MILBURN, Circuit Judge.
Defendant appeals his convictions of twenty-eight counts of mail fraud, six counts of wire fraud, and six counts of interstate transportation of securities taken by fraud, in violation of 18 U.S.C. §§ 2, 1341, 1343, and 2314. For the reasons that follow, we affirm.
On August 7, 1984, a fifty-count indictment was returned against defendant.
Defendant's trial began on March 5, 1985, and concluded on April 15, 1985. Two days after the conclusion of the trial, the jury returned its verdict finding defendant guilty on forty counts. Defendant was sentenced on June 5, 1985.
ISSUES ON APPEAL
Defendant's appeal raises seven issues: whether the trial court erred in admitting out-of-court statements of FNCF employees; whether the trial court erred in admitting FNCF business records; whether the trial court erred in admitting evidence as to how defendant used customer funds for personal purposes; whether the trial court erred in instructing the jury that statements made with reckless indifference as to their truth or falsity would satisfy the misrepresentation element of mail and wire fraud; whether the district court erred in instructing the jury that it is not necessary that the alleged scheme actually succeeded in defrauding anyone; whether the trial court properly instructed the jury regarding the fact that a scheme to defraud had to consist of misrepresentations; whether the trial court constructively amended the indictment by instructing the jury that under 18 U.S.C. § 2314 the government could prove that the securities at issue were either stolen, converted, or taken by fraud when the indictment alleged such characteristics in the conjunctive.
Although FNCF began as a two-man operation, it eventually employed several "account executives" or sales people. At trial, FNCF customers testified to what they had been told by FNCF "account executives." Defendant objected to this testimony arguing that the statements offered by the witnesses were inadmissible hearsay. The government argued that the statements were not inadmissible hearsay for two reasons. First, the government argued that the statements were not being offered for the truth of the matter asserted and thus were not hearsay as that term is defined in Rule 801(c) of the Federal Rules of Evidence. Second, the government argued that the statements in question fell within the scope of the Rule 801(d) provision of statements which are not hearsay. The district court held that the statements were admissible.
The testimony in question falls into one of two categories: statements offered to prove the falsity of the matter asserted and statements offered neither for the truth nor falsity of the matter asserted.
Prior to the adoption of the Federal Rules of Evidence, the Supreme Court noted:
Anderson v. United States, 417 U.S. 211, 219-20, 94 S.Ct. 2253, 2260, 41 L.Ed.2d 20 (1974) (footnotes omitted). The definition of hearsay as including only those statements offered for the truth of the matter asserted was included in the Federal Rules of Evidence. Fed.R.Evid. 801(c).
When statements are offered to prove the falsity of the matter asserted, there is no need to assess the credibility of the declarant. Since there is no need to assess the credibility of the declarant of a false statement, we know of no purpose which would be served by extending the definition of hearsay to cover statements offered for the falsity of the matter asserted. We therefore join those courts which have concluded that statements offered to prove the falsity of the matter asserted are not hearsay. See United States v. Wellington, 754 F.2d 1457, 1464 (9th Cir.) (false representation made to an investor not hearsay because probative value was independent of truth), cert. denied, ___ U.S. ___, 106 S.Ct. 592, 593, 88 L.Ed.2d 573 (1985); United States v. Adkins, 741 F.2d 744, 746 (5th Cir.1984) (holding that statements introduced to prove falsity of matter asserted not hearsay), cert. denied, ___ U.S. ___, 105 S.Ct. 2113, 85 L.Ed.2d 478 (1985).
With regard to the second category of statements — those offered to prove neither the truth nor the falsity of the matter asserted — we hold that the statements were not inadmissible. Just as is the case with statements offered to prove the falsity of the matter asserted, when a statement is offered to prove neither the truth nor falsity, there is no need to assess the credibility of the declarant. The significance lies entirely in the fact that the words were spoken. Thus, the statement does not fall within the Rule 801(c) definition of hearsay nor would the purposes of the hearsay rule be served by treating it as hearsay. See United States v. Shepherd, 739 F.2d 510, 514 (10th Cir.1984) (hearsay rule inapplicable to statement which was, by its nature, neither true nor false).
