Record and brief — Diggs v. United States

— UOnNed

v

; Court, U.S

81-566 /"riLeD ~

No. Aus 27 1981

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1981

JERRY DIGGS,

Petitioner,

-V.-

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JERROLD M. LADAR

507 Polk Street

Suite 310

San Francisco, CA 94102

Attorney for Petitioner

QUESTION PRESENTED

Whether the failure of the trial court

to give any jury instruction on entrapment

despite evidence raising a factual issue

on that theory of defense violated the

Ninth Circuit's standards set forth in

United States v. Reynoso - Ulloa, 548 F.2d

1329 (9th Cir. 1977) and the rules of

United States v. Russell, 411 U.S. 423

(1973), Sherman v. United States, 356 U.S.

369 (1958), and Sorrells v. United States,

287 U.S. 435 (1932).

INDEX

a)

o

we)

®

Opinion Below .ccccccccscccsecccccscccecces

TUPLSGICtioN ccoccccccccccccccvsecessecesese

Question Presented 2... cece eccccccccccees

Constitutional Provision Involved ........

Statement of the CaSe ....ccccccccccceceess

Reason For Granting The Writ .....ee-eeee0>

CEMOCLUSION ccccccwccvcccccccccccccsccesece

Appendix A (Opinion of the Court .........

of Appeal)

Appendix B (Transcript of Tape Recording). 9

on vw wn Nn PF

TABLE OF AUTHORITIES

Cases:

Roy2s v. United States,

401 U.S. 915 (1970) seeeeeeneeneneeeeeeene 6

Sherman v. United States,

ie. mae SED soccoceccoocee & sl aS

Sorrells v. United States,

eee-@sOe' 635 C4932) encvcecesccee 14,.25 3

United States v. Martinez,

430 F.a6 S7i (Sth Cir.) Gere. cocccee 6

denied.

United States v. Ratcliffe,

S56 F.a6 S3k (96h Cir. 1976) eccccece §

United States v. Reynoso - Ulloa,

548 F.2d 1329 (9th Cir. 1977) .. i, 2, 5

United States v. Russell,

San. Cae Gee BEV O? ceccececeocee 4s Be 8

Constitution of The United

States, Fifth Amendment, ....... _ 3

28 U.S.C. §1254(1) “7s, *ee eee eww ee enee

ii

No.

In the Supreme Court of the United States

OCTOBER TERM, 1981

JERRY DIGGS,

Petitioner,

-Vv.=-

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

JERRY DIGGS petitions for a writ of

certiorari to review the judgment of the

United States Court of Appeals for the

Ninth Circuit in this case.

OPINION BELOW

The opinion of the Court of Appeals

(App. A, infra) is reported at 649 F.2d

731 (9th Cir. 1981).

JURISDICTION

The judgment of the Court of Appeals

was entered on June 29, 1981 and the

jurisdiction of this Court is invoked

under 28 U.S.C. §1254(1).

QUESTION PRESENTED

Whether the failure of this trial

court to give any jury instruction on

entrapment despite evidence raising a

factual issue on that theory of defense

violated the Ninth Circuit's standards

set forth in United States v. Reynoso -

Ulloa, 548 F.2d 1329 (9th Cir. 1977)

and the rules of United States v. Russell,

411 U.S. 423 (1973), Sherman v. United

States, 356 U.S. 369 (1958), and Sorrells

v. United States, 287 U.S. 435 (1932).

CONSTITUTIONAL PROVISION INVOLVED

No person shall ... be deprived

of life, liberty, or property,

without due process of law: ...

Fifth Amendment to the

Constitution of The United

States [In pertinent part]

STATEMENT OF THE CASE

Petitioner, and a co-defendant, were

convicted after jury trial before the

United States District Court for the

Northern District of California of mail

and wire fraud and conspiracy to commit

mail and wire fraud. The judgments of

conviction were affirmed by the Ninth

Circuit in an opinion reported at

649 F.2d 731 (9th Cir. 1981) (Appendix A

to this petition).

The facts of the case are fully set forth

in the Ninth Circuit's opinion. Essentially,

the offense arose out of petitioner's involve-

ment with an “off-shore bank” which he, as

the owner, caused to issue purported nego-

tiable instruments which were sold for a fee

to individuals who then used the negotiable

instruments to obtain loans for which they

did not otherwise have sufficient collateral.

The “bank” was a “shell”, having no assets

and its instruments were valueless. The

scheme was discovered by agents of the

Federal Bureau of Investigation who posed as

potential customers interested in purchasing

from petitioner some of the bank's negc-

tiable instruments.

The only issue raised in this petition

relates to the activities of the undercover

F.B.I. agents. Petitioner contends that

the evidence raised a triable issue of fact

as to whether or not he was entrapped by the

undercover agents. The District Court

refused to give an entrapment instruction

and the Ninth Circuit affirmed.

