USCA1 Opinion

December 9, 1993
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 93-1122
UNITED STATES OF AMERICA,
Appellee,
v.
STEPHEN C. JONES,
Defendant, Appellant.
____________________
ERRATA SHEET
Please make the following correction in the opinion in the
case released on December 3, 1993:
Page, line 2:

"entences" should be corrected to read

"sentences"

ab

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________
No. 93-1122
UNITED STATES OF AMERICA,
Appellee,
v.
STEPHEN C. JONES,
Defendant, Appellant.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
___________________
____________________
Before

Selya and Stahl, Circuit Judges,

______________
and Fuste,* District Judge.
______________
____________________

Morris M. Goldings with whom Richard S. Jacobs and Mahon

___________________
__________________
_____
Hawkes & Goldings were on brief for appellant.
_________________
Margaret D. McGaughey, Assistant United States Attorney, w
_______________________
whom Jay P. McCloskey, United States Attorney, and Raymond C. Hurl
________________
_______________
Assistant United States Attorney, were on brief for appellee.
____________________
December 3, 1993
____________________
_____________________
*Of the District of Puerto Rico, sitting by designation.

FUSTE,
FUSTE,
was

convicted of

District Judge.
District Judge.
_______________
conspiracy to

Defendant

defraud

Stephen C. Jones

two federally

insured

banks and to
in

transport forged securities in

violation

violation

of 18

of 18

U.S.C.

U.S.C.

2314
1344

interstate transportation of
of 18 U.S.C.

(Count

1), bank

(Counts II

and

V).

Jones argues

release of collateral form is

and V should,

therefore, be reversed; (2) the

instruction as

the

on appeal

not a "security"

pertinent statute and his conviction

willful blindness

in

contravention

as defined by

gave a

fraud

III), and

forged securities in

2314 (Counts IV and

that (1) a UCC-3

interstate commerce

on Counts IV

judge incorrectly

to Jones'

intent; (3)

there was insufficient evidence to support the verdicts; (4)

the

court erroneously denied a motion to sever Jones' trial from that

of his

codefendant, and (5)

the sentence was overly

severe and

was incorrectly based on Jones' occupation as an attorney.

We conclude that a UCC-3 release of
not a

security as

provided for in

collateral form is

the applicable

statute, the

willful blindness instruction was correctly given, and the denial

of

the motion for

conviction

on

severance was not

Counts IV

and

an error.

and the

We reverse the

consecutive

ten-year

sentence imposed for the transportation of forged securities.

find

that

there

was

sufficient

-22

evidence

to

support

We

Jones'

conviction on Counts

I, II, and III and

therefore the five-year

concurrent sentences imposed on those counts shall stand.

I.
I.
Background
Background
__________

Viewing the evidence in the light most favorable to the

government,
1078-79

see United States v. Rivera-Santiago, 872 F.2d 1073,

___ ________________________________

(1st

Cir.),

following facts

cert. denied, 492

_____________

were established

U.S.

at trial.

910

(1989), the

During the

early

1970s, defendant Stephen C. Jones, together with his father Allan

and

Jones' codefendant, Robert

called

Iyanough

Management,

number of hotels, motels, and

which over

entered

Associates

with a group of contractors

purpose of

a partnership

the partnership

building in Portland, Maine, into

renovations were

the

other property.

Management

The

into

Welch, formed a

was

holding company
years

acquired a

In 1985, Iyanough

known

as

Armory Hotel

and developers in Maine.

to convert

an old

armory

the Portland Regency Inn.

financed through a

loan from Patriot

The

Bank for

$8.2 million, which was secured by a mortgage of the building and

a

security

interest

covering

the

furniture,

fixtures,

and

equipment of the hotel.

was obtained from the

A further cash infusion into the project

Berkshire Saving Bank in the form

of a $2

million irrevocable line of credit, which was secured by a second

mortgage on

the building and

a second security interest

in the

-33

furniture,

fixtures, and equipment

of the hotel.

the original mortgage agreement with

Associates signed a

As a part of

the two banks, Armory Hotel

UCC-1 form with each

bank.

