United States v. Russell , 728 F.3d 23 ( 2013 )

United States Court of Appeals
For the First Circuit
No. 12-1315
UNITED STATES,
Appellee,
v.
RODNEY L. RUSSELL,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. John A. Woodcock, Jr., U.S. District Judge]
Before
Lynch, Chief Judge,
Thompson and Kayatta, Circuit Judges.
William S. Maddox for appellant.
Margaret D. McGaughey, Assistant United States Attorney, with
whom Thomas E. Delahanty II, United States Attorney, was on brief,
for appellee.
August 26, 2013
THOMPSON, Circuit Judge. Appellant Rodney L. Russell
applied for and received government subsidized health care coverage
for several years. Although Russell was working under the table
during those years, he claimed on his renewal applications that he
had no income to report. After a government investigation,
indictment, and multi-day trial, a jury convicted Russell of making
false statements in connection with the payment of health care
benefits, 18 U.S.C. § 1035(a)(2). On appeal, Russell attacks his
conviction on multiple grounds. After careful consideration, we
affirm.
BACKGROUND
A. Health Care Subsidy
We walk through the relevant facts in the light most
favorable to the verdict. United States v. Mercado, 412 F.3d 243,
245 (1st Cir. 2005).
Shortly after losing his job and accompanying health
insurance in 2006, Russell applied for subsidized health insurance
coverage through the Dirigo Health Agency's DirigoChoice Health
Program ("Dirigo"). In 2003, the Maine legislature created Dirigo
Health Agency to expand access to health insurance coverage for
Maine citizens who cannot otherwise afford it. Dirigo negotiates
competitive rates and benefit packages with private insurance
carriers. Through the DirigoChoice Program ("Dirigo Choice"), the
agency also subsidizes insurance premiums for Maine citizens whose
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income level falls below 300% of the federal poverty level. The
subsidy must be renewed every twelve months.
To qualify for the subsidy, applicants must fill out two
applications: an insurance application to the insurance carrier
and a subsidy application to Dirigo. The applicant certifies the
subsidy application and submits supporting documentation, such as
income tax returns and proof of income. The primary determinants
of subsidy eligibility are income and household size.
In 2006, after losing his job as a stockbroker and
financial advisor at the retirement investment firm Commonwealth
Financial Network d/b/a Brown Company, and his accompanying health
insurance, Russell applied for and received subsidized health
insurance coverage through Dirigo Choice. Russell's 2006
application included information about his employment and income,
as well as a pay stub from the Bureau of Unemployment
Compensation.1 It also included a signed certification statement
that read:
In signing this statement, I certify that I
meet the eligibility requirements checked
above. If I'm covering my spouse/domestic
partner, I certify that he/she also meets
individual eligibility requirements. I will
contact the Dirigo Health Agency if my
circumstances change. I understand that
failure to do so may result in loss of
coverage for me and my family members.
1
Russell received unemployment benefits roughly between
October 2006 and March 2007.
-3-
The following year, Russell applied to renew his subsidy.
Where the application asked about gross wages, tips and salaries,
Russell responded, "not available." Russell also indicated "not
available" when asked about his net self-employment income and
gross receipts minus allowable business expenses. He reported an
$8,000 IRA withdrawal, $575 monthly rent, and $600 cash left in his
account which he said he would be "taking out soon." Russell
signed a verification clause on the application which read in
pertinent part:
I understand the questions on this form. All
statements and answers I have given are true
and complete. The Dirigo Health Agency . . .
may check information submitted on this form
. . . . I understand it's a crime to knowingly
provide false, incomplete, or misleading
information on this form and that I could be
charged with perjury.
Relying on the information in Russell's application, in November
2007, Dirigo awarded him an 80% subsidy in the amount of $4,100 for
another full year of coverage (December 1, 2007 through November
2008).2
Russell applied to renew his subsidy a second time on
October 29, 2008. The 2008 renewal application included his 2007
tax return and reported IRA distributions of $9,133.33 and
unemployment benefits of $4,160 for a total income of $13,293.33.
Russell represented he had no gross wages, tips, or salaries before
2
At the time of Russell's renewal application, the income cut
off was $14,700.
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deductions to report by responding "zero" on the relevant section
of the application. He also signed a similar certification that
accompanied his 2007 renewal application. Relying on the
information provided in the 2008 renewal application, Dirigo
awarded Russell an 80% subsidy in the amount of $7,500.3
A year later in 2009, Russell submitted a third renewal
application. He represented he had no gross wages, tips, salaries,
or self-employment income by answering "zero" on the relevant lines
in the application. He also completed the same certification that
accompanied his 2007 and 2008 renewal applications. In an October
29, 2009 email exchange with Tarnya Brunelle, an eligibility
specialist at Dirigo, Russell confirmed that he had "not received
unemployment benefits or any other kind of income since spring
2007." Based on Russell's representations in his 2009 renewal
application, Dirigo awarded him an 80% subsidy in the amount of
$4,100.
For three years -- 2007, 2008, and 2009 -- Russell had
received a subsidy based on his representations on each application
that he had no income to report and that he was unemployed, but
neither turned out to be true. He had in fact been working for his
high school friend, Malcolm French, all along.
3
At the time of Russell's 2008 renewal application, the income
cutoff for the subsidy was $15,600.
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B. The Trial
A federal grand jury investigation eventually led to an
indictment charging Russell with six counts of making false
statements in receiving health care benefits in violation of 18
U.S.C. § 1035(a)(2). Each count corresponds to the date of an
alleged false statement: November 7, 2007, the date of Russell's
2007 renewal application (Count One); October 26, 2008, the date of
his 2008 renewal application (Count Two); October 29, 2008, the
date of the signed certification that accompanied the 2008 renewal
application (Count Three); October 23, 2009, the date of the 2009
renewal application (Count Four), and the date of the signed
certification (Count Five); and October 29, 2009, the time stamped
on the email exchange between Russell and Burnell from Dirigo
(Count Six). The case proceeded to trial on April 25, 2011.
