United States v. Thomas

• Decision Date: 22 January 2021
• Docket Number: No. 19-2969,19-2969
• Citation: 986 F.3d 723
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Michael THOMAS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

986 F.3d 723

UNITED STATES of America, Plaintiff-Appellee,

v.Michael THOMAS, Defendant-Appellant.

No. 19-2969

United States Court of Appeals, Seventh Circuit.

Argued September 21, 2020

Decided January 22, 2021

Nathaniel Whalen, Attorney, Office of the United States Attorney, Hammond, IN, for Plaintiff-Appellee.

Kerry Clementine Connor, Attorney, Kerry C. Connor, Highland, IN, for Defendant-Appellant.

Before Wood, Brennan, and Scudder, Circuit Judges.

Brennan, Circuit Judge.

Michael Thomas set fire to numerous properties in a mobile home park and then used the mail to collect insurance money. The government charged Thomas with mail fraud under 18 U.S.C. § 1341, which requires proof of a "scheme to defraud." At trial Thomas argued the fires were not part of a scheme because they were not a chain of continuous and overlapping events, but rather discrete episodes of alleged criminality, so evidence of the fires as "other acts" was improperly admitted.

A jury convicted Thomas, and on appeal he argues that all but one of the fires were inadmissible character evidence. But Thomas was charged with mail fraud, not arson. We conclude the district court properly decided that six of the fires were part of Thomas's scheme and not "other acts" at all. The district court also properly admitted evidence of another fire that, although too far removed in time to be part of the scheme, was evidence of Thomas's modus operandi . So we affirm.

I. Background

The Born's mobile home park is a one-square-mile residential community of less than one hundred dwellings, located in North Judson, Indiana. The park does not experience many fires—aside from those in this case, only three in the last 26 years. Over about nine years, however, Thomas has been connected to eight blazes there.

The first fire started just before 10 p.m. the night of September 17, 2004 in a mobile home Thomas owned at 2691 Julia Drive. Thomas's uncle said he and Thomas were out at a bar when Thomas heard about the fire. Later Thomas confided in his friend Kyle Nissen that Thomas had a family member start the fire. At the time the authorities could not determine the cause of the fire. Less than three weeks before, Thomas took out an insurance policy on the home. He also secured a second policy with another company that went into effect September 17, 2004—the day of the fire. When Thomas requested payment, the insurance companies paid him $75,000.

The next fires occurred on four properties during the night of November 14, 2010. Thomas had recently purchased a new mobile home with a garage at 5081 South 275 West. He originally planned to lease the property to tenants. Thomas also could access the mobile home owned by his mother-in-law at 5326 South A Street. In the months leading up to the fires, Thomas pressured his former wife Jennifer to purchase insurance on both properties, but she refused. One day Thomas handed her a phone with the insurance company already on the line. Jennifer capitulated and purchased policies on these two residences. When Jennifer's mother found out about the new policy taken out on her home, she vehemently objected and convinced Jennifer to tell Thomas that she planned to cancel the policy. That conversation took place on November 14th.

According to Nissen, he and Thomas had already been planning to burn the two homes and later that same day Thomas urgently approached him with the news that Jennifer wanted to cancel the policy. Thomas told Nissen that they needed to act quickly and that they were "going to do all four." The "four" referred to fires at Thomas's new property, his mother-in-law's home, and two abandoned mobile homes within Born's located at 2729 Air Stream Court and 5370 Holiday Street. The two abandoned homes were included to divert suspicion from the fires at properties connected with Thomas. Thomas and Nissen each burned two properties. The authorities determined that all four fires were intentionally set. Nevertheless, Thomas collected over $50,000 from the two insurance policies.

Another fire occurred in January 2013. In 2012 Thomas purchased a property located at 5101 South 275 West. He hoped to sell it at a profit, but he did not succeed. In December 2012 he took out an insurance policy on the property. Before the insurance was set to expire, Thomas told Nissen that the property "had to go." The home at 5101 South 275 West burned and Thomas filed a claim and collected $60,000 in insurance proceeds.