This form

is a

financing statement which certifies that a party holds a security

interest in

particular property.

Secretary of

State's office

aware that there

the

mortgage

additional
and

in the

The UCC-1

so that any

is an encumbrance

agreements

with

encumbrances upon
event that

any

the

is filed

later parties

upon the property.

banks

provided

the collateral could

part of

the security

with the

will be

Each of
that

no

be incurred,
was

sold or

transferred, the entire mortgage debt would be due and payable on

demand.

As one of

the partners in the Armory Hotel

Associates,

Jones signed the notarized mortgage security agreements with both

banks.
Beginning

in

1987,

Iyanough

experience financial difficulties.

flow,

a sale

equipment

and lease

of the

broker David

back

began

to

As a measure to generate cash

of the

Portland Regency

Mudie.

Management

Inn

furniture, fixtures,
was negotiated

Mudie was originally

led to

and

through

believe that

Iyanough Management owned the Portland Regency and its furniture,

fixtures and equipment.
State's

Office, Mudie

actually owned

Through a search with

found out

the hotel and

that

the Secretary of

Armory Hotel

its contents,

Associates

and discovered

the

-44

lien on the fixtures, furniture

order

to complete

Ltd.,

the group

release of

the sale
financing

the security

and equipment.

and lease
the

back, Kansallis

transaction,

interests of

As a result,

required

Berkshire County

in

Finance
that

Savings

Bank and
forms.

Patriot Bank be
A UCC-3

perfected through the filing

is a document

which can

of UCC-3

be used to

release a

security interest in certain property which has been memorialized

in a UCC-1.1

Welch induced employees of

Iyanough Management to

forge the signatures of the loan officers of the two banks on the
release forms.
the

The two forged documents, purporting

interest of the two banks, were

State's office in Maine in

employee to forge the
the Armory

filed with the Secretary of

August 1987.

Welch also directed

signature of one of the

Hotel Associates on

to release

an

Maine partners of

various other forms

required by

Kansallis.
One

of Kansallis' prerequisites for the closing was an

opinion letter from

that Kansallis was

counsel for Armory Hotel

receiving a

collateral consisting of the

Two drafts of

first security

Associates opining
interest in

the

furniture, fixtures, and equipment.

the opinion letter were

firm by the attorney for Kansallis.

sent to Jones at

his law

The final opinion letter was

____________________

1A UCC-3 can also be used to continue, assign or amend a

security interest. When we discuss the document in this case, we
are referring to its use as a release of a security interest.
-55

returned
firm,

to Kansallis' counsel

and

was signed

Management.

by

Aufiero testified

form by Jones to sign.

Jones

John

several

on the letterhead
Aufiero, counsel
at trial that

about the

transaction

necessary to complete

the arrangement.

completed,

of

Management's
the loan were

for

sum

account.

Iyanough

he was

given the

David Mudie testified that he

times

the

of Jones' law

and

spoke with

the documents

When the transaction was

$1,288,533

was

wired

to

Iyanough

Approximately $290,000 of the proceeds of

eventually transferred into

an account in

Jones'

name.
FBI Agent
of

his

James Osterrieder interviewed Jones

investigation

of

interview, Jones stated

out

the sale

and lease

the

forged

that initially it was his

back

of the

equipment, in order to generate cash.

that the

banks had

documents.

a lien

as part

During the

idea to carry

furniture, fixtures,
Jones stated

on the equipment,

and

that he knew

but thought

that

there was a clause in the

closing document which would allow for

the sale and lease

Jones also told the

Welch

back.

had discussed

the need

for a

agent that he and

UCC-3 release

of interest

before the sale and lease back could proceed, but that Welch said
that he would take
had seen

a draft

care of the problem.

of the

opinion letter

Jones

admitted that he

which was required

by

Kansallis to consummate the sale and lease back deal, and that he

-66

arranged to have Aufiero sign the letter because Jones was out of
town at the time.
Robert Welch pled
transportation
the

guilty to bank fraud

of forged securities,

conspiracy

charge.

