United States v. Warren S. ChangUnited States v. Warren S. Chang
Wаrren H.S. Chang appeals his conviction and sentence for conspiracy, uttering a counterfeit foreign obligation and possessing a counterfeit foreign obligation. On appeal, Chang challenges certain evi-dentiary rulings made by the district court, contends that the evidence presented against him at trial was insufficient to sustain part of his conviction and argues that the sentence imposed by the district court is illegal. We have jurisdiction pursuant to
FACTUAL AND PROCEDURAL BACKGROUND
On October 25, 1996, a federal grand jury indicted Chang and a co-defendant, Harry New Blum, on three separate counts: (1) conspiracy, in violation of
These charges resulted from the two men’s activities rеlating to a particular
Chang and Blum were tried concurrently. The government contended at trial that the co-defendants’ activities were illegal because (a) the Certificate was counterfeit, (b) both defendants knew that the Certificate was counterfeit аnd (c) both defendants had negotiated various transactions involving the Certificate and, therefore, had uttered the Certificate with an intent to defraud.
The government’s case centered around a series of events involving the Midland Bank transaction and the co-defendant’s dealings with BNY Western Trust Company (“BNY”) relating thereto. On October 18, 1995, Chang and Blum met with, among others, James L. Birdwell, BNY’s Vice President of Operations, to discuss the possibility of (a) BNY acting as custodian of the Certificate in cоnnection with the Midland Bank transaction and (b) BNY issuing an asset statement showing that BNY held the Certificate in its possession. At the October 18 meeting, both Chang and Blum represented that they would provide BNY with documentation establishing the Certificate’s authenticity. After the October 18 meeting, Birdwell had reservations about the Certificate, so he contacted the FBI to verify that the proposed transaction was legitimate. The FBI informed Birdwell that it believed the Certificate to be counterfeit, аnd Birdwell agreed to cooperate in the FBI’s investigation. On February 28, 1996, Chang and Blum again met with Birdwell and others at BNY’s office in Los Angeles. The FBI recorded and videotaped the meeting. At the meeting, Chang and Blum showed the original Certificate to Birdwell and produced a black light to demonstrate the watermark and other aspects of the Certificate that, according to Chang and Blum, established its authenticity. The FBI arrested Chang and Blum at the conclusion of the meeting.
Both Chang and Blum insisted throughout trial that, at all times during their negotiations with BNY, Midland Bank and others, they believed the Certificate to be authentic. Chang testified that he had taken several steps to establish the Certificate’s authenticity, both before and after acquiring the Certificate in 1993. Further, Chang and Blum pointed to the fact that the FBI previously had questioned each of them separately regarding the Certificate, but had not seized the Certificate, as an additional basis for their belief that the Certificate was authentic. Chang also attempted to introduce expert testimony from Edmond Lausier, an assistant professor of clinical marketing at the University of Southern California, to counter the government’s evidence that the Certificate was counterfeit. 1 On December 9, 1996, the jury convicted both Chang and Blum on all three counts. At sentencing, the district court ordered Chang confined to prison for 63 months on Count One, 36 months on Count Two, and 12 months on Count Three, all three terms to be served concurrently.
DISCUSSION
I. Exclusion of Professor Lausier’s Expert Testimony
Professor Lausier, Chang’s only proffered expert witness, would have opined
We review thе district court’s exclusion of Lausier’s testimony for an abuse of discretion.
See, e.g., United States v. Scholl,
The Federal Rules of Evidence provide that expert testimony should be admitted only if it “will assist the trier of fact to understand the evidence or to determine a fact in issue.”
A
The district court heard testimony, outside the presence of the jury, to determine whether Professor Lausier was qualified to testify as an expert witness. Although Lausier admitted that he had no formal training in identification of counterfeit securities, Chang argued that Lausier was qualified to testify because he had expert knowledge regarding the history of, and purpose for, the issuance of obligations like the Certificate. The district court rejected Chang’s argument, ruling that (1) “the [only] fact in issue is the authenticity of [the Certificate]”; (2) “whether such things were ever in fact validly issued” was not relevant; and (3) Professor Lausier’s testimony would not be admitted because he was not qualified to opine as to the authenticity of the specific instrument at issue, the Certificate. The district court also ruled that Lausier’s testimony would be “a complete waste of the jury’s time.”
