United States v. Catherine Jolivet ( 2000 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
No. 99-2886
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Western District of Missouri.
Catherine A. Jolivet, *
also known as Catherine A. Vaho, *
*
Appellant. *
___________
Submitted: May 9, 2000
Filed: September 22, 2000
___________
Before RICHARD S. ARNOLD and HEANEY, Circuit Judges, and MAGNUSON1,
District Judge.
___________
HEANEY, Circuit Judge.
Following a jury trial, Catherine A. Jolivet was convicted of four counts of mail
fraud, in violation of 18 U.S.C. §§ 2 and 1341; three counts of money laundering, in
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The Honorable Paul A. Magnuson, Chief Judge, United States District Court
for the District of Minnesota, sitting by designation.
violation of 18 U.S.C. §§ 2 and 1956(a)(1)(A)(i); and one count of conspiracy, in
violation of 18 U.S.C. § 371. She was sentenced to thirty-six months’ imprisonment
on all charges, with the sentences to run concurrently. On appeal, she argues that the
district court plainly erred in admitting expert testimony from the government’s
handwriting analyst, and that the district court abused its discretion by denying her a
continuance. She further argues that the evidence was insufficient to sustain any of the
convictions. We affirm in part and reverse in part.
FACTS
Jolivet’s charges stemmed from four insurance schemes, all of which were
perpetrated in the same manner by Jolivet and her husband, Jeremi-Jo Vaho. Jolivet,
Vaho, or another party would obtain insurance. Sometime thereafter, the insured (or
someone claiming to be the insured) would contact the insurance company, claiming
to have caused an automobile accident.
The government produced evidence that none of these accidents actually
happened. Rather, each of the “victims” was a fictitious person created by Vaho.
Vaho would represent to the insurance companies that he and his fictitious family were
the accident victims, and would then submit false expenses and medical records.
Among the items submitted to the insurance companies were checks and money orders
indicating that they were being used to pay for medical expenses. None of these
instruments were used to pay these expenses, but had been altered to effectuate the
fraudulent scheme. Many of these documents were signed by Jolivet.
After providing the insurance company with fraudulent documentation of the
injuries and expenses from the accident, Vaho would settle the insurance claims on
behalf of himself and his fictitious family. The settlement proceeds were often
deposited in one of Jolivet’s bank accounts.
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DISCUSSION
I. EXPERT TESTIMONY
Jolivet complains that the district court erred in admitting the testimony of
Donald Lock. Lock, proffered as an expert in handwriting comparison, analyzed a
large number of documents at trial to determine if Jolivet was the signatory on the
documents. After comparing the questioned documents with other documents that were
known to contain Jolivet’s signature, he opined that the signatory on the questioned
documents was likely Jolivet, but he would not state that he was absolutely certain of
his conclusions.
In order to be admissible, expert testimony must be both relevant and reliable.
See Kumho Tire Co. v. Carmichael, 526 U.S. 137, 147 (1999). The district court is
afforded wide latitude in making its reliability and relevance determinations. See id.
at 152.
We usually review the district court’s expert testimony determinations for an
abuse of discretion. See id. at 141-42. However, in this case our review is further
limited because Jolivet did not object to the admission of Lock’s testimony at trial.
“Without a timely, contemporaneous objection at trial, a party cannot preserve an issue
for appeal, and this court cannot reverse on appeal unless we find 'plain error.'” United
States v. Martin, 869 F.2d 1118, 1121 (8th Cir. 1989) (quoting United States v.
Roenigk, 810 F.2d 809, 815 (8th Cir. 1987)) (citation omitted).
Because Lock was particularly well-qualified in analyzing questioned
documents--having studied and taught internationally, written manuals, and practiced
in the field for over two decades, performing several thousand comparisons--the district
court did not abuse its discretion in finding Lock’s expert testimony to be reliable. See
United States v. Paul, 175 F.3d 906, 910-11 (11th Cir. 1999). Similarly, in light of
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Lock’s experience and expertise, we believe his testimony may be properly
characterized as offering the jury knowledge beyond their own and enhancing their
understanding of the evidence before them. See id. at 911. The district court thus
committed no abuse of discretion, much less plain error, in admitting Lock’s testimony.
