## Facts

- Michael J. Morley II, a certified public accountant, was connected to a scheme to create and use a forged will for decedent David Thompson, who died in January 1996.
- David Thompson was survived by three cousins; no authentic will was found after his death.
- Attorney Daniel Holmes devised a plan to fabricate a will naming two cousins as primary beneficiaries; Morley did not know the decedent.
- Morley’s charged conduct centered on attesting to a forged signature on the fabricated will, supporting conspiracy, bank fraud, mail fraud, and wire fraud charges.
- Over Morley’s objection, the government introduced evidence that about 14 months earlier Morley asked his parents (both notaries) to notarize signatures on bonds that had been signed outside their presence; the signatures later proved to be forgeries.
- The government did not claim Morley knew the bond signatures were forged when he sought notarization, but offered the incident to show intent, knowledge, and absence of mistake regarding the will attestation.
- A jury convicted Morley on all counts.

## Issues

1. Whether the district court abused its discretion under Federal Rule of Evidence 404(b) by admitting evidence of Morley’s earlier role in improper notarizations when the government did not assert he knew the underlying signatures were forged.
2. Whether, under Rules 401 and 403, the prior-act evidence was relevant for a non-propensity purpose and not substantially outweighed by unfair prejudice.
3. Whether any error in admitting the Rule 404(b) evidence was harmless.

## Decision

- The Third Circuit held the district court abused its discretion by admitting the prior-act evidence under Rule 404(b).
- The court found the earlier notarization incident lacked a sufficient non-propensity link to Morley’s intent, knowledge, or absence of mistake in attesting to the forged will, given the government’s position that Morley did not know of the prior forgeries.
- The court concluded the evidence posed a substantial risk of propensity reasoning and that any slight probative value was substantially outweighed by unfair prejudice under Rule 403.
- The court vacated Morley’s convictions and remanded for a new trial, finding the evidentiary error was not harmless.

## Legal Principles

- Rule 404(b) bars other-acts evidence offered to prove character in order to show conduct in conformity, but permits such evidence for specified non-propensity purposes (e.g., intent, knowledge, absence of mistake) if properly connected to a fact of consequence.
- Courts must identify a genuine, non-propensity chain of relevance under Rule 401; stating a permissible purpose is insufficient if the logical inference depends on propensity.
- Even relevant other-acts evidence may be excluded under Rule 403 when the danger of unfair prejudice substantially outweighs probative value, particularly where the evidence invites character-based inferences.
- Admission of Rule 404(b) evidence is reviewed for abuse of discretion; reversal is required when erroneous admission is not harmless and may have affected the jury’s assessment of contested mental-state elements.

## Conclusion

The Third Circuit ordered a new trial because the government’s prior-notarization evidence, offered to prove intent and knowledge, lacked a supported non-propensity link to the charged fraud and primarily risked persuading the jury that Morley had a dishonest character.


United States v. Morley, 199 F.3d 129 (3d Cir. 1999)