The undercover agents (Wilcox and Miller)

met with petitioner before any of the sub-

stantive acts of fraud charged in the in-

dictment occurred. Their meeting was

surreptitiously recorded and that tape re-

cording was presented to the trial court

for consideration in conjunction with the

request for the entrapment instruction.

(The pertinent portions of the transcript

are set forth in Appendix B to this petition)

REASON FOR GRANTING THE WRIT

Petitioner does not contend that the

tape recording establishes that he was en-

traped. Instead, ali that petitioner

contends is that the tape recording is some

evidence of entrapment and, therefore, that

an entrapment instruction should have been

given. The Ninth Circuit, in applying the

“subjective theory" of entrapment of United

States v. Russell, 411 U.S. 423 (1973),

Sherman v. United States, 356 U.S. 369

(1958), and Sorrells v. United States, 287

U.S. 435 (1932) requires an entrapment in-

struction to be given if there is at least

“slight” evidence of entrapment. United

States v. Ratcliffe, 550 F.2d 431 (9th Cir.

1976), United States v. Reynoso - Ulloa,

548 F.2d 1329 (9th Cir. 1977). If proof

and counterproof on the issue of entrapment

depends on inferences to be drawn from con-

flicting evidence, then the question must

be presented to the jury. United States v.

Martinez, 429 F.2d 971 (9th Cir.) cert.

denied, Royas v. United States, 401 U.S.

915 (1970).

The principal fact upon which the Ninth

Circuit affirmed the trial court's refusal

to instruct on entrapment was that prior to

his contact with the undercover agents,

petitioner had engaged in certain fraudulent

activities. See 649 F.2d 731, at 739. How

ever, assuming the facts to support that

conclusion, that is precisely the question

that the jury should have been permitted to

weigh in deciding whether or not petitioner

was “predisposed” to commit the offense. As

long as thereis "slight" evidence of en-

trapment and as long as inferences may be

drawn which point to the absence of predis-

position, the instruction must be given.

Martinez, supra.

Thus, the Ninth Circuit, in affirming

the conviction failed to follow its own

standards. The failure to give any en-

trapment instruction was clearly error

which deprived petitioner cf an opportunity

to present to the jury the theory of his

defense. For these reasons, certiorari

should be granted.

CONCLUSION

The writ should be granted.

Resrectfully submitted,

JERROLD M. LADAR

JERROLD M. LADAR,

Counsel for Petitioner.

August 26, 1981

APPENDIX A

UNITED STATES of America,

Plaintiff-Appellee,

v.

Jerry DIGGS, Defendant-Appellant.

UNITED STATES of America,

Plaintiff-Appellee,

v.

Peter OLIVEREZ, Defendant-Appellant.

Nos. 79-1741, 79-1753

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted Oct. 10, 1980.

Decided June 29, 1981.

Appeal from the United States Dis-

trict Court for the Northern District of

California.

Before the TRASK and KENNEDY, Circuit

Judges, and TASHIMA, District Judge. pel

TRASK, Circuit Judge:

This is a consolidation of two crimi-

nal appeals. Appellants Diggs and Oliverez

were each indicted on two accounts of mail

and wire fraud and one count of conspiracy

to commit mail and wire fraud, 18 U.S.C. §§

371, 1341, 1343. A jury found them guilty

on all counts. Appellants make various

assignments of error relating to the ad-

missibility of certain evidence, the suffi-

ciency of the evidence supporting the jury

verdict, and the district court's denial of

several defense motions. We affirm.

«7 Wonorable A. Wallace 7ashima, United

States District Judge for the Cen-

tral District of California.

I

Appellant's fraudulent scheme involved

the issuance of negotiable paper-e.g., cer-

tificater of deposit and letters of credit-

by a fictitious bank owned by Diggs (the

Bank). 1/ Such paper was used by Bank clients

to obtain legitimate bank loans tor which

they otherwise did not qualify because of in-

sufficient collateral. A client would list

the worthless paper as a personal asset on

his or her loan application, and the Bank

would vouch for the existence and declared

value of the paper. As a fee for this

17 Diggs had obtained from the government

of Saint Vincent, British West Indies,

a certificate of registration for the

operation of the First National Bank of

the Caribbean, Ltd. Although the Bank

listed its capital as $500,000 in East-

ern Caribbean dollars, it actually pos-

sessed no capital or assets of any kind.

The Bank's registered address was that of

Diggs’ attorney who did not participate

in management of the Bank and had no

knowledge of the Bank's financial status.

The Bank's Board of Directors were three

demale acquaintances of Diggs who like-

wise were unaware of the Bank's operations.

Diggs listed a prestigious accounting

firm as the Bank's independent auditors,*

service, the Bank received a portion of the

loan proceeds, usually ten percent. Oliverez

functioned as the Bank's "exclusive agent"

in the United States, for which he received

forty percent of all service fees paid to the

Bank by clients that he had solicited.

