United States v. Bruce Swinton ( 1996 )

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No. 95-2009
___________
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the Eastern
* District of Arkansas.
Bruce Raymond Swinton, *
*
Appellant. *
___________
Submitted: November 14, 1995
Filed: January 31, 1996
___________
Before FAGG, BRIGHT, and DUPLANTIER,* Circuit Judges.
___________
BRIGHT, Circuit Judge.
A jury convicted Swinton of seven counts of bank fraud in
violation of 18 U.S.C. § 1344, and he was sentenced to thirty-seven
months imprisonment. Swinton raises three issues on appeal: (1)
the court violated Fed. R. Evid. 404(b) by allowing the government
to introduce evidence of other, uncharged transactions in which he
was involved; (2) the evidence was insufficient to support the
conviction; and (3) the jury considered extraneous evidence in
reaching the verdict. We reject Swinton's first two claims and
remand to the district court for an evidentiary hearing on his
third.
*
The Honorable Adrian G. Duplantier, United States District
Judge for the Eastern District of Louisiana, sitting by
designation.
I. BACKGROUND
Swinton, a real estate entrepreneur and building contractor,
was charged with seven counts of causing misrepresentations to be
made to financial institutions in violation of 18 U.S.C. § 1334.
The indictment alleged that Swinton was engaged in a sham sale
scheme in which he persuaded friends and acquaintances to take out
loans in their own names to buy residential properties for him.
Swinton promised the buyers that he would make all payments on the
loans. The purported buyers typically would falsely represent
their qualifications for the loan and their intention to reside on
the property. The purported buyers would also state that they had
made a downpayment on the property which they, in fact, had not
made. Immediately after the sale of the property, the purported
buyer would "transfer" the property to Swinton via a quitclaim
deed. Swinton eventually defaulted on the loans. Since the loans
were all insured, the losses ultimately fell on the Department of
Housing and Urban Development.
Prior to trial, defense counsel filed a motion requesting
disclosure of any "prior bad acts" evidence that the Government
intended to introduce pursuant to Fed. R. Evid. 404(b).1 The
Government responded by stating that they had opened their files
and that any 404(b) material sought by Swinton would be in those
files. The files contained information on the seven charged
1
Rule 404(b) 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, provided
that upon request by the accused, the prosecution in a
criminal case shall provide reasonable notice in advance
of trial, or during trial if the court excuses pretrial
notice on good cause shown, of the general nature of any
such evidence it intends to introduce at trial.
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properties and approximately twelve additional uncharged
transactions.
At trial, the Government produced three witness who testified
that they participated as the purported buyer in transactions for
which Swinton was charged. The Government also introduced evidence
concerning several other uncharged property transactions occurring
within the same approximate time period. The district court
admitted these uncharged transactions into evidence over defense
counsel's objection that the pretrial notice was insufficient to
satisfy the requirements of Rule 404(b). The court determined that
the Government need not satisfy the Rule 404(b) requirements
because the evidence tended to prove the existence of the plan,
scheme, or artifice for which Swinton was charged, and was thus not
"other acts" evidence governed by that rule.
The jury convicted Swinton on all seven counts. The court
sentenced Swinton to thirty-seven months imprisonment followed by
three years of supervised release. Swinton moved for a new trial
claiming that the evidence of the other property transactions
should not have been admitted.
After the trial, a member of the jury contacted Swinton and
indicated that, during jury deliberations, another juror had
mentioned that Swinton had a prior record. No evidence had been
introduced at the trial concerning any prior conviction. Swinton's
counsel filed a motion requesting that he be allowed to discuss the
matter with the jurors and renewed a motion for a new trial based
upon the jury considering extrinsic evidence. The district court
denied both motions, determining that the information was not
"extraneous", as required by Rule 606(b), because any discussion or
speculation about the prior conviction would have originated within
the jury room and not from an extraneous source.
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II. DISCUSSION
A. EVIDENCE OF "PRIOR BAD ACTS"
During trial, the Government introduced evidence concerning
seven property transactions in which Swinton was involved but for
which he had not been indicted. Defense counsel objected to the
evidence asserting that the Government had failed to provide the
notice required by Fed. R. Evid. 404(b). Citing United States v.
Bass, 794 F.2d 1305, 1312 (8th Cir. 1986), cert. denied, 479 U.S.
