United States v. Forcelle

86 F.3d 838 (8th Cir. 1996)

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Nature of the Case

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Facts

D co-founded RMS Company. RMS started as a general machine shop and developed expertise as a manufacturer of precision parts for the aerospace and medical industries. Cretex bought RMS for about four and one-half million dollars. Cretex retained D as president to run the company. D was charged with mail fraud and interstate transportation of funds obtained by fraud. P alleged that D used RMS monies to pay for a portion of a drag racing chassis and a portion of a beach-front house. Five RMS checks totaling $191,000 were used to pay for about one-third of the cost of constructing the New Jersey home. Two RMS checks, totaling $37,000, were used to buy a drag racing chassis. D admitted that he was responsible for the deceptive invoices used to access RMS money to pay for the home and the racing chassis, but he denied any criminal intent. D intended to use the home as a base to expand the company's East Coast market presence. Forcelle believed that the home would benefit RMS and that RMS would use the home to entertain customers, hold meetings, and reward RMS employees. He did not tell Cretex of his plans for the New Jersey residence because Cretex would be too short-sighted to appreciate the value of such a purchase. Forcelle planned to eventually tell Cretex 'after there had been a season's use of the home, [Cretex] would see the advantages of it and there wouldn't have been a problem.' D admitted that he had a false invoice created to purchase the race car chassis, but that he felt it appropriate for RMS to share some of the cost because the racing operation had been used to promote RMS to its customers, employees, and suppliers. P produced evidence that D stole platinum scrap from RMS Company and bribed an official at Boeing Company. d denied these allegations. The government also introduced evidence that Forcelle had improvements made to his house and the homes of two other RMS employees at RMS's expense. D objected to the admission of this evidence, arguing that evidence of other crimes is inadmissible under Federal Rule of Evidence 404(b). The district court admitted evidence about the platinum and home improvements as res gestae evidence, evidence of other criminal activity for the purpose of providing the context in which the charged crimes occurred. The court instructed the jury: Evidence or testimony that D may have been involved in other criminal activity while president of RMS is not evidence or proof that he committed the offenses charged in the indictment. Such testimony has been allowed for the limited purpose of assisting you in understanding the time, place, and circumstances of the acts which form the basis of the offenses charged in the indictment. During jury deliberations, the jury sent several questions to the court. The jury asked: 'Does the deceitful diversion of RMS funds, for purposes intended to be of immediate and/or future financial benefit to RMS, constitute 'intent to defraud?'' The jury found D guilty on one of the five counts of mail fraud and all five counts of interstate transportation of money obtained by fraud in connection with the New Jersey home. D appealed.