
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                  ____________________        No. 95-1139                              UNITED STATES OF AMERICA,                                      Appellee,                                          v.                                  WILLIAM H. WALSH,                                Defendant, Appellant.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                       [Hon. Mark L. Wolf, U.S. District Judge]                                           ___________________                                 ____________________                                        Before                                Boudin, Circuit Judge,                                        _____________                            Bownes, Senior Circuit Judge,                                    ____________________                             and Keeton,* District Judge.                                          ______________                                 ____________________            James  L. Sultan  with whom  Rankin  & Sultan  was on  briefs  for            ________________             ________________        appellant.            Peter  A. Mullin,  Assistant  United States  Attorney,  with  whom            ________________        Donald K.  Stern, United  States  Attorney, and  Pamela Merchant,  New        ________________                                 _______________        England  Bank  Fraud  Task  Force, Criminal  Division,  Department  of        Justice, were on brief for the United States.                                 ____________________                                   January 23, 1996                                 ____________________                                    ____________________        *Of the District of Massachusetts, sitting by designation.                 BOUDIN, Circuit  Judge.  William Walsh  was charged with                         ______________            various offenses  growing  out of  a  bank fraud  scheme  and            convicted on a majority of the counts.  His present appeal is            primarily directed at procedural issues.  We affirm.                                          I.                 Walsh  was  indicted in  1992,  together  with four  co-            defendants, and charged  with conspiracy, twenty-nine  counts            of bank  fraud, and  twenty-nine counts of  false statements.            18 U.S.C.      2, 371,  1344,  1014.   The substance  of  the            indictment was that  Walsh carried  out a  scheme to  defraud            Dime  Savings Bank  of  New York  ("Dime-NY").   He  did  so,            according to the charge, by directing his employees to obtain            29  specific  loans through  the  use of  deceptions  so that            customers  could purchase  condominiums  from  Walsh and  his            associates.                 Walsh's  trial  occurred  in  February  and March  1994.            Taken in  the  light most  favorable to  the verdict,  United                                                                   ______            States v.  Tuesta-Toro, 29  F.3d 771,  773  (1st Cir.  1994),            ______     ___________            cert. denied, 115 S.  Ct. 947 (1995), the  evidence permitted            _____ ______            the  jury  to find  the following.    Walsh was  a Cambridge,            Massachusetts,  city  councillor,  lawyer,  and  real  estate            developer.  With a group of investors, he purchased apartment            buildings  or   complexes,   converted  the   property   into            condominiums, and  sold the condominiums  to customers, using            the unit sales to pay off the acquisition financing.                                           -2-                                         -2-                 Walsh ordinarily served as a trustee of the realty trust            that acquired  the building,  acted as legal  counsel to  the            trust, and  usually served  as the trust's  representative in            the sale  of the individual condominium units.   During 1986,            sales of units  in one of the projects started to fall behind            schedule and the trust began to have difficulty  repaying its            acquisition  loan.   Walsh then  discovered that  Dime-NY had            recently created a wholly  owned subsidiary, called Dime Real            Estate  Services  of   Massachusetts,  Inc.  ("Dime-MA"),  to            originate  mortgage loans  in  Massachusetts.   Dime-MA  made            mortgage loans  available  rapidly--with no  verification  of            income,  assets or  down payments--but  the loans  required a            twenty  percent  down  payment and  secondary  financing  was            prohibited.                 On  this failing project, and then  on two others, Walsh            directed his employees to arrange loans from Dime-MA for unit            purchasers and  to falsify documents submitted  to Dime-MA to            conceal  the existence  of secondary  financing (and  in some            cases  third  mortgages as  well).   In  the  three projects,            approximately  half  the  customers  defaulted   and  Dime-MA            incurred  substantial  losses.     An  investigation  ensued,            followed by  the indictment already described.   Three of the            four co-defendants pleaded guilty; charges against the fourth            co-defendant were abandoned.                                         -3-                                         -3-                 Jury deliberations  began on March 22,  1994.  Following            the  dismissal of a juror during deliberations, the jury (now            reduced to 11 members)  continued deliberations, and on March            28, 1994, it returned  41 guilty and 18 not  guilty verdicts.            