United States v. Taylor

ELY, J. Taylor and Dennis B. Wittman were jointly indicted for their part in the assertedly fraudulent acquisition of a substantial loan from the Continental Bank of Texas ("Continental"), in Houston, Texas. During the period of time covered by the indictment, late 1974 to early 1975, Taylor was a vice-president of the real estate department of Home Federal Savings and Loan Association ("Home Federal"), located in San Diego, California. The fraudulent "scheme or artifice" alleged by the Government was that Taylor and Wittman, who was a principal in several San Diego real estate development entities, had induced Continental to make a $1.97 million loan to a corporation run by Wittman, on the basis of their false representations of several material facts. In a January 16, 1975 letter signed by Taylor and containing an initialed postscript, Taylor and Wittman blatantly misrepresented to Continental that Home Federal held a first lien on certain California real property. This letter was telecopied from San Diego to Houston, where Wittman received it, photocopied it, and delivered the photocopy to a loan officer of Continental. The photocopy tendered to Continental, which was the copy of the letter Continental relied on in approving the loan, was admitted into evidence at Taylor's trial as Government Exhibit "24." On January 23, 1975, Taylor signed a letter agreement with Continental purporting to confirm Home Federal's first lien commitment. After Taylor signed the letter agreement, without authorization, in his capacity as an officer of Home Federal, Continental funded the $1.97 million loan.

In July 1975, Wittman's corporation defaulted on the loan. Taylor and Wittman were indicted in June 1977....

An issue at trial critical to the jurisdictional element of the crime charged(1)2 was whether Taylor had already signed the fraudulent letter dated January 16, 1975 (the predecessor of Exhibit "24") when it was telecopied from California to Texas, or whether Taylor had signed it after its transmission to Texas. Neither the "original" nor the telecopy was ever produced at trial. Instead, the Government introduced Exhibit "24," which was either a photocopy of the telecopy or a more remote reproduction.(2)3 While Exhibit "24" did reflect Taylor's signature, it was never conclusively established that the exhibit was a direct copy of the telecopy, leaving open the possibility that the signature was not affixed prior to interstate communication. Taylor's counsel at trial objected to the admission of this potentially spurious document on the basis of the "best evidence rule." The trial court ultimately admitted Exhibit "24" as secondary evidence, relying on the Government's claim that the original document had been unsuccessfully subpoenaed from the relevant parties, i.e., Continental, Home Federal, and Wittman's corporation.

In the course of the District Court's probe of the prosecuting attorney on the subpoena issue, Taylor's trial counsel made a qualified stipulation to the admission of the exhibit based on the truth of the Government's representations.(3)5

Exhibit "24" proved to be a vital piece of evidence for the Government. It was used to rebut Taylor's contention that a fraudulent scheme did not exist at the time of the transmission of the January 16, 1975 letter; it was used to corroborate in important respects the testimony of the prosecution's key witness, Continental loan officer Michael Wells; and, most importantly, it provided evidence of an essential element of the charged offense--interstate communication to execute a fraud.

The jury rendered a guilty verdict on March 29, 1978. Taylor was sentenced to a term of one year and a day.... The most significant allegation of error was that the District Court erred in the admission of Exhibit "24" because, inter alia, the copy was improper under the "best evidence rule" of the Federal Rules of Evidence. In his direct appeal Taylor did not impugn the veracity of the Government's statements concerning the inability of the subpoena power to uncover the original document, since resolution of that matter necessarily involved matters outside the trial record. Taylor made a personal request for proof of the subpoenas. Unfortunately, the Government did not respond with such proof....

Taylor raises several claims of error in his direct appeal, the most serious of which is that the District Court erred in admitting Exhibit "24" into evidence. Having determined that these claims are without merit, we affirm Taylor's conviction.

Taylor argues that because Exhibit "24" is at best a photocopy of the telecopied January 16, 1975 letter, it was improperly admitted into evidence. Federal Rule of Evidence 1002, Taylor correctly asserts, requires the production of the "original" writing to prove the contents thereof, "except as otherwise provided." Taylor contends that since Exhibit "24" is neither an "original" under Rule 1002 nor a "duplicate" within the exception of Rule 1003, it should not have been admitted into evidence. Taylor's argument overlooks the state of the trial record and the clear application of the exception of Rule 1004(2), which allows the admission of secondary evidence when the "original" cannot be obtained by available judicial procedures. When Exhibit "24" was offered for introduction into evidence at trial, the Government represented to the District Court that subpoenas requesting the "original" letter--i.e., the one typed in San Diego--had been served on the parties and that the "original" was not produced. In reliance on this representation, the District Court admitted Exhibit "24" into evidence. Taylor's counsel did not object to the exhibit's admission. Because Taylor's counsel failed to object to the admission of Exhibit "24," and even stipulated to the unavailability of the "original" letter, the record on direct appeal compels that we reject Taylor's "best evidence" argument.

