U.S. v. English
| Decision Date | 14 November 1995 |
| Docket Number | No. 94-50415,94-50415 |
| Citation | 25 C.C.P.A. 770,92 F.3d 909 |
| Parties | Fed. Sec. L. Rep. P 99,304, 96 Cal. Daily Op. Serv. 5965, 96 Daily Journal D.A.R. 9743 UNITED STATES of America, Plaintiff-Appellee, v. Morris D. ENGLISH, Jr., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Morris D. English, Jr., Safford, Arizona, Pro. Per.
Peter S. Spivack, Assistant United States Attorney, Los Angeles, California, for plaintiff-appellee.
Appeal from the United States District Court for the Central District of California, Dickran M. Tevrizian, District Judge, Presiding. D.C. No. CR-93-0047-DT.
Before FLETCHER, CANBY and HAWKINS, Circuit Judges.
Appellant Morris D. English, Jr. ("English") was indicted on allegations that he had used his company, The Wellington Group, Inc. ("Wellington"), to defraud hundreds of investors of millions of dollars. English was convicted at trial of mail fraud, securities fraud, money laundering, and criminal contempt. English raises seven arguments on appeal, relating to errors he alleges were made by both his counsel and the trial court. English argues that (1) emotional testimony from one of the government's witnesses requires a mistrial, (2) the district court's decision to permit a witness who had observed some of the proceedings to testify despite the court's general witness exclusion order, was an abuse of discretion, (3) a juror's ex parte contact with a spectator requires reversal of all of his convictions, (4) the district court's failure to instruct on the "willfulness" requirement found in the penalty provision of the fraudulent sale of securities statute requires reversal of his securities fraud convictions, (5) the government failed to link all the money involved in the money laundering offenses to English's illegal activity as required by the money laundering statute, (6) the district court abused its discretion by imposing an $881,000 restitution order, and (7) his trial counsel rendered ineffective assistance. We have jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a), and we affirm.
English's conviction and appeal arise out of his activities as President, Chief Executive Officer, and sole shareholder of Wellington. From 1985 to approximately 1991, English, through his company, was purportedly in the business of raising capital to fund loans to be used in the acquisition and development of condominium projects. English's activities were actually designed to swindle millions of dollars from investors. English made false representations to investors regarding the security and intended use of their Wellington investments. He would typically represent to the investors that their funds were to be used for condominium development loans or other short-term, high interest loans. The loans, English told the investors, were secured by a fractionalized interest in a trust deed recorded against the borrower's property. He would then either take the investor's money and never make the promised loan, or make the loan but never pay the investors their principal and interest once the condominium units had been sold. The government contended that English defrauded more than 1,500 victims who lost $30,000,000 or more through this scheme.
English was eventually indicted for his Wellington activities. In its final form, 1 the indictment totaled forty-seven counts, including eleven counts of mail fraud, fifteen counts of securities fraud, fifteen counts of money laundering, five counts of bankruptcy fraud, and one count of criminal contempt. 2 On May 16, 1994, after a six week trial and five weeks of jury deliberations, English was convicted on six counts of mail fraud, eight counts of securities fraud, ten counts of money laundering, five counts of bankruptcy fraud, and one count of criminal contempt. He was acquitted on two counts of mail fraud, and a mistrial was declared on the remaining counts after the jury failed to reach a unanimous verdict.
The district court sentenced English to 216 months in prison. The court also ordered English to pay $881,000 in restitution to nine victims of his fraudulent activities. The district court denied English's post-trial motions for judgment of acquittal and for a new trial. English timely appealed. 3
A district court's denial of a motion for a mistrial is reviewed for an abuse of discretion. United States v. George, 56 F.3d 1078, 1082 (9th Cir.), cert. denied, --- U.S. ----, 116 S.Ct. 351, 133 L.Ed.2d 247 (1995). Under this standard, the reviewing court cannot reverse unless it has a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors. Washington State Dep't of Transp. v. Washington Natural Gas Co., 59 F.3d 793, 805 (9th Cir.1995).