At

and proceeded to

trial,

Welch

arrangement for

the sale

telling Jones

the

the transaction,

never questioned
that
forged

Welch,

Welch about the

working alone,

by Iyanough

Secretary of

State.

Management

and lease back

deal.

caused

Both

Jones was found guilty on all counts.

II.
II.
Discussion
Discussion
__________

he

without

and that

Jones

defendants argued

the UCC-3

employees

Welch was found

trial on

testified that

completed the

details of

and interstate

and

guilty of

documents
filed

with

to be

the

conspiracy and

A.
A.

Release of Collateral as a Security Interest

Release of Collateral as a Security Interest
____________________________________________

Jones first argues that a UCC-3 is not a "security" for

the purposes of

18 U.S.C.

term "security"

as used in

2314.

18 U.S.C.

2314.2

2311 defines the

The district

court found,

____________________
2Section 2311 provides:
"[S]ecurities" includes
any note,
stock
certificate, bond, debenture, check, draft,
warrant, traveler's check, letter of credit,
warehouse receipt, negotiable bill of lading,
evidence of indebtedness,
certificate of
interest or participation in any profitsharing
agreement,
collateral-trust
-77

and

the government

"instrument

or

argues,

document

that
or

a UCC-3

is

writing . . .

analogous to
transferring

an

or

assigning any right, title or interest

in or to goods, wares and

merchandise."

that a

collateral

We

disagree and

hold

is not

a "security"

for

UCC-3 release

the purpose

of 18

of

U.S.C.

2314.
Statutory interpretation
therefore,

is subject

Taylor, 802
______
U.S.

to

F.2d 1108, 1112

1094 (1987).

broad definition

de

is

a question

novo review.

of

law

and,

United States v.
_________________

(9th Cir. 1986), cert. denied, 479

_____________

It has been

found that Congress

of securities in

the context of

intended a

outlawing the

transportation of falsely made or forged securities in interstate

commerce.

United States v. Speidel, 562

_________________________

Cir. 1977),

cert. denied, 435 U.S.

____________

F.2d 1129,

915 (1978).

An

1131 (8th

analysis of

____________________
certificate, preorganization certificate or
subscription, transferable share, investment
contract, voting-trust certificate; valid or
blank motor vehicle title; certificate of
interest in property, tangible or intangible;
instrument or document or writing evidencing
ownership of goods, wares, and merchandise,
or transferring or
assigning any right,
title, or interest in or to goods, wares, and
merchandise; or in general, any instrument
commonly known as
a "security", or any
certificate of interest or participation in,
temporary or interim certificate for, receipt
for, warrant, or right to subscribe to or
purchase any of the foregoing or any forged,
counterfeited, or spurious representation of
any of the foregoing.
-88

the

cases

applying

section 2314,

the

however, does

exactly what is

definition

of

not result

in a

"security"

clear picture

encompassed in this broad definition,

proceed in determining

under

of

or how to

whether novel instruments should

also be

included.
The
support of

district

court

relied

upon Speidel,
_______

its finding that a UCC-3 is

a security.

supra,
_____

In Speidel,
_______

the Eighth Circuit held that a quitclaim deed is a security.

court found that
item

normally considered

financial
of

although a quitclaim
as a

security

title the

to

encumbered

by the

of

commercial and

grantor has

in a

piece of

Although it warrants no specific interest in property,

it does transfer some interest in

used

not the type

The

community, such an instrument is an express conveyance

whatever interest and

property.

deed is

in

convey
by

interests
liens

or

in
to

property.
land, to

clear

transmit full

conveying the grantor's entire interest

Such a deed may

title

title

to

to any grantee.

to
land

be

land

by

After a

quitclaim deed is conveyed, the grantee holds the entire interest

which the grantor had owned.
We are unable

to agree with the district

UCC-3 is analogous to a quitclaim deed.

court that a

Unlike a quitclaim deed,

the

UCC-3 at issue

in this case

is not effective

transfer or assign a title, right or interest

by itself to

in or to property.