Three attempted loan transactions formed

the basis of the indictment. In the first,

a rancher needed a letter of credit to ob-

tain a commercial loan from the First Sec-

urity Bank of Idaho. The Bank agreed to

supply the letter for a fee, and subsequently

represented to First Security that it was

financially capable of providing 100 percent

loan guarantees. In the second, some im-

porters needed security or a guarantee to

obtain a loan of $100,000 from the Gen-

ossenschaft Bank of West Germany. During

negotiations with the importers, Diggs and

* although this firm had not done any work

for the Bank or authorized the Bank to

use its name.

Oliverez told them that the Bank had assets

of $40,000,000. The Bank eventually issued

a $100,000 certificate of deposit in return

for $10,000, and telexed Genossenschaft to

confirm issuance of the certificate.

The last transaction involved issuance of

a letter of credit for four and one-half

million dollars to Grebe, an individual who

required financing to develop oil fields in

West Virginia. The transaction was handled

primarily by Grebe's attorney, Miller. During

negotiations, Oliverez told Miller that the

Bank was a licensed, full-service investment

bank with United States assets of $50,900,000

against only $190,000 of liabilities, in

addition to substantial off-shore assets.

He further told Miller that the Bank had

recently undergone an independent audit which

confirmed these figures. In response to in-

quiries from Grebe's contemplated lender, the

Bank sent through the mails bogus financial

statements purporting to show its multi-

million dollar net worth.

A federal grand jury returned an indict-

ment charging Diggs and Oliverez with two

counts of mail fraud, two counts of wire

fraud, and one count of conspiracy to com-

mit mail and wire fraud in connection with

theor operation of the Bank. After a ten-

day trial, a jury returned verdicts of

guilty on all counts as to both defendants.

Il

Diggs contends that the district court

erred in denying his pre-trial motion to

suppress evidence seized pursuant tc a

subpoena duces tecum issued to the owner of

a motel. The motei was Diggs' residence

during the period when the acts forming

the basis of the indictment were alleged

to have occurred. The court denied the

motion, finding the evidence seized to have

been abandoned property.

A warrantless search or seizure

of abandoned property is not unreasonable

under the Fourth Amendment. Abel vs. Unit-

ed States, 362 U.S. 217, 241, 80 S.Ct. 683,

698, 4 L.Ed.2d 668 (1960); United States vs.

Kress, 446 F.2d 358, 361 (9th Cir. 1971).

The test of abandonment is whether ihe al-

leged owner has retained a reasonable ex-

pectation of privacy in the articles al-

leged to have been abandoned. United

States vs. Haddad, 558 F.2d 968, 975, n.6

(9th Cir. 1977); United States vs. Wilson,

472 F.2d 901, 903 (9th Cir.), cert. denied,

414 U.S. 868, 94 S.Ct. 176, 38 L.Ed.2d 116

(1973). <A finding of abandonment is re-

viewed uncer the clearly erroneous standard.

United States vs. Humphrey, 549 F.2d 650,

652 (9th Cir. 1977).

Diggs argues that the finding of aban-

donment was erroneous. He relies for this

conclusion on United States vs. Botelho,

360 F.Supp. 620 (D.Haw.1973). In that case,

the court held that tenants who had not

been given a notice to vacate leased oremis-

es, as required by Hawaii law, retained a

reasonable expectation of privacy in those

premises even though they had not paid

their rent. Id. at 626. Because he was

never given a formal notice of eviction by

the motel, Diggs argues that he cannot be

found to have abandoned the property that

he left there.

We do not view Botelho as per-

suasive authority. The test in this circuit

for determining whether property is aban-

doned is not "whether all formal property

rights have been relinquished, but whether

the complaining party retains a reasonable

expectation of privacy in the articles al-

leged to be abandoned."' United States vs.

Wilson, supra, 472 F.2d at 902. Here there

is ample evidence that Diggs had no such

expectancy. Diggs left his room at the

motel owing $1,000 in back rent, and was

not seen or heard from after August 25,

1978. The motel terminated his tenancy

after it received in the mail the key to

Diggs’ former room instead of the peyment

which Diggs had promised to send. At no

time did Diggs attempt to retrieve any of

the property left in the motel room. 2/

The trial court's conclusion that Diggs no

longer had a reasonable expectation of priv-

acy in the articles in the room on November 2,

1978, when the subpoena was issued, was

not clearly erroneous. Additionally, be-

cause Diggs abandoned the motel room long

before the search, he lacked standing to

shallenge the breadth of the subpoena. See

Rakas vs. Illinois, 439 U.S. 128, 143, 99

S.Ct. 421, 430, 58 L.Ed.2d 387 (1978); Katz

vs.