During a sidebar conference at trial, English's attorney moved for a mistrial based on the testimony of government witness Stanley Sokol. Mr. Sokol, an investor who had been defrauded by English, referred to the emotional impact of the financial losses on his wife. English contended the testimony may have impermissibly affected the jury's verdicts by playing on the jurors' emotions and sympathy. The court denied the motion for a mistrial. 4
The district court did not abuse its discretion in denying the motion for a mistrial. Although the court acknowledged that Mr. Sokol's testimony had been emotional, the court denied the motion because the challenged testimony was the inadvertent result of the witness' "emotional collapse," and the "real damaging ... fact that Ms. Sokol took her own life as a result of this unfortunate financial transaction" had not come out. Cf. United States v. Lewis, 787 F.2d 1318, 1324-25 (9th Cir.1986) (). The court instructed the government to again admonish Mr. Sokol not to "blurt out anything other than a direct response to the question," and suggested that the government have Mr. Sokol identify the financial documents and then "get rid of Mr. Sokol and get to the next witness." The district court's decision to instruct the government to limit Mr. Sokol's responses rather than grant a mistrial was not an abuse of discretion.
A district court's decision to permit a witness to testify notwithstanding the court's general sequestration order is reviewed for an abuse of discretion. United States v. Hobbs, 31 F.3d 918, 921 (9th Cir.1994). "A witness is not [automatically] disqualified merely because he remains in the courtroom after a sequestration order." United States v. Oropeza, 564 F.2d 316, 326 (9th Cir.1977), cert. denied, 434 U.S. 1080, 98 S.Ct. 1276, 55 L.Ed.2d 788 (1978). In fact, disqualification is "strongly disfavored." Hobbs, 31 F.3d at 921.
Before trial, the district court issued the standard order excluding all potential witnesses from the courtroom during trial. English contends that the district court erred when it allowed a witness who had sat in the courtroom during earlier proceedings to testify over defense objections. The witness, Murray Lawther, was a Wellington investor who testified during the government's rebuttal regarding misrepresentations English had made to him.
The district court did not abuse its discretion by deciding not to disqualify Mr. Lawther from testifying. One factor given considerable weight in determining what sanction, if any, is appropriate for the violation of a sequestration order is whether the side calling the witness deliberately violated the court's order. See, e.g., Hobbs, 31 F.3d at 922-23 (); United States v. Gibson, 675 F.2d 825, 836 (6th Cir.) (whether party seeking the testimony knew of sequestration violation is an important factor in determination of appropriate sanctions), cert. denied, 459 U.S. 972, 103 S.Ct. 305, 74 L.Ed.2d 285 (1982).
Although the government in this instance may have known Mr. Lawther was in the courtroom during some of the trial, there is no indication that the prosecution intended to violate the court's order. Rather, the prosecution had not expected to call Mr. Lawther to the stand at all, but changed its mind after hearing English testify. 5 Moreover, English does not indicate how, if at all, he was prejudiced by the introduction of Mr. Lawther's testimony. See, e.g., United States v. Brewer, 947 F.2d 404, 410-11 (9th Cir.1991)(applying harmless error analysis to review of failure to exclude witnesses from courtroom).
In light of the absence of governmental misconduct and of a showing of prejudice, the court's decision to limit Mr. Lawther to rebutting testimony of English rather than disqualifying Mr. Lawther altogether was not an abuse of its discretion.
To obtain a new trial, the defendant must establish that actual prejudice resulted from an ex parte contact with a juror. United States v. Madrid, 842 F.2d 1090, 1093 (9th Cir.), cert. denied, 488 U.S. 912, 109 S.Ct. 269, 102 L.Ed.2d 256, 257 (1988). We are required to assume that the jury followed any curative instruction given by the court unless there is admissible evidence to the contrary. United States v. Brady, 579 F.2d 1121, 1127 (9th Cir.1978), cert. denied, 439 U.S. 1074, 99 S.Ct. 849, 59 L.Ed.2d 41 (1979).
English contends that the jurors were prejudiced by ex parte contact with investors who had been defrauded by English. Only one incident of ex parte contact with a...
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