UNITED STATES оf America, Plaintiff-Appellee, v. Marvin IVERSON, Defendant-Appellant.
No. 14-8071.
United States Court of Appeals, Tenth Circuit.
March 16, 2016.
818 F.3d 1015
Jason M. Conder, Assistant United States Attorney (Christopher A. Crofts, United States Attorney, District of Wyoming, Stephanie I. Sprecher and David A. Kubichek, Assistant United States Attorneys, on the brief), District of Wyoming, Casper, WY, for Plaintiff-Appellee.
Before HARTZ, O‘BRIEN, and PHILLIPS, Circuit Judges.
HARTZ, Circuit Judge.
Defendant Marvin Iverson was convicted after a jury trial of engaging in a scheme to defraud JPMorgan Chase and Big Horn Federal Savings. See
On appeal Defendant argues that the agent‘s testimony was inadmissible hearsay and violated the best-evidence rule. He also argues that even if the evidence was admissible, it was insufficient to prove that JPMorgan and Big Horn had FDIC insurance at the time of the offense. Despite the government‘s concession to the contrary, we hold that the agent‘s testimony was not inadmissible hearsay; it was either not hearsay or fell within a heаrsay exception. As for the best-evidence rule, Defendant did not raise the issue below and he has not shown plain error. Finally, because there was sufficient evidence that JPMorgan had FDIC insurance at the time of the offense, we reject Defendant‘s sufficiency-of-the-evidence challenge.
I. BACKGROUND
Defendant has been a member of the “sovereign citizens” group called “Wyoming Free State.” Among other practices, such groups instruct their members on various debt-elimination schemes. The scheme here was called the electronic-funds-transfers (EFT) scheme. A member writes a check on a closed account to pay off a debt, with the hope that an unaware financial institution will release title or a lien before the check bounces.
Defendant used the EFT scheme to try to eliminate debts owed to JPMorgan and
Not for deposit
EFT ONLY
For discharge of debt
Marvin Leslie Iverson
Authorized representative
Without Recourse
R., Vol. 2 at 28 (internal quotation marks omitted). Despite this notation, the checks were processed by Big Horn, and the vehicle lien and mortgage were released. After being notified that the checks were drawn on a closed account, the bank demanded that Defendant pay the debt. Defendant refused until he was arrested for this offense. Second, on August 18, 2012, Defendant wrote a check from his closed First Interstate аccount to JPMorgan in the amount of $369,300 to pay off his daughter‘s mortgage. The check had the same EFT notation as before. JPMorgan did not process the check or release the mortgage.
Defendant was charged with scheming to defraud the financial institutions in a one-count indictment filed in the United States District Court for the District of Wyoming. The case went to trial on July 28, 2014. Defendant represented himself with the aid of standby counsel.
Defendant‘s issues on appeal focus on the prosecutor‘s afterthought questioning of FBI Special Agent Kent Smith:
[PROSECUTOR]: I don‘t have any other questions. Thank you.
[DEFENDANT]: No questions.
THE COURT: You may step down.
[PROSECUTOR]: Your Honor, I neglected to ask one question.
THE COURT: Very well.
....
Q. Agent, did you do any research to determine whether or not JPMorgan Chase and Black—or Big Horn Federal Savings were FDIC insured or federally insured institutions?
A. Yes, and both First Interstate—you said Big Horn?
Q. Big Horn.
A. Yes, Big Horn Federal Savings is. I received the F—
[DEFENDANT]: Objection. Foundation.
THE COURT: Sustained.
....
Q. What research did you do?
A. Different for different banks. On JPMorgan Chase I pulled up the FDIC website and found their information and their certificate number. For Big Horn Federal Savings Bank, having been to that actual bank, I requested a copy of their FDIC certificate which included their number.
Q. All right. I ask again. Can you—when you, when you looked at the website—
[DEFENDANT]: Objection.
[Standby Defense Counsel]: Hearsay.
....
Q. —is that a normal course of business to check to see if a bank is FDIC insured—
[DEFENDANT]: Hearsay.
....
Q. —in your normal course of business as an FBI agent?
A. To determine if they‘re FDIC insured?
Q. Yes.
A. Yes, it is.
Q. And do you rely on those records to be accurate to determine if a bank is FDIC insured?
A. Yes, we do.
Q. And I‘d ask again. Do you know if the banks of Big Horn Federal Savings and— [DEFENDANT]: Objection.
....