United States, 389 U.S. 347, 353, 88

S.Ct. 507, 512, 19 L.Ed.2d 576 (1967);

United States vs. Haddad, supra. The dis-

trict court's denial of Diggs’ motion to

27 Diggs' roommate, Gayaa, made an arrange-

ment with the motel to have her belongings

returned to her as she paid off her half

of the bill. Diggs contends that this

arrangement includes his property as

well, apparently hoping to show thereby

that he had not abandoned the seized

property. Although Gayda's testimony

supports this contention, the motel man-

ager testified that the arrangements did

not include Diggs’ belongings. Ap-

parently finding Gayda's testimony lack-*

suppress is, therefore, affirmed.

IIl

Oliverez contends that there was insuffi-

cient evidence as a matter of law- for the

jury to convict him of violating sections 371,

1341, and 1343. The standard of review of

such a contention is whether the evidence

viewed in the light most favorable to the

government, was sufficient to permit a ra-

tional conclusion by the jury that the ac-

cused was guilty beyond a reasonable doubt.

United States vs. Friedman, 593 F.2d 109

(9th Cir. 1978); United States vs. Young,

573 F.2d. 1137, 1139 (9th Cir. 1978). In

making this assessment, the reviewing court

should not substitute its own inferences for

those of the jury. United States vs. Nelson,

419 F.2d. 1237, 1241 (9th Cir.), cert. denied,

396 U.S. 1060, 90 S.Ct. 751, 24 L.Ed.2d 754

(1970).

* ing in credability, the district court

adopted the manager's version of events.

Conspiracy is established when

there is an agreement to accomplish an

illegal objective or to achieve a legal

objective by illegal means, an overt act in

furtherance of such objective, and the in-

tent necessary to commit the underlying

offense. United States vs. Oropeza, 434

U.S. 1080, 98 S.Ct. 1276, 55 L.Ed.2d 788

(1978); United States vs. Friedman, supra,

593 F.2d at 115. The conspiracy need not

be proved by direct evidence; a common

scheme or plan may be inferred from cir-

cumstantial evidence. Glasser vs. United

States, 315 U.S. 60, 80, 62 S.Ct. 457, 469,

86 L.Ed.680 (1942); United States vs. Turner,

528 F.2d 143 (9th Cir.), cert. denied, 429

U.S. 837, 97 S.Ct. 105, 50 L.Ed.2d 103

(1975). In order to obtain a conviction for

mail fraud, the government need only prove

that the defendant was a knowing participant

in a fraudulent scheme that utilized the

mails. United States vs. Price, 623 F.2d

587 at 591, 592 (9th Cir. 1980); United

States vs. Beecroft, 608 F.2d 753, 757 (9th

Cir. 1979). Likewise, to prove a charge of

wire fraud, the government need only show

that the defendant knowingly participated

in a scheme to defraud others by ise of inter-

state communications facilities. United

States vs. Corey, 566 F.2d 429, 430 n.2 (2d

Cir. 1977); United States vs. Wise, 553,

F.2d 1173, 1174 (8th Cir. 1977).

In the present case, the government es-

tablished that there was an agreement be-

tween Oliverez and Diggs whereby Oliverez

would act as the Bank's agent in the United

States and receive a portion of the service

fees collected by the Bank. Oliverez made

false and fraudulent representations in two

of the transactions charged in the indict-

ment, 3/ and there is strong evidence to

jo

~~

The first real contract of the importers,

Mr. and Mrs. Morandell, with the Bank

was a meeting with Oliverez in which he

“soundedpositive" that the Bank could

supply a letter of credit or certificate

of deposit which would be satisfactory

to the Genossenschaft Bank. During a

second meeting, Oliverez heard Diggs say *

support the inference that he did so knowing-

ly. 4/

* that the Bank had assets of §40,000,000.

At a third meeting, Oliverez suggested that

the Morandalls pay for the certificate

of deposit with the money they received

from the loan from Genossenschaft Bank,

which loan was itself to be secured by

the certificate of deposit. The Moran-

dells ultimately obtained a $100,000 cer-

tificate of deposit for only $10,000.

Oliverez also participated in the neg-

otiations with Grebe and Miller. Oliverez

told Miller that an ongoing audit of the

Bank showed it to have assets of $50,000,

000 in the United States against lia-

bilities of only $190,000. Oliverez

also told Miller that there was no risk

involved in dealing with the Bank, that it

was an investment bank licensed as a full-

service bank, that he (Oliverez) was a

consultant who had helped Diggs to form

the Bank, and that the Bank's American

assets were genuine.

47 Notwithstanding his representations to

the Morandells and Miller, see note 3

supra, Oliverez admitted to undercover

FBI agents that Diggs did not tell him

much about the Bank's operations, and that

he believed that Diggs was not being can-

did about the extent of the Bank's off-

shore assets. He also admitted knowing

that the Bank could not issue certificates

of deposit or letters of credit in the

United States if it was legally to avoid

U.S. banking regulations, and confessed

to being unable to verify that the Bank

had any assets. Cf. United States vs.

