U.S. v. Oles
| Decision Date | 07 June 1993 |
| Docket Number | Nos. 92-3045,92-3046,s. 92-3045 |
| Citation | 994 F.2d 1519 |
| Parties | 38 Fed. R. Evid. Serv. 1434 UNITED STATES of America, Plaintiff-Appellee, v. David OLES and Redonda Lugene Oles, Defendants-Appellants. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Lanny D. Welch, Asst. U.S. Atty. (Lee Thompson, U.S. Atty., with him on the brief), Wichita, KS, for plaintiff-appellee.
Vicki Mandell-King, Asst. Federal Public Defender (Michael G. Katz, Federal Public Defender, with her on the briefs), Denver, CO, for defendants-appellants.
Before BRORBY and KELLY, Circuit Judges, and BRIMMER, * District Judge.
Appellants, David W. Oles and Redonda Lugene Oles, were convicted by a jury of bank fraud in violation of 18 U.S.C. § 1344(1) and 18 U.S.C. § 2. Appellants engaged in a "check kiting" scheme in which they "created" false bank account balances by juggling checks written on insufficient funds between five banks. They appeal their convictions alleging errors at various stages of the trial. We affirm.
The scheme was orchestrated as follows. Typically, appellants would write a check greater than the balance in one account and deposit it in another account. Prior to the clearing of the check, appellants would deposit In accomplishing this scheme, the Oleses used different corporate and personal names to establish the five bank accounts. On May 22, 1987, appellants set up the first account at the Fidelity State Bank using the corporate name of Panhandle Grain, whose officers were listed as David Oles and Redonda Cotter. On June 4, 1987, appellants opened the Phoenix Grain account at the First Republic Bank in Ft. Worth, Texas, listing the officers as Redonda Cotter and David Lane. Under the corporate name of Westar Finance, David Oles started an account at Citizens Security Savings in Amarillo, Texas. Appellants also opened accounts for Panhandle Grain and Phoenix Grain at Palo Duro Savings and Loan in Amarillo and Security Pacific Bank in Los Angeles respectively.
enough to cover the first check with another bogus check drafted on a third account. Appellants called daily to obtain their account balances, and tracked the progress of the checks so they were constantly aware of when checks were written, deposited and cleared. Because appellants were aware of the exact time frame in which each bank would clear checks, they were able to conduct hundreds of transactions between June 1987, and September 1987, before arousing the banks' suspicions. Eventually, the banks realized the nature of the Oleses' transactions, and one by one closed their accounts. Because Fidelity State Bank of Garden City, Kansas, was the last bank to close the Oleses' account, it was burdened with a negative balance of $266,198.22
The superseding indictment only charged the appellants for bank fraud relating to the First Republic Bank, Citizens Security Savings, and Fidelity State Bank accounts. Evidence regarding the transactions involving the Palo Duro Savings and Loan and the Security Pacific Bank was admitted at trial.
At trial, the government presented at least eight bank employees and two FBI investigators as witnesses who testified as to the Oleses' transactions. Perhaps the most damaging testimony came from James Archer, a business associate of the Oleses, who also participated in the check kiting scheme.
Subsequent to the convictions, the appellants moved for acquittal or in the alternative for a new trial. The Oleses complained of prosecutorial misconduct, variance between the evidence admitted at trial and the offense charged, error in failing to give the tendered defense instructions, insufficient evidence, and newly discovered evidence. Redonda Oles additionally contended she was prejudiced by ineffective assistance of counsel and improper joinder.
The district court denied the motions for acquittal or in the alternative for new trial. The prosecutorial misconduct contention related to the reference by the prosecutor during closing argument to an outstanding $8.5 million judgment against David Oles. During argument, the court interceded and instructed the issue was irrelevant and was to be disregarded. Upon reviewing the comments in context in the Memorandum and Order, the trial court reasoned the comments were merely a response to Mr. Oles' counsel's contention that Mr. Oles was willing to work out a deal to repay the amount owed to Fidelity State Bank. Thus, the court held that defense counsel opened the door to the outstanding judgment comment, which was nevertheless disallowed. The district court also rejected the Oleses' assertion that evidence relating to the Security Pacific Bank should not have been admitted under Fed.R.Evid. 404(b). The trial court held this evidence was necessary to complete the full story of the charged scheme of bank fraud.
