United States v. H. G. Jack Frost, Jr ( 2000 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 00-1567
___________
United States of America, *
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Arkansas.
H. G. Frost, Jr., also known as *
Jack Frost, *
*
Appellee. *
___________
Submitted: September 12, 2000
Filed: December 11, 2000
___________
Before WOLLMAN, Chief Judge, LAY, and BRIGHT, Circuit Judges.
___________
WOLLMAN, Chief Judge.
The United States appeals from the district court’s order excluding deposition
testimony. We reverse and remand.
I.
On May 25, 1999, a grand jury in the Eastern District of Arkansas returned a
multi-count superseding indictment against H.G. “Jack” Frost alleging offenses related
to several schemes to defraud. Frost, a certified public accountant and business
consultant, is accused of defrauding the Harvey and Bernice Jones Charitable Trust of
substantial amounts of money while serving as the entity’s co-trustee. The government
alleges that in the course of this fraud Frost forged the signature of Bernice Jones, his
co-trustee, on various financial documents.
In March of 1997 the then-attorney for the Trust resigned after discovering
irregularities in the Trust. A new attorney was hired, and the Trust sued Frost and
simultaneously reported the irregularities to the United States Attorney’s Office.
During a March 13, 1997, deposition taken in a civil proceeding, Frost denied signing
Mrs. Jones’s name or initials on the documents in question.
The week prior to his criminal trial, however, Frost asserted that he possessed
absolute authority to apply Bernice Jones’s signature to the documents pursuant to a
valid power of attorney. Although there was evidence that a power of attorney existed,
the document itself could not be located, nor could a revocation of power of attorney
be found. As a result, Frost argued that the government could not prove beyond a
reasonable doubt that his actions were unauthorized. Frost proposed to stipulate that
he had signed Bernice Jones’s name to the documents and made a motion in limine to
prevent the introduction of expert handwriting testimony regarding the alleged
forgeries. The district court granted the motion, a ruling that the government does not
appeal.
Frost also moved to prevent the admission of his deposition testimony wherein
he denied signing the documents in question. He argued that introduction of the
deposition would be unfairly prejudicial and would lead the jury to convict him solely
on the grounds that he was untruthful. Frost also contended that the evidence would
have little probative value inasmuch as the key issues at trial concerned the existence
and scope of the power of attorney. In effect, Frost planned to hinge his entire defense
and focus the trial on the issue of authority. Accordingly, Frost offered not to contest
-2-
criminal intent with regard to his actions if the jury determined that he was not
authorized to sign the documents.
The district court granted Frost’s motion, finding the deposition testimony to be
more prejudicial than probative and thus excludable under Federal Rule of Evidence
403. The government then filed an interlocutory appeal pursuant to 18 U.S.C. § 3731.
II.
Rule 403 permits district courts to exclude relevant evidence if its probative
value is substantially outweighed by the danger of unfair prejudice or confusion of the
issues. See United States v. Christians, 200 F.3d 1124, 1127 (8th Cir. 1999); Fed. R.
Evid. 403. Having given due consideration to its broad discretion in admitting or
excluding evidence under Rule 403, see, e.g., United States v. Loveless, 139 F.3d 587,
592 (8th Cir. 1998); United States v. Sparks, 949 F.2d 1023, 1026 (8th Cir. 1991), we
conclude that the district court erred in excluding Frost’s deposition testimony, an error
resulting perhaps in part because of the government’s failure to present a concise and
cohesive argument in support of its contention that the testimony should be admitted.
The deposition testimony is evidence of fraudulent intent and consciousness of guilt,
and its probative value clearly outweighs its possible prejudicial effect. Unfair
prejudice “speaks to the capacity of some concededly relevant evidence to lure the
fact-finder into declaring guilt on a ground different from proof specific to the offense
charged.” Old Chief v. United States, 519 U.S. 172, 180 (1997). “The critical issue
is the degree of unfairness of the prejudicial evidence and whether it tends to support
a decision on an improper basis.” United States v. Payne, 119 F.3d 637, 645 (8th Cir.
1997). Although the deposition testimony is damaging to Frost’s case, it is not unfairly
so. It is not, as Frost contends, inflammatory.
We note that there was some discussion in the district court regarding the
applicability of Federal Rule of Evidence 404 to the deposition testimony. Although
-3-
the district court excluded the deposition testimony primarily on Rule 403 grounds, it
also intimated that a Rule 404(b) analysis was warranted. Frost’s deposition testimony,
however, was not offered “for the purpose of proving action in conformity therewith
. . .”, Fed. R. Evid. 404. Furthermore, Rule 404 prohibits the admission of extrinsic
evidence. See, e.g., United States v. Maddix, 96 F.3d 311, 315 (8th Cir. 1996).
Frost’s testimony is direct evidence of fraudulent intent and consciousness of guilt. It
does not relate to“other acts,” but rather constitutes evidence intrinsic to the overall
scheme. Rule 404 is therefore inapplicable. See, e.g., United States v. LeCompte, 108
F.3d 948, 952 (8th Cir. 1997); United States v. Forcelle, 86 F.3d 838, 841 (8th Cir.
1996).
Frost contends that his offer not to contest the issue of criminal intent eliminates
the issue of intent, thereby reducing the probative value of his deposition testimony and
increasing the likelihood of unfair prejudice. We observe that “a defendant’s Rule 403
objection offering to concede a point generally cannot prevail over the Government’s
choice to offer evidence showing guilt and all the circumstances surrounding the
offense.” Old Chief, 519 U.S. at 183. Likewise, “[a]s a general rule, the government
is not bound by the defendant’s offer to stipulate.” United States v. Miller, 974 F.2d
953, 960 (8th Cir. 1992).
The judgment is reversed, and the case is remanded for further proceedings not
inconsistent with this opinion.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-4-