Appendix — Prosperi v. United States
Supreme Court brief2000
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APPENDIX A
UNITED STATES of America, Plaintiff-Appellee,
v.
Amold Paul PROSPERI, Defendant-Appellant.
United States of America, Plaintiff-Appellant,
v.
Arnold Paul Prosperi, Defendant-Appellee.
Nos. 98-4605, 98-4692.
UNITED STATES COURT OF APPEALS FOR THE
ELEVENTH CIRCUIT
January 28, 2000, Decided
January 28, 2000, Filed
JUDGES: Before COX, Circuit Judge, KRAVITCH, Senior
Circuit Judge, and PROPST*, Senior District Judge.
*Honorable Robert B. Propst, Senior U.S. District Judge for
the Northern District of Alabama, sitting by designation.
OPINION: KRAVITCH, Senior Circuit Judge:
This appeal involves a statutory interpretation question of
first impression: whether the definition of “counterfeited”
provided in 18 U.S.C. § 513(a) incorporates or replaces the
preexisting common law definition which requires a showing
of similitude between the counterfeit and genuine
obligations. Also presented is the extent to which evidence,
admitted for charges that were later dismissed, may “spill
over” and prejudice the jury’s consideration of the remaining
counts. Finally, this appeal considers allegations of juror
misconduct, a disputed Allen charge, and challenges to the
admission of evidence of extrinsic offenses.
NN
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I. BACKGROUND AND PROCEDURAL HISTORY
ArnoJd Paul Prosperi practiced real estate law in Palm
Beach, Florida. As an attorney, Prosperi represented Patrick
Donovan, an Irish citizen, and managed various financial
matters for him. From approximately 1979 until 1995,
Prosperi handled all of Donovan’s investments in the United
States, both in real estate and securities, acting as attorney
and trustee. During his winter visits to Florida, Donovan met
with Prosperi and reviewed the status of his investments at
these meetings. Prosperi conducted much of Donovan’s
business through the Amaretto Corporation (“Amaretto”), a
company incorporated in the Netherlands Antilles. Amaretto
was beneficially owned by Donovan and his family, but
Prosperi was granted power of attorney with authority to
conduct all the corporation’s affairs on Donovan’s behalf.
During this period, Prosperi orchestrated three major real
estate transactions and one mortgage refinancing for
Donovan. First, Prosperi arranged the purchase and
subsequent sale of a golf course from Amaretto to the United
States Department of Veterans Affairs for $3,050,000 (“the
Holigolf transaction”). Second, Prosperi arranged the
purchase, renovation, and sale of a residential property at 143
East Inlet Drive in Palm Beach, Florida (“the Inlet Drive
transaction”). For this transaction only, Amaretto purchased
50% of the property and initially loaned Prosperi money to
acquire the other 50%. Third, Prosperi bought property at
109 Royal Palm Way and constructed a commercial bank
building using another company beneficially owned by
Donovan, Perth Holdings, Ltd. (“the Royal Palm
transaction”). Prosperi also managed the building on
Donovan’s behalf. Finally, Prosperi arranged the mortgage
refinancing on the Royal Palm property for an amount $1.6
million in excess of the remaining principal (‘the
Refinancing transaction’’).
According to the Government, Prosperi began to
misappropriate funds from Donovan’s proceeds in 1987 for
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his personal use, creating false account statements and other
documents to hide his subterfuge. Prosperi allegedly
diverted the entire $3 million proceeds of the Holigolf
transaction for his personal use! while advising Donovan
that these funds were invested in certificates of deposit
(“CDs”). To. bolster the deception, Prosperi created
documents purporting to be CDs issued by J.P. Morgan bank
and Morgan Guaranty Trust together with supporting
paperwork. Prosperi presented these documents to Donovan
during their annual meetings and represented them as
genuine investments. Prosperi then failed to report the
misdirected funds on his federal income tax returns, omitting
$905,616 from his 1989 return and $532,000 from his 1990
return. The Government also claims that Prosperi diverted
rent revenue from the properties on Inlet Drive and Royal
Palm “Way, as well as proceeds from the Refinancing
transaction, gnd created false account statements to shield
these activities from Donovan.
Donovan did not suspect the embezzlement until he was
contacted by a representative of the United States Internal
Revenue Service investigating Amaretto’s tax liability
arising from the Holigolf transaction. Although Donovan
initially denied any connection to the company,? he later
acknowledged his interest and cooperated with the agent.
During that time, Donovan provided the Government with
| The total proceeds of the sale were $3,050,000. Both parties
agree that Prosperi retained $50,000 of that amount as remuneration
for arranging the transaction.
2 According to Prosperi, Donovan used Amaretto and Prosperi
as part of a larger scheme to conceal his wealth from the Irish
Government. Donovan later settled his tax liability with the Irish
Government for $4 million but denied that Prosperi’s actions on his
behalf had any illicit purpose.
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the financial documents he received from Prosperi and taped
most of his phone conversations with Prosperi in which
Prosperi apologized for taking money from Donovan and
promised to return the money with interest, as soon as he
was able.
In September 1996, a grand jury in Florida returned an
indictment against Prosperi charging him with two counts of
mail fraud under 18 U.S.C. § 1341 (Counts I and II), three
counts of possessing a counterfeited security under 18 U.S.C.
§ 513(a) (Counts III-V), eight counts of money laundering
under 18 U.S.C. §§ 1956 and 1957 (Counts VI-XIII), and
two counts of filing a false tax return under 26 U.S.C. §
7206(1) (Counts XIV and XV). The circumstances
surrounding the Holigolf transaction proceeds comprised the
basis of both the counterfeiting and tax counts. The mail
fraud and money laundering counts were based primarily on
Prosperi’s alleged misappropriation of funds from the Inlet
Drive transaction, the Royal Palm transaction, and the
Refinancing transaction. In June, 1997, the indictment was
superseded to revise the money laundering counts and to add
a forfeiture count under 18 U.S.C. § 982 (Count XVI). .
Prosperi filed four separate motions to dismiss Counts I
and II, II-V, VI-IX, and X-XIII, respectively. The district
court adopted the Report and Recommendation of the
magistrate judge and denied all the motions to dismiss. The
case then proceeded to a two-month long trial. At the close
of the Government’s evidence, Prosperi moved for a
judgment of acquittal on the mail fraud and money
laundering counts on the ground that the Government had
failed to prove that the mailings charged in the indictment
furthered the scheme to defraud. The district court granted
the motion and acquitted Prosperi on counts I, I, and VI-
XIII. The court then sent the remaining tax and counterfeiting
counts (Counts III-V and XIV-XV, respectively) to the jury.
The jury returned a guilty verdict on all counts. Prosperi
sought a judgment of acquittal on the counterfeiting counts
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on the ground that the Government did not prove the J.P.
Morgan CDs bore a sufficient resemblance to genuine CDs in
order to qualify as “counterfeited” within the meaning of 18
U.S.C, § 513. The district court initially denied the motion,
but on reconsideration and after oral argument, granted the
‘motion and entered an order granting acquittal as to Counts
Ill, IV, and V.3 Prosperi appeals his remaining convictions on
the two tax counts, arguing that he was prejudiced by
spillover evidence introduced for the other counts,
irregularities in the jury deliberations, and by the cumulative
effect of prejudicial errors during the trial. The Government,
on cross-appeal, challenges the district court’s grant of
acquittal on the counterfeiting counts. For the reasons that
follow, we affirm Prosperi’s convictions on the tax counts,
reverse the district court’s grant of acquittal on the
counterfeiting counts, and remand for resentencing.
Il. ANALYSIS
A. Alleged Juror Misconduct
On the second full day of deliberation, a dismissed
alternate juror notified Prosperi’s counsel that one of the
sitting jurors, Marilyn Budd, had called her in tears because
she was being pressured by other jurors to convict Prosperi.
The alternate also related that another sitting juror, Morris
Levy, had decided to convict on the first day of testimony
and had arranged the election of a like-minded juror as
foreperson. Counsel reported this to the court and requested a
mistrial or an inquiry. The district judge denied the request
but sent the jury a note reminding them not to discuss the
case unless all twelve jurors were present. Later, defense
counsel requested either a mistrial or full investigation after
3 Prosperi also moved for a new trial on all counts; the district
court denied this motion initially and again after granting Prosperi’s
motion for acquittal.
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observing juror Levy in a heated discussion with juror Budd
away from the other jurors. The district court ruled that
Federal Rule of Evidence 606(b)* precluded him from
inquiring into the jury deliberations. The next morning, the
district court conducted a limited inquiry, at the request of
the Government, to determine if the dismissed alternate had
exerted an improper outside influence on Budd. The alternate
juror reported that she had advised Budd to resist pressure to
change her vote. The district court did not permit defense
counsel to make additional inquiry of the alternate, again
citing Rule 606(b).
Investigation of alleged juror misconduct is committed to
the discretion of the district court and is reviewed only for an
abuse of that discretion. See United States v. Harris, 908
F.2d 728, 733 (11th Cir. 1990). Prosperi argues that the
district court misapprehended the scope of its discretion
under Rule 606(b) in refusing to conduct an investigation,
and that this was a per se abuse of discretion. We repeatedly
have recognized the breadth of the district court’s discretion
under Rule 606(b), and a “failure to hold a hearing
constitutes an abuse of discretion only when there is evidence
4 Federal Rule of Evidence 606(b) provides:
Upon an inquiry into the validity of a verdict or indictment, a juror
may not testify as to any matter or statement occurring during the
course of the jury’s deliberations or to the effect of anything upon that
or any other juror’s mind or emotions as influencing the juror to
assent to or dissent from the verdict or indictment or concerning the
juror’s mental processes in connection therewith, except that a juror
may testify on the question whether extraneous prejudicial
information was improperly brought to the jury’s attention or whether
any outside influence was improperly brought to bear upon any juror.
Nor may a juror’s affidavit or evidence of any statement by the juror
concerning a matter about which the juror would be precluded from
testifying be received for these purposes.
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that the jury was subjected to influence by outside sources.”
United States v. Watchmaker, 761 F.2d 1459, 1465 (11th Cir.
1985). In this case, the district court investigated the
possibility of external influence by the excused alternate, but
declined to investigate allegations of internal influence
occurring during deliberations. Not only was this decision
within its discretion, but a contrary decision may have invited
reversible error. See United States v. Norton, 867 F.2d 1354,
1366 (11th Cir. 1989) (finding no abuse of discretion in
district court’s declination to question juror regarding alleged -
duress during deliberations because the “alleged harassment
or intimidation of one juror by another would not be
competent evidence to impeach the guilty verdict”). Even if
the district court underestimated the scope of its discretion
under Rule 606(b), the court’s ultimate decision not to
investigate allegations of misconduct that were entirely
endemic to the deliberations was not an abuse of its
discretion.
B. The Contested Allen Charge
During its deliberations, the jury sent the judge a note
“indicating a verdict on 3, 4 and 5 [the counterfeiting
counts]” but that “they are hung up on 14 and 15 [the tax
counts] and ... there is no change in the near future.”5 Over
defense counsel’s objection, the district judge declined to
give a full Allen charge and instead instructed the jury to
“please continue to deliberate on counts 14 and 15.6
Prosperi argues this instruction constituted an abbreviated
Allen charge that coerced the jury’s ensuing guilty verdict on
all counts. Prosperi relies exclusively on United States v.
Bass, 490 F.2d 846, 854-55 (5th Cir. 1974), overruled on
other grounds by United States v. Lyons, 731 F.2d 243, 246
5 R34 at 4814-15.
6 Jd. at 4815.
8a
(Sth Cir. 1984), in which our predecessor court reversed a
conviction coerced by an improper Allen charge.’ This
reliance is misplaced. In Bass the jury asked whether it
would be acceptable to return a verdict of guilt on some
counts and hang as to others, to which the district court
responded with an instruction to continue to deliberate on
those counts for which the jury were “not yet in unanimous
agreement.” 490 F.2d at 854. The Bass court found that,
because this instruction bore all the coercive aspects of a
typical Allen charge but none of its curative features, it may
have caused the jury to believe that only guilty verdicts were
acceptable. See id.
An Allen charge in the absence of a prior poll of the jury
will warrant reversal only when “inherently coercive.”
United States v. Trujillo, 146 F.3d 838, 846 (11th Cir. 1998).
The instruction given here, however, can not be properly
considered an Allen charge. The judge’s simple request that
the jury continue deliberating, especially when unaware of
the composition of the jury’s nascent verdict, was routine and
neutral. Nothing in the brief instruction suggested that a
particular outcome was either desired or required and it was
not “inherently coercive.” See Watchmaker, 761 F.2d at
1465 (finding judge’s entreaty to “go back in there and work
with those other eleven people and try to render a verdict”
was not coercive); see also Norton, 867 F.2d at 1366 (finding
instruction encouraging continued deliberation did not
“approximate an Allen charge or in any other way urge a
verdict’”’).®
7 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.
1981) (en banc), this court adopted as binding precedent all decisions
of the former Fifth Circuit handed down prior to October 1, 1981.
8 — Prosperi also suggests that, in light of the irregularities in the
jury proceedings, the subsequent charge would appear to the jury as
an exhortation to convict. However, the “irregularities” cited by
[Footnote continued on next page]
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C. The Counterfeiting Statute
The jury found Prosperi guilty of three counts of making,
uttering, or possessing a counterfeited security with the intent
to deceive another person, in violation of 18 U.S.C.
§ 513(a).? The statute defines the term “counterfeited” as “a
document that purports to be genuine but is not, because it
has been falsely made or manufactured in its entirety.” 18
U.S.C. § 513(c)(1). After the verdict was returned, Prosperi
moved for acquittal on the counterfeiting counts because the
Government had failed to establish the requisite similarity
between the J.P. Morgan CDs and genuine CDs. The court
initially denied the motion but, on reconsideration, granted
the acquittal. On appeal, the Government argues the district
court erred in interpreting § 513(a) to require a finding of
similitude in contravention of the statute’s plain definition of
the term “counterfeited.” We find the Government’s
argument persuasive.
A district court’s interpretation of a statute is a question of
law reviewed de novo. See Rodriguez v. Lamer, 60 F.3d 745,
747 (11th Cir. 1995). Interpretation of this particular aspect
of the counterfeiting statute is a question of first
[Footnote continued from previous page]
Prosperi, and discussed in the previous section, are not as irregular as
he submits. Any suggestion that the jury was made more vulnerable
to coercion thereby is speculation unsupported by the record.
