U.S. v. Mason

Decision Date15 June 1994
Docket Number91-50691,Nos. 91-50690,91-50702,91-50706 and 91-50712,s. 91-50690
Citation26 F.3d 134
PartiesNOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel. UNITED STATES of America, Plaintiff-Appellee, v. Monty G. MASON, II, Richard B. Noyer, Leonardo Radomile, and Lewis Koss, Defendants-Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

Before: FLETCHER, PREGERSON, and NORRIS, Circuit Judges.

MEMORANDUM *
OVERVIEW

Appellants Monty Mason II, Richard Noyer, Leonardo Radomile, and Lewis Koss appeal from their conviction and sentence for RICO and mail fraud, in violation of 18 U.S.C. Secs. 1962(c) and 1341. Appellant Mason also appeals from his conviction and sentence for false declarations before a grand jury, in violation of 18 U.S.C. Sec. 1623. Sentence was imposed on September 23, 1991. Mason was sentenced to forty-six months on each of eleven counts to run concurrently and fined $25,000. Noyer was sentenced to forty-two months on each of two counts to run concurrently and fined $50,000. Radomile was sentenced to thirty-seven months on each of thirteen counts to run concurrently and fined $100,000. Koss was sentenced to forty-six months on each of four counts to run concurrently and fined $100,000. Additionally, all defendants were placed on supervised release for three years. We have jurisdiction to consider these appeals under 28 U.S.C. Sec. 1291.

The appellants challenge their convictions on numerous grounds, including denial of their motions to sever, alleged juror misconduct, alleged error in the admittance or exclusion of certain exhibits and witness statements, alleged government vouching for witnesses, challenges to jury instructions, challenges to the sufficiency of the evidence, challenges to inconsistent verdicts, and challenges to imposed fines. We affirm.

BACKGROUND

This case involved illegal and unethical schemes by a network of Southern California attorneys. Appellants and their employees and associates, called the "Alliance," defrauded insurance companies of millions of dollars in legal fees through systematic control, manipulation, and prolongation of complex civil litigation. Alliance members knowingly represented adverse interests, financed litigation opponents, shared litigation and office expenses, and paid kickbacks to each other and the clients they represented. Twelve attorneys and six non-attorneys either pled guilty or were convicted of crimes arising from their participation in the Alliance.

Count 1 of the Indictment (the RICO count) alleged that Appellants participated in a criminal enterprise (the Alliance) through a pattern of racketeering activity. This pattern consisted of numerous mail fraud violations. The Indictment alleged seventy-seven different mailings related to various schemes to defraud through civil litigation. Ten complex civil litigations were referenced by name in the Indictment, but six were used to establish the pattern of racketeering activity. Those civil litigations were dubbed: Willow Ridge, Cremation, Amgo, Syndico, North American Thoroughbreds, and Disterdick. Each litigation encompassed numerous individual lawsuits and generally involved underlying investment deals that turned sour. Civil pleadings served on various Alliance members through the mail constituted the mailings in furtherance of the various litigation schemes. Mailings related to the Amgo litigation, Syndico litigation, and Disterdick litigation were realleged in Counts 2 through 37 as substantive mail fraud violations.

The following is a brief outline of the schemes promulgated by the Alliance between 1984 and 1987. 1 Insurance companies sell policies which give rise to a duty to defend their insureds against lawsuits filed against them. Before 1984, insurance companies selected the attorneys who would represent their insureds. In December of that year, the California Court of Appeal decided 2 that insurance companies no longer had the right to select counsel for the insured (under certain circumstances). Instead, the insured now had the right to choose. These attorneys became known as "Cumis" counsel.

Lynn Stites, the organizer of the Alliance, established a network of law firms over which he had control and maintained a financial interest. Sue Rubin, his administrative assistant, aided him in all aspects of expanding his network of firms. Stites would coordinate the litigation among the defendants' attorneys who he assigned through intermediaries to various insured defendants. And he controlled, with few exceptions, the plaintiffs' attorneys in these litigations to insure that the case would settle, if at all, only when the insurance companies were no longer willing or required to pay the costs of the Cumis counsel defense. In addition, the defendants recruited by Stites to be represented by Alliance members were paid kickbacks by Stites to acquiesce in the plan and resist settlement of their lawsuits until the insurance companies were unable or unwilling to continue paying for the Cumis counsel.

