Unpublished Disposition, 924 F.2d 1064 (9th Cir. 1991)

MEMORANDUM^* 

Appellants appeal their convictions for mail fraud in violation of 18 U.S.C. § 1341, wire fraud in violation of 18 U.S.C. § 1343 and conspiracy to commit these frauds in violation of 18 U.S.C. § 371. Appellants assert that their sixth amendment right to compulsory process for witnesses in their behalf was violated. They also contend that several of the district court's evidentiary rulings were erroneous and that the evidence was insufficient to support the jury's guilty verdicts. We affirm.

FACTS

The evidence produced at trial established that appellants defrauded the Dunes Hotel and Country Club in 1983 by manipulating the resort's credit policies. Appellant Wilson would recommend people to the Dunes for credit and arrange for them to travel to Las Vegas. Upon arrival in Las Vegas these individuals would use their credit to obtain chips. After gambling with a portion of these chips they would deliver the balance to appellants. Appellants would then arrange to have other individuals cash in the chips.

Zvi Hager, one of the government's primary witnesses, participated in appellants' fraudulent scheme. He testified that on three different occasions he worked in Las Vegas for appellants, cashing in large amounts of chips. Hager estimated that he cashed in approximately $750,000 in chips on these trips.

Zvi Hager's motives for testifying against appellants were fully developed at trial. He admitted, for example, that he was anxious to get revenge against appellants for an incident that occurred in 1985.¹  It also was developed at trial that Hager had told Wilson that he would not come to court if Wilson would pay him $30,000.

The defense subpoenaed Rabbi and Baruch Hager, father and brother of Zvi. Both allegedly had attempted to extort money from appellants. Rabbi Hager had approached Thomas Drost, Chief of Security at the Dunes, in May 1985. After a meeting with the three, Drost concluded that the April 1983 junket organized by Wilson was part of a scheme to defraud the Dunes. Two years earlier, however, after some investigation he had concluded just the opposite. What the Hagers would have testified to at trial is unknown.

When Rabbi and Baruch Hager did not appear on the first day of trial a bench warrant for their arrest was issued. On the fourth day of trial, defense counsel asked if the arrest warrants had been forwarded to New York where the Hagers lived. When the court indicated it was not aware of any problem, defense counsel told the court they would check on the situation and keep the court informed of any problems. Apparently the marshal and the local FBI office between them dropped the ball, neither making any effort to execute the warrants.

On the final day of trial, almost a week later, appellants attempted to recall Zvi Hager as a defense witness. The court sustained the government's objection to the recall. Since Rabbi and Baruch Hager had still not been brought to court, the court offered to consider continuing the trial until the warrants were executed. Appellants declined and rested their case. Later that same day, however, appellants moved for a continuance or, in the alternative, for a missing witness instruction. The district court denied both requests.

A. Appellant's sixth amendment rights were not violated.

The bench warrants issued to obtain the appearance of Rabbi and Baruch Hager were never executed and the government has been unable to explain why. Appellants contend that their sixth amendment rights were violated when the district court denied their request for a continuance to secure the attendance of the missing witnesses. The district court's decision to deny the continuance is reviewed for an abuse of discretion. United States v. Sterling, 742 F.2d 521, 527 (9th Cir. 1984), cert. denied, 471 U.S. 1099 (1985). When requesting a continuance to secure the presence of witnesses a defendant "must show who they are, what their testimony will be, that the testimony will be competent and relevant, that the witnesses can probably be obtained if the continuance is granted, and [that] due diligence has been used to obtain their attendance on the day set for trial." United States v. Hoyos, 573 F.2d 1111, 1114 (9th Cir. 1978) (quotation omitted).

We are troubled by the fact that the bench warrants were never executed in this case. The Hagers were hostile witnesses whose presence could not be secured without the government's assistance. Since appellants could not secure the cooperation of the witnesses, it was understandably difficult for them to make a clear showing as to the content, competence and relevance of the testimony, and we would be inclined to afford some latitude in that respect. We need not decide the issue on that basis, however, because appellants clearly failed to use due diligence in obtaining the Hagers' presence. For that reason we conclude that the district court did not abuse its discretion in denying appellants' request for a continuance.

The record reveals that appellants assumed the burden of keeping the court informed of any problems with the warrants and failed to do so. They should have pressed for execution of the warrants days earlier and asked the court for help in the face of the marshal's inaction. Furthermore, they chose to rest their case when the court offered to consider granting a continuance. The district court did not abuse its discretion by denying the motion for a continuance as untimely given appellants' own failure to act diligently to ensure the presence of the witnesses.

