U.S. v. Riebold

• Decision Date: 05 March 1998
• Docket Number: No. 97-2837,97-2837
• Citation: 135 F.3d 1226
• Parties: UNITED STATES of America, Appellee, v. Elbert Myron RIEBOLD, also known as Mike Riebold, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1226

135 F.3d 1226

UNITED STATES of America, Appellee, v. Elbert Myron RIEBOLD, also known as Mike Riebold, Appellant.

No. 97-2837.

United States Court of Appeals Eighth Circuit.

Submitted Dec. 9, 1997.

Decided Feb. 5, 1998.

Rehearing and Suggestion for Rehearing En Banc Denied March 5, 1998.

Evelyn Gwin Mangan, Springfield, MO, argued, for Appellant.

David C. Jones, Springfield, MO, argued, for Appellee.

Before BOWMAN, FLOYD R. GIBSON, and HANSEN, Circuit Judges.

BOWMAN, Circuit Judge.

A jury convicted Elbert Myron Riebold, also known as Mike Riebold, of money laundering, wire fraud, conspiracy, and interstate transportation of stolen money. Following the jury's verdict, the District Court ¹ sentenced Riebold to 210 months of incarceration and ordered that he pay $2,666,300 in restitution. This appeal follows.

Riebold claims that the District Court erred in admitting evidence of his prior convictions; that the conspiracy conviction must be reversed because the single conspiracy charged in the indictment was not proven; and that he was prejudiced by the government's cross-examination of a certain witness. He also argues that the court abused its discretion in ordering him to pay an excessive amount of restitution. We find no error and therefore affirm in all respects.

I.

From 1988 until 1995, Riebold took money from investors for the development of worthless properties. With the help of his brother, Hubert Riebold, and his business associate, Dr. David Thomasson, Riebold secured more than $2,500,000 in investments for interests in various gold and copper mining operations. In the end, however, it was only the investors who were mined, for the mining operations were non-existent and the investors received absolutely no return on their investments.

For their fraudulent scheme, both Mike and Hubert Riebold were named in a twelve-count indictment. Dr. Thomasson was named as an unindicted co-conspirator. ² Mike and Hubert were tried together and convicted on various counts of interstate transportation of stolen money, money laundering, and fraud. Further, the jury convicted Mike Riebold of conspiracy, but deadlocked on Hubert Riebold's conspiracy charge.

II.

A. Prior Fraud Convictions

Riebold first argues that the District Court erred in admitting evidence of his prior fraud convictions. In 1975, Riebold was convicted on seventy-two counts of fraud, including mail fraud, securities fraud, misapplication of bank funds, wire fraud, and interstate transportation of property obtained by fraud and conspiracy. For these convictions, Riebold was sentenced to five years in prison to be followed by five years of probation. In 1977, Riebold was again convicted of fraud, this time for wire fraud and for use of the mail for sale and delivery of unregistered securities. Riebold was sentenced to five years of incarceration to be served concurrently with the 1975 sentence. Both fraudulent schemes for which Riebold was convicted involved securing investors for bogus mineral development companies.

The District Court allowed the prior fraud convictions to be admitted into evidence by permitting the government to ask witnesses, who had invested in the current failed scheme, whether they were aware of Riebold's prior fraud convictions at the time of their investments. Of those witnesses who replied that they were not aware of Riebold's two prior convictions at the time they invested, the government inquired whether they would have invested had they known.

Initially, the government sought to admit the prior convictions as extrinsic evidence under Federal Rule of Evidence 404(b). The government later asserted that the prior convictions should be admitted as substantive evidence of the crimes charged under the theory of res gestae. Under this theory, the government argued that Riebold's concealment of his prior fraud convictions were part of the charged crime itself. The District Court agreed and allowed the questioning to continue under the theory of res gestae. We review the District Court's ruling for abuse of discretion. See United States v. Forcelle, 86 F.3d 838, 841 (8th Cir.1996).

Under the theory of res gestae, evidence of prior crimes can be admitted when the prior crime is "so blended or connected, with the one[s] on trial as that proof of one incidentally involves the other[s]; or explains the circumstances thereof; or tends logically to prove any element of the crime charged." Id. (quoted cases omitted) (alterations not ours). When evidence is admitted under res gestae, Rule 404(b) is not implicated. See United States v. LeCompte, 108 F.3d 948, 952 (8th Cir.1997). Riebold argues that the evidence is not admissible under the res gestae theory because the concealment of his prior convictions was neither connected to nor an element of the fraud for which he was charged.