1. Employment with Malcolm French
At trial, the government presented evidence that Russell,
after losing his job at the Brown Company in 2006, started working
in some capacity for French. French owns several businesses
including: Cold Stream Contracting, a gravel and construction
business;4 Malcolm French Professional Forestry, which cuts trees,
hauls wood, and performs other forestry services; Malcolm French
Logging; and a garage in Enfield (now in LaGrange), Maine.
4
French has employees put ground cover over salmon culverts on
Cold Stream Contracting property.
-6-
The jury heard testimony from French employees that they
had seen Russell working in French's office. Steven Benson Jr., a
French employee, testified he saw Russell work in French's office
once or twice every two or three weeks when Benson dropped off
paperwork. When Benson dropped off paperwork, he would pass it to
Russell if Russell was there. According to Benson, Russell used
the computer in the office on at least one occasion and several
times endorsed checks with a rubber stamp bearing French's name.5
If Benson called looking for French, Russell sometimes answered the
phone. Another employee of French, Jeffrey Fogg, testified that he
saw Russell at the computer in the office and recalled giving
Russell time cards and receipts from different purchases.
In addition to the testimony of French's employees,
Russell's ex-wife, Julie Plummer, testified that Russell wore work
boots, worked late, and complained about working hard and doing
backbreaking work. Rhonda Henderson, Russell's current wife,
testified that shortly after they met in August 2007, Russell
introduced her to Malcolm French, and his wife, Barbara French.
Russell claimed that he was working for himself cutting wood on
French's land. At one point, Russell, according to Henderson, told
her that he was helping Malcolm French install culverts to allow
salmon to swim upstream on his (French's) property as part of the
5
Benson did not see Russell after French built his new garage
in LaGrange, Maine in 2009.
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work done by an entity called Old Stream Conservation Associates.
Bank records showed that Russell signed checks on behalf of Old
Stream Conservation Associates.
Jerald Davis, an employee of Griffin Greenhouse Supplies
in Maine, which sells greenhouse and nursery supplies, recalled
speaking to Russell around a dozen times both in person and by
telephone about purchasing supplies for Cold Stream Contracting.
Davis remembered Russell in particular because he always paid for
his purchases, such as $9,000-$11,000 worth of soil and multiple
bags of fertilizer, using cash placed in Ziploc bags. Davis
testified that Russell told him he needed these and other materials
for the salmon culverts.6
2. Cash In
The government introduced evidence that French had been
paying Russell in cash and Russell, in turn, paid his bills in
cash. Bank records showed that between January 2007 and 2009,
$30,000 cash was deposited into Russell's account, but there were
no checks from Cold Stream Contracting (not to be confused with Old
Stream Conservation); there might have been one check from French
Professional Forestry. One French employee, who was always present
when other French employees picked up their paychecks, testified
that the employees received their paychecks in envelopes bearing
6
Davis was not aware of a business called Old Stream
Conservation Associates.
-8-
their names, but he never saw Russell's name on any of those
envelopes.
3. Cash Out
Between 2007 and 2009, Russell, according to Henderson,
paid $500 in monthly household bills and several thousand dollars
for his daughter's college tuition in cash. As for Russell's rent,
with the exception of a February 2007 payment, evidence at trial
also showed his rent got paid with cash or money orders.
4. Boston Financial
But there was more. Through the testimony of a human
resources specialist for Boston Financial in Rockland, Maine, the
government put forth the resume and employment application Russell
submitted in March or April 2010 for a customer service
representative position with Boston Financial. Russell's resume
stated that between January 2007 and August 2009, he was employed
as Treasurer for Old Stream Conservation Association in Maine. He
listed as his primary responsibilities managing the budget and
bookkeeping. His resume also listed his prior employment as a
financial advisor with the Brown Company and PaineWebber.
Russell's completed employment application stated his starting and
final salaries for Old Stream Conservation were $10 per hour. The
application listed Old Stream's business address, French as his
supervisor, and paying bills and communicating with agencies as his
duties. Russell signed the application under the certification
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attesting to its truthfulness. After Russell passed a background
check, Boston Financial hired him.
5. Russell's Defense
The defense's theory, as indicated by closing arguments,
was that there was no proof Russell ever received cash from French,
or that Russell was even employed by French. Russell, according to
the defense, got by every day by living on cash gifts and loans
from family and friends and reducing his daily expenses.7 And as
far as the Boston Financial application, Russell listed employment
for French only because he wanted to avoid the appearance of a gap
in his employment history -- a gap he thought would raise red flags
to Boston Financial and decrease his chances of getting hired.
After a four-day trial, the jury found Russell guilty on
Counts Two through Five, but not guilty on Counts One and Six. The
district court denied Russell's renewed motion for a judgment of
acquittal, or, in the alternative, a new trial. Russell's appeal
followed.
7
Russell's brother and sister, as well as several of his
friends, testified that they loaned Russell money between 2007 and
2009. Attorney Michael Griffin testified that at French's request,
he incorporated Old Stream Conservation in 2006. According to
Griffin, Old Stream Conservation did not employ Russell, but
Russell did serve as the company spokesman and was authorized to
sign checks on its behalf.
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DISCUSSION
Russell claims multiple errors below. First, he
challenges the jury instructions on willfulness under 18 U.S.C.