9 18 U.S.C. § 513(a) provides:
Whoever makes, utters or possesses a counterfeited security of a
State or a political subdivision thereof or of an organization, or
whoever makes, utters or possesses a forged security of a State or
political subdivision thereof or of an organization, with intent to
deceive another person, organization, or government shall be fined
under this title or imprisoned for not more than ten years, or both.
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impression,'° but recourse to older counterfeiting statutes is
instructive. Traditional counterfeiting statutes left their key
term undefined. In determining whether a fraudulent $100
bill was counterfeited within the meaning of 18 U.S.C. § 264,
the Court of Appeals for the Third Circuit applied the
following test:
[W]hether the fraudulent obligation bears such a
likeness or resemblance to any of the genuine
obligations or securities issued under the authority of
the United States as is calculated to deceive an honest,
sensible and unsuspecting person of ordinary
observation and care when dealing with a person
supposed to be upright and honest.
United States v. Lustig, 159 F.2d 798, 802 (3d Cir. 1947),
rev'd on other grounds, 338 U.S. 74, 69 S. Ct. 1372, 93 L.
Ed. 1819 (1949). This has become known as the similitude
requirement and was adopted by virtually every court of
appeals including this one. See United States v. Wethington,
141 F.3d 284, 287 (6th Cir. 1998); United States v. Parr, 716
F.2d 796, 807 (11th Cir. 1983); United States v. Parnell, 581
10 Two courts have briefly addressed the meaning of
“counterfeited” in § 513 in different contexts. In United States v.
Pullman, 187 F.3d 816, 822 (8th Cir. 1999), cert. denied, US._,
120 S. Ct. 802, 145 L. Ed. 2d 676 (2000), the Eighth Circuit observed,
without discussion, that § 513 provided its own definition of
“counterfeited.” The question before the Pullman court, however,
was whether § 513 applied to documents “made from scratch,” thus
its brief discussion of the statute does not illuminate the discussion
here. In United States v. Davis, 888 F.2d 283, 285 (3d Cir. 1989), the
Third Circuit concluded, without discussion, that because “washed”
automobile certificates satisfied the “falsely made” requirement of 18
U.S.C. § 2314, they were also counterfeit within § 513’s definition as
“falsely made or manufactured in its entirety.” See also United States
v. Blakey, 960 F.2d 996, 999-1000 (11th Cir. 1992) (citing § 513’s
definition of “counterfeited”).
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F.2d 1374, 1381 (10th Cir. 1978); United States v. Anderson,
532 F.2d 1218, 1224 (9th Cir. 1976); United States v.
Chodor, 479 F.2d 661, 664 (Ist Cir. 1973); United States v.
Smith, 318 F.2d 94, 95 (4th Cir. 1963). The counterfeiting
Statutes, 18 U.S.C. §§ 472, 473, and 474, were then held to
require a finding of similitude, with the understanding that
the common law definition would apply. See Wethington,
141 F.3d at 287 (§ 472); Chodor, 479 F.2d at 664 (§§ 472,
473, and 474); Smith, 318 F.2d at 95 (§ 472).
With the passage of § 513, Congress broke ‘from the
tradition established in §§ 472, 473, and 474 by incorporating
its own definition of the term “counterfeited”: “a document
that purports to be genuine but is not, because it has been
falsely made or manufactured in its entirety.” 18 U.S.C.
§ 513(c)(1). In spite of this language, the district court
accepted Prosperi’s argument that § 513, like its
counterfeiting predecessors, contained an implicit similitude
requirement. Finding the government had not met its burden
to prove similitude between the J.P. Morgan CDs and
genuine CDs, the court granted Prosperi’s motion for
acquittal on the three counterfeiting counts. On appeal, the
Government argues the district court misinterpreted the
statute.!!
In the case of currency or other generally recognizable
documents, a similitude requirement developed both as a
definition, allowing for juries to determine whether a
counterfeit document copied its genuine analogue, and as
evidence of the defendant’s intent to defraud. See United
!1 Both the Government and Prosperi argue the other waived
their respective similitude arguments by not raising them at trial, but
the Government timely appealed the district court’s grant of acquittal
on Prosperi’s counterfeiting counts. Review of this decision turns on
the proper interpretation of 18 U.S.C. § 513, a question we review de
novo.
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States v. Hall, 801 F.2d 356, 358-59 (8th Cir. 1986). In cases
involving less revognizable documents, however, the
Government argues that greater protection for the
unsuspecting individual is warranted.
Review of a statute begins with its language. See
Landreth Timber Co. v. Landreth, 471 U.S. 681, 685, 105 S.
Ct. 2297, 2301, 85 L. Ed. 2d 692 (1985). If the meaning of
the statutory language is plain, reference to legislative history
is not necessary. See United States v. Ron Pair Enter., Inc.,
489 U.S. 235, 240-41, 109 S. Ct. 1026, 1030, 103 L. Ed. 2d
290 (1989). By its plain language, § 513 defines the term
“counterfeited” without reference to similitude. Legislative
usurpation of existing common law definitions should not be
presumed lightly. See Isbrandtsen Co. v. Johnson, 343 U.S.
779, 783, 72 S. Ct. 1011, 1014, 96 L. Ed. 1294 (1952). But
when Congress speaks clearly on an issue, and when the
language chosen comports with the statutory purpose, the
legislative definition supplants the preexisting common law
definition. See id.; United States v. Texas, 507 U.S. 529, 533,
113 S. Ct. 1631, 1634, 123 L. Ed. 2d 245 (1993).
In determining that a finding of similitude was required
for Prosperi’s conviction, the district court relied on one
statement from the legislative history of § 513 stating that the
statute’s definition of counterfeited “carries forward the
general view that, in order for an article to be counterfeit, it
need only bear such likeness or resemblance to the genuine
article as is calculated to deceive an honest, sensible and
unsuspecting person of ordinary observation and care dealing
with a person supposed to be upright and honest.” Senate
Report of the Committee on the Judiciary, Criminal Code
Reform Act of 1981, No. 97-307, 97th Cong. § 1741 at 775-
76. In light of the unambiguous language in the statute,
reference to the legislative history was not necessary.
An interpretation of § 513 that does not incorporate a
similitude requirement also is supported by the statute’s
stated purpose. The Government notes that § 513 was
13a
enacted to address the increasing production of counterfeited
documents that are not as generally recognizable as currency,
such as CDs. See S. Rep. No. 225, 98th Cong., Ist Sess. at
371, reprinted in 1984 U.S.S.C.A.N. 3182, 3512 (“Present
Federal law is inadequate to combat widespread fraud
schemes involving the use of counterfeit State and corporate
securities.”). With that goal in mind, Congress needed a
broader definition of “counterfeited.” If the average
consumer does not know what a genuine CD looks like, she
would not be protected fully by a statute criminalizing only
those counterfeits that resemble genuine CDs.!2
12 In addition to arguing that § 513 does not require a finding of
similitude, the Government rummage about the case law for
decisions in which courts have not required similitude in other
counterfeiting cases. The Government cites Hall, 801 F.2d at 358, for
the proposition that similitude is only required in possession cases. In
Hall, the Eighth Circuit held a finding of similitude was not required
for a conviction of passing an altered obligation in violation of 18
U.S.C. § 472. See id. at 360. The court reasoned that the similitude
requirement originated primarily as a definition of “counterfeited” and
secondarily as evidence of intent to defraud, an element of all
counterfeiting laws but especially significant in cases of possession
only. See id. at 358-59. Because an intent to defraud could be
inferred from the defendant’s attempt to pass an altered $10 bill and
because the currency involved was altered rather than counterfeited,
the Hail court found a similitude requirement unnecessary for either
of its two purposes. Jd. at 360. The Hall decision does not inform the
question before this court.
As another alternative, the Government cites United States v.
Turner, 586 F.2d 395 (Sth Cir. 1978), to argue the similitude
requirement was satisfied here. In Turner, our predecessor court held
that crude, one-sided, monochromatic photocopies of dollar bills were
counterfeit within the meaning of 18 U.S.C. § 474 even though they
bore scant resemblance to genuine currency. See id. at 397-98. The
court reasoned that the successful use of the phony bills to obtain
change from machines “demonstrated their dangerousness.” Jd. at
[Footnote continued on next page]
14a
Although § 513’s definition of “counterfeited” is unique
among counterfeiting statutes, § 2B5.1 of the United States
Sentencing Guidelines defines “counterfeited” in precisely
the same terms, see U.S. Sentencing Guidelines Manual §
2B5.1 applic. n.3 (1998), and courts interpreting the
“purports to be genuine” language in § 2B5.1 have not
required a finding of similitude. See United States v. Webster,
108 F.3d 1156, 1157 (9th Cir. 1997) (Section 2B5.1 does
“not require counterfeit bills to be of ‘passable’ quality. They
must ‘purport’ to be genuine but need not be mistakable as
such.”); see also United States v. Lamere, 980 F.2d 506, 513
(8th Cir. 1992) (U.S.S.G. § 2B5.1 does not “require that the
counterfeit bill or bills in question be of passable quality”).
Prosperi suggests that because J.P. Morgan does not issue
CDs, the phony J.P. Morgan CDs could not purport to be
genuine. Accepting this argument would license
counterfeiters to create fictitious documents with impunity.
Cf. United States v. Schlei, 122 F.3d 944, 972-73 (11th Cir.
1997) (holding that counterfeit, forged, and nonexistent
securities were included within the definition of “security”
for purposes of securities fraud charge because to. hold
otherwise would only encourage fraud), cert. denied, 523
U.S. 1077, 118 S.. Ct. 1523, 140 L. Ed. 2d 674 (1998).
Prosperi also argues that, without hearing evidence on the
characteristics of a genuine CD, the jury would have been
unable to determine whether the CDs “purported to be
genuine.” Prosperi notes the false J.P. Morgan CDs here
[Footnote continued from previous page]
398. The court’s decision, however, turned on the fact that “the
language of section 474 covering obligations ‘made or executed, in
whole or in part, after the similitude’ of genuine obligations is amply
broad to include the photocopies in this case.” Jd. (quoting 18 U.S.C.
§ 474) (emphasis added). Because we do not interpret § 513 to
require a finding of similitude, these arguments do not affect our
decision in any event.
15a
were very crude and lacked many crucial features of genuine
CDs, most significantly a drawer’s signature. However,
similarity to genuine CDs, to the extent that could have been
elucidated given their inherent variety, is only one factor to
consider in determining whether a security “purports to be
genuine.”
Using the evidence presented in this case as an example,
the jury could have found the fraudulent CDs “purported to
be genuine” because they were accompanied by supporting
documentation, were represented as such by an attorney and
trustee, and were, in fact, accepted as genuine by the
intended victim. Thus, although similitude to a genuine
analogue may help establish that a bogus security “purports
to be genuine,” a particular showing of such is not necessary
to sustain a conviction under § 513. In any event, the
Government did elicit testimony from Sharon Adams, a
manager for a subsidiary of J.P. Morgan, that the
counterfeited J.P. Morgan and Morgan GuarantyTrust
Company CDs exhibited many official-looking features, such
as the Morgan name, an account number, opening and
maturity dates, initial principal amount, stated interest rate,
and a warning of the penalty for early withdrawal of the
deposited funds.!3 The jury could have found these features
were included in the counterfeited CDs to increase the
likelihood they would be accepted as genuine, and that is the
standard required by § 513. The district court erred in
interpreting 18 U.S.C. § 513 to require a similitude
requirement.!4 The court’s order of acquittal will be reversed
and Prosperi’s convictions for making, uttering, or
13 R15 at 1098-1100.
14 Because we interpret § 513 as not requiring counterfeits to
bear a similitude to genuine securities, we do not express an opinion
on the validity of Prosperi’s counterfeiting convictions had we
interpreted § 513 differently.
16a
possessing a counterfeit security in violation of 18 U.S.C.
§ 513(a) will be reinstated.
D. Prejudicial Spillover
Prosperi argues his convictions on the tax counts were
impermissibly tainted by the substantial evidence admitted
on the mail fraud and money laundering counts that were
dismissed before submission to the jury. The Government
acknowledges that the counterfeiting and tax counts were
both predicated on the Holigolf transaction, but argues that
nonetheless the evidence regarding the other transactions
would have been admitted under Federal Rule of Evidence
404(b)!5 as evidence of Prosperi’s intent to deceive Donovan
on the counterfeiting counts.!6 Prosperi counters that if the
evidence could have been admitted under Rule 404(b), the
judge would have had to have given a limiting instruction to
the jury, which he did not do.
15 Federal Rule of Evidence 404(b) provides:
Evidence of other crimes, wrongs, %r acts is not admissible to
prove the character of a person in order to show action in conformity
therewith. It may, however, be admissible for other purposes, such as
proof of motive, opportunity, intent, preparation, plan, knowledge,
identity, or absence of mistake or accident, provided that upon request
by the accused, the prosecution in a criminal case shal) provide
reasonable notice in advance of trial, or during trial if the court
excuses pretrial notice on good cause shown, of the general nature of
any such evidence it intends to introduce at trial.
16 The Government also proffers an argument that the evidence
would have been admissible to impeach Prosperi, even though all the
spillover evidence was admitted in the Government’s case-in-chief.
We need not address the merits of this argument, however, in the
wake of our conclusion that the spillover evidence would have been
admitted under Rule 404(b).
17a
Dismissal of some counts charged in the indictment does
not automatically warrant reversal of convictions reached on
remaining counts. See United States v. Pelullo, 14 F.3d 881,
897 (3d Cir. 1994); United States v. Friedman, 854 F.2d 535,
581 (2d Cir. 1988). Rather, a reviewing court must consider
whether the convictions were the result of prejudicial
spillover: that is, was there evidence (1) that would not have
been admitted but for the dismissed charges and (2) that was
improperly relied on by the jury in their consideration of the
remaining charges. See United States v. Rooney, 37 F.3d
847, 856 (2d Cir. 1994).