Q. —JPMorgan Chase are federally insured?
[DEFENDANT]: Hearsay again.
THE COURT: Overruled.
A. Yes, in my research both Big Horn Federal Savings Bank and JPMorgan Chase bank are federally insured.
R., Vol. 3 at 84-86.
II. DISCUSSION
A. Admissibility of the Evidence
Defendant raises two challenges to the admissibility of the testimony that the victim institutions were FDIC insured. He claims (1) that Agent Smith‘s testimony about FDIC insurance coverage was hearsay and (2) the testimony violated the bеst-evidence rule, which required introduction into evidence of the FDIC certificates of coverage. Both the hearsay rule and the best-evidence rule are exceptions to the general rule that a witness can testify to what the witness saw or heard. The hearsay rule ordinarily excludes testimony about what someone wrote or said out of court when “offer[ed] in evidence to prove the truth of the matter asserted in the statement.”
We review a district court‘s evidentiary decisions for abuse of discretion. See United States v. Trujillo, 136 F.3d 1388, 1395 (10th Cir. 1998). The government confesses error on Defendant‘s hearsay issues, but we are not bound by this concession. See United States v. Resendiz-Patino, 420 F.3d 1177, 1182-83 (10th Cir. 2005). We first address hearsay and then the best-evidence rule.
1. Hearsay
Agent Smith‘s testimony about Big Horn‘s FDIC-insured status was based solely upon his review of the bank‘s FDIC certificate. In essence he was reporting on what the certificate said. His testimony about JPMorgan was based on his review of the FDIC website. There are two possible assertions in this testimony. One is Agent Smith‘s assertion that he is accurately reporting what he saw concerning the certificate and the website. The other is what the certificate and website said was true—that the banks were insured by the FDIC. The first assertion presents no hearsay problem because the assertion is made by the witness at trial. See
a. Big Horn‘s FDIC Certificate
Although this circuit has not yet considered a hearsay challenge to the admission into evidence of the content of an FDIC insurance certificate, several of our sister circuits have. Each has rejected the hearsay objection, albeit for differing reasons. The First Circuit affirmed the admission of an FDIC certificate to prove insurance coverage under
The Ninth Circuit may well be correct that the assertion of insurance coverage in an FDIC certificate is not hearsay. The rule against hearsay does not apply to “verbal acts ... in which the statement itself affects the legal rights of the parties or is a circumstance bearing on conduct affecting their rights.”
b. The FDIC Website
Agent Smith‘s testimony regarding JPMorgan‘s insurance status was based solely on his review of the FDIC website. He testified that he looked up JPMorgan on the website, “found their information and their certificate number,” and determined that it “[is] federally insured,” R., Vol. 3 at 85. What the website reports amounts to an assertion that JPMorgan has an FDIC certificate with a particular certificate number and that the insurance remains active. The government was attempting to prove the truth of that assertion. There is no argument that the website itself affects an institution‘s legal rights (as perhaps may be true of a certificate), so we agree with Defendant that Agent Smith‘s testimony offered the website content for its truth and was hearsay.
Again, however, the public-records exception applies. The website information is “a record or statement of [the FDIC].”
We recognize that the government did not argue that Agent Smith‘s testimony about FDIC insurance coverage wаs admissible under the
Therefore, our rejection of the FDIC hearsay argument comes within our general rule that we may affirm on an unpreserved ground if doing so is fair to appellant. See United States v. Harrison, 296 F.3d 994, 1001 (10th Cir. 2002). We cannot express the point better than Judge Brorby did in Hernandez v. Starbuck, 69 F.3d 1089, 1093-94 (10th Cir. 1995):
[The Appellant‘s] argument misconceives the roles played by the appellant, the appellee, and the court of appeals when a district court judgment is appealed. While the appellant challenges the district court‘s ruling, the appellee is only interested in maintaining the status quo, i.e., an affirmance. Because the appellant comes to the court of appeals as the challenger, he bears the burden of demonstrating the allеged error and the precise relief sought. A court of appeals is not required to manufacture an appellant‘s argument on appeal when it has failed in its burden to draw our attention to the error below. In the event of such a failure, the court will ordinarily consider the appellant‘s point waived. Appellees bear no such burden. Though
Fed. R. App. P. 28(b) requires the appellee‘s brief to contain arguments addressing the issues raised by the appellant, we have never characterized the appellee‘s obligation in terms of a categorical imperative. The distinction between appellant‘s and appellees’ obligations under Rule 28 grows out of the court of appeals’ freedom to affirm a district court decision on any grounds for which there is a record sufficient topermit conclusions of law, even grounds not relied upon by the district court. This broad power to affirm extends beyond the counter-arguments raised by the appellee; it includes any ground for which there is record to support conclusions of law. Once the appellant alleges the district court erred, we have a duty to assess the validity of the appellant‘s allegations. This duty arises in part out of our relationship with the district court, and we may not neglect it simply because an appellee fails to defend adequately the district court‘s decision. To do so would open the door to a perverse jurisprudence by which properly deсided district court decisions could be reversed.