-99

At most,

one could

argue that the

from the secured party back to

is a much

UCC-3 transfers

an interest

the owner of the property.

more constrained purpose than the potential

This

uses of a

quitclaim deed, and only permits a transfer of a limited interest

to one

particular party, the original owner.

the filing

of a UCC-3 is

title free of
free

that the owner

of the property

encumbrances and can proceed to

property to

another party.

In

The sole result of

has a

transfer the lien

this case, the

UCC-3 was

merely one step in the process of transferring an interest in the

fixtures,

furniture, and

equipment to

third party,

and was

insufficient on its own to convey title to the items listed.

Furthermore,
qualities as other

UCC-3

does

not

documents which have been

contain

the

same

deemed securities.

In determining whether an instrument is a security,

have

examined factors such as

obligation
interest in

for the payment

goods or

whether the document evidences an

of money or

property and

having intrinsic value

whether the

1224 (2d

inherent value,

in the regular channels

treated as

of commerce, and

sold, United States v. Wexler, 621

_______________________

Cir.), cert. denied,

____________

item could be

United
______

(2d Cir. 1972); whether the

value and is recognized and

whether the document could be

F.2d 1218,

represents a particular

has

States v. Canton, 470 F.2d 861, 863

_________________
instrument has intrinsic

other courts

449 U.S.

used as collateral and

841 (1980);

represents an

-1010

acknowledgment of a debt owed

or a contractual obligation to pay

in the future, United States v. Austin, 462 F.2d

________________________
Cir.),

cert. denied,
____________

409

U.S.

1048

(1972); and

724, 736 (10th

whether

the

document purports to be valuable and is sufficient to establish a

given right, relationship or property interest.

United States v.
________________

Johnson, 700 F.2d 163, 175 (5th Cir. 1983).

_______

The effect of the forged UCC-3 release here was only to

terminate the security

interest which the two banks

held in the

equipment of the Portland

Regency Inn.

fixtures, furniture, and

By

itself, a

document of

release

has no

value, and

does not

represent a tangible or intangible valuable property right.

a form

could not

represent

be sold or

an acknowledgment

used as
of

a debt

obligation to pay in the future.

merely to

terminate and

owed

It

or a

does not

contractual

The form was valuable only

the Armory Hotel Associates and not to

serves

collateral.

Such

not to

any third party.

to

A UCC-3

transfer or

assign any

that when, as in

this case,

property interest.
In addition, we recognize
there is ambiguity
be

construed

in a criminal statute, such

in favor

Borowski, 977 F.2d

________

of

the

defendant.

27 (1st Cir. 1992).

ambiguity should

United States v.
__________________

Because we hold

UCC-3 is not a security as defined for the purposes of

2314,

Jones'

conviction

on
-1111

two

counts

of

that a

18 U.S.C.

interstate

transportation of forged securities pursuant to this section must

be reversed.
B.
B.

Willful Blindness Instruction

Willful Blindness Instruction
_____________________________
Next,

Jones

objects

to

the

"willful

blindness"

instruction given to the jury, arguing that there was no evidence

that he was

aware that

a crime

evidence that he facilitated it.

is

appropriate when

was likely in

progress and

no

A willful blindness instruction

(1) defendant

claims a lack

of knowledge;

(2) the facts suggest a conscious course of deliberate ignorance,

and

(3)

the

instructions,

misunderstood by a juror as

taken

as

whole,

cannot

mandating an inference of knowledge.

United States v. St. Michael's Credit Union, 880 F.2d

_____________________________________________
(1st Cir. 1989).

Here, the first

since Jones claims

that he was ignorant of any

second requirement may

at

trial.

mortgage

agreements

Savings

Bank.

knowledge

By

with

of the partners,
Patriot

signing

these

579, 584

element is obviously present

be established from the

Jones, as one

be

Bank

and

wrongdoing.