Chang contends the district court conceded that Profеssor Lausier was well-qualified to testify as to the “underlying indicia of authenticity”
2
but improperly excluded the testimony because Lausier was unable “to opine on the ultimate question.” Chang cites
United States v. Rahm,
Chang also cites Rahm for the proposition that it is reversible error to exclude expert testimony pertaining to a defendant’s “sole intended defense,” id. at 1415, here the authenticity of the Certificate. This is not an accurate characterization of the defense’s case. Chang’s principal defense at trial was that he believed the Certificate to be genuine (thereby negating an intent to defraud), not that the Certificate was, in fact, genuine. Lausier’s expert testimony was proffered only to support the latter defense. 3
In addition, Chang argues that (a) the district court should not hаve required specific knowledge regarding the identification of counterfeit securities and (b) Professor Lausier’s “practical experience in international finance” was sufficient to qualify him as an expert. Lausier did not have the requisite “knowledge, skill, experience, training, or education” required by
Chang also argues that Professor Lausier’s testimony was relevant to rebut the government’s expert witness, United States Secret Service Special Agent Samuel A. Tong, who testified that he believed the Certificate to be counterfeit. In рarticular, Chang asserts that Lausier’s testimony was necessary to rebut Tong’s testimony regarding the Japanese government’s standard practices relating to obligations analogous to the Certificate. In effect, Chang contends that, even if Lausier was not qualified to opine as to the authenticity of the Certificate, Lausier should have been allowed to testify as to the Japanese government’s general practices in issuing obligations similar to the Certificate in оrder to rebut Tong’s “external” testimony regarding the Certificate. But Tong’s testimony focused on the particular aspects of the Certificate that supported his opinion that the Certificate was counterfeit, not the history and background of the issuance of securities like the Certificate. On redirect, Tong also testified that his area of expertise was printing and manufacturing and that he did not purport to be a finance expert or historian of Japanese securities, thereby further limiting the scope of his testimony. Lausier was not qualified to opine as to the particular aspects of the Certificate or to dispute the techniques used by Tong in evaluating the Certificate; therefore, the district court did not abuse its discretion by excluding Lausier’s expert testimony offered for rebuttal purposes.
Finally, the district court stated as an additional, independent ground for its exclusion of Professor Lausier’s expert testimony that Lausier “was not piсked as an initially neutral party,” expressing concern that Professor Lausier had assisted Chang in his efforts to authenticate the Certificate prior to trial and was, in effect, a “biased” expert witness. Chang asserts that any such bias should go to weight rather than admissibility. In
Hingson v. Pacific S.W. Airlines,
B
Our conclusion that the district court properly excluded Professor Lausier’s testimony is consistent with
United States v. Blum,
No. 97-50228,
II. Sufficiency of Evidence
Count Two charged that Chang “knowingly and with the intent to defraud, uttered, passed and put off in payment and negotiation a false, forged, and counterfeit bond, certificate, obligation, security and promise to pay of a foreign government ..., namely [the Certificate].” Chang argues that the evidence was insufficient to establish that he “uttered, passed and put off in payment and negotiation” the Certificate. The evidence supporting Chang’s conviction on Count Two was sufficient if, “viewing the evidence in the light most favorable to the government, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.”
United States v. Symington,
Scаnt case law exists on the meaning of “utter” in this context. It is clear, however, that an “utterance” is tantamount to an offer. See, e.g., Black’s Law Dictionary 1547 (6th ed.1990) (utter means, among other things, “to offer”).
The record, when viewed in the light most favorable to the government, supports the conclusion that Chang uttered, or offered, the Certificate to BNY on or before February 28, 1996. Birdwell, the Vice President of Operations of BNY, testified that he could have taken possession of the Certificate at the conclusion of his February 28 meeting with Chang and Blum. The defense disputed Birdwell’s testimony because the required custody agreement had not been executed, but Birdwell testified on cross-examination that BNY used a standard form custody agreement and, therefore, the agreement could have been executed at that meeting. Further, we note that (a) Chang brought the original Certificate to the meeting and (b) Chang had authority to sign the custody agreement on behalf of the Panorama Foundation. We hold that the jury could have rationally concluded (as did Birdwell) that a firm offer had been made.
Chang argues it would have been insufficient for the jury to have found that Chang “uttered” the Certificate to BNY because BNY, as a trust institution, does not negotiate instruments. Chang asserts that a bailment is not an utterance and that he only intended to place the Certificate in BNY’s vaults for safekeeping. Chang relies on
United States v. Mitchell,
Alternatively, the evidence presented at trial supported the conclusion that Chang uttered, or offered, the Certificate to Midland Bank (as opposed to BNY). Chang admits that Midland Bank was a prospective offeree of the Certificate. Chang argues, however, that no “offer” to Midland Bank occurred because placement of the Certificate with BNY was a conditiоn precedent to that offer. But, viewing the evidence in the light most favorable to the government, the jury rationally could have found that Chang, on behalf of the Panorama Foundation, offered the Certificate to Midland Bank. The financing agreement that was to govern the transaction with Midland Bank was admitted into evidence at trial, as was evidence that the parties were very close to consummating the deal. While placement of the Certificate with BNY was a condition precedent to completion of the transaction with Midland Bank, it was not a condition precedent to offering the Certificate to Midland Bank. The evidence supports the finding that the Panorama Foundation, through Chang and his representatives, made a firm offer to Midland Bank — an offer that would not be accepted until all the requirements set forth in the financing agreement (including placement of the Certificate with BNY) were in place.
