U.S. v. Schlei

• Decision Date: 18 September 1997
• Docket Number: No. 95-3004,95-3004
• Parties: 48 Fed. R. Evid. Serv. 143, 11 Fla. L. Weekly Fed. C 541 UNITED STATES of America, Plaintiff-Appellee, v. Norbert SCHLEI, B.J. Bravender Ah Loo, Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 944

122 F.3d 944

48 Fed. R. Evid. Serv. 143, 11 Fla. L. Weekly

Fed. C 541

UNITED STATES of America, Plaintiff-Appellee, v. Norbert SCHLEI, B.J. Bravender Ah Loo, Defendants-Appellants.

No. 95-3004.

United States Court of Appeals Eleventh Circuit.

Sept. 18, 1997.

Deborah Jordan, Peter George, Tampa, FL, for Norbert Schlei, Defendant-Appellant.

Adrian R. Castro, Tampa, FL, Philip Allen Lacovara, Mayer, Brown & Platt, New York City, for B.J. Bravender Ah Loo, for Defendant-Appellant.

Charles Wilson, U.S. Attorney, Mark Jay Krum, Tamra Phipps, Gary H. Montilla, David P. Rhodes, Asst. U.S. Attys.

Appeal from the United States District Court for the Middle District of Florida.

Before BLACK, Circuit Judge, and FAY and ALARCN ^*, Senior Circuit Judges.

ALARCN, Senior Circuit Judge:

Barbara Jean Bravender Ah Loo ("Ah Loo") and Norbert Schlei have appealed from the judgments of conviction. ¹ Schlei We vacate the order denying Schlei a new trial and an evidentiary hearing with directions that the district court make express findings regarding the alleged witness intimidation claim. We vacate the judgment of conviction on Count Ten because we conclude that the district court erred in denying Schlei's motion to strike duplicitous allegations regarding a separate crime in a different venue. We affirm the district court's order on the balance of Schlei's contentions.

also seeks review of the district court's sentencing decision. Schlei was convicted of conspiracy and securities fraud. Schlei seeks reversal on numerous grounds, each of which we address below.

The transactions that preceded the indictment in this case are unusual, if not bizarre. Most of the evidence was undisputed.

The prosecution presented evidence that Schlei, and others attempted to sell certain financial instruments in the United States. Schlei and his salespersons represented that these financial instruments had been issued by the government of Japan or the Dai-Ichi Kangyo Bank. The instruments were labeled "Certificates of Balance of Redemption, Series 57" (the "bond certificates"), with face amounts ranging from ten billion yen to 500 billion yen, and cashier's checks allegedly issued by the Dai-Ichi Kangyo Bank (the "bank notes"), each drawn for fifty billion yen. The bond certificates were purportedly issued by the government of Japan in exchange for money or property received from the bond certificate holders or payees.

The prosecution's theory at trial was that Schlei had actual knowledge, or deliberately closed his eyes, to the fact that these financial instruments were worthless because they were not issued by the government of Japan or the Dai-Ichi Kangyo Bank. Schlei testified that he believed that the instruments were valid but that corrupt officials of the government of Japan had falsely claimed that they were not genuine. The jury was persuaded beyond a reasonable doubt that the bond certificates and bank notes were not genuine and that Schlei had the requisite criminal intent to defraud when he represented to prospective purchasers that these instruments were valid.

I SUFFICIENCY OF THE EVIDENCE

A. Background

Schlei argues that the judgment must be reversed because the Government failed to present evidence that he intended to defraud anyone in attempting to sell the bond certificates and the bank notes. He asserts that the record shows that he informed each prospective buyer that the government of Japan claimed that these financial instruments were not valid. He also maintains that fraud has not been demonstrated because no reasonable person would have purchased these instruments without receiving confirmation of their validity from the Japanese government, in view of their extraordinary face value and the disclosures made to prospective purchasers. ² In addition, Schlei contends that the evidence is also insufficient to demonstrate that he directly or indirectly participated in the sale of a bond certificate to undercover officers in Tampa, Florida.

In discussing whether the evidence is sufficient to sustain the judgment of conviction against Schlei, we are required to review the facts produced at trial by the parties in the light most favorable to the Government. United States v. Calhoon, 97 F.3d 518, 523-24 (11th Cir.1996), cert. denied, --- U.S. ---, 118 S.Ct. 44, 139 L.Ed.2d 11 (1997). In reviewing a sufficiency claim, we "accept[ ] all reasonable inferences and credibility choices made in the government's favor,

to determine whether a reasonable trier of fact could find that the evidence established guilt beyond a reasonable doubt." Id. at 523. "We also review de novo whether there was sufficient evidence to support the convictions." Id.