Because we have reinstated Prosperi’s counterfeiting
convictions, the first step in our inquiry will focus on
whether potentially prejudicial evidence was admitted that
would not otherwise have been admitted for either the
counterfeiting or the tax counts. Prosperi contends that all
the evidence regarding the Inlet Drive, Royal Palm, and
Refinancing transactions was admitted to establish Prosperi’s
scheme to defraud Donovan, a necessary predicate to a mail
fraud conviction. According to Prosperi, after the mail fraud-
related counts were dismissed, there was no longer a proper
basis for admitting evidence of these transactions. The
Government persuasively argues, however, that evidence of
these other transactions would have been admitted properly
under Federal Rule of Evidence 404(b), either as inextricably
intertwined with the counterfeiting counts or as evidence of
Prosperi’s intent to deceive Donovan. Because Prosperi’s
creation of counterfeited CDs was only part of an ongoing
plan to deceive Donovan and plunder his assets, evidence of
Prosperi’s other deceptions was inextricably intertwined with
the evidence supporting the counterfeiting counts.- See
United States v. Lehder-Rivas, 955 F.2d 1510, 1515-16 (11th
Cir. 1992) (“Evidence of criminal activity other than the
charged offense is admissible for purposes of Rule 404(b) if
it: ‘pertain[s] to the chain of events explaining the context,
motive and set-up of the crime [and is] linked in time and
circumstances with the charged crime, or forms an integral
18a
and natural part of the crime, or is necessary to complete the
story of the crime for the jury.””) (quoting United States v.
Van Dorn, 925 F.2d 1331, 1338 (11th Cir. 1991)).
In the alternative, the evidence of the other transactions
could have been admitted under Federal Rule of Evidence
404(b) to establish Prosperi’s intent to deceive Donovan with
respect to the counterfeiting counts. Prosperi argues the
Government had substantial evidence of Prosperi’s intent to
deceive Donovan from the circumstances surrounding the
relevant Holigolf transaction, and that duplicative evidence
would have been excluded by the district court under Federal
Rule of Evidence 403.!7 Exclusion of evidence under Rule
403 is within the discretion of the district court, see United
States v. Cross, 928 F.2d 1030, 1048 (11th Cir. 1991), and
this court will not speculate on what the district court would
have done had a Rule 403 objection been raised.
Even had the contested evidence not been admitted under
Rule 404(b), Prosperi’s claim would fail on the second step
of our inquiry, as there is insufficient indication in the record
that Prosperi’s convictions on the tax counts were
prejudicially influenced by evidence of the other transactions.
In evaluating claims of prejudicial spillover, we consider
several factors that would indicate whether prejudice tainted
the jury’s verdict. First, we consider whether the jury
meticulously sifted the evidence admitted for all counts. See
United States v. Miranda, 197 F.3d 1357, 1359 (11th Cir.
1999) (per curiam); United States v. Stefan, 784 F.2d 1093,
17 Federal Rule of Evidence 403 provides:
Although relevant, evidence may be excluded if its probative value
is substantially outweighed by the danger of unfair prejudice,
confusion of the issues, or misleading the jury, or by considerations of
undue delay, waste of time, or needless presentation of cumulative
evidence.
19a
1101 (11th Cir. 1986). Relevant to this inquiry is the
similarity of the evidence introduced for the separate counts:
distinct evidence is less likely to result in prejudicial
spillover. See Pelullo, 14 F.3d at 898. A discriminating
acquittal also can signal that the jury was able to sift through
the evidence properly. See United States v. Eason, 920 F.2d
731, 737 (11th Cir. 1990); see also Pelullo, 14 F.3d at 899.
Second, we examine whether the contested evidence was
inflammatory in nature, and thus liable to prejudice the jury.
See Rooney, 37 F.3d at 855. Third, we consider whether
admission of the other evidence significantly altered the
defendant’s trial strategy. See United States v. Ivic, 700 F.2d
51, 65 (2d Cir. 1983). Finally, we assess the strength of the
evidence against the defendant on the remaining counts. See
Rooney, 37 F.3d at 856.
Application of these factors to the evidence in this case
suggests that no unfair prejudice resulted. The jury convicted
Prosperi on all five counts under its consideration, and the
evidence supporting the tax counts resembled that supporting
the other counts, involving as they both did embezziement
from Donovan. The jury was able to sift through the
evidence presented, however, as evidenced by its delay in
reaching a unanimous verdict on the tax counts after finding
Prosperi guilty of the counterfeiting counts.!8 In addition, the
18 Prosperi finds evidence the jury was incapable of sifting
through the evidence in its request for evidence Prosperi contends did
not pertain to the remaining counts. During deliberations, the jury
requested the transcript pages concerning purported loan checks from
Perth Holdings, Ltd., to Amaretto. Prosperi’s counsel objected on
relevancy grounds. The court, finding the evidence relevant to
Prosperi’s intent to defraud Donovan with regard to the counterfeit
securities, overruled the objection. Because the jury announced its
uncertainty on the tax counts after requesting and receiving this
evidence, there is no indication the jury was unable to properly sift
through the evidence. Furthermore, this note was only one of many
[Footnote continued on next page]
20a
evidence of Prosperi’s other misdeeds, all of the “white
collar” variety, is not the type that would ordinarily inflame
or prejudice a jury. Indeed, the jury’s hesitation and
continued deliberation on the tax counts after reaching a
verdict on the counterfeiting counts strongly suggests the
jury was not inflamed or prejudiced by the spillover
evidence. And other than a bare assertion that he might not
have testified, Prosperi presents no reasonable explanation
that his trial strategy was altered by the admission of the
other evidence. Finally, notwithstanding the jury’s initial
hesitation in delivering a guilty verdict, our review of the
record shows the evidence supporting the tax counts was
substantial.
Prosperi emphasizes the fact that the district court did not
strike any of the evidence or provide a limiting instruction.
Limiting instructions by the court to the jury may provide
further assurance that the jury did not consider improper
evidence. Cf United States v. Adkinson, 135 F.3d 1363,
1373 (llth Cir. 1998) (expressing concern that “the
government’s evidence remained in; none was stricken.
There was no instruction to the jury to disregard any of it. If
this strategy is sanctioned, the rules of evidence provide little
protection against conviction by inadmissible evidence.”)
(footnote omitted). Here, in light of the district court’s
decision that the evidence of the Inlet Drive, Royal Palm, and
Refinancing transactions was admissible to establish
Prosperi’s intent to deceive Donovan, the court’s failure to
provide a specific limiting instruction is hardly remarkable.
Although Prosperi challenges the sufficiency of the
district court’s instructions, he neither submitted proposed
[Footnote continued from previous page]
sent by the jury, the number and substance of which exhibit the jury’s
careful consideration of the evidence.
2la
jury instructions nor objected to the instructions delivered.
In addition, the district court did instruct the jury that:
A separate crime or offense is charged in each count
of the indictment. Each charge and the evidence
pertaining to it should be considered separately. The
fact that you may find the defendant guilty or not guilty
as to one of the offenses charged should not affect your
verdict as to any other offense charged.!9
Only after the jury had been deliberating for several hours
did defense counsel request a further instruction to the jury
“that they are not to consider evidence that doesn’t pertain to
the remaining charges” because of concern the jury “may
well be considering a lot of evidence which is no longer part
of the case.”20 The Government objected on the ground that
all the evidence admitted was relevant to Prosperi’s intent to
deceive Donovan under the counterfeiting counts. The court
declined to instruct the jury further, reasoning:
The evidence that came in related to pending
charges at the time, so there was certainly no error in
allowing the evidence to come in at the time.
The jury was instructed that they only had the two
charges, that is, the tax charges and the counterfeit
security charges, so I think they understand that
Clearly.
Furthermore, by the closing argument of counsel,
they directed the jury to what were the only remaining
issues, and I think they clearly understood closing
argument of counsel in that regard.
19 R32 at 4787.
20 = R33 at 4794.
22a
The indictment still does charge the defendant with
defrauding Mr. Donovan, and of course, it’s confined
to the counterfeit securities, but the other actions with
regard to the financial statements—not financial
statements, bank statements, was really not argued to
the jury because it would be outside the scope of the
indictment.
Conceivably it could be to show intent to defraud in
regard to other matters. They understand that this issue
is no longer before them. I think the jury understands
its function and its duty and it would be very difficult
at this point to go through and remove exhibits from
the jury or to give them further instructions at this
point. I think they have had all the proper instructions,
so I will deny the defendant’s motion.?!
The evidence of the Inlet Drive, Royal Palm, and
Refinancing transactions would have been properly admitted
as either inextricably intertwined with the counterfeiting
counts or as evidence to establish Prosperi’s intent to deceive
Donovan with respect to the counterfeiting counts. Moreover,
the record shows that there was sufficient evidence,
excluding the spillover evidence, to support Prosperi’s
convictions on the tax counts and that the jury’s verdict was
not the result of unfair prejudice. Accordingly, we affirm
Prosperi’s convictions on Counts XIV and XV.
E. Extrinsic Acts Evidence
Prosperi argues that evidence of his failure to file other tax
returns, omissions not pleaded in the indictment, contravenea
Federal Rule of Evidence 404(b). At trial, IRS Special Agent
Jaque Nichols testified that Prosperi did not file a trust return
for the Royal Palm property in 1988 or 1989 or a corporate
21 Id. at 4796-97.
23a
return for Amaretto in 1989.22 Defense counsel’s objections
to this testimony on Rule 404(b) grounds were denied.
Evidence of extrinsic offenses properly may be admitted if
relevant to an issue other than the defendant’s character and
if its probative value is not substantially outweighed by the
danger of unfair prejudice. See United States v. Veltmann, 6
F.3d 1483, 1499 (11th Cir. 1993). A district court’s decision
to admit such evidence will not be reversed absent a clear
abuse of discretion. See United States v. Edwards, 696 F.2d
1277, 1280 (11th Cir. 1983).23 Here, the district court found
the evidence was not admitted to impermissibly establish
propensity, but rather to prove Prosperi’s criminal intent as
manifested by his misrepresentations to a bank and
Amaretto’s tax attorney that the tax returns had been filed.24
We cannot say this determination was a clear abuse of
discretion.
Ill. CONCLUSION
For the foregoing reasons, we REVERSE the district
court’s order of acquittal on Counts III-V, AFFIRM
Prosperi’s conviction on Counts XIV and XV and REMAND
for resentencing in accordance with this opinion. :
22 R20 at 2018-29.
23 Prosperi also argues the Government conceded this issue by
failing to address it in its brief. Even if the Government waived its
right to argue the propriety of the extrinsic acts evidence, we would
not reverse on this ground without independent consideration.
24 — See R20 at 2020-22; id. at 2025-27.
24a
APPENDIX B
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 96-8086-CR-RYSKAMP
UNITED STATES OF AMERICA,
Plaintiff,
VS. —
MAR 26, 1998
ARNOLD PAUL PROSPERI,
CLERK U.S. DIST. CT.
Defendant. S.D. OF FL. - W.P.B.
ORDER G ACQUITT Oo
MI, IV, & V
THIS CAUSE came before the Court upon Defendant’s
Motion for Judgment of Acquittal [DE 173], filed November
26, 1997. The defendant, Arnold Paul Prosperi (“Prosperi”
or “Defendant’’), contends that his convictions on Counts III,
IV, and V are defective, because the government failed to
prove that he “counterfeited securities of an organization” in
violation of 18 U.S.C. § 513. This Court concurs.
Defendant’s convictions on Counts III, IV, and V are hereby
reversed.
DISCUSSION
Defendant makes two arguments attacking his conviction
for counterfeiting securities under 18 U.S.C. § 513
(“§ 513”).! First, Defendant contends that the Government
1 18 U.S.C. § 513 provides in relevant part:
[Footnote continued on next page]
25a
did not produce any evidence, much less proof beyond a
reasonable doubt, that the three documents identified in the
indictment met the well-settled test of “counterfeited” within
the meaning of § 513. Second, Defendant contends that the
evidence failed to establish that the documents in question
purported to be securities “of an organization” for purposes
of § 513.
I. Were The Documents “Counterfeited” Within The
Meaning Of 18 U.S.C. § 513?
Defendant argues that his conviction should be
overturned, because the government failed to prove that he
made, uttered, or possessed “counterfeited” securities for
purposes of § 513. Specifically, Defendant asserts that the
CDs can not be counterfeited under the statute (1) because
they do not bear sufficient physical likeness to genuine CDs
to deceive an ordinary person, and (2) because the jury heard
no evidence that would support a physical resemblance
finding. Brief in Support of Motion for Reconsideration at 2.
[Footnote continued from previous page]
(a) Whoever makes, utters or possesses a counterfeited security ...
of an organization, . . . with intent to deceive another person [or]
Organization . . . shall be fined under this title or imprisoned for not
more than ten years, or both. . .
(c) For purposes of this section—
(1) the term “counterfeited” means a document that purports
to be genuine but is not, because it has been falsely made or
manufactured in it entirety;
Thus, to successfully prosecute a defendant under § 513, “the
government must prove that the defendant: (1) made, uttered, or
possessed (2) a counterfeit security (3) of an organization (4) with
intent to deceive another person, organization, or government.”
United States v. Chappell, 6 F.3d 1095, 1099 (Sth Cir. 1993), cert.
denied, 510 U.S. 1183 (1994).
26a
The applicability of a physical resemblance inquiry or
“similitude test” has been recognized by courts in various
other counterfeiting statutes. However, there is no record of
the similitude test having been addressed in the context of
§ 513.
The Government acknowledges the applicability of a sort
of physical resemblance test under § 513, but urges the Court
to apply the test by focusing primarily on the. “fooling
quality” of the subject CDs. The Government places great
emphasis on whether a reasonable person, like, the
Government argues, Mr. Donovan in the instant case, could
be deceived by the documents. The Government argues that
the similitude standard does not apply in § 513, and that the
issue is not whether “the challenged documents bear striking
a resemblance [sic] to the genuine article.” Government’s
Response at 5. The Government contends that the similitude
standard has only been applied “in decisions that relate to
counterfeiting implements under 18 U.S.C., § 474 or to
statutes that do not define the meaning of the word
‘counterfeit.””
The counterfeiting cases, and particularly cases
involving 18 U.S.C. § 474, impose a similitude
requirement because the statute itself dictates that
analysis. Under Sec. 474, the statute itself :mposes a
“similitude” element that is not present in 18 U.S.C.
§ 513. (emphasis in original)
Government’s Response at 5. However, the Government
recognizes that the phony documents must satisfy some test
of physical similarity, “whether or not the challenged
documents were sufficiently similar to fool someone becomes
very important in determining if the documents actually
purported to be genuine.” Jd. at 6; citing United States v.
Parr, 716 F.2d 796 (11th Cir. 1983). Essentially, the parties
argue not over the standard, both parties cite Parr and speak
generally of two primary elements in the counterfeiting
standard (similarity and deception). Rather, the parties
27a
dispute what is required by the standard. The Government
argues for some minimal physical similarity test, that is
satisfied if a reasonable person is deceived, while Defendant
contends that the phony documents must pass an objective
physical similarity test or “similitude” test.