§ 1035(a)(2). Second, he contends that the government failed to
present sufficient evidence that his alleged false statements were
material to support the conviction. Third, Russell argues the
district court erroneously excluded testimony by Henderson about
his state of mind when applying for the job with Boston Financial
in 2010. And finally, Russell makes multiple claims of
prosecutorial misconduct. We address each argument in seriatim,
providing additional facts as necessary.
I. Jury Instructions
We start with Russell's challenge to the jury instruction
on the definition of the willfulness element of 18 U.S.C.
§ 1035(a)(2). Because Russell preserved his objection to the
district court's refusal to give his requested instruction, our
review is de novo. United States v. Fernandez, Nos. 12-1289, 12-
1290, 2013 WL 3215461, at *10 (1st Cir. June 26, 2013); United
States v. Baird, 712 F.3d 623, 627-28 (1st Cir. 2013). We will
reverse the district court's refusal to give the instruction "only
if the instruction was (1) substantively correct as a matter of
law, (2) not substantially covered by the charge as rendered, and
(3) integral to an important point in the case so that the omission
of the instruction seriously impaired the defendant's ability to
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present his defense." Baird, 712 F.3d at 628; United States v.
Whitney, 524 F.3d 134, 138 (1st Cir. 2008).
18 U.S.C. § 1035(a)(2), the charged offense, provides in
pertinent part:
(a) Whoever, in any matter involving a health
care benefit program, knowingly and willfully
. . .
(2) makes any materially false, fictitious, or
fraudulent statements or representations, or
makes or uses any materially false writing or
document knowing the same to contain any
materially false, fictitious, or fraudulent
statement or entry,
in connection with the delivery of or payment
for health care benefits, items, or services,
shall be fined under this title or imprisoned
not more than 5 years, or both.
18 U.S.C. § 1035(a)(2).
In charging the jury, the district court described the
elements of making a false statement in connection with a health
care benefit program under § 1035(a)(2). The district court
instructed that the government had to prove beyond a reasonable
doubt six elements. The first was that Dirigo Choice,
"administered by the Dirigo Health Agency, is a healthcare benefit
program as that phrase is defined in these instructions." The
second was that Russell "knowingly and willfully made a false
statement substantially as charged in the indictment" for each
count. The court instructed that "[a] false statement is made
knowingly and willfully if Rodney Russell knew it was false or
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demonstrated a reckless disregard for the truth with a conscious
purpose to avoid learning the truth." The court told the jury that
"[a] statement is false if it was untrue when made." To decide
whether the defendant acted knowingly, the court continued, "you
may infer he had knowledge of a fact if you find that he
deliberately closed his eyes to a fact that otherwise would have
been obvious to him." The jury was reminded that it was "entirely
up to [them] to determine whether he deliberately closed his eyes
to the fact and, if so, what inference, if any, should be drawn"
and to "bear in mind that mere negligence or mistake in failing to
learn the fact is not sufficient."
The court then explained the third element: that Russell
"made the statement voluntarily and intentionally." The court
described "voluntarily and intentionally" to "mean[] that the
government must prove beyond a reasonable doubt that Mr. Russell
did not make the statement by accident or mistake." The court's
instructions then addressed the last three elements: that Russell
"made the false statement in connection with a healthcare benefit
program"; that Russell "made the false statement in connection with
the delivery of or payment for healthcare benefits, items, or
services"; and lastly, that Russell's "statement was material to
the Dirigo Health Agency." On materiality, the court instructed
the jury that "[a] material fact or matter is one that has a
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natural tendency to influence or be capable of influencing the
decision of the decisionmaker to whom it was addressed."
On appeal, as he did below, Russell says the court's jury
instruction on the definition of willfulness was wrong. Relying on
other circuit decisions interpreting the language of 18 U.S.C.
§ 1347, he claims that to convict for a violation of § 1035(a)(2),
the government must not only prove that Russell's statements were
false and that he knew they were false, but that he also knew that
making those false statements was illegal. He says the district
court's refusal to adopt his proposed instruction on willfulness,
requiring that the government prove illegality or "bad purpose,"
was erroneous.8
We have not had the occasion to decide whether
willfulness, as it is used in § 1035, requires the government to
prove that the defendant knew that making the false statement was
illegal. The Ninth Circuit, however, recently tackled this issue
head-on in United States v. Ajoku, 718 F.3d 882 (9th Cir. 2013),
and rejected the argument that Russell makes before us -- that the
8
Russell proposed the following instruction on willfulness:
An act or failure to act is "willful" if done voluntarily
and intentionally, and with the specific intent to do
something the law forbids, or with specific intent to
fail to do something the law requires to be done; that is
to say, with bad purpose either to disobey or to
disregard the law. Thus, if you find Rodney Russell
acted in good faith, he cannot be guilty of the crime or
crimes charged.
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willfulness element of § 1035 requires knowledge of unlawfulness.
Id. at 890. In Ajoku, the court explained that willfulness, in the
context of false statement crimes such as 18 U.S.C § 1001, is
defined as "deliberately and with knowledge"; proving the defendant
knew making the false statement was illegal is not required. Id.
at 889. Such an interpretation of the definition of willfulness,
the court observed, is consistent with the traditional rule that
"ignorance of the law is no defense." Id. (citing Bryan v. United
States, 524 U.S. 184, 196 (1998)). The court went on to explain
that the language in § 1001 (where it got its definition of
willfulness) is nearly identical to that found in § 1035. Id.
("While § 1035 sanctions anyone who 'knowingly and willfully . . .
makes any materially false, fictitious or fraudulent statements or
representations,' § 1001 sanctions anyone who 'knowingly and
willfully . . . makes any materially false, fictitious or
fraudulent statement or representation.'"). The court noted that
the only substantive difference between the two statutes is that
§ 1035 is limited to matters involving a health care benefit
program, while § 1001 deals only with matters within the
jurisdiction of the executive, legislative, or judicial branch of
the federal government. Id. at 889.
