U.S. v. Swinton, 95-2009

• Decision Date: 31 January 1996
• Docket Number: No. 95-2009,95-2009
• Citation: 75 F.3d 374
• Parties: 43 Fed. R. Evid. Serv. 780 UNITED STATES of America, Appellee, v. Bruce Raymond SWINTON, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 374

75 F.3d 374

43 Fed. R. Evid. Serv. 780

UNITED STATES of America, Appellee, v. Bruce Raymond SWINTON, Appellant.

No. 95-2009.

United States Court of Appeals Eighth Circuit.

Submitted Nov. 14, 1995.

Decided Jan. 31, 1996.

Appeal from the United States District Court for the Eastern District of Arkansas. GEORGE HOWARD Jr. U.S.D.C. Judge.

Sam T. Heur, argued, Little Rock, Arkansas, for appellant.

John E. Bush, Assistant U.S. Attorney, argued, for appellee.

Before FAGG, BRIGHT, and DUPLANTIER, ^* Circuit Judges.

BRIGHT, Circuit Judge.

A jury convicted Swinton of seven counts of bank fraud in violation of 18 U.S.C. § 1344, and he was sentenced to thirty-seven months imprisonment. Swinton raises three issues on appeal: (1) the court violated Fed.R.Evid. 404(b) by allowing the government to introduce evidence of other, uncharged transactions in which he was involved; (2) the evidence was insufficient to support the conviction; and (3) the jury considered extraneous evidence in reaching the verdict. We reject Swinton's first two claims and remand to the district court for an evidentiary hearing on his third.

I. BACKGROUND

Swinton, a real estate entrepreneur and building contractor, was charged with seven counts of causing misrepresentations to be made to financial institutions in violation of 18 U.S.C. § 1344. The indictment alleged that Swinton was engaged in a sham sale scheme in which he persuaded friends and acquaintances to take out loans in their own names to buy residential properties for him. Swinton promised the buyers that he would make all payments on the loans. The purported buyers typically would falsely represent their qualifications for the loan and their intention to reside on the property. The purported buyers would also state that they had made a downpayment on the property which they, in fact, had not made. Immediately after the sale of the property, the purported buyer would "transfer" the property to Swinton via a quitclaim deed. Swinton eventually defaulted on the loans. Since the loans were all insured, the losses ultimately fell on the Department of Housing and Urban Development.

Prior to trial, defense counsel filed a motion requesting disclosure of any "prior bad acts" evidence that the Government intended to introduce pursuant to Fed.R.Evid. 404(b). ¹ The Government responded by stating that they had opened their files and that any 404(b) material sought by Swinton would be in those files. The files contained information on the seven charged properties and approximately twelve additional uncharged transactions.

At trial, the Government produced three witnesses who testified that they participated as the purported buyer in transactions for which Swinton was charged. The Government also introduced evidence concerning several other uncharged property transactions occurring within the same approximate time period. The district court admitted these uncharged transactions into evidence over defense counsel's objection that the pretrial notice was insufficient to satisfy the requirements of Rule 404(b). The court determined that the Government need not satisfy the Rule 404(b) requirements because the evidence tended to prove the existence of the plan, scheme, or artifice for which Swinton was charged, and was thus not "other acts" evidence governed by that rule.

The jury convicted Swinton on all seven counts. The court sentenced Swinton to thirty-seven months imprisonment followed by three years of supervised release. Swinton moved for a new trial claiming that the evidence of the other property transactions should not have been admitted.

After the trial, a member of the jury contacted Swinton and indicated that, during jury deliberations, another juror had mentioned that Swinton had a prior record. No evidence had been introduced at the trial concerning any prior conviction. Swinton's counsel filed a motion requesting that he be allowed to discuss the matter with the jurors and renewed a motion for a new trial based upon the jury considering extrinsic evidence. The district court denied both motions, determining that the information was not "extraneous", as required by Rule 606(b), because any discussion or speculation about the prior conviction would have originated within the jury room and not from an extraneous source.