Walsh  was thereafter sentenced and now appeals.  Most of the            claims  of error concern the  dismissal of the  juror and its            aftermath, so  we begin  with that  subject, starting with  a            description of the pertinent events.                                         II.                 On March 23,  1994, a  note was received  from the  jury            indicating that one  of the  jurors wished to  meet with  the            judge,  adding:   "He  has several  questions  and we  cannot            relate  to him  in  any  way, shape,  or  form."   The  judge            declined to meet with an  individual juror, but the following            day a court security officer reported that the foreperson was            concerned  that  one  of  the  jurors  had  become  "mentally            unstable."   After consulting  with counsel, the  trial judge            interviewed   the  foreperson,   and   learned  of   constant            interruptions by "juror X",  irrelevant statements by juror X            about events in his past life, and juror  X's efforts to show            other  jurors  written  materials consisting  of  a  campaign            brochure and  a newspaper clipping from his  prior efforts to            win elective office.                 After consulting  further with counsel,  the trial judge            interviewed juror  X; as  in the  judge's interview with  the                                         -4-                                         -4-            foreperson,  counsel and  Walsh  himself were  present.   The            judge  cautioned juror  X not  to indicate  his views  on the            merits of the case.   The interview, which began  by focusing            on  the material that the  juror brought into  the jury room,            involved disjointed and rambling comments  by juror X.  Juror            X also  mentioned a self-described "nervous  problem" and his            general discharge from the military.  Some of the questioning            was  based  on  questions  that  had  been suggested  by  the            government and defense counsel.                   Finally, out of the presence of juror X, the court asked            both sides for their position as to whether juror X should be            excused, and  defense counsel  after consultation with  Walsh            indicated that he "would  not object if the Court  decided to            keep him or eliminate him.  . . . [Either way] we  would move            for a mistrial."   The  government said that  it thought  the            juror  was disabled and should  be excused.   The trial judge            then  excused the juror, agreeing  that he was  "not a person            capable of  engaging in  rational discussions based  upon the            evidence."                 Thereafter, the remaining jurors  were sent home for the            rest  of the day.  The following morning Walsh filed a motion            for  mistrial,  arguing that  the  ability  of the  remaining            jurors to be impartial and open-minded had been undermined by            their exposure  to juror  X.   No one at  this point  knew or            claimed to know how juror X had proposed to vote.   The court                                         -5-                                         -5-            agreed  to question  the remaining  jurors and  solicited and            received proposed questions from counsel.                   Then the district judge, in  the presence of counsel and            the defendant, questioned each  of the 11 jurors individually            as to whether juror X had  discussed the merits prior to  the            jury's  deliberations, had  brought  material  into the  jury            room,  and had  discussed his  own personal  experiences--and            whether the juror being questioned could, to  the extent that            these events had occurred, put them aside and decide the case            impartially based on  the evidence presented.   Eight of  the            jurors had been  exposed to  a campaign brochure  and an  old            newspaper article  about one of  juror X's campaigns;  all of            the   jurors  had   heard  juror   X  discuss   his  personal            experiences; and three jurors had heard comments from juror X            about   the  merits  of  the  case  prior  to  the  start  of            deliberations.                   Each  juror affirmed his or her ability to put aside the            campaign material,  the personal experiences of  juror X, and            any comments made by him before deliberations began.  Defense            counsel  challenged three  jurors who  had heard  comments by            juror  X before  deliberations  began, the  substance of  the            comments not being  revealed.   With respect to  each of  the            three jurors,  the trial judge  made findings that  the juror            was credible in saying  that the pre-deliberation comments of                                         -6-                                         -6-            juror X would have no effect.  The trial judge  then denied a            mistrial.                 At the request of defense  counsel, the trial judge told            the  jury  that it  could  begin its  deliberations  from the            beginning if it wished; the court  also told the jury not  to            discount  a position taken "just because  [juror X] took it."            The  jurors  then  deliberated  for  the  rest  of  the  day.            Returning after a weekend break, they continued deliberations            and asked for reinstruction  on substantive issues.  Late  in            the same day, they  returned the 41 guilty and  18 not guilty            verdicts.                 1.   Walsh's  first claim  of  error is  that the  trial            court erred in dismissing  juror X.  