United States v. Grey

• Decision Date: 08 June 2018
• Docket Number: No. 14-3003,14-3003
• Citation: 891 F.3d 1054
• Parties: UNITED STATES of America, Appellee v. BENJAMIN BRANDON GREY, Appellant
• Court: U.S. Court of Appeals — District of Columbia Circuit

891 F.3d 1054

UNITED STATES of America, Appellee

v.BENJAMIN BRANDON GREY, Appellant

No. 14-3003

United States Court of Appeals, District of Columbia Circuit.

Argued April 3, 2018

Decided June 8, 2018

Tony Axam Jr., Assistant Federal Public Defender, argued the cause for appellant. With him on the briefs were A.J. Kramer, Federal Public Defender, and Rosanna M. Taormina, Assistant Federal Public Defender.

Christopher R. Howland, Assistant U.S. Attorney, argued the cause for appellee. With him on the brief were Jessie K. Liu, U.S. Attorney, and Elizabeth Trosman and Jonathan P. Hooks, Assistant U.S. Attorneys.

Before: Tatel, Srinivasan, and Millett, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge :

Want to buy a luxury car at a great price? Appellant Benjamin Brandon Grey had a deal for you: go to a bank, take out a loan (or several), hand him the money, and you get your car. But Grey’s offer had a serious hitch: he kept the money and you never got a car, for which a jury convicted him of twenty-one counts of bank fraud and other offenses. On appeal, Grey challenges the district court’s admission of (1) evidence of a judgment in a related civil case, (2) evidence of uncharged acts under Federal Rule of Evidence 404(b), and (3) evidence of the financial damage that Grey’s scheme inflicted on his would-be customers. Grey also argues that his trial counsel’s representation was ineffective. For the reasons that follow, we affirm his conviction and deny his ineffective-assistance claim.

I.

At Grey’s four-day jury trial, the government offered the following evidence:

Hector Williams Jr. testified that Grey, whom he had met through a mutual acquaintance, claimed to be a car dealer able to buy luxury cars at low prices, and that he could get Williams a good deal on a BMW. Following several weeks of discussion, Grey claimed to have purchased a BMW and gave Williams a buyer’s order for the car. Order in hand, Williams took out a $35,000 loan from his credit union, and gave Grey the money, which Grey deposited in his bank account. Grey never delivered a car. After repeatedly contacting Grey, who offered a variety of excuses, Williams filed a police report and sued Grey in D.C. Superior Court. Grey failed to appear, and the court entered a default judgment. Williams testified that because he was unable to make payments on his loan, his credit union "end[ed] up suing [him]" and "won." Trial Tr. 267 (Sept. 16, 2013); see id. at 219–67.

Another witness, Jennifer Bertelsen, testified that Grey, with whom she was romantically involved, claimed to own Planet Cars, a business through which he bought cars and resold them at a profit. He urged her to take out loans, which he would use to buy cars to resell, and then split the profits with her. Though "skeptical," Bertelsen testified that she was "in love so [she] trusted him" and took out three loans from three different banks for some $30,000 each and then signed the three checks over to Grey. Trial Tr. 116 (Sept. 17, 2013). Grey deposited the money in his bank account and gave Bertelsen buyer’s orders describing the vehicles she was ostensibly purchasing through Planet Cars. Bertelsen’s relationship with Grey ended, and she never received any money. At trial, Bertelsen testified that she was forced into bankruptcy due to her inability to repay the loans. See id. at 102–70.

Ronny Fernandez, a high school friend of Grey’s, testified that Grey told him about Planet Cars, offered to sell him a BMW, and gave him a document purporting to be the car’s title and listing Planet Cars as the owner. In response to Fernandez’s "concern[ ]" about the transaction, which would involve taking out a loan from a credit union, Grey explained that "because it’s a federal credit union ... if he didn’t give [Fernandez] the car or [the] money ... it would be a federal offense." Trial Tr. 104–05 (Sept. 18, 2013). Reassured, Fernandez took out a $30,000 loan and gave the money to Grey, who deposited it in his bank account. Grey neither delivered a car nor refunded the money. Fernandez sued Grey, but dropped the suit when Grey warned that "if [Fernandez] take[s] him to court, it’s a federal offense and [Grey will] be in jail and then he won’t be able to give [Fernandez] [his] money back." Id. at 116. Grey then offered Fernandez a second deal: if he allowed Grey to list him as a founder of GreyMaxx, another company through which Grey was seeking to buy and sell cars, he would return the money. Fernandez agreed, but Grey neither involved him in GreyMaxx nor repaid the money. Fernandez attempted to pay off his loan to preserve his credit but was ultimately unable to do so, leading his bank to increase the interest rate. Fernandez testified that his debt "put [him] on edge" and that he "ended up losing [his] job being so stressed out." Id. at 118; see id. at 93–120.

