Court Opinion

ID: 2961370
Source: CourtListenerOpinion
Date Created: 2015-09-21 20:42:26.707681+00
Date Added: 2024-06-11T11:41:58.052835
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USCA1 Opinion

	

          January 13, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                                                                     _________________________          No. 91-1574                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                 WILLIAM J. DONOVAN,                                Defendant, Appellant.                                                                                     _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF NEW HAMPSHIRE                       [Hon. Shane Devine, U.S. District Judge]                                           ___________________                                                                                     _________________________                                        Before                                Selya, Circuit Judge,                                       _____________                            Coffin, Senior Circuit Judge,                                    ____________________                               and Cyr, Circuit Judge.                                        _____________                                                                                     _________________________               Jonathan R. Saxe, with whom Twomey and Sisti Law Offices was               ________________            ____________________________          on brief, for appellant.               Patrick  M. Walsh,  Assistant  United States  Attorney, with               _________________          whom Jeffrey  R.  Howard, United  States Attorney,  and Peter  E.               ___________________                                _________          Papps, First Assistant United States Attorney, were on brief, for          _____          appellee.                                                                                     _________________________                         Originally issued February 6, 1992;                        Reissued as redacted January   , 1993.                                                                                     _________________________                    SELYA, Circuit Judge.   Defendant-appellant William  J.                    SELYA, Circuit Judge                           _____________          Donovan,  Jr., a banker, was  convicted in the  district court on          five  counts  of willful  failure  to  file currency  transaction          reports (CTRs) as required  by law.  The offenses  were allegedly          committed  as part of  a pattern  of illegal  activity respecting          banking  transactions  which,  individually, involved  more  than          $10,000  in cash  and, collectively,  exceeded $100,000  within a          twelve-month period.  Donovan  appeals, contending that the lower          court erred  (1) in  instructing the  jury about  the willfulness          requirement of the currency reporting laws, and (2) in permitting          the government  to  cross-examine him,  and  introduce  evidence,          about  events  that  occurred   subsequent  to  the  offenses  of          conviction.    Finding  Donovan's  assignments  of  error  to  be          bootless, we affirm the judgment below.          I.  FACTUAL PRECIS          I.  FACTUAL PRECIS                    We  begin with an overview  of the facts,  taken in the          light most supportive of the verdict.  See United States v. Mena,                                                 ___ _____________    ____          933 F.2d 19,  21-22 (1st  Cir. 1991); United  States v.  Jimenez-                                                ______________     ________          Perez, 869 F.2d 9, 10 (1st Cir. 1989).          _____                    At the  time of  the transactions in  question, Donovan          was  the president and chief executive  officer of Atlantic Trust          Company,  a  federally  insured  bank  based  in  Newington,  New          Hampshire.    His  friend,  Dr.  Edward  Saba,  was  a  physician          practicing in Lowell, Massachusetts.   Donovan had long attempted          to  convince Saba to invest a portion of the considerable savings          that he had amassed.  When Donovan learned about the availability                                          2          of  a large  tract of  land  in Newington,  he persuaded  Saba to          direct part of his savings  toward acquisition and development of          the  tract.   In the  meantime, Donovan  would secure  the zoning          variances, devise the business plan, and do the legwork necessary          to  subdivide the parcel  into approximately  fifteen lots.   The          partners' plan  required an estimated cash  infusion of $450,000,          all furnished by Saba.                    So it was that, in March  of 1987, Saba began to invade          the caches of  hard-earned cash  that he had  squirreled away  in          various  safe  deposit boxes.    Donovan came  to  Lowell several          times, counted bundles of  cash in Saba's presence, and  took the          money  to Atlantic  Trust for  deposit.   