Walsh argues  that there            was no  psychological testing  or psychiatric  examination of            juror X, and  the evidence did  not show that  he was  either            mentally  incompetent or otherwise  incapable of  engaging in            rational  decision-making.   In  substance, Walsh  says  that            juror   X  was   simply  an  unpopular,   perhaps  irritating            participant who  probably sided with the  defendant and whose            removal led to a prompt agreement to convict.                   Walsh did  not make a  timely objection on  this ground.            At the time  of the dismissal, his counsel did  not object to            excusing  juror  X,  or  argue for  psychiatric  testing,  or            suggest  that juror  X could  be dismissed  only if  a higher            degree  of irrationality  were  shown.   Instead, Walsh  made                                         -7-                                         -7-            clear  his intention  to move  for a  mistrial; and  when the            mistrial motion was filed, the ground--inconsistent  with the            contention  now  made--was that  juror  X  was someone  whose            "psychiatric  problems" had  been "clearly  demonstrated" and            whose "negative influence" on other jurors was apparent.                 Although, for  these reasons, the objection  now made is            reviewable only for plain error, the dismissal of juror X was            not error at all.   Federal Rule of Criminal  Procedure 23(b)            permits the judge to  excuse a juror "for just  cause" during            deliberations and to allow the remaining 11 jurors to reach a            verdict.    The trial  judge  has  substantial discretion  in            exercising this responsibility and  may remove the juror when            "convinced that  the juror's abilities to  perform his duties            [have] become impaired."  United States v. Huntress, 956 F.2d                                      _____________    ________            1309, 1312 (5th  Cir. 1992),  cert. denied, 113  S. Ct.  2330                                          _____ ______            (1993).   Similarly, in  United States v.  Molinares Charris,                                     _____________     _________________            822 F.2d 1213, 1223 (1st Cir. 1987),  we permitted a judge to            excuse a juror who had taken a tranquilizer pill and appeared            somewhat unstable.                 The trial judge carefully  and repeatedly consulted with            counsel  in determining  the course  of the  inquiry and  the            questions  to be  put  to  juror X.    See  United States  v.                                                   ___  _____________            Chorney,  63 F.3d 78, 81 (1st  Cir. 1995).  The transcript of            _______            juror  X's voir dire, which  need not be  repeated in detail,                       _________            gave  the trial  judge ample  basis for  concluding  that the                                         -8-                                         -8-            juror was  not able to  perform his duties.   Whether  or not            juror  X was  incompetent  as  a  juror  under  28  U.S.C.               1865(b)(4),  "just cause"  existed under  Rule 23(b)  for his            removal in this  case.  See  United States v. Reese,  33 F.3d                                    ___  _____________    _____            166,  172-73 (2d  Cir. 1994),  cert. denied,  115 S.  Ct. 756                                           _____ ______            (1995) (just cause not limited to incompetence).                 There  is no  evidence that  the trial  judge  knew that            juror X favored acquittal,  if indeed juror X  did.  Nor  did            defense counsel  make any such suggestion  when he acquiesced            in the dismissal of  juror X.  If anything,  Walsh's mistrial            motion suggested  that  juror X  might  be hostile  to  Walsh            because  Walsh was a lawyer  and politician.   Dismissal of a            known holdout  juror raises  an entirely  different question.            Compare  United States  v. Hernandez,  862 F.2d  17 (2d  Cir.            _______  _____________     _________            1988), cert. denied, 489 U.S. 1032 (1989).                   _____ ______                 2.   Walsh's second  objection is  that even if  juror X            was  properly removed, the  court erred in  permitting the 11            remaining  jurors  to return  a  verdict.   Walsh's  broadest            grounds for this  objection are  legal:  he  claims that  the            Constitution  does not permit a  jury with only  11 jurors to            decide  a  federal criminal  case  over  the objection  of  a            defendant.    He also  asserts  that  Rule 23(b)--which  does            permit this course--could not be lawfully enacted through the                                         -9-                                         -9-            Rules  Enabling  Act procedures.    18 U.S.C.      3771, 3772            (1982).1                 Neither of  these objections was  made at the  time that            the district  court was determining whether to  permit the 11            remaining   jurors  to  deliberate   and,  accordingly,  both            objections are subject to review only for plain error.  It is            true  that both issues were  raised in the  trial court after                                                                    _____            the verdict by a  post-verdict motion for dismissal or  a new            trial. But the usual rule  is that an objection must be  made            known  at the time that  the court is  making its decision to            act, e.g.,  United States  v. Gonzalez-Torres, 980  F.2d 788,                 ____   _____________     _______________            791 (1st  Cir. 1992), and  here the proper time  to raise the            objections  was  when  the  court  was  deciding  whether  to            continue with 11 jurors.      