Unpublished Disposition, 846 F.2d 1383 (9th Cir. 1981)

MEMORANDUM^** 

Dana Nicholson appeals from her conviction for mail fraud, willful filing of a false tax return, and failure to file a tax return. The district court had jurisdiction pursuant to 18 U.S.C. § 3231. This court has jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.

The defendant's husband, Nicholas Nicholson became involved with the Western Conference Benefits Trust (WCBT) in 1979 when his company, Far West Administrators (FWA), became a sub-administrator to pay WCBT claims. Defendant Dana Nicholson worked for FWA throughout the period of the alleged fraud. She had responsibility for all of the books and checking accounts from October 1979 through August 1980. She earned $3,000 per month, was vice president of administration, attended staff meetings, and compiled the FWA monthly report which included information relating to the trusts and their bank accounts. Dana Nicholson was convicted on 14 counts of mail fraud under 18 U.S.C. § 1341, and tax fraud and failure to file a tax return under 26 U.S.C. §§ 7206(1) and 7201.

Dana Nicholson was placed on probation for five years, and ordered to make restitution of $86,626 and to perform 1,500 hours of community service. She timely appeals.

Dana Nicholson did not renew her motion to sever at the close of evidence. Because she failed to preserve the issue for appeal, it is waived. See United States v. Loya, 807 F.2d 1483, 1494 (9th Cir. 1987). Even if defendant had preserved the issue, the district court did not abuse its discretion in denying the motion to sever. The jury's demonstrated ability to compartmentalize the evidence by convicting some defendants on certain counts while acquitting others refutes the defendant's assertion that the joinder of her case to the co-defendants was prejudicial. See United States v. Kaplan, 554 F.2d 958, 967 (9th Cir.), cert. denied, 434 U.S. 956 (1977).

Defendant's motion to dismiss for pre-indictment delay was properly denied because she failed to prove actual prejudice resulting from pre-indictment delay and intentional or reckless behavior on the part of the government responsible for the delay. See United States v. Lovasco, 431 U.S. 783 (1977); United States v. Moran, 759 F.2d 777, 780 (9th Cir. 1985), cert. denied, 474 U.S. 1102 (1986). Claims that missing witnesses might have been useful do not establish actual prejudice. United States v. Mays, 549 F.2d 670, 677 (9th Cir. 1977). Furthermore, the district judge's finding that the government did not intentionally or negligently delay the investigation was not an abuse of discretion. See United States v. Rodgers, 722 F.2d 557, 561 (9th Cir. 1983).

The admission of color photographs of the Nicholsons' home was not an abuse of discretion and does not require a reversal of defendant's conviction. The district judge did not err under Rule 403 because she adequately weighed the probative value and prejudicial effect of the pictures before admitting them. See United States v. Potter, 616 F.2d 384, 388 (9th Cir. 1979), cert. denied, 449 U.S. 832 (1980); United States v. Sangrey, 586 F.2d 1312, 1314 (9th Cir. 1978).

After reviewing the evidence in the light most favorable to the verdict, we cannot say that no rational jury could find defendant guilty beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 324 (1979); United States v. Larm, 824 F.2d 780, 782 (9th Cir. 1987), cert. denied, 98 L.Ed 1019 (1988). The government satisfies the requirement of proof of specific intent under Sec. 1341 if it proves the existence of a scheme reasonably calculated to deceive persons of ordinary prudence and comprehension, and this intention is shown by examining the scheme itself. United States v. Green, 745 F.2d 1205, 1207 (9th Cir. 1984), cert. denied, 474 U.S. 925 (1985). Specific intent may be proven by circumstantial evidence. Phillips v. United States, 356 F.2d 297, 303 (9th Cir. 1965), cert. denied, 384 U.S. 952 (1966).

Proof of the first channel of embezzlement was provided by the testimony of Dotson Bennett that the Compete "dues" of three dollars per participant were never approved and by evidence that Dana Nicholson received $52,038 from Compete before the March 1981 split, $83,626 from Compete after the split, and $143,560 from Association Marketing Services after the split. Five witnesses involved with the various companies testified that Dana Nicholson provided no services to Compete. As to the $320,000 allegedly embezzled from Compete to the Nicholsons via two shell corporations, the government showed that Dana Nicholson co-signed with her husband for a transfer of $325,000 from Compete to First Guarantee Funding Company on April 8, 1981. Four days later, the funds were transferred to Risk Management Assurance Group, and in July of 1981 the funds were transferred into the Nicholsons' personal bank account. The Nicholsons signed two loan applications in the summer of 1981, neither of which reflected this $320,000 "loan."

The jury found Dana Nicholson guilty under 26 U.S.C. § 7206 of filing a materially false tax return in 1980, and for failure to file a tax return in 1981. The defendant was fully aware that she received funds from Compete in 1980. Those funds were omitted on the 1980 tax return, which she signed. Knowledge may be inferred from the facts and circumstances of the case and her signature on the tax return is prima facie evidence that she knew of its contents. United States v. Harper, 458 F.2d 891, 894 (7th Cir. 1971), cert. denied, 406 U.S. 930 (1972); see also United States v. Shelton, 588 F.2d 1242 (9th Cir. 1978), cert. denied, 442 U.S. 909 (1979).

Viewing all of the above evidence in the light most favorable to the government, there was sufficient evidence for the jury to conclude that the money was unlawfully taken from Compete and to infer defendant's intent to defraud. There was also sufficient evidence for a rational jury to find that defendant knew of the receipt of the Compete dues, knew that it was income, and knew that it was not disclosed on her tax return. As for failure to file a tax return in 1981, the government established that the Nicholsons had a joint income of $779,816 in 1981 and that Dana Nicholson knew that she had a duty to file a tax return.

AFFIRMED.