B. FNCF Business Records
Defendant's next argument is that the district court erred in admitting into evidence certain records seized from FNCF offices. The documents in question included transaction statements (the documents FNCF sent to customers confirming orders), trade tickets (FNCF forms reflecting a customer's order), advertising materials, copies of cancelled checks, client files (documents on which FNCF retained data regarding customers), correspondence, and client account agreements.
The government argues that these documents were admissible under two theories. The government argues first that the documents were not offered for the truth of the matters asserted and, thus, were not hearsay under Rule 801(c). Alternatively, the government argues that if the records were hearsay, they were admissible under the business records exception set out in Rule 803(6). The district court admitted the records under Rule 803(6).
1. Admissibility Under Rule 803(6)
Defendant's attack on the district court's conclusion is twofold. First, defendant points out that in order to lay the requisite foundation for the evidence to be admissible under Rule 803(6), the government relied
To accept defendant's interpretation of the passing statement in Calhoun would put this circuit at odds with every other circuit and commentator known by this court to have addressed the issue. Similarly, for us to have held in Calhoun that only those who play a role in the creation or compilation of records can testify to lay the foundation would have required us to overrule our earlier holding in United States v. Reese, 568 F.2d 1246 (6th Cir.1977). In Reese, the authenticating witness did not have control over or a personal knowledge of the evidence contained in the record at issue. Nevertheless, we held that the records in question were admissible since the employee had "knowledge of the [business'] regular practice[s]." 568 F.2d at 1252. See also United States v. Wables, 731 F.2d 440, 449 (7th Cir.1984) (citing Reese to support the holding that "[t]he witness [used to lay the foundation] need only have knowledge of the procedures under which the records were created.").
Thus, contrary to defendant's argument, there is no reason why a proper foundation for application of Rule 803(6) cannot be laid, in part or in whole, by the testimony of a government agent or other person outside the organization whose records are sought to be admitted. When a witness is used to lay the foundation for admitting records under Rule 803(6), all that is required is that the witness be familiar with the record keeping system. See Wallace Motor Sales, Inc. v. American Motors Sales Corp., 780 F.2d 1049, 1061 (1st Cir.1985); Wables, 731 F.2d at 449; NLRB v. First Termite Control Co., 646 F.2d 424, 427 (9th Cir.1981); Elizarraras v. Bank of El Paso, 631 F.2d 366 (5th Cir.1980); Reese, 568 F.2d at 1252; 4 J. Weinstein & M. Berger, Weinstein's Evidence ¶ 803(6), at 803-178 (1985) ("The phrase `other qualified witness' should be given the broadest interpretation; he need not be an employee of the entity so long as he understands the system.").
In urging that the district court erred, defendant's second argument is that the records should not have been admitted because they were untrustworthy and inaccurate. Rule 803(6) expressly provides that evidence otherwise admissible under Rule 803(6) is to be excluded if "the source of information or the method or circumstances of preparation indicate lack of trustworthiness." On the issue of trustworthiness, as with other evidentiary holdings, "the trial court is given great latitude." Mississippi River Grain Elevator, Inc. v. Bartlett & Co., Grain, 659 F.2d 1314, 1319 (5th Cir.1981). Thus, on review, we will reverse the district court's decision only if we find a clear abuse of discretion. See, e.g., State Office Systems, Inc. v. Olivetti Corp., 762 F.2d 843, 845 (10th Cir.1985); Guest v. Bailes, 448 F.2d 433, 437 (6th Cir.1971).
