district court did not abuse its discretion in denying Rachel’s
motion to sever.

      “It is well-established that in the federal system there is a preference for joint

trials where defendants have been jointly indicted.” United States v. Hernandez-

Orellana, 539 F.3d 994, 1001 (9th Cir. 2008). A district court abuses its discretion

in denying a motion to sever where the “joint trial was so manifestly prejudicial as

to require the trial judge to exercise his discretion in but one way, by ordering a

separate trial.” United States v. Jenkins, 633 F.3d 788, 807 (9th Cir. 2011)

(internal quotation marks omitted). No such prejudice existed here. Even at a

separate trial, evidence of the “full scope of the conspiracy” would have been

admissible against Rachel. Rizk, 660 F.3d at 1131. Moreover, the district court

issued a limiting instruction to prevent Rachel from being unduly tainted by the

actions of his co-conspirators. Accordingly, the district court did not abuse its

discretion in denying Rachel’s motion to sever.

      AFFIRMED.

                                          8