United States v. Bruck

• Court: Court of Appeals for the First Circuit
• Decided: September 3, 1998
• Docket: 96-1952
• Status: Published

Opinion

USCA1 Opinion

                 United States Court of Appeals

                     For the First Circuit


No. 96-1952



                          UNITED STATES,



                            Appellee,



                                v.



                           MARK BRUCK,



                      Defendant, Appellant.


APPEAL FROM THE UNITED STATES DISTRICT COURT



                FOR THE DISTRICT OF MASSACHUSETTS



       [Hon. Frank H. Freedman, Senior U.S. District Judge]


Before



                     Torruella, Chief Judge,

                Selya and Stahl, Circuit Judges.


Thomas G. Murray for appellant.

     Ariane D. Vuono, Assistant United States Attorney, with whom

Donald K. Stern, United States Attorney, was on brief for appellee.


September 1, 1998


STAHL, Circuit Judge.  Following an eight-day trial, a

jury convicted defendant-appellant Mark Bruck of conspiracy to

commit bank fraud, see 18 U.S.C.  371 (Count I); bank fraud, see18 U.S.C.  1344 (Count II); conspiracy to commit wire fraud, see18 U.S.C.  371 (Count III); wire fraud, see 18 U.S.C.  1343

(Counts IV and V); arson, see 18 U.S.C.  844(i) (Count VI); and

the use of fire to commit a felony, see 18 U.S.C.  844(h)(1)

(Count VII).  Thereafter, the district court sentenced Bruck to

concurrent 78-month terms of incarceration on Counts I-VI, and a

consecutive 60-month term on Count VII.  Bruck seeks a new trial,

arguing that the district court erred in (1) declining to sever

Counts I and II from the remaining charges in the indictment; (2)

declining to hold a hearing on his competence to stand trial and to

grant him an eve-of-trial continuance to gather evidence relating

to his allegedly impaired mental condition; and (3) permitting the

government's case agent to give certain opinion testimony.  We

affirm.

                                I.

  In disregard of Fed. R. App. P. 28(a)(4) and (e), Bruck's

brief contains neither a summary of the evidence presented at trial

nor pertinent record citations.  We therefore largely adopt the

government's factual presentation, adding explanatory details

wherever we believe it helpful and deferring the details of the

procedural history relevant to the issues Bruck advances on appeal

to our discussions of those issues.

  Bruck was the President and principal stockholder of

Advance Resins, Inc.  Advance Resins, which was in the business of

grinding, recycling, and coloring plastic, occupied three converted

airplane hangars in Chicopee, Massachusetts.  The company used two

buildings it owned   Buildings One and Two (we use the company's

denominations)   for operations and office space, and a leased

building   Building Three   for storage.  Advance Resins had once

been a promising business, but by 1990, it had fallen on hard

economic times.

  In January 1980, Advance Resins reached an agreement for

a revolving line of credit with Third National Bank.  Throughout

the 1980s and into the 1990s, this agreement remained in effect

with Third National's two successor banks   Bank of New England and

Fleet Bank.  For the sake of simplicity, we refer to the three

banks collectively as "the Bank."  According to the agreement,

Advance Resins had a borrowing capacity of up to $1.7 million,

depending upon the daily value of its inventory and accounts

receivable.  Each morning, Advance Resins reported the value of its

accounts receivable to the Bank.  By factoring in the value of the

company's inventory (which Advanced Resins reported monthly), the

Bank used this daily report to determine the amount of credit to

which the company would be entitled for the day.

  In the mid-1980s, Advance Resins began to experience cash

flow problems.  This led Bruck to direct his employees to report

false inventory and sales figures to the Bank.  By doing so,

Advance Resins fraudulently increased the amount of credit

available to it to meet the company's daily cash flow needs.  In

late 1992, the Bank terminated the line of credit after discovering

Advance Resins' inaccurate reporting during a field examination of

the account.  Thereafter, Advance Resins repaid in full all

outstanding loans from the Bank.