It is left for this Court to determine what must be shown to
establish that securities are “counterfeited” under § 513. It is
well settled that penal statutes are subject to strict
construction. Donnelley v. United States, 276 U.S. 505, 51 i.
48 S. Ct. 400, 401, 72 L. Ed. 676 (1928); United States v.
Strauss, 285 F.2d 953, 955 (Sth Cir. 1960). Such laws are to
be interpreted strictly against the prosecution and liberally in
favor of the accused. Jd.
While the statute expressly defines its use of tie term
“counterfeited” in § 513(c), no court has determined whether
the similitude standard applies. The instant matter puts this
question squarely at issue. Accordingly, the Court will
address the definition of “counterfeited” in § 513,
specifically as relates to the applicability of the similitude
standard, as a matter of first impression.
A. Does § 513 Require Similitude?
Unlike other counterfeiting statutes, § 513 defines the
term “counterfeited” as it is used in the statute. A security is
“counterfeited” if it “purports to be genuine but is not,
because it has been falsely made or manufactured in its
entirety.” § 513(c). The legislative history of § 513 reveals
that this definition “carries forward the general view that, in
order for an article to constitute a counterfeit, it need only
bear such a likeness or resemblance to the genuine article ‘as
is calculated to deceive an honest, sensible and unsuspecting
person of ordinary observation and care dealing with a
person supposed to be upright and honest.” Senate Report
of the Committee on the Judiciary, Criminal Code Reform
Act of 1981, No. 97-307, 97th Cong. § 1741 at 775-776
(citing United States v. Lustig, 159 F.2d 798 (3rd Cir. 1947),
rev'd on other grounds, 338 U.S. 74 (1949)); United States v.
28a
Chodor, 479 F.2d 661, 664 (ist Cir.), cert. denied, 414 U.S.
912 (1973); United States v. Smith, 318 F.2d 94 (4th Cir.
1963); United States v. Gettman, 44 F. Supp. 360 (D. Minn.
1942). The definition carried forward and applied by
Congress in § 513 is more commonly referred to in
counterfeiting cases as the “similitude test” or “similitude
standard.”? Parr, 716 F.2d at 807. Finding that the similitude
standard is applicable in the context of the instant
prosecution under § 513, it is incumbent on this Court to
determine exactly what the similitude standard requires.
B. What Does the Similitude Standard Require?
The Government would have this Court strip the
similitude standard of its well-established physical
resemblance test. The Government acknowledges that ths
standard applies, citing the standard as identified in Parr, but
refuses to call it a similitude test and to apply an objective
physical likeness inquiry. Government’s Response at 5. The
Fourth Circuit opinion in Smith is the seminal case providing
a practical explanation of what the similitude standard
requires in counterfeiting cases. In Smith, defendant Smith
ran a confidence scheme that involved the sale of a machine
to make money. At the time of his arrest Smith had in his
possession two slips of paper the size of a $10.00 Federal
Reserve note. The front of each note bore a faint, reverse
2 The similitude standard has been widely applied by courts to
cases involving various sorts of documentary imitations. See, e.g.,
Lustig, 159 F.2d at 801, Smith, 318 F.2d at 94, Chodor, 479 F.2d at
664, and Parr, 716 F.2d at 807 (applying this standard to counterfeit
currency cases); United States v. Parnell, 581 F.2d 1374, 1381 (10th
Cir. 1978) (similar; cashier’s checks), cert. denied, 439 U.S. 1076, 99
S. Ct. 852, 59 L. Ed. 2d 44 (1979); United States v. Anderson, 532
F.2d 1218, 1224 (9th Cir.) (similar; stock certificates), cert. denied,
429 U.S. 839, 97 S. Ct. 111, 50 L. Ed. 2d 107 (1976); United States v.
Gomes, 969 F.2d 1290 (ist Cir. 1992) (similar; social security cards).
29a
facsimile, of a Federal Reserve note. The backs were blank.
The prosecution in Smith stressed that only two elements
needed to be established to convict for counterfeiting
obligations under the 18 U.S.C. § 472, possession and intent
to defraud. Rejecting that argument, the court relied on a
dictionary definition of counterfeited, “imitated, simulated,
feigned or pretended,” Smith, 318 F.2d at 95 (citing, 2
Oxford Dictionary 1066 (1933 ed.)), to find that a showing of
physical resemblance was required to convict under the
counterfeiting statute. Jd. The Court then ruled as a matter
of law that the two slips of paper were not counterfeits. Jd.
“They [had] too little likeness to be genuine . . . , [and] did
not have the appearance of an obligation of the United
States.” Jd. at 94-95.
This Circuit has directly addressed the similitude standard
in counterfeiting cases on two occasions. In United States v.
Turner, 586 F.2d 395 (Sth Cir. 1983), cert. denied, 440 U.S.
926, 99 S. Ct. 1258, 59 L. Ed. 2d 480 (1979), the defendant
was prosecuted under 18 U.S.C. § 474, which expressly
provides for a similitude requirement in the statute.3 The
defendant was prosecuted for use of bogus bills, which were
photo copies of the face of genuine one dollar bills on black
and white paper, and were intended to be used to obtain
3 In Bonner v. Prichard, 661 F.2d 1206 (11th Cir. 1981), the
Eleventh Circuit adopted as precedent all opinions of the Fifth Circuit
rendered prior to October 1, 1981.
18 U.S.C. § 474 reads in pertinent part:
Whoever has in his possession or custody, except under authority
from the Secretary of the Treasury or other proper officer, any
obligation or other security made or executed, in whole or in part,
after the similitude of any obligation or other security issued under
the authority of the United States, with the intent to sell or
otherwise use the same; . . . Shall be fined not more than $5,000 or
imprisoned not more than 15 years, or both.
30a
change from a change-making machine. Defendant appealed
his counterfeiting conviction arguing that “as a matter of law,
the photocopies were too crude to constitute the sort of phony
obligations whose possession is proscribed [in the
counterfeiting statute].” Jd. at 397. The Turner court cited
the language of the similitude standard as applied in Smith
and affirmed the conviction. The court chose not to apply an
objective resemblance/likeness inquiry, but solely focused on
the fooling quality of the bogus bills.
While the appellant has correctly perceived that [a
physical resemblance] standard has generally been
invoked in past counterfeiting cases to evaluate the
quality of phony bills, we do not think that this case
requires further speculation regarding the capacity of
these illicit bills to deceive . . . . The vending
company’s president testified that these change
machines are designed to accept only real dollar bills.
Thus the photocopies involved here have
unequivocally demonstrated their dangerousness.
Id. at 397-98.4 The Turner court’s unwillingness to apply the
usual objective physical similarity test in this instance can be
explained by the peculiarity that the deceived thing was a
machine and not an individual. As applied to a machine, the
physical likeness of the phony bill was sufficiently similar to
4 In United States v. Ross, 844 F.2d 187 (4th Cir. 1988), the
Fourth Circuit reached the opposite conclusion in a case mirroring the
facts in Turner. The Ross court analyzed Turner and concluded that
the Fifth Circuit had inappropriately applied a test of “dangerousness”
into the definition of counterfeit. The Ross court also noted that the
defendants in the two cases were prosecuted under different statutes.
The Ross court, relying on the similitude standard of Smith, concluded
that the poor quality of the black and white photocopies of the bills
precluded prosecution for counterfeiting, even if the change machines
would accept them.
3la
a genuine bill to satisfy the similitude inquiry. The bill’s
physical properties bore sufficient likeness to deceive a
sensible and unsuspecting machine, even if they would not
have fooled a sensible and unsuspecting person. Because the
machine was designed to accept only real bills, the
sufficiency of the bogus bill’s likeness, for purposes of the
similitude test, could only be demonstrated if the machine
was in fact deceived. If the machine did not accept the bill,
then the phony bill would not bear a sufficient likeness to
deceive as required under the similitude standard. By
exclusively evaluating this deception elenient, the Turner
court could find that the similitude standard of Smith had
been met. This analysis does not discount the Turner
precedent altogether in cases where persons are the deceived.
Evidence that a person was deceived by a counterfeit may
bear directly on the issue of the quality of the counterfeit, that
is, whether the bogus item is in fact an imitation that
sufficiently resembles a genuine article. See United States v.
Johnson, 434 F.2d 827, 829 (9th Cir. 1970); United States v.
Gomes, 969 F.2d 1290, 1294 n.2 (1st Cir. 1992).
United States v. Parr, 716 F.2d 796 (11th Cir. 1983)
demonstrates that the Eleventh Circuit applies the similitude
Standard and its usual physical resemblance test to
counterfeiting cases where machines are not the intended
victims. In Parr, a defendant was convicted of making and
possessing counterfeit ten dollar bills in violation of 18
U.S.C. § 474, the same statute at issue in Turner. On appeal,
the defendant argued that there was insufficient evidence to
prove similitude under the statute because, at the time of trial,
the bill’s color had a purplish hue, rather than the green
coloration of an authentic one. The Eleventh Circuit upheld
the conviction, noting that the government had elicited
testimony from an expert that the discoloration was a product
of fingerprint analysis. In its opinion, the Eleventh Circuit
emphasized the importance of such expert evidence, because
it informed the jury regarding the physical characteristics of
the phony document and aided their finding of similitude.
32a
The note and the testimony were introduced to
provide a basis for the jury to decide whether or not
the note sufficiently resembled an obligation of the
United States. Appellant had an opportunity to cross-
examine the witnesses and indeed was successful in
bringing out what he has characterized as certain
inconsistencies in the fingerprint expert’s testimony as
to the original color of the note. Amy such
inconsistencies properly were before the jury to take
into account in assessing whether the note was a
“similitude”’ of an obligation of the United States... .
Based on this evidence, the jury concluded that the
note qualified as a “similitude” of an obligation of the
United States.
The note in question, especially in view of the
testimony explaining the absence of the purplish hue
overlying it, is far too similar to an authentic note for
us to conclude that the jury could not have found that it
satisified the “similitude” standard of United States v.
Turner, supra. Accordingly we find that there was
sufficient evidence on the similitude issue.
Id. at 807 (emphasis added). Thus in Parr, the Eleventh
Circuit ruled that a physical resemblance finding by the
factfinder was necessary to satisfying the similitude standard.
This result is consistent with other courts’ applications of the
similitude test. See, e.g., United States v. Smith, 318 F.2d 94,
95 (4th Cir. 1963); United States v. Chodor, 479 F.2d 661,
664 (1st Cir.), cert. denied, 414 U.S. 912, 94 S. Ct. 254, 38
L. Ed. 2d 151 (1973); United States v. Parnell, 581 F.2d
1374, 1381 (10th Cir. 1978), cert. denied, 439 U.S. 1076, 99
S. Ct. 852, 59 L. Ed. 2d 44 (1979); United States v.
Anderson, 532 F.2d 1218, 1224 (9th Cir.), cert. denied, 429
U.S. 839, 97 S. Ct. 111, 50 L. Ed. 2d 107 (1976); United
States v. Brunson, 657 F.2d 110, 114 (7th Cir. 1981), cert.
denied, 454 U.S. 1151, 102 S. Ct. 1019, 71 L. Ed. 2d 306
(1982). Accordingly, in the instant matter for Defendant to
be convicted for having made, uttered, or possessed
33a
“counterfeited” securities, the factfinder must be presented
with evidence allowing it to find objective similitude
between the phony securities and genuine securities.‘
C. Applying The Similitude Standard In The Instant
Case
Defendant contends that the conviction under § 513 must
be overturned because the Government failed to offer
evidence regarding what genuine CDs look like. Defendant
argues that this evidence was a necessary prerequisite to
finding similitude, and therefore to convicting Defendant on
the § 513 counterfeiting charge. Defendant posits that the
jury “would have known, at a glance, that the questioned
documents were missing [a] fundamental feature of a
certificate of deposit, [namely, the issuer’s signature].”
Memo. in Support of Acquittal at 12. The Government
asserts that the jury had a “multitude of evidence that Clearly
supports each of [its] verdicts.” Government’s Response at
4. It notes that the evidence before the jury included the
bogus CDs and testimony from various individuals regarding
the subject CDs.
5 In United States v. Rosnow, 977 F.2d 399 (8th Cir. 1992), a
case not cited by either party in this matter, the Eighth Circuit stated
that “there is no similarity requirement for counterfeits in cases
involving less recognizable instruments such as government checks
and drafts.” Jd. at 410 (citing Buckner v. Hudspeth, 105 F.2d 393, 395
(10th Cir. 1939). The Rosnow case involved the possession of
“Counterfeit Sight Drafts” purportedly payable as an obligation of the
United States through the Commissioner of the IRS. The Tenth
Circuit’s ruling of no similarity requirement appears to be anomalous.
The Buckner case from which Rosnow claims to draw this rule does
not seem to support it, but appears to require physical resemblance
finding, “[forgery is constituted] . . . if the instrument is made with the
intent to defraud and shows on its face that it has sufficient efficacy to
enable it to be used to the injury of another.” Jd. at 395 (emphasis
added).
34a
The standard by which this court is to judge the
sufficiency of the evidence to sustain a conviction was given
by the Eleventh Circuit in Parr, 716 F.2d at 806-807
(footnotes omitted). It is not necessary that the evidence
exclude every reasonable hypothesis of innocence or be
wholly inconsistent with every conclusion except that of
guilt, provided a reasonable trier of fact could find that the
evidence establishes guilt beyond a reasonable doubt. Jd. A
jury is free to choose among reasonable constructions of this
evidence. Jd. at 806-7 (footnote omitted). In assessing
whether this standard is met we must consider the evidence
in the light most favorable to the Government. Glasser v.
United States, 315 U.S. 60, 80, 62 S. Ct. 457, 469, 86 L. Ed.
680 (1942); United States v. Henderson, 693 F.2d 1028, 1030
(11th Cir. 1982).
1. Features Of The Phony CD Versus A Real One
The similitude requirement does not criminalize only
masterpieces. “[T]here is no requirement that the challenged
products be paradigmatic likenesses of . . . perfection.”
United States v. Brunson, 657 F.2d 110, 114 (7th Cir. 1981),
cert. denied, 454 U.S. 1151, 102 S. Ct. 1019, 71 L. Ed. 306
(1982). The charged documents may well lack some of the
features of the authentic or genuine. See, e.g., Chodor, 479
F.2d at 664 (sufficient evidence to find fake ten-dollar bill to
be a counterfeit where, despite absence of serial number and
treasury seal, bogus bill resembled genuine currency);
Turner, 586 F.2d at 397-98 (black and white reproductions
printed on one side only were sufficiently authentic to be
illegal “counterfeits”); United States v. Anderson, 359 F.
