U.S. v. Mathison

• Decision Date: 15 October 1998
• Docket Number: Nos. 97-3599,97-3600,97-3602,97-3603,s. 97-3599
• Citation: 157 F.3d 541
• Parties: UNITED STATES of America, Appellee, v. Eugene H. MATHISON, Appellant. UNITED STATES of America, Appellee, v. Perry GOBEL, Appellant. UNITED STATES of America, Appellee, v. Robert E. HOLMES, Appellant. UNITED STATES of America, Appellee, v. Dean G. CHAMBERS, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 541

157 F.3d 541

UNITED STATES of America, Appellee, v. Eugene H. MATHISON, Appellant.

UNITED STATES of America, Appellee, v. Perry GOBEL, Appellant.

UNITED STATES of America, Appellee, v. Robert E. HOLMES, Appellant.

UNITED STATES of America, Appellee, v. Dean G. CHAMBERS, Appellant.

Nos. 97-3599, 97-3600, 97-3602, 97-3603.

United States Court of Appeals Eighth Circuit.

Submitted May 15, 1998.

Decided Sept. 2, 1998.

Rehearing and Suggestion for Rehearing En Banc Denied Oct. 15, 1998.

Mr. Mathison, on the brief, pro se.

Shari B. Langner, Sioux Falls, SD, argued, for Mr. Gobel.

Brian K. Kirby, Sioux Falls, SD, argued, for Mr. Holmes.

Jeffrey C. Clapper, Sioux Falls, SD, argued, for Mr. Chambers.

David L. Zuercher, AUSA, Pierre, SD, argued, for United States of America.

Before McMILLIAN, NOONAN, ¹ and MORRIS SHEPPARD ARNOLD, Circuit Judges.

MORRIS SHEPPARD ARNOLD, Circuit Judge.

Eugene Mathison and his associates Perry Gobel, Robert Holmes, and Dean Chambers were indicted on numerous counts of conspiracy, see 18 U.S.C. § 371, mail fraud, see 18 U.S.C. § 1341, wire fraud, see 18 U.S.C. § 1343, perjury, see 18 U.S.C. § 1623(a), and money laundering, see 18 U.S.C. § 1956(a)(1), § 1957(a). The government alleged that Mr. Mathison operated three fraudulent investment schemes by himself and that the four defendants together operated a fourth. While operating the fourth investment group alone, the government charged, the defendants defrauded family, friends, and acquaintances of nearly $1 million.

Mr. Mathison's investment groups operated as a simple Ponzi scheme. The first limited group of investors formed the Northern States Investment Group. Mr. Mathison convinced his victims that they were investing with a Kansas City broker who had devised a way to make exceptional returns in the commodities market. Once investors gave Mr. Mathison their money, he began mailing statements showing monthly rates of return from about 7 percent to 17.6 percent. Mr. Mathison never invested the money, however; instead, he deposited the money into a bank account and paid out most of it to himself and his wife. Some small amounts of money were returned to investors.

The next two investment groups, Goldstar and Universal, operated in substantially the same manner as Northern States. In their promotional materials, Mr. Mathison reported the paper success of the first group and all but promised the same success for the new ones. Goldstar collected $102,500 and Universal collected $171,000. Again, no money was ever invested, and substantial payouts were made to Mr. Mathison and his wife from the groups' funds.

In June, 1995, Mr. Mathison was arrested for crimes arising out of his activities with the first three groups. The government produced proof at trial that Mr. Chambers knew that Mr. Mathison had been arrested for fraud and for money laundering. Later that year, the four defendants formed the final relevant entity, the Perob Investment Group. By this time, the government was already investigating Mr. Mathison's activities, and thus the final group's organization was, the government alleged, calculated to conceal Mr. Mathison's involvement. The government alleged also that Mr. Gobel and Mr. Holmes solicited friends and relatives to invest in the group, and that Mr. Chambers acted as the registered agent for the group, while Mr. Mathison continued to do the "investing" from behind the scenes. The defendants collected $947,000 from the Perob investors.

The government maintained at trial that Mr. Gobel and Mr. Holmes used the fake statements from the previous investment groups to lure victims to Perob. All four defendants received sizable amounts of money from Perob's bank accounts. Mr. Mathison laundered some of this money by wiring it to an associate at a bank in Arizona, who then wired the money back to Mr. Mathison, or into another account, at his direction. Much of this laundered money was wired into accounts associated with the first three investment groups and wholly under Mr. Mathison's control.

All four defendants were found guilty of conspiracy, mail fraud, and money laundering, and Mr. Mathison was convicted on five additional counts of wire fraud. Mr. Holmes was convicted in addition on one count of perjury. The trial court ² sentenced the defendants to lengthy prison terms and ordered them to make restitution. They urge reversal on a great number of diverse grounds. Because we find none of their arguments persuasive, we affirm the trial court's judgments.

