PELL, Senior Circuit Judge.
Monty P. McClellan appeals his convictions of two counts of bankruptcy fraud, one count of mail fraud, and two counts of making false statements to a federally insured bank, in violation of 18 U.S.C. §§ 152, 1341, and 1014, respectively.
McClellan is a physician who formerly practiced in Aledo, Illinois. In 1982, he owed about $200,000 to the National Bank of Aledo, debt he had accumulated through a series of bad investments during the 1970's. In 1983, in order to continue his credit and secure additional loans, McClellan submitted financial statements to the Bank of Aledo and to the National Bank of Monmouth, valuing his assets at over $6.5 million and asserting a net worth of nearly $6 million. The listing of assets included close to $2 million in "gold monitor certificates" that were actually worthless.
The next year, the owners of an Iowa motel sued McClellan for breaching a contract to buy the motel. While the jury was deliberating in that case, McClellan and his
A few days after returning from Europe, McClellan filed a Chapter 11 petition. Ten months later, no plan of reorganization had been filed, and the petition was converted to Chapter 7. McClellan's creditors filed an adversary suit against him and succeeded in having his debts declared nondischargeable on the basis of fraud. McClellan then moved to Utah, where he purchased a home in his mother-in-law's name (pursuant to a power of attorney) and began practicing medicine in a newly established clinic owned by his father.
McClellan was indicted on May 6, 1987. Counts I and II charged him with fraudulently transferring the Porsche and the DeLorean, respectively, in contemplation of bankruptcy. He was also charged with use of the mails to defraud American Express and two counts of submitting false statements to federally insured banks.
Among other evidence at McClellan's trial, the prosecution introduced prior testimony of the defendant's first wife, from whom he had been divorced since 1977. It also offered documents and transcripts from McClellan's adversary proceeding in bankruptcy.
McClellan was sentenced to five years on one count of bankruptcy fraud, three years on the other, and five years probation to begin upon his release from prison. Sentence was suspended on the other convictions. He was also ordered to pay $658,775.93 in restitution as a condition of his probation, pursuant to 18 U.S.C. § 3579.
McClellan first argues that the district court ordered an unreasonable amount of restitution and in so doing failed to consider the mandatory factors set forth at 18 U.S.C. § 3580(a), in particular his capacity to pay. The sentencing judge specifically stated that he had considered all of the factors under 18 U.S.C. § 3580(a), listing "the amount of the loss sustained by the victims, the financial resources of the defendant, the financial needs and earning ability of the defendant, the defendant's dependents, such other factors as the court deems appropriate." Despite this statement, McClellan asserts that the court merely gave "lip service," not serious consideration, to the mandatory factors.
A court generally need not state explicitly that it is relying upon a mandatory sentencing consideration. United States v. Gomer, 764 F.2d 1221, 1223 (7th Cir.1985).
McClellan cites Mahoney, in which this court reversed an order of restitution that clearly exceeded the defendant's foreseeable ability to pay. The circumstances in Mahoney, we held, left "little doubt" that the judge "simply forgot or disregarded" the defendant's limited income and the special needs of his dependents, particularly his disabled wife. In McClellan's case, the sentencing judge clearly articulated reasons for the order of full restitution, specifically that McClellan chose to maintain a low income while his father's corporation paid all of his living expenses, that the arrangement was intended to shield him from creditors, and that he likely would continue his repeated manipulations to that end. The court ordered that McClellan begin paying restitution at $100 a month, with the payments to be increased should his income increase. There is no indication that the court overlooked any mandatory consideration; rather, the court discussed his ability to pay in some detail. McClellan's argument addresses the weight given various evidentiary factors in determining his ability to pay, not the court's supposed failure to consider this matter. McClellan has demonstrated no abuse of discretion. See Fountain, 768 F.2d at 802 ("[T]he statute does not say that indigency is a defense, only that it is a factor the judge is required to take into account ...").
McClellan next challenges the imposition of concurrent sentences on the two counts of bankruptcy fraud arising from the transfer of the Porsche and the DeLorean. Because he transferred both cars in a single transaction, McClellan argues that he should have been subject to punishment for only one count of bankruptcy fraud. See Price v. Georgia, 398 U.S. 323, 326, 90 S.Ct. 1757, 1759, 26 L.Ed.2d 300 (1970) (double jeopardy clause prohibits multiple punishments for same offense).