Deference to the district court's evidentiary ruling is particularly appropriate when, as here, the question of admissibility is close, and the district court has exercised its discretion in favor of admitting the evidence. It is well established that federal law favors the admission of evidence which has any probative value at all. See, e.g., Brooks v. Chrysler Corp., 786 F.2d 1191, 1198 (D.C.Cir.1986); United States v. 1,291.83 Acres of Land, 411 F.2d 1081, 1086 (6th Cir.1969) (pre Federal Rules of Evidence case). This principle is applicable
In his argument on this issue, defendant asserts that the district court erred in admitting the record in question because in closing argument the government took the position that defendant's poor record keeping practices were indicative of his intent to defraud customers. The government's argument was based on the absence of records rather than the unreliability of the records which were recovered. The fact that records were missing or unavailable does not evidence a clear abuse of discretion in the district court's finding that the records were trustworthy. Instead, it is an argument which best goes to the weight to be given that evidence. Once a foundation is laid, in the absence of specific and credible evidence of untrustworthiness, the proper approach is to admit the evidence and permit the jury to determine the weight to be given the records. Accord Wallace Motor Sales, Inc. v. American Motors Sales Corp., 780 F.2d at 1061; United States v. Panza, 750 F.2d 1141, 1150 (2d Cir.1984); see also 4 J. Weinstein & M. Berger, Weinstein's Evidence ¶ 803(6), at 803-211 ("The jury's function should not be reduced by excluding relevant evidence unless the court is reasonably assured that the result of the litigation will be less reliable if the evidence is revealed to the jury.")
2. Rule 801(c)
Our conclusion that the district court's admission of this evidence is not reversible error is supported by a second, independent reason; that is, we accept the government's argument that the records were not offered for the truth of the matter asserted and thus were not hearsay. Fed.R.Evid. 801(c). In addressing the question of whether the documents at issue were hearsay, we begin by determining what the evidence offered to prove.
In the instant case, the government relied heavily on defendant's mere possession of the records. For example, in closing argument the government reminded the jury of evidence relating to a specific transaction. The government noted that, according to trial testimony, on one occasion a customer was informed that FNCF did not have certain records. However, noting that the records which are now at issue had been seized during the search, the government argued that defendant did indeed have records he had earlier denied that he possessed. During closing argument, the government urged the conclusion that defendant lied to customers when, as a reason for not returning funds, he said that he did not possess the records. If the jury accepted the government's evidence that (1) the records were in defendant's possession, and (2) that, as a reason for not returning the funds, defendant told customers that the records no longer existed at his place of business, it could find that defendant intended to defraud those customers. Since this finding would not be contingent on the truth of the matters asserted in the documents, the documents were not hearsay. See, e.g., United States v. Anello, 765 F.2d 253, 261 (1st Cir.) (handwritten messages discovered in wastebasket in business of one conspirator not hearsay when offered to establish conspirators' knowledge of each other), cert. denied, ___ U.S. ___, 106 S.Ct. 411, 88 L.Ed.2d 361 (1985); United States v. Arrington, 618 F.2d 1119, 1126 (5th Cir.1980) (utility bills not hearsay when offered to prove residence of defendant in house searched), cert. denied, 449 U.S. 1086, 101 S.Ct. 876, 66 L.Ed.2d 812 (1981); United States v. Mejias, 552 F.2d 435, 446 (2d Cir.) (hotel receipt, luggage invoice, and travel agency business card admissible when offered to establish connection between defendant and motel
We therefore affirm the district court's admission of this evidence for two independent reasons. First, we hold that the records were admissible under Rule 803(6). Second, we hold that the evidence was not hearsay as defined by Rule 801(c).
C. Expenditures of Corporate Funds for Personal Expenses
Defendant's next argument relates to the introduction of several FNCF checks. It was the government's theory that defendant used the FNCF checking account to write checks totaling over $17,000 for various personal expenditures. For example, the government introduced three checks payable to VerMeulen Furniture Company totaling $5,230.35. At trial, the credit manager of VerMeulen Furniture testified that defendant's purchase included "two different sets of bedroom furniture, two sleepers, [and] a party set, which is a table and four chairs...." App. at 443.