McDonald, 576 F.2d 1350, i358 (9th Cir.)*

Viewing the evidence in the

light most favorable to the government, we

conclude that the jury could reasonably have

found that there was an agreement- between

Oliverez and Diggs to accomplish an illegal

objective, and that Oliverez had the re-

quisite intent to commit mail fraud. See

United States vs. Friedman, supra; United

States vs. Price, supra. We also conclude

that there was sufficient evidence for the

jury to find that Oliverez committed both

mail and wire fraud. 5/

* (awareness of a high prabability of fraud

coupled with conscious avoidance of the

truth may support a conviction of mail

fraud), cert denied, 439 U.S. 830, 99

S.Ct. 105, 58 1.Ed.2d 124 (1978); United

States vs. Love, 535 F.2d 1152, 1158 (9th

Cir.), cert. denied, 429 U.S. 847, 97

S.Ct. 130, 50 1.Ed.2d 119 (1976) ("reck-

less indifference" as to the truth or

falsity of a representation satisfies

requirement of acting knowingly).

57 Oliverez’ argument that he is not guilty

of mail or wire fraud because he did not

himself send, mail, or transmit any com-

munication is without merit. See United

States vs. Goldstein, 532 F.2d 1305, 1316

(9th Cir. 1976) (not necessary to show

that defendant actually placed phone calls *

Ill

At trial, a witness testified to having

made three deposits in the Bank totalling

$16,500 and never having recovered any of

them. Diggs contends that the testimony

of this witness should have been excluded

under Fed.R.Evid. 403 and 404(b). Alterna-

tively, he argues that even if the testimony

is admissible, the district court erred in

failing to give a limiting instruction to

the jury.

This circuit has adopted the posi-

tion that Rule 404(b) is an inclusionary

rule-i.e., evidence of other crimes is inad-

missible under this rule only when it proves

nothing but the defendant's criminal pro-

pensities. United States vs. Herrell, 588

F.2d 711, 714 (9th Cir. 1978); United States

vs. Sangrey, 586 F.2d 1312, 1314 (9th Cir.

* in question when evidence showed she was

part of scheme to place calls in vio-

lation of statute), cert. denied, 429

U.S. 960, 97 S.Ct. 384, 50 L.Ed.2d 327

(1977).

1978). Rule 403 permits the introduction of

relevant evidence of other crimes to prove

motive, opportunity, intent, preparation,

plan, knowledge, identity, absence of mis-

take or accideict, and predisposition in en-

trapment cases, so long as its probative

value is not outweighed by its prejudicial

effect. The district court is accorded wide

discretion in deciding whether to admit

such evidence. United States vs. Clardy, 612

F.2d 1139, 1154 (9th Cir. 1980); United

States vs. Sangrey, 586 F.2d 1312, 1314 (9th

Cir. 1978); United States vs. McDonald, 576

F.2d 1350, 1356 (9th Cir. 1978).

The disputed testimony was rel-

evant to several aspects of this case. Both

defendants argue that they were entrapped

by an FBI undercover operation. When

entrapment is raised as a defense, the pros-

ecution may introduce evidence of prior con-

duct to snow the defendant's criminal pro-

pensity and predisposition. United States

vs. Reynoso-Ulloa, 548 F.2d 1329, 1341 (9th

Cir. 1977). Here, the disputed testimony

showed that Diggs was using the Bank fraud-

ulently to obtain money from third parties

before the FBI ever came on the scene. The

testimony was also probative of Diggs' spec-

ific intent to defraud, see United States vs.

McDonald, supra, 576 F.2d at 1356; United

States vs. Hearst, 563 F.2d 1331, 1335 (9th

Cir. 1977), cert. denied, 435 U.S. 1000, 98

S.Ct. 1656, 56 L.Ed.2d 90 (1978), as well

as of the fact that the Bank never possessed

any assets. In view of this, we cannot say

that the district court abused its discretion

when it refused to exclude the testimony.

When it admitted the testimony,

the court instructed the jury to consider it

only ad evidence of the defendant's motive

and intent and of the existence of a conspir-

acy. Neither Diggs not Oliverez objected to

the instruction when it was goven. Thus,

the instruction may provide a basis for re-

versal only if it constituted plain error.

Fed.R.Crim.P. 30, 52; see Herzog vs. United

States, 235 F.2d 664 (9th Cir 1956), cert.

denied, 352 U.S. 844, 77 S.Ct. 54, 1 L.Ed.

2d 59 (1957). This was an adequate limiting

instruction, however, and the giving of it

did not constitute error at all. -Accordingly,

it does not constitute a ground for reversal.

IV

Because of the illness of one of the

jurors, the jury was recessed from the close

of presentations of evidence on August 24

until September 3, when it reconvened to

hear closing arguments and receive instruc-

tions. Oliverez contends that this eleven-

day separation was so prejudicial that a

mistrial should have been declared. This

factual situation appears to raise an issue

of first impression in this Circuit. Although

there are decisions involving separation of

the jury during deliberations, see, e.g.,

United States vs. Eldred, 588 F.2d 746 (9th

Cir. 1978); United States vs. Menna, 45l

F.2d 982, 984 (9th Cir. 1971), we have found:

no cases, nor were any cited to us by the

parties, involving separation during the

course of the trial itself.