  Advance Resins' financial woes continued to mount.  In

late February 1994, Bruck decided to expand the company's insurance

coverage (which had previously extended only to Buildings One and

Two) by purchasing from MassWest Insurance Company $1 million of

coverage for Building Three's physical plant and $900,000 of

coverage for its contents.  Bruck explained to his insurance agent

that the company planned to purchase and improve Building Three in

order to make it suitable for operations.  Immediately after

arranging for the additional insurance coverage, Bruck ordered his

employees to move equipment and highly flammable products into

Building Three.

  On Saturday, March 5, 1994, less than a week after

changing Advance Resins' insurance coverage, Bruck hired several

welders to do some minor work inside Building Three.  Bruck met the

welders and stayed with them as they completed their work.  The

welders left the building shortly after nightfall, but Bruck stayed

behind for a short time, ostensibly to lock up.  Just before

midnight, a passerby reported to the Chicopee Fire Department that

Building Three was on fire.  The fire destroyed the building and

its contents.

  The federal Bureau of Alcohol, Tobacco, and Firearms

("ATF") investigated the conflagration and determined, based upon

various fire investigation techniques, that the fire had numerous

points of origin in the warehouse area where Bruck had been alone

for some period after the welders departed the premises.

Significantly, there was no evidence that the fire had a point of

origin in the area of Building Three where the welders had been

working.  The overall evidence led ATF to conclude that the fire

had been deliberately set.

  In interviews conducted shortly after the fire, Bruck

made a number of misleading statements to ATF agents.  He indicated

that Advance Resins was immensely successful, falsely stating that

the company had recently gone to a 24-hour production schedule to

keep up with orders.  He also claimed to be certain that the

welders had caused the fire, despite having noticed nothing unusual

while locking up after the welders had finished their work. 

Finally, he told the agents that the replacement cost of the

destroyed equipment and inventory was approximately $1.5 million. 

This proved to be a gross exaggeration.

  Investigators soon learned that, before the fire, Bruck

had ordered his bookkeeper and other employees to grossly inflate

the value of the inventory stored in Building Three.  After the

fire, Bruck discovered that his employees had not finished

fabricating and recording the inflated figures.  He then ordered

them to complete the task immediately so that he could present the

fictitious figures to the insurance adjuster.  Eventually, Bruck

delivered to the adjuster false inventory figures indicating that

approximately $1.3 million in inventory had been lost in the fire. 

Not long thereafter, on February 7, 1995, a federal grand jury

returned a seven-count indictment charging Bruck with the crimes

for which he stands convicted.  

                               II.

A.  Misjoinder and Severance

  Prior to trial, Bruck filed a motion to sever the counts

pertaining to his bank fraud (Counts I and II) from the counts

pertaining to the insurance fraud and arson (Counts III-VII),

contending that these two groups of counts were not properly joined

under Fed. R. Crim. P. 8(a) ("Two or more offenses may be charged

in the same indictment . . . if the offenses charged . . . are of

the same or similar character or are based on the same act or

transaction or on two or more acts or transactions connected

together or constituting parts of a common scheme or plan."). 

Magistrate Judge Neiman agreed, holding that the bank fraud charges

and insurance fraud and arson-related charges were substantially

dissimilar and temporally distinct.  He accordingly ordered that

Counts I and II be severed from the remaining counts and tried

separately.  

  The district court, however, summarily reversed the

magistrate judge's determination as contrary to law.  See 28 U.S.C.

 636(b)(1)(A) (non-dispositive pretrial order of a magistrate

judge may be "reconsider[ed] . . . where it has been shown that the

. . . order is clearly erroneous or contrary to law").  The court

therefore ordered that all charges be tried together.  Bruck claims

that the district court's ruling was prejudicial error.

