Unpublished Disposition, 860 F.2d 1090 (9th Cir. 1988)

MEMORANDUM^* 

Appellants appeal from their jury trial convictions of numerous offenses arising from a scheme to have a certain insurance company selected as the carrier for an ERISA trust.

Appellants argue that there was a misjoinder and that severance was mandated by Fed. R. Crim. P. 8 and 14.

The propriety of joinder under Fed. R. Crim. P. 8 is a question of law reviewable de novo. See United States v. Friedman, 445 F.2d 1076, 1082 (9th Cir.), cert. denied, 404 U.S. 958 (1971).

There is no indication that the appellants raised their Rule 8 claim before the district court. Because this argument was not made to the district court, it is waived on appeal. United States v. Ross, 464 F.2d 1278, 1280 (9th Cir. 1972).

Even if appellants had preserved this objection, their claim must fail. We have a policy of broadly construing Rule 8 in favor of initial joinder, United States v. Ford, 632 F.2d 1354, 1373 (9th Cir. 1980), cert. denied, 450 U.S. 934 (1981), and the mere charging of conspiracy makes joinder proper under Rule 8, see United States v. Valenzuela, 596 F.2d 824, 829 (9th Cir.), cert. denied, 441 U.S. 965 (1979). In this case, a conspiracy count was brought. Although a conspiracy charge brought in bad faith will not satisfy Rule 8, appellants have neither alleged nor substantiated an allegation of bad faith. See id.

Appellants also argue that there was insufficient evidence adduced at trial to support the basis for initial joinder. The failure of the government to produce sufficient evidence to prove the count which made possible the initial joinder is not a ground for severance under Rule 14 unless prejudice is shown. United States v. Cozzetti, 441 F.2d 344, 349 (9th Cir. 1971) (if initial joinder is proper, failure of proof of conspiracy count that made joinder possible is not a ground for Rule 14 severance absent prejudice); United States v. Valenzuela, 596 F.2d 824, 829 (9th Cir. 1979) (reversal of conspiracy count does not require reversal of joined offenses).

"Appellants carry the difficult burden of demonstrating undue prejudice resulting from a joint trial, and we will reverse the trial court only in those rare instances where the refusal to sever amounts to an abuse of discretion." United States v. Ford, 632 F.2d 1354, 1373 (9th Cir. 1980) (quoting United States v. McDonald, 576 F.2d 1350, 1356 (9th Cir. 1978)). Even assuming that the evidence at trial was insufficient to connect the appellants with the other defendants, appellants fail to show that the district court abused its discretion by declining to sever under Rule 14.

Appellants complain about the trial judge's comment to the jury that there was insufficient evidence to connect the defendants with certain objects of the conspiracy charged. However, the judge was entitled to comment on the evidence. Moreover, we are not persuaded that appellants were prejudiced by this comment.

Appellants also claim that a jury instruction allowed conviction on an improper basis. They argue that it allowed them to be convicted under 18 U.S.C. § 1341 (mail fraud) for defrauding people of intangible rights to honest services in violation of McNally v. United States, 107 S. Ct. 2875 (1987). Whether jury instructions misstate the law is a question of law reviewable de novo. United States v. Douglass, 780 F.2d 1472, 1475 (9th Cir. 1986).

In explaining what the statute prohibited, the court only discussed plans to obtain fraudulently money or property. The court made no mention of defrauding someone of intangible rights such as rights to honest trustee services. In fact, on appellants' objection, the court had deleted an instruction that the plan could be one to defraud trust beneficiaries of loyal service.

Appellants complain that the use of the word "include" allowed the jury to determine that the statute prohibited defrauding people of things other than money or property: namely, intangible rights to honest trustee services. However, instructions cannot be judged in isolation; they must be taken as a whole when considering their propriety. United States v. Wolters, 656 F.2d 523, 526 (9th Cir. 1981). Appellants fail to view the instruction in context. Although the court used the term "include," it instructed the jury only on what the law now prohibits: schemes to defraud of money or property.

We reject as meritless appellants' other arguments.

AFFIRMED.