Unpublished Disposition, 911 F.2d 739 (9th Cir. 1990)

No. 88-5010.

United States Court of Appeals, Ninth Circuit.

Before JAMES R. BROWNING and PREGERSON, Circuit Judges, and THOMAS J. MACBRIDE, District Judge.^* 

MEMORANDUM^** 

Raymond Girard appeals his conviction, following a jury trial, for three counts of mail fraud in violation of 18 U.S.C. § 1341. Girard contends that: (1) the evidence was insufficient to support his conviction; (2) the district court erred by denying the jury's request to receive the trial transcripts during its deliberations; and (3) the district court's erroneous evidentiary rulings were not harmless error. We have jurisdiction under 28 U.S.C. § 1291 and we affirm.

* Girard contends that the evidence was not sufficient to support his conviction for mail fraud because it did not prove that he knowingly participated in the fraudulent scheme, or that he intended to defraud investors. This contention lacks merit.

"Under 18 U.S.C. § 1341, the essential elements of mail fraud are: (1) a scheme to defraud; (2) a knowing use of the mail to execute the scheme." United States v. Beecroft, 608 F.2d 753, 757 (9th Cir. 1979).

To prove a fraudulent scheme, the government must demonstrate specific intent to defraud. Intent need not be established by direct evidence but may be inferred from the defendant's statements and conduct.... Deceitful statements of half-truths or the concealment of material facts is actual fraud under the statute. The government sustains its burden if it shows beyond a reasonable doubt either: (1) that the defendants knowingly made false representations or (2) that the scheme was reasonably calculated to deceive persons of ordinary prudence and comprehension.

Id. (citations omitted); accord United States v. Clevenger, 733 F.2d 1356, 1358 (9th Cir. 1984) (intent to defraud may be inferred from defendant's statements and conduct or established by proof that defendant knowingly participated in a fraudulent scheme).

Here, the government produced sufficient evidence against Girard to sustain his conviction. A sales brochure distributed by Crandall Gem Investments, Inc. ("Crandall") displayed Girard as the Managing Broker of its Los Angeles office. This brochure falsely represented that Crandall's clients had earned an average profit of 35% per year on their investments. Crandall's sales literature also represented that gems could be liquidated easily and quickly. In fact, no investors profited on gem sales, and Crandall's salespersons discouraged investor's liquidation requests. Investors who insisted on liquidating their gems always lost money. Girard also represented to investors that he received a commission rate of 13% of their purchases, and that they purchased gems at cost without markups. In fact, Crandall's profit was based on substantial markups in the price of gems over their cost. From these markups, Crandall paid its salespersons commissions of 25% to 42- 1/2%, and paid sales managers, such as Girard, additional commissions of 10%-15% on the sales of their group.

The evidence also showed that Girard made fraudulent misrepresentations to induce investments in Crandall's money market funds and annuity plans. Girard and other salespersons at Crandall persuaded customers to invest in the money market funds by offering high interest rates, instant liquidity, and other safety features. Girard and other salespersons also falsely represented to investors that assets worth 120%-200% of the money market funds were held as collateral for the money market funds, that the ratio of assets to funds was verified daily by a custodian, that the assets were held in trust, and that the money market funds were segregated from other Crandall accounts.

In particular, Girard was convicted of using these fraudulent sales tactics to solicit three investors; Fern Wolfe, Dorothy Wright, and Edward Wilson. Wolfe testified that she invested in Crandall's money market fund in reliance on Girard's and codefendant Terr's misrepresentations that this investment was profitable, safe, and liquid. Girard and Terr persuaded Wolfe to mortgage her house in order to increase her money market investment. Instead of putting Wolfe's money into the money market fund, however, Girard and Terr used the money to purchase gems, without Wolfe's permission. Girard also ignored Wolfe's repeated requests to liquidate her gem investments.

Wright testified that in reliance on advice from Girard and Terr, she mortgaged her home and invested in a Crandall annuity plan. Wright further testified that Girard purchased gems on margin for her without her permission, refused to liquidate her gems as he had promised, and misrepresented the profit she had earned on her investment.

