United States v. Brown

• Decision Date: 23 December 2011
• Docket Number: No. 10–12273.,10–12273.
• Citation: 665 F.3d 1239,23 Fla. L. Weekly Fed. C 667
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. James R. BROWN, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

23 Fla. L. Weekly Fed. C 667

665 F.3d 1239

UNITED STATES of America, Plaintiff–Appellee,

v.James R. BROWN, Defendant–Appellant.

No. 10–12273.

United States Court of Appeals, Eleventh Circuit.

Dec. 23, 2011.

Jamila Marjani Hall, Lawrence R. Sommerfeld, Sally Yates, Atlanta, GA, for Plaintiff–Appellee.

Whitman Matthew Dodge, Stephanie A. Kearns, Fed. Pub. Defenders, Fed. Def. Program, Inc., Atlanta, GA, for Defendant–Appellant.

Appeal from the United States District Court for the Northern District of Georgia.

Before HULL, MARCUS and BLACK, Circuit Judges.

PER CURIAM:

After a jury trial, Defendant James R. Brown appeals his convictions for mail fraud and interstate transportation of forged securities, and his restitution order of $120,421.59. After oral argument and review of the briefs and record, we affirm.

I. BACKGROUND

A. U.S. Treasury Checks Payable to Weinstein

Defendant Brown's convictions arise from events occurring in August 2003. That month, Washington Mutual Group of Funds (“WM Funds”) received a new account application from Terry Clark of Consumer Concepts Investments, an investment firm. Clark was Defendant Brown's college friend and financial advisor. Attached to the application were two U.S. Treasury checks, totaling $297,435.83, for the account's opening deposit. The checks, dated February 28, 2003, were made payable to, and allegedly endorsed by, Frank Weinstein. Clark purported to submit the application on behalf of the alleged account holders, Weinstein, Anthony Stringer, and Defendant Brown, as “tenants by entirety” (the “Weinstein account”).

The application was mailed from Georgia to WM Funds' Rhode Island location. It requested that the account be linked to a Capitol City Bank account held solely in Brown's name.

When the two checks underwent processing, the bank that opened and serviced mutual fund accounts for WM Funds became suspicious of them and ordered an investigation into the Weinstein account. The investigation revealed that Weinstein did not authorize the deposit of the two U.S. Treasury checks. Thus, the Weinstein account was never funded.

The investigation of the Weinstein checks led to Defendant Brown's indictment in 2008 for his 2003 conduct. The two-count indictment charged Brown with (1) attempting to commit and committing mail fraud, in violation of 18 U.S.C. §§ 1341 and 1349 (Count One); and (2) transporting forged securities in interstate commerce, in violation of 18 U.S.C. § 2314 (Count Two). The indictment described Brown's above conduct as a scheme to defraud, as follows:

[Defendant] James R. Brown ... devised and participated in a scheme and artifice ... to obtain money from the United States by means of false and fraudulent pretenses and representations to the effect that [Frank Weinstein] authorized the establishment of a WM Group of Funds mutual funds account, registered in [Weinstein]'s name, on which defendant JAMES R. BROWN was a registered co-account holder, when in fact, as the defendant, JAMES R. BROWN, then well knew and believed, [Weinstein] did not authorize the establishment of a WM Group of Funds account using [Weinstein]'s name.

Brown pled not guilty.

B. Rule 404(b) Evidence as to Winnick and Cassidy Checks

Before Defendant Brown's jury trial, the government filed a notice of intent to submit Rule 404(b) evidence: namely, Brown's “two prior fraud schemes” that occurred in late November and early December 2002, involving checks payable to Alexander Winnick and Mark Cassidy. Brown illegally obtained the checks, forged the payees' signatures, and deposited the checks in fraudulent accounts. Brown created the accounts by providing a false social security number for the payees and listing himself as “tenants by entirety” with the payees. The government argued that both schemes, which were nearly identical to the indicted offense, would demonstrate Brown's intent underlying the charged conduct and show absence of mistake or accident.

Brown moved in limine to exclude the proposed evidence for two main reasons. First, the evidence was unnecessary, pursuant to Rule 404(b), because the government claimed to have “overwhelming” evidence of Brown's guilt on the indicted Weinstein-check charges. Second, the evidence was excludable under Rule 403 because its prejudicial effect substantially outweighed its relevance, and its presentation would unduly delay the trial.

