Wednesday, July 29, 2009

The Fake Salvation Army Website

This post is about an evidentiary issue that arose in U.S. v. Stephens, 2009 WL 1608845 (U.S. Court of Appeals for the 5th Circuit 2009). Here, according to the Court of Appeals, is how brothers Bartholomew Stephens and Steven Stephens came to be prosecuted:

[I]n the wake of Hurricane Katrina, Steven registered a website: www. salvation army online. org The website was patterned after the official Salvation Army website and claimed to be the website of the organization's international headquarters. A donation link was created on the website, through which people could contribute money into PayPal accounts created in the names and identification numbers of individuals other than Steven or Bartholomew but linked to the brothers' bank accounts. Donations were made, and the brothers profited. Eventually, the FBI learned of the suspect Salvation Army site and obtained a search warrant for an apartment the brothers shared with another individual. The FBI executed the warrant and recovered a trove of incriminating evidence regarding each defendant.

U.S. v. Stephens, supra. They were indicted “for conspiracy to commit wire fraud and aggravated identity theft (count one), aiding and abetting wire fraud (counts two through seven), and aggravated identity theft (counts eight and nine).” U.S. v. Stephens, supra. The two went to trial together and were both convicted on all counts. They appealed, arguing, in part, that the district court judge who presided over their trial erred when he allowed the prosecutor to introduce this evidence:

Approximately one month after the bogus Salvation Army website was registered, the domain, purporting to be part of the Red Cross, was registered using the name Beis Stephens, as well as Bartholomew's e-mail address, mailing address, and credit card information. A laptop recovered from the brothers' apartment contained a picture of Bartholomew wearing a shirt that read `BEIS LETHAL INC.’ This laptop also contained the www. salvation army online. org web page and search results for the Salvation Army that listed www. salvation army online. org as the first `hit.’ One of these searches appeared in a subfolder entitled `BJ Stephens.’

U.S. v. Stephens, supra.

The federal judge who presided over the trial admitted the evidence under Rule 404(b) of the Federal Rules of Evidence. Rule 404(b) provides as follows:

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. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. . . .

Rule 404(b) creates an exception to the general rule – found in Rule 404(a) of the Federal Rules of Evidence and in similar state provisions – “excluding circumstantial use of character evidence.” Advisory Committee Note – Federal Rule of Evidence 404. As the drafters of Rule 404 noted, character evidence can be used “for the purpose of suggesting an inference that the person acted on the occasion in question consistently with his character. This use of character is often described as `circumstantial.’” Advisory Committee Note – Federal Rule of Evidence 404. As the drafters also noted, in most

jurisdictions today, the circumstantial use of character is rejected but with important exceptions: (1) an accused may introduce pertinent evidence of good character . . .; (2) an accused may introduce pertinent evidence of the character of the victim, as in support of a claim of self-defense to a charge of homicide . . . ; and (3) the character of a witness may be gone into as bearing on his credibility.

Advisory Committee Note – Federal Rule of Evidence 404.

Rule 404(b), which is the rule that was at issue in U.S. v. Stephens, deals with a

specialized but important application of the general rule excluding circumstantial use of character evidence. Consistently with that rule, evidence of other crimes, wrongs, or acts is not admissible to prove character as a basis for suggesting the inference that conduct on a particular occasion was in conformity with it. However, the evidence may be offered for another purpose, such as proof of motive, opportunity, and so on, which does not fall within the prohibition. In this situation the rule does not require that the evidence be excluded. . . . The determination must be made whether the danger of undue prejudice outweighs the probative value of the evidence in view of the availability of other means of proof and other facts appropriate for making decision of this kind. . . .

Advisory Committee Note – Federal Rule of Evidence 404.

The premise is that one side shouldn’t be able to show you did some bad things in that past and use the evidence of those “bad acts” to claim you’re a bad person who continues to do bad things. As the Stephens judge noted, Rule 404(b) is intended “to `guard against the inherent danger that the admission of “other acts” evidence might lead a jury to convict a defendant not of the charged offense, but instead of an extrinsic offense.’” U.S. v. Stephens, supra.