In this case, in any event, the            standard  of review does not matter  as to the constitutional            claim because  in  Williams  v. Florida,  399  U.S.  78,  103                               ________     _______            (1970),  the Supreme Court  said that the  12-member jury was            not required  by the Constitution  and that Congress  and the            states  could  select  a different  number.    We think  that            Williams effectively answers the claim that 11 jurors are too            ________            few.   A number of circuits  have held that a jury  of 11 can                                            ____________________                 1The separate provisions  enabling the Supreme  Court to            prescribe rules of criminal procedure were later repealed and            consolidated with the Rules Enabling Act provisions governing            the  enactment  of  rules   of  civil  procedure.    Judicial            Improvements and Access to Justice Act, Pub. L.  No. 100-702,               401-04, 102 Stat. 4642, 4648-52 (1988); 28 U.S.C.    2072-            74.                                         -10-                                         -10-            constitutionally  decide a  federal  criminal  case,  without            consent  of the parties, where  a juror has  been removed for            cause.  E.g.,  United States  v. Ahmad, 974  F.2d 1163,  1164                    ____   _____________     _____            (9th Cir. 1992).                 Williams   directly  rejects   the  argument   that  the                 ________            historical number of jurors is binding--how many would be too            few is  not an  issue in this  case--and we  think that  this            conclusion is not altered by Walsh's attempt  to rephrase the            challenge as a concern  for a "unanimous" jury.   The Supreme            Court has  not said whether a  less-than-unanimous verdict is            acceptable.   Compare Apodaca v. Oregon, 406 U.S. 404 (1972).                          _______ _______    ______            But  whether it  is  or not,  we  think that  rendition of  a            verdict agreed to by all jurors, after one juror with unknown            views has been dismissed for cause, is a unanimous verdict.                 The  gist of Walsh's claim under  the Rules Enabling Act            is  that Congress might be able to alter the requisite number            from  12 to  11 but  that Rule  23(b) was  adopted--under the            procedures specified by  the Rules Enabling  Act--by judicial            action  coupled with  Congress' failure  to veto  the change.            Inaction, says Walsh, is not enough for a fundamental change.            The Second  Circuit has concluded, however,  that this change            can be accomplished through  the enabling procedures.  United                                                                   ______            States v. Stratton, 779  F.2d 820, 831 (2d Cir.  1985), cert.            ______    ________                                      _____            denied, 476 U.S. 1162 (1986).            ______                                         -11-                                         -11-                 Rules  that  are "strictly  procedural"  can  be adopted            through the Rules Enabling Act without an affirmative vote by            Congress, Burlington Northern Railroad Company  v. Woods, 480                      _____________________________________    _____            U.S. 1, 5 (1987), and this extends to rules that fall "within            the uncertain area between substance and procedure, [but] are            rationally  capable  of  classification   as  either."    Id.                                                                      ___            (quoting Hanna v. Plumer, 380 U.S. 460, 472 (1965)).  In view                     _____    ______            of  the defendant's failure  to make  a timely  objection, we            need not  decide this claim  outright but are  satisfied that            the  use  of the  11-member  jury did  not  constitute "clear            error" based on the Rules Enabling Act claim.2                 3.   Walsh did make in  timely fashion an objection that            this  jury was  not  capable  after  juror X's  discharge  of            rendering  a fair and impartial verdict.  When this issue was            raised by Walsh immediately after the discharge, the district            court  properly undertook "an  adequate inquiry  to determine            [what  had happened and] .  . . whether  it was prejudicial."            United  States v.  Ortiz-Arrigoitia, 996  F.2d 436,  442 (1st            ______________     ________________            Cir. 1993), cert. denied,  114 S. Ct. 1368  (1994).  A  trial                        _____ ______            judge enjoys discretion to determine the scope of the inquiry            in deciding whether the jury has been tainted.  United States                                                            _____________                                            ____________________                 2Since  the issues were first  raised in a  motion for a            new  trial and rejected on  the merits, one  could argue that            the  customary  abuse  of discretion  standard  is irrelevant            because the issues are strictly legal.  But we do not see why            rejection  of an untimely legal claim  should be reviewed for            anything  more than  plain error.   