B. The court did not err by refusing to recall Zvi Hager as a defense witness.

The district court did not permit appellants to recall Zvi Hager as a defense witness. Appellants contend that this ruling violated their sixth amendment rights. They argue that they should have been permitted to develop further evidence of Zvi Hager's bias and question him regarding the Hager family's interview with investigator Drost.

We review the district court's decision to limit further cross-examination of Zvi Hager for an abuse of discretion. United States v. Simtob, 901 F.2d 799, 804 (9th Cir. 1990). The district court did not abuse its discretion by barring further cross-examination. Zvi Hager's bias against the appellants was thoroughly developed and his character completely impeached during his initial testimony. See United States v. DeRosa, 670 F.2d 889, 896 (9th Cir.), cert. denied, 459 U.S. 993 and 459 U.S. 1-014 (1982).

We also reject appellants' assertion that the district court's ruling prevented them from developing their defense through testimony they could have elicited from Zvi Hager regarding the Drost interview. In arguing for Zvi Hager's recall, appellants made only a passing reference to the Drost interview and made it patently clear that they intended to focus on impeaching Zvi Hager.²  Under these circumstances the district court did not err by refusing to recall the witness.

C. The district court did not err when it excluded evidence of a 1978 fraudulent scheme which originated in the New York junket office.

Thomas Drost, the investigator for the Dunes Hotel, conducted an investigation of a 1978 Las Vegas junket known as the Perfetti junket. This investigation implicated Mr. Weintraub, a supervisor of the hotel's New York junket office, in a scheme to defraud the Dunes. Members of the Perfetti junket reported that they had paid money to Weintraub that was never reported to the Dunes. Appellants contend that this information was relevant to show that Mr. Weintraub rather than the plaintiffs might have been behind the fraudulent junkets at issue in this case. The court ruled that this information was collateral and irrelevant.

The district court's determination of relevancy is reviewed for an abuse of discretion. United States v. Burreson, 643 F.2d 1344, 1349 (9th Cir.), cert. denied, 454 U.S. 830 and 454 U.S. 847 (1981). The district court's determination that a connection between the two junkets was a necessary predicate to the admission of this evidence was not erroneous. See United States v. Monks, 774 F.2d 945, 954 (9th Cir. 1985) (court did not abuse its discretion by finding testimony that a third person had engaged in earlier criminal activity to be irrelevant when no evidence connected that third person with the criminal conduct at issue).

D. The hotel's business records were properly admitted by the district court.

Appellants assert that the district court erred by allowing into evidence two types of Dunes business records. First, the district court admitted Dunes credit records which detailed the credit history and reference sources for customers seeking credit at the Dunes. The records originated in the hotel's New York junket office. The specific cards admitted at trial reflected that appellant Wilson recommended approximately fifteen individuals to the Dunes for credit. Second, the district court admitted records which reflected these individuals' credit transactions and gambling activities within the hotel when they came to Las Vegas. The government established that all of these records were prepared in the ordinary course of business by hotel employees.

1. The New York records.

Appellants argue that the cards originating in the New York office were so inherently unreliable that they should not have been admitted under the business records exception to the hearsay rule. See Fed.R.Evid. 803(6). Since an objection on this ground was not made we will review the district court's decision only if it rose to the level of plain error. United States v. Hurt, 795 F.2d 765, 773 (9th Cir. 1986), amended 808 F.2d 707 (1987), cert. denied, 484 U.S. 816 (1987).

Appellants assert that the credit records were unreliable because Weintraub, the supervisor of the Dunes' New York junket office, was suspended from all promotion and credit activities in May 1983. Evidence was presented, however, which weakens appellants' argument that the records were unreliable. Michael Hessling, the vice-president of casino operations at the resort, testified that Weintraub's authority to recommend people to the Dunes for credit and to collect on outstanding credit was reinstated in July 1983. Ms. Anderson, a credit manager at the Dunes, testified that the Dunes relied on the credit applications received from the New York office. No evidence suggests these records were tampered with or were other than what they purported to be. We find no plain error in their admission.

Appellants assert that the records detailing the credit transactions and playing habits of those individuals Wilson recommended for credit were irrelevant and inherently prejudicial. Appellants also contend that their admission violated the sixth amendment's confrontation clause. We reject these arguments.

We review the district court's relevancy determinations for abuse of discretion. United States v. Burreson, 643 F.2d at 1349. The player records showed that individuals who obtained credit at the Dunes through Wilson's recommendations took out their credit in the form of chips and, with few exceptions, did not repay the casino. The records also showed that these individuals left the playing areas with unused chips. This evidence supported the government's theory of conspiracy among the Wilson-recommended players, and was therefore relevant. Fed.R.Evid. 401.

