U.S. v. Alexander, 87-1912

• Decision Date: 14 June 1988
• Docket Number: No. 87-1912,87-1912
• Citation: 849 F.2d 1293
• Parties: 25 Fed. R. Evid. Serv. 1179 UNITED STATES of America, Plaintiff-Appellee, v. Robert A. ALEXANDER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1293

849 F.2d 1293

25 Fed. R. Evid. Serv. 1179

UNITED STATES of America, Plaintiff-Appellee, v. Robert A. ALEXANDER, Defendant-Appellant.

No. 87-1912.

United States Court of Appeals Tenth Circuit.

June 14, 1988.

Marilyn Modin Wagner (B. Hayden Crawford with her, on the brief) of Crawford, Crowe & Bainbridge, P.A., Tulsa, Okl., for defendant-appellant.

Kenneth P. Snoke, Asst. U.S. Atty. (Tony M. Graham, U.S. Atty., with him, on the brief), Tulsa, Okl., for plaintiff-appellee.

Before HOLLOWAY, Chief Judge, and BARRETT, Senior Circuit Judge, and DUMBAULD ^*, District Judge.

BARRETT, Senior Circuit Judge.

Robert Alexander (Alexander) appeals his jury convictions of two counts of mail fraud and five counts of wire fraud under 18 U.S.C. Secs. 1341 and 1343.

During the summer of 1981, Alexander, as president and chief executive officer of Universal Energy Corporation (UEC), entered into an agreement with Petroleum Pipe, S.A. (PPSA) for the purchase of $2,700,000 of variously sized pipe. PPSA was a pipe selling brokerage company with offices in Zurich, London and Singapore. Under their agreement, PPSA would direct sell pipe to UEC and would provide copies of bills of lading, invoices and mill certificates on all pipe shipped to UEC. Thereafter, UEC would resell the pipe and PPSA and UEC would equally share the profits and losses.

By the end of 1981, PPSA had delivered $2,700,000 worth of pipe to the United States and Alexander had paid $1,500,000 to PPSA. During subsequent discussions between PPSA and Alexander relative to UEC's unpaid balance of $1,200,000, Alexander cited financial problems, pitted pipe, and the lack of mill certificates as the reasons for his non-payment.

Settlement negotiations on the unpaid balance subsequently ensued between UEC and PPSA in late December, 1981. These negotiations culminated on January 15, 1982 when the parties entered into a written agency agreement whereby, (a) UEC was to be paid a $95,984.59 commission from PPSA for representing PPSA in some pipe sales to Atlantic Richfield Corporation's (ARCO) Indonesian subsidiary in Singapore, (b) UEC would represent PPSA as its agent in bidding on pipe and billing ARCO for delivery of pipe by PPSA directly to ARCO's Singapore operations, (c) PPSA would repurchase some of the pipe sold to UEC to fulfill the first pipe delivery to ARCO in Singapore, and (d) Alexander would remit to PPSA $435,124.18. Thereafter, UEC remitted the $435,124.18 due PPSA under this agreement.

During this period, PPSA shipped ARCO its first pipe order and notified UEC of the shipment. UEC immediately billed ARCO. ARCO subsequently remitted $344,699.80, the full amount due, to UEC. Thereafter, although the UEC/PPSA agency agreement required that ARCO's payments be transferred directly to PPSA's Swiss bank account, Alexander deposited the ARCO check into UEC's account. Alexander then used the proceeds of the ARCO check for UEC's operations.

Shortly thereafter, PPSA delivered the first of three shipments of 50,000 feet of 9 5/8" pipe to ARCO. PPSA notified UEC of the shipments and, as before, UEC billed ARCO for the pipe. ARCO thereafter remitted $1,108,994.34, the full amount due, directly to UEC. These funds were deposited to UEC's account and used to pay off existing bank loans and for operating capital.

During this time, ARCO was unaware that under the UEC/PPSA agency agreement, UEC was required to insure that ARCO's payments were wired directly to PPSA's Swiss bank account.

After PPSA's second pipe shipment to ARCO, and UEC's failure to remit to PPSA, PPSA officials informed Alexander that no further deliveries would be made under ARCO's purchase orders until such time as arrangements were made by Alexander to pay for the first two shipments. It is apparently uncontested that as of March, 1982, UEC had received, retained and applied to its own use approximately $1,500,000 from ARCO. These were funds which, under the UEC/PPSA agency agreement, UEC had agreed to wire transfer directly to PPSA's account.

PPSA officials subsequently met with Alexander on May 10, 1982. During this meeting, an agreement was reached whereby Alexander agreed to pay PPSA $1,340,525.48 as full and final settlement of both his ARCO agency agreement and his earlier direct purchase agreement with PPSA. Alexander failed to pay PPSA in accordance with this agreement. Rather, Alexander advised PPSA that there had been some delays and that the funds due PPSA would be sent later.

