Unpublished Disposition, 884 F.2d 582 (9th Cir. 1988)

MEMORANDUM^* 

Benny W. Carlson and his co-defendant, Richard Candelaria, were both charged with securities fraud in connection with the sale of International Teledata Corporation (ITC) stock at Montgomery Securities brokerage firm in February, 1983. Both Carlson and Candelaria were also charged with wire fraud involving the same sale of stock. Carlson alone was charged with making and filing a false federal income tax return for the year 1983 in violation of 26 U.S.C. § 7206.¹  This charge involved misclassifying the stock transaction as long-term capital gains when it should have been classified as short-term capital gains.

Carlson filed a pre-trial motion to dismiss the indictment due to preindictment delay and subsequently filed a supplement to the motion. The hearing on the motion was held before a magistrate on July 17, 1987, at which time the motion was denied.

Carlson and Candelaria's joint trial began on November 16, 1987 and resulted in a mistrial. The retrial began on February 16, 1988 during which Carlson made several motions to sever pursuant to Fed. R. Crim. P. 14. Carlson argued that evidence submitted against Candelaria unfairly prejudiced Carlson even though the jury was instructed to disregard the evidence in relation to Carlson. These motions were denied.

Carlson and Candelaria were acquitted on the fraud and wire fraud charges. Carlson was convicted of tax fraud. Carlson filed a motion for judgment of acquittalpursuant to Fed. R. Crim. P. 29(c) which was denied.

Carlson now appeals the district court's refusal to dismiss the indictment due to preindictment delay, its decision to admit the evidence used against Candelaria which allegedly prejudiced Carlson, and its refusal to sever.

A district court's decision to deny a motion to dismiss an indictment due to preindictment delay is reviewed for an abuse of discretion. United States v. Sherlock, 865 F.2d 1069, 1073 (9th Cir. 1989). A district court's balancing of the probative value of evidence against its prejudicial harm under Fed.R.Evid. 403 is reviewed for an abuse of discretion. United States v. Rubio, 727 F.2d 786, 798 (9th Cir. 1983). A district court's decision denying a motion to sever pursuant to Fed. R. Crim. P. 12(b) (5) is reviewed for an abuse of discretion. United States v. Burgess, 791 F.2d 676, 678 (9th Cir. 1986).

The district court did not abuse its discretion by denying

Carlson's motion to dismiss the indictment due to

preindictment delay.

For charges to be dismissed because of preindictment delay, the defendant must establish that the delay has risen to the level of a denial of due process. To do this, the defendant must satisfy a two prong test established in United States v. Moran, 759 F.2d 777 (9th Cir. 1985), cert. denied, 474 U.S. 1102 (1986). The defendant must first prove in definite, not speculative terms that the preindictment delay caused actual prejudice to his case. Id. at 780-81. Second, the defendant must show that the length of the delay, balanced against the reasons for the delay violates fundamental concepts of justice. Id. at 782.

Carlson fails to prove that he suffered actual prejudice due

to preindictment delay.

Carlson contends that he suffered actual prejudice due to preindictment delay because the delay caused the unavailability of three witnesses at trial: Mr. Wizeman, Charles Anshen, and E.R. Feldman. Carlson asserts that Wizeman was a key witness because Wizeman signed documents which facilitated the stock transfer and thus would have testified about this transfer. Carlson fails, however, to explain how this testimony would have provided him with a defense.

Carlson also argues that Anshen and Feldman were key witnesses because they were custodians of record for Columbia Stock Transfer Company, the company that handled the stock transaction central to this case. Carlson contends that there was confusion at trial over the stock transfer records because Anshen and Feldman did not testify. This assertion, however, does not support Carlson's claim that he suffered prejudice because Anshen and Feldman were unavailable at trial. As is the case with Wizeman, Carlson fails to prove that Anshen and Feldman would have provided him with a defense.