On appeal defendant concedes that some of the items purchased with these checks were "probably not used in the course of F.N.C.F. business." Defendant-Appellant's Brief on Appeal at 31-32. Nevertheless, defendant argues that the evidence was irrelevant and, alternatively, that the probative value was substantially outweighed by the danger of unfair prejudice.
Relevant evidence is defined in Rule 401 of the Federal Rules of Evidence as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." In United States v. Bibby, 752 F.2d 1116, 1125 (6th Cir.1985), cert. denied, ___ U.S. ___, 106 S.Ct. 1183, 89 L.Ed.2d 800 (1986), we set out the elements of 18 U.S.C. § 1341: "In order to establish a violation of the mail fraud statute, 18 U.S.C. § 1341, the government must prove both (1) a scheme to defraud, and (2) a mailing for the purpose of executing the scheme."
Clearly, proof that defendant was using FNCF funds for personal expenses, rather than paying client accounts when they became due, is relevant on the "scheme to defraud" element. The purchases tend to show that rather than intending to use customer funds to purchase metals, defendant intended to use them for personal expenditures. Since the checks were relevant, we reject defendant's first argument. Accord United States v. Knight, 607 F.2d 1172, 1176 (5th Cir.1979) (in mail fraud prosecution, "evidence of a substantial investment in real estate made by" defendants held "clearly relevant under Rule 401"); cf. United States v. Pollack, 417 F.2d 240, 241 (5th Cir.1969) (per curiam) (in mail fraud and fraud in the sale of securities prosecution evidence concerning expenditures at a hotel held relevant to show disposition of funds received in fraudulent undertakings), cert. denied, 397 U.S. 917, 90 S.Ct. 924, 25 L.Ed.2d 98 (1970).
Defendant's alternative argument is that under Rule 403 of the Federal Rules of Evidence, the probative value of the evidence
Defendant has not shown how he was unfairly prejudiced by the admission of this evidence. Accordingly, defendant's assignment of error is rejected.
D. Jury Instruction on Reckless Indifference
Defendant argues that the following jury instruction given by the trial court as to false and fraudulent statements was improper:
App. at 554-55 (emphasis added). Defendant's attack on this instruction is twofold.
1. Reckless Indifference to Truth as Proof of Knowledge that Statements were False
First, defendant argues that a finding of reckless indifference is not enough to establish a fraudulent representation. Although United States v. Rabinowitz, 327 F.2d 62 (6th Cir.1964), does not directly address the "reckless indifference" standard, defendant relies heavily on the following language from our opinion in that case:
Id. at 76-77 (citation omitted). In United States v. Stull, 743 F.2d 439 (6th Cir.1984), cert. denied, 470 U.S. 1062, 105 S.Ct. 1779, 84 L.Ed.2d 838 (1985), we expressly held that the following jury instruction defining false or fraudulent statements "conformed to the prevailing legal standard":
Id. at 445-46 & n. 7 (emphasis included in Stull opinion).
While superficially these two opinions may appear inconsistent, they are not. By stating in Rabinowitz that "defendants must have known [the statements] to be false," we left open the question of what evidence would be required to prove knowledge of falsity. In Stull, we held that proof of reckless indifference was sufficient in 18 U.S.C. § 1341 prosecutions, citing, among other cases, Irwin v. United States, 338 F.2d 770, 774 (9th Cir.1964), cert. denied, 381 U.S. 911, 85 S.Ct. 1530, 14 L.Ed.2d 433 (1965). 743 F.2d at 446. Irwin, in turn, expressed the rationale we implicitly adopted in Stull: "One who acts with reckless indifference as to whether a representation is true or false is chargeable as if he had knowledge of its falsity." Irwin, 338 F.2d at 774. Thus, while prosecutions under section 1341 require a showing that defendants knew the statements to be false, one who acts with reckless indifference as to the truth or falsity of their statement is chargeable with this knowledge.
