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1
IN THE UNITED STATES COURT OF APPEALS
2
FOR THE FIFTH CIRCUIT
3
_______________
4
No. 93-2145
5
_______________
6
UNITED STATES OF AMERICA,
7
Plaintiff-Appellee,
8
vs.
9
JOHN ADDISON BALLIS,
10
Defendant-Appellant.
11
_________________________
12
Appeal From the United States District Court
13
for the Southern District of Texas
14
_________________________
15
(August 8, 1994)
16
Before KING and SMITH, Circuit Judges, and KENT,* District Judge.
17
Samuel B. Kent, District Judge:
18
John Ballis appeals his conviction on six counts of bank
19
fraud and conspiracy to defraud and four counts of obstructing the
20
investigation of that fraud. Ballis asserts that the district
21
court erred in (1) excluding certain evidence of his discussions
22
with federal agents pursuant to a prior plea agreement; (2) refus-
23
ing to sever the fraud counts from the obstruction counts; and (3)
* District Judge of the Southern District of Texas, sitting
by designation.

1
refusing to enforce the plea agreement. We affirm in part, and
2
reverse in part.
3
I. BACKGROUND
4
In late 1986, the FBI began an investigation of transactions
5
involving Roy Dailey, the Chief Executive Officer and Chairman of
6
the Board at First Savings Association of East Texas ("FSAET"), a
7
federally insured savings institution in Houston, Texas. In the
8
course of the investigation, FBI Special Agent Tim Lauzon began
9
focusing on FSAET loans to Ballis or persons affiliated with
10
Ballis. The investigation revealed that from March to December
11
1984 Ballis and Dailey had arranged for FSAET to lend approxi-
12
mately $21.3 million to nominee borrowers acting on Ballis's be-
13
half. To support these loans, Ballis and Dailey had submitted
14
financial statements which falsely inflated the value of collat-
15
eral and the ability of the nominees to service the loans. The
16
loans were never repaid and resulted in foreclosures.
17
In particular, Agent Lauzon discovered that in December 1984
18
Ballis had asked Dailey to arrange for FSAET to loan $4.1 million
19
to Archie Wood, Ballis' ranch foreman, for the purchase of raw
20
land from M.F. Developers, a shell corporation created by Ballis
21
and one Lance Winchester. In return, Dailey asked Ballis to pay
22
him a portion of the loan proceeds. FSAET made the loan on Decem-
23
ber 27, 1984, from which Ballis paid the underlying debt on the
24
property and still had $1,821,092.64 left over.
25
Ballis deposited the excess at First State Bank of Liberty,
26
Texas ("FSBL") on December 28, 1984. That afternoon, he
2

1
instructed Suzanne Fairchild, vice president at FSBL, to withdraw
2
$300,000 in cash from the $1.8 million deposit and deliver it to
3
one John Adger. Adger then delivered the money to Dailey. From
4
the remaining loan proceeds, Fairchild made a number of additional
5
disbursements to Ballis, Wood, and Winchester, some of which ended
6
up in Dailey's hands.
7
Eventually, the investigation led to a grand jury subpoena
8
for Fairchild. Prior to her appearance, however, Ballis met with
9
Fairchild and instructed her not to provide any documents to the
10
grand jury that would show that he had paid money to Dailey from
11
the Wood loan proceeds. Fairchild complied, providing copies of
12
falsified and fictitious documents to the grand jury in May 1987
13
and May 1988, after showing the documents to Ballis and receiving
14
his approval for their submission. Among other misdeeds,
15
Fairchild created a fictitious certificate of deposit for $305,000
16
and fictitious documents making it appear that loan proceeds had
17
been reinvested, rather than paid to Dailey. She also furnished
18
altered copies of Ballis's bank statements which omitted his
19
certificate of deposit activity.
20
From the FSBL records Fairchild submitted to the grand jury,
21
the government could not find any cash withdrawals from the
22
disbursement of the $1.8 million deposit which would have
23
indicated a bribery payment from Ballis to Dailey. Thus, while
24
investigators could establish that Dailey received large amounts
25
of cash shortly after the Wood loan, they could not determine the
26
source. Subsequently, Ballis's attorney, Thomas Royce, told
3

1
investigators that a bribe to Dailey could not be established
2
without Ballis's cooperation and testimony.
3
On July 13, 1988, the government entered an agreement with
4
Ballis, wherein Ballis agreed to give the government complete and
5
truthful information about all participants and events involving
6
the suspect loans and Roy Dailey. In return, Ballis would plead
7
guilty to a criminal information charging only one count of making
8
a false statement to a financial institution in violation of
9
18 U.S.C. � 1014.
10
Pursuant to this agreement, FBI Agents Tim Lauzon and Randy
11
Durney and AUSA Mitchell Lansden interviewed Ballis on July 27 and
12
28. These agents asked Ballis to explain the events surrounding
13
the loan to Archie Wood, including the method, source and total
14
amount of payment to Dailey for making the loan to Wood. During
15
the interviews, Ballis stated that, consistent with the falsified
16
documents Fairchild had furnished to the grand jury, the $300,000
17
payment to Dailey was made by cashing in a $305,000 certificate of
18
deposit. In fact, this certificate had been manufactured after
19
the cash had been shipped to Dailey directly from the $1.8 million
20
excess loan proceeds. Moreover, in this meeting Ballis did not
21
mention his conspiracy with Fairchild to provide false and
22
fictitious documents to the grand jury, or the additional $200,000
23
he had later paid Dailey from the excess loan proceeds.
24
On January 2, 1990, Ballis pled guilty to a criminal
25
information pursuant to his written agreement with the government.
26
The information charged Ballis with submitting a false invoice to
4

