He’s making a list,
He’s checking it
United States v. Loftis, 2016 WL 7176657(9th Cir.
Dec. 9, 2016), decision available here.
|Left to right: The Hon. Judges Fisher, W. Fletcher, and N.R. Smith|
Decision by Judge Fisher, joined by
Judges W. Fletcher and N.R. Smith. Hard fought appeal by Montana AFPD John
Facts: Loftis is charged with wire fraud, for allegedly victimizing
investors through falserepresentations. Id. at *1.
Though the government posits a broad scheme, spanning six years and several
states, charged transactions involved
just three investors and all took place in Montana. Id.
Before trial it became clear that the
government intended to introduce evidence of crimes beyond the charged offenses.
Loftis thus moved in limine for
exclusion of uncharged conduct. Id.
The district court granted the motion in
part, finding some evidence excludable under FRE 404(b). While “[t]he extent to
which the district court properly applied [the evidentiary] principles is not
clear,” id. at *4, the court held that
some evidence would be excluded under FRE 404(b) unless the government showed
the uncharged conduct evidence was “inextricably intertwined” with the Montana
scheme. Id. at *1.
The government filed an interlocutory appeal;
trial was stayed. Id.
Issue(s): Did the district court properly exclude evidence of
uncharged offenses, absent a showing from the government that the crimes were inextricably
intertwined with the scheme employed in Montana?
Held: 1. FRE 404(b) and “other” acts: “We hold the evidence of uncharged transactions is not evidence of ‘other’ crimes or acts
under Rule 404(b), because it is evidence of part of the crime charged in the
indictment—the overall scheme to defraud.” Id.
at *2 (emphasis in original, footnote omitted). ‘Because the evidence from
other investors is charged conduct, the government is not required to rely on the
inextricably intertwined doctrine to avoid Rule 404(b).” Id. at *4.
intertwined:” “[However,] . . . even if the uncharged
transactions at issue were not part of the crime charged, they would not be
subject to exclusion under Rule 404(b) because they are ‘part of the same
transaction’ as the charged transactions. The inextricably intertwined doctrine,
therefore, affords a second basis for concluding the evidence should not be
treated as ‘other’ crimes or ‘other’ acts evidence under Rule 404(b).” Id.
Of Note: While this is a disappointing outcome, Judge Fisher
does take pains to emphasize why the
evidence is admissible. Wire fraud’s first element requires the government to
prove “the existence of a scheme to defraud.” Id. at *3. Hence, evidence from uncharged crimes is admissible as
proof of that first element – it is not, by definition, “other crimes” and is not
precluded under FRE 404(b). Id.
This doesn’t mean that in a fraud
case the government can throw everything at the barn to see what sticks – “these
holdings apply only when the charged and uncharged transactions can fairly be
characterized as parts of a single
fraudulent scheme.” Id. at *4
Put differently, when our
creative clients have other, different
scams running, those crimes fall outside of Loftis
– they don’t bear on the first element of the charged wire (or mail)
How to Use:
Fish gotta swim, birds gotta fly, AUSAs gotta overprove their case: it’s the nature
What are you supposed to do when a gung-ho prosecutor invokes Loftis and smuggles in a mountain of inflammatory
junk to “prove” a fraudulent scheme (a scheme that is often painfully clear
from the charged offenses?) Counter-invoke
Judge Fisher’s explicit caveat: Loftis
doesn’t address exclusion of this evidence on other bases, such as FRE 403. Id. at *4. (And remind the DJ that
excluding cumulative evidence will shave weeks off an interminable fraud trial . . . .)
Reading: What about snitches running their own
“uncharged conduct” schemes? Under Loftis,
aren’t their shenanigans evidence of fraud crimes (and hence their motive for
falsely incriminating your poor client to earn that 5K break?) For an
interesting rift on this theme, see Jessica Broderick, Reverse 404(b) Evidence: Exploring Standards When Defendants Want to
Introduce Other Bad Acts of Third Parties, at 79 U. Colo. L. Rev. 587
(2008), available here.
Labels: Evidence, Fisher, Fraud, FRE 403, FRE 404(b), Wire Fraud