See  Gonzalez-Torres, 980                                                ___  _______________            F.2d at 791.                                         -12-                                         -12-            v.  Boylan, 898 F.2d 230,  258 (1st Cir.),  cert. denied, 498                ______                                  _____ ______            U.S. 849 (1990).                   As already  noted, the district  court judge  separately            examined each of the jurors, asking his own questions as well            as various questions suggested by counsel.  In each instance,            the judge  received a  forthright declaration that  the juror            was not going to be affected by the personal comments made by            juror X, by materials he had brought into the jury room, or--            in the case  of three  jurors--by the comments  that juror  X            made  about  the  merits  before deliberations  began.    The            judgment of the trial judge, who can appraise the jurors face            to face, deserves great weight.                 Although  Walsh now  complains that  the district  judge            limited  his own  questioning unduly--in  an effort  to avoid            learning how the jurors were leaning--Walsh did not press for            more detailed inquiry  at the time.  The trial judge treads a            delicate  line in this  kind of  inquiry.   Assuming arguendo                                                                 ________            that Walsh is right in saying that Fed. R. Evid. 606(b)  does            not  apply prior to the verdict, there are still obvious good            reasons for a trial judge to avoid learning how an individual            juror  is leaning.  United  States v. Rengifo,  789 F.2d 975,                                ______________    _______            985 (1st Cir. 1986).                 Although Walsh  now argues  that there is  a substantial            chance that the jurors were prejudiced by juror X, nothing in            the record  makes this  at all  likely.   In addition  to the                                         -13-                                         -13-            jurors' own denials,  we note that  the brochure had  nothing            directly to  do with the trial; there is no reason to believe            that  a newspaper article brought in by a juror regarding his            prior  political  campaign contained  anything  material; and            judging by the voir dire of juror X, his personal experiences                           _________            were also not germane to the trial.                 Walsh now argues that juror X was hostile to lawyers and            politicians (Walsh was both) and that this view may have been            passed on to the other  jurors.  In fact, juror X's  brochure            was  more  qualified, expressing  (in  a  description of  X's            "positions")  objections  to  "the   [unspecified]  unethical            ethics practiced by certain members  of the bar" and "machine            controlled politics  and .  . . [unspecified]  dirty tricks."            The  jurors  said that  they  paid  little attention  to  the            pamphlet.   Further, it is  Walsh who now  takes the position            that juror X  favored Walsh, which hardly suggests that juror                          _______            X was denigrating Walsh.                 Finally, Walsh now complains that by discharging juror X            the  court led the jury to think  that juror X's views should            be disregarded.   In fact, the judge expressly  cautioned the            jury not to  discount views simply because  they were earlier            expressed by juror  X.  Walsh also says that  the jury should            have  been directed  to start  its deliberations  anew.   The            judge told the  jury that it was entitled to  start anew.  We            think  that this was all that was either useful or necessary.                                         -14-                                         -14-            At the time,  Walsh raised no  objection to the  instructions            given.    4.   Walsh's last claim of error based on the juror            X episode relates  to a  post-trial event.   According to  an            affidavit from Walsh's secretary, she received a call a  week            or so after  the verdict from someone  identifying himself as            juror X who  said he had been  on the defendant's side,  that            the  defendant  had  been  "railroaded," and  that  she  (the            secretary) "would not believe what went on in the jury room."            About  a  month  later,  Walsh submitted  this  affidavit  in            support of a request that the jury and juror X  be subject to            further voir dire or authorized inquiry by counsel.                      _________                 The district court declined  to hold such a post-verdict            inquiry  or to  authorize discussions with  the jurors  or to            grant a new  trial based on the affidavit.   Walsh now argues            that  because  the  parties  were  barred  from  unsupervised            contact  with the jurors after  the verdict, United States v.                                                         _____________            Kepreos, 759 F.2d 961, 967 (1st Cir.), cert. denied, 474 U.S.            _______                                _____ ______            901 (1985), the trial  court had an obligation to  conduct an            investigation  itself.   The  abuse  of  discretion  standard            governs this claim, see Boylan, 898 F.2d at 258, and we think                                ___ ______            that there was no such abuse in this case.                  