(brackets, citations, footnote, and internal quotation marks omitted) (emphasis added). We also repeat his caution to appellees: “We admonish appellees not to take our language as a license not to address appellant‘s arguments. The appellee‘s brief plays a vital function in informing the court of the weaknesses in the appellant‘s arguments. By failing to address a ground for relief raised by the appellant, the appellee greatly increases the chances the court of appeals will be persuaded by the appellant‘s position.” Id. at 1094 n. 3.
2. Best-Evidence Rule
Defendant also challenges the introduction of Agent Smith‘s testimony as a violation of the best-evidence rule. Because Defendant failed to raise this objection in the district court, we review only for plain error. See United States v. Frost, 684 F.3d 963, 971 (10th Cir. 2012). We will grant relief under the plain-error standard only if (1) the district court committed an error, (2) the error is clear at the time of the appeal, (3) the error “affects substantial rights,” and (4) the error “seriously affects the fairness, integrity, or public reputation of judicial proceedings.” Id. (internal quotation marks omitted). An error is clear “when it is contrary to well-settled law.” United States v. Whitney, 229 F.3d 1296, 1309 (10th Cir. 2000). It affects substantial rights only “when it is prejudicial, meaning that there is a reasonable probability that, but for the error claimed, the result of the proceeding would have been different.” United States v. Algarate-Valencia, 550 F.3d 1238, 1242 (10th Cir. 2008) (internal quotation marks omitted).
We need not decide if the testimony violated the best-evidence rule, because even if there was error, it was not clear. The best-evidence rule does not apply to testimony relating to the existence of a document, as opposed to its contents. See
At least one circuit has applied this reasoning to testimony about FDIC-insured status. In United States v. Sliker, 751 F.2d 477, 483 (2d Cir. 1984), the Second Circuit affirmed the admission of testimony “that the bank‘s deposits ‘are’ FDIC insured” against the objection “that the best evidence rule required the Government to produce a certified copy of the insurance policy itself.” The court ruled that the evidence should not be excluded under
Because the admission of similar testimony has been affirmed against a best-evidence-rule objection in our sister circuit and follows our precedent in an analogous context, we cannot say any error is clear. See United States v. Teague, 443 F.3d 1310, 1319 (10th Cir. 2006) (“If neither the Supreme Court nor the Tenth Circuit has ruled on the subject, we cannot find plain error if the authority in other circuits is split.“); United States v. Ruiz-Gea, 340 F.3d 1181, 1187 (10th Cir. 2003) (“In general, for an error to be contrary to well-settled law, either the Supreme Court or this court must have addressed the issue.“); United States v. Rickett, 535 F. Appx. 668, 677 (10th Cir. 2013) (“[T]o render an alleged error ‘clear’ or ‘obvious,’ Mr. Rickett needs controlling Supreme Court or Tenth Circuit precedent, or a hefty weight of controlling authority from other circuits.” (emphasis omitted)). We therefore reject Defendant‘s best-evidence-rule argument.
B. Sufficiency of the Evidence
Even though Agent Smith‘s testimony was admissible, we must still decide whether the evidenсe was sufficient to sustain the jury‘s verdict that JPMorgan and Big Horn were FDIC insured when Defendant committed the charged acts. Viewing the evidence in the light most favorable to the government, United States v. Cooper, 375 F.3d 1041, 1044 (10th Cir. 2004), we hold that the evidence was sufficient to find that JPMorgan was FDIC insured on the relevant date. Because that is enough to sustain the conviction, we affirm.