On five  occasions, the          deposits  exceeded  $10,000.1    Each  time,  Donovan  personally          handled  the  crediting  of  the deposit  to  Saba's  account and          prepared  the  currency  for transshipment  to  Atlantic  Trust's          correspondent,  Bank of  New  England (which  served as  Atlantic          Trust's depository  with  the Federal  Reserve).   In  so  doing,          Donovan  bypassed conventional  channels, thus  circumventing the          bank's  internal  auditing  and  tracking mechanisms.    He  also          neglected to file the CTRs required by federal law.                      Over a  period of  time, several bank  employees became          suspicious  of the  unorthodox  methods used  in handling  Saba's          funds.   These  employees tried  to discuss  their concerns  with                                        ____________________               1The five deposits were in  the amounts of $30,000, $91,000,          $30,000, $55,000, and $30,000,  respectively.  They were  made at          various  times between  March 13, 1987  and April  21, 1987.   In          addition, Saba  deposited the proceeds of  a maturing certificate          of deposit, some $193,000, into an account at Atlantic Trust.                                          3          Donovan, but he  curtly dismissed their  qualms.  When  Donovan's          tenure at the bank  ended, his successor arranged for  an outside          audit.   In the audit's  aftermath, Donovan's activities  came to          the  attention of  federal authorities.   The  instant indictment          ensued.          II.  INDICTMENT AND TRIAL          II.  INDICTMENT AND TRIAL                    Donovan was charged with  violating 31 U.S.C.   5313(a)          (1988) and the  regulations thereunder.  The statute  provides in          relevant part:                         When a domestic financial institution is                    involved  in a  transaction for  the payment,                    receipt,  or transfer of  United States coins                    or currency . . . in an amount, denomination,                    or   amount   and   denomination,  or   under                    circumstances  the  Secretary  prescribes  by                    regulation,  the institution . . . shall file                    a report  on the transaction at  the time and                    in  the way  the  Secretary  prescribes.    A                    participant acting for  another person  shall                    make the report as the agent or bailee of the                    person and  identify the person  for whom the                    transaction is being made.          31 U.S.C.   5313(a) (1988).  The concomitant regulation states:                         Each financial institution other  than a                    casino  or the  Postal Service  shall file  a                    report of each deposit,  withdrawal, exchange                    of currency or other payment or transfer, by,                    through,  or  to  such financial  institution                    which involves a  transaction in currency  of                    more than $10,000.          31  C.F.R.  103.22(a)(1) (1985).2    A willful  violation  of the                                        ____________________               2The  regulation  exempts  from the  reporting  requirements          "[d]eposits or  withdrawals of currency from  an existing account          by  an established depositor who . .  . operates a retail type of          business."   31 C.F.R.    103.22(b)(2)(i) (1985).   The defendant          has not contended that Saba was an exempt customer under this, or          any other, section of the regulation.                                          4          statute and regulation carries criminal penalties:                         A   person   willfully  violating   this                    subchapter or a  regulation prescribed  under                    this subchapter . . . shall be fined not more                    than $1000,  imprisoned for not more than one                    year, or both.          31 U.S.C.   5322(a) (1988).                    At trial,  Donovan conceded that he was required by law          to file CTRs for the five cash deposits at issue.   He contended,          however, that he made an innocent mistake (or, more accurately, a          series  of   innocent  mistakes).     As  Donovan  told   it,  he          misunderstood the  import of the regulatory  scheme; knowing Saba          to be an  honest person who had  garnered the money lawfully  and          paid taxes on  it   facts which the government  did not dispute            Donovan thought  it was  unnecessary to report  the transactions.          If this were so, then the charges  were improvidently prosecuted.          See  id. (specifying  that  willfulness  is  an  element  of  the          ___  ___          offense).  A  jury, disbelieving  the tale,  found the  appellant          guilty on all five counts.          III.   [This Part  of  the panel  opinion  is superseded  by  the          III.   [This Part  of  the panel  opinion  is superseded  by  the          opinion of the en banc court]          opinion of the en banc court]          IV.  THE ADMISSION OF CERTAIN EVIDENCE          IV.  THE ADMISSION OF CERTAIN EVIDENCE                    Donovan's   second  ground   of  appeal   concerns  the          admission of  evidence about  events occurring subsequent  to the          offenses of conviction.   To put the matter into  perspective, we          recount  some  additional facts.    