The trial court also refused claims of insufficiency of the evidence, and error in failing to tender certain jury instructions. Redonda Oles' contentions that she was subject to ineffective assistance of counsel and improper joinder were deemed without merit. Finally, the court rejected the Oleses' demands for a new trial based upon alleged newly discovered evidence. The Oleses argued witness James Archer perjured himself on the stand when he testified that he had no deal with the government granting him immunity. The district court found there was no binding arrangement with the government and even if there was the court would not grant a new trial in view of the overwhelming nature of the evidence against the Oleses.
The appellants raise the following issues before this court: 1) whether the district court erred in admitting other act evidence relating to the two banks not listed in the superseding indictment; 2) whether the district court erred in allowing witnesses to testify as to the ultimate issue of law; 3) whether the prosecutor's comments in closing argument were improper justifying reversal; 4) whether the district court erred in denying the motion for new trial based on newly discovered evidence of a plea bargain and perjured testimony; and 5) whether the district court violated the Oleses' right to be present during a key stage in the proceedings and Mrs. Oles' right to counsel of choice.
Appellants argue the government first gave notice they intended to introduce other act evidence relating to Security Pacific Bank, Palo Duro Savings and Loan, and Sunwest Bank in Albuquerque, as proof of knowledge, intent, and common scheme or plan under Fed.R.Evid. 404(b). Appellants contend the United States then changed its position and argued the activities were inextricably intertwined with the charged offense when the district court preliminarily indicated that it was inclined to disallow the evidence on the 404(b) ground. In a pretrial hearing the district court ruled that the Security Pacific and Palo Duro evidence was admissible as it was interrelated with the charges in the indictment. 1 Appellants assert the evidence relating to the Security Pacific account should have been excluded as it was extrinsic to the charges because it was not essential to prove the charges, and should have been disallowed under 404(b). We review the admission of evidence under an abuse of discretion standard. United States v. Morgan, 936 F.2d 1561, 1571 (10th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1190, 117 L.Ed.2d 431 (1992).
During the trial the government presented evidence that the Oleses orchestrated transactions between the three banks listed in the indictment and the Security Pacific account. Such evidence included the testimony of an employee of Security Pacific who identified a wire transfer from Fidelity State Bank to Security Pacific, and an employee of First Republic Bank who verified wire transfers from First Republic to Security Pacific.
Evidence relating to Security Pacific was admissible without addressing Fed.R.Evid. 404(b). " 'Rule 404(b) only applies to evidence of acts extrinsic to the charged crime.' " United States v. Sasser, 971 F.2d 470, 479 (10th Cir.1992) (quoting United States v. Record, 873 F.2d 1363, 1372 n. 5 (10th Cir.1989)), cert. denied, --- U.S. ----, 113 S.Ct. 1292, 122 L.Ed.2d 683 (1993). "An uncharged act may not be extrinsic if it was part of the scheme for which a defendant is being prosecuted." Record, 873 F.2d at 1372, n. 5. The transfers into and out of the Security Pacific account were part of the Oleses' scheme to defraud the listed banks, and therefore were intrinsic to the charged offense. Consequently, a 404(b) analysis "does not apply to other acts which are so 'inextricably intertwined' with the crime charged that testimony concerning the charged act 'would have been confusing and incomplete without mention of the prior act.' " United States v. Treff, 924 F.2d 975, 981 (10th Cir.) (quoting United States v. Richardson, 764 F.2d 1514, 1521-22 (11th Cir.1985)), cert. denied, --- U.S. ----, 111 S.Ct. 2272, 114 L.Ed.2d 723 (1991). Because the evidence relating to the Security Pacific account was inextricably intertwined with the appellants' check kiting scheme, the district court properly allowed the admission of such evidence.
Appellants next contend the trial court erred in allowing testimony relating to the ultimate issue of law, as they claim that two of the witnesses expressed the belief that the Oleses were engaged in check kiting. Fed.R.Evid. While testimony on ultimate facts is authorized under Rule 704, the committee's comments emphasize that testimony on ultimate questions of law is not favored. The basis for this distinction is that testimony on the ultimate factual questions aids the jury in reaching a verdict; testimony which articulates and applies the relevant law, however, circumvents the jury's decision-making function by telling it how to decide the case.
704(a)...
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