II. DISCUSSION

A. EVIDENCE OF "PRIOR BAD ACTS"

During trial, the Government introduced evidence concerning seven property transactions in which Swinton was involved but for which he had not been indicted. Defense counsel objected to the evidence asserting that the Government had failed to provide the notice required by Fed.R.Evid. 404(b). Citing United States v. Bass, 794 F.2d 1305, 1312 (8th Cir.1986), cert. denied, 479 U.S. 869, 107 S.Ct. 233, 93 L.Ed.2d 159 (1986), the district court stated that the evidence was not Rule 404(b) evidence and admitted the evidence pursuant to Rule 402. We review a district court's decision to admit evidence for an abuse of discretion. United States v. Severe, 29 F.3d 444, 447 (8th Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 763, 130 L.Ed.2d 660 (1995).

Rule 404(b) governs the admission into evidence of "other crimes, wrongs, or acts." The rule applies only to "extrinsic" and not to "intrinsic" evidence. See, United States v. Oakie, 12 F.3d 1436, 1441-42 (8th Cir.1993); Bass, 794 F.2d at 1312; United States v. DeLuna, 763 F.2d 897, 913 (8th Cir.), cert. denied, 474 U.S. 980, 106 S.Ct. 382, 88 L.Ed.2d 336 (1985); see also, Rule 404(b) Senate committee notes, 1991 amendment. In Bass, we explained this distinction stating,

We have held that where evidence of other crimes 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; or tends logically to prove any element of the crime charged," it is admissible as an integral part of the immediate context of the crime charged. When the other crimes evidence is so integrated, it is not extrinsic and therefore is not governed by Rule 404(b).

Bass, 794 F.2d at 1312 (quoting United States v. Derring, 592 F.2d 1003, 1007 (8th Cir.1979) (citations omitted).

The Government further argues that the evidence concerning the other uncharged transactions went directly to an element of the crime--the existence of a scheme or artifice--and thus must be considered as "intrinsic" evidence. Section 1344, the violation of which Swinton was convicted, provides:

Whoever knowingly executes, or attempts to execute, a scheme or artifice--

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

18 U.S.C. § 1344 (1994). Thus, as one of the elements of bank fraud, the government must establish that the defendant knowingly executed (or attempted to execute) a "scheme or artifice". The indictment alleged that Swinton was involved in a single scheme to defraud financial institutions, and that in furtherance of this scheme, he "would cause misrepresentations and false information in the mortgage loan applications and closing documents." Superseding Indictment, p. 2. Although Swinton was charged with seven separate counts of bank fraud, this court has previously held that each execution of a single scheme to defraud constitutes a separate offense. See United States v. Barnhart, 979 F.2d 647, 651 (8th Cir.1992).

In this case, Swinton was charged with conducting a continuing scheme to defraud. Where the charged offenses were not isolated acts, but rather, were part of the series of transactions involving the same principal actors, in the same roles, and employing the same general modus operandi, the various acts may be considered to constitute a single scheme. See United States v. Muscatell, 42 F.3d 627, 630-31 (11th Cir.), cert. denied, --- U.S. ----, 115 S.Ct. 2617, 132 L.Ed.2d 859 (1995). "An uncharged act may not be extrinsic if it was part of the scheme for which a defendant is being prosecuted." United States v. Oles, 994 F.2d 1519, 1522 (10th Cir.1993) (quoting United States v. Record, 873 F.2d 1363, 1372 n. 5 (10th Cir.1989)).

In sum, the uncharged transactions are "intrinsic" to the charged counts of bank fraud if (1) the collected transactions were all part of a single scheme, or (2) the uncharged transactions were "so blended or connected, with the one[s] on trial as that proof of one incidentally involves the other[s]." Bass, 794 F.2d at 1312. With these principles in mind, we examine the specific uncharged transactions introduced at trial.

Three of the seven uncharged transactions introduced at trial concerned loan transactions in which Courtney Washington was the purported buyer of the property. Washington was also the purported buyer in four of the charged transactions. At trial, Washington testified that in each of the charged transactions, he had no intention of acquiring an ownership interest in the properties but rather purchased the properties for Swinton because Swinton had "bad credit". He also stated that although the loans indicated that he made a downpayment, no such payment was actually made. After the sale transpired, Washington quitclaimed the properties back to Swinton. Union Modern Mortgage made each of the loans in the charged transactions, and the same closing agent ran all the closings.

The three uncharged transactions involving both Swinton and Washington which were introduced at trial were clearly part of the same scheme as the four charged counts. Union Modern Mortgage made each loan, and the closing agent that closed the charged transactions closed these uncharged counts as well. Washington also quitclaimed these properties to Swinton following the sale. Finally,...