United States v. Grintjes, Michael ( 2001 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-2234
United States of America,
Plaintiff-Appellee,
v.
Michael Grintjes,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 99-CR-143--Charles N. Clevert, Judge.
Argued October 23, 2000--Decided January 22, 2001
Before Posner, Diane P. Wood, and Williams, Circuit
Judges.
Diane P. Wood, Circuit Judge. Michael Grintjes, a
mortgage broker, became involved in a scheme
concocted by one of his clients, Thomas Younk. It
was a variant of the kind of property flipping
practice we discussed recently in United States
v. Haehle, 227 F.3d 857, 858 (7th Cir. 2000).
Younk’s plan was to obtain inflated appraisals of
properties, use the inflated appraisals to obtain
mortgages, purchase the properties for
significantly less than the amount of the
mortgage, and pocket the rest of the loan.
Grintjes’s involvement in Younk’s scheme led to
his indictment on one count of aiding and
abetting a fraudulent scheme involving the
interstate transfer of funds, in violation of 18
U.S.C. sec.sec. 2 and 2314. Grintjes testified in
his own defense at trial, and the government
decided to respond with several rebuttal
witnesses. Grintjes objected on the grounds that
the government’s proposed evidence was
inappropriate for rebuttal and that its
introduction at that stage of the trial violated
his right, under Brady v. Maryland, 373 U.S. 83(1963), to have the government disclose
potentially exculpatory evidence in time for him
to make use of it. The district court admitted
the testimony over his objection, and the jury
convicted Grintjes. Grintjes now renews his
challenges to the rebuttal evidence. Because we
find that the district court did not abuse its
discretion in admitting the evidence, we affirm
the conviction.
I
Grintjes began brokering mortgage transactions
for Younk in October 1997. Between that date and
February 1998, he handled eight loans for Younk,
all involving Younk’s purchase of properties in
northeast Wisconsin. In each of these
transactions, Younk sent Grintjes an offer to
purchase and an appraisal of the property
prepared by Charlene Nasgovitz, an appraiser
working in Younk’s real estate office. Grintjes
would then collect other necessary paperwork,
including verifications from Younk’s banks that
he had the money for the down payment available
in his accounts, and would present the package to
one or more lenders for approval. Grintjes
testified that he never independently inspected
the properties Younk sought to finance, nor did
he ever verify the appraisals. He opined,
however, that it was not common in the industry
for a mortgage broker to do so.
On January 15, 1998, Grintjes presented one of
Younk’s loan applications to USA Funding. The
property Younk wanted to buy had been appraised
by Younk’s office at $352,000; Younk stated that
he planned to purchase the property for $350,000
and was seeking a loan of $262,500. Unfortunately
for Younk and Grintjes, however, the president of
USA Funding, Michael Walters, was familiar with
the property Younk described and became
suspicious about the appraisal. According to
Walters, the property was a small house in
Coleman, Wisconsin, and it could not have been
worth $350,000. USA Funding ordered a review
appraisal and discovered that the initial
appraisal was fraudulent. After making this
discovery, on January 15, Walters spoke with
Grintjes about the loan application and
explicitly told him that the appraisal Younk had
supplied was fraudulent. In spite of that
intelligence, on the next day Grintjes presented
the identical loan application to another lender,
Bankers Wholesale. Bankers Wholesale fell for the
story and made the loan to Younk. It turned out
to be a sham from top to bottom: the owners of
the property had never agreed to sell it; Younk
never bought it; and not a penny of the loan
money was ever paid to the current owners.
Based on these facts, the government indicted
Grintjes for aiding and abetting a fraudulent
scheme involving the interstate transfer of
funds. The essence of Grintjes’s defense was that
he was just a go-between, that he had no reason
to suspect that the documents Younk and others
supplied to him were fraudulent, and that he had
been duped by Younk just as the lenders were. In
his direct testimony, Grintjes claimed that he
had been confident that Younk’s deals were
legitimate because all of the information that he
had collected about Younk and the properties
checked out. Grintjes made particular reference
to the verification of deposit forms he received
from Younk’s banks. Because Grintjes’s office had
followed standard procedures in sending the forms
to the banks to be filled out, said Grintjes, and
because three separate banks had filled out the
forms and vouched for Younk’s creditworthiness,
Grintjes asserted that he was confident that
Younk was legitimate.
The government then cross-examined Grintjes
about the verification of deposit forms, and
Grintjes identified his signature on three of the
forms attesting to the fact that the forms were
being sent directly from Grintjes’s office to the
banks and had not passed through Younk’s hands.
