United States v. Finley

301 F.3d 1000 (9th Cir. 2001)

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Nature of the Case

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Facts

D was charged with one count of making a false claim against the United States, one count of attempting to interfere with the administration of the Internal Revenue Service, and three counts of bank fraud. D owned a law bookstore and ran a bar review course for students of non-accredited law schools. He began looking for investors to assist him in opening a chain of approximately twenty bookstores across the United States. D could not obtain traditional bank financing because of a dispute he had with the IRS over a large tax claim. D went to a character by the name of Schweitzer. who claimed that he possessed recorded liens against Norwest Bank of Montana, other banks, and individuals and that he could draw on these accounts by issuing negotiable instruments. D explained his business plan to open a chain of bookstores. D owed the IRS about $180,000 and that D owed a mortgage on his condominium with Great Western Bank. Schweitzer gave Finley several documents that looked like financial instruments and were entitled, 'Comptroller's Warrants' and 'Certified Banker's Checks.' Schweitzer made one document payable to D and the Bank of America for $ 6,125,000. Schweitzer made the second document out to D and Great Western Bank for $150,000, or about twice the remaining amount D owed on his mortgage. The third instrument named the IRS and D as payees for $360,000, twice the amount Finley owed in taxes. Schweitzer was to receive thirty-five percent of the profits from the bookstores. The bank began processing the $6 million instrument, but it returned it marked 'fictitious check' with a separate notice that indicated 'please resubmit when corrections are made.' The bank received a 'fraud alert' addressing similar instruments from Schweitzer. The bank gave a copy of the alert to D. D attempted to negotiate the instrument a second time in August 1996. This time Finley told the bank to send it to a designated address, but the item came back unpaid again. The same happened to the other two “instruments” when D attempted to negotiate them. D went a little bit crazy and embarked on a campaign to cause public trouble for 'Robin Hood and the 9 Hoods' and portrayed various government officials as 'bad guys' for not cashing the documents. The FBI arrested Schweitzer and others, but not D. D testified twice against Schweitzer and P notified D that it would indict him. A grand jury formally indicted D on November 6, 1998. D filed a notice under Fed. R. Crim. P. 12.2(b), informing P that he intended to introduce testimony 'relating to a mental disease or defect or any other mental condition' relevant to guilt. Dr. Wicks, a licensed clinical psychologist in California, had examined D. He stated that D 'has an atypical belief system, a system which is very rigid.' D intended to call Wicks to testify to show that D did not have the intent to defraud, the requisite mens rea for the crime. P moved under Rule704, to preclude D from relying on expert mental health testimony at the trial. P's contention was that Rule 704(b) barred the testimony because it addressed an honestly-held 'value system. At trial, Dr. Wicks explained his thirty years of experience in psychology including his extensive experience in conducting psychological evaluations of patients. He stated that he spent two days with D, including administering a battery of psychological tests and interviewing him. Dr. Wicks testified that D has an atypical belief system. Dr. Wicks explained that most people have an open belief system that is subject to change, but some people have closed belief systems. Closed belief systems are more abnormal because they are fixed and rigid. Dr. Wicks opined that D was vulnerable to a delusional disorder. He elaborated that a person with a delusional disorder can be dissuaded from the delusion 'only with tremendous, tremendous difficulty.' P objected and a Daubert hearing was ordered. Dr. Wicks explained his methodology and stated the psychological community accepted the methodology he used. That methodology included a history of the patient, consisting of family, vocational, educational, medical, and legal histories, the observation of the patient's behavior, and the administration of standard psychological tests. He stated he did not diagnose D as having a delusional disorder, although D's symptoms did fit within many of its criteria. He explained his fear that such a diagnosis might have suggested that D was legally incompetent, whereas Dr. Wicks believed D could assist counsel and understood his legal proceedings. The court excluded the testimony because the testimony would not be helpful to the jury.⁪ The court struck the testimony as a sanction for a Fed. R. Crim. P. 16(b)(1)(C) violation. D was convicted and appealed.