U.S. v. Prosperi, s. 98-4605
| Decision Date | 28 January 2000 |
| Docket Number | 98-4692,Nos. 98-4605,s. 98-4605 |
| Citation | 201 F.3d 1335 |
| Parties | (11th Cir. 2000) UNITED STATES of America, Plaintiff-Appellee, v. Arnold Paul PROSPERI, Defendant-Appellant. United States of America, Plaintiff-Appellant, v. Arnold Paul Prosperi, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
[Copyrighted Material Omitted]
[Copyrighted Material Omitted] Appeals from the United States District Court for the Southern District of Florida. (No. 96-08086-CR-KLR), Kenneth L. Ryskamp, Judge.
Before COX, Circuit Judge, KRAVITCH, Senior Circuit Judge, and PROPST*, Senior District Judge.
This appeal involves a statutory interpretation question of first impression: whether the definition of "counterfeited" provided in 18 U.S.C. 513(a) incorporates or replaces the preexisting common law definition which requires a showing of similitude between the counterfeit and genuine obligations. Also presented is the extent to which evidence, admitted for charges that were later dismissed, may "spill over" and prejudice the jury's consideration of the remaining counts. Finally, this appeal considers allegations of juror misconduct, a disputed Allen charge, and challenges to the admission of evidence of extrinsic offenses.
Arnold Paul Prosperi practiced real estate law in Palm Beach, Florida. As an attorney, Prosperi represented Patrick Donovan, an Irish citizen, and managed various financial matters for him. From approximately 1979 until 1995, Prosperi handled all of Donovan's investments in the United States, both in real estate and securities, acting as attorney and trustee. During his winter visits to Florida, Donovan met with Prosperi and reviewed the status of his investments at these meetings. Prosperi conducted much of Donovan's business through the Amaretto Corporation ("Amaretto"), a company incorporated in the Netherlands Antilles. Amaretto was beneficially owned by Donovan and his family, but Prosperi was granted power of attorney with authority to conduct all the corporation's affairs on Donovan's behalf.
During this period, Prosperi orchestrated three major real estate transactions and one mortgage refinancing for Donovan. First, Prosperi arranged the purchase and subsequent sale of a golf course from Amaretto to the United States Department of Veterans Affairs for $3,050,000 ("the Holigolf transaction"). Second, Prosperi arranged the purchase, renovation, and sale of a residential property at 143 East Inlet Drive in Palm Beach, Florida ("the Inlet Drive transaction"). For this transaction only, Amaretto purchased 50% of the property and initially loaned Prosperi money to acquire the other 50%. Third, Prosperi bought property at 109 Royal Palm Way and constructed a commercial bank building using another company beneficially owned by Donovan, Perth Holdings, Ltd. ("the Royal Palm transaction"). Prosperi also managed the building on Donovan's behalf. Finally, Prosperi arranged the mortgage refinancing on the Royal Palm property for an amount $1.6 million in excess of the remaining principal ("the Refinancing transaction").
According to the Government, Prosperi began to misappropriate funds from Donovan's proceeds in 1987 for his personal use, creating false account statements and other documents to hide his subterfuge. Prosperi allegedly diverted the entire $3 million proceeds of the Holigolf transaction for his personal use1 while advising Donovan that these funds were invested in certificates of deposit ("CDs"). To bolster the deception, Prosperi created documents purporting to be CDs issued by J.P. Morgan bank and Morgan Guaranty Trust together with supporting paperwork. Prosperi presented these documents to Donovan during their annual meetings and represented them as genuine investments. Prosperi then failed to report the misdirected funds on his federal income tax returns, omitting $905,616 from his 1989 return and $532,000 from his 1990 return. The Government also claims that Prosperi diverted rent revenue from the properties on Inlet Drive and Royal Palm Way, as well as proceeds from the Refinancing transaction, and created false account statements to shield these activities from Donovan.
Donovan did not suspect the embezzlement until he was contacted by a representative of the United States Internal Revenue Service investigating Amaretto's tax liability arising from the Holigolf transaction. Although Donovan initially denied any connection to the company,2 he later acknowledged his interest and cooperated with the agent. During that time, Donovan provided the Government with the financial documents he received from Prosperi and taped most of his phone conversations with Prosperi in which Prosperi apologized for taking money from Donovan and promised to return the money with interest, as soon as he was able.