Supp. 61, 66, (E.D. Ark. 1973) (evidence supported
conviction for counterfeiting corporate bonds where fake
documents were “adequate similitudes” of genuine bonds).
The First Circuit applied these principles more recently in
setting aside a defendant’s conviction for possessing
counterfeit social security cards. In United States v. Gomes,
969 F.2d 1290 (ist Cir. 1992), the cards at issue contained
the heading “SOCIAL SECURITY” in large white letters;
35a
but were missing several essential features of genuine social
security cards, including printed nine-digit numbers, printed
names, and holders’ signatures. The court reasoned:
Although a bogus document cannot be considered a
counterfeit unless it possesses enough verisimilitude to
deceive the ordinary person, the law does not
criminalize only masterpieces. Thus, to run afoul of
the counterfeiting laws, a copy does not have to be an
artistic triumph or so good an imitation as to baffle an
expert.
Id. at 1293. The Court reversed the conviction noting the
cards’ obvious incompleteness and concluding that the cards
“could not, as a matter of law, be considered counterfeit.” Jd
at 1295.
In the instant matter, the three fraudulent CDs were
printed on letterhead of J.P. Morgan and the Morgan
Guaranty Trust Company of New York, and contained
features such as (1) the certificate holder’s name; (2) an
identifying number; (3) an opening date on which the
certificates were purchased; (4) a maturity date; (5) a
principle amount; (6) an interest rate; and (7) a statement that
the certificate was subject to penalties for early termination.°
However, some regular and essential features of authentic
CDs were not present on the phony ones. The bogus CDs did
6 — The Court notes that evidence adduced at trial shows that the
defendant gave Mr. Donovan other documents over the course of their
relationship that contained virtually the identical information as the
counterfeit securities. See Citibank documents dated 4/7/93
(Government Exhibit 11) and 4/8/94 (Government Exhibit 12).
Unlike the phony CDs, these documents are entitled “Your Account
Statement” and not “Certificate of Deposit.” Despite the similar
information provided in each, the Government has not coniended that
these documents were counterfeited securities, but has characterized
them as “statements”. See Tr. Vol. 4 at 482.
36a
not contain the signature of the maker or drawer. The
documents also did not possess a full statement of terms and
disclosures as do most valid CDs. Such disclosures often
define terms and provide rate information, compounding
frequency, minimum balance requirements, balance
computation methods, renewal policies, and the like. The
general appearance and information contained in the bogus
documents gives the impression of a homemade document,
crudely typed with the barest of features that one would
expect in such a valid and binding negotiable instrument—
not even a signature from the supposed issuer is present.
This is noticeably unlike a real CD, which appears in the
likeness of a formal legal contract and is signed by the issuer.
The Government argues that absence of a single feature,
even if it is a signature, does not preclude a finding of
similitude or otherwise negate a counterfeiting conviction. It
points to the circuit court’s ruling in United States v. Webb,
443 F.2d 308 (Sth Cir. 1971), where a counterfeit check
passed by a defendant lacked the signature of the maker, yet
was found by the court to be a “security” for purposes of 18
U.S.C. § 2314. The court found that the check had “most” of
the attributes of a check and had been accepted in good faith
as a genuine security. However, Webb is a forgery case.
Forgery statutes do not demand an objective similitude test as
is commonplace in counterfeiting statues, but only require
an “appearance of validity upon its face as to enable it to be
used to the prejudice of another.” Jd. at 310. The Court’s
attention is also drawn to United States v. Hanna, 1995 WL
66616 (S.D.N.Y. 1995), where a defendant was convicted of
counterfeiting a New York Life check under the same statute
at issue presently, § 513. In Hanna, the jury heard evidence
from a New York Life representativ: at the check bore no
resemblance to any of its real checks, because it did not
contain a number of specific markings required by New York
Life. Jd. at *3. However, the jury determined the checks to
be counterfeited, and the district court denied the defendant’s
argument that there was insufficient proof of counterfeiting.
37a
While it is apparent that the jury heard evidence relating to
the physical similitude of the check, the Hanna opinion
provides little insight for this Court because it does not
address the totality of the evidence heard by jury. This Court
can only presume that the evidence offered allowed the jury
to find sufficient resemblance between the counterfeit New
York Life check and a genuine check. In any event, it
appears that the jury in Hanna was presented both the real
check and the phony one, so as to allow it to conclude that
the phony was counterfeit for purposes of § 513. Id.
While this Court notes the deficiencies of the phony CDs,
it can not say as a matter of law that they fail to meet the
similitude requirement. The phony CDs did possess many of
the essential terms of valid CDs and were able to deceive Mr.
Donovan in some measure.? While this Court notes their
shortcomings, it does not find the discrepancies so obvious as
would cause the CDs to fail the similitude test as a matter of
law. Because this case involves counterfeit securities, before
reversing a jury’s verdict this Court would require a greater
showing of disparity between the phony and the genuine
documents than might be required in other contexts. The
physical features of securities vary by institution and are not
7 The extent to which Mr. Donovan was actually deceived by
the phony CDs is unclear as the trial record indicates that he received
numerous records, account statements, and other financial data from
the Defendant. For sure, Donovan thought he owned CDs. Tr. Vol. 3
at 438, 441. The extent to which Donovan actually looked at and
evaluated these particular fraudulent documents or depended on oral
representations of the Defendant is unclear. It should be noted that
Donovan was not giving consideration in exchange for the securities
which is a usual factual scenario in a counterfeiting case. When
consideration is given, a heightened examination of the security
would be expected. The bogus CDs were given to Donovan much
like a receipt would be given. The “securities” were a record showing
» that his money was on deposit and earning interest.
i
|
|
|
|
38a
commonly familiar to the average person. These factors
allow a less representative security more leeway under the
similitude standard than would be given a counterfeit of a
commonly known instrument such as money.
However, the jury must be presented with evidence that
would allow it to determine whether the bogus documents
sufficiently resembled genuine ones. In the instant case,
evidence of the real versus the phony CD was not presented.
The jury was shown the phony CDs and concluded that they
were counterfeited. However, they were not provided a valid
CD with which to compare the phony. This is essential in a
counterfeit securities case, as the court can not expect the
common juror to have a accurate notion of the appearance of
a security. Unlike currency cases in which a court may
presume that the general populace has sufficient experience
to know the characteristics of a genuine dollar bill, most
persons could not identify the distinguishing attributes of a
CD. If the jury could have seen both the valid and the phony,
it is possible that it would have concluded that the objective
similitude requirement was not met. So then, it is left to this
Court to determine if witness testimony provided sufficient
evidence upon which to find that the — CDs were
counterfeited.
2. Other Evidence And Witness Testimony As To
The CDs’ Similitude
Defendant posits that because the Government did not
present the jury with a likeness of a real CD, it should have
presented the jury with expert testimony to establish
similitude. An expert did not testify at trial as to the
resemblance of the phony CDs versus real ones, however the
Government believes that enough evidence was gleaned from
other evidence and the testimony of other witnesses for the
jury to have found that Defendant counterfeited the CDs.
The Government cites testimony and evidence of two
letters purporting to be from J.P. Morgan officials and
referring to the bogus CDs. These letters refer to the phony
39a
CDs and were intended to “convince Donovan of the genuine
nature of J.P. Morgan certificates.” Government’s Response
at 9. J.P. Morgan vice president Gary Adkin testified at trial
that he could understand how an individual might identify
one of the forged letters, allegedly signed by him, as an
authentic. Tr. Vol. 6 at 382. Adkin also testified that the
forged letter made factual references to the bogus CDs
supposedly issued by J.P. Morgan. Jd. While this testimony
and the letters evidence the Defendant’s intent to deceive Mr.
Donovan, they do not provide a basis for the factfinder’s
similitude determination.
The Government cites the testimony of another J.P.
Morgan official, Sharon Adams, who testified regarding the
contents of the alleged CDs, specifically that each stated a
particular holder, account number, opening date, maturity
date, interest rate, and a warning of an early withdrawal
penalty. Tr. Vol. 7 at 1099-1100. However, like the
presentation of the phony CDs themselves to the jury, Ms.
Adams testimony provides the {factfinder no basis for
determining the physical likeness of the real CDs. It only
States the contents of the phony documents.
The Government also cites the testimony of the Defendant
himself, who testified, like Ms. Adams, of the contents of the
bogus CDs. Tr. Vol. 21 at 4093. Defendant also testified
that the information contained in the bogus CDs might be
appropriate in a real CD. Jd. Again, however, this evidence
fails to bear on the objective resemblance of the phony CDs
with real ones, but only admits that they share common types
of information.
The Government cites to no other testimony or convincing
evidence that will support the jury’s finding that Defendant
“counterfeited” securities under § 513. Having not been
presented with evidence of the likeness of a real CD, nor
presented with witness testimony as to the objective physical
qualities of the phony CDs versus genuine ones, this Court
finds that the jury’s conviction under § 513 is unsupportable.
40a
The evidence, even when considered in the light most
favorable to the government, as required by Glasser, 315
U.S. at 80, 62 S. Ct. at 469, does not support the jury’s
finding. Accordingly, the Defendant’s Motion for Judgment
of Acquittal as to Counts III, IV, and V will be granted.
II. Were The Documents “Of An Organization” Within
The Meaning Of 18 U.S.C. § 513?
Defendant contends that he could not have counterfeited
securities under § 513 because the phony CDs were not “of
an organization” as required under the statute. Defendant
admits that J.P. Morgan and its associated companies are
organizations within the meaning of the statute. However,
Defendant asserts that because these institutions do not issue
CDs, he can not be convicted under § 513 for making,
uttering, or possessing a counterfeited security “‘of an
organization.” Defendant presents a novel argument to this
Court, and one in which neither party cites case law to
support its substantive argument. Defendant argues that, at
the very least, the rule of lenity requires the Court to adopt a
construction in the defendant’s favor. Crandon v. United
States, 494 U.S. 152 168 (1990); United States v.
Thompson/Center Arms Co., 504 U.S. 505, 518 (1992) (when
a court is confronted with an ambiguous statute, “i]t is
proper . . . to apply the rule of lenity and resolve ambiguity in
[the defendant’s] favor”); Dunn v. United States, 442 U.S.
100, 112 (1979). The Government contends that this
argument is mooted once this Court finds that J.P. Morgan is
an organization under the statute. It is uncontroverted that
8 18 U.S.C. § 513 provides in relevant part:
(a) Whoever makes, utters or possesses a counterfeited security . . .
of an organization, . . . with intent to deceive another person [or]
organization . . . shall be fined under this title or imprisoned for not
more than ten years, or both . . . (emphasis added).
4la
J.P. Morgan and the affiliated banking companies, as
established banking institutions whick offer a variety of
banking services, are organizations under the statute.
In this case, J.P. Morgan does not issue CDs, a banking
service commonplace at many other financi] institutions.9
Defendant would have this Court find that because there
exists no genuine J.P. Morgan CD, Defendant could not have
counterfeited a J.P. Morgan CD. In the context of most
counterfeiting cases, Defendant’s argument makes sense. To
find that one has produced a counterfeit document without an
existing real corresponding document would be nonsensical.
However, the analysis as applied to counterfeited securities is
different. The term “counterfeited” as defined in § 513
includes a document that is not genuine “because it has been
falsely made or manufactured in its entirety.” 18 U.S.C. §
513(c) (emphasis added). Accordingly, on its face this
statute comprehends and includes those phony securities that
are complete fabrications, yet supposedly issue from an
organization. See generally, United States vy. Blakey, 960
F.2d 996, 1000 (11th Cir. 1992) (noting that unlike other
similar statutes § 513 proscribes a document “falsely made
“in its entirety”).
This Court can think of plausible explanations for
including documents that are entirely fabricated in the
counterfeit securities context. A security is unlike national
currency, passports, social security cards, etc., where there
exists one physical well-known standard. Securities are
issued by numerous banking institutions. While there are
certain essential characteristics that inure to all, no two CDs
are physically identical. Because of its general
characteristics and information contained therein, even the
well-informed may be fooled by a counterfeit security, and
9 J.P. Morgan is a holding company of financial institutions
rather than a bank itself.
42a
assume it to be the genuine article. Even a securities expert
will not know the specific sorts of securities offered by all
financial institutions. It is less important that there exist a
genuine CD issued by the institution named on the fake
document, because the legitimate counterfeiting harm may be
accomplished on an informed victim by simply using the
name of a respected organization in a document resembling a
common security, like a CD. By including documents
manufactured in their entirety, § 513 covers those defendants
who may use the name of an institution to perpetrate
securities counterfeits, even though the institution does not
issue a particular type of security. Accordingly, Defendant’s
argument on this point will not succeed. Defendant’s phony
CDs were “of an organization” for purposes of § 513.
CONCLUSION
The Court has considered the motion and the pertinent
portions of the record and being otherwise fully advised in
the premises, it is
ORDERED AND ADJUDGED that Defendant’s Motion
for a Judgment of Acquittal [DE 173] be and the same is
hereby GRANTED as to Counts III, IV and V.
DONE AND ORDERED in Chambers at West Palm
Beach, Florida, this 26 day of March, 1998.
/s/
KENNETH L. RYSKAMP
UNITED STATES DISTRICT JUDGE
43a
APPENDIX C
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 98-4605FF, 98-4692FF
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
Filed
versus
U.S. Court of Appeals
ARNOLD PAUL PROSPERI, Eleventh Circuit
Defendant-Appellant. Mar. 30, 2000
SOLO LO OOS Oe Beeeeeoeosoeeoeoaecoanan
On Appeal from the United States
District Court for the
Southern District of Florida
(Opinion » 11th Cir, 19_, F.2d ).
Before: COX, Circuit Judge, KRAVITCH, Senior Circuit
Judge, and PROPST*, Senior District Judge.
PER CURIAM:
The Petition(s) for Rehearing are DENIED and no member
of this panel nor other Judge in regular active service on the
Court having requested that the Court be polled on rehearing
en banc (Rule 35, Federal Rules of Appellate Procedure;
Eleventh Circuit Rule 35-5), the Petition(s) for Rehearing En
Banc are DENIED.
ENTERED FOR THE COURT:
/s/
SENIOR UNITED STATES CIRCUIT JUDGE
* Honorable Robert B. Propst, Senior U.S. District Judge for
the Northern District of Alabama, sitting by designation.
