U.S. v. McLaughlin, Nos. 91-1455

Decision Date10 October 1991
Docket Number91-1456,Nos. 91-1455
PartiesUNITED STATES of America, Appellee, v. Bernard Michael McLAUGHLIN, Defendant, Appellant. UNITED STATES of America, Appellee, v. David Carl BRUCE, Defendant, Appellant. . Heard
CourtU.S. Court of Appeals — First Circuit

Jonathan R. Saxe, by Appointment of the Court, with whom Twomey and Sisti Law Offices, Portsmouth, N.H., was on brief for appellant Bernard Michael McLaughlin.

Bernard J. Robertson, Exeter, N.H., for appellant David Carl Bruce.

Arnold H. Huftalen, Asst. U.S. Atty., with whom Jeffrey R. Howard, U.S. Atty., Concord, N.H., was on briefs for the U.S.

Before CAMPBELL, Circuit Judge, BROWN, * Senior Circuit Judge, and BOWNES, Senior Circuit Judge.

LEVIN H. CAMPBELL, Circuit Judge.

David Bruce and Bernard McLaughlin appeal from their convictions in the United States District Court for the District of New Hampshire for bank fraud and conspiracy to commit bank fraud. Finding no reversible error, we affirm the convictions.

On appeal, Bruce's claims of error revolve around the district court's denial of his motion to suppress based upon a purported immunity agreement. McLaughlin, on the other hand, challenges the lower court's evidentiary rulings at trial, its refusal to sever, and the alleged insufficiency of evidence. We turn first to Bruce's claims of error.

I. Bruce--Background

The United States Customs Service, in conjunction with the FBI and the IRS, was conducting an investigation into various illegal activities of one William Wood ("Wood"). In 1987, Bruce began cooperating with the authorities in the investigation of a large scale fraud involving Wood and the Bank of Marlborough in Massachusetts. Bruce was contacted because some checks from the Bank of Marlborough were traced to Bruce's business, Exeter Restaurants. Bruce agreed to cooperate and did cooperate, meeting with FBI, customs, and other investigators at various times. According to Bruce's testimony at the suppression hearing, "in the initial meetings ... the subject was primarily the Wood affair ... but with each meeting the discussion was leaning in the direction of entangling Bernard McLaughlin, myself and others." Bruce said he was assured by law enforcement authorities that they "would always do everything they possibly could to see that [he] was not indicted in this matter" in return for the information he was providing. The record is unclear as to Bruce's precise connection with the Bank of Marlborough fraud. It appears, however, that Bruce travelled to and from Canada on Wood's behalf and that this activity was being investigated at the time.

In the course of the foregoing investigation, lawful wiretaps were placed on Wood's telephone in 1987-88. Certain overheard conversations indicated that Bruce and McLaughlin, in conjunction with Wood, were involved in a separate conspiracy to defraud the Bank of New England in Springfield, Massachusetts. These recorded conversations, ultimately used as evidence in the present case, revealed that McLaughlin sought a loan from the Bank of New England. The stated purpose of the loan was to purchase a piece of heavy construction equipment, namely a Caterpillar 966 C, from Bruce. To secure this loan, McLaughlin made several false representations to the Bank of New England. He offered as collateral another Caterpillar he supposedly owned and the Caterpillar he was supposedly to buy from Bruce. Neither Bruce nor McLaughlin, however, owned the equipment. The serial numbers of both machines, required as proof of ownership, were supplied by Wood. Believing that the principal lent to McLaughlin was secured by the two pieces of equipment, the Bank of New England issued a check in the amount of $60,000 to Exeter Restaurants. Bruce in turn deposited the check in his account. Subsequently, on March 5, 1987, Bruce wrote two checks to McLaughlin, one for $50,000 and the other for $10,000.

Between 1988 and 1990, Bruce continued to cooperate with the government and met several times with officials. While Bruce testified that his cooperation extended to the subject matter of the instant case, government witnesses denied this. In 1990, Bruce met with Assistant U.S. Attorney Cannon. Bruce testified they may have met twice or three times, but Cannon testified, and the district court supportably found, that they met only twice. The first meeting, in March, 1990, was at the same time Bruce appeared to testify before a grand jury. It is undisputed that Bruce's grand jury testimony then was unrelated to the present case. Before he testified, according to Bruce's version,

Mr. Cannon said that the fellows from each agency have told him of my past cooperation and he certainly hoped that that would continue, and if it did continue he would do everything within his power to see that I was not indicted.