At the outset we note that a bank‘s status as an FDIC-insured institution on the date of the crime is an element of federal bank fraud that must be proved to the jury beyond a reasonable doubt. See United States v. Rackley, 986 F.2d 1357, 1360-61 (10th Cir. 1993) (“In order to convict the defendant of bank fraud under
To be sure, the evidence in this case was not as strong as the website procedure would have yielded. But viewed in the light most favorable to the government, it was sufficient. Regarding JPMorgan, Agеnt Smith testified that “in [his] research ... JPMorgan Chase bank [is] federally insured.” R., Vol. 3 at 86. He described that research as “pull[ing] up the FDIC website and [finding] their information and their certificate number.”
In this case the jury could draw a reasonable inference that Agent Smith cheсked the FDIC website within a few months of the offense. Defendant‘s offense against JPMorgan occurred in August 2012. Smith investigated the matter and arrested Defendant in October, al-midpage-ps n=“1026“/>though only on the charge of defrauding Big Horn. A superseding indictment handed down in March 2013 included the charge of defrauding JPMorgan, which was described as a “federally insured financial institution[,]” R., Vol. 1 at 66. (It appears that the jury was given a date-stamped copy of the indictment.) A jury could infer that Agent Smith conducted his research on JPMorgan‘s FDIC insurance before that indictment issued, about seven months after the offense. In our view, that time lapse is sufficiently short that the jury could infer FDIC insurance coverage in the summer of 2012. See United States v. Brunson, 907 F.2d 117, 119 (10th Cir. 1990) (relying in part on documentary evidence showing federal insurance coverage seven months after the crime as circumstantial evidence of insurance on the date of the crime).
Moreover, our examination of the trial exhibits reveals two mortgage-loan statements—dated July 30, 2012, and August 31, 2012—which both include the notation “JPMorgan Chase Bank, N.A. Member FDIC.” United States v. Iverson, No. 12-CR-245-J, Trial Ex. 500 at 9-10, 13-14 (D.Wyo.2012). These documents, admitted without objection as business records of the bank, are strong corroboration that JPMorgan was FDIC insured both immediately before and immediately after the offense occurred. See United States v. Pascarella, 84 F.3d 61, 71 (2d Cir. 1996) (finding sufficient evidence of bank‘s FDIC insurance in part based on Defendant‘s “bank statements stat[ing] that the bank was so insured“). In all, we are satisfied that the evidence regarding JPMorgan‘s FDIC status was sufficient to support a jury finding that JPMorgan was FDIC insured on the date of the offense.
Because there was sufficient evidence that JPMorgan was FDIC insured on the date of the offense, we need not address Defendant‘s argument that there was insufficient evidence of Big Horn‘s coverage. Defendant‘s offense, a violation of
On occasion, as here, the jury instructions unnecessarily set forth the means of committing the offense in the conjunctive (just as in the indictment), stating that the jury must find that the defendant committed the offense through all the alleged means.4 In that circumstance we have previously adopted what we have called the law of the case regarding unobjected-to elements instructions in criminal prosecutions. We have held that each charged element, even if unnecessary, must be proved, and reversal is required if there is insufficient evidence of any element. See, e.g., United States v. Romero, 136 F.3d 1268, 1273 (10th Cir. 1998); United States v. Cronic, 900 F.2d 1511, 1515 n. 3 (10th Cir. 1990); United States v. Killip, 819 F.2d 1542, 1547-48 (10th Cir. 1987); United States v. Biglow, 554 F. Appx. 679, 683-84 (10th Cir. 2014). But those holdings have now been overruled by the Supreme Court‘s opinion in Musacchio v. United States, — U.S. —, 136 S. Ct. 709 (2016), which held that “when a jury instruction sets forth all the elements of the charged crime but incorrectly adds one more element, a sufficiency challenge should be assessеd against the elements of the charged crime, not against the erroneously heightened command in the jury instruction,”
In short, the government adequately proved the offense charged in the indictment.
III. CONCLUSION
We AFFIRM the judgment below.
O‘BRIEN, Circuit Judge, concurring.