The  restrictions  on   post-verdict  contact  and   the            limitations  on juror testimony  about deliberations, Fed. R.            Evid.  606(b), exist  to protect  important interests  in the            finality of the verdict and the privacy of the deliberations.                                         -15-                                         -15-            See  Tanner v. United States, 483  U.S. 107, 120 (1987).  The            ___  ______    _____________            affidavit  contains only general rhetoric from juror X and no            specific allegations of misconduct.   Given what the district            court  already  knew  about  juror X,  the  telephone  call--            assuming  (as we  do)  that it  came  from juror  X--did  not            require any further inquiry.                                         III.                 Walsh's brief raises two further  issues, both unrelated            to  juror X.   The  first claim  relates to  the government's            admitted failure to turn  over certain documents in  a timely            fashion.  The documents related to Frances Schwartz, a senior            attorney  working for  Walsh who  was assigned  to the  three            development  projects involved  in this  case.   Schwartz was            indicted with Walsh and was one of the co-defendants who pled            guilty to the conspiracy count and testified against Walsh at            trial.                   On direct examination, Schwartz gave  damaging testimony            against  Walsh.    In addition  to  identifying  a  number of            documents and  describing the  operations of Walsh's  office,            Schwartz testified  to  discussions and  correspondence  with            Walsh  that--as  recounted   and  interpreted  by  Schwartz--            confirmed Walsh's knowing  participation in and direction  of            the  fraud.   Schwartz'  testimony was  thus quite  damaging,            although another co-defendant who pled guilty also  testified            that  Walsh  knowingly   directed  the  concealment   of  the                                         -16-                                         -16-            secondary financing.     Early   in   her  cross-examination,            Schwartz mentioned that she had "daytimers" or calendars that            she  had used  to refresh  her recollection.   Later,  on re-            cross, she  mentioned that she had allowed  the government to            review  the daytimers and make  copies of them.   The defense            immediately  objected   that  it   had  never   received  the            daytimers.   The government said that  these daytimers should            have  been disclosed  earlier  but had  been overlooked  when            other  materials from  Schwartz  had been  made available  to            Walsh's counsel.   Copies of the  daytimers were provided  to            the defendant later that day.                 Following a timely  motion by Walsh to  dismiss the case            because  of this  delay, the trial  court denied  the motion,            finding   that  Walsh's   strategy   would   not  have   been            substantially different if  the daytimers had been  disclosed            earlier.   The court instructed  the jury that the government            had failed in its discovery obligation, and  it allowed Walsh            to  recall Schwartz  to continue  her examination,  using the            daytimers  to  try   to  establish  inconsistencies   between            Schwartz'  prior  testimony and  the  daytimers.   Walsh  now            complains that this was inadequate.                 This court previously  considered the  issue of  delayed            disclosure  of impeachment material  required to be disclosed            under  the Jencks Act.   United States v.  Arboleda, 929 F.2d                                     _____________     ________            858,  862-65  (1st Cir.  1991).   We  said that  the critical                                         -17-                                         -17-            question   was   whether  the   delay  had   "prevented  [the            material's]  effective use by  the defense," id.  at 862, and                                                         ___            that  some  showing of  prejudice  was  required beyond  mere            assertions that  the defendant  would  have conducted  cross-            examination differently.  Id.  at 864.  Cf. United  States v.                                      ___           ___ ______________            Lanoue, No. 95-1140, slip op. at 34 (1st Cir. 1995).  Delayed            ______            disclosure of  Brady material  is subject  to the same  rule.                           _____            See  United States  v. Osorio,  929 F.2d  753, 758  (1st Cir.            ___  _____________     ______            1991).                   On this appeal, Walsh  argues that if his  trial counsel            had  received the daytimers earlier, he would have focused at            the outset on the  alleged inconsistencies between  Schwartz'            testimony  and the  daytimers instead  of attempting  to cast            doubt on the reliability of her memory.  In fact, the initial            cross-examination  did  not  focus  on Schwartz'  memory  but            rather  on her veracity, which  the defense counsel sought to            undermine  by emphasizing her  prior drug use  and her desire            for a lenient  sentence.   And when Schwartz  was subject  to            further cross after the  daytimers had been produced, Walsh's            counsel    paid   minimal    attention   to    the   supposed            inconsistencies.                   