1
FSAET to obtain an advance on a construction loan. Judge Lynn
2
Hughes of the Southern District of Texas sentenced Ballis to two
3
years' probation.
4
In April, 1990, agent Durney reviewed the contents of a safe
5
deposit box that had been drilled open by the Federal Deposit
6
Insurance Corporation. He found the original $305,000 certificate
7
of deposit of which Fairchild had provided a copy to the grand
8
jury, and discovered that the certificate was the product of a
9
"cut and tape job." Durney later examined the contents of another
10
safe deposit box that had been drilled open and found microfiche
11
copies of Ballis's bank statements, which also had been provided
12
to the grand jury. He found that the bank statements had been
13
folded over and taped to conceal the certificate of deposit
14
activity on Ballis's accounts.
15
Fairchild became the target of a federal grand jury
16
investigation in August 1990. She subsequently entered into a
17
proffer agreement with the government, and told investigators that
18
Ballis had been untruthful in the debriefings by concealing the
19
additional bribe to Dailey and his ongoing conspiracy with
20
Fairchild to obstruct the federal grand jury investigation and
21
Dailey's trial.
A ten-count indictment issued against Ballis
22
on March 27, 1992, charging him with conspiracy to commit offenses
23
against a savings and loan in violation of 18 U.S.C. �371 (count
24
one); conspiracy to obstruct justice and make false statements to
25
federal agents in violation of 18 U.S.C. �371 (count seven); and
26
aiding and abetting the following offenses: bank fraud in
5

1
violation of 18 U.S.C. � 1344 (count two), bribing a savings and
2
loan officer in violation of 18 U.S.C. � 215 (count three),
3
receiving a benefit in connection with a loan in violation of
4
18 U.S.C. � 1006 (count four), misapplication of the funds of a
5
savings and loan in violation of � 657 (count five), making false
6
entries in the books and records of a savings and loan in
7
violation of 18 U.S.C. � 1006 (count six), obstruction of justice
8
in violation of 18 U.S.C. � 1503 (counts eight and ten), and
9
making a false statement to a federal agent in violation of 18
10
U.S.C. � 1001 (count nine).
11
A jury found Ballis guilty of all ten counts, and the court
12
sentenced him to concurrent terms of five years' imprisonment on
13
counts 1, 2, and 3; concurrent terms of five years' imprisonment
14
on counts 4, 5, and 6, to run consecutively to counts 1 through 3;
15
concurrent terms of 30 months' imprisonment on counts 7, 8, 9, and
16
10, to run consecutively to counts 1 through 6; concurrent terms
17
of three years' supervised release on counts 7 through 10; a
18
$500,000 fine; $4,260,000 in restitution; and a $50 special
19
assessment.
20
II. EVIDENTIARY RULINGS
21
Ballis first challenges various evidentiary rulings made by
22
the trial court, complaining that the court erroneously prevented
23
him from adducing any defense testimony as to the events of July
24
27 and 28, 1988, when Ballis met with federal agents for
25
debriefing in accordance with the terms of his plea agreement.
6

1
The record supports this contention. Because two counts of the
2
indictment specifically charged Ballis with criminal conduct
3
during those meetings, we find that the trial court's exclusion of
4
the defense version of those meetings mandates reversal of Ballis'
5
convictions on those counts.
6
A. THE EXCLUDED EVIDENCE
7
Evidence about the meetings of July 27 and 28, 1988, related
8
only to counts seven and nine of the indictment. Count nine
9
charged Ballis with making a false statement to a federal official
10
on those dates, in violation of 18 U.S.C. � 1001. Count seven
11
charged Ballis with participating in a conspiracy to obstruct
12
justice and to make false statements to federal officials. This
13
count described fifteen overt acts in furtherence of the
14
conspiracy, the eleventh of which was the conduct charged in count
15
nine. In its case-in-chief, the government presented evidence
16
tending to prove that Ballis told the agents at these meetings
17
that he would fully disclose what he knew about illegal activities
18
at the bank, but that instead he purposefully witheld information
19
about certain illegal kick-backs and the subsequent coverup of
20
those transactions.
21
To substantively counter these charges, Ballis needed to
22
present evidence that the events of July 27 and 28 were different
23
from those described by government witnesses; that is, that Ballis
24
either did not speak as accused, or that he had a non-culpatory
25
reason for witholding information. Specifically, Ballis contended
7