Of one thing there can be no doubt, or at least no reasonable doubt: the deposits in both Big Horn Federal Savings Bank (BHFSB) and JPMorgan Chase Bank (JPM) are now federally insured and were federally insured when Iverson committed these banking crimes. One can be sure of such things by going to the FDIC‘s official internet site. It directs inquiries about FDIC-insured institutions to its web pages: “FDIC BankFind allows you to locate FDIC-insured banking institutions.”1 And those pages do, indeed, show both banks to have been continuously insured for decades. For instance, all branches of BHFSB are federally insured and have been so insured since February 28, 1936.2 See Appendix. The bank was established in 1935 as a Savings and Loan; in 1990 it changed its organizational type to “Mutual Savings Bank” and adopted its current name; and since July 2011 its regulatory agency has been the Comptroller of the Currency.3
I join Judge Hartz‘s carefully crafted and compelling opinion. I write separately only to suggest an alternative basis for affirming. We can and should take judicial notice of the banks’ federally insured status during the relevant events. Doing so elevates substance over form and eliminates the need to wrestle with arcane evidentiary issues.
I. Judicial Notice in General
A judge or court may notice facts “not subject to reasonable dispute” because either they are “generally known within the trial court‘s territorial jurisdiction” or “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.”
On that score the legislative history of Rule 201(f) is revealing: the civil/criminal divide came from Congrеss. United States v. Jones, 580 F.2d 219, 223 (6th Cir. 1978); see also 1 Christopher B. Mueller & Laird C. Kirkpatrick, Federal Evidence § 2:10 (4th ed. 2013). As the rule was originally proposed by the Supreme Court both civil and criminal juries would be instructed to accept judicially noticed facts as conclusive.
These are valid concerns, but only as to judicial notice of adjudicative facts, not legislative ones. As Mueller and Kirkpatrick explain:
[J]udicial notice of adjudicative facts that help prove charges or defeat defenses on the merits is improper on appeal ... even though failure of proof on the part of the prosecution generally bars retrial of the defendant. It is less clear [whether this proposition] should apply to post-trial judicial notice of facts relating to matters of subject matter jurisdiction or venue, as opposed to matters relating to culpability.... It is one thing to say that defendants in criminal cases are entitled to jury determinations, and to the protection provided by the standard of proof beyond a reasonable doubt, on elements relating to culpability. It is another thing to argue that defendants are entitled to such protections on points relating to the division of legislative responsibility between Congress and the states.... Perhaps with these points in the back of their minds, courts have in fact taken post-trial judicial notice of points relating to jurisdiction and venue, and there seems to be a growing trend toward making judges rather than juries responsible for deciding these points. Sound modern authority has concluded more generally that judicial notice in such settings lies beyond the reach of Rule 201.
Mueller & Kirkpatrick, supra, § 2:10.
II. Adjudicative Facts v. Legislative Facts
The rule applies only to “adjudicative” facts, not “legislative” facts.
When a court finds facts concerning the immediate parties who did what, where, when, how, and with what motive or intent the court is performing an adjudicative function, and the facts are conveniently called adjudicative facts.
Stated in other terms, the adjudicative facts are those to which the law is applied in the process of adjudication. They are the facts that normally go to the jury in a jury case. They relate to the parties, their activities, their properties, their businesses.
Legislative facts, on the other hand, do not relate specifically to the activities or characteristics of the litigants. A court generally relies upon legislative facts when it purports to develop a particular law or policy and thus considers material wholly unrelated to the activities of the parties.
Legislative facts are ordinarily general and do not concern the immediate parties. In the great mass of cases decided by courts, the legislative element is either absent or unimportant or interstitial, because in most cases the applicable law and policy have been previously established. But whenever a tribunal engages in the creation of law or of policy, it may need to resort to legislative facts, whether or not those facts have been developed on the record.
United States v. Gould, 536 F.2d 216, 219-20 (8th Cir. 1976) (citations and quotation marks omitted); see also Mueller & Kirkpatrick, supra, § 2:2 (“[A]djudicative facts are the ‘who, what, where, and when’ of a lawsuit....“).
