United States v. Cohen ( 2002 )

Opinions of the United
2002 Decisions States Court of Appeals
for the Third Circuit
8-22-2002
USA v. Cohen
Precedential or Non-Precedential: Precedential
Docket No. 01-3111
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PRECEDENTIAL
Filed August 22, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 01-3111, 01-3318
UNITED STATES OF AMERICA,
Cross-Appellant in 01-3318
v.
MICHAEL S. COHEN,
Appellant in 01-3111
ON APPEAL FROM THE
UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF PENNSYLVANIA
(Dist. Court No. 00-cr-00715-1)
District Court Judge: Honorable Berle M. Schiller
Argued June 24, 2002
Before: BECKER, Chief Judge, and ALITO and
AMBRO, Circuit Judges.
(Filed: August 22, 2002)
Lynanne B. Wescott (Argued)
Saul Ewing LLP
Centre Square West
1500 Market Street - 38th Floor
Philadelphia, PA 19102
Counsel for Appellant in 01-3111
Counsel for Cross-Appellee in
01-3318
Patrick L. Meehan
United States Attorney
Laurie Magid
Deputy United States Attorney for
Policy and Appeals
Robert A. Zauzmer
Assistant United States Attorney
Senior Appellate Counsel
Amy L. Kurland (Argued)
Assistant United States Attorney
Suite 1250
615 Chestnut Street
Philadelphia, PA 19106
Counsel for Appellee in 01-3111
Counsel for Cross-Appellant in
01-3318
OPINION OF THE COURT
ALITO, Circuit Judge:
This is an appeal and cross-appeal from a judgment in a
criminal case. The defendant, former Secret Service Agent
Michael Cohen, was indicted on charges stemming from his
theft of $2,800 taken in seizures. A jury found Cohen guilty
of one count of obstruction of justice, one count of making
false statements, one count of witness tampering, and two
counts of theft. After the trial, the District Court dismissed
the witness tampering count on the ground that the court
had incorrectly instructed the jury regarding that charge.
In this appeal, Cohen challenges the sufficiency of the
evidence on the obstruction of justice count and also raises
numerous sentencing issues. The government cross-
appeals, contending that the District Court should not have
dismissed the witness tampering count but instead should
have granted a new trial. We agree with Cohen that the
evidence is insufficient to sustain the obstruction charge,
and we agree with the government that the error in the jury
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instructions on witness tampering should have resulted in
a new trial rather than outright dismissal of the count. We
therefore reverse these portions of the judgment and
remand for the entry of a judgment of acquittal on the
obstruction of justice charge and for a new trial on the
witness tampering count. In light of our disposition of these
charges, we do not reach the sentencing issues at this time.
I.
Michael Cohen was hired by the United States Secret
Service in August 1987. App. at 62. While with the Secret
Service, he received numerous commendations and was
"very well-thought of." Id. at 125. In 1999, Cohen was
promoted to the position of Assistant to the Special Agent
in Charge and was transferred from Kansas City to
Philadelphia in order to supervise the Philadelphia office’s
fraud squad. Id. at 16. Shortly after his transfer, Cohen
stole money seized during the course of two Secret Service
investigations. He resigned his position in March 2000. Id.
at 77.
A.
Cohen’s first theft involved cash seized in the case of
United States v. Ayubi, 01-CR-10-ALL (D.N.J.). The record
in that case reveals that on December 8, 1999, a criminal
complaint was filed charging Mohammad Tariq Ayubi with
one count of bank fraud, in violation of 18 U.S.C.SS 1344
and 2, and that a warrant for Ayubi’s arrest was issued. On
that same day, Cohen assisted another Secret Service
Agent, Dean Vernon, with the arrest of Ayubi and the
seizure of numerous items found in Ayubi’s residence. App.
at 27. Vernon was in charge of the case, but the
assignment was his "very first case as an agent coming out
of training." Id. at 27.
