U.S. v. Chorney

• Decision Date: 02 March 1995
• Docket Number: No. 94-1343,94-1343
• Parties: UNITED STATES of America, Appellee, v. Harold F. CHORNEY, Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 78

63 F.3d 78

UNITED STATES of America, Appellee, v. Harold F. CHORNEY, Defendant, Appellant.

No. 94-1343.

United States Court of Appeals, First Circuit.

Heard March 2, 1995.

Decided Aug. 24, 1995.

Scott A. Lutes, Charlestown, RI, for appellant.

Sean Connelly, Dept. of Justice, Washington, DC, with whom Sheldon Whitehouse, U.S. Atty., Seymour Posner and Margaret Curran, Asst. U.S. Attys., Providence, RI, were on brief for the U.S.

Before BOUDIN, Circuit Judge, CAMPBELL, Senior Circuit Judge, and STAHL, Circuit Judge.

BOUDIN, Circuit Judge.

Appellant Harold Chorney was convicted of seven counts of making false statements or reports to a federally insured bank, 18 U.S.C. Sec. 1014, and he now appeals to challenge both his conviction and sentence. We set forth the evidence in the light most favorable to the verdict. United States v. Tuesta-Toro, 29 F.3d 771, 773 (1st Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 947, 130 L.Ed.2d 890 (1995).

Chorney was president and owner of Cumberland Investment Corporation ("Cumberland"), a coin-trading company that specialized in U.S. silver dollars. During the 1980s, Cumberland obtained a series of loans from the Eastland Bank in Woonsocket, Rhode Island. To secure such loans, Eastland Bank required pledged assets worth twice as much as the loans themselves. Most of Cumberland's collateral comprised silver dollars. The gravaman of the charge against Chorney was that he engineered a false appraisal.

The pledged silver dollars were appraised by William Tebbetts of the Mayflower Coin and Stamp Company. Chorney submitted the Tebbetts appraisal to Eastland Bank, which relied upon the appraisal in deciding how much to loan to Chorney. The value of an uncirculated silver dollar turns on its condition, which is rated on a "mint state" ("MS") scale. A silver dollar in MS-65 condition is considered a "gem" and is worth substantially more than a coin of MS-64 or lesser quality.

Tebbetts testified that in March 1985 he purchased a coin business, renamed Mayflower, with money given to him by Chorney. Tebbetts assigned all his rights in the business to Cumberland, and Cumberland employed him at a weekly salary. In June 1985, Tebbetts examined hundreds of the pledged silver dollars being held by Eastland Bank and graded them all between MS-62 and MS-64. According to Ann Fiumefreddo, Chorney's secretary, Chorney directed her to type a letter to Eastland Bank on Mayflower letterhead stating that all of the silver dollars that Tebbetts had examined were of MS-65 quality. Tebbetts stated that he signed the letter because he wanted to "keep [his] job."

In August 1985, Tebbetts signed an appraisal on Mayflower letterhead appraising Cumberland's silver dollar collection, including the coins pledged to Eastland Bank. Tebbetts graded all the coins as being MS-65, because Chorney told him to do so even though Tebbetts knew that this was untrue. The letter identified Tebbetts as the chief coin appraiser for Mayflower but did not disclose that Chorney owned Mayflower and employed Tebbetts. Fiumefreddo, who typed the appraisal for Tebbetts, asked Chorney whether he could have a company that he owned appraise another company that he owned. Chorney replied, "You're better off not knowing or don't ask questions; something to that effect."

In mid-1985, Cumberland already had an outstanding loan balance from Eastland Bank of over half a million dollars. But after the false appraisal just recounted, Eastland Bank made additional extensions and renewals of the loans in late 1985 and again in each of the next four years. As the bank increased and renewed its loans, it took additional coins from Cumberland. By May 1989, the balance stood at $2.5 million. Bank officials testified that, starting in the fall of 1985, the bank relied on the Tebbetts appraisal in making the loan extensions and renewals.

Ultimately, in 1989, Sotheby's auction house appraised the silver dollars--now numbering 7,820--that Chorney had pledged to Eastland over the years as collateral to secure the loans. The Sotheby's appraisal determined that of the 7,820 coins, only one percent were in MS-65 condition and that the overwhelming majority of the coins were MS-63 or lower. In the wake of that information, Cumberland went bankrupt, defaulted on the loans, and criminal proceedings against Chorney followed.