1
that any ommisions in his statements at the debriefings resulted
2
from the conduct of his interrogators rather than from a conscious
3
attempt at obfuscation by himself. At trial, however, the court
4
excluded virtually all defense testimony of witnesses to those
5
meetings as to what they actually observed. Rather, before Ballis
6
even began to present his case, the court stated:
7
THE COURT: I am not going to permit [the lawyers]
8
to ... testify about what they heard and what they saw
9
during the course of those meetings. It is not relevant
10
to any proceeding....
11
MR. HAYNES [(defense counsel)]: What I had in
12
mind, Judge, ... was that [Ballis's former attorney] Mr.
13
Royce could speak to the subject matter of the July 27
14
and 28, 1988 debriefing....
15
THE COURT: Mr. Haynes, there will be, as far as I
16
am concerned, little or no hearsay presented through
17
these witnesses.... I'm not going to permit lawyers to
18
come in and talk about what happened behind the scene.
19
MR. HAYNES: I am not going to go behind the scene,
20
Judge. I'm only going to address -- my plan was only to
21
address the meetings where the witness [government
22
agent] Lauzon who had previously testified he --
23
THE COURT: That is hearsay....
24
MR. HAYNES: Yes, but they testified about that
25
meeting. Now I have a chance --
26
THE COURT: But you asked them about those.... It
27
is not relevant what they heard him say or any witness
28
say. That would be hearsay. Now, they can tell us what
29
they said. But that is all they can say is what they
30
said during those meetings.... They can't tell us what
31
they heard him ask. They can't tell us what they heard
32
[agent] Mitch Lansden ask. And they can't tell us what
33
your client ... said in response to those questions.
34
Ballis' former attorney, Royce, then took the stand and began
35
to testify that at some point during the July 27 meeting Agent
36
Lauzon jumped up and banged on the table. This is the only aspect
8

1
of the meeting which the court allowed the defense to describe.
2
To the prosecutor's subsequent objection, the court responded:
3
THE COURT: I sustain it. It is hearsay.
4
MR. HAYNES: What he says he saw him do?
5
THE COURT: What he did is also hearsay.
6
MR. HAYNES: The Court will not then let this
7
witness say what he saw another witness do?
8
THE COURT: No, sir. That is right.
9
Later, counsel nonetheless attempted to again refer to the
10
substance of the July 27th meeting:
11
Q: What happened? What happened that you saw? Not
12
going into any conversation. What happened as you saw?
13
MR. BRADDOCK: Your Honor, I object at this time
14
based on the Court's prior ruling that this would be
15
hearsay.
16
THE COURT: I sustain it.
17
Although the Court then permitted Royce to recount his own
18
statements during the meeting, any context of these statements was
19
barred:
20
Q: Well, was Mr. Ballis doing or saying anything at the
21
time that was the reason for your saying stop cutting us
22
off?
23
MR. BRADDOCK: Your Honor, I object. It would be
24
improper for this witness to give that answer.
25
THE COURT: I sustain it.
26
...
27
MR. HAYNES: The question asking if he saw anything
28
that was the basis for his remark is [an] improper
29
question, Your Honor?
30
THE COURT: Yes, sir. It is hearsay.
31
When Ballis himself took the stand, it became apparent that
9

1
the court had simply overlooked counts seven and nine in making
2
these rulings:
3
MR. HAYNES: In don't want to go into the
4
debriefing but I want to show, Judge, what he told the
5
agents on the 27th.
6
THE COURT: It is irrelevant.
7
MR. HAYNES: What he told the agents?
8
THE COURT: It is not an issue in this case.
9
As with Royce, the trial court did initially allow Ballis to
10
testify as to what he himself said at the debriefings, but would
11
allow no testimony as to what anyone else did or did not say, or
12
how they said it. Even with respect to Ballis' own statements,
13
however, the court soon stopped taking evidence, on the grounds
14
that Ballis had already testified generally that his statements to
15
the agents conformed with his other testimony on the substantive
16
fraud charges. Defense counsel pointed out that Ballis needed to
17
testify as to the exact things that he told the agents "because
18
that is the exact place where the indictment accuses Mr. Ballis of
19
telling an untruth to the federal agents." The court responded:
20
We've heard Mr. Ballis' testimony as to what happened
21
[with the loans]. Now you are asking him to bolster his
22
testimony by asking him specific questions [about what
23
he told the agents]. Well, if he hasn't told them
24
anything different than what his testimony is here, then
25
... you don't need to ask him specifically, well, did
26
you tell them this and what did you tell them regarding
27
this because he has already told them when you asked him
28
originally, what is your testimony about what happened
29
.... And anything that Mr. Ballis says now is simply
bolstering....2
30
2 Ballis also complains of the exclusion of other testimony
relevant to these false statement charges. Given this Court's
disposition of this issue below, we need not reach the propriety
10

