United States v. Aristotle Matsa , 540 F. App'x 520 ( 2013 )

NOT RECOMMENDED FOR PUBLICATION
File Name: 13a0920n.06
No. 12-4353
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
United States of America, ) Oct 25, 2013
) DEBORAH S. HUNT, Clerk
Plaintiff-Appellee, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
Aristotle R. Matsa, ) SOUTHERN DISTRICT OF OHIO
)
Defendant-Appellant. )
)
)
Before: MERRITT, GIBBONS, and McKEAGUE, Circuit Judges.
MERRITT, Circuit Judge. A jury found Aristotle “Rick” Matsa guilty of various charges
for concealing his assets from taxing authorities and obstructing an investigation of the concealment.
Matsa now challenges his conviction on three grounds: 1) the district court’s decision to remove his
counsel of choice violated his Sixth Amendment rights; 2) the prosecution engaged in systematic
misconduct that deprived him of due process; and 3) the authorities obtained an invalid search
warrant by failing to inform the magistrate about their confidential informant. For the following
reasons, the judgment of the district court is affirmed.
I. Background
Matsa was a licensed real-estate broker and lawyer in Ohio. He routinely reported losses or
minimal income from his businesses, such that from 1985 to 2006 he paid a total of $107 in federal
income tax. His legal troubles began when Chrissoula Matsa, his wife at the time with whom he was
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United States v. Matsa
undergoing divorce proceedings, tipped off law enforcement to his shady dealings. A subsequent
investigation by the federal grand jury revealed a number of dubious practices, including the use of
phony trusts to mask personal assets, the failure to report rental income, and the transfer of property
(though not actual control) to friends and relatives. During the investigation, Matsa failed to comply
fully with the government’s subpoena of his records. Based on this conduct, the grand jury indicted
Matsa for one count of corrupt interference with administration of the internal revenue laws, 26
U.S.C. § 7212(a); fifteen counts of assisting preparation of false tax returns, 26 U.S.C. § 7206(2);
one count of failing to report a foreign bank account, 31 U.S.C. §§ 5314, 5322(b); one count of
conspiracy to obstruct justice, 18 U.S.C. § 371; two counts of witness tampering, 18 U.S.C. §
1512(b); one count of making a false statement, 18 U.S.C. § 1001; and one count of obstruction of
justice, 18 U.S.C. § 1503(a). The grand jury also indicted Matsa’s mother for conspiracy to obstruct
justice and tried them together. A jury found Matsa guilty on all counts after a five-week trial, and
the court sentenced him to a term of 85 months’ imprisonment. This appeal followed.
II. Removal of Counsel
The removal of Matsa’s counsel, Thomas Tyack, concerns the obstruction counts. As part
of the grand jury investigation, the government subpoenaed Matsa for records connected to his
various law offices, businesses, and trusts. Matsa responded through Tyack, who wrote a letter to
the prosecutor stating that Matsa did not control most of the requested documents. However, a later
search of Matsa’s home and office pursuant to a warrant revealed documents covered by the
subpoena. The obstruction charges were based in part on Matsa’s response to the subpoena through
Tyack.
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The government moved for Tyack’s removal as counsel, arguing that his role in sending the
letter would make him a necessary witness at trial. The district court conducted two hearings on the
question and ordered two rounds of briefing. During the course of these proceedings, a compromise
was suggested whereby Matsa would stipulate to the contents of the letter without naming Tyack
and would also stipulate to waive any sort of defense claiming reliance on Tyack’s advice. By the
first stipulation, it was intended that the jury would not learn of Tyack’s role in sending the letter
and thereby draw conclusions about his trial performance. The second stipulation was intended to
remove the possibility that the government would call Tyack to rebut Matsa’s claim that he
responded to the subpoena solely based on Tyack’s advice. However, Matsa refused to accept the
stipulations on the ground that they were too broad, and no further compromise was reached that
might have narrowed the wording.