2. Constructive Amendment
Defendant's second assignment of error with regard to the above jury instruction is that "by permitting the government to go to the jury on a reckless indifference instruction in the actual trial, the Court allowed an improper constructive amendment of the Indictment." Defendant-Appellant's Brief on Appeal at 15. In making this argument, defendant relies on the fact that reckless indifference was not charged in the indictment. Rather, defendant notes that the indictment charged that he "well knew" that the representations made were false.
In response, the government takes the position that the instruction was neither a constructive amendment nor an impermissible variance. Defendant's assignment of error fails for two reasons.
a. Absence of Prejudice
The distinction between an amendment and a variance was set out by this court in United States v. Beeler, 587 F.2d 340, 342 (6th Cir.1978), cert. denied, 454 U.S. 860, 102 S.Ct. 315, 70 L.Ed.2d 158 (1981): "A variance occurs when the proof introduced at trial differs materially from the facts alleged in the indictment. In contrast, an amendment involves a change, whether literal or in effect, in the terms of the indictment."
Included in this definition are three types of variations between a grand jury indictment and evidence presented at trial. The least common is an actual amendment. This occurs "when the charging terms of the indictment are altered." United States v. Castro, 776 F.2d 1118, 1121 (3d Cir.1985), cert. denied, ___ U.S. ___, 106 S.Ct. 1233, 89 L.Ed.2d 342 (1986). The second, but most common, type of variation encompassed by this definition is a variance. A variance occurs when "the charging terms are unchanged, but the evidence at trial proves facts materially different from those alleged in the indictment." Id. The third type of variation, a constructive amendment, falls somewhere in the borderland between an actual amendment and a variance. A constructive amendment occurs when the terms of an indictment are in effect altered by the presentation of evidence and jury instructions which so modify essential elements of the offense charged that there is a substantial likelihood that the defendant may have been convicted of an offense other than that charged in the indictment. See United States v. Davis, 679 F.2d 845, 851 (11th Cir.1982), cert. denied, 459 U.S. 1207, 103 S.Ct. 1198, 75 L.Ed.2d 441 (1983); Beeler, 587 F.2d at 342; cf. United States v. Ylda, 653 F.2d 912, 914-15 (5th Cir.1981) (per curiam) (trial court's jury instruction altered elements of offense but evidence was consistent with indictment; held, no possibility that defendant was convicted of crime other than that set out in indictment and instruction was thus harmless).
Although the distinction between a variance and a constructive amendment is at best "shadowy," 3 C. Wright, Federal Practice and Procedure § 516, at 26 (2d ed. 1982), it has been considered significant. In dicta we have repeatedly stated that "amendments are deemed prejudicial per se." United States v. Burkhart, 682 F.2d 589, 591 (6th Cir.), cert. denied, 459 U.S. 915, 103 S.Ct. 228, 74 L.Ed.2d 181 (1982); see also Beeler, 587 F.2d at 342 (where although prejudice was clearly present, we noted the per se rule).
We have held that a variance crosses the constructive amendment line only when the variance "create[s] `a substantial likelihood' that a defendant may have been `convicted of an offense other than that charged by the grand jury.'" Beeler, 587 F.2d at 342; see also United States v. Gray, 790 F.2d 1290, 1297 (6th Cir.1986) (per curiam). No such danger is present in the instant case, and, thus, the problem, if any, is one of a variance.
Since we are dealing with a variance, and not an amendment, the only remaining question is whether prejudice is present. "[B]ecause variances between indictments and proof at trial are not regarded as per se error, the burden of proof as to error has been placed on defendants, who must not only show the variance exists but also that the variance is `fatal.'" Cola v. Reardon, 787 F.2d 681, 700 (1st Cir.1986) (emphasis in original). In the instant case, defendant has not shown any prejudice, and, accordingly, this assignment of error is rejected.