The federal wire fraud statute under which Riebold was charged reads in pertinent part:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted ... any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined [or imprisoned, or both].

18 U.S.C. § 1343 (1994). This Court has construed § 1343 to forbid both schemes to defraud, whether or not any specific misrepresentations have been made, and to obtain money by false or fraudulent pretenses, representations, or promises. See United States v. Clausen, 792 F.2d 102, 104 (8th Cir.), cert. denied, 479 U.S. 858, 107 S.Ct. 202, 93 L.Ed.2d 133 (1986).

In trying to prove that Riebold obtained money by false representations, the government questioned investor Doug Collins about whether he had ever asked Riebold about Riebold's criminal past. See Trial Tr. at 370. Collins testified that, before he had invested in the scheme, he had asked Riebold whether Riebold had ever been in prison. See id. Collins testified that, in response, Riebold stated that he had never been in prison. See id. Also, the government asked investor Kent Beus whether he had ever confronted Riebold about his prior fraud convictions. See id. at 244. Beus testified that he had confronted Riebold, and in response Riebold told Beus about only one fraud conviction. See id. Beus further testified that he would not have invested had he known about the second fraud conviction. See id. Thus, Riebold falsely represented his past to both Collins and Beus at the time they were considering investing.

Riebold reminds us that he never actually lied to the other investors about his past; he just chose not to share the information with them. Riebold argues that the questioning of these investors about his prior convictions was therefore improper because the mere concealment of the convictions was not an element of the fraud. But under § 1343 "a scheme to defraud need not include false representations." Clausen, 792 F.2d at 105.

We would be reluctant to hold that a convicted felon always must disclose his past to those with whom he deals. We do not so hold in this case. But here Riebold had twice been convicted of fraud, the prior convictions were for conduct very similar to the fraudulent conduct in which he was engaged, and Riebold knew the victims were making substantial investments based in part upon their trust in his character and integrity. In these circumstances, the fact that Riebold concealed his past went directly to whether he intended to devise a scheme to defraud under 18 U.S.C. § 1343. In addition, investors Bill Lee and Connis Gilbert testified that they would not have invested any money in Riebold's operations had they known about his prior convictions. See Trial Tr. at 71, 524. Thus, Riebold's concealment of his prior convictions was an important part of the scheme; otherwise, investors would have been hard to come by. Evidence of Riebold's prior fraud convictions was properly admitted under the res gestae theory because it proved an element of the crime charged--that Riebold obtained money by false pretenses.

B. Prosecutorial Misconduct

Riebold next argues that the manner in which the government questioned witness Charles Pursley constituted prosecutorial misconduct. On cross examination, the government sought to question Pursley about Riebold's involvement in the swindle of an Oklahoma bank named "Homestead." Riebold's counsel objected to the questioning, and counsel for both sides approached the bench. In a sidebar conference, the District Court instructed the government not to inquire into the "Homestead swindle case," but stated that it would allow the government to pursue questioning concerning the victims in Riebold's 1975 fraud conviction, which the government contended was related to Homestead. Trial Tr. at 1985-86. Thereafter, the government asked Pursley to review a newspaper article and asked, "Now, having read that, are you familiar with whether or not the trial out in New Mexico involved in part funds from a company known as Homestead?" Id. at 1987. Riebold's counsel asked to approach the bench, and in a sidebar conference the court instructed the government to move to another line of questioning. See id. at 1989. The government moved on, and the Homestead issue was never raised again.

We review claims of prosecutorial misconduct under a two-part test to determine whether the prosecutor's questioning was improper, and, if so, whether such questioning prejudiced the defendant's right to a fair trial. See United States v. Swanson, 9 F.3d 1354, 1360 (8th Cir.1993). While we agree with Riebold that the government should not have mentioned Homestead in its question, we do not believe the question rises to the level of being improper.

Further, even if this question was improper, Riebold's right to a fair trial was not prejudiced. We review for abuse of discretion a district court's...