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United States v. Villarreal

United States District Court, D. Montana, Missoula Division

October 16, 2017




         Defendant Joseph Michael Villarreal (“Villarreal”) filed a combined motion to sever and motion in limine to limit and define the Government's trial proof. (Doc. 17). The Government opposes these motions. (Doc. 23.)

         Villarreal has been charged with seven counts of wire fraud pursuant to 18 U.S.C. § 1343 and three counts of money laundering pursuant to 18 U.S.C. § 1957. (Doc. 2.) Counts I-VII allege that Villarreal “solicited funds from several individuals . . . that were supposed to be used to purchase hay on the wholesale market to re-sell on the retail market and to refine and optimize a farming and ranching operation, ” but used the funds for “personal and unrelated business expenditures and failed to return any money.” (Id. at 2.) Villarreal contends that the Government's alleged scheme is actually “two distinct and separate schemes to defraud, ” specifically, the “hay scheme” and “ranch scheme.” (Doc. 18 at 2.) Villarreal argues these separate schemes are misjoined in the indictment and require severance pursuant to Fed. R. Crim. P. 14. (Id.) The Government counters that the indictment “identifies one broad scheme to defraud and any confusion about the bounds of the scheme can be rectified with a unanimity jury instruction.” (Doc. 23 at 2.)

         The Government proposes to offer evidence at trial of Villarreal's 1996 conviction for two counts of theft in Yavapai County, Arizona. (Doc. 16.) The Government contends the evidence is admissible under Rule 404(b) because it is offered to prove Villarreal's “motive, intent, plan, knowledge, and absence of mistake or accident.” (Id. at 2.) Villarreal contends that the prior conviction “does not prove a material point and is extremely stale.” (Doc. 18 at 10.) Villarreal also seeks: to limit the Government's use of unidentified evidence which may have a “tenuous or non-existent nexus to the charges;” to preclude any testimony or evidence concerning his purported military service; and to require the Government to establish the relevance and nexus of firearm and ammunition purchases prior to admission. (Id. at 10-12.)

         For the reasons explained, both Villarreal's motion to sever and associated motion in limine will be denied. Although the Court is inclined to admit evidence of the 1996 conviction, the ruling on this motion in limine is reserved until trial. Finally, the Court reserves ruling on Villarreal's remaining motions in limine.


         I. Motion to Sever

         The Federal Rules of Criminal Procedure allow joinder of separate counts in Rule 8(a), providing that an indictment may charge separate counts if the offenses charged are of the “same or similar character, or are based on the same act or transaction, or are connected with or constitute parts of a common scheme or plan.” Rule 8 has been broadly construed in favor of initial joinder. United States v. Jawara, 474 F.3d 565, 572 (9th Cir. 2006); United States v. Dowd, 451 F.3d 1244, 1249 (11th Cir. 2006); United States v. Boulanger, 444 F.3d 76, 87 (1st Cir. 2006). By allowing either party to move for severance of counts, Fed. R. Crim. P. 14 recognizes that joinder, even when proper under Rule 8(a), may be prejudicial to either a defendant or the Government. Zafiro v. United States, 506 U.S. 534, 538 (1993). However, the mere possibility of prejudice is not enough, “Rule 14 sets a high standard for a showing of prejudice” and gives district courts “wide discretion in ruling on a severance motion.” United States v. Vasquez-Velasco, 15 F.3d 833, 845 (9th Cir. 1994); United States v. Felix-Gutierrez, 940 F.2d 1200, 1209 (9th Cir. 1991). It is well established that defendants are “not entitled to severance merely because they may have a better chance of acquittal in separate trials.” Zafiro, 506 U.S. at 540. Further, Rule 14 does not require severance even when prejudice is shown; rather, “it leaves the tailoring of the relief to be granted, if any, to the district court's sound discretion.” Id. at 538-39.