In addition to the nearly identical language in these two
criminal statutes involving false statements, the court observed
that they were enacted for the same purpose: "to protect federal
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interests from the harms of knowing and willful fraud and
deception." Id. at 890. In light of their similar language and
shared purpose, the court held that the same definition of
"willful" used in § 1001 applies in interpreting "willful" in
§ 1035. Id. Because the district court's jury instructions used
that definition -- i.e., "deliberately and with knowledge that the
statements were untrue or the document was false" -- the Ninth
Circuit concluded the district court did not err when instructing
the jury. Id. We agree with the Ninth Circuit's reasoning and
hold that, as used in § 1035, the "willfulness" element does not
require the government to prove that the defendant knew it was a
crime to make the particular false statement.
Russell's reliance on Bryan v. United States, 524 U.S.
184 (1998), to urge us to conclude otherwise is misplaced. In
Bryan, the defendant was convicted of dealing in firearms without
a license in violation of 18 U.S.C. § 924(a)(1)(D). 524 U.S. at
189-90. The defendant challenged his conviction, arguing that the
court erred by failing to instruct that the government had to prove
that he knew of the licensing requirement. Id. at 190. Russell
latches onto the Supreme Court's observation that the word
"willful," when used in the criminal context, generally means the
act was undertaken with a "bad purpose." Id. at 191. But the
Supreme Court also made clear that "[t]he word 'willfully' is
sometimes said to be 'a word of many meanings' whose construction
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is often dependent on the context in which it appears." Id. In
the context of Russell's case, which involves a § 1035(a)
violation, we agree with the Ninth Circuit that an instruction on
"willfulness" does not necessarily require knowledge of illegality.
The other circuit decisions cited by Russell do not hold
otherwise. See United States v. Jones, 664 F.3d 966, 981 (5th Cir.
2011) (holding only that a jury instruction lowering the mens rea
requirement from "knowingly and willfully" to "knew, or should have
known" was inappropriate); United States v. Delgado, 668 F.3d 219,
225 & n.3 (5th Cir. 2012) (merely noting, but not giving substance
to, the willfulness requirement); United States v. Hayes, 574 F.3d
460, 477-78 (8th Cir. 2009) (motion for acquittal should have been
granted where no evidence suggested that defendant was aware that
false statement was being made).9
Because the district court here properly instructed the
jury that the government need only prove that the defendant's
statements were false and that the defendant knew they were false,
we find no error.
9
Russell's reliance on United States v. Awad, 551 F.3d 930,
938-40 (9th Cir. 2009), is particularly misplaced. As discussed
above, even to the extent that dictum in that case suggests that
there can be no willfulness without knowledge of illegality, not
even the Ninth Circuit applies that rule to cases under § 1035.
See Ajoku, 718 F.3d at 882.
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II. Materiality
Russell's next challenge concerns the materiality of his
alleged misrepresentations to Dirigo on his 2008 and 2009 subsidy
applications and certifications. He says there was insufficient
evidence for the jury to conclude that the false statements he made
were material to Dirigo's decision to award him subsidized health
care because even if he was working, his income in those years
would have still made him eligible for the subsidy.
We review Russell's sufficiency of the evidence challenge
de novo, considering the evidence in the light most favorable to
the verdict. United States v. Rios-Ortiz, 708 F.3d 310, 315 (1st
Cir. 2013). We will reverse only if we find that "no rational
factfinder could have concluded that the evidence presented at
trial, together with all reasonable inferences, established each
element of the crime beyond a reasonable doubt." United States v.
Symonevich, 688 F.3d 12, 23 (1st Cir. 2012) (citing United States
v. Rodriguez-Vélez, 597 F.3d 32, 39 (1st Cir. 2010)).
"[A] false statement is material if it has a 'natural
tendency to influence, or [is] capable of influencing, the decision
of the decisionmaking body to which it was addressed.'" Neder v.
United States, 527 U.S. 1, 16 (1999) (quoting United States v.
Gaudin, 515 U.S. 506, 509 (1995)) (alteration in original). The
government need not prove that the false statement actually
-18-
influenced or deceived the decisionmaker. United States v. Newell,
658 F.3d 1, 17 (1st Cir. 2011).
The jury here could have reasonably concluded that
Russell's statements had a natural tendency to influence Dirigo's
decision to award him subsidized health care, and thus were
material, even if Dirigo did not actually rely on those statements.
At trial, the jury heard testimony from Dirigo's director that
there was a limit on the income an applicant could earn in 2008 and
2009 to be eligible for an 80% health care subsidy like the one
Russell was awarded. The jury learned that Dirigo does not employ
investigators to verify statements made by applicants on subsidy
applications and that the agency therefore has to rely on
applicants' statements in determining eligibility. The agency
requires the applicant to sign a certification to help it ensure
that all the representations made by the applicant are true.
Russell was awarded a $7,500 subsidy in 2008, and a $4,100 subsidy
in October 2009, based on his representation in his application
that he was neither employed nor receiving income. He signed the
accompanying certifications attesting to the truthfulness of his
statements in those applications.
