In Embezzlement Case, Tenth Circuit Rejects “Everybody-Is-Doing-It” Defense

Defense witnesses were offered to testify that they too received emergency assistance funds for vehicle repairs contrary to the program guidelines; evidence was irrelevant, inadmissible under FRE 403 and did not constitute habit evidence, under FRE 406, or a due process violation, in United States v. Oldbear, 568 F.3d 814 (10th Cir. June 10, 2009) (No. 08-6095)

In the case, defendant Oldbear, an administrative assistant in the office which distributed funds under an Emergency Assistance Program, was prosecuted for embezzling Indian tribal funds to repair her vehicle and to purchase another vehicle, and for making a false statement to a government agent during the investigation about funds abuse.

At trial, the court excluded three defense witnesses offered to testify that “they also received emergency assistance funds for personal vehicle repairs.” One witness testified outside the presence of the jury. The trial court referred to the “testimony as attempting to establish an ‘everybody-is-doing-it defense,’” and noted that “evidence of a mere deviation from the emergency assistance program guidelines is not probative of any matter that is put in issue . . . . And that’s all we have from [the witness] is evidence of a mere deviation.” Oldbear, 568 F.3d at 819. The jury convicted the defendant. On appeal, she challenged the exclusion of the defense witnesses, claiming the trial court “gutted her defense.”

The circuit affirmed the exclusion of the defense witnesses. The circuit agreed with the trial court that the proffered testimony was irrelevant. As the circuit explained:

“Though the standard for relevance under Federal Rule of Evidence 401 is quite generous, proffered evidence must, at minimum, advance the inquiry of some consequential fact to be considered relevant and admissible. The consequential facts at issue during Oldbear’s trial were whether the tribe authorized her expenditures and whether she possessed the requisite intent to commit embezzlement. Oldbear has failed to show how her proffered witnesses’ testimony affected the degree of probability of these facts, see Fed. R. Evid. 401, or advanced the inquiry with respect to them…. Such evidence could not prove whether the tribe approved Oldbear’s expenditures, nor could it shed any light on her state of mind.”
Oldbear, 568 F.3d at 821 (citations omitted).

The circuit also concluded the evidence was inadmissible under FRE 403, a ground that the trial court did not reach. The circuit noted:

“Here, the district court aptly characterized Oldbear’s proffer as an attempt to establish an ‘everybody-is-doing-it defense.’ Essentially, the witnesses would have testified that they, like Oldbear, were allowed to use tribal funds to pay for personal transportation expenses. But only Oldbear’s actions and state of mind were material to her guilt. And the fact that others may have been the beneficiaries of improper conduct does nothing to excuse Oldbear. The witnesses’ testimony was a sideshow from which the jury could have gleaned little valuable information other than additional instances of sloppy or corrupt management of the Emergency Assistance Program. Such testimony only would have served ‘to sidetrack the jury into consideration of factual disputes only tangentially related to the facts at issue.’ Moreover, ample evidence in the record showed that tribal officials frequently deviated from the emergency assistance guidelines, making the witnesses’ testimony, at best, cumulative.”
Oldbear, 568 F.3d at 821 (citations omitted). Finally, the circuit noted that assuming any error resulted from the exclusion of the defense witnesses, the error was harmless in light of substantial evidence of guilt.

The circuit also rejected other theories of the defense to admit the excluded testimony. For the first time on appeal, the defendant argued that the exclusion violated her due process rights. The circuit found no plain error was shown that a due process violation resulted since the testimony was inadmissible under the FRE, and the defendant was not denied fundamental fairness since she did not show “that the excluded evidence might have affected the outcome of her trial.” Oldbear, 568 F.3d at 820.

The circuit found unmeritorious the defense suggestion that the testimony was admissible as habit evidence, under FRE 406. The conduct was not reflexive. No routine practice was established, which was necessary to show a habit. Additionally, three instances were insufficient to establish a “habitual pattern.” Oldbear, 568 F.3d at 822 (citing Camfield v. City of Oklahoma City, 248 F.3d 1214, 1232–33 (10th Cir. 2001) (five acts was insufficient)). The circuit added that “illegal acts such as embezzlement cannot properly be characterized as semi-automatic or reflexive.” Oldbear, 568 F.3d at 822 (citing United States v. Troutman, 814 F.2d 1428, 1455 (10th Cir. 1987) (holding that serial extortion, or refraining from extortion, does not constitute a habit under FRE 406)).

Federal Rules of Evidence