U.S. v. Walsh

• Citation: 75 F.3d 1
• Decision Date: 03 October 1995
• Docket Number: No. 95-1139,95-1139
• Parties: UNITED STATES of America, Appellee, v. William H. WALSH, Defendant, Appellant. . Heard
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

Page 1

75 F.3d 1

UNITED STATES of America, Appellee, v. William H. WALSH, Defendant, Appellant.

No. 95-1139.

United States Court of Appeals, First Circuit.

Heard Oct. 3, 1995.

Decided Jan. 23, 1996.

James L. Sultan, with whom Rankin & Sultan, Boston, MA, was on briefs, for appellant.

Peter A. Mullin, Assistant United States Attorney, with whom Donald K. Stern, United States Attorney, and Pamela Merchant, New England Bank Fraud Task Force, Criminal Division, Department of Justice, were on brief, for United States.

Before BOUDIN, Circuit Judge, BOWNES, Senior Circuit Judge, and KEETON, ^* District Judge.

BOUDIN, Circuit Judge.

William Walsh was charged with various offenses growing out of a bank fraud scheme and convicted on a majority of the counts. His present appeal is primarily directed at procedural issues. We affirm.

I.

Walsh was indicted in 1992, together with four co-defendants, and charged with conspiracy, twenty-nine counts of bank fraud, and twenty-nine counts of false statements. 18 U.S.C. §§ 2, 371, 1344, 1014. The substance of the indictment was that Walsh carried out a scheme to defraud Dime Savings Bank of New York ("Dime-NY"). He did so, according to the charge, by directing his employees to obtain 29 specific loans through the use of deceptions so that customers could purchase condominiums from Walsh and his associates.

Walsh's trial occurred in February and March 1994. Taken in the light most favorable to the verdict, United States v. Tuesta-Toro, 29 F.3d 771, 773 (1st Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 947, 130 L.Ed.2d 890 (1995), the evidence permitted the jury to find the following. Walsh was a Cambridge, Massachusetts, city councillor, lawyer, and real estate developer. With a group of investors, he purchased apartment buildings or complexes, converted the property into condominiums, and sold the condominiums to customers, using the unit sales to pay off the acquisition financing.

Walsh ordinarily served as a trustee of the realty trust that acquired the building, acted as legal counsel to the trust, and usually served as the trust's representative in the sale of the individual condominium units. During 1986, sales of units in one of the projects started to fall behind schedule and the trust began to have difficulty repaying its acquisition loan. Walsh then discovered that Dime-NY had recently created a wholly owned subsidiary, called Dime Real Estate Services of Massachusetts, Inc. ("Dime-MA"), to originate mortgage loans in Massachusetts. Dime-MA made mortgage loans available rapidly--with no verification of income, assets or down payments--but the loans required a twenty percent down payment and secondary financing was prohibited.

On this failing project, and then on two others, Walsh directed his employees to arrange loans from Dime-MA for unit purchasers and to falsify documents submitted to Dime-MA to conceal the existence of secondary financing (and in some cases third mortgages as well). In the three projects, approximately half the customers defaulted and Dime-MA incurred substantial losses. An investigation ensued, followed by the indictment already described. Three of the four co-defendants pleaded guilty; charges against the fourth co-defendant were abandoned.

Jury deliberations began on March 22, 1994. Following the dismissal of a juror during deliberations, the jury (now reduced to 11 members) continued deliberations, and on March 28, 1994, it returned 41 guilty and 18 not guilty verdicts. Walsh was thereafter sentenced and now appeals. Most of the claims of error concern the dismissal of the juror and its aftermath, so we begin with that subject, starting with a description of the pertinent events.

II.

On March 23, 1994, a note was received from the jury indicating that one of the jurors wished to meet with the judge, adding: "He has several questions and we cannot relate to him in any way, shape, or form." The judge declined to meet with an individual juror, but the following day a court security officer reported that the foreperson was concerned that one of the jurors had become "mentally unstable." After consulting with counsel, the trial judge interviewed the foreperson, and learned of constant interruptions by "juror X", irrelevant statements by juror X about events in his past life, and juror X's efforts to show other jurors written materials consisting of a campaign brochure and a newspaper clipping from his prior efforts to win elective office.