or reviewability of these rulings.
11

1
B. ANALYSIS
2
All of this excluded testimony was highly relevant to the
3
crimes charged, as the parties' words and actions at the
4
debriefings formed the entire basis for count nine of the
5
indictment, as well as for overt act 11 of count seven. Moreover,
6
the testimony would have been neither hearsay nor "bolstering."
7
Hearsay is generally any out-of-court statement which is offered
8
to prove the truth of the matter asserted. Fed. R. Evid. 801(c)
9
(emphasis added). Therefore, nothing that the federal agents did
10
at the debriefings could have been hearsay, as no party suggests
11
that their actions were offered as truthful assertions, and
12
nothing they said at these meetings would have been hearsay
13
testimony from Ballis or Royce, because these witnesses only
14
wanted to show the effect of those statements, not the truth of
15
those statements. Likewise, any testimony by Royce or Ballis as
16
to what Ballis said at the meetings would not be hearsay because
17
they were not offered for the truth of the statements: the trial
18
court allowed extensive testimony as to the truth of the
19
underlying transactions being discussed. Rather, the statements
20
were offered simply to prove that they were made and that, as
21
made, they were not criminal as expressly charged in the
22
indictment. Clearly, where the content of discussions which
23
actually occurred is a primary issue, a party is entitled to
24
adduce evidence of those discussions at trial. NLRB v. J.P.
25
Stevens & Co., 538 F.2d 1152, 1162 (5th Cir. 1976).
26
Moreover, Ballis' testimony as to his prior statements would
12

1
certainly not have been "bolstering." "Bolstering" is the use of
2
evidence of prior occurrences of truthfulness by an unimpeached
3
witness to show that the witness is generally believable. United
4
States v. Fusco, 748 F.2d 996, 998 (5th Cir. 1984). The term does
5
not refer to a defendant's version of prior statements which are
6
now charged as having been false. Neither would the testimony
7
have been cumulative. Ballis was charged both with committing
8
fraud and with later lying about it, and he should have been
9
permitted to testify as to both charges.
10
The lack of merit in the government's trial objections can be
11
easily grasped by considering the application of such rules
12
against the government itself. If all testimony about statements
13
at the meeting had been inadmissable hearsay, the government would
14
never have been able to prove that Ballis had made any false
15
statements at all. In fact, on appeal the government appears to
16
have conceded that these rulings were erroneous, in that its brief
17
studiously avoids defending their propriety.
18
Instead, the government counters that Ballis' complaints are
19
"unfounded" because both Royce and Ballis3 testified "extensively"
20
concerning their version of what happened at the debriefings, were
21
given "wide latitude" to present Ballis' story, "and were only
22
limited from testifying about what third parties said." As noted
23
above, however, this statement is a gross misrepresentation of the
24
record and applicable law. This Court has located only two
3 The government makes the same claim about one Moen, but
does not reference the location in the record of any such
testimony.
13

1
questions in Ballis' direct testimony concerning the debriefing to
2
which a substantive defensive answer was permitted, and the
3
government met the follow-up question to each of these with a
4
sustained objection. Otherwise, Ballis was only able to present a
5
limited defense by way of explanation while on cross-examination.
6
As to the government's contention that defense witnesses were
7
"only" limited from testifying about what third parties did or
8
said at these meetings, it should be clear that -- against a
9
charge of failing to reveal material information at those meetings
10
-- evidence of the words and actions of the meetings' protaganists
11
would have been uniquely relevant and admissable.
12
The government also contends that this Court should not even
13
consider any error in the trial court's rulings because Ballis
14
made no proffer of the excluded evidence as required by Rule
15
103(a) of the Federal Rules of Evidence. This Rule provides that
16
error may not be predicated upon a ruling which excludes evidence
17
unless a substantial right of the party is affected, and "the
18
substance of the evidence was made known to the court by offer or
19
was apparent from the context within which questions were asked."
20
This Circuit "will not even consider the propriety of the decision
21
to exclude the evidence at issue, if no offer of proof was made at
22
trial." United States v. Winkle, 587 F.2d 705, 710 (5th Cir.),
23
cert. denied, 444 U.S. 827 (1979).
24
At trial, Ballis made no formal offer of specific excluded
25
evidence. However, neither the Rules nor this Circuit require a
26
formal offer to preserve error. Id. Rather, Rule 103(a)(2) only
14