The agents transferred the seized items to the field office
in Philadelphia to be sorted and inventoried in accordance
with prescribed Secret Service procedure. During a review
of the seized evidence, Vernon discovered an envelope
containing "what appeared to be a thousand dollars of
genuine United States currency." App. at 30. Vernon
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"immediately picked [his] phone up and . . . paged Mr.
Cohen on the intercom to call [him] at [his] extension." Id.
at 31. Cohen came down to the squad, praised the agents
for finding the money, and asked Vernon to see him in his
office so that they could "take care of the money." Id. at 32-
33. According to Vernon’s testimony, when he arrived at
Cohen’s office, Cohen instructed: "[J]ust don’t worry about
it, I’ll hold on to the money for now, when it’s time to, you
know, inventory the money, we’ll take care of it . .. ." Id.
at 34. Vernon further testified that Cohen "jokingly said"
that "maybe when the case is over with, . . . . you might be
able to keep the money and split it . . . . Christmas was
coming . . . [and] it would be nice to have . . . the money
at the end of the holiday. . . ." Id. at 34. Later, Cohen called
Vernon to his office, and Cohen pulled out the envelope
with the money. Vernon testified that Cohen asked him to
"hold on to half of the money" and said that"if anybody
says anything to you about the money . . . you’ve got half
and I’ve got half." Id. at 36. Vernon testified he "held onto
the envelop[e]," "went back to his office, sat down at [his]
desk," "opened the envelop[e] up,"looked inside and there
was four hundred dollars still in the envelop[e]." Id. at 37.
Shortly before the Christmas holiday, Cohen again called
Vernon to his office. During this meeting, Cohen suggested
that they donate the money to charity, and Vernon
returned the $400. Id. at 38. After the agents came back
from the Christmas holiday, Cohen again gave Vernon $200
and suggested that he deposit it into his travel account, an
account that each agent maintains for official travel
expenses. Vernon initially kept the money in his desk
drawer but later became concerned that it might be stolen
and therefore deposited it into his travel account. In early
March, Vernon reported to his supervisor what he and
Cohen had done. Investigating agents instructed Vernon to
inventory the remaining money "on a personal property
form, not a 1544 [form]," even though Vernon informed the
agents that the money had been seized during the
investigation of the Ayubi case. Id. at 55-56.
B.
Cohen’s second theft involved the case of Iman Idress. On
January 13, 2000, as part of a large-scale counterfeiting
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investigation, Secret Service agents executed search
warrants at Idress’s residence and storage locker. App. at 7.
Richard Kavanaugh, who had begun working for the Secret
Service in September 1998, was the case agent, and this
was his first major case. Id. at 3. In executing the warrants,
agents seized two carloads of items, including a fire box. Id.
at 9. After these items had been taken to Philadelphia,
agents opened the firebox and found "hundreds of
thousands of dollars of counterfeit money orders, all sorts
of checkbooks and IDs and about $3,000 in cash." Id. at
11. The agents called Cohen, and he kept the money in his
desk over the weekend. Cohen called Kavanaugh on
Monday to congratulate him on the success of the search,
and Kavanaugh mentioned that another agent had told him
that approximately $3,100 had been found in a lockbox.
Cohen testified that he informed Kavanaugh "that’s not
what I counted because I counted the money also . . . . I
think there was approximately $1,200 in there." Id. at 73.
According to Kavanaugh, when he mentioned starting asset
forfeiture paperwork for the currency, Cohen told him to
"hold off on that for a little bit" and added:"[W]e’ll hold
onto [the money] and if [Idress] doesn’t say anything about
it, we’ll split it up amongst the team." Supp. App. at 13.
Kavanaugh questioned Cohen about the propriety of
splitting the money, but Cohen informed him that"[w]e did
it all the time in Kansas City." Id. at 14.
