United States Court of Appeals
For the First Circuit
No. 08-1539
UNITED STATES OF AMERICA,
Appellee,
v.
MICHAEL WYATT,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul Barbadoro, U.S. District Judge]
Before
Boudin, John R. Gibson,* and Howard,
Circuit Judges.
Susan E. Taylor for appellant.
Donald Feith, Assistant United States Attorney with whom
Thomas P Colantuono, United States Attorney, was on brief, for
appellee.
March 26, 2009
*
Of the Eighth Circuit, sitting by designation.
HOWARD, Circuit Judge. Michael Wyatt (Wyatt) appeals his
conviction of one count of conspiracy to commit wire fraud, in
violation of 18 U.S.C. §§ 1343, 1349, claiming (1) that he was the
recipient of ineffective assistance of counsel, (2) that the
district judge improperly granted a motion in limine requesting
admission of inappropriate character evidence, and (3) that there
was insufficient evidence to support the jury's finding of intent
and consequently, the district court erred in denying his motion
for acquittal. We affirm.
I. Background
Wyatt was, for a time, a residential loan officer, who
eventually went into business as a broker for commercial and
venture capital lending.1 Early 2003 proved to be a fateful time
for Wyatt's new business venture. Around that time, he met
Virginia Moate (Moate), an escrow agent in New Jersey, as well as
Larry Stallings and his son, Christopher Stallings (the Stallings),
Wyatt's soon-to-be business partners and co-conspirators. Acting
on Wyatt's instructions, Moate opened an escrow account for Wyatt's
new venture.
With these preparations laid, Wyatt was able to engage in
the transactions that gave rise to the indictment. These
1
Because these facts bear on Wyatt's sufficiency of the evidence
claim, we relate the facts in the light most favorable to the
jury's verdict. United States v. Cruz-Diaz, 550 F.3d 169, 171 (1st
Cir. 2008). We will further augment our overview of the case, as
necessary, in our discussion.
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transactions involved seeking high-risk borrowers and offering to
facilitate sizable loans, on the order of several million dollars.
As part of these loans, Wyatt would insist on substantial initial
payments, which would, at closing, be used to procure an "insurance
binder" to protect the lender(s) against default. The loan
documents made clear that these initial payments were to be held in
escrow (in the account created by Moate) until closing. And should
the transaction fail to close, these payments were to be fully
refundable.
Wyatt pitched and negotiated three such transactions.
One was with Beaconvision, a software development company located
in Nashua, NH, in the amount of two million dollars, with advance
fee payments totaling $200,000. The second was with InCiti
Apparel, a clothing company, in the amount of one million dollars
with an advance fee payment of $100,000. The third such
transaction, with Market and Match, a Nevada entity specializing in
fertilizer and municipal waste, was in the amount of two million
dollars with advance fees of $200,000. The evidence showed,
despite contrary promises to his clients, that Wyatt directed Moate
to disburse the purportedly escrowed advance fee payments to
himself and his co-conspirators, including the Stallings. All
told, Wyatt directed that approximately $98,000 of the $500,000
total advance fee payments be disbursed to him. None of these
loans ever closed, and no part of the advance fee payments --
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including the portions that Wyatt ordered disbursed to himself --
were refunded to any of the victims.
After trial, the jury found the defendant guilty on the
sole count of conspiracy to commit wire fraud, and the district
court sentenced Wyatt to fifty months incarceration followed by
three years of supervised release. This appeal timely followed.
II. Ineffective Assistance of Counsel
Wyatt's primary contention, made for the first time on
appeal, is that he received ineffective assistance of counsel at
trial. He notes that, in his opening statement, his trial counsel
repeatedly promised the jury that Wyatt would testify in his own
defense, but, when the time came, advised him not to testify.
Wyatt, acting on this advice, chose not to testify. He claims that
this turn of events cost him in the eyes of the jury. See Ouber v.
Guarino, 293 F.3d 19, 28 (1st Cir. 2002) (affirming decision
granting petition for writ of habeas corpus based on ineffective
assistance of counsel where in opening statement, defense counsel
promised jury that defendant would testify, counsel structured
entire defense around defendant's testimony, yet on advice of
counsel, defendant ultimately did not testify).
