United States District Court, D. Nebraska
MEMORANDUM AND ORDER
R. Zwart, United States Magistrate Judge
matter is before the court on Defendant Jeffery S. Sikes'
motion to sever, (Filing No. 43). For the reasons
set forth below the motion is granted.
multiple count indictment was entered against Defendant on
November 19, 2015. (Filing No. 1). Counts I-IX
allege Defendant engaged in a scheme to defraud real estate
owners by falsely representing he had located tenants to rent
various retail commercial properties located in Kearney,
Nebraska and Grand Island, Nebraska. Defendant allegedly
requested the developers pay him a fee for locating the
supposed tenants. Defendant provided the real estate
developers with instructions, via email, to wire transfer
money to bank accounts owned and/or controlled by Defendant.
There were, in fact, no potential tenants for the commercial
properties and Defendant allegedly kept the developers'
money for his own purposes. The government asserts these
actions violated 18 U.S.C. §§ 1342-43.
X-XII assert Defendant contacted a potential investor and
falsely represented that Defendant had invested his own money
and the money of family members into a new company called
Vanguard R and D. He further represented that if the
potential investor contributed $150, 000 to the company,
Defendants' financial advisor would deposit $150, 000
into an Individual Retirement Account ("IRA") for
the investor. Defendant communicated with the potential
investor via United States mail and electronic
communications, including providing him with a false or
fabricated prospectus representing the alleged IRA. The
potential investor provided Defendant with $150, 000 for
Vanguard R and D. Defendant allegedly converted this money
for his own use. The government asserts these actions
violated 18 U.S.C. § 1341.
XIII-XIX allege Defendant participated in a scheme to defraud
a real estate company - B & J Partnership d/b/a Speedway
Properties. Defendant and other persons associated with
Vanguard Nebraska, a limited liability company, contacted
representatives from B & J Partnership about obtaining a
lease for commercial space owned by B & J in Lincoln,
Nebraska. Defendant allegedly requested B & J finance
$750, 000 for the build out of the commercial space in
question. Defendant further represented Vanguard Nebraska
would guarantee all amounts owed by Vanguard under the lease
agreement and promissory note. Defendant allegedly provided B
& J with fictitious financial documents to further induce
B & J to provide financing for Vanguard. The indictment
further alleges Defendant established a contract with ADC
Corporation to serve as the general contractor for the
project. ADC Corporation is controlled by Defendant.
of the scheme, the indictment alleges Defendant, either
personally or through ADC, generated and submitted false
invoices and billing statements to Nebraska Land Title and
Abstract, the escrow agent for the project. Upon receipt of
the invoices and billing statements the escrow agent would
authorize release of funds placed in the escrow account by B
& J. The released funds were allegedly used for
Defendant's personal use. The government asserts these
actions violated 18 U.S.C. §§ 1342-43.
filed a motion to sever the various counts into three
separate trials: one trial for counts I-IX; one for counts
X-XIII; and one for counts XIII-XIX. The government objects
to the motion and argues all of the counts have been properly
joined and should be heard at the same trial.
support of his motion to sever, Defendant advances two
arguments: (1) The counts were not properly joined under Fed.
R. Crim. P. 8(a); and (2) even if the court determines
joinder was proper, the counts should be severed under Fed.
R. Crim. P. 14.
to Rule 8(a), two or more offenses may be joined for trial if
they "are the same or similar character, or are based on
the same act or transaction, or are connected with or
constitute parts of a common scheme or plan." Fed. R.
Crim. P. 8(a). Rule 8 is interpreted broadly in favor of
joinder. "In applying the 'same or similar
character' standard, the court permits joinder when the
counts refer to the same time of offenses 'occurring over
a relatively short period of time, and the evidence of each
overlaps.'" United States v. Boyd, 180 F.3d
967, 981 (8th Cir. 1999) (quoting United States v.
Lindsey, 782 F.2d 116, 117 (8th Cir. 1986)). "The
decision of whether to sever a trial is left to the district
court's sound discretion." United States v.
Steele, 550 F.3d 693, 702 (8th Cir. 2008) (citing
United States v. Lawson, 173 F.3d 666, 671 (8th Cir.
case, Defendant argues the counts were not properly joined,
while the government argues joinder was proper under Rule
8(a) because the alleged crimes are of the same or similar
character. The alleged crimes took place, sometimes
concurrently, over the course of two years. This is
"relatively short period of time" for the purposes
of joinder of claims. But the fact that the alleged crimes
took place within a relatively short period of time is not
sufficient, by itself, to make a showing that the crimes are
of a same or similar character. The government must also make
a showing that the evidence from the individual fraudulent
schemes will overlap at trial.
government asserts the evidence overlaps because if the
counts remain joined, the evidence of each allegedly
fraudulent scheme will be admitted as evidence at trial under
Fed.R.Evid. 404(b). Rule 404(b) allows evidence of crimes,
wrongs and other acts to be admitted to show "motive,
opportunity, intent, preparation, plan, knowledge, identity,
absence of mistake, or lack of accident." The prior acts
"need not be duplicates." United States v.
Thomas, 398 F.3d 1058, 1063 (8th Cir. 2005). They must
only be "sufficiently similar to support an inference of
criminal intent." United States v. Lucas, 521
F.3d 861, 865 (8th Cir. 2008). The government broadly asserts
that even if granted separate trials, the evidence of the
separate schemes would be used to demonstrate Defendant's
intent, knowledge, plan, and absence of mistake. But the
government provides little in the way of specifics as to how
evidence of one fraud would be relevant to trial on the other
acts of fraud. While the ultimate decision of admissibility
will be at the discretion of the trial court, at this stage
in the proceedings, and based on the indictment, the
government has presented only conclusory statements that
alleged fraudulent schemes could be used for proof of
anything other than Defendant's alleged propensity to
commit fraud - a clearly improper purpose under the Federal
Rules of Evidence.
government also appears to argue that the claims are properly
joined because they constituted a common plan or scheme. In
broad terms, the counts involve some type of alleged fraud
and the use of e-mail, regular mail, and/or wire transfers
and alleged violations of the same or similar sections of
federal statutes. Also, in broad terms, two of the alleged
fraudulent schemes involved real estate. Finally, each of the
alleged schemes was apparently employed for the financial
gain of the defendant. But when the ...