Multiple violations of § 152 occur, and multiple indictments lie, when each fraudulent transfer is a "separate act, taken at a discrete time, with the requisite intent." United States v. Melton, 763 F.2d 401, 402 (11th Cir.1985) (quoting United States v. Moss, 562 F.2d 155, 160 (2nd Cir.1977), cert. denied, 435 U.S. 914, 98 S.Ct. 1467, 55 L.Ed.2d 505 (1978)); see also United States v. Harris, 388 F.2d 373 (7th Cir.1967). In contrast,
Blockburger v. United States, 284 U.S. 299, 302, 52 S.Ct. 180, 181, 76 L.Ed. 306 (1932). McClellan executed a single transaction. Although two items were involved, he did not make two separate sales or form the requisite intent on two occasions. The question is not how many items McClellan sold, but how many discrete actions he took. See Moss, 562 F.2d at 160.
The Government, defending the separate punishments, relies upon the fact that the titles to the two cars were transferred a month apart, one in April and one in June of 1984. The date that title was formally transferred, however, is not the operative time with respect to McClellan's intent. The record indicates that the reason for the discrepancy was a delay in processing the
McClellan next argues that the trial court erred in admitting hearsay testimony from the adversary proceeding in bankruptcy, which was conducted in 1986. McClellan's ex-wife testified on behalf of the creditors, relating a conversation she had with him in about 1975, while they were still married:
By the time of McClellan's criminal trial eighteen months later, his ex-wife had become disabled by a brain tumor. Her attending physician advised the trial court that his patient's memory and reasoning ability were impaired and that she was not expected to live much longer.
McClellan argues that the admission of his ex-wife's testimony violated the Confrontation Clause. The Supreme Court discussed the problem of hearsay testimony and the Confrontation Clause in Ohio v. Roberts, 448 U.S. 56, 100 S.Ct. 2531, 65 L.Ed.2d 597 (1980):
Id. at 66, 100 S.Ct. at 2539 (emphasis added). Since evidence that is admissible under an established hearsay exception need not bear any further indicia of reliability, McClellan's Confrontation Clause argument must fail if Rule 804(b)(1) provided a proper basis for admission of the testimony.
McClellan argues that the evidence did not fall within the 804(b)(1) exception because the cross-examination at the bankruptcy proceeding was not "vigorous" enough to challenge the witness' credibility. This argument is somewhat misconceived; the emphasis in this inquiry is upon the motive underlying the cross-examination rather than the actual exchange that took place. United States v. Pizarro, 717 F.2d 336, 349 (7th Cir.1983). The circumstances of McClellan's adversary proceeding provided ample motive to impeach his ex-wife: several million dollars of debt were at issue and her testimony undermined his credibility, clearly damaging his case. McClellan's argument that the testimony bore inadequate indicia of reliability to be admitted is thus unavailing. The testimony was admissible under Rule 804 and its admission therefore comports with the reliability requirement of the Confrontation Clause. Roberts, 448 U.S. at 66, 100 S.Ct. at 2539 ("[C]ertain hearsay exceptions rest upon such solid foundations that admission of virtually any evidence within them" is constitutionally permissible); Mancusi v. Stubbs, 408 U.S. 204, 216, 92 S.Ct. 2308, 2314, 33 L.Ed.2d 293 (1972) (admission of cross-examined prior testimony comported with Confrontation Clause). McClellan's remaining arguments regarding reliability (pointing out that years elapsed between the conversation and the testimony, speculating that the witness' medical condition affected her prior testimony, and hypothesizing that she harbored bitter feelings toward McClellan after their divorce) were considerations for the jury; they do not affect the admissibility of the evidence.
In a similar vein, McClellan argues that his own prior testimony and written admissions from the adversary proceeding should not have been admitted against him.
McClellan next attacks the sufficiency of the evidence to convict him of mail fraud. We reverse a conviction on this basis only if, viewing the evidence in the light most favorable to the prosecution, we conclude that no rational trier of fact could have found all elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979). The mailing of a billing document from the travel agency to Airline Reporting Corporation formed the basis of the mail fraud charge. McClellan points out that the Government witnesses who testified to the mailing could not remember exactly where or when the vouchers were mailed. The precise details of the mailing need not be established, however; it is sufficient to establish that mailing is the sender's regular business practice. United States v. Keplinger, 776 F.2d 678, 690 (7th Cir.1985), cert. denied, 476 U.S. 1183, 106 S.Ct. 2919, 91 L.Ed.2d 548 (1986); United States v. Joyce, 499 F.2d 9, 15 (7th Cir.), cert. denied, 419 U.S. 1031, 95 S.Ct. 512, 42 L.Ed.2d 306 (1974).