II. MOTIONS FOR A CONTINUANCE
Jolivet next argues that the district court erred in denying two of her motions for
a continuance. According to Jolivet, her counsel had insufficient time to prepare for
trial and therefore did not adequately represent her. We review for an abuse of
discretion, mindful that continuances “generally are not favored and should be granted
only when the party requesting one has shown a compelling reason.” United States v.
Cotroneo, 89 F.3d 510, 514 (8th Cir. 1996).
Jolivet’s trial was originally scheduled for January 4, 1999. In late December
of 1998, Jolivet’s attorney filed a motion to withdraw as counsel. The district court
granted the motion, appointed new counsel, and continued the trial until February 8,
1999.
Apparently unaware that the court had already ruled on the issue, Jolivet
subsequently filed a pro se motion asking that her trial remain scheduled for January 4.
As she stated in her motion, any request for a further continuance was a strategy
employed by the government to “drag [the case] as long as it takes for Defendant to
grow weak and frustrated enough to agree to a plea offer.” (App. at 76.) Informing the
court that she was “ready to proceed to trial,” Jolivet stated that she “would like to see
trial proceed as scheduled on January 4, 1999.” (Id.)
Despite Jolivet’s request, the trial remained set for February 8. On January 19,
Jolivet’s attorney requested a continuance because he would be in trial in state court
on February 8. The district court denied the motion, noting Jolivet’s recent request for
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a speedy resolution. On January 27, counsel renewed his motion, this time because
Jolivet had a scheduling conflict on February 8. The district court denied this motion
as well.
In light of Jolivet’s own requests for an expeditious disposition, it was not an
abuse of discretion for the district court to deny further continuances. Moreover, in
neither motion did counsel suggest that absent a continuance he would have insufficient
time to adequately prepare for trial, the ground Jolivet now relies upon for reversal on
appeal. As this issue was not properly presented to the district court, our review is
limited to plain error and we find none. See Fed. R. Crim. P. 52(b); accord Parkus v.
Delo, 135 F.3d 1232, 1234 (8th Cir. 1998) (analyzing appellant’s objection to jury
instructions under plain error standard where appellant raised different grounds before
district and appellate courts).
III. SUFFICIENCY OF THE EVIDENCE
Jolivet further challenges her convictions, contending that the evidence adduced
at trial was insufficient to support any of them. We view the evidence in the light most
favorable to the verdict, accepting as established all reasonable inferences the evidence
tends to prove. See United States v. Hawkey, 148 F.3d 920, 923 (8th Cir. 1998).
While the government is obligated to prove every element of the offenses, see United
States v. Hildebrand, 152 F.3d 756, 761 (8th Cir. 1998), the evidence “need not
exclude every reasonable hypothesis of innocence, but simply be sufficient to convince
the jury beyond a reasonable doubt that the defendant is guilty,” Hawkey, 148 F.3d at
923 (quoting United States v. McGuire, 45 F.3d 1177, 1186 (8th Cir. 1995)).
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A. Mail Fraud
Jolivet was convicted of four counts of mail fraud stemming from two insurance
schemes. In order to sustain a conviction for mail fraud, the government must show
that the defendant knowingly participated in a scheme to defraud, and that it was
reasonably foreseeable that the mails would be used to effectuate the scheme. See
Hildebrand, 152 F.3d at 761. The use of mails need not be essential to the scheme; a
conviction may be sustained even if the use of mails was merely incidental to the
scheme. See United States v. Nelson, 988 F.2d 798, 804 (8th Cir. 1993). Moreover,
it is not necessary that the defendant herself use the mails, so long as she caused the
mails to be used in furtherance of her scheme. See id.; accord Hildebrand, 152 F.3d
at 761 (“[E]ach participant in a scheme to defraud is responsible for his partners’ use
of the mails in furtherance of that scheme.”)
Jolivet does not deny the existence of either scheme to defraud, or that it was
foreseeable that the mails were used to further the schemes. Rather, she argues that she
did not knowingly participate in the plan. In order to consider her claims, we must
further detail the facts surrounding each plot.
1. The Norwood Claim
In early January of 1994, Anicet Penoukou–a confederate of Jolivet and
Vaho’s–reported that while driving a rental car, he was involved in an at-fault accident
in which he hit Martin Norwood’vehicle. Martin Norwood was a fictitious character
portrayed by Vaho.
The rental car was insured by The Travelers Insurance Company (Travelers).