The

evidence adduced

signed the original

Berkshire

agreements,

he

County

displayed

of the encumbrances placed on the fixtures, furniture,

and equipment of
known that the
could

the Portland Regency Inn.

agreements provided that Armory

not incur any

and that the

He also would

additional encumbrances on

have

Hotel Associates

the collateral,

mortgage would become due and payable if any of the

-1212

collateral

was sold or transferred.

at trial that Jones

for

There was evidence produced

and Welch discussed the need

Iyanough Management, and

to obtain cash

the possibility of

obtaining such

cash through a deal with Mudie involving a sale of the furniture,

fixtures, and equipment
evidence that
Rodr guez,

Mudie

its

final form,

things,

that the

Associates

discussed

the lawyer

regarding the deal,

of the Portland Regency Inn.

the deal

for Kansallis,

with

sent

Jones

firm was

and that

there

letter

acting as
were no

and

documents to

including drafts of the opinion

this opinion

There was

other

Jones

letter.

represented, among
counsel for

that

In

other

Armory Hotel

encumbrances on

the

furniture, fixtures,

and equipment

interest was perfected.

so that

Kansallis' security

Furthermore, John Aufiero testified that

Jones brought him the opinion

letter on the letterhead of Jones'

law firm, and requested that Aufiero sign the document.

Testimony by the
it

was Jones'

FBI agent established

idea to arrange

the sale

that initially

and lease back

of the

furniture, fixtures, and equipment.

Jones told the agent that he

was

the equipment but

aware of

there was some

told Jones that

the banks'

liens on

way out of them.

According to Jones, Welch later

Welch did not think that

the collateral, but

that Welch would take

after the money came through

felt that

the bank would release

care of it.

The day

from Mudie and Kansallis, there was

-1313

evidence

that

Jones

personally

received

checks

totalling

approximately $290,000.

This evidence, taken in the light most favorable to the

government, is sufficient for a

jury to conclude that Jones knew

about

the deal

deal would not

with Kansallis and

be able to

go forward without

prior security interests held by

fixtures, and equipment of
there is sufficient
that Jones knew

Mudie, and knew

a release of

the

the two banks in the furniture,

the Portland Regency Inn.

evidence from which

interests unless their mortgages were

Moreover,

a jury could

both (1) that the banks

the opinion letter

that such a

conclude,

would not release their

paid in full, and (2) that

was an alternative

means of representing

to

Kansallis that the property was no longer encumbered by any prior

liens.

Even if, as

Welch testified,

actual steps taken by Welch

Jones was unaware

to release the security interest, we

find that the

facts established at trial suggest

of

could have

knowledge

of the

been

due

to

that this lack

a conscious

course

of

deliberate ignorance on the part of Jones.

The
jurors

the

inference

jury

instruction

impression
of

knowledge

that
on

given was

they were
the

part

not

likely

compelled
of

to

Jones.

instructed the jury

[t]hat in
considering whether
defendant
Stephen
Jones
knowingly
committed
any
-1414

to give
make

The

an

judge

offense, you may infer but are not required

to infer, knowledge on his part from a
combination of suspicion and indifference to
the truth if you find beyond a reasonable
doubt that to have existed on his part. [sic]
If you find that he had a strong suspicious
[sic] that things were not what they seemed,
or that someone had withheld some important
facts, yet that he shut his eyes for fear of
what he would learn, you may conclude that he
acted knowingly . . . . With regard to any
such inference you must reason with care.
You may not draw this inference or knowledge
from negligence or mistake. I instruct you
that negligence, even gross negligence, is
not a proper basis to support a finding of
wilfulness, or to support
a finding of
knowledge, nor is error or mistake . . . I'm
not suggesting one way or the other how you
should find with respect to this matter.
I
am not suggesting that you make any such
finding, or that if you do, what the finding
should be. I'm simply telling you . . . that
you may infer knowledge if you find willful
blindness to a fact to have occurred.
This

instruction clearly did not mandate

a finding of knowledge

on the part of the jury.

Jones
instructions on

objects that

willful blindness

arguing that his wording

the

proper

requested
requested

context
jury

the court

for

the

is

to utilize

which the defendant

"more properly put such

instruction

instruction

failed

jury."