We have consistently maintained that ineffective
assistance of counsel claims should ordinarily be litigated in the
first instance in district court. United States v. Hicks, 531 F.3d
49, 55 (1st Cir.), cert denied, 129 S. Ct. 590 (2008) (citing
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Massaro v. United States, 538 U.S. 500, 505 (2003)); United States
v. Griffin, 524 F.3d 71, 75 n.1 (1st Cir. 2008).
It is true that we make an exception for cases in which
trial counsel's ineffectiveness is manifestly apparent from the
record, Hicks, 531 F.3d at 55, but this is not such a case. The
record is devoid of trial counsel's response to Wyatt's claim of
ineffectiveness, including the circumstances that prompted him to
make the promise to the jury, as well as the motivation for, and
substance of, his alleged advice to Wyatt regarding the possibility
of Wyatt testifying. These are precisely the kinds of issues that
should be ventilated in a trial court in the first instance. See
Hicks, 531 F.3d at 56; United States v. Torres-Rosario, 447 F.3d
61, 64-65 (1st Cir. 2006). Consequently, Wyatt's claim for
ineffective assistance of counsel cannot be sustained on direct
appeal, and this claim instead must be remitted to a petition for
collateral relief pursuant to 28 U.S.C. § 2255.
III. Evidentiary Objection
Wyatt next takes issue with the district court's
tentative decision to deny his motion in limine and tentative
decision to permit the government to cross-examine Wyatt regarding
a similar transaction to prove Wyatt's intent, knowledge, and
absence of mistake pursuant to Federal Rule of Evidence 404(b).
Further background frames the tentative ruling more
clearly. Well in advance of trial, Wyatt filed a motion to
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"suppress" evidence regarding a similar transaction between himself
and Pedro Diaz-Sanchez (Diaz-Sanchez), which did not involve the
Stallings. The district court denied the motion without prejudice,
and the government revived the controversy when it filed a motion
in limine seeking to introduce the same evidence pursuant to
Federal Rule of Evidence 404(b). The government, however, agreed
not to introduce any such evidence in its case-in-chief, and
apparently without objection from Wyatt, the district court took
the government's motion under advisement.
At the close of the government's case-in-chief, Wyatt
sought the district court's ruling on the government's motion in
limine if he were to testify. At the court's request, the
government proffered evidence suggesting that Wyatt engaged in a
similar transaction with Diaz-Sanchez in which he received a fully
refundable commitment fee of $25,000 to secure a loan of eight
million dollars. Within days of receiving the fee, Wyatt withdrew
$20,000 of the fee in cash, the loan never closed, and Wyatt never
refunded the fee. The district court suggested that this evidence,
despite some weaknesses,2 was highly probative of Wyatt's intent.
Nevertheless, the district judge made clear that he had
not made up his mind, and needed to hear additional information
2
The government conceded that it could not prove direct
conversations between Diaz-Sanchez and Wyatt, and it was unable to
determine whether the intermediary through whom the loan was
negotiated, a woman named Carmen, was associated with Wyatt's
company, Weller Financial.
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before reaching a conclusion. Consequently, he reserved judgment
until after he heard Wyatt's testimony, and explicitly instructed
the government to approach the bench before introducing the
evidence so that he could confer with counsel, and confirm his
tentative ruling. Ultimately, evidence of the Diaz-Sanchez
transaction was never introduced.
Nonetheless, Wyatt claims that the court's tentative
ruling prejudiced him because the court's tentative ruling
dissuaded him from testifying. Further, Wyatt claims that the
district court's tentative conclusion was erroneous because the
evidence amounted to impermissible character evidence under Rule
404.
Although we have long required that evidence admitted
pursuant to Rule 404(b) have "some special relevance" other than to
prove that the defendant had a propensity to commit the crime in
question, United States v. Jiminez, 507 F.3d 13, 17 (1st Cir.
2007), cert. denied, 128 S. Ct. 1321 (2008), this standard is not
"particularly demanding." Id. Thus, a district court's decision
under Rule 404(b) is accorded deference. United States v. Landrau-
Lopez, 444 F.3d 19, 23 (1st Cir.), cert. denied, 549 U.S. 873
(2006) (citing United States v. Williams, 985 F.2d 634, 637 (1st
Cir. 1993)).