  Insofar as Bruck claims error, his argument is not

without some force.  Although the Tenth Circuit has taken the

position that three separate and apparently temporally distinct

bank and insurance fraud schemes were properly joined under Fed. R.

Crim. P. 8(a) because each involved an "alleged[] defraud[ing] of

the victim through the submission of falsified documents," United

States v. Hollis, 971 F.2d 1441, 1456 (10th Cir. 1992), we cannot

say that the factors we have cited repeatedly as most relevant to

whether two or more charges are properly joined strongly favored

joinder in this case.  See United States v. Edgar, 82 F.3d 499, 503

(1st Cir.) (directing courts to look to "'whether the charges are

laid under the same statute, whether they involve similar victims,

locations, or modes of operation, and the time frame in which the

charged conduct occurred'") (quoting United States v. Taylor, 54

F.3d 967, 973 (1st Cir. 1995)), cert. denied, 117 S. Ct. 184 (1996). 

Furthermore, we note that arson, with the attendant physical

dangers it presents to, at the very least, the firefighters

summoned to extinguish the blaze, is an offense of dissimilar

character to bank fraud.  Indeed, we note that the sentencing

guidelines set the base offense level for arson involving a

structure other than a dwelling, without any adjustments for

specific offense characteristics, at 20, see U.S.S.G. 

2K1.4(a)(2), but set the base offense level for bank fraud, sansspecific offense adjustments, at 6, see U.S.S.G.  2F1.1.

  We do, however, part company with Bruck insofar as he

views any misjoinder as prejudicial.  See United States v. Lane,

474 U.S. 438, 449 (1986) ("[A]n error involving misjoinder affects

substantial rights and requires reversal only if the misjoinder

results in actual prejudice."); see also Fed. R. Crim. P. 52(a)

("Any error, defect, irregularity or variance which does not affect

substantial rights shall be disregarded.").  We reach our

conclusion by assuming arguendo that a misjoinder exists but

answering in the negative the harmless-error inquiry appropriate

for non-constitutional error:  was the putative error likely to

have "'had substantial and injurious effect or influence in

determining the jury's verdict?'"  Lane, 474 U.S. at 449 (quoting

Kotteakos v. United States, 328 U.S. 750, 776 (1946)).

  Obviously, the rule against misjoinder primarily seeks to

serve the same interest advanced by the general rule set forth in

Fed. R. Evid. 404(b)("Evidence of other crimes, wrongs, or acts is

not admissible to prove the character of a person in order to show

action in conformity therewith.").  That is, the rule against

misjoinder strives to ensure that the jury does not convict an

accused of a charged crime simply because the accused has been

charged with, or convicted of, a different, unrelated crime.  Cf.United States v. Amato, 15 F.3d 230, 236-37 (2d Cir. 1994)

(recognizing that the joinder of dissimilar charges creates

excessive risk of prejudicial spillover).  We therefore analyze

whether the insurance fraud and arson-related evidence was likely

to have caused the jury to convict on the bank fraud charges,

and/or whether the bank fraud evidence was likely to have caused

the jury to convict on the insurance fraud and arson-related

charges.  On both issues, we think it unlikely that the jury was

led astray.

  With respect to the bank fraud charges, several factors

drive our conclusion.  We believe it likely that, at a separate

bank fraud trial, much of the insurance fraud and arson-related

evidence would have been relevant to whether Bruck had the

requisite unlawful intent with respect to the bank fraud.  See Fed.

R. Evid. 404(b) (evidence of similar other acts can be relevant to

issues pertaining to an accused's intent); cf. Lane, 474 U.S. at

450 (finding misjoinder harmless because evidence with respect to

the charge that should have been severed would likely have been

admissible at a separate trial).  After all, Bruck's modus operandi  inflating inventory and sales figures with the intent to secure

advantage from large financial institutions   was nearly identical

in each episode.  Moreover, Bruck's testimony tended to put in

question both whether he had the capacity to form the requisite

intent and whether Bruck was merely present where others were

committing the crime.  See generally 2 Jack B. Weinstein & Margaret

A. Berger, Weinstein's Federal Evidence,  404.22[1][b] and

[c](Joseph M. Mclaughlin, ed., Matthew Bender 2d ed. 1998) (Fed. R.