Oliverez suggests that the separation

prejudiced him in three ways:

(1) The memories of the jurors were

likely to have been vague after the inter-

ruption.

(2) Some jurors might have commenced

deli»erations about the case within them-

selves during the interruption, contrary to

the concept of collegial jury decisionmaking.

(3) There might have been pressure for

a quick verdict due to concern for the

health of the recently ill juror.

The trial court has "full discretion in

determining whether the jury shall be al-

lowed to separate at any particular time

during the course of the trial...."Sulli-

van vs. United States, 414 F.2d 714, 715

(9th Cir. 1969) (quoting Hines vs. United

States, 365 F.2d 649, 651 (10th Cir. 1966).

Our review of the record indicates that this

discretion was not abused here. Oliverez

has alleged only hypothetical prejudice,

whereas the circuits are virtually unanimous

that in order for a jury separation to con-

stitute reversible error, the defendant must

show that he suffered actual prejudice

because of the separation. E.g.,° United

States vs. Carter, 602 F.2d 799, 805 06

(7th Cir. 1979); United States vs. Almonte,

594 F.2d 261 267 (lst Cir. 1979); Blackmon

vs. United States, 474 F.2d 1125, 1126 (6th

Cir.), cert. denied, 414 U.S. 912, 94 S.Ct.

252, 38 L.Ed.2d 150 (1973); United States

vs. Harris, 458 F.2d 670. 674 75 (Sth Cir.)

cert. denied, 409 U.S. 888, 93 S.Ct. 195, 34

L.Ed.2d 145 (1972); Cardarella vs. United

States, 375 F.2d 222, 227 28 (8th Cir. 1967);

see, e.g., United States vs. Siragusa, 450

F.2d 592, 595 (2d Cir. 1971); United States

vs. Weiss, 431 F.2d 1402, 1407 (10th Cir.

1970); Sullivan vs. United States, 414 F.

2d 714, 716 (9th Cir. 1969).

The record does not disclose the exis-

tence of any actual prejudice. The district

judge repeatedly admonished the jurors not

to discuss the case with anyone, or even to

allow anyone to approach and address them

concerning it. He further instructed them

not to form or express any opinion about

the case until it was formally submitted to

them following closing arguments. The

jurors had ample opporturity to refresh

their memories with respect to the evidence

by listening to tapes of testimony given

during the trial and re-examining exhibits.

Some of them did so. Finally, the judge

made sure that the juror who had taken ill

was fully recovered before he permitted

deliberations to continue, so that there

would be no temptation to cut short deliber-

ations out of concern for this juror's health.

In view of these precautions and the com-

plete absence of any showing of actual pre-

judice, Oliverez' hypothetical speculations

of prejudice so not persuade us that reversal

is required here. The district court's denial

of Oliverez' motion for mistrial is affirmed.

V

Both Diggs and Oliverez argue

that the trial judge erred in refusing to

give the jury an instruction on their entrap-

ment defense. Whether there exist issues

of fact as to a defense of entrapment is

properly a question for the trial judge, the

standard of review being abuse of discre-

tion. See United States vs. Glaeser, 550

F.2d 483, 487 (9th Cir. 1977). The primary

focus of appellate review should be on the

defendant's predisposition to commit the

crime rather than on the character of the

government agent's actions. 6/ United States

67 Diggs devotes a substantial portion of his

sotaine brief to a discussion of constit-

utional due process review of govern-

ment actions that can form the basis of

an entrapment defense. It has been

suggested that the conduct of government

agents in a particular instance might

be so outrageous that constitutional

review under the due process clause would

be required regardless of the the defen-

dant's criminal predisposition. See, e.g.,

United States vs. Prairie, 572 F.2d 1316,

t es reading United

States vs. Russell, supra, as permitting

such a constitutional defense) ; Tribe,

The Supreme Court, 1972 Term--For word.

Toward a Model of Roles in the Due Pro-

cess of Life and Law, 87 Harv.L.Rev. 1,

244, 251 52 (1973). However, the govern-

ment's conduct in this case did not ap-

proach the "con science-shocking" behavior *

vs. Russell, 411, U.S. 423, 432, 34, 93 S.Ct.

1637, 1643 44, 36 L.Ed.2d 366 (1973) (re-

affirmi: 2 subjective theory of entrapment

articulated in Sherman vs. United-States, 356

U.S. 369, 78 S.Ct.819, 2L.Ed.2d 848 (1958)

and Sorrels vs. United States, 287 U.S. 435,

53 S.Ct. 210, 77 L.Ed. 413 (1932)); United

States vs. Reynoso-Ulloa, supra, 548 F.2d at

1334 3 Although only "slight" evidence is

needed to create a factual issue and get the

defense to the jury, this evidence must at

least suggest that the defendant was initially

unwilling to commit the crime, or that govern-

ment involvement planted the criminal design

in the defendant's mind. United States vs.