In this case, the district court did not abuse its
discretion by preliminarily ruling that evidence of the Diaz-
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Sanchez transaction would be admissible to show Wyatt's intent,
knowledge, and absence of mistake. Even though it was not
identical to the transactions that Wyatt participated in with the
Stallings, the Diaz-Sanchez transaction bore enough indicia of
similarity that the District Court did not abuse its discretion
when it concluded that evidence of the transaction would assist the
jury in determining whether Wyatt was "duped" by the Stallings, or
whether Wyatt fully understood the fraudulent nature of the charged
transactions. Such a conclusion is in harmony with our
understanding of Rule 404(b). Landrau-Lopez, 444 F.3d at 24
(citing United States v. Spinosa, 982 F.3d 620, 628 (1st Cir. 1992)
(other bad act need not be identical to crime charged so long as it
is sufficiently similar to permit juror to draw reasonable
inference probative of knowledge or intent).3
IV. Sufficiency of the Evidence
Wyatt concludes his appeal with a challenge to the
sufficiency of the evidence. His sufficiency argument is limited
to a claim that the district court erred in denying his motion for
an acquittal pursuant to Federal Rule of Criminal Procedure 29
3
In his brief, Wyatt claims that the district court's tentative
decision was an improper balancing of the potential prejudice of
the evidence against its potential probative value under Rule 403.
Given our generally deferential review of a district court's
balancing of prejudice, see United States v. Morales-Aldahondo, 524
F.3d 115, 119-120 (1st Cir.), cert. denied, 129 S. Ct. 512 (2008),
this objection must fail for the same reasons as Wyatt's Rule
404(b) objection.
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because there was insufficient evidence as to his intent. Where a
defendant has moved for a judgment of acquittal on sufficiency
grounds, our review is de novo. United States v. Cruz-Rodriguez,
541 F.3d 19, 26 (1st Cir. 2008), cert. denied, 129 S. Ct. 1017
(2009). Nevertheless, in assessing the sufficiency of the
evidence, we examine the evidence -- direct and circumstantial --
as well as all plausible inferences drawn therefrom, in the light
most favorable to the verdict, and determine whether a rational
fact finder could conclude beyond a reasonable doubt that the
defendant committed the charged crime. Id.
To sustain a conspiracy conviction, the government must
adduce proof beyond a reasonable doubt (1) that an agreement
existed to commit the particular crime; (2) that the defendant knew
of the agreement; and (3) that he voluntarily participated in it.
Id. In other words, the government must prove that the defendant
joined and participated in the conspiracy with the knowledge of,
and the intent to further, its unlawful objective. 1 Sand et al.,
Modern Federal Jury Instructions, Instruction 19-3S (2005). It is
important to note, however, that such proof may consist of
circumstantial evidence, such as acts committed by the defendant
that further the conspiracy's purpose. Id.
On this standard, it is plain to us that a reasonable
fact finder could conclude beyond a reasonable doubt that Wyatt
possessed the requisite intent. Wyatt took several steps, the
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facts of which are undisputed, that a reasonable fact finder could
believe served to further the goals of the conspiracy. He made
presentations to several counterparties to induce them to wire
money for the scheme. He ordered the withdrawal of monies from an
escrow account, and disbursement of the funds not only to the
Stallings, but also to himself. Finally, Wyatt retained the
roughly $100,000 that was disbursed to his own account and appears
to have made no effort to return these funds when it became clear
that the loans at issue would not close. From these facts, a
rational fact finder could indeed conclude that Wyatt intended to
agree with his co-conspirators to engage in a scheme to harvest
loan advance fees from unsuspecting borrowers, and that Wyatt, who
did not return any funds that were disbursed to him, intended to
commit the underlying offense.
Wyatt does not dispute the character and nature of this
evidence. Rather he argues, based on other evidence such as the
testimony of Moate, that he believed the Stallings had the capacity
and intent to engage in the lending transactions. Wyatt further
argues that if sophisticated business owners could fall prey to the
scam, so could he. Finally, Wyatt argues that his disassociation
from the Stallings, while they were engaging in further
transactions and well in advance of their arrest, is also
indicative of his innocence.
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Although the jury was free to credit this evidence if it
so chose, we cannot conclude that a rational fact finder must
credit the evidence Wyatt cites over the government's powerful
evidence indicating intent: namely, that Wyatt actively solicited
victims, induced them to send him large amounts of money, which he,
along with others, retained, and made no effort to disgorge.
As intent was the only element to which Wyatt has lodged
a sufficiency objection, we cannot conclude that the jury reached
a conclusion that the evidence would not support.
V. Conclusion
All of Wyatt's arguments having proven unavailing, his
conviction is affirmed in all respects.
It is so ordered.
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