We review for abuse of discretion the court's determination that the probative value of these records was not substantially outweighed by their prejudicial effect. United States v. Rubio, 727 F.2d 786, 798 (9th Cir. 1983). We reject appellants' assertion that the records were unfairly prejudicial. They have not shown prejudice which goes beyond the tendency the records had "to make a fact in issue more or less probable." United States v. Johnson, 820 F.2d 1065, 1069 (9th Cir. 1987).

Appellants also assert that the introduction of the records violated the confrontation clause. This circuit has held that the admission of records pursuant to the business records exception to the hearsay rule does not violate the sixth amendment. United States v. Miller, 830 F.2d 1073, 1077 (9th Cir. 1987), cert. denied, 485 U.S. 1033 (1988).

E. The district court properly excluded documents related to Zvi Hager's claims against the Dunes Hotel.

On one of Zvi Hager's trips the Dunes Hotel refused to return $32,000 in chips that he had on deposit with the hotel, nor would the hotel cash out approximately $6,000 of chips he had in his possession. This decision was based on a Dunes executive's determination that Hager had not gambled enough to justify such large amounts of chips. Hager returned to New York and appellant Wilson obtained counsel on Hager's behalf in order to secure the return of that money. The Dunes eventually settled the suit and forwarded a check to New York. Hager testified that he signed the check over to Wilson.

Appellants claim that the district court erred by excluding Hager's sworn creditor's bankruptcy claim filed in the Dunes Hotel's bankruptcy proceedings and a letter written by Hager to the New York Bar Association. They argue that this evidence was relevant to show that Hager gambled with his own money in Las Vegas and was not working for appellants.

The district court excluded the bankruptcy claim, ruling that it was extrinsic impeachment evidence inadmissible under Fed.R.Evid. 608(b). It also found that it simply would waste time and confuse the jury. Fed.R.Evid. 403. We do not undertake a Rule 608(b) analysis because we find that the court's determination under Rule 403 was not erroneous. See United States v. Miller, 874 F.2d 1255, 1266 (9th Cir. 1989) (court did not err by excluding evidence that may have been relevant to establish bias when relevance is outweighed by potential for confusion and wasting of court's time).

The bankruptcy claim was made up of two parts. The first consisted of a bankruptcy Proof of Claim against the Dunes for $53,036.00. The second part consisted of attachments which described appellants' conspiracy against the Dunes and Hager's role in it. These allegations were consistent with Zvi Hager's testimony at trial. The claim was denied on the grounds that Hager's interest in the monies was illegally obtained. Since the claim and the attached documents contradict one another and the claim was denied by the bankruptcy court, the exhibit was essentially worthless. The court did not abuse its discretion by excluding it under Rule 403.

Appellants also contend that a letter of complaint sent by Zvi Hager to the New York Bar Association was also improperly excluded. This letter alleged that Mr. Bertram Zweibon had successfully collected $32,200.00 on Hager's behalf and that Hager had never received the money. The district court found that the claim was inadmissible under Fed.R.Evid. 608(b).

The record reveals that appellants attempted to use the letter solely to impeach Hager's credibility. The district court excluded it as extrinsic evidence pursuant to Fed.R.Evid. 608(b). Appellants claim on appeal, that the letter should not have been excluded under Rule 608(b) because it went to a material issue in the case, was not raised at trial; accordingly we review only for plain error. United States v. Hurt, 795 F.2d at 773. The letter did not contend that Hager had used his own funds in Las Vegas. It is therefore not relevant to prove appellants' theory that Hager used his own funds. No plain error occurred.

F. The evidence was sufficient to support the jury's judgment.

Appellants contend that the evidence is not sufficient to sustain their convictions. We review this claim by considering whether a rational jury, taking the evidence in the light most favorable to the government, could have found the essential elements of the crime to exist beyond a reasonable doubt. United States v. Marabelles, 724 F.2d 1374, 1377 (9th Cir. 1984).

Appellants assert that the evidence is insufficient to support a finding that they intended to defraud the Dunes Hotel, a common element of all the offenses of which they were convicted. 18 U.S.C. §§ 371, 1341-1342. We reject this contention. The testimony by Green and Hager established that appellants operated a scheme to defraud the Dunes Hotel. According to their testimony Wilson recommended people to the Dunes for credit and convinced these individuals to use this credit to obtain large numbers of chips. These chips were then transferred to Wilson who arranged to have them returned for cash by a different individual so that the Dunes was unable to apply the chips to the proper credit line. Appellants' assertion that no fraudulent intent may be inferred from these actions ignores the fact that the evidence must be viewed in the light most favorable to the government. We find ample support in the record for the verdicts.

AFFIRMED.