When Kavanaugh returned to the office on Tuesday, he
informed Cohen that he wanted to complete the "legal asset
forfeiture" paperwork, in accordance with Secret Service
procedure. Id. at 17. Cohen agreed, but told him that he
would do "the asset forfeiture for the $1,159 that was
seized." Id. at 17. Kavanaugh testified that he did not
question Cohen about the discrepancy between the amount
that the other agents had told him was found in the firebox
and the amount that Cohen proposed to inventory because
he "was afraid to" mention the difference; however, he
discussed his belief that Cohen skimmed $1,800 from the
seized $3,000 with other members of his squad. Id. at 18-
19.
Cohen inventoried $1,173 on an appropriate Form 1544,
but he signed the "evidence inventoried by" line rather than
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the "reviewing supervisor" line.1 Because Cohen was a
supervisor, he was "supposed to sign under ‘Reviewing
Supervisor.’ " Id. at 24-25. As a result of this error, the form
was returned to Kavanaugh to fill out properly. Kavanaugh
inventoried the $1,173 on a second Form 1544, which he
signed as if he had inventoried the evidence. Cohen signed
the form as the supervising agent.
After Kavanaugh filed the second Form 1544, he spoke
with an Assistant United States Attorney in connection with
the Idress case, and Kavanaugh informed the Assistant that
the agents had seized $1,159 during the search. App. 27.
Kavanaugh then prepared another search warrant and
supporting affidavit in the Idress case. In the affidavit,
which he swore to before a judicial officer, he stated that
$1,159 had been seized during the search. Id.
On February 29, 2000, Cohen was called into the office
of Assistant Special Agent in Charge Spurlock and told that
internal affairs inspectors were in Philadelphia to speak to
some of the agents on the squad. Spurlock informed Cohen
that Kavanaugh would be on administrative leave until
further notice. Cohen inquired about the reason for the
leave, and Spurlock replied that there were allegations that
money had been stolen from a case. Cohen immediately
confessed to skimming $1,800 from money seized during
the Idress investigation in order to spare the junior agents
from an internal affairs investigation.
Cohen was subsequently indicted on two counts of theft
(one concerning the Ayubi case and one concerning the
Idress case), in violation of 18 U.S.C. S 654; two counts of
obstruction of justice (again, one concerning the Ayubi case
and one concerning the Idress case), in violation of 18
U.S.C. S 1503; one count of making false statements on the
Form 1544, in violation of 18 U.S.C. S 1001; and one count
of witness tampering, in violation of 18 U.S.C.S 1512, for
his role in the events that culminated in Kavanaugh’s
swearing falsely before a judicial officer in applying for the
_________________________________________________________________
1. Cohen informed Kavanaugh that $1,159 had been seized; however,
Cohen stated on the Form 1544 that agents had seized $1,173 in
genuine currency. Kavanaugh informed the United States Attorney and
testified in court that agents seized $1,159.
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later Idress search warrant. Cohen was tried before a jury.
At the close of the government’s case, the District Court
granted Cohen’s motion for judgment of acquittal on the
obstruction charge related to the Idress case, finding
insufficient evidence of a pending judicial proceeding at the
time of Cohen’s actions. The jury subsequently found
Cohen guilty on all of the remaining charges. At sentencing,
the District Court dismissed the witness tampering count
after the parties agreed the District Court had given
incorrect jury instructions on that count.
The District Court sentenced Cohen to 33 months of
incarceration, a $6,000 fine, and three years of supervised
release. The Court determined that Cohen’s offense had
resulted in substantial interference with justice under
U.S.S.G. S 2J1.2(b)(2) and that Cohen had exercised a
leadership position under U.S.S.G. S 3B1.1(c) and had
abused a position of trust under U.S.S.G. S 3B1.3.
Cohen took this timely appeal. He argues, first, that there
was insufficient evidence to support the Ayubi obstruction
of justice count and, second, that the District Court
committed a variety of errors in sentencing. The
government cross-appeals, contending that the District
Court erred in dismissing the witness tampering count
instead of granting a new trial on that count.
II.