The Stephens brothers argued that the district court judge shouldn’t have admitted the evidence of the Red Cross site; the government, not surprisingly, disagreed:

The Government asserts that . . . the Red Cross website . . .was intrinsic to the charged crimes. Rule 404(b) is not implicated if the Red Cross evidence was intrinsic to the acts for which the brothers were charged, i.e. the fraudulent Salvation Army website. We find `other act’ evidence to be intrinsic to the charged crime `when the evidence of the other act and the evidence of the crime charged are “inextricably intertwined” or both acts are part of a “single criminal episode” or the other acts were ‘necessary preliminaries' to the crime charged.’ Intrinsic evidence `is admissible so that the jury may evaluate all the circumstances under which the defendant acted. The government argues that the Red Cross website was intrinsic to the Salvation Army website conspiracy because it . . .established the connection between Steven and Bartholomew and was inextricably intertwined with the evidence of both of the substantive offenses.

U.S. v. Stephens, supra. The Court of Appeals didn’t buy the government’s argument:

[W]e conclude that the Red Cross website evidence is not intrinsic to the Salvation Army scheme. The action of creating the Red Cross website was not `inextricably intertwined’ with the evidence of the Salvation Army website. Neither was it a part of a single criminal episode or a necessary preliminary step in the Salvation Army website scheme. Certainly the actions are similar, but they were still distinct events.

U.S. v. Stephens, supra.

Since the evidence was extrinsic, the Court of Appeals applied a two-part test to decide if its admission constituted reversible error. The first question was whether the extrinsic evidence – the Red Cross site – was relevant to an issue other than the Stephens brothers’ character. The government said it was relevant to their “plan, intent, motive and preparation” for the Salvation Army site. U.S. v. Stephens, supra. The brothers argued it wasn’t relevant to any of those issues because “the Government did not put on proof that it was not a legitimate Red Cross website”. U.S. v. Stephens, supra. After noting that extrinsic evidence of “`using the same scheme repeatedly is relevant to . . . intent, in that it” demonstrates how an operation worked, the Court of Appeals found this

was the case with Bartholomew's registration of the Red Cross website. For example, the `Mock Money Makin.doc’ spreadsheet, recovered from one of the computers in the brothers' apartment, contained information about the PayPal accounts linked to the Salvation Army website, as well as information about creating a PayPal account for the Red Cross website and about listing the Red Cross website on a search engine called Overture. This spreadsheet demonstrated, at least in part, how the operation worked and therefore helped establish the brothers' intent, planning, preparation, and knowledge.

U.S. v. Stephens. The Court of Appeals then addressed the second question in its extrinsic evidence analysis: whether the evidence possessed probative value that was not substantially outweighed by its undue prejudice and otherwise met the requirements for admitting evidence. The Court of Appeals found that the Stephens brothers had not shown that the probative value of the evidence (as described above) was outweighed by its prejudicial effect:

There was ample non-Red Cross evidence supporting the jury's verdict. Though the defendants emphasize the number of references made to the Red Cross website by the Government, this does nothing to undermine the overwhelming evidence that exists regarding the Salvation Army web site scheme, nor the fact that the jury was instructed to use the extrinsic evidence to ascertain the brothers' mental state. . . . Furthermore, even assuming that the district court erred in admitting the evidence of the Red Cross website, neither defendant has demonstrated that such evidence affected his substantial rights. We cannot conclude that the district court committed plain error when it admitted evidence regarding the Red Cross website.

U.S. v. Stephens, supra. The court therefore affirmed their convictions.

(And if you were wondering, Steven was sentenced to serve 111 months in prison, while Bartholomew was sentence to serve 105 months in prison. Both prison terms were to be followed by three years supervised release. U.S. v. Stephens, supra.)

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