869 (1986), the district court stated that the evidence was not
Rule 404(b) evidence and admitted the evidence pursuant to Rule
402. We review a district court's decision to admit evidence for
an abuse of discretion. United States v. Severe, 29 F.3d 444, 447
(8th Cir. 1994), cert. denied, 115 S.Ct. 763 (1995).
Rule 404(b) governs the admission into evidence of "other
crimes, wrongs, or acts." The rule applies only to "extrinsic"
and not to "intrinsic" evidence. See, United States v. Oakie, 12
F.3d 1436, 1441-42 (8th Cir. 1993); Bass, 794 F.2d at 1312; United
States v. Deluna, 763 F.2d 897, 913 (8th Cir.), cert. denied, 474
U.S. 980 (1985); see also, Rule 404(b) Senate committee notes, 1991
amendment. In Bass, we explained this distinction stating,
We have held that where evidence of other crimes is
"so blended or connected, with the one[s] on trial as
that proof of one incidentally involves the other[s]; or
explains the circumstances; or tends logically to prove
any element of the crime charged," it is admissible as an
integral part of the immediate context of the crime
charged. When the other crimes evidence is so
integrated, it is not extrinsic and therefore is not
governed by Rule 404(b).
Bass, 794 F.2d at 1312 (quoting United States v. Derring, 592 F.2d
1003, 1007 (8th Cir. 1979) (citations omitted).
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The Government further argues that the evidence concerning the
other uncharged transactions went directly to an element of the
crime -- the existence of a scheme or artifice -- and thus must be
considered as "intrinsic" evidence. Section 1344, the violation of
which Swinton was convicted, provides:
Whoever knowingly executes, or attempts to execute,
a scheme or artifice --
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits,
assets, securities, or other property owned by, or under
the custody or control of, a financial institution, by
means of false or fraudulent pretenses, representations,
or promises;
shall be fined not more than $1,000,000 or imprisoned not
more than 30 years, or both.
18 U.S.C. § 1344 (1994). Thus, as one of the elements of bank
fraud, the government must establish that the defendant knowingly
executed (or attempted to execute) a "scheme or artifice". The
indictment alleged that Swinton was involved in a single scheme to
defraud financial institutions, and that in furtherance of this
scheme, he "would cause misrepresentations and false information in
the mortgage loan applications and closing documents." Superseding
Indictment, p. 2. Although Swinton was charged with seven separate
counts of bank fraud, this court has previously held that each
execution of a single scheme to defraud constitutes a separate
offense. See United States v. Barnhart, 979 F.2d 647, 651 (8th
Cir. 1992).
In this case, Swinton was charged with conducting a continuing
scheme to defraud. Where the charged offenses were not isolated
acts, but rather, were part of the series of transactions involving
the same principal actors, in the same roles, and employing the
same general modus operandi, the various acts may be considered to
constitute a single scheme. See United States v. Muscatell, 42
F.3d 627, 630-31 (11th Cir.), cert. denied, 115 S.Ct. 2617 (1995).
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"An uncharged act may not be extrinsic if it was part of the scheme
for which a defendant is being prosecuted." United States v. Oles,
994 F.2d 1519, 1522 (10th Cir. 1993) (quoting United States v.
Record, 873 F.2d 1363, 1372 n.5 (10th Cir. 1989).
In sum, the uncharged transactions are "intrinsic" to the
charged counts of bank fraud if (1) the collected transactions were
all part of a single scheme, or (2) the uncharged transactions were
"so blended or connected, with the one[s] on trial as that proof of
one incidentally involves the other[s]." Bass, 794 F.2d at 1312.
With these principles in mind, we examine the specific uncharged
transactions introduced at trial.
Three of the seven uncharged transactions introduced at trial
concerned loan transactions in which Courtney Washington was the
purported buyer of the property. Washington was also the purported
buyer in four of the charged transactions. At trial, Washington
testified that in each of the charged transactions, he had no
intention of acquiring an ownership interest in the properties but
rather purchased the properties for Swinton because Swinton had
"bad credit". He also stated that although the loans indicated
that he made a downpayment, no such payment was actually made.
After the sale transpired, Washington quitclaimed the properties
back to Swinton. Union Modern Mortgage made each of the loans in
the charged transactions, and the same closing agent ran all the
closings.