44a
APPENDIX D
The Fifth Amendment to the United States Constitution
provides:
No person shall be held to answer for a capital, or
otherwise infamous crime, unless on a presentment or
indictment of a Grand Jury, except in cases arising in the land
or naval forces, or in the Militia, when in actual service in
time of War or public danger; nor shall any person be subject
for the same offence to be twice put in jeopardy of life or
limb; nor shall be compelled in any criminal case to be a
witness against himself, nor be deprived of life, liberty, or
property, without due process of law; nor shall private
property be taken for public use, without just compensation.
The Sixth Amendment to the United States Constitution
provides:
In all criminal prosecutions, the accused shall enjoy the
right to a speedy and public trial, by an impartial jury of the
State and district wherein the crime shall have been
committed, which district shall have been previously
ascertained by law, and to be informed of the nature and
cause of the accusation; to be confronted with the witnesses
against him; to have compulsory process for obtaining
witnesses in his favor, and to have the Assistance of Counsel
for his defense.
* * ag *
18 U.S.C. § 513 provides:
(a) Whoever makes, utters or possesses a counterfeited
security of a State or a political subdivision thereof or of an
organization, or whoever makes, utters or possesses a forged
security of a State or political subdivision thereof or of an
organization, with intent to deceive another person,
organization, or government shall be fined under this title or
imprisoned for not more than ten years, or both.
45a
(b) Whoever makes, receives, possesses, sells or otherwise
transfer an implement designed for or particularly suited for
making a counterfeit or forged security with the intent that it
be so used shall be punished by a fine under this title or by
imprisonment for not more than ten years, or both.
(c) For purposes of this section—
(1) the term “counterfeited” means a document that
purports to be genuine but is not, because it has been
falsely made or manufactured in its entirety;
(2) the term “forged” means a document that purports to
be genuine but is not because it has been falsely altered,
completed, signed, or endorsed, or contains a false
addition thereto or insertion therein, or is a combination
of parts of two or more genuine documents;
(3) the term “security” means—
(A) a note, stock certificate, treasury stock
certificate, treasury bond, debenture, certificate of
deposit, interest coupon, bill, check, draft, warrant,
debit instrument as defined in section 916(c) of the
Electronic Fund Transfer Act, money order, traveler’s
check, letter of credit, warehouse receipt, negotiable
bill of lading, evidence of indebtedness, certificate of
interest in or participation in any profit-sharing
agreement, _ collateral-trust certificate, pre-
reorganization certificate of subscription, transferable
share, investment contract, voting trust certificate, or
certificate of interest in tangible or intangible
property;
(B) an instrument evidencing ownership of goods,
wares, or merchandise;
(C) any other written instrument commonly
known as a security;
(D) a certificate of interest in, certificate of
participation in, certificate for, receipt for, or warrant
46a
or option or other right to subscribe te or purchase,
any of the foregoing; or
(E) ablank form of any of the foregoing;
(4) the term “organization” means a legal entity, other
than a government, established or organized for any
purpose, and includes a corporation, company,
association, firm, partnership, joint stock company,
foundation, institution, society, union, or any other
association of persons which operates in or the activities
of which affect interstate or foreign commerce; and
(5) the term “State” includes a State of the United States,
the District of Columbia, Puerto Rico, Guam, the Virgin
Islands, and any other territory or possession of the
United States.
* * * *
26 U.S.C. § 7206 provides:
Any person who—
(1) Declaration under penalties of perjury. — Willfully
makes and subscribes any return, statement, or other
document, which contains or is verified by a wnitten
declaration that it is made under the penalties of perjury, and
which he does not believe to be true and correct as to every
material matter . . .
shall be guilty of a felony and, upon conviction thereof, shall
be fined not more than $100,000 ($500,000 in the case of a
corporation), or imprisoned not more than 3 years, or both,
together with the costs of prosecution.
* * * *
Federal Rule Of Evidence Rule 606 provides:
(a) At the trial. - A member of the jury may not testify as
a witness before that jury in the trial of the case in which the
juror is sitting as a juror. If the juror is called so to testify,
47a
the opposing party shall be afforded an opportunity te object
out of the presence of the jury.
(b) Inquiry into validity of verdict or indictment. — Upon
an inquiry into the validity of a verdict or indictment, a juror
may not testify as to any matter or statement occurring during
the course of the jury’s deliberations or to the effect of
anything upon that or any other juror’s mind or emotions as
influencing the juror to assent to or dissent from the verdict
or indictment or concerning the juror’s mental processes in
connection therewith, except that a juror may testify on the
question whether extraneous prejudicial information was
improperly brought to the jury’s attention or whether any
outside influence was improperly brought to bear upon any
juror. Nor may a juror’s affidavit or evidence of any
Statement by the juror concerning a matter about which the
juror would be precluded from testifying be received for
these purposes.
a a ab vce
48a
APPENDIX E
[EXCERPTS FROM TRIAL RECORD]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
NORTHERN DIVISION
UNITED STATES OF ) Docket No.
AMERICA, )
)
Plaintiff, ) 96-8086-CR-
) RYSKAMP
)
v. )
) West Palm Beach, Fl.
ARNOLD PAUL PROSPERI, ) November 5, 1997
) 9:00 a.m.
Defendant. )
)
VOLUME 26
TRANSCRIPT OF TRIAL
BEFORE THE HONORABLE KENNETH L. RYSKAMP
and a jury
APPEARANCES:
For the Government: STEPHEN CARLTON, ESQ.
HOWARD DARGAN, ESQ.
For the Defendant: THOMAS PUCCIO, ESQ.
ROMA THEUS I, ESQ.
Court Reporter: Richard Greenspan,
CSR, RPR, RMR, CRR
United States Courthouse
West Pim Beach, 33401
49a
[Trial Transcript Page 4799]
(In chambers)
THE COURT: What’s the problem?
MR. PUCCIO: = Can I wait until my client gets in here?
THE COURT: Sure. Where is he?
MR. PUCCIO: With MR. THEUS, I assume.
Judge, I had a couple of conversations with that juror
who was excused, taking your Honor’s suggestion that it may
be helpful, and she revealed to me certain things which I
think are deeply disturbing in terms of the deliberations.
First, she said to me that one if not two jurors, Mr.
Levy, first of all, Morris Levy, the gentleman you might
recall who didn’t want to be excused going on vacation with
his wife and wanted to be part of the deliberations, had made
up his mind from day one and a juror he sort of palled around
with, Mr.-- DJ, the fellow sitting next to him, she believed
was of similar mind.
She indicated to me that Mr. Levy engineered the
selection of a foreperson long before your Honor gave the
jury any instructions in that regard, told the jury that it was
his suggestion, this other fellow’s suggestion that Tom,
another juror, I think his name was Higgins be the
foreperson.
I view that as a step in the deliberative process that
took place without permission of the court before the
deliberations and instructions, et cetera.
I also believe, your Honor, that a hearing would
50a
[Trial Transcript Page 4800]
produce information that there was a lot of discussion about
this case and peoples’ minds made up beforehand.
Additionally, your Honor, I learned -- I spoke to her
last night, just frankly just to see, to get a feel for the
case and what she thought about the trial, et cetera. I did
notice that she did make comment to the newspaper about the
wayshe felt and perhaps why I talked to her.
I talked to her again this morning having slept on it
_ because I am concerned that we have jurors there, at least
one, maybe two, who prejudged the case in violation of your
Honor’s instructions.
I then learned- this morning that one of the sitting
jurors, apparently Marilyn Budd, hysterically contacted this
excused juror last evening and indicated to her that she was
in a state of crying and hysteria, that she was being
pummeled into submission, so to speak, and cursed at, et
cetera, et cetera, et cetera.
Apparently she then spoke to her again this morning,
so you have two at least, based or what I was told, two
contacts by a sitting juror with a person not sitting
concerning the deliberations in the case and what’s going on.
I believe, your Honor -- I also was told, just so — I
assume it’s relevant, that the present state of the jury
deliberations is 10 to 2 in favor of conviction, that the --
that Ms. Budd, the hysterical juror who called, is a person
Sla
[Trial Transcript Page 4801]
voting for acquittal and that another juror, identified to me
as a juror who sat in the first seat, is also a juror voting
for acquittal where the others are voting for a conviction.
I looked at 23(d), your Honor, to see how this might
affect this situation and I don’t think that 23(d) -- I think
this is a situation in which one or more jurors should be
excused.
This is certainly a situation in which my client,
particularly in light of the present state of affairs, is not
going to consent to a jury of less than 12.
I did look quickly, I had someone look at the
legislative history cf 23(d) and the definition of just cause
and I would indicate to your Honor that the two cases that
supported the change in the statute were cases, one case in
which a juror, deliberating juror had a heart attack after a
six-month trial and another case in which -- I’m sorry, after a
four month trial, another case after a six-month =<al a
deliberating juror had to be removed by a psychiatrist for
health reasons.
THE COURT: If we are going to put the law into
perspective, Rule 606(b) says upon inquiry into the validity
of a verdict or indictment, a juror may not testify as to any
matter or statement occurring during the course of the jury’s
deliberations or to the effect of anything upon that or any
other juror’s mind or emotions as influencing the juror to
52a
[Trial Transcript Page 4802]
assent or dissent from the verdict or indictment or concerning
that juror’s mental processes in connection therewith, except
that a juror may testify on the question of whether extraneous
prejudicial information was improperly brought to the jury’s
attention or whether any outside influence was improperly
brought to bear upon any juror, or may, any juror’s affidavit
or evidence of any statement by the juror concerning a matter
about which the juror would be precluded from testifying be
received for these purposes.
MR. PUCCIO: That rule I am familiar with, your
Honor, impeaching a verdict. This is a different situation.
THE COURT: I didn’t intend that you continue to talk
with this juror. I only intended that you say -- to comment
on what they thought of the case, that it might be helpful. I
didn’t intend that this go into anything going on in the jury
room.
As far as I am concerned, nothing is going on in the
jury room and I have no evidence of anything going on in the
jury room and I’m not going to inquire.
Now, I can give the jury instructions not to discuss
the case. If they choose to discuss the case before the case
is over, they just haven’t followed my instruction. It doesn’t |
affect the validity of the jury. I imagine jurors do that all
the time. You tell them not to, but that doesn’t affect the
validity of the verdict.
53a
[Trial Transcript Page 4803]
MR. PUCCIO: _ I think if a juror violates his oath it
does affect the verdict.
THE COURT: But the only way you get that is with
illegal testimony under 606(b).
MR. PUCCIO: Judge, this is different because 606(b)
is the codification of the old rule a juror can’t impeach his
or her verdict, but even under that rule you have extraneous
influence here. You have a juror -- a person outside the jury
giving advice to a person within the jury.
THE COURT: Did she give advice?
MR. PUCCIO: She did.
THE COURT: Then she is improper, but at that point
--it may be advice as to how to proceed and we will deal with
that later on, but I am not doing anything at the present time.
MR. PUCCIO: I think it’s clear to me that based upon
this juror’s conversation with me, she had given advice to the
sitting juror of how she should deal with this situation.
THE COURT: _Not how to vote, but how to deal with
the situation?
MR. PUCCIO: How to deal with the situation, stick to
your guns kind of testimony.
THE COURT: _Isn’t that what you want her to say?
MR. PUCCIO: _ Judge, I don’t want anyone to say
anything. My problem is I think you have a situation where
you have a tainted jury and I have never been in a case where
you
¢
54a
[Trial Transcript Page 4804]
have a situation where jurors are talking and getting advice
from people outside the jury, regardless of who it favors or
who it doesn’t favor, and I also think -- I don’t recall a case
where somebody is single-minded enough to engineer the
selection of a foreperson.
THE COURT: Everybody has read the Runaway Jury
and I think they are all getting carried away with that sort of
stuff.
MR. PUCCIO: That may be, but that doesn’t help my
client.
THE COURT: You made your record.
MR. PUCCIO: My application is for your Honor to
remove the juror who made up his mind or have a hearing to
determine if that’s the case. In the alternative, to remove
one or more jurors because of these incidents. In the absence
of doing that, I would move for a mistrial.
THE COURT: I will deny those motions.
4
I may send a note into the jury and instruct them not
to discuss it, remind them that I instructed them not to
discuss this case in any manner with any other person, they
can only discuss it within the jury room.
MR. PUCCIO: _ If your Honor is going to send a note
to the jury, I would like to see what the note says.
THE COURT: Basically that, you are reminded that
you are not to discuss this case in any manner with anyone
outside
55a
[Trial Transcript Page 4805}
the jury room.
MR. DARGAN: We would have no objection to that.
MR. PUCCIO: __ It’s broader than that, they shouldn’t
be discussing the case until all 12 are present.
THE COURT: Unless all 12 are present and with no
one outside the jury.
MR. PUCCIO: Can I examine the instruction?
THE COURT: Sure, but I want to finish getting this
jury picked.
(Recess at 10:20 a.m.)
(10:45 a.m.,; at the side bar)
MR. PUCCIO: _ I looked at the note. I don’t have a
problem with the note, but we were outside when the jury
went out for recess and it was observed that that one juror
who we believe was the one who was contacted by the
excused juror appeared to be in tears, which corroborates
what I was told, and it suggests to me, your Honor, that there
is a fair amount of browbeating going on there.
THE COURT: That happens in a lot of juries.
MR. PUCCIO: It’s not proper. You asked them to
talk to one another civilly and to discuss the issues. People
shouldn’t be reduced to tears. .
THE COURT: What am I going to do about it?
MR>PUCCIO: _It seems to me that you could suggest
_ to the jurors that they treat one another civilly and that if
562
[Trial Transcript Page 4806]
anyone has any conscientiously held views, that they --
THE COURT: I say that in the instructions. I say you
should discuss it, don’t hesitate to change your mind if you
are convinced you are wrong, do not give up your honest
beliefs merely to get the case over with.
MR. PUCCIO: Maybe you should give that instruction
again.
THE COURT: I don’t see any reason. A lot of times
you can hear -- I will go outside a jury room and they are
hollaring and screaming at one another, and that’s part of the
process. Some people are more sensitive than others. They
are not used to the give and take and they may get emotional
about it.
MR. PUCCIO: In this particular case, where I am
advised that a juror calls last night hysterically crying and
then I see this juror crying outside the courtroom, outside the
courthouse, it seems to me that that’s a pretty compelling
case of what’s going on and I would think that some
instruction is in order that somebody should not be
browbeaten into submission.