Evid. 404(b) other act evidence tends to be relevant when

sufficiently similar to charged offense and when the defense puts

intent in question by challenging defendant's capacity and/or by

suggesting that defendant was merely present at a crime scene). 

The fact that the insurance fraud and arson came some time after

the bank fraud does not detract from the likely relevance of the

insurance fraud and arson-related evidence in this instance.  Seeid. at  404.22[1][a] (noting that subsequent acts can be relevant

to prove intent).

  Of course, the trial court might have excluded this

evidence as cumulative because the evidence of Bruck's intent with

respect to the bank fraud, standing alone, was very strong.  SeeFed. R. Evid. 403.  Bruck's accountant and one of his sales agents

testified that Bruck had ordered them to falsify the books every

day for many years; their testimony was entirely consistent with

each other, with that of several Bank employees, and with reports

from customers; and the false accounting books were themselves

before the jury as evidence.  Yet the overwhelming nature of this

evidence itself compels the conclusion that the insurance fraud and

arson-related evidence did not cause the jury to convict Bruck of

bank fraud.  See Lane, 474 U.S. at 750 (overwhelming evidence of

guilt on a particular charge typically renders misjoinder of

another charge non-prejudicial).

  With respect to whether the bank fraud evidence likely

led the jury to convict Bruck on the insurance fraud and arson-

related charges, our analysis is similar.  For the same reason that

much of the insurance fraud and arson-related evidence would likely

have been relevant at a bank fraud trial to show Bruck's intent

with respect to the bank fraud, much of the bank fraud evidence

would likely have been relevant at a trial on the insurance fraud

and arson-related charges to show Bruck's intent with respect to

those charges.  Moreover, although the evidence against Bruck on

these charges was largely circumstantial, it was quite strong:  the

fire came less than a week after Bruck changed the insurance to

cover a building Advance Resins did not yet own; Bruck moved

equipment and flammable material into Building Three immediately

before the fire; Bruck was the last person in the building before

the fire started; and Bruck sought to inflate the inventory figures

in Building Three before and after the fire.  Finally, the bank

fraud evidence would only have tended to reinforce a theme that

already would have been before the jury on the basis of the

insurance fraud and arson-related evidence:  that Bruck defrauded

large financial institutions in order to gain funds for Advance

Resins.  Thus, although the bank fraud evidence also might have

been excludable as cumulative under Fed. R. Evid. 403, we are

confident that it was not the difference-maker that led the jury to

conclude that Bruck set the fire in Building Three and then sought

to defraud Advance Resins' insurer.

  For these reasons, we conclude that any misjoinder of the

bank fraud charges and the arson-related charges was not

prejudicial.

B.  Competency and the Motion to Continue

          Bruck has a history of psychological illness, and as the

December 4, 1995 trial date approached (after several continuances

to accommodate defense counsel's schedule), Bruck began to behave

in a particularly erratic manner.  Contrary to his lawyer's

specific instructions not to have contact with any witnesses, Bruck

wrote a letter to a government witness urging her to change her

anticipated testimony.  Also, defense counsel reported that he was

experiencing ever-increasing difficulty in communicating with

Bruck, and that Bruck was showing signs of significant

disorientation and forgetfulness.  Finally, counsel reported that

the Social Security Administration was sending Bruck's benefit

checks to Bruck's mother because it had concerns about Bruck's

competence to handle his own affairs.  