The three uncharged transactions involving both Swinton and
Washington which were introduced at trial were clearly part of the
same scheme as the four charged counts. Union Modern Mortgage made
each loan, and the closing agent that closed the charged
transactions closed these uncharged counts as well. Washington
also quitclaimed these properties to Swinton following the sale.
Finally, Washington testified that he had no intention to assume an
ownership interest in any of these properties. Such evidence did
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not concern "other acts" but rather acts belonging to the charged
scheme. See Severe, 29 F.3d at 447. The evidence of the other,
uncharged transactions did not necessarily implicate Rule 404(b)
because this evidence related to the existence of a scheme, an
element of the charged crime.
Swinton was convicted on one count relating to the purchase
and sale of a property at 2601 Rock Street in which Herbert Brooks
was the purported buyer. At trial, the Government introduced
evidence about a prior uncharged transaction regarding a property
at 1817 Shiller in which both Swinton and Brooks participated. The
Shiller property was a part of the overall scheme and employed the
same modus operandi in which Brooks misrepresented the existence of
a downpayment, purchased the property for Swinton, and then
quitclaimed the property to Swinton after the closing.
Furthermore, the Shiller property was closely integrated into the
Rock Street transaction. First, the earlier transaction explained
how Brooks came to be involved with the Rock Street transaction.
Secondly, the real estate contract for the Rock Street property
indicated that Brooks would be trading his equity in the Shiller
property as a source of downpayment. The Government introduced
evidence surrounding the Shiller property to show that Brooks
believed he had no equity in that property, and thus was not
contributing any value to the subsequent purchase.2
Finally, the Government introduced uncharged transactions
concerning 2505 Marshall, 1322 Jones, and 1824-26 Pulaski. In all
these instances, the purported buyer was Janette Jackson. Jackson
was the purported buyer in one of the indicted transactions, 917
College. In obtaining the loan for the College property, Jackson
indicated that she would occupy that property for her home and that
2
An uncharged transaction involving Swinton, Brooks and a
property located at 5418 W. 33rd was also discussed at trial. That
property, however, was first introduced by defense counsel.
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funds for the purchase came from her sale of the Marshall property.
The Government introduced evidence concerning the 1322 Jones
property because the loan file for that transaction, which followed
the College transaction, indicated that Jackson's home was 2201
Center and not 917 College. The uncharged transaction thus
presented evidence tending to show that Jackson had not intended to
occupy the College property. The Government introduced evidence
surrounding the Marshall property which indicated that the property
had been quitclaimed from Jackson to Swinton. This evidence thus
called into question the existence of any proceeds from the
Marshall property. Thus the Marshall and Jones transactions were
"so blended or connected" with the charged count "so that proof of
one incidentally involves the other[s]." Bass, 794 F.2d at 1312.
The evidence submitted surrounding the 1824-26 Pulaski
transaction, however, is more problematic. Although the district
court conditionally admitted evidence regarding that transaction,3
the Government never established that a quitclaim deed had been
used in that instance, nor that any of the representations in the
file were false. Accordingly the Government did not show that this
property was a part of the same overall scheme or that it was
blended with one of the charged counts in any way other than the
fact that Jackson and Swinton were both participants.
Although evidence surrounding this transaction should not have
been admitted into evidence, in light of the entire record, we
determine that its admission constituted harmless error.
Discussion of the Pulaski transaction consisted of a series of
hypothetical questions to a bank officer concerning the loan.
Little, if any, prejudice flowed from the admission of the
evidence, given that the Government never developed any evidence of
3
Apparently the evidence was not withdrawn and no limiting
instruction was subsequently given so the materials remained in
evidence.
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wrongdoing. The introduction of the Pulaski transaction into
evidence cannot be said to have prejudiced Swinton.
We add a comment. The issue here is a close one, and the
Government ought not to have risked prejudicial error in the trial.
The prosecutor should have disclosed the evidence in question to
the defendant as likely Rule 404(b) evidence. Simply making
available mountains of documents without specifying which will
likely be submitted has elements of unfairness causing needless
expense to the defendant. There is no reason for the prosecution
not to provide reasonable notice of such evidence prior to the
trial
B. SUFFICIENCY OF THE EVIDENCE
Swinton argues that the evidence was insufficient as a matter
of law to support the jury's verdict. He argues that the
Government presented no evidence that directly established that he
intended to defraud the financial institutions or that he enlisted
others to further this scheme.