Ratcliffe, 550 F.2d 431, 434 (9th Cir. 1976);

United States vs. Christopher, 488 F.2d 849,

850 51 & n.l (9th Cir. 1973). Five factors

should guide a court's assessment of whether

the defendant had criminal predisposition:

(1) The defendant's reputation.

* necessary to trigger substantive due pro-

cess review.

(2) Whether the initial suggestion of

criminal activity was made by the govern-

ment.

(3) Whether the defendant engaged in

the alleged criminal conduct for profit.

(4) Whether the defendant displayed

relectance to engage in the activity,

which was only overcome by repeated govern-

ment persuasion.

(5) The nature of the inducement or

persuasion.

United States vs. Reynoso-Ulloa, supra, 548

F.2d at 1336. 7/

Oliverez' argument on this issue is

without merit. He had only one encounter

with government agents, during which nothing

occurred to support the claim that he was

pressured by the government into committing

i/ The Reynoso panel also noted that it

could find no case in which an entrap-

ment defense was successfully raised with-

out a showing of the defendant's initial

reluctance to commit the criminal act.

548 F.2d at 1336 n.11.

illegal acts. 8/ Additionall, the contract

between Oliverez and Diggs appears by its

terms to have been for the personal profit

of each. Nor does Oliverez point. to evidence

in the record showing that he was initially

reluctant to act. The sole factor milita-

ting in favor of an entrapment defense is

his apparent good standing in the community

and lack of a criminal record. This is not

enough to show entrapment.

Diggs relies on a transcript which was an

exhibit at trial but never admitted into

evidence, to show factual issues as to

whether the government first proposed ille-

gal activity and whether iggs was initially

reluctant to engage in such activity. The

record, however, discloses numerous inci-

dents which show Diggs to have engaged in

conscious deception and fraud before the

agents ever came on the scene. 9/ Indeed, at

87 Oliverez erroneously relies on certain

actions of Miller, who was not a govern-

ment agent.

9 / Diggs attempts to nullify the effect of *

the time the alleged entrapment of appel-

lants occurred, the agents were totally un-

aware of the acts that formed the substan-

tive basis for the indictment. The record

supports the trial judge's determination

that, as a matter of law, Diggs did not

adduce sufficient evidence in to support his

theory of entrapment.

Neither Diggs not Oliverez raised any

factual issues relating to their respective

entrapment defenses. Accordingly, the dis-

trict court properly refused to allow the

jury to consider those defenses.

VI

In post-trial proceedings, Oliverez moved

for a new trial pursuant to Fed.R.Crim.P. 33.

The basis for the motion was an affidavit

by Diggs to the effect that Oliverez did

* these acts by arguing that they material-

ly differ from the acts that he committed

after his encounters with the agents,

which were the basis for the indictment.

Diggs cites no authority in support of

this distinction, and we are not per-

suaded by it.

not knowingly participate in any illegal ac-

tivities, but merely took orders and instruc-

tions from Diggs.

A defendant who moves for a nev trial

because of newly discovered evidence must

meet all of the requirements of Rule 33:

41) It must appear from the motion that

the evidence relied on it, in fact, newly

discovered, i.e., discovered after the trial;

(2) the motion must allege facts from

which the court may infer diligence on the

part of the movant;

(3) the evidence relied on must not be

merely cumulative cr impeaching;

(4) must be material to the issue's

involved, and

(5) must be such as, on a new trial,

would probably produce an acquittal.

See, e.g., United States vs. Krasny, 607

F.2d 840 (9th Cir. 1979), cert. denied, 445

U.S. 942, 100 S.ct. 1-37, 63 L.Ed.2d 775

(1980); United States vs. Cervantes, 542 F.

2d 773, 779 (9t- Cir. 1976). The evidence

offered by Oliverez fails to satisfy re-

quirements (1), (2) and (5).

When a defendant who_has cho-

sen not to testify subsequently comes for-

ward to offer testimony exculpating a co-

defendant, the evidence is not "newly dis-

covered.'' McAteer vs. United States, 148

F.2d 992 (5th Cir. 1945); Coplin vs. United

States, 88 F.2d 652, 665 (9th Cir.), cert.

denied, 301 U.S. 703, 57 S.Ct. 929, 81 L.Ed.

1357 (1937); see United States vs. Jacobs,

475 F.2d 270, 286, n.33 (2d Cir.), cert.

denied, 414 U.S. 821, 94 S.Ct. 116, 131, 38

L.Ed.2d 53 (1973). Morover, there has

been no showing of diligence on the part of

appellant Oliverez, 10/ and appellant has

made no showing that in a new trial Diggs'

testimony would probably result in acquittal.

17 The affidavit of Diggs' trial attorney,

McCabe, indicates that neither Oliverez

nor his counsel approached McCabe to

discuss the possibility of Diggs’ tes-

tifying on Oliverez' behalf.