Thus, whether characterized as an offer to BNY or to Midland Bank, we hold that the evidence was sufficient to sustain Chang’s conviction for uttering a counterfeit foreign security.
III. “Uttering” Jury Instruction
Chang also objects to the instruction given the jury regarding the meaning of. the term “uttering” as set forth in his indictment. The challenged instruction provided that “the term ‘uttering’ means to make or attempt to make use of any written or printed instrument with intent to defraud.... ” Chang argues that it was improper for the district court to instruct the jury that an “attempt to make use” of the Certificate wаs sufficient to constitute an utterance. 4
Chang concedes that this issue was not properly preserved for appeal; therefore, we may review the jury instruction only for plain error.
See Jones v. United States,
We conclude that reversal on this grounds is not merited. In doing so, we need not determine whether an utterance of an instrument is, in аll cases, tantamount to an “attempt to make use of’ that instrument or whether such an instruction is sufficient to support conviction of a defendant for uttering a counterfeit foreign security. Regardless, there is ample evidence in this case to support our finding that the jury instruction error (if there was any such error) did not affect the
One such instruction told the jury that “[o]ne utters an item in payment or negotiation if he offers the item to another while representing that the item is genuine, ... in an effort to ultimately receive money or other things of value in exchange for the item.” As discussed previously, the evidence supported a finding by the jury that Chang (a) offered the Certificate to BNY or Midland Bank, (b) while representing it was authentic and (c) with the ultimate goal of receiving money from Midland Bank or insurance and an asset statement from BNY. Thus, the “attempt to make use of’ language of the 'disputed instruction is tempered with the language of the second instruction, which informed the jury that an “attempt to make use of’ must amount to an “offer.” The district court’s instruction was not plainly erroneous.
IV. Hearsay Exclusion
Chang also appeals the еxclusion under the hearsay rule of his proffered testimony that the Security Information Center (the “SIC”), a federal agency, had assigned an identifying number to the Certificate. Chang argues that the SIC’s alleged assignment of a registration number amounts to an admission by the government that the Certificate was genuine and that, as such, Chang’s testimony was not hearsay.
See
Chang failed to preserve this issue for appeal. Chang never informed the district court that he was offering the testimony in question as a party-opponent admission (or for any other nonhearsay purpose or under any exception to the hearsay rule, for that matter), and this theory of admissibility was not apparent from the context of his testimony. “If a party fails to state the specific grounds upon which evidence is admissible, the issue is not preserved for review, and the court of appeals will reverse only for plain error.”
Arizona v.
Elmer.;
Chang relies on
A statement is not hearsay if ... [t]he statement is offered against a party and is ... a statement by the party’s agent ... concerning a matter within the scope of the agency or employment, made during the existence of the relationship ....
“
Chang also argues that the SIC-related testimony should have been admitted as additional, nonhearsay evidence of the various sources upon which he relied in determining that the Certifícate was authentic and, ultimately, as evidеnce of his state of mind. This argument is without merit because evidence of the SIC’s alleged actions’ effect on Chang’s state of mind was admitted at trial. The district judge allowed the following exchanges between Chang and his lawyer to remain on the record:
Q. “Did you place any reliance on the assignment of a CUSIP number?”
A. ‘Tes.”
Q. “Is there any other reason why you relied upon it?”
A. “This gave me proof that this is a certificate and it does exist.”
Any further questions offered to establish the same point would have been cumulative, so their exclusion wаs not plainly erroneous.
Y. Sentencing Error
The final issue raised by Chang is whether the prison sentence imposed for his conviction on Count One is illegal because it exceeds the statutory maximum established by
The district court sentenced Chang to a total prison term of 63 months, consisting of individual sentences of 63 months on Count One, 36 months on Count Two and 12 months on Count Three, all to be served concurrently. The sentences impоsed for Counts Two and Three equal the statutory máximums established for those offenses,
see
Given that Chang’s sentence clearly exceeds the statutory maximum established under
CONCLUSION
Based on the foregoing, we AFFIRM the judgment entered against Chang but VACATE his sentence and REMAND FOR RESENTENCING.
Notes
. Blum did not argue at trial that the Certificate was, in fact, authentic; rather, he claimed that he had relied on Chang’s representations that the Certificate was authentic.
. This somewhat misstates the trial record. Although the district court acknowledged that Lausier was “extremely qualified” in international finance, it refused to accept Chang's argument that Lausier’s proffered testimony could establish the Certificate’s "underlying indicia of authenticity.” Thus, the district court ruled that Lausier’s background knowledge was nоt relevant to determining the authenticity of the Certificate itself.
. At a later point in the trial proceedings, Chang did try to call Lausier, as a percipient witness, for the purpose of corroborating Chang’s state of mind argument. The district court refused to allow Lausier to testify, and Chang does not appeal the district court’s ruling.
. Presumably, this instruction often is given by district courts in "utterance” cases under