U.S. v. Koen

• Citation: 982 F.2d 1101
• Decision Date: 15 December 1992
• Docket Number: No. 91-2267,91-2267
• Parties: 37 Fed. R. Evid. Serv. 758 UNITED STATES of America, Plaintiff-Appellee, v. Charles E. KOEN, Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

Page 1101

982 F.2d 1101

37 Fed. R. Evid. Serv. 758

UNITED STATES of America, Plaintiff-Appellee, v. Charles E. KOEN, Defendant-Appellant.

No. 91-2267.

United States Court of Appeals, Seventh Circuit.

Argued Feb. 19, 1992.

Decided Dec. 15, 1992.

Frederick J. Hess, U.S. Atty., James Porter, Asst. U.S. Atty. (argued), Office of the United States Attorney, Criminal Div., Fairview Heights, IL, for plaintiff-appellee.

Michael A. Gross (argued), St. Louis, MO, for defendant-appellant.

Before EASTERBROOK and RIPPLE, Circuit Judges, and WOOD, Jr., Senior Circuit Judge.

RIPPLE, Circuit Judge.

Charles Koen was convicted by a jury of twenty-four criminal offenses, including arson, mail fraud, misapplication and embezzlement of government funds, and making false representations on a government form. On appeal, he raises five issues: (1) whether the evidence was sufficient to support his conviction for arson and certain mail fraud charges; (2) whether an embezzlement count relating to a 1987 payment for a car lease was properly joined with the other counts in the indictment, and, if so, whether it should have been severed; (3) whether the court erred in not granting Mr. Koen a continuance after his retained counsel withdrew temporarily from trial; (4) whether the court erred in admitting evidence of uncharged "bad acts" under Federal Rule of Evidence 404(b); and (5) whether, during cross-examination of Mr. Koen's wife, the prosecutor impermissibly commented upon Mr. Koen's refusal to testify. For the following reasons, we affirm Mr. Koen's conviction.

I BACKGROUND

Mr. Koen was a founder and the executive director of United Front, Inc. (the United Front), an organization based in Cairo, Illinois, that operated housing and other social service programs. The United Front received a portion of its funding from both the federal and state governments. On the evening of September 18-19, 1985, the Security Bank building in Cairo suffered a serious fire. The United Front operated out of this building, which was wholly owned by Mr. Koen. The evidence indicates that the fire was set intentionally. A state fire investigator who was on the scene testified that the fire had at least three separate points of origin. In addition, traces of accelerant were found in the building. At the time of the fire, Mr. Koen and the United Front were in serious financial distress. Testimony at trial revealed that he and his connected business entities owed almost $300,000. The State of Illinois had also informed Mr. Koen that it was planning to audit United Front records On August 1, 1989, a grand jury in the Southern District of Illinois indicted Mr. Koen on a number of offenses relating to his management of the United Front and to the Security Bank building fire. He was eventually tried on twenty-four counts, that, for purposes of our analysis, can be grouped into three distinct categories. The charges in the first category, Counts 1, 2, 3, 5, and 6, all alleged that Mr. Koen committed fraud or embezzlement or made misstatements to federal authorities while administering the United Front's programs. ¹ We shall refer to these as the "Program Fraud Counts." The second category of charges consists of Count 7, which alleged that Mr. Koen violated 18 U.S.C. §§ 842 and 844(f) by committing arson of the Security Bank building--a building that housed organizations receiving federal financial assistance. The third category of charges, Counts 8 through 25, charged Mr. Koen with committing various acts of mail fraud, in violation of 18 U.S.C. §§ 1341 and 1342. All of the mail fraud counts were based on checks mailed by the building's insurer, United States Fidelity & Guaranty Insurance Company (USF & G), in the course of processing and settling the insurance claim on the building. A jury convicted Mr. Koen on all charges and he was sentenced to twelve years' imprisonment.

relating to its administration of a state-funded program.

Mr. Koen challenges his conviction, alleging that a number of reversible errors occurred during trial. Because each claim of error is attended by a discrete group of facts, we shall set out additional facts relevant to each claim when that claim is discussed.

II ANALYSIS

On appeal, Mr. Koen first claims that the evidence at trial was insufficient to support his conviction for arson and for certain acts of mail fraud. Second, he asserts that the district court erred when it joined Count 5, the embezzlement count dealing with a 1987 payment on Mr. Koen's car lease, with the rest of the counts in the indictment, and then declined to sever it. Third, he argues that the district court erred when it refused to grant a continuance after his retained counsel withdrew temporarily from trial. Fourth, Mr. Koen claims that the court erroneously allowed the government to introduce evidence of uncharged bad acts. Finally, Mr. Koen claims that during his wife's cross-examination, the prosecutor impermissibly referred to Mr. Koen's decision not to testify. We shall deal with each of these issues in turn.