In reviewing the sufficiency of the evidence, this court must
view the evidence in the light most favorable to the government,
resolving all conflicts in the government's favor. United States
v. Wonderly, 70 F.3d 1020, 1023 (8th Cir. 1995). Intent to defraud
need not be shown by direct evidence; rather, it may be inferred
from all the facts and circumstances surrounding the defendant's
actions. Id. (quoting United States v. Clausen, 792 F.2d 102, 105
(8th Cir.), cert. denied, 479 U.S. 856 (1986)). Upon reviewing the
evidence, we determine that the jury could reasonably have
concluded that Swinton knowingly executed a scheme to obtain funds
under false pretenses. Accordingly, we hold that the evidence was
sufficient to support the jury's verdict.
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C. JURY MISCONDUCT
Swinton states that, after the trial, one of the jurors
contacted him and informed him that during jury deliberations,
someone stated that Swinton had a criminal record. The juror did
not indicate the source of this information. Although Swinton did
have a prior conviction, no evidence introduced at the trial
contained any mention of this prior conviction.4
Swinton's counsel filed renewed motions requesting that he be
allowed to discuss the matter with the jurors and for a new trial
based upon the jury considering extrinsic evidence. The district
court denied both motions, determining that the information was not
"extraneous" because any discussion or speculation about the prior
conviction would have originated within the jury room and not from
an extraneous source.
Fed. R. Evid. 606(b) generally prohibits a juror from
impeaching his or her verdict.5 See United States v. Krall, 835
4
In fact, the trial judge prohibited any mention of Swinton's
prior felony conviction in the testimony of witness Washington.
Tr. at 467-82.
5
Fed. R. Evid. 606(b) provides:
Upon an inquiry into the validity of a verdict or
indictment, a juror may not testify as to any matter or
statement occurring during the course of the jury's
deliberations or to the effect of anything upon that or
any other juror's mind or emotions as influencing the
juror to assent to or dissent from the verdict or
indictment or concerning the juror's mental processes in
connection therewith, except that a juror may testify on
the question whether extraneous prejudicial information
was improperly brought to the jury's attention or whether
any outside influence was improperly brought to bear upon
any juror. Nor may a juror's affidavit or evidence of
any statement by the juror concerning a matter about
which the juror would be precluded from testifying be
received for these purposes.
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F.2d 711, 715-16 (8th Cir. 1987). The only exception to this rule
is that "a juror may testify on the question whether extraneous
prejudicial information was improperly brought to the jury's
attention or whether any outside influence was improperly brought
to bear upon any juror." Fed. R. Evid. 606(b).
Although Swinton does not contend that "any outside influence
was improperly brought to bear upon any juror", he argues that the
discussion of the prior conviction constitutes "extraneous
prejudicial information." In United States v. Bassler, 651 F.2d
600, 602 (8th Cir. 1981), cert. denied, 454 U.S. 1151 (1982), this
court stated,
Extrinsic or extraneous influences include publicity
received and discussed in the jury room, matters
considered by the jury but not admitted into evidence,
and communications or other contact between jurors and
outside persons. Extrinsic or extraneous influences may
be grounds for impeaching a verdict.
Discussion of a prior conviction which was not introduced at trial
fits the category of "matters considered by the jury but not
admitted into evidence."
The Government argues that if the jury improperly discussed
defendant's prior conviction, such a discussion is not a matter of
extrinsic evidence at all because it would have originated from
within the jury room. The Government's position, basically, is
that evidence coming from the jurors themselves is not "extrinsic."
The question of when a juror is resorting to knowledge
obtained outside the record presents some difficulties. Although
jurors are expected to bring commonly known facts to bear in
assessing the facts presented for their consideration, resort by a
juror to anything other than common knowledge or record facts might
be held to violate the right to confrontation. 3 Weinstein's
Evidence, ¶ 606[04], at 606-44, 46 (1995); see also United States
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ex rel. Owen v. McMann, 435 F.2d 813 (2d Cir. 1970), cert. denied,
402 U.S. 906 (1971).
In McMann, Judge Friendly provides a thorough discussion of
when statements by jurors regarding their personal knowledge of a
defendant may invalidate a verdict. First, Judge Friendly rejects
the juror/non-juror distinction that the Government suggests here,
stating, "There is no rational distinction between the potentially
prejudicial effect of extra-record information which a juror
enunciates on the basis of the printed word and that which comes
from his brain." 435 F.2d at 820. Judge Friendly instead adopts
a distinction between allegations of specific facts as opposed to
general knowledge or beliefs:
In short, the inquiry is not whether the jurors "became
witnesses" in the sense that they discussed any matters
not of record but whether they discussed specific extra-
record facts relating to the defendant, and if they did,
whether there was a significant possibility that the
defendant was prejudiced thereby.