Saba's  initial outlays  were          sufficient  to  fund  the  land acquisition.    But,  incremental          expenses  began to accrete.  To defray these costs, Saba supplied                                          5          an extra $100,000 for the project.  Donovan then opened a $50,000          line of credit secured  by a mortgage on the property, signing an          affidavit in which he attestedto the business purpose of theloan.                    As matters  turned out,  Donovan played fast  and loose          with Saba.   He diverted some of the  $100,000 to his own use and          employed  the $50,000  line-of-credit  advance for  a variety  of          personal  ends unrelated  to the  partnership's business.   Among          other things,  Donovan  used the  misdirected  money for  a  down          payment  on a  boat  slip, the  purchase  of an  automobile,  and          partial satisfaction of  a personal  loan.  The  timing of  these          expenditures   was  significant:     when  Donovan  executed  the          "business  purpose"  affidavit,  for  instance,  he  had  already          written  a  check for  the boat  slip  (drawn in  anticipation of          funding the line of credit).                    The  district  court  permitted the  prosecution,  over          objection,  to cross-examine  Donovan  about these  events.   The          court  also  admitted as  full  exhibits  a  number of  documents          relating thereto,  including the  affidavit.  Although  less than          pellucidly clear about  the legal fundament  on which its  ruling          rested, the court, in a manner evocative of Fed. R.  Evid. 608(b)          (which  provides, inter alia, that the  district court may permit                            _____ ____          cross-examination  about  specific   instances  of  a   witness's          conduct, if  probative of  untruthfulness), said it  was allowing          the evidence for impeachment purposes.                    We  need not  explore  the interstices  of Rule  608(b)          because we  believe the  evidence was admissible  on a  different                                          6          rationale.  Donovan's  defense had three  foci, viz. (1)  intent,          i.e., he  denied willfully violating the  reporting requirements;          (2)  motive, i.e., he  asserted that he had  nothing to gain from          ducking  those requirements;  and (3)  mistake, i.e.,  he claimed          that he misunderstood the reporting laws.  The testimony elicited          by the cross-examination, and  the exhibits related thereto, were          relevant to assessing these issues   most specifically, Donovan's          state of mind in  failing to report the currency  transactions as          required by law.   The evidence was,  therefore, admissible under          Fed. R. Evid. 404(b).3                        The appellant  offers four reasons why  Rule 404(b) was          inapposite:  the district court did not resort to it; the  events          in  question postdated  the  offenses of  conviction; the  events          lacked special relevance to those offenses; and  the evidence was          unduly prejudicial.  We find none of these reasons persuasive.                                          A.                                          A.                                          __                    The  appellant's  first contention  need not  detain us          long.   To be sure,  the record is  tenebrous as to  the district          court's  theory of admissibility.  Nonetheless, it is the rule in                                        ____________________               3The rule provides:                         Evidence  of  other  crimes, wrongs,  or                    acts is not admissible to prove the character                    of  a  person  in  order to  show  action  in                    conformity  therewith.   It may,  however, be                    admissible for other  purposes, such as proof                    of motive,  opportunity, intent, preparation,                    plan,  knowledge,  identity,  or  absence  of                    mistake or accident.          Fed. R. Evid. 404(b).                                          7          this circuit that,  so long as the decision  to admit evidence is          proper  under some theory, the  basis upon which  it was actually          admitted by  the district court  is ordinarily of  little moment.          Thus,  in United States v. Walsh, 928  F.2d 7 (1st Cir. 1991), we                    _____________    _____          concluded  that, because  certain  evidence was  admissible under          Fed.  R.  Evid.  404(b),  it  was  "unnecessary  to  resolve  the          disagreement as to which  ground the district court had  in mind"          in  permitting its introduction.   Id. at  10 n.10.   To the same                                             ___          effect is United States v. Nivica, 887 F.2d 1110, 1127  (1st Cir.                    _____________    ______          1989), cert. denied, 494  U.S. 1005 (1990), where we  wrote that,                 _____ ______          "if  the  trier  incorrectly  admits  evidence  under  a  hearsay          exception,  we will  not  reverse so  long  as the  material  was          properly  admissible . . .  under a different  rule of evidence."          