In September 1996, a grand jury in Florida returned an indictment against Prosperi charging him with two counts of mail fraud under 18 U.S.C. 1341 (Counts I and II), three counts of possessing a counterfeited security under 18 U.S.C. 513(a) (Counts III-V), eight counts of money laundering under 18 U.S.C. 1956 and 1957 (Counts VI-XIII), and two counts of filing a false tax return under 26 U.S.C. 7206(1) (Counts XIV and XV). The circumstances surrounding the Holigolf transaction proceeds comprised the basis of both the counterfeiting and tax counts. The mail fraud and money laundering counts were based primarily on Prosperi's alleged misappropriation of funds from the Inlet Drive transaction, the Royal Palm transaction, and the Refinancing transaction. In June, 1997, the indictment was superseded to revise the money laundering counts and to add a forfeiture count under 18 U.S.C. 982 (Count XVI).
Prosperi filed four separate motions to dismiss Counts I and II, III-V, VI-IX, and X-XIII, respectively. The district court adopted the Report and Recommendation of the magistrate judge and denied all the motions to dismiss. The case then proceeded to a two-month long trial. At the close of the Government's evidence, Prosperi moved for a judgment of acquittal on the mail fraud and money laundering counts on the ground that the Government had failed to prove that the mailings charged in the indictment furthered the scheme to defraud. The district court granted the motion and acquitted Prosperi on counts I, II, and VI-XIII. The court then sent the remaining tax and counterfeiting counts (counts III-V and XIV-XV, respectively) to the jury.
The jury returned a guilty verdict on all counts. Prosperi sought a judgment of acquittal on the counterfeiting counts on the ground that the Government did not prove the J.P. Morgan CDs bore a sufficient resemblance to genuine CDs in order to qualify as "counterfeited" within the meaning of 18 U.S.C. 513. The district court initially denied the motion, but on reconsideration and after oral argument granted the motion and entered an order granting acquittal as to Counts III, IV, and V.3 Prosperi appeals his remaining convictions on the two tax counts, arguing that he was prejudiced by spillover evidence introduced for the other counts, irregularities in the jury deliberations, and by the cumulative effect of prejudicial errors during the trial. The Government, on cross-appeal, challenges the district court's grant of acquittal on the counterfeiting counts. For the reasons that follow, we affirm Prosperi's convictions on the tax counts, reverse the district court's grant of acquittal on the counterfciting counts, and remand for resentencing.
On the second full day of deliberation, a dismissed alternate juror notified Prosperi's counsel that one of the sitting jurors, Marilyn Budd, had called her in tears because she was being pressured by other jurors to convict Prosperi. The alternate also related that another sitting juror, Morris Levy, had decided to convict on the first day of testimony and had arranged the election of a like-minded juror as foreperson. Counsel reported this to the court and requested a mistrial or an inquiry. The district judge denied the request but sent the jury a note reminding them not to discuss the case unless all twelve jurors were present. Later, defense counsel requested either a mistrial or full investigation after observing juror Levy in a heated discussion with juror Budd away from the other jurors. The district court ruled that Federal Rule of Evidence 606(b)4 precluded him from inquiring into the jury deliberations. The next morning, the district court conducted a limited inquiry, at the request of the Government, to determine if the dismissed alternate had exerted an improper outside influence on Budd. The alternate juror reported that she had advised Budd to resist pressure to change her vote. The district court did not permit defense counsel to make additional inquiry of the alternate, again citing Rule 606(b).
Investigation of alleged juror misconduct is committed to the discretion of the district court and is reviewed only for an abuse of that discretion. See United States v. Harris, 908 F.2d 728, 733 (11th Cir.1990). Prosperi argues that the district court misapprehended the scope of its discretion under Rule 606(b) in refusing to conduct an investigation, and that this was a per se abuse of discretion. We repeatedly have recognized the breadth of the district court's discretion under Rule 606(b), and a "failure to hold a hearing constitutes an abuse of discretion only when there is evidence that the jury was subjected to influence by outside sources." United States v. Watchmaker, 761 F.2d 1459, 1465 (11th Cir.1985). In this case, the district court investigated the possibility of external influence by the excused alternate, but declined to investigate allegations of internal influence occurring during deliberations. Not only was this decision within its discretion, but a contrary decision may have...
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