We have carefully considered Taylor's remaining claims and find that the District Court did not abuse its discretion, that the jury was properly instructed, and that the evidence was adequate to support the jury verdict. Therefore, Taylor's conviction of wire fraud in the District Court is affirmed....

1. 2. 18 U.S.C. §1343 (1976) requires that the "scheme or artifice to defraud" involve the transmission "by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice."

2. 3. An argument can be made that the "original" letter typed in San Diego is not the original, legally operative document for purposes of "best evidence" analysis because the officer of the defrauded Texas bank made the loan in reliance of either the telecopy or a photocopy of the telecopy. Under this view, the latter documents, rather than the "original" typed letter, must be treated as legally operative originals. See United States v. Gerhart, 538 F.2d 807, 810 n.4 (8th Cir. 1976); 5 J. Weinstein & M. Berger, Weinstein's Evidence ¶1001(3)[01] to [02] (1978 & Supp. 1979). Because we decide the admissibility issue on other grounds, we need not rule on this rationale.

3. 5. At trial, the following colloquy between the district judge, defense counsel, and prosecutor took place:

The Court: Well, now, here's my ruling. I understand your point. I am going to overrule your objection to the admissibility, and the evidence in the case will have to be whatever it is concerning what [Exhibit "24"] purports to be--ultimately turns out to be.

Mr. Shenas [Defense Counsel]: Is that ruling based on a representation that the original of this letter has been subpoenaed from [Continental], from [Wittman's corporation], and from Home Federal by the Government?

The Court: Yes.

Mr. Shenas: Thank you.

The Court: Now do you want something--and that's a representation you are willing to rely on?

Mr. Shenas: Your Honor, I don't know if that's true or not. If counsel will tell me that's true, I will believe it. He hasn't said that--anything.

Mr. Kelton [Prosecuting Attorney]: What?

Mr. Shenas: That the original of that document was subpoenaed by the Government from [Continental], [Wittman's corporation], and Home Federal.

Mr. Kelton: When the Grand Jury investigation was--

The Court: Now, can't you answer that question directly?

Mr. Kelton: When the Grand Jury investigation was initiated--

The Court: Can't you answer "yes" or "no"?

Mr. Kelton: Yes.

The Court: Is that the answer, "Yes"? All right. Now, this is important when you come down to make a representation of that kind.

Mr. Kelton: Judge, I must say for the record that there's no original that could be located. But I am making this statement after subpoenaes, after speaking to the attorneys, after speaking to everybody involved in this transaction, and I really object to Mr. Shenas' implication that somebody has tampered with this evidence.

The Court: Just a minute. I am the person who is asking the question, whether [Wittman's corporation] has been subpoenaed, Home Federal has been subpoenaed, and the bank in Texas has been subpoenaed for the production of the original letter of January 16, 1975--which was Telexed to Texas.

Mr. Kelton: Yes, they have, and I would also say this, your Honor: There is no way that the original letter could have been in Texas because it was Telexed. That's the point.

The Court: Well, it would then show up with Home Federal, wouldn't it?

Mr. Kelton: Home Federal does not have it.

The Court: All right. It's been subpoenaed there. That's the only thing I am asking about, and you said it has been. So that's enough. That's what you have said and we needn't have any more explanation.[ql[hm1]And on that basis, I will accept this in evidence.[ql[hm1]Now, you know the responsibility you are assuming when you say it's been subpoenaed. Don't look so disheartened.

Mr. Kelton: I'm not disheartened, Judge. The only point I am trying to make is that I made a good faith offer of proof to the Court--

The Court: I am not suggesting you didn't make it in good faith. I am asking about a foundation for it, for my accepting in evidence secondary evidence.

Mr. Kelton: I would just like to put my position on the record, your Honor. It would take one second. That is this: That all I have to do to lay that foundation through this witness is establish a record that that was kept in the ordinary course of business at [Wittman's corporation], and that they do not have the original available. And that is my position under the Federal Rules. And I think I have made that clear.

The Court: All right. I will admit the document on the basis of secondary evidence because of your inability through subpoena power to produce the originals.

#R.T., Vol. V, at 51-54 (emphasis added).