The trial judge has broad dis-

cretion to decide that new evidence is not

sufficiently credible to support a motion

for a new trial. See United States vs.

Panza, 612 F.2d 432, 441 (9th Cir. 1979).

That discussion was not abused here.

The convictions are AFFIRMED.

APPENDIX B

DIGGS: But actually, I been in real

estate for a long time and it came to a

point where I needed the vehicle to fund

various things too. Okay. So I wanted

an offshore bank, was an ideal situation

for me, at this point in time. [It gives

me more flexibility.

WILCOX: Oh yeah, that's what we were

thinking it would. Well, we had a sit-

uation in fact, there might even be time.

We could call this guy and see if he still

is interested. We could have made $40,000

right off the top on issuing $280,000 in

LCs.

DIGGS: Is that correct?

WILCOX: And that deal might still be

open. That guy called me yesterday. I've

just been avoiding it. It was for some

cotton which is to delivered, well it has

been delivered in Italy to a company over

there that makes cloth apparently and what

happened, these guys gained control of the

company, they did something to the credit,

so the owners of the cotton, who are in

Texas or Jouisiana or somewhere in that

area of the U.S., would not release the

stuff without having some sort of financial

instrument to guarantee they get paid or

at least to give the illusion that they get

paid. So we were going to be given $280,000.

We were going to be given ten points plus

ten thousand. This was back a couple of

months ago and we were just going to take

the $10,000 and let the ten points go to

whoever could write it and we, I thought we

had this thing written out on British Bank

Corporation down in Los Angeles but it turns

out, the guy couldn't produce when he said

he could produce. And that's about the same

period that we were looking at obtaining a

St. Vincent bank but it just didn’t work out

so that's why I asked what process you went

through to obtain the bank. It would be a

guide for us for something in the future.

Like now, the capitalization requirement,

we've come up against that and what do they

seally require for capitalization?

DIGGS: Well you see, that’s two situations.

There's one that's for private use and public

use. Public use is a different sort of a

whole new ballgame. It does require to be

a real bank.

WILCOX: Okay. What do you mean by a

real bank?

DIGGS: It has some assets. They can be

certified...

WILCOX: Okay. Well, getting a certified

statement is no problem. You can get those.

DIGGS: See, there are people who are

getting themselves involved in United States

banking laws but I am not about to waste my

time. In fact, to be quite candid you are

the first Americans that I even have ever

discussed banking with. Normally I won't

even respond to Americans who respond to my

ads. Because the laws are so strict and

difficult to deal with and I must be

extremely careful.

WILCOX: Yeah, that doesn't preclude

you from operating here. The machinery

for enforcing those laws is so rickety and

so bad. We've had no problem at all, I

won't want to say with the regulatory agencies,

you structure it right. There's really no

problem there because the money is here in

this country, that's the problem.

MILLER: I'm wondering if you're reluctant

to do business.

DIGGS: I wouldn't say I'm reluctant, but

I'm cautious.

WILCOX: Okay, this is very interesting

because we were going through this process

and you're an inside window. You really

can be helpful to use. We may not even con-

sider it now if we can work with you because

you've already done the work. If we, like

John said, have a meeting of the minds here.

DIGGS: Well, once I'm sure of what you

really want and I would have some ideas.

WILCOX: Now this situation with letters

of credit, we were wanting to buy time. We

wanted a 180 to 120 day letter of credit,

one of the two. If, for that period of

time, there would be no draw against the LC

and within the period of time, the revenues,

this is the plan, the revenues which would

be generated by the sale of the cloth

manufactured from the cotton would be

sufficient to pay off the owners of the

cotton so the LC would then be retired with

no draw against it whatsoever and that would

be a matter of buying time was that amounted

to. The LC would be a credit vehicle and

no actually a cash vehicle.

DiGGS: I understand. So you need a

bank to make certain statements I assume.

MILLER: Yes

WILCOX: Uh hum. Basically, that's it.

No I don't know about that one. Tell you

what, have my cards here, called let's

just see.

WILCOX: Yeah, we've run into these

things uh several cimes.

MILLER: Several times, and we thought

it's a possibility of making quick money but

we've had to pass it up every single time

because we're not equipped to do it. We had

it all set up with the guy down in Los

Angeles who was going to do it for us,

British Bank Corporation, but the guy never

came across... (inaudible).

DIGGS: When I think about the time, ah,

offshore banks although considered to be very

shady, very mysterious but are in greater

demand as time moves along. Because in-

flation is raising hell all over the world.

And people just want an out for various

activities and it's a fact, matter fact,

Swiss banks when they started about three

hundred years ago, were quite unpopular.

Look at Swiss banks today.

WILCOX: Well we look at it as an

excellent opportunity for making some

money and avoidiny a lot of problems in this

country.

DIGGS: It's a matter of being able to

communicate well enough, you know. If that's

possible, we can do business together.