The

is reversible
substantially

the

offered,

instruction in

failure
error

to

only

correct,

give a

if "the
was

not

substantially covered in the charge actually given, and covers an

important point

in

the trial

so that

the failure

to give

it

-1515

seriously impaired
defense."

the defendant's

ability to

present a

United States v. Nason, No. 92-2303,

_______________________

given

slip op. at 11

(1st Cir. July 9, 1993) (citing United States v. Newton, 891 F.2d
_______________________
944,

949 (1st

test.

Cir. 1989)).

Although

his

Jones'

requested

argument fails

instruction

is

under this

substantially

correct, Jones fails to point out in what manner his instructions

were superior to those given, and a comparison of the two sets of

instructions shows no material difference in what was conveyed to

the jury.

There is no suggestion that an important point was not

conveyed by

the given

instructions.

We

find no

error in

the

judge's declining to adopt Jones' suggested instructions.

C.
C.

Sufficiency of the Evidence

Sufficiency of the Evidence
___________________________
Jones

argues that there

was insufficient

evidence to

sustain

his conviction.

In

order to successfully challenge the

sufficiency of the evidence on appeal, a defendant must show that

no

reasonable

reasonable doubt.
(1st

jury

On appeal, we

most favorable to

inferences

in

have

found

him

guilty

beyond

United States v. Innamorati, 996 F.2d 456, 469

___________________________

Cir. 1993).

light

could

its

evidence in the

the government, "drawing

favor

determinations in line

must view the

and

resolving

all plausible

all

with the jury's verdict."

credibility

United States
_____________

v. David, 940 F.2d 722, 730 (1st Cir.), cert. denied,

U.S.
________
____________ ___
__
-1616

(1991).

We will examine the conspiracy and bank fraud charges in

turn.
1.
1.

Conspiracy Charge
Conspiracy Charge
_________________
Conviction

of

conspiracy

requires

proof

that

the

defendant

entered into

an

agreement with

another to

commit a

crime; the agreement need not be express but may be implicit in a

working

relationship.

Innamorati,
__________

government must prove two kinds of

intent to commit the crime.
prove

that

participated

in all

of the

States v. G mez-Pab n,
_____________________

F.2d

intent:

However,

co-conspirator

996

knew

at

470.

The

intent to agree

and

"[t]he government need not

all

objectives

of

the

of the

911 F.2d 847, 853 (1st

details

plan."

or

United
______

Cir. 1990), cert.

_____

denied, 498 U.S. 1074 (1991) (citations omitted).

______
In order to convict Jones of conspiracy to
fraud,3 the prosecution must show
defraud

Patriot Bank and

commit bank

that Jones and Welch agreed to

Berkshire County Savings

Bank.

Jones

argues that the fraud perpetrated upon the banks was completed on
July 23, 1987,

when the forged

Maine Secretary
connecting

Jones

of

UCC-3 forms were filed

with the

that

the only

direct

evidence

any fraudulent

activity

was

State, and
to

the opinion

____________________

3Our disposition of this appeal renders moot any discussion

of the part of the charge for conspiracy to transport forged
securities in interstate commerce. For that reason, we limit the
analysis to the sufficiency of the charge for conspiracy to
commit bank fraud.
-1717

letter dated August

evidence that
lease back

10, 1987.

Jones knew about

arrangement, and

obtain releases
have inferred

This claim,

from the two

that even if

however, ignores the

the possibility of the

discussed
banks.

with Welch
From this,

Jones did not have

that Welch was forging the UCC-3 forms,

sale and

the need

to

the jury could

actual knowledge

he knew that there was a

need to obtain

a release from the

bank would not

allow such a release unless the mortgage was paid

in full, and he
of it."

knew that somehow Welch was going

that the

to "take care

Based on this evidence, a reasonable jury could conclude

that even if there was

by

banks, he was aware

and let his

knowing that the

no express agreement, Jones sat passively

partner proceed

with the

transaction could not be

sale and

lease back,

completed legally and

would effect a fraud on the new lender.

2.
2.