Other circuits agree with  this practical, common sense approach.          See, e.g., United States  v. Cardenas, 895 F.2d 1338,  1345 (11th          ___  ____  _____________     ________          Cir. 1990) ("'If the admission was proper on any ground, it is of          no consequence that the  court might have given the  wrong reason          for  its admission.'")  (quoting  Navajo Freight  Lines, Inc.  v.                                            ___________________________          Mahaffy, 174 F.2d 305, 307 (10th Cir. 1949)).          _______                    In this case, the appellant was not unfairly prejudiced          by the district court's resort to an arguably different theory of          admissibility; after all, permitting  the government to offer the          evidence   strictly  for   impeachment   purposes   was  a   more          circumscribed use than Rule 404(b) would have allowed.  Hence, if          the  court's theory  of  admissibility was  erroneous, the  error          favored  the appellant.  Cf.,  e.g., United States  v. Oppon, 863                                   ___   ____  _____________     _____                                          8          F.2d  141, 148  (1st Cir.  1988).   Ordinarily,  an error  in the          admission  of evidence does not  afford a ground  for reversal at          the behest of a party who benefitted from the error.  See Fed. R.                                                                ___          Evid.  103(a) ("Error may not  be predicated upon  a ruling which          admits  or excludes evidence  unless a  substantial right  of the          party is  affected . . . .").  Furthermore, while it is true that          the district court made  no explicit findings under  Rule 404(b),          such findings are not an invariable prerequisite to the admission          of Rule 404(b) evidence.  See, e.g., United States v. De La Cruz,                                    ___  ____  _____________    __________          902 F.2d 121,  123 (1st Cir. 1990);  United States v.  Foley, 871                                               _____________     _____          F.2d 235, 238 (1st Cir. 1989).   Here, the record is sufficiently          translucent that we can work the Rule 404(b) calculus unaided.4                                          B.                                          B.                                          __                    The   appellant's   second   contention    is   equally          unavailing.   The fact that the acts took place subsequent to the          transactions for which Donovan was convicted  does not thwart the          Rule 404(b)  regime.5  In  United States v. Bank  of New England,                                     _____________    ____________________          821 F.2d  844, 858 (1st Cir.), cert. denied, 484 U.S. 943 (1987),                                         _____ ______                                        ____________________               4We note that the court did refer to the evidence as tending          to  show the absence of "honest mistake"   a recognized basis for          allowing evidence to be introduced under Rule 404(b).                5The  challenged  evidence concerned  events  which occurred          within a  year of the  offenses of conviction.   Thus,  they were          sufficiently  contiguous in  time, if  otherwise relevant,  to be          admitted.   See,  e.g., United  States v.  Rodriguez-Estrada, 877                      ___   ____  ______________     _________________          F.2d 153, 156 (1st Cir. 1989) ("When, as in this case, the linked          incident occurs close  in time,  and is highly  relevant, to  the          charged  conduct, the argument  for admissibility is powerful.");          United  States v. Fields, 871 F.2d 188, 198 (1st Cir.) (admitting          ______________    ______          evidence of subsequent  acts that occurred three years  after the          charged crimes), cert. denied, 493 U.S. 955 (1989).                           _____ ______                                          9          we stated that Rule 404(b) "has been held to allow the  admission          of acts or  conduct subsequent  to the offense  charged to  prove          intent to commit  the alleged illegal act."  See  also id. at 859                                                       ___  ____ ___          ("Rule 404(b) allows  the admission of subsequent conduct to show          a defendant's mental state at the time of the charged offense . .          . .");  cf. Mena, 933  F.2d at 25  n.5 (subsequent events  may be                  ___ ____          probative of a defendant's motive or intent at an earlier time).                    In  so holding,  we do  no more  than vivify  the well-          settled  concept that Rule 404(b)  is not to  be read grudgingly.          As we stated in United States v. Fields, 871 F.2d 188 (1st Cir.),                          _____________    ______          cert.  denied, 493  U.S. 955  (1989), a  case where  the district          _____  ______          court permitted  evidence of postconspiracy activity  to show the          existence  of   the  conspiracy   and  the  participation   of  a          coconspirator therein, Rule 404(b) is a rule  "of inclusion which          allows the introduction of  evidence of other crimes, wrongs,  or          acts   unless  the   evidence  tends   to  only   prove  criminal          disposition."  