The final fire occurred three months later, on April 17, 2013. In February of that year Thomas had renewed the insurance policy for his property at 2691 Julia Drive, the site of the first fire. Around this time Thomas and Jennifer separated. In early April Thomas told Jennifer "you better get out what you want that's important to you." Thomas then contacted Nissen and asked if he could help move a motorcycle out of the home. Hours later the home caught fire, and Thomas, who was at the house when the fire started, briefly checked into the hospital with smoke inhalation. Fire department officials came to the scene and checked the house for "hot spots" where rekindling—a second or subsequent ignition—might happen, but they found none. Eight hours later, after the firefighters had left, Thomas's home again caught fire. Thomas claimed both blazes were caused by a pizza box he set on top of the stove. An Indiana fire marshal testified that the second fire at the property was intentionally set.

After the fire Jennifer and Thomas reunited briefly. Thomas enlisted Jennifer to make insurance claims for items "lost" inside the house. He told Jennifer to look online and "max out" the number of items they could claim. For this fire Thomas received four checks totaling $426,227.31 in insurance money. These four checks served as the basis for four counts of mail fraud on which Thomas was indicted in April 2018. The indictment charged a scheme that included all these fires, spanning from 2004 to 2013.

Before trial Thomas moved to strike portions of the indictment as surplusage.

That motion asked the district court to delete paragraphs in the indictment referring to the fires in 2004, 2010, and January 2013. The magistrate judge granted the motion in part, removing a paragraph referencing the two diversionary fires in 2010, reasoning that the government had not sufficiently established that these fires were part of the charged scheme. The magistrate judge retained the paragraphs referring to the 2004 fire, deciding it was properly part of the scheme.

Closer to trial Thomas moved in limine to exclude evidence of the 2004 fire on Julia Drive and the two 2010 "distractor" fires. The district court ruled that the 2010 fires were part of the scheme and did not implicate Federal Rule of Evidence 404(b). The court also concluded that the 2004 fire was too far removed in time to be part of the scheme, but that it was admissible as modus operandi evidence and to prove identity. A jury convicted Thomas on all counts and he was sentenced to 90 months’ imprisonment.

II. Discussion

Thomas asks that his convictions be reversed because the district court improperly admitted as character evidence the 2004 fire, the 2010 fires on his properties, the two 2010 diversionary fires, and the January 2013 fire. We begin with an overview of Federal Rule of Evidence 404(b) and then evaluate the district court's decisions to admit certain fires as part of the scheme and to exclude the 2004 fire from the scheme.

Rule 404(b)(1) states "evidence of any other crime, wrong, or act is not admissible to prove a person's character in order to show that on a particular occasion the person acted in accordance with the character." This general prohibition of "character evidence" is supplemented by section (b)(2) that states proffered evidence "may be admissible for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident." Courts have long policed the sometimes blurry line between evidence that must be excluded under Rule 404(b)(1) and evidence that may be admitted under Rule 404(b)(2).

In United States v. Gomez , 763 F.3d 845 (7th Cir. 2014), this court articulated a general framework for analyzing Rule 404(b) cases, jettisoning a previous multi-factor test. First, the proponent of the other acts evidence must show, through a chain of propensity-free inferences, that the evidence is relevant for a reason other than propensity. Id . at 860. Second, the court must determine under Federal Rule of Evidence 403 whether the probative value of the evidence is substantially outweighed by the prejudicial effect of the evidence on the defendant, paying close attention to whether the fact the evidence helps establish is disputed. Id . Third, even if evidence was improperly admitted, the court must conduct a harmless error analysis. Id . at 863. Of course, before we apply the analysis from Gomez the proof must actually be evidence of other acts. "Direct evidence of a crime is almost always admissible against a defendant" and is not "other act evidence." United States v. Gorman , 613 F.3d 711, 717 (7th Cir. 2010) ; United States v. Bradford , 905 F.3d 497, 506 (7th Cir. 2018) ("Evidence that ‘tend[s] to prove the elements of the offense’ does not violate Rule 404(b).").

Thomas was charged with mail fraud under 18 U.S.C. § 1341, which requires "(1) a scheme or artifice to defraud, (2) the use of the mailing system for the purpose of executing the scheme, and (3) the defendant's participation in the scheme with the intent to defraud."

United States v. Seidling , 737 F.3d 1155, 1160 (7th Cir. 2013). Thomas contests the scope of his alleged "scheme to defraud."

"We review a district court's decision to admit evidence of other bad acts for an abuse of discretion." United States v. Norweathers , 895 F.3d 485, 490 (7th Cir. 2018). But, if evidentiary objections are not made at trial, they are reviewed for plain error.

A. The fires...