Bank Fraud Charges

Bank Fraud Charges
__________________

In order to convict Jones of bank fraud under 18 U.S.C.

1344(1), the
Jones "engaged

jury had to

find beyond a reasonable

in or attempted to engage

of conduct designed

doubt that

in a pattern or course

to deceive a federally chartered

or insured

financial institution into releasing property, with the intent to

victimize the
loss."

institution by exposing it to

actual or potential

United States v. Ragosta, 970 F.2d 1085, 1089 (2d Cir.),

_________________________

cert. denied,
_____________ ____

U.S.

(1992) (quoting
____

United States v.
________________

-1818

Stavroulakis, 952 F.2d 686, 694 (2d Cir. 1992)).

____________
intent can

be established

through

The element of

circumstantial evidence

inferences drawn from evidence presented at trial.

The

and

Id. at 1090.
___

same evidence which serves to sustain a conviction

for conspiracy to commit bank fraud will suffice to affirm Jones'

conviction

for

bank

fraud under

willful

blindness theory.

Jones knew that a sale and lease back of the furniture, fixtures,
and equipment was being planned.
a release of
not

He knew that Kansallis required

the banks' interest and

be granted unless

that such a release

the mortgage was

paid off.

would

Even if, as

Welch testified, Jones never found out about the forgery and just
trusted

Welch

to

desperately needed

work

cash, a

that

Jones deliberately

"The

purpose

of the

criminal liability on
wrongdoing,

(1st

Cir. 1986).

a deal

which

rational jury

shut

willful

would

his eyes

to what

blindness

theory

consciously

provide

could have

refuse

concluded

is

to

evidence

impose

likelihood of

to

take

United States v. Rothrock, 806

__________________________
The

the

was occurring.

people who, recognizing the

nonetheless

investigatory steps."
323

out

presented at

basic

F.2d 318,
trial

was

sufficient for a conviction on the counts of bank fraud.

D.
D.

Motion to Sever
Motion to Sever
_______________

-1919

Jones moved

for severance

of his trial

from that

of

codefendant Welch under Fed.

R. Crim. P. 14.4

The court denied

his motion, holding that Jones failed to persuasively demonstrate

that

he would

joinder.

incur

prejudice at

trial

as

a result

of

the

Jones appeals the denial, arguing that he was a victim

of the prejudicial spillover of evidence against his codefendant,

who

had already pled

In addition, Jones

guilty to the

substantive counts charged.

suggests that the jury may have held him to a

higher standard than Welch since Jones was an attorney.

Finally,

Jones argues that the joinder improperly placed him in a position

where, in order to exercise his Fifth Amendment privilege against

self-incrimination,

he

was

forced to

accept

an

adverse jury

inference.
The grant or
to

denial of a motion for

the discretion of the trial

for an

court and will only be disturbed

abuse of that discretion.

F.2d 1, 12 (1st Cir. 1985).

severance is left

United States v. Porter, 764

________________________

For reasons of judicial economy, co-

____________________
4Fed. R. Crim. P. 14 provides in part:
If it appears that a
defendant or the
government is prejudiced by a joinder of
offenses or of defendants in an indictment or
information or by such joinder for trial
together, the court may order an election or
separate trials of counts, grant a severance
of defendants or
provide whatever other
relief justice requires.
-2020

conspirators are generally tried together absent a strong showing

of prejudice.
Cir. 1991).
show

United States v. Perkins, 926 F.2d 1271, 1280 (1st

________________________
to obtain

a severance, a

defendant must

that substantial prejudice,

amounting to a

miscarriage of

justice,

In order

would result

Sabatino, 943 F.2d

________

from a

joint

94, 96 (1st Cir.

trial.

United States v.
_________________

1991).