Cohen contends that his obstruction of justice conviction
is not supported by sufficient evidence. He argues that
there was no pending judicial proceeding at the time of his
theft. He also contends that the government failed to prove
that the stolen currency was evidence of a crime and thus
failed to prove that, by stealing this money, he endeavored
to obstruct justice. In reviewing the sufficiency of the
evidence to support a criminal conviction, we must of
course consider the evidence in the light most favorable to
the verdict and ask whether a reasonable jury could have
found that the contested elements were proven beyond a
reasonable doubt. See United States v. Davis, 183 F.3d 231,
238 (3d Cir. 1999); United States v. Pungitore , 910 F.2d
1084, 1129 (3d Cir. 1990). Under this standard, the
evidence here is insufficient.
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Title 18 of the United States Code, section 1503 provides
that "[w]hoever corruptly obstructs or impedes or endeavors
to obstruct or impedes the due administration of justice,
shall be guilty of an offense against the United States." We
have interpreted the phrase "due administration of justice"
to refer to a judicial proceeding and not "an investigation
simpliciter." Davis, 183 F.3d at 239. Consequently, the
pendency of a judicial proceeding is "a necessary
prerequisite for a conviction for violation" of the statute.
United States v. Nelson, 852 F.2d 706, 709 (3d Cir. 1988)
(citing United States v. Simmons, 591 F.2d 206, 208 n.2 (3d
Cir. 1979)). In order for a conviction to stand under 18
U.S.C. S 1503, "a defendant must have notice or knowledge
of the pendency of some judicial proceeding constituting
the ‘administration of justice.’ " Davis, 183 F.3d at 239(quoting Nelson, 852 F.2d at 710).
In the present case, Cohen argues that the prosecution
merely established that Ayubi had been arrested when
Cohen stole the money found in the envelope, that"there
was no testimony that there was any judicial involvement
at all in the arrest," and that accordingly there was
insufficient proof that a judicial proceeding within the
meaning of our precedents was pending. Appellant’s Br. at
11. In response, the government states the following:
Vernon testified that Cohen assisted him in arresting
the defendant after he had obtained a warrant (App.
27a). To obtain a warrant it is necessary to apply to the
court and present a criminal complaint. Fed. R. Crim.
P. 3, 4(a). Thus, a judicial proceeding had been
initiated.
Appellee’s Br. at 24-25.
We hold that the government did not introduce sufficient
evidence for a rational jury to find that Cohen
misappropriated the money with the intent to obstruct the
Ayubi investigation, and therefore do not need to determine
whether the Ayubi investigation constituted a pending
judicial proceeding within the meaning of 18 U.S.C.S 1503.
In order to support Cohen’s conviction for endeavoring to
obstruct justice,2 the evidence must show, not only that a
_________________________________________________________________
2. The government stipulated at trial that Cohen did not in fact obstruct
that case.
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judicial proceeding was pending and that Cohen had
"knowledge or notice of the pending proceeding," but also
that he "act[ed] corruptly with the intent of influencing,
obstructing, or impeding the proceeding" and that his
actions "had the ‘natural and probable effect’ of interfering
with the due administration of justice." In re Grand Jury
Proceeding Impounded, 241 F.3d 308, 317 n.8 (3d Cir.
2001) (citation omitted). The government failed to prove
these latter elements.
The government has not pointed to a shred of evidence
showing that the money that was found in the envelope and
that Cohen misappropriated had any connection
whatsoever to any charges that were investigated or
considered in the Ayubi matter. Nor has the government
pointed to any evidence showing that Cohen had any
knowledge of any such connection. Indeed, the government
has pointed to virtually no evidence in the record regarding
the nature of the Ayubi investigation or prosecution. Only
by examining the Ayubi docket sheets ourselves have we
been able to learn the charges against Ayubi (bank fraud,
in violation of 18 U.S.C. S 1544) and the disposition of
those charges (he pled guilty to an information). 3 While it is
certainly possible that the cash that Cohen stole might
have had some bearing on those charges or on the
investigation, the government has not called any such
evidence to our attention.