Travelers contacted Vaho (whom Travelers believed to be Norwood) regarding the
accident. Vaho stated that he was involved in the accident, that his car had been
damaged and repaired, and that he and his family were receiving medical treatment.
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Vaho indicated that his address was 4347 S. Weller, Apt. 79, in Springfield, Missouri--
Jolivet’s address. Travelers subsequently sent a letter to this address, asking Vaho to
detail the accident.
In June, someone again posing as Norwood mailed copies of medical records,
invoices, and copies of checks and money orders to Travelers in support of the
Norwood claim. Again, Travelers was informed that the Norwoods’ address was the
very address at which Jolivet was living. Moreover, all of the documentation
supporting the claim--the medical records, invoices, checks and money orders--had all
been altered so as to appear to relate to the Norwoods’ claim. Some of the altered
checks and money orders bore Jolivet’s signature.
2. The Dashire Claim
Sometime in 1995, Jolivet and Vaho became friends with Jacqueline Hawkins.
Vaho would help Hawkins pay her bills, and eventually Vaho offered to help Hawkins
get insurance on her car. He suggested that she purchase insurance from Shelter
Insurance Company (Shelter). In early April, Hawkins received insurance from Shelter,
and paid her premium with money she had received from Vaho.
On April 13, 1995, a person claiming to be Jacqueline Hawkins contacted
Shelter and advised that she had hit a 1985 Peugeot station wagon2 driven by Paula
Dashire, another fictitious identity. Hawkins later denied she was ever involved in an
accident with Dashire and stated that she had not reported any accident to Shelter.
On April 18, 1995, Vaho, identifying himself as James Dashire, contacted
Shelter regarding the accident. Thereafter, a Shelter representative came to the
defendant’s residence to inspect the damage to the station wagon and issued a check
2
Jolivet owned a Peugeot station wagon during this time period.
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payable to Paula and James Dashire to cover the property damage. Jolivet endorsed
this check and deposited it into her own bank account.
In May, Shelter wrote to the Dashires at Jolivet’s address for more information
about the claim. In response, Shelter received information similar to that received by
Travelers on the Norwood claim--altered treatment records, invoices, and copies of
checks and money orders. After receiving this information, Shelter agreed to settle the
Dashire claims, and sent a settlement letter with releases to the Dashires.
The evidence detailed above is sufficient to support Jolivet’s convictions. Jolivet
was linked to the Norwood fraud by her signature on the altered checks and money
orders--purportedly for medical payments--that were presented to Travelers, and by the
use of her address for the correspondence between Norwood and Travelers. While not
overwhelming, the jury could infer from this evidence that Jolivet was materially
involved in the fraud.
Jolivet’s convictions on the Dashire claim must also stand. The government
produced essentially the same evidence here as with the Norwood claim, but
additionally showed that Jolivet deposited some of the proceeds of the Dashire fraud
into her own bank account. While we note that the evidence suggests that Vaho was
the mastermind of these operations, Vaho’s criminal involvement does not absolve
Jolivet of responsibility for her part in the wrongdoing.
B. Conspiracy
Jolivet was convicted of one count of conspiracy to commit mail fraud, money
laundering, and interstate transportation of property taken by fraud. In order to convict
a defendant of conspiracy, the jury must find (1) an agreement to achieve some illegal
purpose; (2) the defendant had knowledge of the agreement; and (3) the defendant
knowingly became a party to the agreement. See United States v. Nichols, 151 F.3d
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850, 851 (8th Cir. 1998). The government must also prove that one of the conspirators
performed some act in furtherance of the conspiracy. See United States v. Peterson,
No. 99-3680, 2000 WL 1047947, at *2 (8th Cir. July 31, 2000).
Jolivet argues the government established neither that she had knowledge of the
conspiracy, nor that she agreed to join it. We disagree. Along with evidence of the
Norwood and Dashire claims, the government also presented evidence of two
additional fraudulent schemes with a similar modus operandi. In the first claim, Jolivet
herself reported she was involved in an accident with Raymond Bras. Vaho played the
part of Raymond Bras. Jolivet’s insurance adjuster spoke with Jolivet personally about
the accident. Meanwhile, as with the Norwood and Dashire claims, Vaho provided the
insurance company with phony documentation of medical and personal expenses
related to the accident.