Mere speculative

allegations as to possible prejudice from joinder

the burden of

do not sustain

showing an abuse of discretion in denying a motion

for severance.
Jones
trial was so
at

trial that

banks

show that

the

presence of

prejudicial as to warrant severance.

because Welch
the

failed to

and

there was

no

conspiracy between

operated on his
the

Welch argued
Jones and

own to perpetrate the

transportation

of

the

forged

Several times on the stand Welch emphasized that he

one responsible for the criminal

acts.

be helpful

he had no knowledge

activity.

to Jones' claim that

Welch at

him

fraud upon

documents.

was the only

Such evidence could only

of Welch's

Jones'
The

claim of a spillover effect is also unavailing.

danger which

is to be

unable to separate

prevented is

that the jury

the evidence against different

will be

defendants or

that evidence which is admissible against only one defendant will

be used by the jury

against a co-conspirator.

See Perkins,
___ _______

926

-2121

F.2d at 1281.
is

best

Usually,

dealt

with

however, any prejudice caused by joinder

through

individual consideration
Bruner,
______

657 F.2d

evidence, and
unable

1278

Jones has

to each

defendant.

(D.C. Cir.

1981).

defendant.

also

noted that

jury

to

give

United States v.
_________________
there is

that the

no

jury was

fairly the guilt or innocence

The judge instructed

plea by Welch could not

the

Here,

not identified any,

to evaluate separately and

of each

and

instructing

the jury that a guilty

be considered as evidence against Jones,

each

defendant should

be

given separate

consideration.

He informed the

admitted solely

against one

jury that any evidence which was

defendant could

not be

considered

against the other defendant.

Jones

argues that

the jury

higher standard of conduct than

However,
the

Jones presents no

jury to view

may

have held

him to

Welch because he is an attorney.

evidence that his

him more harshly.

In any

occupation caused

event, Jones could

have requested a special jury instruction that attorneys are held

to the same standard
See
___

of conduct as others, and failed

United States v. Picciandra,

____________________________

788 F.2d

39, 46

to do so.

(1st Cir.),

cert. denied, 479 U.S. 847 (1986).

____________
Finally,

Jones claims that

the joinder, combined with

the willful blindness instruction, forced

inference

on

the part

of

the

jury

him to risk an adverse

by exercising

his

Fifth

-2222

Amendment privilege not

to testify.

In Porter,

we rejected the

______
argument
grounds

that
for

antagonistic defense

severance

defendant to
F.2d

the

of

trial

because

testify in violation

at 14.

The

need for

of

a
it

codefendant was
would

force the

of the Fifth Amendment.

severance

to protect

764

Jones' Fifth

Amendment rights was even more minimal, since Welch's defense was
completely in line

with Jones' claim of innocence.

had no impact on Jones' Fifth

The joinder

Amendment rights and there was

no

abuse of discretion in the trial court's refusal of the motion to

sever.
E.
E.

Severity of Sentence
Severity of Sentence
____________________
Jones

objects

to

the

sentence by the trial court.

would be appropriate
Because

we

of

the

reverse

Jones'

for conspiracy

fifteen-year

He argues that a five-year sentence

for a first time offender

transportation of forged
five years

length

conviction

such as himself.

for

the

securities, his sentence is

to commit bank

fraud and

interstate

reduced to

five years

each for two counts of bank fraud, to be served concurrently.

see no

reason

to

guideline sentencing
sentence on
trial judge.

alter

Judge

Carter's

on Counts I,

the remaining

assessment

II, and III.

counts will stand

and

We

pre-

Therefore, the

as crafted

by the

See United States v. Jim nez-Rivera, 842 F.2d 545,

___ ________________________________

548 (1st Cir.), cert. denied., 487 U.S. 1223 (1988).

____________
-2323

III.
III.
Conclusion
Conclusion
__________
Because we
the purpose of
and

hold that a

18 U.S.C.

UCC-3 is not a

2314, Jones' conviction

V for the interstate transportation

reversed.
reversed
________

Sufficient

"security" for

on Counts IV

of forged securities is

evidence was adduced

at trial to

Jones of conspiracy and bank fraud on Counts I, II, and

the

trial court

did not

motion to sever Jones'

these reasons, Jones'
are affirmed.
affirmed
________

abuse

its discretion

convict

III, and

by denying

trial from that of his codefendant.

convictions for conspiracy and

the

For

bank fraud

-2424