PPSA subsequently notified Alexander that it would file legal action to collect the $1,340,525.48 due and owing. In response, Alexander sent PPSA a series of checks for the monies due PPSA. None of the checks were honored for payment. During this time frame, UEC also sent ARCO a bill for the second shipment of 9 5/8" pipe. Thereafter, although PPSA had not formally delivered the pipe, ARCO, by inadvertence, sent UEC a check for $1,090,919.96 in payment for the pipe. Upon receipt of the check, Alexander deposited it into a seldom used UEC account and thereafter withdrew the funds for his personal use. By this time, Alexander had obtained and utilized in excess of $2,500,000 paid by ARCO for pipe sold and delivered by PPSA.

In October, 1984, PPSA filed a civil suit against UEC for $2,500,000 plus interest. That suit was subsequently settled for $1,050,000 which Alexander paid to PPSA in 1985.

On October, 8, 1986, Alexander was charged in a seven-count indictment with mail and wire fraud. The indictment charged Alexander with a scheme to defraud PPSA and to obtain money or property by false and fraudulent pretenses. Prior to trial, Alexander sought to exclude evidence that he had attempted to obtain money from one Robert Sutton and from people in Arkansas whom he later discovered might have been drug dealers. The court reserved ruling on Alexander's motion.

Alexander's trial commenced on February 26, 1987, and continued through April 7, 1987. Shortly after the trial had commenced, a superseding indictment was returned against Alexander in an unrelated case before a different judge. At the government's request, the indictment was sealed and not disclosed to anyone except court personnel, Alexander and his attorneys. Alexander's motions for a dismissal and for a continuance in his pending trial were both denied by the district court.

During the trial, Alexander defended on the basis that he had retained the monies received from ARCO in good faith, based on legitimate and reasonable concerns about his contracts with PPSA. Alexander contended that he retained the monies with no intent to defraud. The court denied Alexander's repeated attempts to introduce evidence of the settlement of the civil suit brought by PPSA.

Alexander was convicted on all seven counts. His post-trial motions for judgments of acquittal and a new trial were denied.

On appeal, Alexander contends the district court erred in: (1) denying his motions for mistrial, new trial, and judgment of acquittal on the grounds of prosecutorial misconduct; and (2) improperly excluding evidence that the money he had retained was a legitimate offset against money owed to him.

I.

Alexander contends that the trial court erred in denying his motions for mistrial, new trial and for judgment of acquittal on the grounds of prosecutorial misconduct.

Alexander argues that prosecutorial misconduct arose from: the prosecutor's verbal utterances, laughter, and physical gestures designed to ridicule him in the presence of the jury; the return of a superseding indictment against Alexander in a companion case during the jury trial in the instant case; and the prosecutor's cross-examination of him relative to his borrowing money from one Robert Sutton and his attempts to borrow money from people in Arkansas whom Alexander described as "people who handled drugs." (R., Vol. XXIV at p. 3151.)

Prosecutorial misconduct is not per se reversible error. United States v. Taylor, 800 F.2d 1012, 1018 (10th Cir.1986), cert. denied, --- U.S. ----, 108 S.Ct. 123, 98 L.Ed.2d 81 (1987). We follow the general rule that not all misconduct requires reversal; rather, it is only when such conduct can be said to have influenced the verdict that it becomes prejudicial. Id.

In United States v. Martinez-Nava, 838 F.2d 411, 416 (10th Cir.1988), we observed:

In analyzing claims of prosecutorial misconduct, we must perform a two-step analysis. We must first examine whether the prosecutor's conduct was in fact improper, and if so, then determine whether such conduct requires reversal, or whether it was harmless beyond a reasonable doubt. United States v. Hasting, 461 U.S. 499, 510, 103 S.Ct. 1974, 1981, 76 L.Ed.2d 96 (1983). "It is only when such conduct can present a question whether there is reason to believe that it influenced the jury's verdict that the failure to take appropriate steps to remove it will warrant a reversal." Marks v. United States, 260 F.2d 377, 383 (10th Cir.1958), cert. denied 358 U.S. 929, 79 S.Ct. 315, 3 L.Ed.2d 302 (1959)....

In determining whether the prosecutorial misconduct complained of was harmless, we are guided by United States v. Hastings, 461 U.S. 499, 508-09, 103 S.Ct. 1974, 1980, 76 L.Ed.2d 96 (1983):

After examining the harmless-error rules of the 50 States along with the federal analog, 28 U.S.C. Sec. 2111, the Chapman [v. State of Cal.] Court stated:

All of these rules, state or federal, serve a very useful purpose insofar as they block setting aside convictions for small errors or defects that have little, if any, likelihood of having changed the result of the trial. We conclude that there may be some constitutional errors which in the setting of a particular case are so unimportant and insignificant that they may, consistent with the Federal Constitution, be deemed harmless, not requiring the automatic reversal of the conviction." 386 U.S. , at 22 [87 S.Ct. 824, 827, 17 L.Ed.2d 705] (emphasis added).

In holding that the harmless-error...