THE COURT: Until I get a note from the jury that
says they are deadlocked or they need further instructions, I
don’t see any need to instruct them.
MR. CARLTON: Your Honor, I think some comment
from the court is appropriate to counsel that the time to talk
to
57a
[Trial Transcript Page 4807]
the alternate juror has come and passed and I don’t think any
further contact should happen.
THE COURT: I think I made that happen.
MR. PUCCIO: You didn’t tell me not to talk to that
. Juror.
THE COURT: I said you could talk immediately after
the trial. I didn’t mean keep an ongoing conversation with
her. No further contact with the alternate juror. :
MR.DARGAN: Also we would request the jurors
themselves be given wide berth as you had instructed
previously. If there are people milling about where the jurors
are spying on the jurors, we think that’s inappropriate.
MR. PUCCIO: _ Nobody is spying on the jurors. I was
outside with my client and the jurors came outside the
building. I don’t know what I am supposed to do, Judge, but
not to pass over that other point --
(Pause)
THE COURT: This says “May we have Prosperi’s
testimony regarding ‘loan’ notation on checks being loans
from Perth to Amaretto read back.” I don’t know where that
testimony is. If the attorneys can find it --
MR. DARGAN: I know I crossed him on. that
extensively.
THE COURT: -- I would send it into the jury room.
MR. DARGAN: _I crossed him for probably two hours ~
on
———_
58a
[Trial Transcript Page 4808]
that.
THE COURT: I will just tell them to rely upon their
coliective memory then.
MR. PUCCIO: _ I would object to that.
MR. CARLTON: How is that possibly objectionable?
MR. PUCCIO: _ I don’t know, if a juror is asking for
testimony --
THE COURT: Can you all find it?
CARLTON: Do you want us to find the specific
part?
THE COURT: If you can find it and redact the pages,
I will send it in. I am not going to read it back. We have got
other cases to go on. The only way = will get it is the
written testimony.
MR. PUCCIO: _— Just to go back to that other point,
because I don’t want to waive any rights my client has, with
respect to this alternate juror, and again, your Honor, in fact
you encouraged us to speak to the juror, she is a private
citizen now. I don’t know on what basis I could be
prohibited.
You understand, your Honor, I am an agent here for a
client, I am not doing this because I feel like spending my
evenings talking to an alternate juror, but I don’t want to
stupidly waive on behalf of my client -- recklessly waive on
behalf of my client any interest he has.
I think I would believe he has a right to speak to her
59a
[Trial Transcript Page 4809]
himself if he wanted to, so I don’t know how I could be
prevented from doing that, unless there is some rule of law
that says I can’t.
THE COURT: I can do it until the jury returns its
verdict. Then you can talk to everybody.
MR. PUCCIO: Is there a rule--she is no longer on the
~ jury. It doesn’t raise an issue, Judge. Obviously I don’t want-
THE COURT: I could do it and you could appeal me
and by the time of the appeal it would be moot, but I just
don’t want any more contact with the person.
MR. DARGAN: I take it that would include people
associated with the defendant, his family and the like?
THE COURT: Yes. Until the jury returns a verdict, I
don’t want any further contact with the alternate.
MR. PUCCIO: _I take an exception to your ruling.
THE COURT: All right.
(Recess at 10:55 a.m.)
(12:34, jury not present)
THE COURT: The first question, have you reached
an agreement as to what testimony we would send in to
them?
MR. CARLTON: With regard to the government’s
position, we reviewed all of the transcript volumes that
concern Prosperi’s direct and cross-examination and we have
made copies available to defense counsel and we have
selected
60a
[Trial Transcript Page 4810]
to our best ability those portions that the government desires
to have read back to the jury and as responsive to the jury’s
question.
THE COURT: And you have got the portions you
want?
MR. PUCCIO: _ I have looked at them, your Honor.
The biggest problem I have with them is all these pages
pertain to charges that have been dismissed or on which
judgment of acquittal has been entered, so I would object to
the utilization of any of this material.
MR. CARLTON: Our response to that position, insofar
as argument is concerned, is that this deals with the witness’s
credibility. It’s the defendant testifying.
THE COURT: Or a scheme to defraud.
I will allow the testimony to go in.
MR. PUCCIO: __If you allow it to go in, there are pages
and pages having to do with that $75,000 fee. I mean, there
are very few pages that relate to this note that relate to loan
notation on checks.
THE COURT: I am sure they will skip over. They
are looking for something. They only may be interested in a
few pages, but they don’t know where it is.
MR. PUCCIO: I would object to sending them
anything beyond what they asked for. You note my first
objection, but if we are going to go beyond that to sending
them something, they should only be sent a few pages that
deal directly with
6la
[Trial Transcript Page 4811]
this.
MR. DARGAN: The $75,000 on cross-examination, on
direct he had testified the $75,000 was a fee and on
cross-examination he indicated it was a fee from Amaretto
and on cross-examination I pointed out that there was no
indication that this was a loan and this should have been a
loan reflected on the check register, reflected on the checks,
if this was a fee from Amaretto there would have been a
notation that Perth was loaning money to Amaretto and that’s
directly what they are asking about.
MR. PUCCIO: These these have to do with ‘93 and
‘94. The indictment no longer deals with ‘93 and ‘94, it
deals with ‘89 and ‘90.
MR. DARGAN: And it goes to not only credibility, but
whether or not there was bona fide loans all along and the
issue is significant to the tax charges.
THE COURT: I will let the government submit what
they think is apropos. Are you satisfied that that’s all the
testimony or do you think more testimony should go?
MR. PUCCIO:. I don’t want to submit more testimony, I
would submit less testimony.
THE COURT: Then I will send that testimony in to
them and I will respond that we are sending the testimony in.
MR. DARGAN: For the record, the pages that the
government feels are relevant are pages --
62a
[Trial Transcript Page 4812]
THE COURT: I am not going to point them to any
pages.
MR. DARGAN: _ Just for the record.
Froi | the direct examination, page 3547 through page
3564. I have looked through this and I didn’t see any side
bars through there and I gave copies to counsel as well.
Then in the cross-examination the government believes
the relevant portions are from page 4132 through 4190, and
- again, I looked through these pages and did not see any side
bars. I gave these to counsel about a half hour ago and if I
am mistaken, please correct me, counsel, but I didn‘t see any
side bars.
MR. PUCCIO: __I just want to make sure we agree on
that. I didn’t see any either.
THE COURT: Okay, the next question is there a legal
definition relating to the tax returns for the concept of a
loan. I don‘t understand the question.
MR. PUCCIO: __ I would suggest what the jury is trying
to find out is whether loans are reportable on tax returns
because the charge has to do with income being reported or
not reported. So I would suggest the jury be told that ioans
do not have to be reported on a tax return as income.
THE COURT: What do you construe the question to
be?
MR. CARLTON: I vehemently disagree with that
interpretation. I think what they are searching for, is there
a legal definition for loan and I don’t think the court can
63a
[Trial Transcript Page 4813]
supply one. I think that the court can’t really answer this
question.
THE COURT: But they say is there a legal definition
related to tax returns for the concept of loan.
MR. THEUS: Your Honor, if I might, in the pattern
jury instruction for the Eleventh circuit that deals with tax
evasion, I believe one of the parts of the instruction is that
loans are not taxable.
MR. CARLTON: This is not an evasion, this is a
7206(1).
THE COURT: That’s dasically what I am going to
say here. First of all, I will say I cannot give you a legal
definition of the word loan. However, loans are not taxable
under the income tax code.
MR. THEUS: Or not reportable as income.
MR. PUCCIO: Or do not have to be reported as
income.
MR. CARLTON: I think if you are going to make that
comment to the jury, your Honor, I think that you need to
point out that it is up for the jurors to decide if these were
loans.
THE COURT: _ They are not asking that I don’t think.
MR. DARGAN: That is the issue, whether this was a
bona fide loan.
THE COURT: Let me work this up. Just a minute.
So far I have “I cannot give you a definition of the
64a
— [Trial Transcript Page 4814]
word ‘loan.’ However, loans are not required to be reported
on an income tax return.”
Then I will say “It is up to the jury to decide
whether there was a loan.”
MR. PUCCIO: _ I would object to that because that’s
not what they are asking for.
MR. CARLTON: That’s balanced.
MR. PUCCIO: It’s not a question of balanced, it’s a
question of answering what they have asked for.
MR. CARLTON: We think it’s balanced.
MR. PUCCIO: _That’s rearguing the government’s
case. I object to that.
THE COURT: They are just asking for a definition,
so I will leave it where it is. Okay, here we go, Betty, make
copies of that.
MR. DARGAN: May we see the final version?
THE COURT: Sure.
MR. PUCCIO: Can we go out to lunch?
THE COURT: Sure, if they have your beeper number
or phone number. _
(Recess at 12:40 p.m.)
(3:00 p.m., jury not present)
THE COURT: You have seen the note from the jury
indicating a verdict on 3, 4 and 5 and they say they are hung
up on 14 and 15 and they say there is no change in the near
. 65a
[Trial Transcript Page 4815]
future, which I don’t think this warrants an Ailen charge at
this time. I will just tell them to continue to deliberate on
counts 14 and 15.
MR. PUCCIO: For ali the reasons I put on the record
before, Judge, I would move for a mistrial.
THE COURT: Okay. You don’t have any objection to
my instruction though, right?
MR. PUCCIO: I would move for a mistrial.
THE COURT: Denied.
MR. CARLTON: With regard to counts 3, 4 and 5, is
your Honor going to seal those verdicts at this time?
THE COURT: You mean to take the verdict? It’s all
on one piece of paper. You are afraid they will change their
mind?
MR. CARLTON: No, I just inquired.
THE COURT: I have said here, “Members of the jury,
please continue to deliberate oa counts 14 and 15.”
MR. PUCCIO: __ I just want to note my objection for the
record.
- THE COURT: Your objection is noted and overruled.
(Recess at 3:05 p.m.)
(4:00 p.m., at the side bar)
MR. PUCCIO: ~. Your Honor, about a half hour ago the
jury was excused for a break, I assume, and escorted outside
the building. I have been advised that at least two people
66a
[Trial Transcript Page 4816]
observed that Mr. Levy had taken Ms. Budd aside.
THE COURT: Whois Mr. Levy?
MR. PUCCIO: Mr. Levy is the gentleman who
canceled his vacation to stay on the jury and who was the
subject of my application this morning, who I believe based
on everything I have been told, made up his mind about this
case a long time ago, certainly before the evidence was
concluded.
He, in the observation of two people, took Ms. Budd
aside, who was the hysterical juror who called the excused
juror last evening and again this morning, and they were
walked away some distance from everyone else who was
outside and were engaged in animated heated conversation,
appeared to be arguing.
Your Honor just sent a note in earlier today saying
jurors should not be deliberating about this case without
everybody being present. I have two people who are willing
to testify right now that they observed this.
THE COURT: You don’t know what they are saying,
though, right?
MR. PUCCIO: __ They can’t read lips.
THE COURT: Maybe they were arguing about who
had the better lunch.
MR. PUCCIO: Anything is possible, Judge. I try to
goin all probabilities, it’s pretty strong circumstantial case I
think is being built here of an unfair pressure on this juror
67a
[Trial Transcript Page 4817]
by this Mr. Levy, who is adamant in his desire to return a
guilty verdict in this case.
I would again ask- for a full hearing on this matter.
Absent that, I would ask for a mistrial in this matter. Any
kind of juror interference like this or juror misconduct is
extremely serious and I think it should be immediately
addressed.
THE COURT: The only thing that I can really
consider under Rule 608(b) is outside influence and it may be
that at some point we will deal with the telephone call with
the alternate, but this doesn’t involve outside influence.
These are jurors talking and we don’t even know what was
said at the time.
MR. PUCCIO: Judge, could I just suggest to the court,
I’m sure I am fully conveying my thoughts to your Honor,
who is obviously familiar with these rules, I understand that
606(b) to be that a jury can’t impeach a verdict. . We don’t
have a verdict here, so I don’t think it’s applicable.
THE COURT: The only thing you can even take a
statement on is whether there is an outside influence.
Otherwise there is no reason to interrogate them about it.
MR. PUCCIO: At this point I believe I made a prima
facie case which I can prove with a couple of witnesses that
jurors are violating the court’s instructions, which were
reiterated in writing today, that you must not talk about this
68a
[Trial Transcript Page 4818]
case without the jurors being present and I believe I see a
situation of a juror, Mr. Levy, who is driven here to return a
guilty verdict. I can only conclude that from all I have been
told about him over the last 24 hours, and is now pounding
away against this woman, who won’t give in, at least it
appears to me, on the last two counts.
THE COURT: Anything the government wants to
say?
MR. CARLTON: Mr. Puccio is not complaining about
the woman who obviously is still on the jury and who is in
favor of the defense who was complaining about being
browbeaten, he is not asking for an inquiry of her.
MR. PUCCIO: I am asking it.
THE COURT: She is one who made the call.
MR. CARLTON: Exactly.
MR. PUCCIO: Ofcourse I am asking for an inquiry of
her, Judge. I am asking for an inquiry of both parties. Just
so I am clear. I mean, my view of the situation is that we
have a record thus far which requires the disqualification of
one, perhaps two jurors, Ms. Budd included, and I think that
that’s where we are in this thing.
THE COURT: Okay, I don’t see the need to make any
inquiry at this time, so your objection is noted and your
motion for a mistrial is denied. We will await on the jury.
MR. THEUS: The court may recall the case of
United States v. Heller where there was jury misconduct
involved.
69a
[Trial Transcript Page 4819]
THE COURT: That was where they made a racial
remark.
MR. THEUS: Anti-Semitism.
THE COURT: In the River Cops case I also had a
situation where the foreman of the jury realized that the jury
wasn’t functioning very well, so he went to the library and
got a book on being a juror, brought the book back, didn’t
show it to anybody else, but organized he jury according to
the outline in the book, marshaling the evidence, appointing a
secretary and doing all this stuff, and eventually that came
out and then we had a hearing on it.
That was outside influence, bringing another book into
the jury room. However, he didn’t show it to any other juror
and the Court of Appeals said all he did was organize it in an
orderly way that didn’t affect the verdict, just how sand
handled the evidence and how they debated it.
But the Heller case I remember very well because of
some juror made a racial slur against Heller being Jewish and
they did set that aside, but I don’t think we are anywhere
close to that.
All night, thank you.
