United States v. Iverson
| Decision Date | 16 March 2016 |
| Docket Number | No. 14–8071.,14–8071. |
| Parties | UNITED STATES of America, Plaintiff–Appellee, v. Marvin IVERSON, Defendant–Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Grant Russell Smith, Research and Writing Specialist, Cheyenne, WY, (Virginia L. Grady, Federal Public Defender, Districts of Colorado and Wyoming, Jim Barrett, Assistant Federal Public Defender, Cheyenne, WY, with him on the briefs), for Defendant–Appellant.
Jason M. Conder, Assistant United States Attorney (Christopher A. Crofts, United States Attorney, District of Wyoming, Stephanie I. Sprecherand David A. Kubichek, Assistant United States Attorneys, on the brief), District of Wyoming, Casper, WY, for Plaintiff–Appellee.
Before HARTZ, O'BRIEN, and PHILLIPS, Circuit Judges.
Defendant Marvin Iverson was convicted after a jury trial of engaging in a scheme to defraud JPMorgan Chase and Big Horn Federal Savings. See 18 U.S.C. § 1344. The statute requires that the victims be "financial institutions." Id. To establish that element of the offense, the government offered the testimony of an FBI agent to try to prove that JPMorgan and Big Horn were insured by the Federal Deposit Insurance Corporation (FDIC). See id. § 20(1) (); 12 U.S.C. § 1813(c)(2)("The term 'insured depository institution' means any bank or savings association the deposits of which are insured by the [FDIC] pursuant to this chapter.").
On appeal Defendant argues that the agent's testimony was inadmissible hearsay and violated the best-evidence rule. He also argues that even if the evidence was admissible, it was insufficient to prove that JPMorgan and Big Horn had FDIC insurance at the time of the offense. Despite the government's concession to the contrary, we hold that the agent's testimony was not inadmissible hearsay; it was either not hearsay or fell within a hearsay exception. As for the best-evidence rule, Defendant did not raise the issue below and he has not shown plain error. Finally, because there was sufficient evidence that JPMorgan had FDIC insurance at the time of the offense, we reject Defendant's sufficiency-of-the-evidence challenge.
Defendant has been a member of the "sovereign citizens" group called "Wyoming Free State." Among other practices, such groups instruct their members on various debt-elimination schemes. The scheme here was called the electronic-funds-transfers (EFT) scheme. A member writes a check on a closed account to pay off a debt, with the hope that an unaware financial institution will release title or a lien before the check bounces.
Defendant used the EFT scheme to try to eliminate debts owed to JPMorgan and Big Horn. First, on June 22, 2012, using a closed checking account with First Interstate Bank, Defendant wrote Big Horn two checks totaling over $27,000 to pay off a vehicle loan and a mortgage. On the back of each check was written:
R., Vol. 2 at 28 (internal quotation marks omitted). Despite this notation, the checks were processed by Big Horn, and the vehicle lien and mortgage were released. After being notified that the checks were drawn on a closed account, the bank demanded that Defendant pay the debt. Defendant refused until he was arrested for this offense. Second, on August 18, 2012, Defendant wrote a check from his closed First Interstate account to JPMorgan in the amount of $369,300 to pay off his daughter's mortgage. The check had the same EFT notation as before. JPMorgan did not process the check or release the mortgage.
Defendant was charged with scheming to defraud the financial institutions in a one-count indictment filed in the United States District Court for the District of Wyoming. The case went to trial on July 28, 2014. Defendant represented himself with the aid of standby counsel.
Defendant's issues on appeal focus on the prosecutor's afterthought questioning of FBI Special Agent Kent Smith:
Defendant raises two challenges to the admissibility of the testimony that the victim institutions were FDIC insured. He claims (1) that Agent Smith's testimony about FDIC insurance coverage was hearsay and (2) the testimony violated the best-evidence rule, which required introduction into evidence of the FDIC certificates of coverage. Both the hearsay rule and the best-evidence rule are exceptions to the general rule that a witness can testify to what the witness saw or heard. The hearsay rule ordinarily excludes testimony about what someone wrote or said out of court when "offer[ed] in evidence to prove the truth of the matter asserted in the statement." Fed.R.Evid. 801(c). And the best-evidence rule ordinarily excludes testimony about what appeared in a document when offered to prove "its content." Fed.R.Evid. 1002.
We review a district court's evidentiary decisions for abuse of discretion. See United States v. Trujillo, 136 F.3d 1388, 1395 (10th Cir.1998). The government confesses error on Defendant's hearsay issues, but we are not bound by this concession. See United States v. Resendiz–Patino, 420 F.3d 1177, 1182–83 (10th Cir.2005). We first address hearsay and then the best-evidence rule.
Agent Smith's testimony about Big Horn's FDIC-insured status was based solely upon his review of the bank's FDIC certificate. In essence he was reporting on what the certificate said. His testimony about JPMorgan was based on his review of the FDIC website. There are two possible assertions in this testimony. One is Agent Smith's assertion that he is accurately reporting what he saw concerning the certificate and the website. The other is what the certificate and website said was true—that the banks were insured by the FDIC. The first assertion presents no hearsay problem because the assertion is made by the witness at trial. See Fed.R.Evid. 801(c)(1)(hearsay is limited to "a statement that ... the declarant does not make while testifying at the current trial or hearing"). Agent Smith could be carefully cross-examined about the accuracy of his perception and memory of what he saw. (The probability of witness error in reporting the content of a document is, however, a concern of the best-evidence rule, which we address in the next section.)1 Thus, the only hearsay issues are whether the statements in the certificate and on the website were hearsay; and if so, did they come within an exception to the hearsay rule. We begin with the Big Horn testimony.
Although this circuit has not yet considered a hearsay challenge to the admission into evidence of the content of an FDIC insurance certificate, several of our sister circuits have. Each has rejected the hearsay objection, albeit for differing reasons. The First Circuit affirmed the admission of an FDIC certificate to prove insurance coverage under Fed.R.Evid. 803(6), the business-records exception. See United States v. Albert, 773 F.2d 386, 388–89 (1st Cir.1985). The Sixth Circuit has likewise held that an FDIC certificate qualifies as a business record, see United States v. Riley, 435 F.2d 725, 726 (6th Cir.1970), but it also has held one admissible as a public record under Fed.R.Evid. 803(8), see United States v. Arthur, 822 F.2d 60, at *3 (6th Cir.1987)(unpublished). And the Ninth Circuit has held that the certificate is not hearsay because it is a "verbal act." See United States v. Bellucci, 995 F.2d 157, 160–61 (9th Cir.1993). The parties have not cited nor have we found any case holding that FDIC certificates are inadmissible hearsay. For the following reasons, we reject Defendant's contention that they are.
The Ninth Circuit may well be correct that the assertion of insurance coverage in an FDIC certificate is not hearsay. The rule against hearsay does not apply to "verbal acts ... in which the statement itself affects the legal rights of the parties or is a circumstance bearing on conduct affecting their rights." Fed.R.Evid. 801advisory committee's note to 1972 proposed rules, subdivision (c) (internal quotation marks omitted); see id. (...
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