William Hill, who had met Grey through a mutual friend, testified that Grey also offered him an opportunity to invest in GreyMaxx. Hill agreed and gave Grey $34,000, after which communications with Grey tapered off and ultimately ended. Grey never returned the money. See id. at 193–216.

The government called seven employees of the banks and credit unions where the relevant transactions occurred. They described each of the loans and the corresponding deposits in Grey’s bank accounts. Together with this testimony, the government introduced into evidence the associated loan applications, security agreements, checks, deposit slips, and bank statements. See, e.g. , Trial Tr. 57–67 (Sept. 17, 2013) (Williams loan and associated documentation).

Two government witnesses provided evidence of uncharged acts under Federal Rule of Evidence 404(b). Although the government had sought to introduce five such acts, at a pretrial hearing, the district court, concerned that admitting too many acts would be "overkill" and "prejudic[ial]," rejected two and then allowed the government to "pick two" from the remaining three. Hearing Tr. 10 (July 23, 2013). One of the witnesses the government selected, Waleed Esbaitah, testified that he gave Grey $1,500 to buy a car. Grey neither delivered a car nor returned the money. See Trial Tr. 32–42 (Sept. 19, 2013). The other witness, Ralph Kolius, a sales manager at Chevy Chase Nissan, testified that the dealership had to repossess a car Grey had purchased when it discovered that Grey’s check was drawn on a closed Planet Cars bank account. See Trial Tr. 167–81 (Sept. 18, 2013). The court cautioned the jury about the Rule 404(b) evidence’s "limited purpose" three times during trial—after opening statements and after each witness’s testimony—and then again in its instructions to the jury. Trial Tr. 207 (Sept. 16, 2013); Trial Tr. 182–83 (Sept. 18, 2013); Trial Tr. 81–82 (Sept. 19, 2013).

Grey presented no evidence in defense, and the jury convicted him on twenty-one counts of wire fraud, bank fraud, false statement on a loan application, and first-degree fraud. See 18 U.S.C. § 1343 (wire fraud); id. § 1344 (bank fraud); id. § 1014 (false statement); D.C. Code § 22-3221(a) (first-degree fraud). The district court sentenced him to 102 months’ (eight-and-a-half years’) imprisonment and 60 months’ supervised release.

II.

Grey’s strongest challenge is to the district court’s admission of Williams’ testimony about the default judgment, and so we begin there. Because Grey’s counsel failed to object, we review for plain error, which means Grey can prevail only if we find "(1) an error, (2) that is clear or obvious, (3) that affected the outcome of the district court proceedings, and (4) that seriously affects the fairness, integrity, or public reputation of judicial proceedings." United States v. King-Gore , 875 F.3d 1141, 1144 (D.C. Cir. 2017) (citing Puckett v. United States , 556 U.S. 129, 135, 129 S.Ct. 1423, 173 L.Ed.2d 266 (2009) ).

Grey argues that Williams’ testimony was hearsay and "both irrelevant and highly prejudicial." Appellant’s Br. 24. Although our court has yet to rule on the issue, numerous courts have held that civil judgments introduced in subsequent cases for the truth of their underlying facts are inadmissible hearsay. See, e.g. , United States v. Sine , 493 F.3d 1021, 1036 (9th Cir. 2007) ("A court judgment is hearsay ‘to the extent that it is offered to prove the truth of the matters asserted in the judgment.’ " (quoting United States v. Boulware , 384 F.3d 794, 806 (9th Cir. 2004) )); see also, e.g. , Greycas, Inc. v. Proud , 826 F.2d 1560, 1567 (7th Cir. 1987) (same); State v. Johnson , 298 S.C. 496, 381 S.E.2d 732, 733 (1989) (same). Three major evidence treatises agree. See 5 Wigmore on Evidence § 1671a (Chadbourn rev. ed. 1974) ("[A] judgment in another cause , finding a fact now in issue, is ordinarily not receivable."); see also 2 McCormick on Evidence § 298 (7th ed. 2016) (same); 5 Weinstein’s Federal Evidence § 803.25 (2d ed. 2018) (same). Moreover, neither of the two narrow hearsay exceptions that allow admission of certain types of judgments applies here. See Fed. R. Evid. 803(22) (excepting certain judgments of criminal convictions); Fed R. Evid. 803(23) (excepting certain judgments "admitted to prove a matter of personal, family, or general history, or boundaries"). And the government’s purported nonhearsay rationale for introducing this evidence—that it served to explain Williams’ actions and support his credibility, Appellee’s Br. 37 n.8—does not hold water. The default judgment was not entered until after Williams’ dealings with Grey, and any credibility-related benefit arises solely from the facts underlying the judgment (a.k.a. hearsay). See Fed. R. Evid. 801(c) (defining hearsay as out-of-court statements "offer[ed] in evidence to prove the truth of the matter asserted").

Not only was the evidence of the Williams judgment inadmissible hearsay, its probative value was "substantially outweighed" by its prejudicial impact. Fed. R. Evid. 403. Any relevant inferences about...