On May 27, 1993, the jury found Chorney guilty of seven counts of making a false report and statement to a federally insured bank. 18 U.S.C. Sec. 1014. Chorney was acquitted on a related conspiracy count, 18 U.S.C. Sec. 371, and on ten counts of mail fraud, 18 U.S.C. Sec. 1341. On May 9, 1994, the district court sentenced Chorney to 27 months' imprisonment, followed by three years' supervised release, and ordered him to pay $569,469 in restitution to the Federal Deposit Insurance Corporation (Eastland Bank's successor in interest), and $28,000 to cover the cost of his court-appointed attorney.

1. On this appeal, Chorney's opening set of challenges is to his conviction. The first of these--that the district court erred in denying his motion to appear as co-counsel--need not detain us long. We have held that "hybrid representation," by counsel and the defendant, "is to be employed sparingly and, as a rule, is available only in the district court's discretion." United States v. Nivica, 887 F.2d 1110, 1121 (1st Cir.1989), cert. denied, 494 U.S. 1005, 110 S.Ct. 1300, 108 L.Ed.2d 477 (1990).

Here, Chorney's request was based primarily on his desire to present certain constitutional issues in the pre-trial phase, although there was also some reference to Chorney's desire to cross-examine witnesses. The district court gave defense counsel additional time to present the constitutional issues, none of which are pressed on this appeal. We see neither an abuse of discretion nor any indication of prejudice in the district court's decision not to allow Chorney to act as his own counsel in presenting those issues.

Chorney's next claim of trial error, based on Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), concerns the government's failure to provide him with videotapes, photographs and a transcript; all were made in connection with the bankruptcy trustee's seizure of assets, including 8,641 silver dollars, from Cumberland's offices on August 17, 1990. Chorney says that the government gave him one inadequate videotape but that he did not learn of the additional materials until after he filed this appeal.

The additional materials are not part of the record on appeal, having never been filed in the district court. See Fed.R.App.P. 10(a). The proper means for Chorney to raise his contention was by a motion for a new trial under Fed.R.Crim.P. 33. See United States v. Lau, 647 F.Supp. 33, 34 (D.P.R.1986), aff'd, 828 F.2d 871 (1st Cir.1987), cert. denied, 486 U.S. 1005, 108 S.Ct. 1729, 100 L.Ed.2d 194 (1988). Rule 33 permits such a motion to be made at any time within two years after judgment, and that time has not yet expired.

The requirement of a motion in the district court is not some esoteric formality. In present case, the government argues that the materials in dispute were not covered by the Brady doctrine, and several of the arguments (e.g., lack of materiality) involve issues of fact or fact-based judgments. This court is not in a good position to resolve those issues in the first instance, and there is every reason why they normally should be winnowed by the trial judge. Accordingly, we decline to address the Brady issue at this time. See generally United States v. Slade, 980 F.2d 27, 30 (1st Cir.1992).

In his last claim of trial error, Chorney says that the district court erred when it excused a juror during final jury deliberations and permitted an 11-member jury to return a verdict. Fed.R.Crim.P. 23(b) permits this course, in the trial court's discretion, "if the court finds it necessary to excuse a juror for just cause" after the case is submitted to the full jury. Chorney objects that the court abused its discretion and, in addition, failed to make a formal finding of just cause.

The case was submitted to the jury on the afternoon of Monday, May 24, 1993. Deliberations continued the next day. On the morning of Wednesday, May 26, juror Giguere did not appear because his eldest son had been killed while working on a construction job. After Chorney declined to consent to an 11-member jury, the trial judge said that he was inclined to adjourn for six days (Monday, May 30, being a holiday) to see whether Giguere would be able to rejoin the deliberations, but the judge expressed some concerns about this delay.

The court then summoned the jury, explained the situation, indicated its tentative solution, but also said that the delay "may be just enough to break the momentum, to break your chain of thought...." Without objection by either side, the court asked the jury to reflect and provide its own assessment. The jury retired and returned to express a preference for continuing its deliberations. After reflecting, the district court allowed the jury to resume deliberations on Thursday, May 27, and the verdict was rendered later that day.

In managing juries, trial judges are constantly faced with practical problems, ranging from jurors' dentist appointments to personal disputes among jury members to rare family tragedies like this one. Quite often some costs or risks attend every alternative open to the court. Where the trial judge takes the time to hear counsel and thoughtfully weighs the options, we will not second guess the decision unless the balance struck is manifestly unreasonable. Accord United States v. Doherty, 867 F.2d 47, 71 (1st Cir.), cert. denied, 492 U.S. 918, 109 S.Ct. 3243, 106 L.Ed.2d 590(1989).

The facts already described make it evident that this was a classic close call. It is true, as Chorney says, that the district court did not seek to contact Giguere immediately to...