U.S. v. McGowan

• Decision Date: 22 December 2009
• Docket Number: No. 08-1384.,08-1384.
• Citation: 590 F.3d 446
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Brian D. McGOWAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

590 F.3d 446

UNITED STATES of America, Plaintiff-Appellee, v. Brian D. McGOWAN, Defendant-Appellant.

No. 08-1384.

United States Court of Appeals, Seventh Circuit.

Argued February 24, 2009.

Decided December 22, 2009.

Erika Csicsila (argued), Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.

Robert J. Gorence, Gorence & Oliveros, J. Miles Hanisee (argued), Law Office of J. Miles Hanisee, Albuquerque, NM, for Defendant-Appellant.

Before: ROVNER, WOOD and SYKES, Circuit Judges.

ROVNER, Circuit Judge.

A jury convicted Brian D. McGowan of eighteen counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of investment advisor fraud, in violation of 15 U.S.C. §§ 80b-6(2) and 80b-17. He was sentenced to a term of sixty-six months' imprisonment and was ordered to pay restitution in the amount of $182,470.12. On appeal, he disputes the district court's decision to allow the main witness against him to testify by videotaped deposition. He also challenges the charges against him on statute-of-limitations grounds. We affirm.

I.

In 1986, when working as a warehouse manager in a discount department store, Camille LaMie was hit by a forklift. Although her injuries prevented her from returning to that job, she attempted to work at another store for a brief time as a customer service representative. Because her injuries made walking difficult, she left that job as well. Ultimately, she underwent spinal surgery and bone grafts, spending a year in a body cast. She was unable to collect workers' compensation because the discount store had declared bankruptcy. From the time of her injury until her father's death in 1993, LaMie lived on food stamps, Social Security Supplemental Income and Medicaid. After her father died, she inherited approximately $266,000 and a house in Chicago. All of her public assistance ended with her receipt of the inheritance and LaMie relied entirely on that money for her support.

By 1997, LaMie was fifty-four years old, unemployed, medically uninsured, and suffering from a variety of chronic medical problems including diabetes, hypothyroidism, chronic obstructive pulmonary disease, cirrhosis of the liver caused by an autoimmune disorder, clinical depression, diabetic neuropathy and hepatic failure. Her luck was about to get worse. Because she lacked health insurance, she became increasingly concerned about her declining health and her ability to pay her ongoing medical expenses. She had been investing her money conservatively in certificates of deposit, but now sought to increase her rate of return and obtain a steady monthly income while at the same time keeping her principal safe. In September 1997, a friend introduced LaMie to Brian McGowan, a financial advisor. LaMie told McGowan that she needed no-risk investments and that she also needed health insurance. McGowan told her he would keep her principal safe and obtain health insurance for her. He told LaMie that his clients included Walter Payton, Michael Jordan and Michael Jordan's mother. In fact, he had never represented any of these people.

LaMie researched McGowan's background to the best of her ability and decided to invest the bulk of her inheritance with him. She paid him an up-front "consulting fee" of $2,500 and signed a customer agreement. Between September and December of 1997, LaMie invested $260,000 with McGowan. Needless to say, McGowan did not keep LaMie's principal safe. He told her he was placing $100,000 in Cypress Bioscience, a drug company that he characterized as "safe." He invested $8,200 in a commodities account that he intended to trade daily, which he told LaMie eliminated any risk. He banked $30,000 of her money in a "no risk" real estate deal, and told her he was placing $60,000 in Chicago Capital Holdings. He claimed to invest another $60,000 in an unspecified manner. McGowan did invest some of LaMie's money in real estate: he bought a house for himself in New Mexico. He invested $90,000 in Cypress Bioscience and placed $8200 in a commodities account, but did not protect LaMie's principal or make any other investments. Nor did he obtain health insurance for her as he promised. When LaMie tried to obtain financial statements from McGowan to check on the status of her investments, he promised to send them but never did. The information he did provide was misleading and uninformative.