Id. at 196.  See also Huddleston v. United States,                         ___          ___ ____ __________    _____________          485  U.S.  681,  688-89  (1988)  ("Congress  was  not  nearly  so          concerned with  the potential  prejudicial effect of  Rule 404(b)          evidence as it was  with ensuring that restrictions would  not be          placed on  the admission of  such evidence.");  United States  v.                                                          _____________          Flores Perez, 849  F.2d 1, 4  (1st Cir.  1988) (when evidence  of          ____________          other wrongs is introduced to show knowledge,  motive, or intent,          Rule 404(b) has "been construed broadly").                                          C.                                          C.                                          __                    Inasmuch as the appellant's third and fourth objections                                          10          lie  at  the heart  of  the matter,  we  treat with  them  in the          ensemble.    Federal courts  undertake  a  bifurcated inquiry  in          deciding  questions of  admissibility  under Rule  404(b).   See,                                                                       ___          e.g., United States  v. Rodriguez-Estrada, 877 F.2d 153, 155 (1st          ____  _____________     _________________          Cir. 1989);  Fields, 871  F.2d at  196; Oppon,  863 F.2d  at 146.                       ______                     _____          First, the  evidence must possess some  "special relevance," that          is,  it must  be  "offered not  merely  to show  the  defendant's          propensity  for  crime but  to  establish  some material  issue."          United States v. Devin, 918 F.2d  280, 286 (1st Cir. 1990).  Once          _____________    _____          it is  established that the evidence has  such special relevance,          its  probative   worth  must   then  be  balanced   "against  the          countervailing considerations enumerated in  Rule 403 in order to          gauge admissibility."  Id.   We think that the  disputed evidence                                 ___          clears both hurdles.                    1.    Special  Relevance.   The  cross-examination  and                    1.    Special  Relevance.                          __________________          related   extrinsic  evidence   were  particularly   relevant  to          Donovan's  motive, intent, and defense of mistake.6  The material          adduced  could  assist  in   persuading  a  jury  that  Donovan's          investment idea  reflected a  scheme  to obtain  funds from  Saba          which  he  (Donovan)  could  use   in  his  self-interest.    The          subsequent acts, especially the  false swearing in the affidavit,                                        ____________________               6We note that,  in the context of  Donovan's defense, intent          and  mistake  are  sisters  under  the  skin.    Such  a  sibling          relationship  is not  unusual;  when  mistake  is asserted  as  a          defense to criminal charges,  it is often proffered to  negate an          intent  requirement.   See generally  22 C.  Wright &  K. Graham,                                 ___ _________          Federal  Practice   and  Procedure     5247,   at  517-18  (1978)          __________________________________          ("'[A]bsence of mistake  or accident' .  . . is simply  a special          form of  the exception that  permits the use  of other crimes  to          prove intent.").                                          11          reflected a  conscious disregard  of any legal  requirements that          might hinder  Donovan's ability  to use  Saba's property  for his          immediate  benefit.   A  jury could  conclude,  from hearing  the          cross-examination and seeing the evidence about the conversion of          Saba's property, that Donovan sought  to minimize all avenues  of          oversight which  would increase his accountability to anyone   be          it  Saba, the  bank, or federal  authorities.  A  jury could also          conclude,  therefore, that Donovan was not in fact mistaken about          the obligations of  the reporting laws and  regulations, but that          he willfully  sought to  skirt  them because  he considered  them          unimportant and feared that conformity  with them would hinder or          prevent his use of Saba's money  for his own benefit.7  In short,          because the currency transactions  and the conduct which occurred          in their  wake  could plausibly  be viewed  as part  of a  common          scheme, the  challenged evidence  was specially relevant  to shed          light on the appellant's intent at earlier stages of the scheme.                    Before leaving this  prong of the Rule 404(b)  test, we          note that the cross-examination and associated evidence were also          specially  relevant to  depict the broader  context in  which the          charged  conduct took  place.   We have  frequently allowed  Rule                                        ____________________               7The  following exchange, which  took place during Donovan's          cross-examination, typified the disputed evidence:                    [Prosecutor]:   Do you  regard that affidavit                    that  I showed you .  . . do  you regard that                    like the currency transaction report, as just                    one of those silly  forms that people have to                    put   up  with  when  they  conduct  business                    transactions?                    [Donovan]:  I'm afraid I do.                                          12          404(b) evidence to  be employed  for such purposes.   See,  e.g.,                                                                ___   ____          Devin, 918 F.2d at  287 ("'other acts' evidence which  is closely          _____          bound up  with the crimes  charged is eligible  for admissibility          under   Rule  404(b)");  Rodriguez-Estrada,   877  F.2d   at  156                                   _________________          (similar);  Fields,  871  F.2d  at 194  (evidence  of  other acts                      ______          admissible if it  "is necessary  to complete the  picture of  the          crime on trial");  United States  v. Reveron  Martinez, 836  F.2d                             _____________     _________________          684, 687-88 (1st Cir. 1988) (details of uncharged acts admissible          "'to show  the chain of  events forming the  context'") (citation          omitted); United States  v. D'Alora,  585 F.2d 16,  20 (1st  Cir.                    _____________     _______          1978) (similar).                    2.   Probative Value/Prejudicial Effect.   Although the                    2.   Probative Value/Prejudicial Effect.                         __________________________________          evidence  possessed  the special  relevance  required under  Rule          404(b),  it must still be  scrutinized under Fed.  R. Evid. 403.8          Such scrutiny proceeds, of  course, on the understanding that  an          appellate tribunal can  reverse on this  basis only if  admitting          the evidence was tantamount to an abuse of discretion.  See De La                                                                  ___ _____          Cruz, 902  F.2d at  124; Rodriguez-Estrada,  877 F.2d  at 155-56;          ____                     _________________          Fields, 871 F.2d at 196.  We are unable to say that the probative          ______          value/prejudicial effect seesaw was so out of kilter in this case                                        ____________________               8The rule provides in pertinent part:                    Although relevant, evidence  may be  excluded                    if  its  probative  value   is  substantially                    outweighed by the danger of unfair prejudice,                    confusion  of the  issues, or  misleading the                    jury,  or by  considerations of  undue delay,                    waste  of time,  or needless  presentation of                    cumulative evidence.          Fed. R. Evid. 403.                                          13          as to call for corrective measures.                    To dwell upon the point  would serve no useful purpose.          The trial judge refused to allow the prosecution to introduce the          disputed  evidence during its case  in chief.   It was only after          Donovan took  the  witness stand  and made  "honest mistake"  the          centerpiece  of   his  defense  that  the   court  permitted  the          government  to  show the  panoramic  picture  of the  defendant's          dealings with Saba.  The picture, to be sure, was not pretty.  It          placed  Donovan in  a  harshly unflattering  light.   But,  "[b]y          design,  all  evidence is  meant to  be  prejudicial; it  is only          unfair prejudice which must  be avoided."  Rodriguez-Estrada, 877          ______                                     _________________          F.2d at 156.   Having in mind  the limiting instruction given  by          the court   an  instruction which was more restrictive  than Rule          404(b)  demanded     we  do  not  believe the  border  separating          fairness from unfairness was violated in this instance.                      In fine, from the  distant vista of an  algid appellate          record, we are unprepared to say that, as a matter of discretion,          the jury  should have  been forced  to pass upon  the honesty  of          Donovan's  claimed "mistake"  in a vacuum,  shielded from  a full          account  of his coarse course  of subsequent conduct.    Compare,                                                                   _______          e.g.,  United States  v. Sanchez-Robles,  927 F.2d  1070, 1077-78          ____   _____________     ______________          (9th Cir. 1991);  Doty v. Sewall, 908  F.2d 1053, 1058 (1st  Cir.                            ____    ______          1990);  Cardenas, 895 F.2d at 1342; United States v. McNeill, 728                  ________                    _____________    _______          F.2d 5, 12-13 (1st Cir. 1984).          V.  CONCLUSION          V.  CONCLUSION                    We need go no  further.  From aught that  appears after                                          14          careful  attention to  the record, the  briefs, and  the parties'          oral  arguments,  the  appellant  was  fairly  tried  and  justly          convicted.  The judgment below must therefore be          Affirmed.          Affirmed.          ________                                          15