As far as the government’s brief discloses, the record of
the present case simply shows that the money in question
was found in an envelope that was seized from Ayubi’s
residence, and this is insufficient to show that
misappropriation of the money constituted an attempt to
obstruct the due administration of justice in the Ayubi
case. The government does not point to any evidence in the
record of this case as to why the envelope was seized. The
record of the case does not reveal that a search warrant
was issued -- and, in fact, it appears from the docket
sheets in the Ayubi case that there was no such warrant.
_________________________________________________________________
3. The one-count information charged that Ayubi had defrauded and
attempted to defraud several banks by depositing counterfeit checks into
accounts and then withdrawing and attempting to withdraw those funds.
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Nor does the record of the present case show that the
agents who seized the cash thought at the time of seizure
that the cash had potential investigative or evidentiary
value; on the contrary, it appears that the presence of the
cash in the envelope was not even discovered until the
seized items were taken back to Philadelphia and
examined. A great volume of items, including a vehicle,
computers, and "boxes and boxes" of items, were seized
from Ayubi’s residence. Id. at 28. For all that the record
shows of the present case, the envelope with the cash was
simply something that the agents happened to take
inadvertently. Thus, all that the record seems to show is
that the cash was in an envelope that was seized--
properly or not -- from Ayubi’s residence at the time of his
arrest.
In order to sustain the charge of endeavoring to obstruct
justice, the government was required to prove much more.
The government was required to prove, beyond a reasonable
doubt, that the defendant had the intent of "influencing,
obstructing, or impeding the proceeding" and that his
actions "had the ‘natural and probable effect’ " of doing so.
In re Grand Jury Proceeding Impounded, 241 F.3d at 317
n.8. The government failed to meet that burden.
Accordingly, we must reverse the conviction on the
remaining obstruction of justice count and remand for
entry of a judgment of acquittal on that count.
III.
The government contends in its cross-appeal that the
District Court erred when it dismissed the witness
tampering charge rather than ordering a new trial on that
charge. In dismissing that count, the Court stated:
The witness tampering charge should never have been
made the way it was done; it was error for me to
charge [the jury] on 1512(b)(2) as well as (b)(1). And
because I think there was confusion in the jury’s mind
on that, I’m dismissing the conviction on [the witness
tampering count]. . . . I do not think it serves
anybody’s purpose to order an entire new trial when
there was error committed.
10
Appendix at 157.
The usual remedy for an error in a jury instruction is
retrial, and the District Court did not provide any
justification for its decision to dismiss that count. Nor has
the defendant provided any plausible justification in his
appellate brief. We surmise that the District Court
dismissed the witness tampering count because a
conviction on that charge would not have affected Cohen’s
term of imprisonment. That was not a legally correct reason
for dismissal, even if it seemed at the time to make
practical sense. Under Fed. R. Crim. P. 29, a judgment of
acquittal may be entered only if "the evidence is insufficient
to sustain a conviction of such offense or offenses." The
District Court made no such finding, and therefore the
appropriate remedy was to order a new trial. See Fed. R. of
Crim. P. 33. Moreover, in light of our reversal of the
defendant’s conviction for obstruction, it is no longer true
that the outcome of a trial on the witness tampering charge
would not affect the defendant’s sentence. We reverse the
order dismissing the witness tampering count and remand
for a new trial on that charge if the government elects to go
forward.
Although the defendant raised several issues regarding
the calculation of his sentence, we do not reach those
issues at this time. Several of the issues related to the
guideline for the obstruction count, as to which we have
reversed. In addition, because there may be a retrial on the
witness tampering charge, the factors that may ultimately
come into play in calculating the defendant’s sentence
cannot be addressed at this time.
IV.
For these reasons, the judgment of the District Court is
reversed in part and the case is remanded for further
proceedings in accordance with this opinion.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
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