LaMie became increasingly suspicious as McGowan continued to evade her questions and requests for reports on the status of her investments. After consulting several friends regarding her problems with McGowan, she contacted the FBI in April 1998. The FBI directed her to call McGowan and record her conversations with him. FBI agents scripted questions for LaMie to ask and supplied her with blank tapes and recording equipment. Between April and July of 1998, LaMie recorded nineteen telephone calls with McGowan. During those calls, McGowan lied repeatedly about the status of LaMie's investments. He told her that her money had been invested in a number of ventures including Cypress Bioscience, Maximum Video, Navarre, Chicago Capital Holdings, and a Ramada Inn. He also told her a small amount of her money was in a commodities account, and in perhaps his most creative lie, he told her some of her money was invested in a new production of the musical "Annie." Although McGowan had placed some of LaMie's money in Cypress Bioscience, the investment was not in the amount he promised. Everything else, except for the commodities account, was a pure fabrication, as he admitted at trial. McGowan also lied when he told LaMie that he was keeping her principal safe and that her investments were generating interest income. He lied when she asked him to liquidate her investments and return her money, and he lied about obtaining health insurance for her.

All of the testimony from LaMie came into the trial through Federal Rule of Criminal Procedure 15(a) videotaped depositions that were recorded because of LaMie's precarious health. LaMie resided in South Carolina at the time of the trial, which was held in Chicago. LaMie's doctors believed that both travel and testifying at trial presented great risks to her health. The district court found that she was unavailable for trial because of her health problems, and her videotaped deposition testimony was admitted over McGowan's objections. A jury found McGowan guilty of eighteen counts of wire fraud based on the misrepresentations he made during phone calls spanning from April 13, 1998 to June 29, 1998. The jury also found McGowan guilty of one count of investment advisor fraud. McGowan appeals.

II.

On appeal, McGowan contends that the admission of LaMie's videotaped depositions violated Federal Rule of Evidence 804(a)(4) and his constitutional rights under the Confrontation Clause. He also argues that the court erred when it denied his motion to dismiss the indictment on statute-of-limitations grounds. He maintains that his crimes were complete more than five years prior to the filing of the indictment, and that 18 U.S.C. § 3282 requires that prosecutions for wire fraud be brought within five years of the offense.

A.

The grand jury returned the indictment against McGowan on April 3, 2003. In March 2004, because LaMie suffered from poor health, the government moved to preserve her testimony pursuant to Federal Rule of Criminal Procedure 15(a). That rule provides:

A party may move that a prospective witness be deposed in order to preserve testimony for trial. The court may grant the motion because of exceptional circumstances and in the interest of justice. If the court orders the deposition to be taken, it may also require the deponent to produce at the deposition any designated material that is not privileged, including any book, paper, document, record, recording, or data.

Fed.R.Crim.P. 15(a). In support of the motion, the government submitted a letter from LaMie's physician, Dr. George Sandoz, describing her medical conditions. Dr. Sandoz, a neurologist and opthamologist, had been treating LaMie since 2001. According to Dr. Sandoz, LaMie was "almost bedridden," required oxygen twenty-four hours a day, and suffered from severe diabetes, diabetic neuropathy and biliary cirrhosis, among other things. LaMie took long-acting narcotics to control her pain, according to Dr. Sandoz. He opined that it would not be safe for LaMie to travel because of her medical conditions. After a hearing, the court granted the government's motion.

LaMie was deposed on May 6, 7, 26, and 27, 2004, in South Carolina. McGowan and his lawyer were present at the videotaped depositions and McGowan's lawyer cross-examined LaMie extensively. At a June 9, 2004 status call, the parties discussed LaMie's availability for trial. McGowan's lawyer intended to challenge any suggestion that LaMie was unavailable for trial. During the depositions, he learned that LaMie owned a car and had recently renewed her driver's license. Based on this and other information from the depositions, he believed that prior representations about LaMie's health were exaggerated. He told the court he wished to have another physician review Dr. Sandoz's assessment of LaMie. The government maintained that LaMie could not travel to Chicago to testify because of her extensive health-related limitations. The government also clarified that LaMie had renewed her driver's license by mail and had driven the car only once in the past year, and only a very short distance. The court ordered briefing on the issue.

Along with its brief, the government submitted two affidavits from LaMie's physicians, one from Dr. Sandoz and one from Dr. Charles Busse. Dr. Sandoz again asserted that several chronic health conditions made it medically unsafe for LaMie to travel or to testify at a trial. Dr. Sandoz described LaMie's severe diabetes and opined that stress and changes in schedule could cause serious problems with her insulin treatment, and...