During closing arguments, defense counsel argued that
Russell's statements could not have been material to Dirigo's
decision because he would have qualified for a subsidy even if he
had accurately reported his income. The government, on the other
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hand, urged that materiality turns on whether the false statements
have a natural tendency to influence or are capable of influencing
the decisionmaker. Whether Russell's statements were material was
ultimately a question for the jury. But the record clearly
supports a finding that Russell received income in the amount he
reported, plus some additional sums that he did not disclose. Had
he forthrightly stated on his application that he had unspecified
amounts of undocumented cash income above the precise amounts he
reported, it is reasonable to believe that Dirigo might well have
determined that he failed to meet his burden of proving
eligibility. As we said, the government need only prove that the
false statement had a "natural tendency to influence, or [is]
capable of influencing, the decision." Neder, 527 U.S. at 16(quoting Gaudin, 515 U.S. at 509) (alteration in original). Given
the evidence presented at trial, we believe that a rational fact
finder could conclude that they were material.
Russell says that the court's rulings on the loss amount
and restitution at sentencing support his argument that the false
statements were not "material" to Dirigo's decision to award
Russell subsidized health care and that, as a result, the jury's
verdict cannot stand. The district judge's remarks at Russell's
sentencing do not change our view. At sentencing, the judge heard
counsel on the amount of loss and whether restitution should be
ordered. The judge summarized the defense's argument -- namely,
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that there was no actual loss because "the false statement didn't
make a difference." The defense's theory, as understood by the
judge, was that even if Russell was working at the time of his
alleged false statements in 2008 and 2010, there is no evidence he
earned more than the amount that he would have been allowed to earn
to receive subsidized coverage. And thus, "if he had told the
truth, the result would have been the same."
Noting the complexity in calculating the loss amount, the
judge concluded that there was insufficient evidence in the record
to determine what amount Russell earned while employed by French
from the fall of 2007 to June 2010. There was "no basis," in the
judge's view, "to logically come to the conclusion that [Russell]
made more than the amounts that would have entitled him to the
subsidy . . . ." The judge then addressed the government's
argument that the loss calculation should be determined by the
amount in premiums (estimated by the government at $19,000) that
Russell intended to take by falsely claiming he was not working on
the subsidy renewal applications. In doing so, the judge said he
was not "convinced, based on th[e] record, that [Russell] intended
to steal premiums from the Dirigo program by falsely reporting no
income." The judge was, however, convinced that Russell was
working and that he was working for Malcolm French. What was
perplexing for the judge was why Russell did not simply report he
was working.
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Because Russell's earnings could not be calculated, the
judge concluded he could neither determine the loss amount nor
order restitution. The judge explained that the record did not
support a finding that Russell "would not have been entitled to the
subsidy in any event." And, the judge added, if Russell was
entitled to the subsidy, there was no "victim for whom restitution
is owed."
The court's conclusion as to loss amount and restitution
does not call into question the jury's finding that the false
statements to Dirigo were material. In imposing the sentence, the
court made clear that the verdict was "compelled by the evidence,"
explaining that Russell "knew he was lying when he completed th[e]
forms and said he was not working." It was for the jury to
determine whether Russell's misrepresentations to Dirigo were
capable of influencing its decision to award him subsidized health
care, even if, as defense counsel argued, his earnings at the time
were so low that he still would have been eligible to receive the
subsidy. As indicated by the verdict, they answered in the
affirmative, and we will not disturb their conclusion.
III. State-of-Mind Exception Under Rule 803(3)
At trial, Henderson testified that she was aware Russell
completed an application with Boston Financial prior to being
offered a job there. At that point, defense counsel asked her:
"Was Mr. Russell worried that if he didn't put down that he was
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employed by Old Stream Conservation and that he was earning money
from it, that he wouldn't get the job with Boston Financial?"
After Henderson responded, "Yes," the government objected on
hearsay grounds. Defense counsel argued that Henderson's testimony
that Russell was worried was admissible as a state-of-mind hearsay
exception under Federal Rule of Evidence 803(3).
After hearing argument from counsel and voir dire of
Henderson (which revealed she helped Russell complete the
application), the court ruled that Henderson's testimony about
Russell's worry and the reason for his worry was not admissible
under the rule. Russell's statement to Henderson that he was
worried, the court said, was inseparable from Russell's memory
about his employment history from 2007 to 2009 when completing the
form.
On appeal, Russell continues to press that Henderson's
testimony about Russell's state of mind when he was completing his
2010 job application for Boston Financial is admissible under Rule
803(3). Under that rule, hearsay is admissible if it is a
statement that expresses a declarant's state of mind at the time
the statement is made. The rule allows, in pertinent part, any:
statement of [a] declarant's then existing
state of mind . . . such as intent, plan,
motive, design, mental feeling . . . but not
including a statement of memory or belief to
prove the fact remembered or believed unless
it relates to the execution, revocation,
identification, or terms of declarant's will.
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Fed. R. Evid. 803(3).
To be admissible under the state-of-mind exception, the
declaration, among other things, "must mirror a state of mind,
which, in light of all the circumstances, including proximity in
time, is reasonably likely to have been the same condition existing
at the material time." United States v. Rivera-Hernández, 497 F.3d
71, 81 (1st Cir. 2007) (quoting Colasanto v. Life Ins. Co. of N.
Am., 100 F.3d 203, 212 (1st Cir. 1996)) (internal quotation marks
and citations omitted). Because "disputes over whether particular
statements come within the state-of-mind exception are fact-
sensitive, the trial court is in the best position to resolve
them." Colasanto, 100 F.3d at 212.
Russell's argument as to why Henderson's testimony should
have been admissible under Rule 803(3) is confusing. On the one
hand, he says that her testimony does not attempt to establish that
he did not falsely claim he was unemployed on his subsidy
applications; the testimony, he says, was simply to reflect his
state of mind in 2010 that he listed employment with French because
he was worried that if he did not, Boston Financial would see a gap
in his employment history and not hire him. On the other hand, he
claims that Henderson should have been able to describe his mental
state in 2010 to explain the difference between his 2010
application to Boston Financial (which represented he was employed
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by French) and his previous subsidy applications (which represented
he was unemployed).