         Villarreal contends that Counts I through VI, which he refers to as the “hay scheme, ” are unrelated to Count VII, the “ranch scheme, ” and the ranch scheme's attendant money laundering charges, Counts VIII through X. (Doc. 18 at 6.) The indictment alleges that Villarreal executed a material scheme to defraud by “means of material false and fraudulent pretenses and representations” designed to induce several individuals into giving him money which was “supposed to be used to purchase hay on the wholesale market to re-sell on the retail market and to refine and optimize a farming and ranching operation.” (Doc. 2 at 2 (emphasis added).) Villarreal emphasizes the word and in the above allegation to support his position that the indictment has “cobble[d] together unrelated accusations.” (Doc. 18 at 6.) Villarreal's argument is that solely because all victims were induced into giving him money to their detriment by allegedly false statements and representations does not mean there was a common scheme. (Id. at 6-7.)

         Based on his contention that there was not a common scheme, Villarreal argues that the trial testimony of the different alleged victims will be completely unrelated. (Id. at 6.) Two victims would testify about his allegedly false assertions and representations concerning buying and selling hay and one would testify about his allegedly false assertions and representations concerning improving ranch operations. (Id. at 6-7.) Villarreal asserts that allowing the Government to call all of these alleged victims in one trial will result in testimony concerning “unrelated false promises by unrelated parties who happened to be involved in unsuccessful business transactions” with him. (Id. at 7.) Villarreal argues that this will confuse and prejudice the jury into finding a “uniting scheme or plan somewhere in the mix.” (Id.)

         The Government responds by arguing that the motion to sever should be denied for three reasons. (Doc. 23 at 8.) First, Villarreal's argument relies upon facts outside of the indictment which are not generally considered when deciding the validity of joinder, but which still support the finding of one scheme. (Id.) Second, the counts are properly joined as constituting one common scheme to defraud. (Id.) Lastly, even if the Court were to find two separate schemes, the evidence of each would be admissible to prove the other. (Id.)

         The determination of whether joinder is appropriate is normally “determined solely by the allegations in the indictment.” United States v. Jawara, 474 F.3d 565, 572 (9th Cir. 2006). However, factors such as commonality of testimonial evidence among counts have been examined by courts reviewing the propriety of an initial joinder. Id. The Ninth Circuit in United States v. Jawara, 474 F.3d 565, 578 (9th Cir. 2006), established that courts analyzing whether counts are of the “same or similar character” should consider such factors “as the elements of the statutory offenses, the temporal proximity of the acts, the likelihood and extent of evidentiary overlap, the physical location of the acts, the modus operandi of the crimes, and the identity of the victims.”

         These factors justify joinder in this case. Villarreal's motion challenges the joinder of different counts of wire fraud alleged as part of the same scheme. Since all are charged under the same statute, the elements to be proven on these counts are identical.[1] The seven counts all arise within a two-year period, making them temporally connected. As to overlapping evidence, although the witnesses will be different between Counts I-VI and Count VII, the evidence is likely to be very similar. Contrary to Villarreal's assertion, the evidence will not be unrelated since all alleged victims will likely testify as to being entrapped by similar misrepresentations and false pretenses concerning the delivery of agricultural goods or services. This common means of defrauding further establishes a common modus operandi between the crimes and logically supports the Government's allegation of a unifying scheme. As to the identity of the victims, the indictment indicates that Villarreal targeted one industry, agriculture, making the victims identity similar in this regard. Lastly, while the physical locations of the alleged acts span several states, the Court finds the failure of this factor is outweighed by the satisfaction of the rest. Therefore, the Court finds that the counts were properly joined as being of the “same or similar character” under Fed. R. Crim. P. 8(a).

         Before disposing of this issue, the Court must address the possibility of a duplicity argument which the Government believes has been implicitly raised by Villarreal. (Doc. 23 at 7.) The Government asserts that Villarreal's position-that proceeding to a trial allowing testimony concerning what he claims are two different schemes will prejudicially allow the jury to conflate the unrelated evidence into a unifying scheme-invokes the argument that the indictment is duplicitous. “An indictment is considered duplicitous if a single count combines two or more different offenses.” United States v. Reneria, 557 F.3d 1003, 1007 (9th Cir. 2009) (citation omitted). One danger of duplicity “is that a jury could ...

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