In the next scheme, Jolivet again reported that she had caused an accident, this
time with David Tracko. Again, Vaho held himself out to be Tracko, the accident
victim. Vaho deposited the insurance settlement proceeds in a joint account for himself
and the Trackos, and from those proceeds obtained a cashier’s check in the amount of
$4,700.00, payable to Susan Tracko. This cashier’s check was subsequently deposited
in Jolivet’s bank account, bearing Susan Tracko’s endorsement.
The evidence detailed above is more than sufficient to establish a link between
Jolivet and the conspiracy. See United States v. Mathison, 157 F.3d 541, 550 (8th Cir.
1998) (noting that slight evidence connecting defendant to conspiracy may be sufficient
to convict). She reported some of the fraudulent accidents personally, and she
deposited the proceeds of the fraud into her account. Moreover, the insurance
companies were presented with altered checks and money orders bearing her signature,
and her address was used for correspondences between the insurance companies and
the fictitious accident victims. Finding Jolivet’s arguments unpersuasive, we affirm her
conspiracy conviction.
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C. Money Laundering
Jolivet was also convicted of three counts of money laundering. In order to be
found guilty of money laundering under § 1956(a)(1)(A)(i), the government must prove
that the defendant “engaged in financial transactions with the knowing use of the
proceeds of illegal activities” and with the “intent to promote the carrying on” of
unlawful activity. Hildebrand, 152 F.3d at 762 (quoting § 1956(a)(1)(A)(i)). Thus,
although the prohibited conduct is characterized as money laundering, it is different
from traditional money laundering because the criminalized act is the reinvestment of
illegal proceeds rather than the concealment of those proceeds. See id. (contrasting §
1956(a)(1)(A)(i)’s prohibition of reinvestment money laundering to § 1956(a)(1)(B)(i)’
prohibition of concealment money laundering).
The three counts of money laundering relevant to this appeal stem from Jolivet’s
deposit of the proceeds she received from the insurance fraud. The first count relates
to the Tracko claim and Jolivet’s deposit of the $4,700.00 cashier’s check, payable to
and endorsed by Susan Tracko, into her account. The second and third counts are
based on Jolivet’s deposit of the Norwood and Dashire insurance settlement checks
directly into her bank accounts.
With regard to the Norwood and Dashire deposits, the government argues that
Jolivet’s singular act of depositing the settlement checks into her bank account is
sufficient to sustain the convictions. This argument is based on the premise that
Jolivet’s acts of endorsing and depositing the checks made the proceeds available for
use, thereby furthering the illegal activity. We disagree.
We begin our analysis by considering the plain language of the statute in
question. The government must prove that the defendant, using illegally-gained
proceeds, undertook a financial transaction “with the intent to promote the carrying on
of specified unlawful activity.” § 1956(a)(1)(A)(i). It is true that the deposit of funds
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in a bank account may promote an antecedent unlawful activity by making the funds
available to the wrongdoer. However, the government bears the burden of proving that
the money was used to further the carrying on of such illegal activity. We find no logic
in the government’s suggestion that Jolivet could promote the carrying on of an already
completed crime. Cf. United States v. Edgmon, 952 F.2d 1206, 1214 (10th Cir. 1991)
(“Congress aimed the crime of money laundering at conduct that follows in time the
underlying crime rather than to afford an alternative means of punishing the prior
‘specified unlawful activity.’”)
We recognize a split among our sister circuits on this issue. Compare United
States v. Paramo, 998 F.2d 1212, 1217-18 (3d Cir. 1993) (holding deposit of illegally
obtained check was sufficient to sustain conviction under § 1956(a)(1)(A)(i)), and
United States v. Montoya, 945 F.2d 1068, 1076 (9th Cir. 1991) (same), with United
States v. Calderon, 169 F.3d 718, 722 (11th Cir. 1999) (reversing § 1956(a)(1)(A)(i)
conviction where government presented no evidence that illegal proceeds, once
deposited, were spent in furtherance of illegal scheme), and United States v. Heaps, 39
F.3d 479, 486 (4th Cir. 1994) (rejecting broad statutory interpretation employed in
Montoya and Paramo as inconsistent with congressional intent; “[t]he statute should
not be interpreted to make any [illegal] transaction a money laundering crime.”)
Mindful of this conflict, we find the decisions of the Fourth and Eleventh Circuits to be
more consistent with the plain meaning of the statute and with congressional intent.