Grintjes also testified that he personally sent
at least one of the forms to the bank. In
response to the prosecutor’s suggestion that the
bank verifications were forged, Grintjes
testified that he had "no way to know" that the
forms were forgeries.
In order to rebut Grintjes’s testimony that he
felt confident relying on the bank verification
forms, the government decided to call employees
from three different banks who were prepared to
testify that their signatures on the verification
of deposit forms were forged. One of the bank
employees was also going to testify that the
account numbers listed on the form did not even
exist at her bank. According to the government,
it was highly unlikely that Grintjes would have
wound up with forged documents from three
separate banks if he had actually followed
standard procedures in processing the forms. This
made it likely that Grintjes was lying about the
procedures he followed in collecting the forms.
It was the government’s theory that Younk forged
the forms and supplied them directly to Grintjes;
if that were true, Grintjes would have had every
reason to suspect Younk of foul play.
Grintjes objected to the admission of this
testimony on two grounds. First, he argued that
the testimony was not appropriate rebuttal
evidence but was essentially an extension of the
government’s case-in-chief. According to
Grintjes, he never denied that the documents were
forgeries; he merely stated that he had no
knowledge of whether they had been forged, so
proof that the documents had been forged would
not contradict or impeach his testimony.
Grintjes’s second argument was that the evidence
of the forgeries was potentially exculpatory in
that it suggested that employees at the various
banks may have been involved in Younk’s scheme,
and that as such, the government was required by
Brady to turn the evidence over to Grintjes
before trial. The district court admitted the
rebuttal evidence over Grintjes’s objection, and
he now appeals that decision.
II
The proper function of rebuttal evidence is "to
contradict, impeach or defuse the impact of the
evidence offered by an adverse party." United
States v. Papia, 560 F.2d 827, 848 (7th Cir.
1977). We review the district court’s decision to
allow rebuttal evidence for abuse of discretion.
Mercado v. Ahmed, 974 F.2d 863, 872 (7th Cir.
1992). Grintjes testified that one of the reasons
why he was confident that Younk’s transactions
were above-board was because he followed all the
standard procedures in collecting the
verifications of deposit from Younk’s banks. He
also testified that his office sent the forms to
three different banks to be filled out, and that
he personally sent one of the forms. The
government had a different view of events: it
wanted to persuade the jury that Younk actually
supplied the forged forms directly to Grintjes
and that the forms were never sent to the banks.
Although the evidence that all three of the forms
were forged did not rebut with certainty
Grintjes’s claim that he sent the forms to the
banks properly, at the very least the evidence
tended to show that he may have been lying about
how he handled the forms. The government’s
evidence also undercut Grintjes’s more general
contention that he had no reason to suspect the
Younk transactions were not legitimate.
Grintjes argues that, even if the testimony did
contradict or defuse his testimony, it still
should not have been admitted in rebuttal,
because it was essentially a continuation of the
government’s case-in-chief. The government
counters that, during its case-in-chief, it had
no way to know whether Grintjes would testify at
all, much less what he would say about the forms
or anything else. The district court was well
within the bounds of its discretion when it
decided to accept the government’s argument.
Finally, Grintjes argues that the bank
employees’ testimony should not have been
admissible to prove that Grintjes lied about
sending the forms to the banks, because the
evidence could just as easily lead to the
inference that people at the banks were
responsible for the forgeries. We disagree. Even
if the evidence was not ironclad proof of
Grintjes’s wrongdoing, it nevertheless tended to
show that Grintjes lied about whether he followed
the standard procedures or whether he knew the
forms were forgeries. If Grintjes believed a
different interpretation of the evidence was more
logical, he was free to argue his view, as he
did, in closing. The evidence of the forgeries
tended both to impeach Grintjes and to contradict
his innocent explanation of his involvement in
the scheme. Once again, the district court did
not abuse its discretion in admitting the
testimony as rebuttal evidence.
Grintjes’s second contention, that the
government had an obligation under Brady (which
it violated) to turn the evidence of the
forgeries over to him before trial, fares no
better. Brady prohibits prosecutors from
suppressing evidence "favorable to an accused" if
the evidence is "material either to guilt or to
punishment." 373 U.S. 83, 87 (1963). In order to
establish a Brady violation, Grintjes must show
"(1) that the prosecution suppressed evidence;
(2) that the evidence was favorable to the
defense; and (3) that the evidence was material
to an issue at trial." United States v. Morris,
80 F.3d 1151, 1169 (7th Cir. 1996). We review the
district court’s decision on Grintjes’s Brady
claim for abuse of discretion. United States v.