III. Applying the Distinction
In Gould, the defendants were charged with importing a Schedule II controlled substance (cocaine). 536 F.2d at 217. The statute defined a Schedule II controlled substance as, among other things, those substances containing coca leaves. Id. at 218. The evidence at trial included expert testimony that the substance imported contained cocaine hydrochloride but there was no direct evidence of cocaine hydrochloride being a derivative of coca leaves. Id. The trial court, however, took judicial notice of cocaine hydrochloride‘s status as a Schedule II controlled substance and instructed the jury: “If you find the substance was cocaine hydrochloride, you are instructed that cocaine hydrochloride is a schedule II controlled substance under the laws of the United States.” Id. (quotation marks omitted). The Eighth Circuit concluded the trial court had not erred in taking judicial notice: “The fact that cocaine hydrochloride is derived from coca leaves is, if not common knowledge, at least a matter which is capable of certain, easily accessible and indisputably accurate verification.” Id. at 219. It also decided no error occurred in the trial court‘s judicial notice instruction, which required the jury to accept the noticed fact as conclu-midpage-ps n=“1031“/>sive, contrary to Rule 201. Id. at 219-21. It determined Rule 201 not to apply because the judicially-noticed fact was a legislative fact, not an adjudicative one:
It does not relate to who did what, where, when, how, and with what motive or intent, nor is it a fact which would traditionally go to the jury. The fact that cocaine hydrochloride is a derivative of coca leaves is a universal fact that is unrelated to the activities of the parties to this litigation.
Id. at 220-21 (citation and quotation marks omitted). Importantly, the court concluded the jury‘s role in determining adjudicative facts was not preempted because it was required to determine what substance was seized. Id. at 220-21; see also United States v. Coffman, 638 F.2d 192, 194 (10th Cir. 1980) (following the reasoning in Gould and finding no error in the trial court‘s instruction to the jury that LSD was a Schedule I controlled substance).
More to the point here is United States v. Davis, 726 F.3d 357 (2d Cir. 2013). Davis assaulted another inmate while imprisoned at the Metropolitan Detention Center (MDC), a federal prison located in New York. He was charged with federal assault under
[T]o determine whether a crime took place within the special maritime and territorial jurisdiction of the United States requires two separate inquiries: one to determine the ‘locus of the crime’ and one to determine the existence vel non of federal jurisdiction. While the former is plainly a factual question for the jury to decide, the latter—turning on a fixed legal status that does not change from case to case and involving consideration of source materials (such as deeds, statutes, and treaties) that judges are better suited to evaluate than
juries—has always been treated in this Circuit as a legal question that a court may decide on its own.
Id. (citation omitted); see also United States v. Behmanshah, 49 F. Appx. 372, 376 n. 2 (3d Cir. 2002) (concluding evidence was sufficient to satisfy interstate commerce element of money laundering offense based on, inter alia, the use of an FDIC-insured institution; appellate court the first to notice the FDIC-insured status of subject bank) (unpublished).7
These cases are highly persuasive, particularly Davis. I see no daylight between a federal prison‘s status as being “within the special maritime and territorial jurisdiction of the United States” and a bank‘s status as being federally insured. Particularly when all national banks are required to have FDIC insurance8 and Wyoming law also requires the same for all banks in the state.9 Rule 201 does not apply.
IV. Noticing the Obvious Does Not Infringe Upon Iverson‘s Rights
Noticing the FDIC-insured status of the financial institutions involved here does not interfere with Iverson‘s right to a jury trial.10 Like deciding (1) whether a crime took place within the special maritime and territorial jurisdiction of the United States (Davis) or (2) whether a defendant imported a Schedule II controlled substance (Gould), determining whether Iverson defrauded a FDIC-insured bank requires two separate inquiries: one to determine that Iverson did in fact defraud a certain bank and one to establish the existence of federal court jurisdiction. The former is clearly a question for the jury and the jury was so instructed in this case. (R. Vol. 1 at 113 (requiring jury to find beyond a reasonable doubt that “the defendant, Marvin Iverson, knowingly executed a scheme or artifice to defraud Big Horn Federal Savings Bank and JPMorgan Chase Bank“)). The latter inquiry, on the other hand, is simply a legal question as to whether the bank is one with respect to which Congress can properly exercise its legislative powers.
Most of Iverson‘s arguments are little more than background noise intended to distract us from the core issue, his nearly palpable guilt. After all, a properly instructed jury convicted him. It did so after being instructed that no conviction could lie if it entertained a reasonable doubt as to whether “[BHFSB] and [JPM] are financial institutions within the meaning of the law; in this case that means the
PHILLIPS, Circuit Judge, dissenting:
I respectfully dissent. Because I believe that the district court erred in admitting hearsay testimony from FBI Agent Kent Smith to establish that Big Horn Federal Savings Bank (Big Horn Bank) and JPMorgan Chase Bank were FDIC insured, I would reverse and remand for a new trial.
