United States v. Beyer

• Decision Date: 21 December 2017
• Docket Number: No. 16-4455,16-4455
• Citation: 878 F.3d 610
• Parties: UNITED STATES of America Plaintiff–Appellee v. Robert S. BEYER, II Defendant–Appellant
• Court: U.S. Court of Appeals — Eighth Circuit

878 F.3d 610

UNITED STATES of America Plaintiff–Appellee
v.
Robert S. BEYER, II Defendant–Appellant

No. 16-4455

United States Court of Appeals, Eighth Circuit.

Submitted: September 22, 2017
Filed: December 21, 2017
Rehearing and Rehearing En Banc Denied March 1, 2018

Dianna Collins, Assistant U.S. Attorney, U.S. Attorney's Office, Eastern District of Missouri, Saint Louis, MO, Amanda Schlager Wick, U.S. Department of Justice, Criminal Division, Fraud Section, Washington, DC, for Plaintiff–Appellee.

Robert S. Beyer, II, U.S. Penitentiary, Marion, IL, Kevin Christopher Curran, Assistant Federal Public Defender, Robert Wolfrum, Federal Public Defender's Office, Saint Louis, MO, for Defendant–Appellant.

Before COLLOTON, BENTON, and KELLY, Circuit Judges.

BENTON, Circuit Judge.

A jury found Robert S. Beyer, II guilty of wire fraud in violation of 18 U.S.C. § 1343 and unlawful monetary transaction in violation of 18 U.S.C. § 1957. The district court¹ sentenced him to 97 months' imprisonment. He appeals the conviction and sentence. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

I.

Beyer sold insurance and securities for several companies. In 2011, he formed Heroic Life Assurance Company. He described HLA as a start-up life insurance company. Beyer asked at least four of his pre-HLA clients to invest with HLA. He assured them that their money would be kept safe, promising two of them a guaranteed rate of return.

The investors gave HLA over $330,000. Beyer spent much of their money for his personal benefit. Beyer repaid one investor, using another investor's funds. He did not return any funds to any others.

A jury found Beyer guilty. At sentencing, the district court applied a vulnerable-victim enhancement. It also denied a downward departure in criminal history.

II.

Beyer stressed he used some investor funds for legitimate business expenses. The government countered with evidence that Beyer spent about $109,000 of investor funds on non-business expenses, including retail purchases, meals and incidentals, child support, gas, and dating services. Beyer did not pay these expenses in cash.

Beyer withdrew about $30,000 in cash from the investor funds. The government introduced evidence he spent at least some of the cash withdrawals for non-business expenses, including withdrawing about $300 in cash at an ATM in an adult-entertainment club. This "ATM-location evidence" discussion takes 18 lines of a three-volume transcript, and it was not mentioned again.

Beyer objected to the ATM-location evidence. The district court admitted it without limitation. Beyer appeals. This court reviews a district court's evidentiary rulings for abuse of discretion. United States v. Never Misses A Shot , 781 F.3d 1017, 1027 (8th Cir. 2015).

878 F.3d 613

In his objection, Beyer paraphrased Rule 403: a district court may "exclude relevant evidence if its probative value is substantially outweighed by a danger of ... unfair prejudice." Unfair prejudice is "an undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one." Fed. R. Evid. 403 advisory committee's note; see also United States v. Fletcher , 322 F.3d 508, 518 (8th Cir. 2003) (" Rule 403 is concerned only with unfair prejudice, that is, an undue tendency to suggest decision on an improper basis.") (internal quotation marks and attribution omitted).

Admitting the ATM-location evidence, the district court said: "[Defense counsel], as you're aware, it's a rule of inclusion instead of exclusion. So I'm going to overrule your objection." The government believes the district court was applying Rule 403. See United States v. Dennis , 625 F.2d 782, 797 (8th Cir. 1980) ("In weighing the probative value of evidence against the dangers and considerations enumerated in Rule 403, the general rule is that the balance should be struck in favor of admission."). Beyer believes the district court was referencing Rule 404(b). See, e.g. , United States v. Armstrong , 782 F.3d 1028, 1034 (8th Cir. 2015) (stating "Rule 404(b) is a rule of inclusion rather than exclusion"), quoting United States v. Turner , 583 F.3d 1062, 1065 (8th Cir. 2009).

Regardless of Beyer's belief, he focuses on Rule 403, which controls this issue. "[B]oth Rule 404(b) evidence and evidence beyond the rule's scope are subject to the dictates of Rule 403, which requires that the probative value of evidence is not substantially outweighed by the danger of unfair prejudice." United States v. Adams , 401 F.3d 886, 899 (8th Cir. 2005). According to Beyer, the ATM-location evidence "introduced a spurious and prejudicial lure quite capable of distracting jurors from resolving the hotly contested question of whether he acted with an intent to defraud."

This court rejected a similar argument in United States v. Abodeely , 801 F.2d 1020 (8th Cir. 1986). There, the government alleged the defendant under-reported taxable income. Id. at 1022. The government presented evidence of potential sources of unreported income, including prostitution. Id. This court acknowledged that the evidence was "certainly prejudicial." Id. at 1026. But this court approved its admission because the evidence was "highly probative of unreported taxable income." Id.

The Abodeely evidence—income from illegal acts—is more prejudicial than the ATM-location evidence. Like the Abodeely evidence, the ATM-location evidence was highly probative of a necessary element, the intent to defraud. See 18 U.S.C. § 1343. The location of Beyer's withdrawals—an adult club—was proof he might not have used investor funds for legitimate business expenses. The district court did not abuse its discretion in admitting the ATM-location evidence. See Abodeely , 801 F.2d at 1026 ; see also United States v. Shrum , 655 F.3d 782, 786 (8th Cir. 2011) (affirming the admission of evidence that the defendant spent business income on gambling, despite his argument that the evidence "inflame[d] moral prejudice.").

III.

The Presentence Investigation Report did not recommend a vulnerable-victim enhancement. See USSG § 3A1.1(b)(1) ("If the defendant knew or should have known that a victim of the offense was a vulnerable victim, increase by 2 levels."). The government objected. At sentencing, the government presented testimony from two victims, R.R. and Mi.F. R.R. is permanently disabled from a train derailment in 1994.

878 F.3d 614

From a settlement, he had about $250,000 left, the bulk of his savings. R.R.'s only source of income is a $2,500 monthly disability pension. He testified he gave Beyer "a complete picture" of his financial situation. He said he did not "keep up on" investment "stuff," but trusted Beyer. At trial, an FBI agent...