United States v. Varoudakis

233 F.3d 113 (1st Cir. 2000)

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Nature of the Case

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Facts

Varoudakis (D) opened a restaurant and nightclub called Destinations. Business declined about a year after it opened. D paid his suppliers cash on delivery and owed his workers back wages. His landlord claimed $600,000 in back rent and damages. Eviction proceedings were begun in December 1994. In late 1994, D increased the contents insurance coverage to $500,000 and bought business interruption insurance for $100,000. Cheryl Britt, D's long-time girlfriend, testified that D told her he increased the insurance so he could burn the restaurant and collect the insurance proceeds. D filed for bankruptcy for the business and himself personally. Britt testified that several weeks before the April 1995 fire, D told her to stop paying the bills. Britt did not pay the February 1995 insurance bill. On March 27, 1995, the insurance policy was canceled. D relied on the cancellation to contest the government's theory that he burned Destinations to collect insurance. Britt testified that D did not know the insurance was canceled. In March, D began moving sound and lighting equipment from Destinations to a property he owned in Everett. D removed more than $100,000 worth of equipment. Britt and her sister, Diane Casey, testified that at the end of March 1995, D hired Casey's boyfriend, Nick Adams, to torch Destinations. Britt said that D told her to pay Adams $2,000 when the job was completed. On the night of April 3, D went to the Foxwoods Casino with friends. D instructed Casey to switch shifts with Mansour Alrisheq, on the night of April 3 because Alrisheq did not know of the planned arson. Casey also said D told her to give Adams the keys to Destinations. Destinations burned on April 4, 1995. Investigators determined that arson caused the fire. D did not dispute this finding at trial. D called his insurance agent from Foxwoods to report the fire and then learned that the fire damage was not extensive. D told investigators that the fire might have been connected with the robbery of the Destinations drop-safe, which held between $5,000 and $7,000, and that a rival Greek club might be responsible. He also mentioned Casey and Adams as suspects. Britt was promised immunity. However, she lied about her involvement in the fire and her relationship with D to investigators and in two grand jury appearances. The government did not revoke her immunity. Britt was one of the government's main witnesses. At trial, the court allowed Britt to testify that in December 1993 she saw D set fire to a Cadillac he had leased. D told Britt that the lease had expired and he wanted to avoid excessive mileage charges. D offered the car lease agreement to impeach Britt's testimony as it had 23 months remaining. D was convicted. D appealed in that the car fire evidence should not have been admitted under Rule 404(b) because its sole purpose was to demonstrate criminal propensity, or that the evidence should not have been admitted under Rule 403 because its probative value was substantially outweighed by its unfairly prejudicial effect.