See Maura E. Fenningham, Note, A Full Laundering Cycle is Required: Plowing Back
the Proceeds to Carry on Crime is the Crime Under 18 U.S.C. § 1956(a)(1)(A)(i), 70
Notre Dame L. Rev. 891, 938 (1995) (concluding that Third and Ninth Circuits have
“misinterpreted the plain language of section 1956(a)(1)(A)(i) in seeking to apply a
broader proscription than Congress sought to establish. While this broad reach may
further serve the ultimate legislative goal of thwarting crime through its pocketbook,
it does so without legislative support.”)
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Although we have not squarely addressed this issue before, our earlier
jurisprudence provides further guidance and support for our conclusion. In Hildebrand,
the defendants were charged with money laundering under § 1956(a)(1)(A)(i) for
promoting a scheme to defraud would-be participants in a class action lawsuit. They
challenged the sufficiency of the evidence to support their convictions. In analyzing
their claims, we referred to this type of money laundering as “'reinvestment' money
laundering,” recognizing the statute required the government to prove that the
defendants expended illegally-obtained proceeds in order to further promote the
fraudulent scheme. Hildebrand, 152 F.3d at 762. We affirmed the convictions, noting
that the government produced evidence that the illegal proceeds were in fact reinvested
because they were used to maintain the defendants’ office, the headquarters for the
illegal scheme. See id.; but cf. United States v. Brown, 186 F.3d 661, 670 (5th Cir.
1999) (reversing § 1956(a)(1)(A)(i) conviction where government presented evidence
that defendant used illegal proceeds to maintain car dealership despite fact dealership
was involved in fraudulent activity).
The government directs us to United States v. Nattier, 127 F.3d 655 (8th Cir.
1997), in support of its “deposit money laundering” theory. In Nattier, the defendants
were operating International Realty Investments, Inc. (IRI), a Missouri corporation.
One of the defendants worked at a bank, and came upon a similarly-named corporation
that had unclaimed dividends owed to it. This defendant directed these monies by
checks to IRI, which deposited the checks and bought property with the proceeds. We
affirmed the money laundering convictions. See Nattier, 127 F.3d at 658-59.
We find Nattier readily distinguishable. Because the illegal proceeds--the
dividend payments--were only available to IRI because it was similar in name to the
true owner of the dividends, IRI’s very existence was an integral element of the
scheme. The continued viability of the corporation was necessary to receive further
payments, that is, to carry out future crimes. The deposit and investment of funds thus
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promoted further unlawful activity because it allowed the corporation to stay afloat.
See id.
In contrast, Jolivet undertook her fraudulent scheme personally. She did not
operate through a corporate shell or other business entity which required revenues to
continue its criminal enterprise. Rather, she and Vaho simply undertook to defraud
insurance companies, something for which she needed very few resources. Finding no
merit to the government’s “deposit money laundering” theory, we turn to its next
argument.
The government contends that Jolivet is nonetheless guilty of all three counts
because she did in fact reinvest the illegally-obtained proceeds in order to promote
further crimes. If the government had produced evidence that Jolivet used the
insurance settlement monies to continue her schemes, her convictions would stand. See
Hildebrand, 152 F.3d at 762. However, that is not the case. While Jolivet and Vaho
continued their fraudulent schemes for some time, the government has failed to produce
any evidence that either Jolivet or Vaho used the proceeds from any one incident to
further their future schemes. Rather, the undisputed evidence showed that most of the
money went to pay daily living expenses and to pay credit card debt, and the
government admits that it was “not able to track the precise use of the assets after they
left the defendant’s bank account.” (Appellee’s Br. at 42.) While the government
speculates that the insurance settlement money could have been used to further the
schemes, it has produced no evidence to support its conjecture. With no evidence that
the proceeds were used for anything other than personal expenses, the government is
missing a link essential to a finding of guilt, and accordingly the money laundering
convictions must be reversed. See United States v. Olaniyi-Oke, 199 F.3d 767, 770
(5th Cir. 1999).
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CONCLUSION
For the reasons articulated above, we affirm Jolivet’s conspiracy and mail
fraud convictions and sentences, but reverse her money laundering convictions and
remand to the district court for proceedings consistent with this opinion.
A true copy.
Attest:
CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.
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