I.

Mr. Mathison asserts that the trial court was biased against him. He maintains that the judge should have recused himself from this case because Mr. Mathison had embarrassed and humiliated him during a deposition in a civil case several years earlier when the judge was in practice. Federal law requires a federal judge to disqualify himself or herself where "his impartiality might reasonably be questioned," see 28 U.S.C. § 455(a), or where "he has a personal bias or prejudice concerning a party," see 28 U.S.C. § 455(b)(1).

We find, after careful review, that Mr. Mathison waived his right to seek recusal from the trial court. We have held that claims under § 455 will not be considered unless they were timely made before the trial court. See United States v. Bauer, 19 F.3d 409, 414 (8th Cir.1994). In a letter that he sent to the trial court following some particularly adverse rulings, Mr. Mathison referred to the events that he now claims warranted a recusal. The letter indicated his opinion that the events alluded to might warrant the judge's recusal, but nowhere did the letter actually seek recusal. We therefore believe that the trial court quite properly did not consider the letter to be a motion to recuse.

Mr. Mathison chose not to raise the matter of recusal before the trial court, although he plainly thought that he might have a basis for asking the judge to recuse. Mr. Mathison did not simply forfeit an objection by mere inadvertent inaction; he made a conscious choice not to raise the objection. In these circumstances, it is plain to us that he has waived it. See United States v. Olano, 507 U.S. 725, 732-34, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993).

II.

Mr. Holmes and Mr. Chambers mount several challenges to the trial court's refusal to sever their trials from Mr. Mathison's. In counts 1-37, only Mr. Mathison was a defendant, and crimes arising out of only the first three of the four investment schemes were alleged. In counts 38-61, which concerned the fourth investment group, all four defendants were charged.

Although Mr. Holmes and Mr. Chambers moved for severance during a pretrial hearing, they did not renew the motion at the close of the government's case or at the close of all of the evidence. Because of this omission, we review the denial of the motion for plain error only. See id. at 733-34, 113 S.Ct. 1770. To succeed on plain-error review of the denial of a motion to sever, a defendant must show an abuse of discretion by the trial court as well as "prejudice affecting his substantial rights and an extraordinary reason to reverse." United States v. Rogers, 150 F.3d 851, 855-56 (8th Cir.1998); see also Fed.R.Crim.P. 14.

While it is true, as the defendants point out, that the acts alleged in counts 1-37 were distinct from those alleged in counts 38-61, the trial court did not abuse its discretion by having all of the counts considered in the same trial. Mr. Mathison's first three investment groups served as the model and progenitor for the final scam. At least one defendant, Mr. Mathison, was involved in all of the acts, and the government presented evidence allegedly linking Mr. Gobel and Mr. Holmes to the acts underlying all of the counts. Furthermore, the complex money-laundering scheme, for which all of the defendants were convicted, involved money obtained from all four of the investment groups. As in a typical Ponzi scheme, money obtained from victims of the final scam was used to placate victims of the previous three scams. Finally, promotional materials from the first three scams were used to defraud investors in the fourth one. For all of these reasons, we hold that the offenses charged were "of the same or similar character" and were "based on ... two or more ... transactions connected together," see Fed.R.Crim.P. 8(a), and that joinder of all of the counts was therefore proper.

It is true that the government produced more evidence of Mr. Mathison's guilt than it did of his co-defendants', and it is also true that Mr. Mathison was indicted on more counts than his co-conspirators were. But "[a] defendant is not entitled to severance merely because the evidence against a co-defendant is more damaging than the evidence against him.... Severance becomes necessary [only] where ... a jury could not be expected to compartmentalize the evidence as it relates to separate defendants." United States v. Jackson, 549 F.2d 517, 525 (8th Cir.1977), cert. denied, 430 U.S. 985, 431 U.S. 923, 968, 97 S.Ct. 1682, 2195, 2928, 52 L.Ed.2d 379, 53 L.Ed.2d 236, 1064 (1977). In this case, "any risk of prejudice was reduced by the district court's instructions, which directed the jury to consider each offense and its supporting evidence separately, and to analyze the evidence with respect to each individual without considering evidence admitted solely against other defendants." United States v. Noske, 117 F.3d 1053, 1057 (8th Cir.1997), cert. denied, --- U.S. ----, ----, 118 S.Ct. 315, 389, 139 L.Ed.2d 244, 304 (1997), --- U.S. ----, 118 S.Ct. 1060, 140 L.Ed.2d 121 (1998).

More important, because a substantial amount, if not all, of the evidence presented with respect to counts 1-37 would have been admissible (and likely would have been used) in a separate trial on counts 38-61, Mr. Holmes and Mr. Chambers could not have been prejudiced by the trial court's failure to sever their trials from that of Mr. Mathison. We have held, moreover, that defe...