## Facts

- Rex K. DeGeorge, an attorney, arranged construction of a 76-foot yacht (*Principe di Pictor*) in 1992 for approximately $1.9 million.
- He used purported corporate transfers to inflate the yacht’s value and conceal his ownership, including assignments to Continental Pictures Corp. and then to Polaris Pictures Corp., a company formed by DeGeorge and run nominally by Paul Ebeling.
- Polaris allegedly “financed” the purchase through notes issued by U.S. Inbanco, Ltd., another corporation formed by DeGeorge, intended to appear to be a bank.
- DeGeorge concealed his ownership from the marine insurer, in part because he previously had three insured boats lost at sea that were never recovered and believed he would have difficulty obtaining insurance in his own name.
- The yacht was scuttled off the coast of Italy on November 4, 1992.
- After the sinking, DeGeorge and others allegedly fabricated an account involving a fictitious “Captain Libovich” and sought to collect inflated insurance proceeds under a policy issued to Polaris with loss payable to U.S. Inbanco.
- A civil coverage dispute with the insurer followed; false statements made in that litigation formed the basis for the perjury charge.
- A federal jury convicted DeGeorge of conspiracy, mail fraud, wire fraud, and perjury; the district court imposed a prison sentence, restitution, and other terms.

## Issues

1. Whether pre-indictment delay violated the Fifth Amendment due process clause by causing actual, non-speculative prejudice.
2. Whether the statute of limitations was properly tolled under 18 U.S.C. § 3292 while the government sought evidence from foreign authorities, without proof a grand jury was actively investigating the specific offenses at the time of the tolling application.
3. Whether evidence of DeGeorge’s three prior uninsured or insured “boat losses” was admissible as intrinsic (“inextricably intertwined”) evidence rather than governed by Federal Rule of Evidence 404(b), and whether it should have been excluded under Rule 403.
4. Whether the evidence was sufficient to sustain convictions for conspiracy, mail fraud, wire fraud, and perjury.
5. Whether the district court committed Guidelines error at sentencing, including by treating perjury in a way that produced an improper obstruction-related enhancement.

## Decision

- The Ninth Circuit affirmed DeGeorge’s convictions for conspiracy, mail fraud, wire fraud, and perjury.
- The court rejected the due process claim based on pre-indictment delay because DeGeorge failed to show actual, non-speculative prejudice.
- The court upheld tolling of the limitations period under 18 U.S.C. § 3292, holding the statute does not require a showing that the grand jury was already investigating the particular offenses when tolling was sought.
- The court held that evidence of DeGeorge’s prior boat losses was admissible as “inextricably intertwined” with the charged scheme, and that the district court’s limitations avoided unfair prejudice under Rule 403.
- The court held the trial evidence was sufficient for a rational jury to find guilt beyond a reasonable doubt on all counts.
- The court reversed in part on sentencing and remanded for resentencing due to error in applying the Guidelines, including an improper obstruction-related enhancement tied to the perjury conviction.

## Legal Principles

- A due process challenge for pre-indictment delay requires the defendant to show actual, non-speculative prejudice; absent that showing, the claim fails without requiring further inquiry into justification for the delay.
- Under 18 U.S.C. § 3292, a district court may suspend the limitations period while the government seeks evidence located in a foreign country through an official request; the statute does not require proof that a grand jury was actively investigating the specific offenses at the time of the application.
- “Inextricably intertwined” (intrinsic) evidence may be admitted without resort to Rule 404(b) when it is part of the same transaction as the charged conduct or necessary to present a coherent account of the charged crime.
- Even when intrinsic, other-acts evidence remains subject to Rule 403; trial courts may mitigate unfair prejudice by limiting the detail admitted to what is necessary for the non-propensity purpose.
- On sufficiency review, conflicts in witness credibility are generally for the jury; convictions stand if a rational factfinder could find each element proved beyond a reasonable doubt.
- Sentencing must follow the applicable Guidelines framework; misclassification or misuse of enhancements requires remand for resentencing.

## Conclusion

The Ninth Circuit upheld DeGeorge’s fraud and perjury convictions arising from an allegedly staged yacht loss and inflated insurance claim, approving both foreign-evidence tolling under § 3292 and admission of prior-loss evidence as intrinsic to the scheme, but it remanded for resentencing because the district court applied the Guidelines incorrectly.


United States v. DeGeorge, 380 F.3d 1203 (9th Cir. 2004)