The government‘s case ended on a strange and abrupt note. After appearing to have finished examining its final witness, Agent Smith, the government realized that it had overlooked an element of Iverson‘s bank-fraud offense charged under
1. Hearsay
After recognizing the urgent need to establish the FDIC-insurance element, the government resumed its questioning of Agent Smith by asking whether he had done “any research” to determine the FDIC-insurance status of Big Horn Bank and JPMorgan Chase. R. vol. III at 85. The agent answered yes, adding that Big Horn Bank was so insured. To this volunteered testimony, Iverson‘s standby counsel successfully objected on foundation grounds. The government then circled back, asking what research Agent Smith had done. This time, Agent Smith answered that for JPMorgan Chase he had “pulled up the FDIC website and found their information and their certificate number,” and that for Big Horn Bank he had “been to that actual bank [and] requested a copy of their FDIC certificate which included their number.”1
The government then asked—interspersed with hearsay objections—whether looking at the FDIC website was “a normal course of business to check to see if a bank is FDIC insured ... in your normal course of business as an FBI agent....”
On appeal, Iverson contends that the district court abused its discretion by admitting Agent Smith‘s FDIC-insurance
On appeal, the government confesses the hearsay error. In doing so, it explains its reasoning well:
[I]f a witness‘s knowledge about a fact of consequence is based only on the witness‘s personal knowledge of an out-of-court statement offered to prove the truth of the fact asserted in that statement, then [the witness‘s] testimony must comply with the hearsay rule; i.e., it must be allowed by a statute, an exception to the rules of evidence, or by a Supreme Court rule.
Appellee‘s Br. at 9 (citing United States v. Gutierrez de Lopez, 761 F.3d 1123, 1132 (10th Cir. 2014) (citing
Along this same line, the government notes that “[i]n light of the foregoing rules, there can be little doubt that Special Agent Smith‘s testimony about the insured status of the two banks was hearsay.”
In my view, the government correctly concedes Iverson‘s hearsay argument. Agent Smith based his FDIC-insurance testimony on out-of-court statements contained in records that the government never admitted at trial. The out-of-court statements Agent Smith relied on are hearsay—they are out-of-court statements “offer[ed] in evidence to prove the truth of the matter asserted in the statement[s].”
So in my view, the majority errs by refusing the government‘s concession of error. In doing so, it blesses аn impermis-
As support for this remarkable course, the majority falls back on strings of cases standing for propositions undisputed here—first, that if the government proceeds correctly it can introduce FDIC certificates under hearsay-exceptions found in
My chief criticism of the majority is that it ignores the key point that the parties emphasized—the government failed to admit into evidence either of the two records.5 The majority steps too far by assuming the existence of the unproduced records and their automatic admissibility. Even if a proponent seeking admission of a record satisfies
The government doesn‘t need us to ease its evidentiary burdens. Nothing in the rules blocks the government‘s clear path to admitting FDIC certificates to prove that financial institutions are FDIC insured. See Cooper, 375 F.3d at 1048 (outlining ways the government can admit an FDIC certificate to satisfy the FDIC-insurance element). The government might well succeed by simply bringing an FDIC certificate to court together with a knowledgeable witness who could testify about the bank‘s FDIC-insurance status. See United States v. Brunson, 907 F.2d 117, 119 (10th Cir. 1990) (concluding that a bank manager‘s testimony—along with the FDIC certificate—sufficiently proved the FDIC-insurance element). Rule 803(8) is a blinking neon sign promising hospitality to litigators seeking admission of public records. But the rules of evidence afford a party opposing the admission of public records—such as the FDIC certificate and FDIC webpage here—the opportunity to challenge relevancy, trustworthiness, and authenticity of the proffered record.
In my view, the majority‘s judicial-shortcut approach awards a forfeit win to the government contrary to the Federal Rules of Evidence. In effect, the majority has created its own exception to the Rule 803(8) hearsay exception. Under its approach a witness—like Agent Smith—need no longer produce and admit into evidence at trial hearsay records, but instead can wing it by testifying from memory about the critical contents of the hearsay records. That alone is a startling development, but doubly so when the witness‘s testimony is offered to prove a required element of a criminal offense.6 See United States v. Gaudin, 515 U.S. 506, 522-23 (1995) (concluding that “[t]he Constitution gives a criminal defendant the right to have a jury determine, beyond a reasonable doubt, his guilt of every element of the crime with which he is charged. The trial judge‘s refusal to allow the jury to pass on the ‘materiality’ of Gaudin‘s false statements [under
By rolling out this red carpet, the majority essentially invites the government to forgo any hassles arising from pesky criminal defendants examining and challenging the content, trustworthiness, and authenticity of records containing hearsay—even
2. Best-Evidence Rule
On appeal, but not at trial, Iverson argues that Agent Smith‘s testimony about the FDIC-insurance element also violated the best-evidence rule,
For the first prong, I agree with Iverson that Agent Smith‘s testimony violated the best-evidence rule (since the government didn‘t admit into evidence originals or copies of the two public records).