On the first day of trial, before voir dire, the district court held a hearing on the admissibility of the Rule 404(b) evidence. The government reiterated its pretrial arguments. Further, the government argued that the evidence was inextricably intertwined and thus not subject to Rule 404(b). Defendant Brown also repeated his pretrial arguments.

The district court inquired as to the government's proof that Brown committed the two prior fraud schemes. After noting that Brown previously claimed he had no knowledge of the 2002 fraudulent transactions but was himself the victim of identity theft, the district court found that the evidence was admissible. The district court concluded that the evidence was “more 404(b) than inextricably intertwined” but determined the danger of prejudice was not greater than the evidence's probative value. Brown then asked for a limiting instruction, which the district court agreed to give.

C. Trial Evidence as to Weinstein Account

The government first called John Hickey, an investigations manager for the corporate fraud unit of the bank that processed the Weinstein account on behalf of WM Funds. Hickey identified and discussed a series of exhibits.

Exhibit 1 was the Weinstein account application. The application listed Weinstein, Stringer, and Defendant Brown as tenants by entirety. The application bore their purported signatures and listed their social security numbers and birth dates. The account holders' address was “170 Mapledale Lane, College Park, Georgia,” and the application listed two phone numbers, one with a California area code, and the other with a Georgia area code. Clark was named the investment professional. The application included a voided copy of a check for Capitol City Bank. The check stated the account was owned by “a James Brown, 170 Maple Dale Lane in College Park, Georgia.”

Exhibits 2 and 3 were two U.S. Treasury checks, which were payable to Weinstein and which had been attached to the Weinstein account application for deposit. The checks, purportedly endorsed by Weinstein, totaled $297,435.83. During the course of Hickey's investigation of the Weinstein account, Hickey concluded that Weinstein had not authorized the checks to be deposited into the Weinstein account. The account was thus not funded.

The government also called Weinstein's accountant Gregory Lacombe to testify. Lacombe had provided tax and financial consulting services to Weinstein from 1990 until Weinstein's death. In 2002, Lacombe assisted Weinstein in obtaining tax refund checks for the 1977, 1978, and 1979 tax years. Although the original refund checks were issued and mailed around February or March 2003, Weinstein never received them. Lacombe identified the previously introduced Exhibits 2 and 3 as Weinstein's tax refund checks, dated February 28, 2003, for tax years 1977 and 1978. Lacombe had reported the missing checks to the IRS, and the IRS reissued them later that year, one by direct deposit and one by hard copy. Weinstein received the reissued checks.

Lacombe testified that he was personally familiar with Weinstein's signature. Lacombe stated that the signatures on the two original U.S. Treasury checks and the Weinstein account application were not Weinstein's. However, the endorsement on the hard copy reissued check, which was introduced as an exhibit, was Weinstein's signature. Additionally, Lacombe testified that the Weinstein application listed the wrong social security number for Weinstein.

Next, IRS coordinator Gloria Jackson testified that two U.S. Treasury checks, totaling $297,435.83, were issued for tax refunds to Weinstein in February 2003. They were later cancelled, and new checks were issued in May and July 2003.

D. Trial Evidence as to Winnick and Cassidy Accounts

The rest of the government's presentation focused on two other fraudulent accounts created by Defendant Brown. Government witness Hickey testified that he recognized Brown's name during his investigation of the Weinstein account from two other WM Funds account applications. Hickey identified two exhibits as WM Funds account applications: one in the name of Brown and Mark Cassidy, and one in the name of Brown and Alexander Winnick. Both applications named the account holders “tenants-by-entirety.”

As to the Winnick account, Hickey testified as follows. In late November 2002, the Winnick account was opened with WM Funds. Clark submitted the application on behalf of the account holders. The application listed the same account holder address and phone numbers as the Weinstein account. It also provided Winnick's and Brown's social security numbers. The Winnick account was first linked to a California bank account in the name of All American Legal Systems, Brown's business. Later, the account was linked to Brown's Capitol City Bank account. Only Brown had check-writing privileges on the Winnick account. The opening deposit for the Winnick account was a check purportedly written by Winnick for $9,825.00. However, like the Weinstein account, the account was never funded because a bank investigation revealed that the check was altered and Winnick had not authorized the check's deposit.

Winnick himself testified. He did not know Defendant Brown and had not authorized an application for an account at WM Funds. When shown a check from his account, Winnick testified that he had not written the check and had not given anyone permission to write it. The social security number listed as his on the WM Funds account application was not, in fact, his.

Government witness Hickey also testified about the...