McMann, 435 F.2d at 818 n.5.
This court's opinion in United States v. Eagle, 539 F.2d 1166,
1170 (8th Cir.), cert. denied, 429 U.S. 1110 (1976), further
suggests that the jury's discussion of specific extra-record facts
can constitute grounds for challenging the verdict. In Eagle, a
juror speculated during the trial that the defendant might be one
of the men charged in an unrelated incident in which two FBI agents
had been killed. This court found that this "realization" did not
constitute an "extraneous influence" because the juror never voiced
his suspicions in the jury room. Because the allegations didn't go
beyond the mental processes of the juror they did not amount to
"extraneous influences." In this case however, the allegation
concerning Swinton's prior conviction was voiced. In this
instance, we have an allegation that the jury considered a specific
statement of fact that had not been admitted into evidence. We
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therefore conclude that the statement was "extraneous prejudicial
information" within the meaning of Rule 606(b). See also, United
States v. Perkins, 748 F.2d 1519, 1533-34 (11th Cir. 1984).
The district court declined to investigate the purported
statement any further because it incorrectly determined that any
such testimony would be barred under Rule 606(b). Given the risk
that the jury's discussion of a prior conviction may prejudice the
defendant in a case where fraudulent intent is a key ingredient, we
believe it is appropriate to remand to the district court to hold
an evidentiary hearing. See United States v. Bagnariol, 665 F.2d
877, 885 (9th Cir. 1981), cert. denied, 456 U.S. 962 (1982) (noting
that where trial court learns of possible juror misconduct, it must
hold evidentiary hearing to determine precise nature of extraneous
information); United States v. Rhodes, 556 F.2d 599, 602 (1st Cir.
1977) (stating that denial of motion for new trial without any
investigation of exposure to extraneous materials was insufficient
response to serious matters raised in affidavit); cf. United States
v. Cheyenne, 855 F.2d 566, 568 (8th Cir. 1988) (stating district
court properly conducted extensive hearing to determine effect of
extraneous material on jury deliberations); see also, 3 Weinstein's
Evidence, ¶ 606[05], at 606-52 (when sufficient showing is made of
type of misconduct which is not on its face barred by Rule 606(b),
further inquiry is warranted).
This circuit has established standards governing inquiries
into juror misconduct. First, where juror misconduct exposes the
jury to factual matters not in evidence, we presume prejudice and
require the government to prove beyond a reasonable doubt that the
inappropriate activity did not harm the defendant. Wyldes v.
Hundley, 69 F.3d 247, 252 (8th Cir. 1995); see also United States
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v. Rowley, 975 F.2d 1357, 1363 (8th Cir. 1992); Cheyenne, 855 F.2d
at 568.6
Second, this circuit applies an objective test to assess
whether the extraneous information would likely affect a typical
juror when the government must overcome a presumption of prejudice.
United States v. Blumeyer, 62 F.3d 1013, 1017 (8th Cir. 1995). The
relevant considerations include (1) whether the extrinsic evidence
was received by the jury and the manner in which it was received;
(2) whether it was available to the jury for a lengthy period of
time; (3) whether it was discussed and considered extensively by
the jury; (4) whether it was introduced before a verdict was
reached and, if so, at what point during the deliberations was it
introduced; and (5) whether it was reasonably likely to affect the
verdict, considering the strength of the government's case and
whether it outweighed any possible prejudice caused by the
extrinsic evidence. Id.III. CONCLUSION
We affirm the rulings of the district court that the uncharged
transactions were properly admissible and that the verdict was
supported by sufficient evidence. We remand to the district court
to hold an evidentiary hearing as to potential juror misconduct, to
make appropriate findings, and upon those findings to either grant
or deny the defendant's motion for a new trial.
6
In Taylor v. Mabry, 593 F.2d 318, 320 (8th Cir. 1979)(per
curiam), this court stated that proof that one juror had informed
other jurors of defendant's prior convictions would constitute a
primae facie showing of prejudice.
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A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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