The facts before the court in the instant case do not present reversible error for a second reason. The rule prohibiting judicial amendment of indictments is inapplicable to matters of form or surplusage. See, e.g., United States v. Nabors, 762 F.2d 642, 647 (8th Cir.1985); United States v. Cusmano, 659 F.2d 714, 717 (6th Cir.1981), cert. denied, 467 U.S. 1252, 104 S.Ct. 3536, 82 L.Ed.2d 841 (1984); cf. United States v. Miller, 471 U.S. 130, 105 S.Ct. 1811, 1815, 85 L.Ed.2d 99 (1985) (in context of variance Court noted, "A part of the indictment unnecessary to and independent from the allegations of the offense proved may normally be treated as `a useless averment' that `may be ignored.'") (quoting Ford v. United States, 273 U.S. 593, 602, 47 S.Ct. 531, 534, 71 L.Ed. 793 (1927)).
Presented with the same facts now before this court, the Ninth Circuit has held the "well knowing" language to be surplusage. United States v. Love, 535 F.2d 1152, 1158 (9th Cir.), cert. denied, 429 U.S. 847, 97 S.Ct. 131, 50 L.Ed.2d 119 (1976). The rationale of the Love court, which we find persuasive and now adopt, was as follows. The court began by recognizing that, "`[o]ne who acts with reckless indifference as to whether a representation is true or false is chargeable as if he had knowledge of its falsity.'" 535 F.2d at 1158 (quoting Irwin v. United States, 338 F.2d 770, 774 (9th Cir.1964), cert. denied, 381 U.S. 911, 919, 85 S.Ct. 1548, 14 L.Ed.2d 433, 11 L.Ed.2d 438 (1965)).
535 F.2d at 1158.
E. Proof that Investors were Actually Defrauded
Defendant next argues that the district court erred in giving the following jury instruction: "It is not necessary that the government prove ... that the alleged scheme actually succeeded in defrauding anyone." App. at 556. To support his argument that this instruction was error, defendant relies on dicta from United States v. Rabinowitz, 327 F.2d 62, 76-77 (6th Cir.1964). However, in United States v. Goodpaster, 769 F.2d 374, 378-79 (6th Cir.), cert. denied, ___ U.S. ___, 106 S.Ct. 391, 88 L.Ed.2d 343 (1985), we affirmed a defendant's conviction relying on the "well established" rule that "a conviction under § 1341 does not require proof that the intended victim was actually defrauded." Consistent with Goodpaster, we reject defendant's argument.
F. Jury Instruction on Misrepresentation
Defendant's next argument is based on the following jury instruction:
App. at 551. Defendant argues that this instruction failed to inform the jury that the fraudulent representations must have been made as part of the scheme to defraud. In Nolan v. Green, 383 F.2d 814, 816 (6th Cir.1967), we wrote:
See also Wood v. Marshall, 790 F.2d 548 (6th Cir.1986).
Reading these instructions as a whole, we find defendant's criticism to be without merit. In one sentence the instruction states that the jury must find a scheme to defraud "by means of false and fraudulent pretenses, representations, and promises." In the very next sentence, the court instructed the jury that it must find that "the promises or statements were false." Accordingly, we hold that although the instruction in question may not have been as precise as it could have been, it did adequately apprise the jury of the applicable law.
G. Jury Instructions on Violations of 18 U.S.C. § 2314
Defendant's final claim of error is that the trial court improperly instructed the jury regarding Counts Two, Six, Fourteen, Sixteen, Forty, and Forty-six. In those counts the grand jury charged that defendant violated 18 U.S.C. § 2314 by having received checks through the mail,
Accordingly, the judgment of the district court is AFFIRMED in all respects.
W. LaFave & A. Scott, Handbook on Criminal Law § 28, at 198 (1972) (footnotes omitted).