The district court did not err in excluding Henderson's
testimony. Rule 803(3) bars the introduction of "a statement of
memory or belief to prove the fact remembered or believed."
Henderson was prevented from testifying as to Russell's alleged
belief about his lack of recent work history and the impact it
would have on a prospective employer; as Russell admits, one
purpose of this testimony was to prove that Russell lacked recent
work history. The court did not err in excluding this testimony.
Even if, for argument's sake, the district court had
erred, any error was harmless. "Erroneous evidentiary rulings are
harmless if it is highly probable that the error did not affect the
outcome of the case." McDonough v. City of Quincy, 452 F.3d 8,
19-20 (1st Cir. 2006). That requirement is satisfied here.
Henderson's testimony addressed why Russell said he was French's
employee on the 2010 application, when he claimed on his benefits
applications that he was not -- i.e., to avoid a gap in employment
which would concern a future employer. Even though Henderson's
testimony on that specific point was excluded, both she and
Jennifer Holgerson, a human resources representative at Boston
Financial, testified about how they would perceive a substantial
gap in a job applicant's employment history. Henderson, as the
director of an assisted living facility who hired employees,
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explained that she would view with skepticism any application that
had a four-year gap in employment. Holgerson testified that such
a gap would raise "red flags" when reviewing a job application.
In his closing argument, defense counsel exploited
Holgerson's testimony. He argued that Russell said he was French's
employee on his 2010 Boston Financial application because if he did
not, "he'd have to deal with a four-year employment gap," which as
Holgerson testified, "would raise red flags if there wasn't an
adequate explanation for it." Thus, even without Henderson's
testimony addressing the reason Russell was worried when completing
the job application, the jury had learned from Holgerson, as
pointed out by defense counsel in his closing argument, that a
potential employer would be concerned about an applicant who had a
four-year gap in his employment.
IV. Prosecutorial Misconduct
Russell's prosecutorial misconduct claim attacks various
statements made by the prosecutor in his closing and the
prosecutor's alleged reference to Russell's gambling when eliciting
testimony from a witness. Because Russell raised no objection at
trial, we review for plain error. See United States v. Kasenge,
660 F.3d 537, 541 (1st Cir. 2013). Under that standard, Russell
must show that: "(1) an error occurred (2) which was clear or
obvious and which not only (3) affected the defendant's substantial
rights, but also (4) seriously impaired the fairness, integrity, or
-26-
public reputation of [the] proceedings." Id. at 542 (quoting
United States v. Duarte, 246 F.3d 56, 60 (1st Cir. 2001)). We will
reverse only if, in light of the entire record, the challenged
prosecutorial conduct "so poisoned the well that the trial's
outcome was likely affected." United States v. Henderson, 320 F.3d
92, 107 (1st Cir. 2003) (quoting United States v. Sepulveda, 15
F.3d 1161, 1188 (1st Cir. 1993)). To make that assessment, we
consider: "'(1) the severity of the prosecutor's misconduct,
including whether it was deliberate or accidental; (2) the context
in which the misconduct occurred; (3) whether the judge gave
curative instructions and the likely effect of such instructions;
and (4) the strength of the evidence against the defendants.'"
Kasenge, 660 F.3d at 542 (quoting United States v.
Nelson–Rodriguez, 319 F.3d 12, 38 (1st Cir. 2003)). With this
standard in mind, we turn first to the specific statements made by
the prosecutor at closing that Russell claims require reversal.
A. The Prosecutor's Closing Argument
1. Alleged Reference to Russell's Failure to Testify
Russell first contends that the prosecutor improperly
commented on his failure to testify by arguing: (1) "[w]hy do you
suppose the defendant would not want his name listed as treasurer"
of Old Stream Conservation during a time when he was telling Dirigo
that he was unemployed and had no income; (2) that the jury would
"know from his own job application that the defendant was being
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paid by Old Stream between 2007 and 2009, but there was not a
single paycheck deposited into the defendant's bank account during
that period of time"; and (3) that "[t]here's no indication in [the
call log] that Mr. Russell called up Dirigo Health and said, whoa,
wait a minute, what am I getting these benefits for?" Russell
recites these statements, but he fails to explain why they
constitute improper commentary.
In assessing whether a prosecutor has improperly
commented on a defendant's exercise of his Fifth Amendment rights
against self-incrimination, we typically look to "whether the
prosecutor's language shows a manifest intention to comment on the
defendant's failure to testify and whether the jury would naturally
and necessarily understand it to be a comment on the defendant's
failure to testify." United States v. Barbour, 393 F.3d 82, 90
(1st Cir. 2004) (citing United States v. Wihbey, 75 F.3d 761, 769
(1st Cir. 1996)). In doing so, we neither "lightly infer that a
prosecutor intends an ambiguous remark to have its most damaging
meaning" nor do "we assume the jury will draw from the comments the
most damaging meaning." Id. at 91.
In this case, however, Russell's argument that the
prosecutor's statements improperly commented on his failure to
testify is undeveloped and unsupported by any reference to legal
authority. It is therefore waived. See Cruz v. Bristol-Myers
Squibb Co., PR, Inc., 699 F.3d 563, 572 (1st Cir. 2012). The
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prosecutor's statements cannot plausibly be construed as comments
on Russell's failure to testify. But even if the comments were
improper (and, again, we do not see how they were), they did not
likely affect the outcome of the trial. See Henderson, 320 F.3d at
107. The comments were made once and not elaborated upon, and
defense counsel did not timely object to the comments, which, as
our case law suggests, makes it less likely the remarks infected
the jury. See United States v. Shoup, 476 F.3d 38, 44 (1st Cir.