1. The Source of the Financial Instruments

In the early part of 1985, Sam M. Han, a Korean-American, met with C.K. Lee, a fellow Korean-American, and T. Hiraki, a Japanese national, in Los Angeles, California. Lee and Hiraki told Han that they represented certain persons who wanted Han's assistance in getting the government of Japan to acknowledge the validity of the bond certificates and bank notes. Han was told by Hiraki and Lee that the government of Japan claimed that the financial instruments were not genuine and had refused to honor them. Han urged Lee and Hiraki to seek legal advice.

In March of 1985, Han and Lee met with Schlei at his law office in Los Angeles to discuss negotiation of the financial instruments. Han and Lee informed Schlei that the government of Japan would not negotiate with them without pressure from outside of Japan. Sometime shortly thereafter, Schlei met with Han and Lee, as well as a group of Japanese nationals, including Toshio Takahashi. Schlei, Han, and Takahashi later traveled to Japan and interviewed persons who possessed some of the bond certificates and bank notes. The holders of these instruments informed Schlei and Han that they received them from a woman named Hatsu Aoyagi.

On April 8, 1985, Schlei and Han met with Stanley Sporkin, the general counsel for the Central Intelligence Agency ("CIA"). At this meeting, Schlei told Sporkin that he had been informed by a group of Japanese citizens that a secret, two billion dollar fund had been accumulated by General Douglas MacArthur during the American occupation of Japan. Schlei stated the secret fund came from money confiscated from foreigners, the imperial family, and property seized during Japan's occupation of Korea. Schlei's alleged informants referred to it as the Marquat Fund (the "M Fund"). Schlei told Sporkin that the fund was administered by the United States and the Liberal Democratic Party in Japan. Schlei related that he was informed that in 1958, then-Vice President Nixon promised to give Okinawa to Japan and turn control of the M Fund over to Japan in exchange for Japan's support in electing him president of the United States. Schlei told Sporkin that a woman who had been indicted for the forgery of these financial instruments had been acquitted of that charge.

Sporkin testified that Schlei declared that he wanted the CIA to know he was going to try to present these instruments for payment and "wanted to give [him] a heads up to a possible political problem." Sporkin informed Schlei that he knew nothing about the financial instruments or the M Fund, and that the story Schlei had related "seem[ed] extraordinary." Sporkin also testified that he thought "it was a crazy idea, preposterous."

Sporkin promised Schlei that he would call him to indicate whether the CIA had any interest in Schlei's plan to attempt to sell the bond certificates and the bank notes. In a subsequent telephone call, Sporkin told Schlei that the CIA had no interest in the proposed sale of the financial instruments because "[i]t was a private matter."

After returning to Los Angeles, Schlei agreed to provide legal representation to Hiraki, Takahashi, Lee, and Han "in relation to the negotiation and cashing of certain checks and other instruments." ³ In May of 1985, Schlei and Lee tried to negotiate one of the bank notes at the Dai-Ichi Kangyo Bank in Japan. The bank notified Schlei that it would not honor the bank note because it was a forgery.

In furtherance of the plan to sell the bond certificates and bank notes, Schlei filed the articles of incorporation of the Japan-America Foundation, Inc. ("Foundation") in Panama on January 6, 1986. Schlei was designated as a member of the board of the Foundation as well as its secretary and treasurer. Takahashi was named as the chairman of the board and chief executive officer. Han was designated as the president of the Foundation. Pursuant to the articles of incorporation, the Foundation was formed to arrange the assignment of the bond certificates and bank notes from the nominees or payees, and to invest the proceeds of any sale "to benefit the peoples of Japan and the United States or secondarily the peoples of the nations of the Pacific Basin and the world."

Lee, Michael Dow, and Jesse Levine were indicted on January 31, 1986, in the District of Nevada for attempting to sell some of the bond certificates. Upon being informed of the arrest of Lee, Dow, and Levine, Schlei went to Nevada to help them. Schlei also wrote a letter to the United States Attorney for the District of Nevada, demanding the return of the bond certificates and bank notes to the Foundation as the owner of the instruments.

On February 17, 1986, approximately three weeks after Lee was indicted for attempting to sell forged bond certificates, Schlei met with United States Ambassador Mike Mansfield at the United States embassy in Tokyo, Japan. Also present were Daniel Russel, the Ambassador's executive assistant, and John Weeks, the embassy's assistant financial attache. At this meeting, Schlei related the alleged genesis of the bond certificates and the bank notes, as related to him by his clients.

Russel testified at trial. He summarized Schlei's narration as follows:

Well, he...