After consulting further with counsel, the trial judge interviewed juror X; as in the judge's interview with the foreperson, counsel and Walsh himself were present. The judge cautioned juror X not to indicate his views on the merits of the case. The interview, which began by focusing on the material that the juror brought into the jury room, involved disjointed and rambling comments by juror X. Juror X also mentioned a self-described "nervous problem" and his general discharge from the military. Some of the questioning was based on questions that had been suggested by the government and defense counsel.

Finally, out of the presence of juror X, the court asked both sides for their position as to whether juror X should be excused, and defense counsel after consultation with Walsh indicated that he "would not object if the Court decided to keep him or eliminate him.... [Either way] we would move for a mistrial." The government said that it thought the juror was disabled and should be excused. The trial judge then excused the juror, agreeing that he was "not a person capable of engaging in rational discussions based upon the evidence."

Thereafter, the remaining jurors were sent home for the rest of the day. The following morning Walsh filed a motion for mistrial, arguing that the ability of the remaining jurors to be impartial and open-minded had been undermined by their exposure to juror X. No one at this point knew or claimed to know how juror X had proposed to vote. The court agreed to question the remaining jurors and solicited and received proposed questions from counsel.

Then the district judge, in the presence of counsel and the defendant, questioned each of the 11 jurors individually as to whether juror X had discussed the merits prior to the jury's deliberations, had brought material into the jury room, and had discussed his own personal experiences--and whether the juror being questioned could, to the extent that these events had occurred, put them aside and decide the case impartially based on the evidence presented. Eight of the jurors had been exposed to a campaign brochure and an old newspaper article about one of juror X's campaigns; all of the jurors had heard juror X discuss his personal experiences; and three jurors had heard comments from juror X about the merits of the case prior to the start of deliberations.

Each juror affirmed his or her ability to put aside the campaign material, the personal experiences of juror X, and any comments made by him before deliberations began. Defense counsel challenged three jurors who had heard comments by juror X before deliberations began, the substance of the comments not being revealed. With respect to each of the three jurors, the trial judge made findings that the juror was credible in saying that the pre-deliberation comments of juror X would have no effect. The trial judge then denied a mistrial.

At the request of defense counsel, the trial judge told the jury that it could begin its deliberations from the beginning if it wished; the court also told the jury not to discount a position taken "just because [juror X] took it." The jurors then deliberated for the rest of the day. Returning after a weekend break, they continued deliberations and asked for reinstruction on substantive issues. Late in the same day, they returned the 41 guilty and 18 not guilty verdicts.

1. Walsh's first claim of error is that the trial court erred in dismissing juror X. Walsh argues that there was no psychological testing or psychiatric examination of juror X, and the evidence did not show that he was either mentally incompetent or otherwise incapable of engaging in rational decision-making. In substance, Walsh says that juror X was simply an unpopular, perhaps irritating participant who probably sided with the defendant and whose removal led to a prompt agreement to convict.

Walsh did not make a timely objection on this ground. At the time of the dismissal, his counsel did not object to excusing juror X, or argue for psychiatric testing, or suggest that juror X could be dismissed only if a higher degree of irrationality were shown. Instead, Walsh made clear his intention to move for a mistrial; and when the mistrial motion was filed, the ground--inconsistent with the contention now made--was that juror X was someone whose "psychiatric problems" had been "clearly demonstrated" and whose "negative influence" on other jurors was apparent.

Although, for these reasons, the objection now made is reviewable only for plain error, the dismissal of juror X was not error at all. Federal Rule of Criminal Procedure 23(b) permits the judge to excuse a juror "for just cause" during deliberations and to allow the remaining 11 jurors to reach a verdict. The trial judge has substantial discretion in exercising this responsibility and may remove the juror when "convinced that the juror's abilities to perform his duties [have] become impaired." United States v. Huntress, 956 F.2d 1309, 1312 (5th Cir.1992), cert. denied, 508 U.S. 905, 113 S.Ct. 2330, 124 L.Ed.2d 243 (1993). Similarly, in United States v. Molinares Charris, 822 F.2d 1213, 1223 (1st Cir.1987), we permitted a judge to excuse a juror who had taken a tranquilizer pill and appeared somewhat unstable.

The trial judge carefully and repeatedly consulted with counsel in determining the course of the inquiry and the questions to be put to juror X. See United States v. Chorney, 63 F.3d 78, 81 (1st Cir.1995). The...