2007); United States v. Procopio, 88 F.3d 21, 31 (1st Cir. 1996).
Any potential influence on the jury was mitigated by the
jury instructions, which repeated the government's beyond-a-
reasonable-doubt burden, and stated that the defendant had no
obligation to testify, and that the jury should draw no inference
from his choice. In both his preliminary and final jury
instructions, the judge instructed the jury that the lawyer's
comments and closing arguments were not evidence, and that it was
to decide the facts from the evidence presented. We assume the
jury followed these instructions. See Morales-Vallelanes v.
Potter, 605 F.3d 27, 34-35 (1st Cir. 2010). Finally, the evidence
of Russell's guilt was strong, including the renewal subsidy
applications indicating Russell was not employed or receiving any
income and the witnesses who testified that Russell was seen
working in some capacity for French during that time.
-29-
Thus, the prosecutor's comments were not significant
enough to affect Russell's rights or seriously impair his trial.
2. The Conspiracy Theory Related Comments
Russell next argues that the prosecutor made multiple
comments which, taken together, improperly insinuated that Barbara
French, Malcolm French, French's employees, Russell, and others
conspired to hide damaging evidence (that Russell was working and
being paid under the table) from the government. The prosecutor's
closing did not explicitly argue that such a conspiracy existed.
Russell nonetheless claims that the comments alluded to one, and
that because the evidence presented at trial did not support a
conspiracy theory, the comments somehow amounted to prosecutorial
misconduct.
a. Malcolm French and Barbara French
We start with Russell's argument that the prosecutor
improperly commented on the Frenches' "failure to testify,"
alluding to a conspiracy between the Frenches and Russell.10 During
his closing argument, the prosecutor said:
Now, Boston Financial has somebody check his
references. You heard Ms. Holgerson explain
the practice and procedure that Boston
Financial follows every single time somebody
10
Russell says that by attributing certain statements to the
Frenches and drawing the image of a conspiracy between them and
Russell, the prosecutor commented on the Frenches' failure to
testify. Because there are no Fifth Amendment implications here,
we do not see how the prosecutor's comments could have been
improperly referencing the Frenches' failure to testify.
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applies for a job. Mr. Russell knew that they
were going to check his references. He signed
a release authorizing Boston Financial to
contact his references . . . . He provided
Malcolm French's name and telephone number,
and you know from Ms. Holgerson that it is
Boston Financial's practice to check the
references before hiring and that they
followed that practice in this case.
The prosecutor then went on to make the following statement:
Ms. Holgerson [from Boston Financial]. . . told
you . . . that if she had received information
contrary to what was disclosed in the
application, she would have questioned Mr.
Russell about it. She also told you she never
did because she never had to . . . . It is fair
for you to infer from that evidence and from
Ms. Holgerson's testimony that Malcolm French
confirmed that the defendant worked for Old
Stream Conservation between 2007 and 2009.
Russell argues this latter comment was improper for two
reasons. First, he claims Holgerson never said any of this.
Second, he says that because Malcolm French is the only one who
could have confirmed whether Russell worked for him, asking the
jury to infer from Holgerson's testimony that French confirmed
Russell's employment amounted to improper comment on French's
failure to testify. A look at both the prosecutor's statements and
Holgerson's testimony at trial show that the prosecutor's
description of Holgerson's testimony was accurate.
Holgerson testified that a third-party vendor, Sterling
Financial ("Sterling"), conducts background checks on all Boston
Financial applicants. The background check includes an employment
reference check. Holgerson explained that if Boston Financial
-31-
cannot confirm a candidate's employment history, it will "reach
back out to the candidate and do some research with them, ask for
proof of employment or an explanation." And if it cannot confirm
that somebody worked where they said they worked, the discrepancy
would be brought to her attention. Holgerson said that it is her
practice to follow up on such information and that she would not
ignore that type of information and extend a candidate an offer.
When it came to Russell's application, Boston Financial,
according to Holgerson, followed the same hiring process. She was
personally involved in that process; she reviewed Russell's resume,
conducted his phone screening interview, scheduled him to interview
with a manager, and extended him an offer. Holgerson testified
that Sterling ran a background check on Russell (which included the
employment reference check) and that she never heard from Sterling
that there was a problem with Russell's background check.
In light of Holgerson's testimony, we see no error in the
prosecutor's statements that Holgerson said she would have known if
the employment reference check on Russell revealed any
discrepancies. The prosecutor's statement that Holgerson would
have questioned Russell about it was just another way of
summarizing Holgerson's testimony that she would have followed up
on this type of information. Stating that it was fair for the jury
to infer from Holgerson's testimony that Malcolm French confirmed
Russell's employment with French in connection with the job
-32-
application to Boston Financial had nothing to do with French's
failure to testify. The inference that French confirmed Russell's
employment with him can be drawn from Holgerson's testimony about
Boston Financial's hiring process as it applied to Russell.
Moving on to Russell's challenge to the prosecutor's
comments about Barbara French, Russell takes issue with the
prosecutor's statement that she "conveniently failed to send in the
monthly Cold Stream Contracting general ledger" for January,
February, and March 2007. We see no impropriety. The prosecutor
was "entitled to draw the jury's attention to the balance of
evidence on contested issues." United States v. Stroman, 500 F.3d
61, 65 (1st Cir. 2007). The Frenches' accountant, Gail Davis,
testified that Barbara French did not send her the general ledger
(which Barbara French managed) for January, February, March, or
April 2007. Even though the government focused Davis on whether or
not she was sent those ledgers (regardless of the reason), Davis
testified that Barbara's operating system had crashed because she
had been using an outdated operating system which in turn prevented
her from sending the ledgers (corresponding to January, February,
and March 2007).