Kozinski, 16 F.3d 795, 818 (7th Cir. 1994).
Grintjes has not persuaded us that he meets the
second of the Brady criteria: he has not shown
that the evidence of the forgeries was "favorable
to the accused." See United States v. Polland,
994 F.2d 1262, 1267 (7th Cir. 1993) (Brady does
not require disclosure of evidence that is "more
inculpatory than exculpatory."). The evidence to
which Grintjes objected showed that documents
that he had in his control, and that he certified
were obtained through standard procedures, were
in fact forged. As far as it went, this evidence
could not have been affirmatively helpful to
Grintjes. The best Grintjes can suggest is that
if he had known of the forgeries before trial, he
would have had the opportunity to investigate who
was responsible for the forgeries, and then if he
had been able to show that someone at the banks
was responsible, that evidence would ultimately
have bolstered his case.
This argument betrays a misunderstanding of the
Brady rule. The government admits that if it had
possessed any evidence tending to show that
someone at the banks was behind the forgeries, it
would have been required to turn that evidence
over. But there was no such evidence. The
evidence that the government did have showed only
that the documents Grintjes swore were collected
from several banks using standard procedures were
really forgeries. This was inculpatory evidence,
not exculpatory.
Although the fact that the challenged evidence
was not favorable to the defense is sufficient to
dispose of Grintjes’s Brady claim, we add for the
sake of completeness that his argument would
founder on other aspects of the Brady rule as
well. Brady applies only where the allegedly
exculpatory evidence was not disclosed in time
for the defendant to make use of it. See, e.g.,
United States v. Adams, 834 F.2d 632, 634 (7th
Cir. 1987). Grintjes argues that he was not
provided with the alleged Brady evidence in time
to make use of it in this case, because he had no
time after he was confronted with the evidence
during the government’s rebuttal to investigate
the genesis of the forgeries. But Brady does not
require pretrial disclosure. United States v.
Sweeney, 688 F.2d 1131, 1141 (7th Cir. 1982). It
demands only that the disclosure not come "’so
late as to prevent the defendant from receiving
a fair trial.’" Adams, 834 F.2d at 634, quoting
United States v. McPartlin, 595 F.2d 1321, 1346
(7th Cir. 1979). In Grintjes’s case, the evidence
was admitted at trial, and Grintjes had a full
opportunity to make whatever arguments he wanted
to make about the value of the evidence during
his closing. Moreover, Grintjes did not seek a
continuance at the time he learned of the
evidence, which would have been the appropriate
course if he felt he needed more time to
investigate the exculpatory potential of the
evidence. These facts cannot support a conclusion
that the evidence was disclosed too late for
Grintjes to make use of it.
Furthermore, this court has repeatedly held that
Brady does not apply to evidence that a defendant
would have been able to discover himself through
reasonable diligence. See, e.g., Crivens v. Roth,
172 F.3d 991, 996 (7th Cir. 1999); United States
v. Dimas, 3 F.3d 1015, 1018-19 (7th Cir. 1993).
In this case, Grintjes had the verification forms
in his possession well before trial; if he had
been interested in investigating whether they
were forged, he easily could have done so. In
fact, the government seems to have discovered the
forgeries simply by showing the forms to the bank
employees and asking them whether they had signed
the forms; there is no reason to think that
Grintjes’s attorneys could not have done the same
thing if they thought the information was
relevant.
Finally, a Brady violation requires a new trial
only if there is a reasonable possibility that
the outcome of the case would have been different
had the evidence not been suppressed. See
Crivens, 172 F.3d at 996. On this point, Grintjes
urges that the outcome of the case could well
have been different if he had had the chance to
investigate the forgeries. This, however, is pure
speculation. Even under Grintjes’s theory,
earlier disclosure of the evidence of the
forgeries could only have affected the outcome of
the case if Grintjes’s investigation of the
documents had actually turned up evidence that
the forgeries were committed by people within the
banks; this possibility seems remote at best.
Notably, many months have now passed since
Grintjes became aware of the forgeries, yet
Grintjes’s counsel admits that no evidence that
the forgeries were committed by bank employees
has yet been uncovered. There is literally
nothing to suggest that the government’s failure
to disclose the evidence of the forgeries sooner
affected the outcome of the case in any way.
III
We conclude that there was no Brady violation
in this case and that the district court did not
abuse its discretion in permitting the government
to introduce rebuttal evidence showing that the
forms verifying the deposits were forged. The
judgment of the district court is
Affirmed.