(Adjourned at 4:10 p.m. until 9:00 a.m., November 6,
1997)
70a
[4820]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
NORTHERN DIVISION
UNITED STATES OF ) Docket No.
AMERICA, )
)
Plaintiff, ) 96-8086-CR-
) RYSKAMP
)
v. )
) West Palm Beach, F1.
ARNOLD PAUL ) November 6, 1997
PROSPERI, )
) 9:00 a.m.
Defendant.
VOLUME 27 :
TRANSCRIPT OF TRIAL
BEFORE THE HONORABLE KENNETH L. RYSKAMP
and a jury
APPEARANCES:
For the Government: STEPHEN CARLTON, ESQ.
HOWARD DARGAN, ESQ.
For the Defendant: THOMAS PUCCIO, ESQ.
ROMA THEUS I, ESQ.
Court Reporter: Richard Greenspan,
CSR, RPR, RMR, CRR
United States Courthouse
West Palm Beach, 33401
Tla
[Trial Transcript Page 4821]
(10:45 a.m., jury not present)
MR. DARGAN: _ Judge, just in an abundance of caution,
MR. CARLTON and I went back to members of our office
and discussed the situation that Mr. Puccio raised, discussed
it as well with some of the people in the Appellate Division,
and I think the consensus from our office is that it would be
prudent if your Honor made an inquiry of the alternate, to
have her come in to lock in, if you will, what exactly was the
extrinsic matter that was discussed.
As I understand it, it was strictly stick to your
guns, something not prejudicial, but I think it is important
that be locked in so six months down the road, 4 months
down the road the version of events does not change.
I think if there is other extrinsic matter that was
discussed, I think if it is done promptly it would still give
your Honor an opportunity to potentially correct the situation
and remove any taint that might possibly exist, if we can
learn what exactly happened from the alternate juror.
Also it may provide the basis for the United States
to argue that the sitting juror should be removed for cause,
depending upon what was given to her, but I think it’s
premature for us to argue that at this point.
I think the important point is if your Honor could
make that inquiry, not to get into what the deliberations were
that are being discussed by the jury, but just what the
72a
[Trial Transcript Page 4822]
extrinsic matter is.
THE COURT: The important thing is not what the
juror said to the alternate, the important thing is what the
alternate said to the juror.
Most of the cases that deal with this, they talk
about outside contact with jurors, usually that’s when an
outsider contacts a juror. In his case the juror contacted an
outsider, albeit a former juror or the alternate juror, who
heard all the testimony. It’s not like a party had approached
or an attorney had approached or even a family member had
approached where you are trying to influence that juror, and
furthermore, it is the juror who made the contact.
The important question is what did the alternate say
to the juror and I agree that we probably should make a
record of that. If you could bring her in some time, I know I
am tied up between 3 and 5 this afternoon with a contested
sentencing hearing.
MR.DARGAN: Your Honor, I am not sure that the
government even knows where she is or how to contact her.
I think it would be appropriate for the court, either through
Betty or the marshals, to reach out for her and schedule an
appointment and we can all be there.
I think it would be prudent that the attorneys, both
sides involved, not contact this juror, so there is no
appearance of any impropriety, as well as any parties
73a
[Trial Transcript Page 4823]
associated with the defendant.
THE COURT: Betty, do you know how to contact
that alternate juror?
THE CLERK: Yes, I can. I mean, I can find out the
phone number.
THE COURT: Call her and see if we can get her in
here before 3:00, before that Morgan hearing.
‘MR.PUCCIO: Judge, could I just say, I agree -- I
mean I consent to the application.
I just wanted to say two things. One, your Honor, is
that I wasn’t attempting in my conversation to “debrief” this
woman. I was more listening to what she had to say, so I
really have no idea what else she has to say beyond what I
related to the court the other day, so I think a debriefing of
some sort is essential.
The second thing I would say is, and I looked at the
same cases your Honor is looking at, in fact, in the same
book, but I would say your Honor, in addition to the
proposition in this circuit, I think it’s the Supreme Court
ruled that when there is such a contact, there is presumptive
prejudice, a rebuttable presumption, of course, so this should
be done, but beyond that I believe that perhaps even more
compelling here is what I would view, putting together what
this woman told me with what was observed outside
yesterday, a real case of juror coercion.
74a
[Trial Transcript Page 4824]
These cases are not often easily documented decause
of 606, but here we can -- this issue can be reached, perhaps
even corrected by the court without intruding on 606. We
don’t have a verdict yet and we are not getting information
from the affected juror, we are getting information from a
private citizen who used to be a juror and also people who
were eyewitnesses. This woman, Ms. Budd, is obviously
being put upon.
THE COURT: Deliberations means give and take.
You hear jurors arguing all the time. That’s -- you hear
lawyers argue. That’s the way you get at the truth, by
arguing your various impressions.
I don’t think we are anywhere near -- the cases on
juror coercion, I don’t think I have ever seen one, but this is
a normal thing that goes on in the jury room, that they argue
their position. That’s normal. I am not concerned with that
at this point.
MR. PUCCIO: __ I was saying the reason you don’t see
them is the rule that doesn’t allow jurors to impeach their
verdict, but here we have a unique situation, you have a party
who knows about the coercion who can be interrogated.
THE COURT: I will not ask what the juror said, only
what she said to the juror.
MR. DARGAN: That’s appropriate and consistent with
the case law.
75a
[Trial Transcript Page 4825]
MR. PUCCIO: _ I can make my objection later, but I
think it’s important to find out if there is coercion going on,
and if there is, your Honor should take corrective action.
MR. CARLTON: That’s creating error, that’s what
that’s doing.
THE COURT: I will inquire into what she is
communicating to the juror. I imagine there are numerous
cases with which jurors disregard the court’s instructions and
go home and discuss it with their family and friends. We
will never know how often that happens. At least it isn’t,
you are not dealing with aninappropriate contact by a party,
an attorney or a friend of a party to solicit a vote or to
convince somebody, but I suspect that very often jurors
disregard the court’s instruction and discuss it with their
family. They shouldn’t do that, but we will never know.
MR. PUCCIO: In this case we would know because
we have a witness.
MR. CARLTON: You can’t do that.
THE COURT: Okay, we will see if we can contact
her.
(Recess at 10:55 a.m.)
(2:00 p.m., in the courtroom)
(Alternate Bonnie Huffman present)
THE COURT: The reason we are doing this is
because we are required whenever there has been a contact
with a juror,
76a
[Trial Transcript Page 4826]
that we determine the nature of the contact and make sure
nothing inappropriate occurred, so we just want to make a
record of that.
Just relax and we are just going to ask you a few
questions. I think just to be on the safe side I should have
you sworn. So if you will swear her.
BONNI HUFFMAN, ALTERNATE JUROR, SWORN.
THE COURT: I believe it was yesterday defense
counsel, MR. PUCCIO, said that he had talked to you on the
phone and that you had reported that one of the jurors had
called you on the phone. Is that correct?
MS. HUFFMAN: Yes.
THE COURT: What was that juror’s name.
MS. HUFFMAN: Marilyn.
THE COURT: __ I am not interested in what she said to
you, but I am interested in what you said to her. That may
somehow involve what she said to you, but first of all,
according to a newspaper account, you indicated to the
lawyers or the newspaper afterward that you were somewhat
favorable to the defendant’s position; is that correct?
MS. HUFFMAN: That’s true.
THE COURT: Could you just kind of summarize what
you said -- did she call you once or twice?
MS. HUFFMAN: Once, and then I called her back
because she lived in Delray and I didn’t want her --
77a
[Trial Transcript Page 4827]
THE COURT But it was all on the same occasion, it
wasn’t on two different times?
MS. HUFFMAN: Yes. Well, she has been calling me
regularly inquiring about my mother. She was ill.
THE COURT: I am _ only’ concerned about
conversations you had after you left.
MS. HUFFMAN: Okay, twice.
THE COURT: Twice, okay.
She called you both times?
MS. HUFFMAN: No.
THE COURT: You called her one time?
MS. HUFFMAN: Yes.
THE COURT: On the first occasion basically what
did you say to her?
MS. HUFFMAN: I just -- she seemed upset because of
how it was going and I told her that she needed to stand by
what she believed in.
THE COURT: Okay. Apparently she called you
because she was favorable to the defendant’s position and
she felt that you would be sympathetic to that; is that correct?
MS. HUFFMAN: She had told me that one thing, and I
really truly don’t remember what it was, one thing that she
had believed was to be the truth, that she felt different about,
but the rest of it she didn’t.
THE COURT: I’m not so much concerned about what
she
78a
[Trial Transcript Page 4828]
said to you, but more concerned about what you said to her.
You just said stand by, stick to your guns, in other words?
MS. HUFFMAN: Yes, stick by what you believe in
because don’t -- because they are raising their voices at you
and saying things like that, that you can’t -- I don’t feel
that’s being truthful if you allow someone to intimidate you
to go the other way. That’s pretty much what I said.
THE COURT: That was the first conversation, right?
MS. HUFFMAN: Yes.
THE COURT: Now, the second conversation when
you Called her, what did you say to her?
MS. HUFFMAN: I will have to sit and think about it.
I’m so sorry. I really don’t remember.
THE COURT: Generally along the same lines?
MS. HUFFMAN: Yes. It was about the trial.
THE COURT: Did any of you feel that it was
improper for you to be talking since you were no longer on
the jury? : :
MS. HUFFMAN: No, sir.
THE COURT: You know that I instructed the jury not
to talk to anyone -- of course, maybe she felt you were on the
jury and that ou were excluded, but of course you were off
the jury at this time.
Would it be fair to summarize that you favored the
defendant’s position, she favored the defendant’s position at
the time that you were talking and you urged her to stand by
79a
[Trial Transcript Page 4829]
her guns and not to give in to pressure in effect?
MS. HUFFMAN: Right. And I truly don’t believe she
knew how I felt, what my opinion was.
THE COURT: She might have read it in the paper if it
was in the paper, since somebody told me it was.
All right, any other areas that counsel think we
ought to go into?
MR.DARGAN: Just if that was the only
communication, that was the only conversation that she had
along those lines, the government is satisfied.
MR. PUCCIO: Your Honor, may I have a side bar on
this?
THE COURT: Certainly.
(At the side bar)
MR. PUCCIO: The reason I asked for a side bar is I
don’t want to be putting words in anyone’s mouth, but I
would discuss it with the court first.
I believe that it’s appropriate to conduct an inquiry
as to what this juror was saying to her, because as I said
before --
THE COURT: Was saying?
MR. PUCCIO: _ To this person because we believe that
the tremendous amount of pressure, beyond what is proper,
was put on the juror that called her, that caused her to call
her.
When she spoke to me, when this witness, the former
80a
[Trial Transcript Page 4830}
juror spoke to me, she indicated the woman called her and
was hysterical and was up all night, et cetera, et cetera, et
cetera. I think with we need a full record on that.
I think also a record should be developed on what
occurred prior to deliberations that this woman knows about,
the selection of a foreperson without authorization of the
court, which apparently took place weeks before the
deliberations, the fact that she indicated to me, this woman
indicated to me that Mr. Levy and others, but certainly Mr.
Levy, had made up his mind about my client’s guilt, before
the evidence even practically started, and had made it known.
I would also think the amount of misconduct that I
would suggest has occurred, she should be asked about
whether any of the jurors had access to information within
the jury room that they shouldn’t have, such as newspaper
articles or other information about the background of the
case, anything else that’s not within the rules that they should
have.
THE COURT: Okay, I am not going to allow any
interrogation along those lines. That goes into the prohibited
areas of jury deliberations. The only thing I am concerned
about is any extraneous information going into the jury room
and from the defendant’s standpoint they certainly have no
complaint because apparently she was urging her to stand by
her position.
I will release her at this time. I don’t intend to
8la
[Trial Transcript Page 4831]
ask any further questions.
MR. PUCCIO: _ I was not -- in addition to asking her
about what the juror said to her, I was talking about
information about what occurred prior to the deliberations.
THE COURT: No, I am not going to go into that.
(In the courtroom)
THE COURT: Those are the only questions we have.
You are free to go. Thank you.
Court will be in recess.
(Jury present)
THE COURT: Has the jury arrived at a verdict?
THE FOREMAN: Yes, we have.
THE COURT: If you will hand the verdict form to the
clerk, please.
You may publish the verdict.
THE CLERK: United States District Court, Southern
District of Florida, United States of America v. Amold Paul-
Prosperi, case number 96-8086-Criminal-Ryskamp.
We, the jury, find the defendant Amold Paul
As to count 3: Guilty.
As to count 4: Guilty.
As to count 5: Guilty.
Astocount14: Guilty.
Astocount15: Guilty.
82a
[Trial Transcript Page 4832]
Thomas Higgins, foreperson, November 6, 1997.
THE COURT:
Members of the jury, I am going to ask
the clerk to poll you; that is, she will call your name and ask
you if that’s your verdict and you will respond accordingly.
THE CLERK:
read your verdict?
JUROR: Yes.
THE CLERK:
your verdict?
JUROR: Yes.
~ THE CLERK:
your verdict?
JUROR: Yes.
THE CLERK:
your verdict?
JUROR: Yes.
THE CLERK:
your verdict?
JUROR: Yes.
THE CLERK:
your verdict?
JUROR: Yes.
THE CLERK:
verdict?
JUROR: Yes.
Norma Bacharach, is the verdict as
Charles Scott, is the verdict as read
Jean Sarazen, is the verdict as read
Thomas Higgins, is the verdict as read
Donald Hotaling, is the verdict as read
Morris Levy, is the verdict as read
Clovis Lane, is the verdict as read your
THE CLERK:
read your verdict?
JUROR: Yes.
THE CLERK:
your verdict?
~ “JUROR: Yes.
THE CLERK:
your verdict?
JUROR: Yes.
THE CLERK:
your verdict?
JUROR: Yes.-
THE CLERK:
your verdict?
JUROR: Yes.
THE COURT:
83a
[Trial Transcript Page 4833]
Madeline Hanney, is the verdict as
George Linnartz, is the verdict as read
Penelope Enfield, is the verdict as read
Marilyn Budd, is the verdict as read
Hope Fearnley, is the verdict as read
Members of the jury, I would like to
thank you for your service. This case is longer than most that
we take. I know it was a considerable inconvenience to you
for the time that you spent on this case. I’m sure you have
learned a good bit about the criminal justice system and how
the courts work. You are now discharged from any further
obligations in this case.
Once again, thank you and you are discharged.
(Jury excused)
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.