Davis further testified that the newer operating system
generated checks the same way the older system did. When shown a
copy of a check from Cold Stream Contracting to Griffin Greenhouse
dated March 16, 2007, Davis confirmed that the date of the check
-33-
indicates it would have been generated even under the older
operating system. And when asked whether she would know about such
cash transactions, Davis testified that she would only know about
them if the Frenches spoke to her about them or if those
transactions were documented on the ledger. It was up to the jury
to decide whether Barbara French did not send Davis the ledgers for
January, February, and March 2007 (given the evidence of the check
to Griffin Greenhouse) because there were transactions she did not
want Davis to know about or whether the ledgers were not delivered
to Davis due to an operational system malfunction (given Davis's
testimony on that point). The prosecutor's remark merely attempted
to urge the jury to draw the reasonable inference that Barbara
French intentionally failed to send Davis the ledgers in light of
the evidence that Cold Stream made check payments that were neither
noted on the ledger nor shared with Davis.
b. Testimony of French's Accountant
We find no merit in Russell's additional claim that the
prosecutor's remarks overstated Davis's testimony. In arguing that
the evidence established that Russell was being paid in cash by
French in 2007, 2008, and 2009, the prosecutor said:
The evidence establishes that Cold Stream was
dealing in cash at Griffin Greenhouse. Old
Stream has cash being deposited into its account.
We know that none of this cash is going through
their books and records; Malcolm's paid
accountant told you that and established that for
you. She told you that if Malcolm was paying
expenses in cash and not withdrawing the cash
-34-
from the bank account and not telling her about
it, she would have no reason to know about it
. . . .
The prosecutor's summary was a fair representation of the
accountant's testimony. When asked about cash withdrawals from the
Cold Stream account, Davis testified that there was only one cash
withdrawal in the three-year period (from 2007 to 2009) for $200 or
$500 to make a cash payment to an oil company. According to Davis,
if Cold Stream had told her it "kept cash on-hand," she "would know
about it." Davis also said that if Cold Stream had any cash on-
hand, it would have to be reported on its tax returns; she did not
know of any cash on-hand listed on Cold Stream's tax returns.
3. "Bagman"
Russell next takes issue with the prosecutor's statement
that "[t]he defendant acting as the bagman dropping off bags of
cash . . . [t]his is how Mr. [Jerald] Davis remembered Mr.
Russell." Russell says that in addition to the fact that Davis did
not use the term "bagman," the term bagman conjures up an
impermissible unsavory connotation that warrants a new trial. We
disagree. The prosecutor's comments referring to Davis's testimony
that he remembered Russell dropping off bags of cash was consistent
with Davis's testimony. Davis testified that Russell paid $9,000
to $11,000 in cash for truckloads of soil and multiple bags of
fertilizer from Griffin Greenhouse. Davis said Russell brought in
the cash in a Ziploc bag on more than one occasion. When asked
-35-
what stood out the most in Davis's mind about Russell, Davis said,
"The cash."
We find nothing inappropriate about using the word
"bagman" to describe Russell, when Davis in fact testified that
Russell purchased materials from Griffin Greenhouse with cash
stuffed in Ziploc bags. Because the prosecutor's comments
reflected a fair interpretation of Davis's testimony, they did not
constitute prosecutorial misconduct.11
B. The Prosecutor's References to Gambling
Russell makes one last claim of misconduct based on the
prosecutor's cross-examination of Russell's friend, George
Hartmann. The prosecutor asked Hartmann about the last time he had
seen Russell. Hartmann responded that he had dinner with Russell
11
We also reject Russell's cursory argument that the prosecutor
attempted to rope in to the conspiracy Henderson (Russell's wife)
and French's employees by misusing their grand jury testimony.
Russell says the prosecutor improperly began his cross-examination
of Henderson by asking her if she remembered her grand jury
testimony, instead of first asking her a question which might have
revealed she needed her memory refreshed with her grand jury
testimony. Russell further claims the prosecutor's imaginary
conspiracy theory was apparent by his statements in closing about
the differences between the grand jury testimony of Fogg, Benson,
and Webber (all French employees), and their testimony at trial.
Russell's reply argues that misusing the grand jury testimony in
this way was a deliberate attempt to mischaracterize witness
testimony. Russell neither presents any developed analysis nor
references any relevant case law to support his claims. We decline
to address such undeveloped arguments. See Colón v. R.K. Grace &
Co., 358 F.3d 1, 5–6 (1st Cir. 2003) ("It is not this court's role
to assemble a coherent argument for one side merely because
evidentiary pieces are mentioned somewhere among the factual
recitations and the topic sentence of the argument is supplied in
the argument section of the brief.").
-36-
the previous evening at "Hollywood Slots." Russell says this
testimony amounted to an impermissible reference to gambling. The
prosecutor's line of questioning had nothing to do with gambling.
The questions focused on what Hartmann and Russell discussed at
dinner, who else was there, what Hartmann and defense counsel
discussed the night before, and other matters unrelated to
gambling. The other instances in which Russell says the prosecutor
improperly raised the gambling issue (after the court had told him
that introducing a gambling issue into the case may be prejudicial)
occurred outside of the jury's presence -- namely, at side bar
during the testimony of Russell's first wife, after voir dire of
his current wife, Henderson, and at the end of the second day of
trial. Russell points to no other time during which the jury heard
any testimony by witnesses about Russell's gambling.
In sum, neither the prosecutor's statements during
closing arguments nor his questions in eliciting testimony from
Hartmann necessitate reversal.
CONCLUSION
For the aforementioned reasons, we affirm the judgment
below.
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