Bruce went on to say that Cannon told him he (Cannon) was "the person who ultimately made that decision.... And when he told me that I told him everything fully and completely about this case." (Emphasis supplied.)

Cannon, in his own testimony, did not disagree that he had made the stated promise. However, Cannon stoutly denied that any of their discussion at this first meeting pertained in any way to the Bank of New England matter. Cannon testified that he (Cannon) knew nothing at this time of "this case now before the Court." He indicated that the conversations with Bruce at the first meeting had to do with the latter's taking checks to and from Canada for Wood, a customs violation totally unrelated to the instant indictment.

A month or more after the grand jury session, Cannon said he obtained another investigator's file and for the first time learned of Bruce's implication in the Bank of New England fraud. Cannon immediately met with Bruce in June, 1990, at which time Cannon informed Bruce that the earlier recorded conversations implicated him (Bruce) in the conspiracy to defraud the Bank of New England, and that he thought that Bruce's involvement in that conspiracy was such that he would probably be indicted. Despite this warning, Cannon testified, Bruce continued to cooperate. According to Cannon, Bruce "indicated that whether or not we intended to indict him was up to us; that he would still continue to be truthful, as he had tried to be in the past."

On August 1, 1990, a grand jury returned a three-count indictment charging McLaughlin with two counts of bank fraud in violation of 18 U.S.C. §§ 1014 1 and 1344 2 and one count of conspiracy to commit bank fraud in violation of 18 U.S.C. § 371. Bruce was charged only with a single count of conspiracy to commit bank fraud, based exclusively on his alleged involvement in the Bank of New England matter. Wood was not indicted in this matter. Bruce engaged in plea negotiations but these broke down. The day his trial was scheduled to begin, Bruce moved to suppress, contending that, in reliance upon the government's broken promise to provide immunity, he had produced incriminatory evidence that the government intended to use at his trial. As this evidence had been, in his view, coerced, he requested its suppression. The evidence Bruce sought to suppress included the two checks he wrote to McLaughlin and the checking account statement from his own bank which reflected that transaction. Bruce argued that he had earlier turned over those documents to FBI agents in Boston while his informal immunity agreement was in effect, and that the government could not use them as evidence against him because doing so would constitute a violation of the immunity agreement and of his Fifth Amendment privilege against self-incrimination. 3 Bruce also asked the court to dismiss the charge against him as violative of the promised immunity.

The government responded that any informal immunity agreement was limited to the Bank of Marlborough fraud or, at least, to matters involving Wood other than the instant Bank of New England matter. Since the conspiracy count had to do with the Bank of New England fraud, there was no violation of the agreement. After the district court had held an evidentiary hearing on Bruce's motion to suppress, it found that the informal immunity agreement did not extend to the Bank of New England matter. United States v. McLaughlin, 769 F.Supp. 45, 47 (D.N.H.1991). Bruce's motion was denied orally and by an order issued on January 29, 1991.

Bruce's Arguments on Appeal

Bruce argues that the district court erred in denying his motion to suppress and in finding that the informal immunity agreement did not include immunity from indictment for his activities relative to the Bank of New England transaction. The standard of review of an appeal from a denial of a motion to suppress is that the decision will be upheld if any reasonable view of the evidence supports the trial court's decision. United States v. Young, 877 F.2d 1099, 1100 (1st Cir.1989); United States v. Gerry, 845 F.2d 34, 36 (1st Cir.1988); United States v. Veillette, 778 F.2d 899, 902 (1st Cir.1985), cert. denied, 476 U.S. 1115, 106 S.Ct. 1970, 90 L.Ed.2d 654 (1986). We are satisfied that evidence supports the district court's decision to deny the motion to suppress. We also hold that the court did not err in refusing to dismiss the indictment because of the alleged immunity agreement.

It is, of course, clear that Bruce did not receive a grant of immunity pursuant to statute. 4 According to his own testimony, he was orally promised by prosecutors during the investigation of Wood that they would do everything in their power not to indict him. In 1990, Cannon allegedly also represented that he was the person who ultimately decided whether or not to indict, indicating, Bruce said, that Cannon possessed the necessary "power" not to indict. Cannon's promise was made just before Bruce testified at the grand jury proceeding relating to the Bank of Marlborough and related matters.

The district court, after an...

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