Walsh says  that when Schwartz was  recalled for further            cross  after the daytimers had been produced, it was too late            to cross-examine  effectively on inconsistencies  because she            had been "well prepared by the government to explain away any                                         -18-                                         -18-            inconsistencies."  As it happens, there is no evidence of any            such discussion  after the  daytimers first became  an issue.            As to  preparation prior to the  original direct examination,            the government  was entitled to prepare the  witness, and the            risk  of  facing an  initially  prepared  witness would  have            existed whether or not the daytimers had been produced.                   Walsh's  final claim  of error,  a claim  raised  in the            district  court  and rejected  there,  is  that the  evidence            failed  to  show  that the  victim  was  a  federally insured            financial  institution.    At  the  time  of  the  fraudulent            filings,  18 U.S.C.    1344  aimed at  schemes to  defraud "a            federally chartered or insured  financial institution" or  to            obtain  property owned by, or under the custody or control of            such an institution through falsehoods.  See United States v.                                                     ___ _____________            Brandon,  17 F.3d 409, 424 n.11 (1st Cir.), cert. denied, 115            _______                                     _____ ______            S. Ct. 81  (1994).  Walsh's argument  turns on the  fact that            Dime-NY  was  a  federally  insured  bank,  but  Dime-MA--the            immediate maker of the loans--was not.  The government quotes            to  us in response a statement from  Brandon, 17 F.3d at 426,                                                 _______            that                 the government  does not  have to show  the alleged                 scheme  was  directed  solely  toward  a particular                                        ______                 institution;   it  is   sufficient  to   show  that                 defendant  knowingly  executed a  fraudulent scheme                 that exposed a federally insured  bank to a risk of                 loss.            That  language,   however,  was  directed  to   the  scienter            requirement,  and not to  the nexus claim  made here.   As it                                         -19-                                         -19-            happens,  the Brandon  court also  rejected a  nexus argument                          _______            somewhat similar  to Walsh's  argument here but  on different            facts.   The intermediaries  with whom defendants  in Brandon                                                                  _______            dealt  were  mortgage brokers  who  forwarded the  fraudulent            applications to the federally insured bank which individually            approved the  loans  and  forwarded  the money  back  to  the            mortgage brokers.  See id. at 423, 426-27 & n.16.                               ___ ___                 While the nexus in  Brandon was different--one can argue                                     _______            about  whether it  was  closer or  more remote--Brandon  does                                                            _______            confirm  that  a  defendant   can  violate  section  1344  by            submitting the dishonest loan  application to an entity which            is not itself a federally insured institution.  Here, Dime-MA            was  practically an  alter ego of  Dime-NY:  it  was a wholly            owned  subsidiary   of  Dime-NY;  all  of   the  subsidiary's            directors and principal officers were officers of the parent;            and Dime-MA was  subject to examination  by the same  federal            bank  examiners  as  Dime-NY  and reported  its  result  on a            consolidated basis.                 Further, focusing  on the  loan process, the  connection            between  the defendant  and the  federally insured  victim is            even  tighter.  Dime-NY provided all of the funds for Dime-MA            both  for  its  operating   expenses  and  to  fund  mortgage            closings.   Dime-NY determined  what loan products  should be            offered  and,  on  the closing  of  a  loan  by Dime-MA,  the            mortgage  was  immediately assigned  to  Dime-NY, which  then                                         -20-                                         -20-            serviced  the  loan.     For  most  practical  purposes,  and            certainly  for  the  purposes  underlying  section 1344,  the            mortgage fraud perpetrated against Dime-MA was effectively  a            fraud against Dime-NY.                 We agree that there must be some outer limits to section            1344.   For example, ruinous  fraud directed against  a major            bank  customer, but unrelated to  a customer's deposits in or            loans from the bank, might  ultimately harm the bank  itself,            if only through  loss of a valued customer.   But here, as in            Brandon, "this case presents a situation of direct harm to [a            _______            federally  insured bank] resulting from a scheme specifically            designed  to fraudulently  avoid  the  requirements  of  that            federally insured  bank in order to  obtain funds originating            directly from  [that bank]."   17 F.3d  at 427 n.16.   As  in            Brandon,  we confine our affirmance to  the present facts and            _______            decline  to   contrive   general  rules   to  govern   myriad            variations.                 Affirmed.                 ________                                         -21-                                         -21-