The district court granted the government’s motion and removed Tyack as counsel (though
neither the court nor the prosecutor accused Tyack of wrongdoing). It held that Matsa was likely
to raise an advice-of-counsel defense and that Tyack was therefore likely to be called as a witness
at trial. The court found that disqualification would not cause Matsa substantial hardship because
Tyack could help substitute counsel and because trial had been continued. Citing Second Circuit
precedent, the court alternatively held that Tyack would be acting as an “unsworn witness” because
he might present his first-hand knowledge of the facts without allowing the government an
opportunity for cross-examination.
The Sixth Amendment’s right to counsel of choice is not absolute. There is a presumption
that non-indigent criminal defendants will have counsel of choice, but that presumption may be
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overcome by a showing of “serious potential” that counsel’s continued representation will create
a conflict of interest. United States v. Wheat, 486 U.S. 153, 164 (1988). A district court has broad
discretion to remove counsel for a potential conflict, even if the defendant wishes to waive the
conflict. The Sixth Circuit applies a deferential standard of review to a district court’s judgment that
removal is required. Such a judgment will be reversed only if “arbitrary” or “without adequate
reasons.” United States v. Swafford, 512 F.3d 833, 839 (6th Cir. 2008) (quoting United States v.
Mays, 69 F.3d 116, 121 (6th Cir. 1995)).
Considering the facts of this case, the district court’s decision to remove Tyack was not
arbitrary. Tyack was closely involved in the alleged obstruction through his response to the
government’s subpoena. Had the issue been limited to the question of whether the contents of the
letter were true—that is, whether Matsa was in fact the custodian of the records requested in the
subpoena—then the government might have established its case without having to call Tyack to the
stand. But Matsa’s express refusal to waive an advice-of-counsel defense raised a realistic
possibility that Matsa would attempt to shift blame to Tyack rather than defend the truth of the
statements in the letter. Because Matsa and Tyack were the only two people privy to the
circumstances surrounding the response to the subpoena, the government was likely to require
Tyack’s testimony. As the district court correctly recognized, a “lawyer shall not act as advocate
at a trial in which the lawyer is likely to be a necessary witness unless . . . disqualification of the
lawyer would work substantial hardship on the client.” ABA Model Rules of Prof’l Conduct
3.7(a)(3). It was not arbitrary for the district court to conclude that substitution of counsel would
not work significant hardship, even though Tyack had represented Matsa for a number of years and
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was very familiar with his affairs. Tyack would be available to Matsa’s new counsel, and plenty of
time remained before trial.
Matsa’s arguments to the contrary are not persuasive. He cites a number of district court
opinions to argue that the court in this case might have adopted alternatives to disqualification.
However, it was within the district court’s discretion to choose disqualification given the facts.
Matsa also claims that the government pursued removal in bad faith and that the district court failed
to consider that possibility. This argument reflects the requirement that a court consider whether
the government has sought “to ‘manufacture’ a conflict in order to prevent a defendant from having
particularly able defense counsel at his side.” Wheat, 486 U.S. at 163. Though the court did not
find, in so many words, that the government pursued removal in good faith, this omission is not fatal
to its ruling. The record gives no reason to believe that the government “manufactured” the conflict
that led to Tyack’s removal or that, as Matsa puts it in his brief, the motion to remove was “purely
tactical.”
Indeed, Matsa makes no colorable allegation that the government appended the obstruction
charges to the indictment simply to get Tyack off the case. His primary complaint, rather, is that the
government’s proposed stipulations were too broad to have been pursued in good faith—in
particular, that they would have forced Matsa to waive the advice-of-counsel defense as to all counts
in the indictment. But if an advice-of-counsel defense would have required Tyack’s testimony, there
would have been a conflict regardless of whether the defense was raised against the obstruction
charges or against some other count.