1
requires that the proponent of excluded evidence show in some
2
fashion the substance of his proposed testimony, and Rule 103(b)
3
leaves the form of offer within the discretion of the trial court.
4
Admittedly, this framework renders the requirements of proffer
5
less than definite, as the adequacy of a given informal proffer
6
will necessarily depend upon its particular circumstances. See,
7
e.g, McQuaig v. McCoy, 806 F.2d 1298, 1302 n.3 (5th Cir.
8
1987)("[O]ur holding [finding proffer sufficient] is limited to
9
the facts of this case."). Generally, however, excluded evidence
10
is sufficiently preserved for review when the trial court has been
11
informed as to what counsel intends to show by the evidence and
12
why it should be admitted, and this court has a record upon which
13
we may adequately examine the propriety and harmfulness of the
14
ruling. See id. at 1301-02 (relying on these factors to determine
15
that error had been preserved).
16
As the above-quoted transcript excerpts demonstrate, the
17
trial court was well-informed as to the substance of the evidence
18
it excluded. It is apparent both from the colloquies with the
19
trial judge and "from the context within which questions were
20
asked" that Ballis wished to offer testimony that the statements
21
he made to the agents were substantively different from those
22
recalled by the agents at trial, and that the actions of the
23
agents themselves prevented his disclosure of the additional
24
material information of which he was convicted of withholding.
25
Moreover, when arguing against the exclusion of evidence,
26
"the degree of precision with which counsel is required to argue
15

1
must be judged ... in accordance with the leeway the court affords
2
him in advancing his argument." Cf. Beech Aircraft Corp. v.
3
Rainey, 488 U.S. 153, 174-75 & n. 22 (1988). At the bench
4
conference in which the trial court initially excluded Ballis'
5
evidence, defense counsel alerted the trial court that the
6
evidence it would be excluding concerned Ballis' version of the
7
debriefings. By itself, such a general description of the
8
excluded evidence would not preserve error. See Winkle, 587 F.2d
9
at 710 (counsel's statement that defendant's excluded testimony
10
would concern "his version" of conversations is inadequate
11
proffer). In this case, however, the trial court had admonished
12
counsel earlier in the same conference that:
13
I've tried the Dailey case. I've tried the Motion to
14
Dismiss and now I've heard the government's case in this
15
case. There is no mystery here as to what all of us
16
understand. We have all heard all of this at least
17
three times.... I don't need you to spoon feed me,
18
counsel. I've heard this twice. If you have an
19
objection, make it and I will rule on your objection.
20
But you don't need to spoon feed me on every conceivable
21
thought that you have. I probably may be equal to or
22
ahead of you in some of this in what I've heard from the
23
other trial.
24
Apparently out of deference to this warning, Ballis "proffered"
25
the entire record of the motion to dismiss hearing (rather than
26
specifically listing the parts of that testimony which he would
27
like to present) both after Royce's testimony and at the close of
28
evidence. At that hearing, Royce and Ballis had testified that at
29
the debriefings the government's agents had never asked about the
30
information Ballis had allegedly witheld, that they had made it
31
clear from their words and actions that they did not wish to hear
16

1
about transactions other than those which they had asked about,
2
and that they misunderstood the statements which Ballis had in
3
fact made.
4
Ordinarily, of course, such a global proffer of mass prior
5
testimony would not be sufficient to preserve error. In this
6
case, however, where the trial judge expressed an intimate
7
familiarity with the testimony offered and in fact accepted the
8
offer as a sufficient proffer, we hold that the defendant
9
fulfilled the purpose of Rule 103(a) in apprising the trial court
10
of the substance of the evidence being rejected and giving the
11
court sufficient information for it to decide that exclusion would
12
be erroneous and unfair. See McQuaig, 806 F.2d at 1301-02
13
(finding error preserved where no proffer made at trial, but
14
detailed discussion of the substance of the rejected testimony
15
took place at pre-trial conference, where trial court accepted
16
offering party's objection to exclusion); Collins v. Wayne Corp.,
17
621 F.2d 777, 781 (5th Cir. 1980)(finding error preserved on
18
exclusion of deposition testimony, despite failure to offer
19
deposition at trial, where substance of deposition had been made
known to the district court during motion in limine hearing).4
20
4 The government also seems to contend that no error
occurred because Ballis did not attempt to ellicit the excluded
testimony from other witnesses. Similarly, the government
objects to Ballis' pointing out in his reply brief, for the first
time, additional instances of the court's rejecting evidence that
the agents "cut him off" in the debriefings. However, "[i]f the
trial judge refuses to hear one witness and an offer is made, the
proponent need not call all of the other witnesses who would
testify to the same fact. Like the objector, he is entitled to
rely on the ruling of the court." 21 Charles A. Wright & Arthur
R. Miller, Federal Practice & Procedure � 5040 (1977).
17

1
Finally, the government contends that the trial court did not
2
abuse its broad discretion in excluding evidence based on
3
relevance or materiality, or that any error in these rulings was
4
harmless. However, here we are faced with a trial court's
5
exclusion of almost all of a defendant's evidence as to his
6
version of the events surrounding one of his alleged criminal
7
acts. This exclusion effectively precluded the presentation of
8
any defense to one substantive count of the indictment and one
9
alleged "overt act" of a conspiracy count. The proffered evidence
10
would have been highly relevant and clearly admissible.
11
Therefore, the trial court had no discretion to refuse it, and the
12
exclusion was presumptively harmful. Accordingly, the convictions
13
on counts seven and nine of the indictment cannot stand.
14
III. SEVERANCE
15
Ballis next contends that the district court erroneously
16
denied his motion to sever counts one through six of the
17
indictment, charging bank fraud and conspiracy to defraud, from
18
counts seven through ten, charging conspiracy to obstruct justice,
19
obstruction of justice, and making false statements. Ballis does
20
not deny that this joinder was appropriate under Fed. R. Crim. P.
21
8(a) because the counts were similar, based on the same act or
22
transaction, or based on two or more acts or transactions
23
connected together or constituting parts of a common scheme or
24
plan. See United States v. Chagra, 754 F.2d 1186, 1188 (5th
25
Cir.), cert. denied, 474 U.S. 922 (1985); United States v. Davis,
18