Carlson also fails to prove that the witnesses were unavailable. At the hearing on Carlson's motion to dismiss, the magistrate ordered the government to provide Carlson with the address and phone number of the Wyndham hotel in Nassau where the government stated that Wizeman was working; the phone number where Wizeman was staying at the time in Germany; and the address of the home Wizeman owned in Las Vegas. The magistrate also ordered the government to provide Carlson with Anshen and Feldman's address. Carlson makes no claim that this information was insufficient or that he tried to locate the witnesses but failed. In fact, Carlson fails to offer any evidence at all to prove his assertion of the witnesses' unavailability. In addition, Carlson fails to establish a link between the preindictment delay and this alleged unavailability of the witnesses. Nowhere is it shown that Wizeman, Anshen, and Feldman would have been available had it not been for the delay.

Due to Carlson's failure to prove that the witnesses' testimony would have meaningfully contributed to Carlson's defense, that the witnesses were indeed unavailable, and that the preindictment delay caused the witnesses' unavailability, Carlson has not made the required showing in definite terms of actual prejudice due to the preindictment delay. See Moran, 759 F.2d at 780-81.

Carlson fails to prove that the preindictment delay violated

fundamental concepts of justice.

Carlson contends that the preindictment delay violated fundamental concepts of justice because it was designed to harass and gain a tactical advantage over him. Carlson argues that the government carried out this design by handing down the indictment on the "eve of the running of the statute of limitations." 26 U.S.C. § 6531 designates a six year statute of limitation for offenses described in 26 U.S.C. § 7206(1), the statute under which Carlson was convicted. The stock transaction in question occurred in February, 1983 and the fraudulent tax return was filed for the year 1983. Carlson was indicted in January 1987, two years short of the running of the statute of limitations. Thus, Carlson's claim that the indictment was handed down on the eve of the running of the statute of limitations is clearly without merit.

Carlson fails to offer any evidence to support his allegation that the length of the preindictment delay violated fundamental concepts of justice. Statutes of limitations are considered primary guarantees against prejudice resulting from the passage of time between the crime and the indictment. United States v. Marion, 404 U.S. 307, 322 (1971). Since the charges against Carlson were brought well within the statute of limitations, his bald assertions of injustice are inadequate to prove that the preindictment delay was unreasonable.

Because Carlson fails to show that he suffered actual prejudice due to preindictment delay and that the delay violated fundamental concepts of justice, we conclude that Carlson was not denied his right to due process and that the district court did not abuse its discretion by refusing to dismiss the indictment.

Carlson was not unfairly prejudiced by evidence admitted

against Candelaria but which referred to Carlson

in Carlson and Candelaria's joint trial.

During trial, evidence was admitted against Candelaria that, according to Carlson, was signed by Carlson or specifically referred to Carlson. Pursuant to Fed.R.Evid. 105, the court instructed the jury to consider this evidence only against Candelaria and to disregard it with respect to Carlson.² 

Carlson contends that he was denied a fair and impartial trial because the limiting jury instructions provided inadequate protection against the prejudicial effects of the evidence. Thus, Carlson argues, the court abused its discretion by admitting the evidence and giving limiting jury instructions rather than excluding the evidence pursuant to Fed.R.Evid. 403³  or ordering a separate trial for Carlson pursuant to Fed.R.Crim. P 14.⁴ 

Carlson analogizes this case to Bruton v. U.S., 391 U.S. 123 (1968), in which the confession of a co-defendant, which implicated the defendant, was admitted at the defendants' joint trial. The Supreme Court found that the limiting jury instructions given by the district court were inadequate to protect the defendant from the prejudicial effects of the co-defendant's confession. Carlson contends that he was prejudiced by the evidence to the same extent that Bruton was prejudiced by his co-defendant's confession because the evidence went "straight to the heart" of Carlson's conviction. However, Carlson fails to offer any evidence to support this assertion.

Because Carlson fails to show that he was prejudiced by the evidence, he also fails to show that the limiting jury instructions were inadequate to ensure him a fair and impartial trial. We therefore find that the district court did not abuse its discretion by admitting the evidence and refusing to provide Carlson with a separate trial.

AFFIRMED.