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In sum, our review of the record and of the facts of this case shows that the district court did
not abuse its discretion by removing Tyack as counsel.1
III. Prosecutorial Misconduct
Matsa claims a potpourri of prosecutorial bad acts that he believes require reversal of his
conviction. The disputed conduct occurred both prior to and during trial. Additionally, Matsa
claims the cumulative effect of the prosecution’s conduct warrants reversal.
A. Pretrial Conduct
Matsa identifies four categories of pretrial prosecutorial misbehavior: 1) intimidation of
witnesses before the grand jury; 2) obstruction of Matsa’s pre-deposition access to a witness who
was the named beneficiary of one of Matsa’s trusts; 3) threats toward defense counsel; and 4)
violation of attorney-client privilege.2 Matsa raised these arguments in various motions to dismiss
the indictment, which the district court denied. A federal court’s authority to dismiss an indictment
stems from its supervisory powers. See United States v. Williams, 504 U.S. 36, 46 (1992). Refusal
to dismiss an indictment is reviewed for abuse of discretion. United States v. Lee, 359 F.3d 412, 417
(6th Cir. 2004).3
1
Because we hold that the particular facts of the case justified the district court’s conclusion that Tyack was
likely to testify, we decline to address the district court’s broader, alternative rationale that Tyack was an “unsworn
witness.” Cf. United States v. Locascio, 6 F.3d 924, 933–34 (2d Cir. 1993).
2
Matsa also argued before the district court that the prosecutor acted improperly by threatening to indict his
mother if he did not plead guilty—a threat that came to fruition. Though Matsa mentions this incident in the facts section
of his brief, he does not develop any sort of argument about why it requires reversal of his conviction. We therefore do
not consider whether the prosecutor acted improperly by threatening to indict Matsa’s mother. See Treesh v. Bagley,
612 F.3d 424, 434 (6th Cir. 2010).
3
Matsa argues that the district court should have assessed pretrial misconduct by using the test articulated in
United States v. Deitz, 577 F.3d 672 (6th Cir. 2009). However, Deitz applies to claims of misconduct at trial. When
alleged misconduct occurs prior to trial, the question of whether to dismiss the indictment is left to the district court’s
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1. Witness intimidation. Matsa claims the prosecutor acted improperly by accusing several
witnesses of lying in their testimony to the grand jury. For example, in questioning one witness
before the grand jury, the prosecutor said, “Now you lied to us within ten minutes today.” Matsa
also alleges that, during the grand jury proceedings, the prosecutor told another witness in the
hallway that he planned to “throw swords” and that the witness might not wish to fall on a sword
for Matsa.
Though Matsa claims these actions deprived him of due process by forcing witnesses to
conform their testimony to the prosecutor’s will, the facts alleged do not state a due process
violation. An individual has no constitutional right to present witnesses at a grand jury proceeding,
see Williams, 504 U.S. at 51–52, and Matsa did not renew his objection at trial. Rather, Matsa’s
claim must be analyzed under the standard established in Bank of Nova Scotia v. United States, 487
U.S. 250 (1988). Under this standard, an indictment should be dismissed for prosecutorial
misconduct before the grand jury only “‘if it is established that the violation substantially influenced
the grand jury’s decision to indict,’ or if there is ‘grave doubt’ that the decision to indict was free
from the substantial influence of such violations.” Id. at 256 (quoting United States v. Mechanik,
475 U.S. 66, 78 (1986)).
Assuming that the prosecutor’s comments were indeed improper, the district court did not
abuse its discretion by finding a lack of prejudice. As the parties agree, the comments at issue were
made before a predecessor grand jury—not the grand jury that ultimately returned the indictment.
discretion.
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Therefore, any violation did not “substantially influence[] the grand jury to indict.” Bank of Nova
Scotia, 487 U.S. at 256.4
2. Obstruction of access to a witness. Matsa alleges that the government denied him a fair
trial by blocking access to a witness prior to the witness’s deposition. However, Matsa does not
adequately explain the circumstances of the alleged obstruction, and the government disputes it
altogether. Even if the government in fact blocked access to the witness, Matsa still was able to
question the witness at the deposition itself. Matsa does not explain how a defendant is denied a fair
trial when he actually had an opportunity to question a witness. The district court did not abuse its
discretion by refusing to dismiss the indictment on this ground.
