Court Opinion

ID: 4356168
Source: CourtListenerOpinion
Date Created: 2019-01-04 17:00:21.286565+00
Date Added: 2024-06-11T09:24:32.232469
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 17-3562
                         ___________________________

                              United States of America

                         lllllllllllllllllllllPlaintiff - Appellee

                                            v.

                                  Lynn Alisa Espejo

                       lllllllllllllllllllllDefendant - Appellant
                                       ____________

                     Appeal from United States District Court
              for the Eastern District of Arkansas - Western Division
                                   ____________

                          Submitted: September 28, 2018
                             Filed: January 4, 2019
                                 ____________

Before COLLOTON, GRUENDER, and GRASZ, Circuit Judges.
                        ____________

GRASZ, Circuit Judge.

       Lynn Alisa Espejo appeals her conviction for various crimes related to stealing
funds from a medical practice while working as its bookkeeper, arguing that the
district court erred by excluding potentially exculpatory evidence regarding the
medical practice’s destruction of financial records. We conclude that the district
court1 did not abuse its discretion in excluding the evidence.

                                  I. Background

      Espejo was the administrator for Practice Management Services Inc. (“PMSI”),
a medical practice. As the administrator, Espejo was effectively responsible for
managing the office. When PMSI changed presidents from Dr. Bruce Sanderson to
Dr. Scott Brown in 2010, Brown discovered a debit card linked to PMSI’s account
which, along with several other issues, caused him to further investigate PMSI’s
finances. PMSI placed Espejo on administrative leave, and she subsequently resigned
on October 1, 2010. The investigation ultimately revealed that Espejo had transferred
some of PMSI’s funds into her personal account.

       Many of PMSI’s financial records that were part of the investigation into
Espejo’s use of funds are now missing. During the investigation into the funds in
2010, Espejo’s attorney asked PMSI’s counsel to retain all financial documents for
the case. In February 2011, after You Shred-It visited PMSI for its periodic
shredding of records, a PMSI employee discovered that all of the documents in
storage were gone, including the Espejo documents stored in a locked cabinet. PMSI
also failed to preserve Espejo’s computer. Fortunately, off-site bank and credit card
records reproduced the relevant transactions, and every testifying doctor besides
Sanderson reproduced their settlement statements from PMSI for the relevant years.
Sanderson reproduced only his 2010 settlement statements.

      In 2014, a grand jury indicted Espejo on fifteen counts of wire fraud, seven
counts of money laundering, and four counts of filing false tax returns. Espejo moved

      1
       The Honorable Kristine G. Baker, United States District Judge for the Eastern
District of Arkansas.

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to dismiss the indictment for, among other reasons, intentional destruction of
evidence. The district court denied the motion to dismiss the indictment but, on the
Government’s motion, dismissed one of the counts of money laundering.

       In pretrial motions, the Government moved to exclude evidence and argument
related to PMSI’s destruction of financial documents. At trial, the district court
excluded evidence related to the destruction of the records under Fed. R. Evid. 401,
402, and 403. The district court explained that it did not understand why the missing
documents would be needed for a defense given the availability of credit card
statements to show what Espejo purchased with the funds at issue. It also explained
that there was no evidence the Government destroyed the documents. It further
prohibited defense counsel from asking Sanderson about intentional destruction of
his settlement statements, pending review of further evidence in the case.

       Espejo wanted the missing records to support her defense that Sanderson
routed personal funds through PMSI’s account in order to hide money from his wife.
She conceded that she transferred $611,099.04 from PMSI and a related entity to her
personal bank account and that she maintained separate Quickbooks files to hide the
transactions. She testified that Sanderson authorized these practices, asking her to
purchase items for him and reimburse herself from PMSI’s account, and occasionally
allowing her to purchase gifts for her children with funds reimbursed from PMSI’s
account. She also conceded that she made a few personal purchases using the PMSI
debit card, but she stated that those purchases involved mistaken use of the wrong
card and that she reimbursed any such mistakes.

      Sanderson admitted he had routed personal transactions through PMSI’s
account, using checks directly from the account for purchases. He denied ever
authorizing Espejo to use her personal account for purchases on his behalf.