3. Sufficiency of the Evidence
I agree with the majority that sufficient evidence would support Iverson‘s conviction if Agent Smith‘s FDIC testimony had been admissible. But because I believe the hearsay rule should have disallowed this testimony, I cannot vote to affirm Iverson‘s conviction.
In this circumstance, the government directs us to Lockhart v. Nelson, 488 U.S. 33 (1988). There, the Supreme Court reviewed a case in which a jury convicted a defendant (Lockhart) of being a habitual criminal after finding that he had four previous felony convictions.
I agree with the government that a retrial is the proper remedy here since the government‘s total evidence—including the erroneously admitted hearsay testimony of Agent Smith—would have sufficed to sustain Iverson‘s guilty verdict.10 Appellee‘s Br. at 13. In fact, in the district court, Iverson never even argued that the evidence would be insufficient if the hearsay
APPENDIX
Federal Deposit Insurance Corporation
Bank Information
Big Horn Federal Savings Bank - Active (FDIC # 29637) Insured Since February 28, 1936
Data as of: February 21, 2016
Big Horn Federal Savings Bank is an active bank.
FDIC Certificate#: 29637
Headquarters: 33 North 6th Street, Greybull, WY 82426, Big Horn County
Locations: 6 domestic in 1 states, 0 in territories, and 0 in foreign locations
Established: January 1, 1935
Insured: February 28, 1936
Bank Charter Class: Savings Association
Regulated By: Office of the Comptroller of the Currency
Corporate Website: http://www.bighornfederal.com
Consumer Assistance: http://www.helpwithmybank.gov
Contact the FDIC about: Big Horn Federal Savings Bank
Showing 1 to 4 of 4 entries
Show 10 entries
| Date | Event |
|---|---|
| 1/1/1935 | Institution established: Original name: Big Horn Federal Savings and Loan Association (29637) |
| 9/19/1990 | Changed name to Big Horn Federal Savings Bank (29637) |
| 9/19/1990 | Changed organization type to MUTUAL SAVINGS BANK |
| 7/21/2011 | Changed primary regulatory agency from OFFICE OF THRIFT SUPERVISION to COMPTROLLER OF THE CURRENCY |
Notes
To find the defendant guilty of this crime you must be convinced that the government has proved each of the following beyond a reasonable doubt:
First: the defendant, Marvin Iverson, knowingly executed a scheme or artifice to obtain money or property from Big Horn Federal Savings Bank and JPMorgan Chase Bank by means of false or fraudulent pretenses, representations, or promises;
Second: Big Horn Federal Savings Bank and JPMorgan Chase Bank are financial institutions within the meaning of the law; in this case, that means the government must prove that Big Horn Federal Savings Bank and JPMorgan Chase Bank were insured by the Federal Deposit Insurance Corporation;
Third: the false or fraudulent pretenses, representations, or promises that the defendant made were material, meaning they would naturally tend to influence, or were capable of influencing the decision of the Big Horn Federal Savings Bank and the JPMorgan Chase Bank.
Id. at 115.
JPM was also FDIC-insured on the date of the crime but because we need only one, see Musacchio v. United States, — U.S. —, 136 S. Ct. 709 (2016), for simplicity I will only refer to BHFSB. But these cases do not support the majority‘s shortcut approach. Under the rules of evidence, a hearsay statement in a public record cannot be admitted into evidence apart from the public record—the hearsay statement can‘t travel alone. The majority‘s cited cases follow this rule. They allow the hearsay statements if the proponent admits into evidence the record containing the hearsay. See, e.g., United States v. Arthur, 822 F.2d 60, at *3 (6th Cir. 1987) (unpublished table decision) (holding that the certificate was properly admitted under