McClellan further asserts that the mailing from the travel agent to the ticket bureau was incidental to, rather than "in furtherance of" any scheme to defraud. A mailing is not "in furtherance" if the scheme has already reached fruition at the time of the mailing. United States v. Bonansinga, 773 F.2d 166, 168 (7th Cir. 1985), cert. denied, 476 U.S. 1160, 106 S.Ct. 2281, 90 L.Ed.2d 723 (1986). McClellan cites United States v. Maze, 414 U.S. 395, 94 S.Ct. 645, 38 L.Ed.2d 603 (1974). Maze used a credit card to obtain food and lodging at several motels. The mailing alleged was the motels' mailing of invoices to the bank that had issued the credit card. Because the defendant had already achieved the end of his scheme by the time of the mailing (and in fact would have been in a better position had the mailing never taken place) the mailing was held too remote from the plan to form the basis of a mail fraud conviction. McClellan's scheme, unlike Maze's, depended upon the mailing. His object could not have been achieved unless the travel agency mailed the invoices to the ticket bureau, which in turn issued McClellan's tickets. The mailing was not, like that in Maze, a mere shifting of losses between victims; rather, it was a necessary step in McClellan's plan to obtain the tickets. Cf. United States v. Wormick, 709 F.2d 454 (7th Cir.1983).
McClellan likewise challenges the sufficiency of the evidence to support his conviction of bankruptcy fraud, contending that no evidence demonstrated the intent "knowingly and fraudulently" to execute the transfer. The evidence showed that McClellan sold the cars while the jury was deliberating in the Iowa case, one day before a $1 million judgment was entered against him. Two months later, he filed a petition in bankruptcy. For several months after the transfer, McClellan continued to drive the cars; he eventually regained use of them as a benefit of his employment with his father's new corporation. This evidence was sufficient to support the jury's inference that the transfer was made "in contemplation of bankruptcy" and with fraudulent intent. Although McClellan asserts that his testimony denying intent to defraud was "uncontroverted," the jury was entitled to draw inferences from the evidence and determine his credibility. Branion v. Gramly, 855 F.2d 1256, 1263 (7th Cir.1988) (a trier of fact may disbelieve or reject any evidence).
Finally, McClellan claims that the prosecutor's reference to certain documents should have been cause for a mistrial, and that the district court's cautionary instruction could not adequately erase the elicited testimony from the jurors' minds. McClellan testified during his direct examination that he believed the false financial statements were accurate at the time he submitted them to the banks. Attempting to impeach McClellan, the prosecutor questioned him about two balance sheets which appeared to indicate the contrary. The documents had not been turned over to the defense in the course of discovery. The district court held that this conduct violated a local discovery rule but denied the defense request for a mistrial. Instead the
A trial judge has broad discretion in determining when a cautionary instruction, as opposed to a mistrial, can prevent any possible prejudice. United States v. Mealy, 851 F.2d 890, 902 (7th Cir.1988). The trial judge is often in the best position to make this determination in the context of the entire trial. Id. Much of the appellant's argument seems to rest on the assertion that a cautionary instruction can under no circumstances serve its intended purpose. Yet this court has held on several occasions that such instructions can be sufficient to avoid the possibility of unfair prejudice. See, e.g., id. at 903; United States v. Fulk, 816 F.2d 1202, 1205 (7th Cir.1987). McClellan gives no indication of how the reference to the documents is supposed so unfairly to have prejudiced the defense as to warrant a mistrial, except to say that the documents "went to the very heart of the central issue of his innocence or guilt of bank fraud." Curiously, at trial, his counsel characterized the evidence as exculpatory. Given the volume of evidence indicating the defendant's intent, it is difficult to see how this particular evidence could have been so prejudicial. We generally presume that jurors have followed a cautionary instruction; id. at 903; McClellan has offered nothing to indicate that this general rule should not apply here. We find no error in the district court's refusal to declare a mistrial.
For the reasons previously discussed, we remand this matter for resentencing on counts I and II of the indictment. McClellan has not otherwise demonstrated error in his trial or his sentence. Accordingly, the judgment of the district court is AFFIRMED.