  On November 8, 1995, defense counsel brought these

matters to the district court's attention in a motion for a

competency hearing.  In support of his motion, counsel argued that

Bruck was potentially incapable of understanding the proceedings

against him and/or assisting with his defense.  See Dusky v. United

States, 362 U.S. 402, 402 (1960) (setting forth the test for

competence to stand trial).  On November 13, 1995, the court

ordered that Bruck undergo an examination to determine his

competence to stand trial, but asked that the examination and

report be expedited to the extent practicable, given the proximity

of the trial date and the inconvenience yet another continuance

would cause a number of out-of-state government witnesses.  Over

the next several days, Howard Lester, Ed.D., examined Bruck and

concluded that, while he would have liked to have conducted more

extensive testing and perused medical records he was unable to

obtain on the tight deadlines established by the court, Bruck was

competent to stand trial.  Lester also concluded that Bruck

probably was fabricating or exaggerating many of his symptoms.

  On the basis of Lester's report (which was not filed

until December 1, 1995, but whose basic conclusions were reported

to the judge and counsel during the last week in November), the

court denied defense counsel's request for a full-blown evidentiary

hearing.  So too did the court deny several motions by the defense

for a continuance   filed between November 21, 1995 and December 4,

1995   to develop psychological evidence tending to establish that

Bruck was insane and/or lacked the mens rea to commit the crimes

with which he was charged.  Bruck now claims that the district

court's failure to afford a competency hearing and/or to grant a

continuance was error.  We do not agree.

  Because the conviction of a criminal defendant while he

is legally incompetent violates due process, see Pate v. Robinson,

383 U.S. 375, 378 (1965), a district court has a duty to order a

competency hearing if there is "reasonable cause" to doubt the

defendant's competence to stand trial, see 18 U.S.C.  4241.  Yet

if a qualified mental health professional has determined that a

defendant is competent, "a court is not required to hold a further

evidentiary hearing absent extenuating circumstances."  United

States v. Lebron, 76 F.3d 29, 32 (1st Cir.), cert. denied, 116 S.

Ct. 2537 (1996).  We review a district court's decision not to hold

a full competency hearing only for abuse of discretion so long as

there was a sufficient evidentiary basis to ground the court's

competency determination.  See id.

  We review the denial of a motion for a continuance to

develop or locate evidence pertinent to a defendant's psychological

condition under a similar paradigm.  In conducting our review, we

consider (1) defendant's diligence in preparing his defense; (2)

the likely utility of the continuance if granted; (3) the

inconvenience to the court, witnesses, and the government; and (4)

the extent to which the defendant may have suffered prejudice from

the denial.  See United States v. Soldevila-Lopez, 17 F.3d 480, 488

(1st Cir. 1994).  Again here, we accord deference to the trial

court's decision to deny the motion.  See id. at 487.

  In this instance, Bruck has provided us with no basis for

concluding that the lower court abused its discretion with respect

to its failure to hold a full-blown competency hearing.  In his

brief, Bruck simply asserts, without elaboration, that "enough was

contained in counsel's motion and recitation to the Court, and

indeed in Dr. Lester's report which would warrant a conclusion"

that Bruck was incompetent.  He also generally states that "[a]

reading of the Defendant's testimony during trial supports the

conclusion that the Defendant was not functioning within the realm

of competence," and points to the fact that the court had Bruck

taken into custody following the verdicts because it felt that

Bruck was a suicide risk.  Such generalizations, unsupported by

efforts at applying specific record evidence to the relevant legal

standards, leaves us in the position of simply stating that, on our

review of the record, we discern no abuse of discretion in the

trial court's acceptance of Dr. Lester's conclusion that Bruck was

competent to stand trial without taking additional evidence.

