U.S. v. Harvey, 90-3569
| Decision Date | 10 March 1992 |
| Docket Number | No. 90-3569,90-3569 |
| Citation | 959 F.2d 1371 |
| Parties | 35 Fed. R. Evid. Serv. 341 UNITED STATES of America, Plaintiff-Appellee, v. George HARVEY, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Brenda Atkinson (argued), Crim. Div., Barry R. Elden, Asst. U.S. Attys., Crim. Receiving, Appellate Div., Chicago, Ill., for plaintiff-appellee.
Standish E. Willis, Chicago, Ill. (argued), for defendant-appellant.
Before EASTERBROOK, RIPPLE, and MANION, Circuit Judges.
George Harvey called himself a "loan broker." Several potential borrowers paid Harvey substantial sums "up front" supposedly to enable him to line up loans from off-shore lenders. Although Harvey kept the front money, the borrowers never received the loans. Harvey was charged and convicted of several offenses, including mail and wire fraud. He appeals all convictions. We affirm.
During 1985 and 1986, four people, all desperate to borrow money and unable to obtain credit from conventional sources such as banks, turned to Harvey, a self-styled "loan broker." Despite assurances that he had access to almost unlimited funds, Harvey was unable to obtain loans for any of his "clients." Harvey insists that his failure to obtain the promised loans was due to nothing more than the vagaries of the loan-brokering business. A federal grand jury disagreed, and charged Harvey with scheming to defraud his "clients" in violation of the mail and wire fraud statutes, as well as tax evasion and several other criminal offenses.
At trial, the government introduced testimony from all four of Harvey's alleged victims. This testimony showed that Harvey's dealings with each of them followed the same general pattern. Harvey would meet with a person needing money and unable to obtain it from other sources. Harvey would tell the potential borrower that he represented a consortium of wealthy people (generally, traders and brokers in Chicago's commodity exchanges) who had funnelled money into a Bahamian corporation for tax purposes and were looking to reinvest the money by making loans in the United States. According to Harvey, this consortium provided access to virtually unlimited funds, so that obtaining a loan would be no problem. Often accompanying Harvey at meetings with potential borrowers was Charles Gibson, whom Harvey referred to as his "assistant" and "leg person." Gibson's primary role in Harvey's scam was to stay in contact with borrowers after initial meetings with him and Harvey.
Harvey always requested an advance fee from potential borrowers. Typically, Harvey requested $30,000 although in some cases he settled for less and in one case asked for and received more. Harvey deposited the advance fees in escrow accounts from which he could draw funds as needed (or wanted). Harvey told potential borrowers that he would refund the advance fee (or the unused portion of the fee) if he was unable to obtain a loan.
As it turned out, the consortium of investors Harvey claimed to represent did not exist. Harvey never obtained any of the loans he promised to obtain. Nor did he refund any of the advance fees. Instead, Harvey converted this money to his own use, leaving the victims without the needed loans or the money they advanced to Harvey.
Harvey's primary defense at trial was that he honestly believed he could obtain loans for his "clients" and that he made good-faith efforts to obtain those loans. The jury nevertheless convicted Harvey on all counts. Harvey raises several issues on appeal.
As we noted, the government introduced testimony from four people who fell prey to Harvey's scheme during 1985 and 1986. The indictment, however, charged mailings and wirings relating to only three of the victims. Harvey contends that the district court erred by admitting the testimony of George Jubiter, the fourth victim. According to Harvey, that testimony was evidence of another crime prohibited by Fed.R.Evid. 404(b).
Evidence of other crimes is inadmissible to show that a defendant has a bad character and that he acted consistently with that character. Fed.R.Evid. 404(b); see United States v. Monzon, 869 F.2d 338, 344 (7th Cir.1989). But evidence of other crimes is admissible to prove some other fact at issue in the case, such as the defendant's intent or the absence of accident or mistake. Fed.R.Evid. 404(b). Harvey's dealings with Jubiter followed substantially the same pattern as his dealings with his other victims: Jubiter needed a loan, Harvey posed as a representative of a consortium with money in the Bahamas to make the loan, Jubiter paid Harvey an advance fee that was supposedly refundable, and Jubiter received neither a loan nor a refund. Harvey's dealings with Jubiter also occurred during the same general time period as his dealings with the other victims. This similarity and temporal proximity raises the inference that Harvey's dealings with Jubiter and the other three victims were all part of a common scheme. This, in turn, raises an inference that Harvey's failures to obtain loans or refund advance fees were intentional, rather than the result of accident or bad luck. Cf. United States v. Beasley, 809 F.2d 1273, 1278 (7th Cir.1987) ().
