Court Opinion

ID: 2726271
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:00:30.419756+00
Date Added: 2024-06-11T10:03:10.980454
License: Public Domain

FILED
                           NOT FOR PUBLICATION                              SEP 08 2014

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,                        No. 13-30125

              Plaintiff - Appellee,              D.C. No. 6:10-cr-60122-AA-2

  v.
                                                 MEMORANDUM*
KEVIN SAWYER,

              Defendant - Appellant.

UNITED STATES OF AMERICA,                        No. 13-30127

              Plaintiff - Appellee,              D.C. No. 6:10-cr-60122-AA-1

  v.

TAMARA SAWYER,

              Defendant - Appellant.

                   Appeal from the United States District Court
                            for the District of Oregon
                   Ann L. Aiken, Chief District Judge, Presiding

                      Argued and Submitted August 25, 2014
                               Seattle, Washington

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Before: NOONAN, HAWKINS, and CHRISTEN, Circuit Judges.

      Defendants, a husband and wife, were charged in a twenty-one count

indictment with conspiracy, wire fraud, bank fraud, making false statements to a

financial institution, and money laundering. The charges stem from alleged real

estate investment fraud and mortgage fraud schemes.1 After the district court

granted the government’s motion in limine to exclude evidence of defendants’

intent or ability to repay the investors in the schemes, defendants entered

conditional guilty pleas reserving their right to challenge that ruling. They contend

the excluded evidence is relevant to establishing their specific intent to defraud,

which is an element of several of the charges against them. We have jurisdiction

under 28 U.S.C. § 1291 and affirm the district court’s order.

      1.     We review a district court’s evidentiary rulings for abuse of

discretion. United States v. Waters, 627 F.3d 345, 351–52 (9th Cir. 2010). We

conclude the district court did not abuse its discretion by excluding evidence of

defendants’ intent or ability to repay as irrelevant under Federal Rule of Evidence

401. The ability to repay is irrelevant because to prove fraud, the government only

needed to show that the Sawyers intended to deceive investors about where and

      1
            The parties are familiar with the facts of the case, so we will not
recount them here.

                                           2
how they intended to use the money. The Ninth Circuit, as well as every other

circuit court to address the issue, has determined that a defendant’s intent to repay

his or her victims is not a defense to criminal fraud charges. See United States v.

Treadwell, 593 F.3d 990, 997 (9th Cir. 2010) (“The intent to induce one’s victim to

give up his or her property on the basis of an intentional misrepresentation causes

‘harm’ by depriving the victim of the opportunity to weigh the true benefits and

risks of the transaction, regardless of whether or not the victim will suffer the

permanent loss of money or property.”);2 United States v. Oren, 893 F.2d 1057,

1062 (9th Cir. 1990) (“[O]ne defrauds another when he causes him to be

‘deprive[d] . . . of property by means of false . . . representations.’”) (quoting

Carpenter v. United States, 484 U.S. 19, 27 (1987) (alteration in original)); United

States v. Benny, 786 F.2d 1410, 1417 (9th Cir. 1986) (“While an honest, good-faith

belief in the truth of the misrepresentations may negate intent to defraud, a

good-faith belief that the victim will be repaid and will sustain no loss is no

defense at all.”). Whether they could pay investors back is irrelevant because it

      2
             See also United States v. Hamilton, 499 F.3d 734, 736–37 (7th Cir.
2007); United States v. Curry, 461 F.3d 452, 458 (4th Cir. 2006); United States v.
Daniel, 329 F.3d 480, 488 (6th Cir. 2003); United States v. Karro, 257 F.3d 112,
118 (2d Cir. 2001); United States v. Scott, 701 F.2d 1340, 1347–48 (11th Cir.
1983); United States v. Southers, 583 F.2d 1302, 1307–08 (5th Cir. 1978).

                                            3
does not make a fact of consequence (intent to deceive) more or less probable than

it would be without the evidence. Fed. R. Evid. 401.

       Citing United States v. Thomas, 32 F.3d 418 (9th Cir. 1994), defendants

argue they should have been permitted to present to the jury the strongest

circumstantial evidence regarding the presence or absence of specific intent to

defraud—and that their ability to repay constituted such evidence. But Thomas is

distinguishable. Thomas involved mail fraud, a charge not at issue here, and the

mail fraud statute has changed since the time of the Thomas defendant’s actions.

Id. at 419. At that time, deprivation of honest services and fair dealing did not

constitute a mail fraud offense; rather, in order to commit mail fraud, a defendant

must have intended to deprive his or her victims of money or property. Id. That is

not the case here. Treadwell, 593 F.3d at 998 (“To our knowledge, our precedents

establishing that § 1343 [wire fraud] does not require an intent to cause pecuniary

loss are consistent with the views of all other circuits that have addressed the

issue.”).

       2.    Even if evidence of the Sawyers’ ability to repay were relevant, it was

excludable under Federal Rule of Evidence 403 because the probative value of the

proffered evidence was substantially outweighed by the danger that the jury would

                                           4
be confused or misled. In the district court’s words, admitting the evidence would

have likely “confuse[d] the jury” and “give[n] them a chance to commit error.”

      3.     We also conclude the district court’s evidentiary ruling did not violate

the Sawyers’ due process rights. The district court acknowledged the possibility

that defendants could offer the excluded testimony on alternate grounds, and that

they had the right to present a defense; it only ruled that the defense “needs to be a

relevant defense.” Defendants were not denied the opportunity to present a

defense.

      AFFIRMED.

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