Wilson testified that he initially had invested in the Crandall money market fund. Terr used this money to purchase gems on margin for Wilson, without Wilson's permission. Girard knew that gems already had been purchased on margin for Wilson without Wilson's permission. Nevertheless, Girard persuaded Wilson to refinance his house and invest more money in gems by leading Wilson to believe that he had already profited on his gem investment, and telling Wilson that he would receive a 40%-50% return on his additional investment.

Thus, the government presented ample evidence to show that Girard and other Crandall salespersons engaged in a scheme to defraud their clients by knowingly making "deceitful statements of half-truths" and concealing material facts. See Beecroft, 608 F.2d at 757. The testimony from Wolfe, Wright, and Wilson also demonstrated that this "scheme was reasonably calculated to deceive persons of ordinary prudence and comprehension." See id. Therefore, the evidence was sufficient to allow a rational jury to infer that Girard knowingly participated in the scheme to defraud investors. See id. Finally, the jury could infer Girard's intent to defraud from both his knowing participation in the scheme to defraud, and from his statements and conduct. See Clevenger, 733 F.2d at 1358.

II

Girard contends that the district court erred by denying the jury's request to receive the trial transcript during its deliberations. Girard argues that this request may have indicated that the jury had a reasonable doubt regarding the evidence against him. These contentions lack merit.

A trial court is given broad discretion in deciding whether to provide transcripts requested by the jury. United States v. Nolan, 700 F.2d 479, 486 (9th Cir.), cert. denied, 462 U.S. 1123 (1983). In general, rereading testimony during the jury's deliberations "is disfavored because of the emphasis it places on specific testimony and the delay it causes in the trial." Id. (citing United States v. De Palma, 414 F.2d 394, 396 (9th Cir. 1969), cert. denied, 396 U.S. 1046 (1970)). The district court must consider the particular facts and circumstances of the case when deciding whether to allow the rereading of testimony. United States v. Sacco, 869 F.2d 499, 501 (9th Cir. 1989).

Here, on the first day of deliberations, the jury sent the district judge a note requesting a copy of the trial transcripts. The judge responded that the transcripts were not available and told the jurors that they would have to rely on their memory of the testimony.

The district judge did not abuse his discretion by denying the jury's request for the transcripts. The jury's note did not specify any reason for the request, nor indicate that the jurors were concerned about any particular testimony. Nor did the district judge err by failing to ask the jury which portions of the transcript it wanted, because providing the jury with parts of the transcript might have placed undue emphasis on certain testimony. See Sacco, 869 F.2d at 501; De Palma, 414 F.2d at 396. Moreover, the trial of Girard and his codefendants lasted four weeks; to allow the jury to read the transcripts when they were available would have unduly delayed its deliberations. See De Palma, 414 F.2d at 396.

III

Girard contends that two of the district court's erroneous evidentiary rulings are not harmless error as to him.¹  Specifically, Girard contends that the exclusion of evidence of insurance recovery by investors Fern Wolfe and Dorothy Wilson, and the admission of testimony regarding Wolfe's and Wright's investment motives were prejudicial. These contentions lack merit.

A district court's nonconstitutional errors are not reversible unless it is more probable than not that they affected the verdict. United States v. Soulard, 730 F.2d 1292, 1296 (9th Cir. 1984); Fed. R. Crim. P. 52(a).

In light of all the evidence against Girard, it is not more probable than not that these errors affected the jury's verdict. The evidence showed that Wolfe and Wright invested in Crandall in reliance on Girard's and codefendant Terr's fraudulent misrepresentations. The fact that Wolfe and Wright received a settlement from Crandall's insurer does not negate the substantial evidence that Girard knowingly participated in the scheme to defraud.

Similarly, admitting the testimony regarding Wolfe's and Wright's investment motives was harmless error. The case against Girard turned on proving the existence of a scheme to defraud and his specific intent to deceive or defraud. There was ample evidence to prove these elements of the offense. Wolfe's and Wright's investment motives were of only the most tangential importance in establishing Girard's knowing participation in Crandall's scheme to defraud and his specific intent to defraud.

Thus, we conclude that the exclusion of the evidence of insurance recovery and the admission of testimony regarding investor motives were harmless error. See id.

AFFIRMED.