1
752 F.2d 963, 972 (5th Cir. 1985). Rather, he contends that
2
joinder unduly prejudiced him by forcing him to choose between
3
exercising his right to testify as to the obstruction counts or
4
exercising his Fifth Amendment privilege to not testify as to the
5
substantive counts.
6
A district court may sever offenses properly joined under
7
Rule 8 if it appears that the defendant may be prejudiced by the
8
joinder. Fed. R. Crim. P. 14. In making this decision, the trial
9
judge must balance the prejudice to the defendant against the
10
interests of judicial economy. United States v. Forrest, 623 F.2d
11
1107, 1115 (5th Cir.), cert. denied, 449 U.S. 924 (1980). The
12
court's ruling on whether there is sufficient prejudice from the
13
joinder of offenses to require a severance is reviewed for abuse
14
of discretion, and will not be reversed without a showing of
15
specific and compelling prejudice which results in an unfair
16
trial. Chagra, 754 F.2d at 1186. "The burden of demonstrating
17
prejudice is a difficult one, and the ruling of the trial judge
18
will rarely be disturbed on review.... The defendant must show
19
something more than the fact that a separate trial might offer him
20
a better chance of aquittal." United States v. Park, 531 F.2d
21
754, 762 (5th Cir. 1976)(citations omitted).
22
Moreover, "[s]everance is not mandatory simply because a
23
defendant indicates that he wishes to testify on some counts but
24
not on others. Rather, `[s]everance for this reason, as for any
25
other, remains in the sound discretion of the trial court.'"
26
Alvarez v. Wainwright, 607 F.2d 683, 685 (5th Cir. 1979)(quoting
19

1
United States v. Williamson, 482 F.2d 508 (5th Cir. 1973); see
2
also Davis, 752 F.2d at 972; Forrest, 623 F.2d at 1115.
3
"Consequently, a defendant seeking severance of charges because he
4
wishes to testify as to some counts but not as to others has the
5
burden of demonstrating `that he has both important testimony to
6
give concerning one count and a strong need to refrain from
7
testifying on the other.'" Davis, 752 F.2d at 972 (quoting
8
Forrest, 623 F.2d at 1115).
9
On appeal, Ballis claims that joinder here prejudiced him
10
because he could only prove his defense of actual innocence to the
11
obstruction charges by presenting evidence that, contrary to the
12
government's position, he had in fact fully confessed to the
13
government investigators his guilt on the fraud and conspiracy
14
counts. Therefore, he argues, joinder deprived him of his
15
perceived rights to remain silent as to the fraud counts in one
16
trial while exercising his right to present evidence in his own
17
defense on the obstruction counts in a separate trial.
18
At trial, however, Ballis did not point out this dilemma with
19
sufficient specificity for the trial court to have abused its
20
discretion in denying the motion. On the day trial began, Ballis
21
still indicated indecision as to whether he would testify even in
22
a severed trial, and did not indicate what his testimony would be
23
in any event. As we have oft-stated, this is simply not a
24
sufficient showing of prejudice:
25
In making such a showing, it is essential that the
26
defendant present enough information -- regarding the
27
nature of the testimony he wishes to give on one count
28
and his reason for not wishing to testify on the other -
20

1
- to satisfy the court that the claim of prejudice is
2
genuine and to enable it intelligently to weigh the
3
considerations of "economy and expedition in judicial
4
administration" against the defendant's interest in
5
having a free choice with respect to testifying.
6
Park, 531 F.2d at 763 (quoting Baker v. United States, 401 F.2d
7
958, 977 (D.C. Cir. 1968))(upholding refusal to sever in deference
8
to defendant's desire to testify only on one count where,
9
immediately before trial, defendant had not decided whether to
10
testify); United States v. Outler, 659 F.2d 1306, 1313 (5th Cir.
11
1981)(affirming refusal to sever where defendant "made no
12
explanation as to why it was important for him to remain silent as
13
to [some] charges, other than express his desire to do so."),
14
cert. denied, 455 U.S. 950 (1982); Forrest, 623 F.2d at 1115
15
("Appellant's bare allegation that he wanted to testify with
16
respect to one count but not with respect to the other gave the
17
trial judge no factual basis on which to evaluate possible
18
prejudice.").
19
Moreover, we cannot find that the district court abused its
20
discretion in denying severance of the charges because Ballis has
21
not shown that he suffered a specific and compelling prejudice as
22
a result of the joinder. No prejudice inures to the defendant
23
where a severance of counts would not result in a segregation of
24
evidence. United States v. Winn, 948 F.2d 145, 161 (5th Cir.
25
1991), cert. denied, 112 S.Ct. 1599 (1992); United States v.
26
Scott, 659 F.2d 585, 589 (5th Cir. 1981), cert. denied, 459 U.S.
27
854 (1982); Park, 531 F.2d at 763. Here, even if Ballis had been
28
tried separately on the bank fraud counts, evidence of the
21