The government's evidence indicated that Stites required participating Alliance members to follow three rules: (1) members were not allowed to talk about the cases to anyone; (2) they were not to cooperate in any way with the insurance companies who were required to pay their fees; and (3) they were not to settle a lawsuit without prior authorization from Stites.

ANALYSIS
A. JOINDER

Fed.R.Crim.P. 8(b) allows the joinder of defendants where the defendants are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. United States v. Sanchez-Lopez, 879 F.2d 541, 550 (9th Cir.1989). Rule 8(b) is construed liberally in favor of joinder. Id. at 551. And defendants who are indicted together in federal court should generally be tried together. United States v. Tootick, 952 F.2d 1078, 1080 (9th Cir.1991). Joinder is favored in federal criminal cases for reasons of judicial economy and efficiency, despite the possibility of prejudice inherent in joint trials. Id. However, Fed.R.Crim.P. 14 allows a trial court to grant severance if codefendants would be prejudiced by joinder. Id.

Appellants contend that the district court erred in denying several motions to sever under Fed.R.Crim.P. 14. A district court's decision whether to sever under Rule 14 is reviewed for an abuse of discretion. United States v. Cuozzo, 962 F.2d 945, 949 (9th Cir.) cert. denied, --- U.S. ----, 113 S.Ct. 475 (1992) (citing United States v. Castro, 887 F.2d 988, 996 (9th Cir.1989). The parties seeking reversal of a denial of a motion to sever must prove that the joint trial caused such "clear," "manifest," or "undue" prejudice that the accused were denied a fair trial. United States v. Cuozzo, 962 F.2d at 950 (citing United States v. Castro at 996).

Before trial, all defendants moved for a severance of Noyer, Koss, and Mason from Radomile on the ground of antagonistic and mutually exclusive defenses. The district court initially avoided the issue by setting two separate trials, (one including Radomile and the other including Noyer, Koss, and Mason), for the fifteen defendants then in the case. However, guilty pleas eventually reduced the number of defendants to eight, so the court denied the severance motions and set a joint trial.

To obtain severance on the ground of antagonistic and mutually exclusive defenses, the codefendants must show that the acceptance of one party's defense precludes acquittal of another defendant. United States v. Sherlock, 865 F.2d 1069, 1081 (9th Cir.1989). Antagonism between the defenses must rise to the level of being irreconcilable and mutually exclusive. Id. This typically occurs where each of two defendants claims innocence, while seeking to prove that the other committed the alleged crime. United States v. Tootick, 952 at 1081 (citations omitted). Mere inconsistency in defense positions is insufficient to meet this standard. Id.

During trial the district court considered and rejected the severance arguments raised here by the defendants. The court stated:

Radomile does not need to prove the existence of the Alliance to exculpate himself, nor does Noyer. Indeed, it is perfectly consistent with Radomile's defense that the Alliance did not exist....

Now, likewise, the innocence of these [other] defendants ... does not hinge on Radomile himself being proven guilty. Each can also claim that there was no Alliance, but if there were, he or she were innocent dupes like Radomile claims to be.

The Appellants' defense positions were not irreconcilable or mutually exclusive. Radomile and Noyer contended that they were victims who sought to expose the Alliance. Mason contended that he had represented the best interests of his clients.

Further, the jury's verdicts demonstrate that the acquittal of one was not dependent upon the conviction of another. All Appellants were convicted on Count 1 (RICO), Noyer was convicted of one count of mail fraud, Koss was convicted of three counts of mail fraud, Radomile was convicted of eleven counts of mail fraud, and Mason was convicted of eight counts of mail fraud and three counts of perjury. The four other defendants who stood trial with the Appellants, all of whom sought severance from Radomile, were acquitted of all charges. The verdicts indicate that the jury considered the evidence as it related to each Appellant, irrespective of the various defense theories presented.

Radomile specifically contends that certain witness statements concerning Radomile's honesty and integrity made by Appellant Noyer's witnesses prejudiced Radomile. Further, Radomile contends that these instances show the particularly high level of antagonism...

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