  So too do we leave intact the court's decision not to

award Bruck an eve-of-trial continuance to develop further

psychological evidence.  Bruck has made no effort to point us to

evidence suggesting that he had a diminished capacity to form

criminal intent and/or that he was legally insane at the time he

committed his crimes.  All he has done is to emphasize that there

is evidence he never obtained   e.g., whatever evidence led the

Social Security Administration to send Bruck's benefits checks to

Bruck's mother   that might have assisted him in generating a last-

minute, mens rea-related defense.  This argument is plainly

insufficient for us to find an abuse of discretion on this record,

especially given Bruck's failure to discuss the relevant insanity

and diminished capacity principles and to apply those principles to

the record of this case.  In so ruling, we also note Bruck's

apparent lack of diligence in failing to secure the missing

evidence in the two and one-half years since his trial, despite the

fact that the extent to which the moving party may have been

prejudiced by the denial of a motion to continue is one of the

factors we look to in assessing whether the lower court acted

within its discretion.  See Soldevila-Lopez, 17 F.3d at 488.

  For these reasons, we decline to revisit the question of

Bruck's competence and/or to order a new trial because the district

court denied Bruck's motions for a continuance.

C.  Opinion Testimony

  In his brief, Bruck excerpts the following exchange

between the government's trial counsel and Special Agent Michael

Bouchard, who was the case agent and lead investigator in the

government's arson case against Bruck:

       Q.     (By AUSA Kinder).  Could you have

  a seat please[?] Based on the training and

  experience you have had in arson

  investigations, have you learned that there's

  certain indicators in an arson for profit

  scheme that you look for?



         MR. MURRAY [Defense counsel]: 

  Objection.



         THE COURT:  He may testify.

  

    A.     Yes.



    Q.  Did you find any of those

  indicators for the investigation of the

  Advance Resins' fire?



    A.     Yes, I did.



    Q.     What were they?



    A.     The fire was deliberately set in

  multiple locations.  The fire was set for

  economic--



         MR. MURRAY:  I object and move to

  strike.  That is a conclusion left to the

  jury's determination, not this agent's.



         THE COURT:  Well, he may give his

  opinion based on his experience, background

  and training, and on the number of fires he's

  investigated, teaching experience and so

  forth.  Based on that, he may give his opinion

  as to whether or not it was a set fire and to

  show how he determined it.



Bruck then makes the following argument, which we reproduce

verbatim in its entirety:

    Allowing this testimony was clear

  error.  In the first place defense counsel was

  totally surprised that an expert opinion had

  been sought from the agent, in that no notice

  was given under Rule 16(a)(1)E of the Federal

  Rules of Criminal Procedure.  Additionally,

  the opinion is incompetent under Daubert v.

  Merrell Dow Pharmaceuticals, Inc., 509 U.S.

  579 (1993), and inadmissible under Rule 704(b)

  of the Federal Rules of Evidence as an opinion

  on the ultimate issue.  The trial judge

  however was obdurate in allowing the testimony

  to remain.  Given the disputed nature of the

  arson testimony, this error, standing alone,

  requires reversal.



At oral argument, counsel rested on his brief with respect to this

question.

  Counsel's approach to this issue has left us less than

fully certain as to exactly what testimony Bruck finds

objectionable.  The government followed the lower court's lead and

assumed that the testimony being challenged was Agent Bouchard's

statement that "[t]he fire was deliberately set in multiple

locations."  And indeed, in the "Overview" section of his brief,

Bruck states that he will be arguing that it was error to allow

Bouchard to opine that the fire was deliberately set.  The timing

of counsel's objection, however, in combination with the non-

specific nature of the argument presented, leaves us wondering

whether the objected-to testimony was, in fact, Agent Bouchard's

opining that the fire was set for economic reasons.  Given this

state of affairs, we regard the point as having been waived.  SeeUnited States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).  But in

any event, in view of what we regard as strong evidence of guilt on

the insurance fraud and arson-related charges, we are confident

that any improperly-admitted opinion testimony was absolutely

harmless.  See United States v. Newman, 49 F.3d 1, 7 (1st Cir. 1995)

(ruling that the erroneous admission of opinion as to the ultimate

issue of guilt or innocence was harmless).

  We therefore decline to disturb Bruck's convictions on

the basis of this colloquy.


III.

  For the reasons stated, we affirm Bruck's convictions in

all respects.