1
obstruction of justice offenses would have been probative evidence
2
of consciousness of guilt and admissible against the defendant
3
whether he testified or not. Davis, 752 F.2d at 972. Similarly,
4
evidence of the bank fraud offenses would have been probative of
5
Ballis's motive to obstruct the government's investigation and to
6
make false statements to federal authorities. Thus, this evidence
7
would have been admissible in a separate trial under Fed. R. Evid.
8
404(b). Furthermore, Ballis points to no authority suggesting
9
that, even if the counts had been severed, the government could
10
not have tried him on the obstruction counts first. If he had
11
testified in that trial, admitting his guilt to the fraud counts,
12
these admissions would have been admissible against him in the
13
subsequent fraud trial whether he took the stand or not. See Fed.
14
R. Evid. 804(b)(1) & (3). Therefore, the claim of real prejudice
15
is speculative at best, and we cannot find that the trial court
16
abused its discretion in denying severance.
17
IV. BREACH OF THE PLEA AGREEMENT
18
Ballis argues that rescission of the plea agreement was not
19
an available remedy to the government because (1) the government
20
bargained away the remedy of rescission, (2) the government waived
21
the right to rescind the plea agreement by failing to promptly
22
rescind, (3) the government ratified the plea agreement by
23
retaining the benefit of the plea bargain, (4) the doctrine of
24
"unclean hands" barred the government's equitable remedy of
25
rescission, and (5) the enforceability of the agreement should
22

1
have been decided by the judge who accepted the plea, rather than
2
by the subsequent trial judge. We find none of these positions
3
persuasive.
4
Prior to trial, Judge Hoyt held an evidentiary hearing to
5
determine whether Ballis had breached his plea agreement with the
6
government. In this agreement, Ballis had promised to provide
7
"full and truthful" information concerning involvement of himself
8
and others in the defrauding of FSAET. Following the hearing, the
9
district court found that Ballis, in violation of his agreed-upon
10
duties, had withheld important information about these activities
11
from the government and otherwise gave untruthful testimony.
12
Moreover, the court found that Ballis had never intended to abide
13
by the plea agreement and therefore had induced the agreement by
14
fraud. Accordingly, the court ruled that the agreement had been
15
void ab initio.
16
A district court's findings as to whether a defendant has
17
breached a plea agreement will be overturned only if clearly
18
erroneous. United States v. Gerant, 995 F.2d 505, 508 (4th Cir.
19
1993); United States v. Tilley, 964 F.2d 66, 71 (1st Cir. 1992);
20
United States v. Wood, 780 F.2d 929, 932 (11th Cir.), cert.
21
denied, 479 U.S. 824 (1986). Any credibility decisions are
22
reserved to the district court's discretion and will not be
23
disturbed on appeal. Gerant, 995 at 508. Appropriately,
24
therefore, Ballis does not contest the court's finding that he
25
materially breached or fraudulently induced the plea agreement.
26
He claims only that the remedy of rescission was inappropriate in
23

1
this case.
2
Plea bargain agreements are contractual in nature, and are to
3
be construed accordingly. United States v. Fulbright, 804 F.2d
4
847, 852 (5th Cir. 1986). Under the principles of contract law, a
5
party may avoid the obligations of an agreement gained by
6
misrepresentation or fraud. United States v. Texarkana Trawlers,
7
846 F.2d 297, 304 (5th Cir.), cert. denied, 488 U.S. 943 (1988).
8
Moreover, if a defendant materially breaches his commitments under
9
a plea agreement, the government is released from its obligations
10
under that compact and may bring a new indictment on previously
11
dismissed charges, regardless of what it may have promised
12
earlier. Tilley, 964 F.2d at 71; United States v. Britt, 917 F.2d
13
353 (8th Cir. 1990), cert. denied, 498 U.S. 1090 (1991); United
14
States v. Gonzalez-Sanchez, 825 F.2d 572, 578 (1st Cir.) ("[T]he
15
failure of the defendant to fulfill his promise to cooperate and
16
testify fully and honestly releases the government from the plea
17
agreement."), cert. denied, 484 U.S. 989 (1987); United States v.
18
Reardon, 787 F.2d 512, 516 (10th Cir. 1986)(same).
19
Nonetheless, Ballis contends that the government could not
20
rescind the plea agreement because it bargained away that right
21
during the plea negotiations. According to Ballis, the
22
government's sole remedy for a failure to give complete and
23
truthful information would be to prosecute him for perjury, and
24
not to seek rescission. He also argues that since the written
25
letter agreement was silent or ambiguous on the remedies
26
available, the district court erred in refusing to hear extrinsic
24