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      Some of the evidence indicated that Espejo transferred more funds to her
account than Sanderson deposited in PMSI’s account. Sanderson’s 2010 statements
showed that he deposited $4,612.07 beyond what he owed PMSI between January 1
and September 9, 2010. Espejo took $210,425.41 in funds from PMSI’s account
during the same time period. Her defense was that Sanderson had deposited extra
funds in the account that had continually built up over time.

       Despite the missing records, the evidence at trial indicated that PMSI’s account
contained some extra funds with an unknown source. At the end of 2009, the account
balance was $99,259.27. There were six doctors in the practice at that time, each of
whom contributed about $5,000-6,000 when they joined. Sanderson also testified that
a previous member of the practice, Dr. Columbus Brown, was in arrears by “a big
amount” to PMSI, indicating that the doctors’ collective contributions alone could not
account for the surplus in the account. The Government introduced evidence of other
sources of income: a $14,000 check from Memphis Pathology Lab that was not
credited to any doctor, and a $41,062.48 refund from McKesson Specialty Care
Distribution that was not credited to any doctor. There was additional testimony
about Espejo possibly depositing the doctors’ tax refunds into PMSI’s account
without crediting them.

       After hearing most of this evidence, the district court excluded all evidence
regarding intentional destruction of the settlement statements, including questions on
the topic directed to Sanderson. The district court explained that it had heard no
evidence of what particular documents were destroyed and no evidence of any
particular person destroying documents. It observed that the destruction also
occurred several months after Espejo resigned from PMSI, which suggested that the
destruction was not an intentional act. It also explained that it did not want to allow
speculation on the issue without more particular evidence. After reviewing the
relevant testimony from the motion to dismiss hearings, the district court concluded
the evidence of destruction was too speculative because the key witness could only

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testify that documents went missing over a weekend, without confirming what
documents they were or even confirming that it was the shredding company that took
them.

       At the end of the trial, the jury convicted Espejo on all counts at issue. The
district court sentenced Espejo, and she timely appealed.

                              II. Standard of Review

       “We review evidentiary rulings for an abuse of discretion, but our review is de
novo when the challenge implicates a constitutional right.” United States v. West,
829 F.3d 1013, 1017 (8th Cir. 2016). “Even where an evidentiary ruling is an abuse
of discretion or violates a constitutional proscription, however, we will not reverse
unless the error is more than harmless in that it affected a substantial right or had
more than a slight influence on the verdict.” Id.

                                    III. Analysis

      The district court did not err in excluding evidence regarding the destroyed
medical records. “We have recognized the right of a criminal defendant to present
a complete defense, grounded in either the Sixth or Fourteenth Amendments, with the
caveat that it may be limited by other legitimate interests of criminal trials, such as
excluding incompetent, irrelevant, or privileged testimony.” Id. The right is also
limited by Fed. R. Evid. 403. See id. at 1019.

      The limited probative value of the missing documents is apparent because
Espejo would have to prove the existence of deposits that were not in the available
bank account records in order to show probative value. Sanderson’s deposits only
appear to exceed his bills by a few thousand dollars, and Espejo took $611,099.04 in
reimbursements. The only evidence in the record of other sources of funds is the

                                         -5-
Government’s evidence that Espejo was depositing vendor refunds and tax refunds
without crediting them to the doctors.

       Even if the missing documents were relevant, the limited probative value of the
destruction of those documents is also apparent because Espejo did not offer a clear
motive for anyone at PMSI to destroy those documents. Espejo had no evidence
establishing Sanderson’s motive beyond her own testimony, and Sanderson openly
admitted to using the account directly for personal purchases. There is also no
evidence that any other doctor would have wanted those records destroyed. In fact,
it appears that the new president of PMSI would have an interest in maintaining the
records and investigating Sanderson’s practices of routing personal purchases through
PMSI. In the absence of any significant evidence linking an individual to the
destruction of the records, the district court did not abuse its discretion in disallowing
any evidence on the issue.

                                    IV. Conclusion

      The district court did not abuse its discretion in excluding evidence regarding
the destruction of documents. We affirm.
                       ______________________________

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