A. The Sufficiency of the Evidence

A defendant attempting to overturn a conviction on the grounds of insufficient evidence bears a heavy burden.

[W]e must affirm as long as "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." In making this determination we look to all of the evidence and draw all reasonable inferences from the evidence in the light most favorable to the government. We must affirm unless the record is barren of any evidence, regardless of weight, from which the trier of fact could find guilt beyond a reasonable doubt.

United States v. Jackson, 935 F.2d 832, 840 (7th Cir.1991) (quoting United States v. Atterson, 926 F.2d 649, 655 (7th Cir.1991), cert. denied sub nom. Lauralez v. United States, --- U.S. ----, 111 S.Ct. 2909, 115 L.Ed.2d 1072 (1991)). Mr. Koen was convicted of twenty-four criminal offenses. On appeal, he claims that insufficient evidence was adduced at trial to convict him of arson and of twelve mail fraud counts relating to USF & G's mailing of checks to

claims adjusters, arson investigators, and attorneys.

1. The arson conviction

With regard to the arson conviction, we believe that there was sufficient evidence to support the jury's verdict. At the time of the fire, Mr. Koen was in financial difficulty; he and his related businesses had debts totalling around $300,000. Appellant's Br. at 8. In addition, the State of Illinois had announced that it was planning to audit United Front's records, copies of which were kept in United Front's offices in the bank building. As Mr. Koen admits in his brief, these facts "provided an ample evidentiary basis for the jury to conclude that Koen had a motive for arson...." Id. at 51.

Despite this evidence, Mr. Koen contends that he was improperly convicted of arson because the government put forward insufficient evidence that he was involved with burning the bank building. However, much circumstantial evidence connects him to the crime. See United States v. Lundy, 809 F.2d 392, 396 (7th Cir.1987) (circumstantial evidence as relevant as direct evidence in establishing guilt or innocence); see also United States v. Kamel, 965 F.2d 484, 488 n. 4 (7th Cir.1992) (same). Evidence introduced at trial indicated, among other things, that Mr. Koen had bought his partner's interest in the building shortly before the fire, making himself the sole beneficiary of the building's insurance policy. The building itself was insured for its replacement value--an amount higher than its actual worth. Additionally, testimony was given that the arson was an inside job, done by a person who had knowledge of the building. The portion of the structure where the fire was most heavily concentrated was the area in which the United Front kept its records. Filing cabinets in that room were found with their drawers open. Also, Mr. Koen left Cairo shortly before the fire, and testimony suggested that he took the fire insurance policy covering the building with him on his trip. Tr. at 699-700. Mr. Koen responds in his brief that there are innocent explanations for all of these facts, which do not necessarily support an inference that he was involved with arson. However, this argument misapprehends the limited nature of our review of the jury's verdict. As an appellate court, our task is not to determine whether we would have come to the same conclusion that the jury did; rather, we must decide whether the decision that the jury reached was reasonable. See Kamel, 965 F.2d at 489. Having reviewed the record, we conclude that there was sufficient evidence upon which the jury could base Mr. Koen's arson conviction; thus, his conviction on Count 7 must be upheld.

2. The mail fraud convictions

A closer question is whether the evidence was sufficient to support convictions on the challenged mail fraud counts. The indictment alleges that Mr. Koen caused USF & G to send checks through the mail on eighteen separate occasions in furtherance of a scheme to defraud that company. Each mailing constitutes a separate mail fraud count in the indictment. Mr. Koen challenges his convictions based on twelve of these mailings. Each of these mailings transmitted a retainer check from the insurance company to an entity that would assist the company in ascertaining the cause of the fire and therefore would resolve the issue of coverage. ²

The elements required to support a conviction under the mail fraud statute, 18 U.S.C. § 1341, are: (1) a scheme to defraud and (2) use of the mail for the purpose of executing, or attempting to execute, the scheme to defraud. Schmuck v A mailing that is not in furtherance of the fraud, but instead works against it will not support a mail fraud conviction. See United States v. Bonansinga, 773 F.2d 166, 172 (7th Cir.1985), cert. denied, 476 U.S. 1160, 106 S.Ct. 2281, 90 L.Ed.2d 723 (1986). Case law suggests that, in the context...