1
evidence concerning the intent of the parties in this regard, such
2
as similar agreements which specifically permitted the remedy of
3
rescission.
4
Even if the contract were ambiguous, however, and Ballis
5
could prove that the government had "bargained away" the
6
rescission remedy, he would not be entitled to relief. Having
7
induced the plea agreement by fraud, Ballis may not attempt to
8
enforce any part of the agreement.
9
Moreover, even were the agreement enforceable, Ballis'
10
obligations under it were not ambiguous. The letter clearly
11
stated that its terms were conditioned on Ballis' giving complete
12
and truthful information about the loans at FSAET, and clearly
13
states that it reflects the entire agreement of the parties.
14
There is nothing in the agreement suggesting that the government
15
waived its right to prosecute Ballis for the underlying offenses
16
and any other offenses the government discovered if he failed to
17
perform as promised. It certainly does not imply that the
18
government had agreed that prosecuting Ballis for perjury was its
19
exclusive remedy for a breach of the agreement. Although
20
circumstances surrounding the agreement's negotiations might
21
indicate that such was Ballis' intent, parol evidence is
22
inadmissible to prove the meaning of an unambiguous plea
23
agreement. United States v. Ingram, 979 F.2d 1179, 1184 (7th Cir.
24
1992). The lack of comprehensive provisions specifying remedies
25
in the case of breach does not render the agreement ambiguous;
26
contracts typically presume compliance, and the remedies for
25

1
breach are commonly supplied simply by reference to the applicable
2
law of contracts.
3
For this same reason, there is also no merit to Ballis'
4
contention that he suffered any prejudice from the trial court's
5
refusal to transfer the motion to dismiss to the judge who
6
presided over the original plea. Judge Hoyt correctly interpreted
7
the agreement, and another judge's supposed knowledge of the
8
agreement could not have properly rendered a different result.
9
Ballis also alleges that the government waived the right to
10
rescind the plea agreement by failing to promptly rescind the
11
agreement after learning of his breach. He argues that even if
12
the agreement was induced by his fraud, it was merely voidable
13
rather than void, and the government was required to either
14
rescind or affirm within a reasonable time. Ballis points out
15
that AUSA Lansden admitted learning of the breach in Spring, 1990
16
(two years before the government rescinded the agreement by
17
indicting him), and that FBI Special Agent Norman Townsend had
18
discovered Fairchild's "cut and paste job" in the safe deposit box
19
in 1989. Therefore, Ballis reasons, the government had notice of
20
his breach even before he pled guilty, and waived its right to
21
rescind the plea agreement by failing to do so promptly when it
22
became aware of this breach. Moreover, he argues that the
23
government ratified the agreement because it retained the benefits
24
of the plea agreement after it learned of the breach, in that
25
Ballis pled guilty, served two years probation, and provided the
26
government with information.
26

1
However, Ballis has provided no evidence establishing that
2
the government knew of his involvement with Fairchild's cover-up
3
either prior to his plea or an unreasonable length of time before
4
bringing the indictment in this case. See Britt, 917 F.2d at 360
5
(refusing to find waiver). Nor did the government ever indicate
6
to Ballis that it would ratify the plea agreement after
7
discovering the breach. Furthermore, Ballis' contention that the
8
government received the benefit of the plea bargain is specious.
9
The government received only untruthful and misleading information
10
in exchange for the agreement, while Ballis received a light
11
sentence of only two years' probation.
12
Finally, Ballis contends that the government should not have
13
been permitted the equitable remedy of rescission because it
14
entered the agreement with "unclean hands." Ballis bases this
15
argument on evidence that the AUSAs who proffered the agreement
16
intended to "trick" Ballis into not fulfilling his end of the
17
bargain. The trial judge rejected this conclusion, however, and
18
we cannot say that this finding was clearly erroneous.
19
VI. CONCLUSION
20
Having fraudulently induced his original plea agreement,
21
Ballis is not entitled to enforcement of that agreement in order
22
to avoid prosecution on the charges here. Ballis also did not
23
demonstrate prejudice from the joinder of counts in this case
24
sufficient that we may say the trial judge abused his discretion
25
in refusing to grant a severance. We are persuaded, however, that
27

1
the trial court erroneously excluded Ballis' defense to the
2
charges in counts seven and nine of the indictment and,
3
accordingly, these convictions are REVERSED and REMANDED for
4
further proceedings, as may be appropriate. In all other
5
respects, however, we AFFIRM.
28

MEMORANDUM
To:
Judge King
Judge Smith
From:
Judge Kent
Date:
July 7, 1994
Re:
United States v. Ballis, No. 93-2145
Please find attached for your consideration a proposed
opinion.
Sincerely,