Since Harvey's intent to defraud his victims was an issue in this case, Jubiter's testimony was logically relevant because it tended to make it more likely that Harvey acted with fraudulent intent. See Fed.R.Evid. 401. Jubiter's testimony was admissible under Rule 404(b) so long as the danger of unfair prejudice did not substantially outweigh the testimony's probative value regarding Harvey's intent. See Fed.R.Evid. 403; United States v. Draiman, 784 F.2d 248, 254 (7th Cir.1986); cf. Beasley, 809 F.2d at 1279. The danger of unfair prejudice here was slight; after all, the jury heard testimony from three other victims whom Harvey allegedly defrauded. Jubiter's testimony may have strengthened the inference that Harvey was not dealing honestly with the other three victims, but that inference was a proper one to suggest. Moreover, the district court instructed the jury to consider Jubiter's testimony only as evidence of a preexisting scheme and of Harvey's intent to defraud the other three victims. The district court did not abuse its discretion in admitting Jubiter's testimony.
Harvey complains that the district court erred by refusing to admit documents that he refers to as "travel vouchers." Several government witnesses (including two of Harvey's victims) testified that Harvey said he would have to travel to meet with lenders. Harvey asserts that the travel vouchers would have shown that he actually did travel which, in turn, would have supported his defense that he honestly believed he could procure the loans he promised and that he made a good-faith effort to procure those loans.
Before trial, the government filed a motion in limine seeking to bar as irrelevant any evidence regarding attempts Harvey may have made to procure loan funding from sources other than the consortium he claimed to represent. Harvey filed a response that asserted that evidence of his attempts to procure loans from any source was relevant to his good-faith defense; the response referred generally to "evidence of [Harvey's] travels" but did not mention or describe the travel vouchers or any other specific evidence. The district court granted the government's motion in limine. Harvey does not point to any place in the record showing that he ever attempted to introduce the travel vouchers or offer any more detail about them at trial, and we have found no reference in the record to those vouchers.
The government argues that Harvey has waived the issue concerning admission of the travel vouchers because he did not offer the travel vouchers' substance for the district court's consideration as Fed.R.Evid. 103(a)(2) requires. We agree. Harvey cannot complain about the district court's "decision" to refuse to admit evidence that he never moved to admit, or even attempted to describe. Harvey relies on his response to the government's motion in limine to show that he sought to admit the travel vouchers, but that response was too vague to preserve the issue of the travel vouchers' admissibility. Even if evidence of Harvey's efforts to procure funds from sources other than the consortium he claimed to represent were relevant, Harvey's response did not even mention travel vouchers, much less explain what those vouchers were or how those vouchers would show that his travels might be connected to any attempts to procure loan funds. Harvey's response hardly placed the travel vouchers' "substance" before the district court. Thus, Harvey has waived the issue of the travel vouchers' admissibility.
Moreover, we agree with the district court and the government that evidence of Harvey's attempts to procure funds from sources other than the consortium he claimed to represent was irrelevant. There is a "distinction between an honest belief in ability to perform and good faith, though ultimately unfulfilled, representations." United States v. Alexander, 743 F.2d 472, 478 (7th Cir.1984). Harvey told his victims that he represented a specific group of people that provided almost unlimited access to funds. Obtaining loans from those people, according to Harvey, would be no problem. If those statements were false, and Harvey did not in good faith believe they were true, his belief that he could procure funds from other sources, and his effort to do so, were no defense. See id. at 479; United States v. Stull, 743 F.2d 439, 446 (6th Cir.1984); United States v. Black, 684 F.2d 481, 484 (7th Cir.1982). Even if Harvey's response to the motion in limine was sufficient to alert the court that he wanted to introduce some kind of documentary evidence to show he...
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