3. Threats toward defense counsel. Matsa complains of several aggressive statements the
prosecutor made to his attorneys prior to trial. For example, the prosecutor threatened to report
Tyack to the Ohio Bar Association and told another attorney that “your client better watch out and
you better watch out too.” The attorneys testified at a motion hearing that these statements were
“chilling” and caused them to proceed with “great caution” in discovery. The district court found
that the comments were improper but did not prejudice Matsa such as to require dismissal of the
indictment. This was not an abuse of discretion. Matsa points to case law condemning personal
4
Though it has no bearing on whether the district court’s pretrial ruling was correct, several of the witnesses
in question testified for the government at Matsa’s trial and admitted they lied to the grand jury. Matsa suggests that
the witnesses’ change of heart might have stemmed from coercion in the grand jury proceedings. However, Matsa did
not claim below that the government deprived him of trial witnesses, and the issue on appeal is limited to whether the
district court erred by refusing to dismiss the indictment in its pretrial ruling. Matsa did submit a motion for new trial
in which he incorporated his pretrial misconduct motion and claimed cumulative prejudicial effect. This argument is
addressed in Part III.C below.
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attacks on defense counsel during trial, but the statements in question did not occur before the jury
at trial. Matsa received—and continues to receive—vigorous representation.
4. Attorney-client privilege. A search of Matsa’s home and office yielded some 300,000
documents and recordings, many of which involved Matsa in his capacity as an attorney. Matsa
moved to suppress privileged material discovered in the search and to dismiss the indictment
because privileged material was used to obtain it. The district court held that, even if it was
otherwise privileged, the material in question fell within the crime-fraud exception to the privilege
because it contained conversations in which Matsa attempted to obstruct the investigation and
tamper with witnesses. See United States v. Zolin, 491 U.S. 554, 562–63 (1989) (discussing crime-
fraud exception). The court therefore refused to dismiss the indictment. On appeal, Matsa simply
repeats his claim that the government used privileged material and specifies no legal or factual error
in the district court’s holding. Accordingly, refusal to dismiss the indictment or bar use of the
records in question was not an abuse of discretion.
B. Conduct at Trial
Matsa claims two categories of misconduct at trial: 1) that the prosecutor improperly
expressed his personal beliefs through comments and facial expressions and 2) that the prosecutor’s
questioning of witness Ross Gillespie improperly solicited Gillespie’s commentary on Matsa’s
truthfulness. We review this claim de novo. United States v. Deitz, 577 F.3d 672, 694 (6th Cir.
2009). In determining whether reversal for prosecutorial misconduct is warranted, the key question
is whether the prosecutor acted both improperly and flagrantly so, which in turn requires assessing
the misleading nature, extent, and deliberateness of the conduct alongside the overall strength of the
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government’s case. Id. Flagrant misconduct requires reversal, but non-flagrant violations do not
unless the government’s case was weak and the court failed to cure the violation. Id.
1. Commentary and facial expressions. Matsa points to two specific episodes of improper
commentary. In the first, the prosecutor grunted, snickered, and shook his head while questioning
a witness. In a sidebar conference, the trial judge admonished the prosecutor to be careful. Matsa
does not claim that this sort of conduct pervaded the proceedings, and isolated incidents during a
five-week trial do not require reversal. United States v. Collins, 78 F.3d 1021, 1039 (6th Cir. 1996).
The second episode regards the prosecutor’s cross-examination of Matsa. During
questioning, the prosecutor suggested on multiple occasions that Matsa was “blaming” others for
his conduct. Viewed as a whole, the prosecutor’s questioning, while charged, was not flagrantly
improper. The suggestion that Matsa was blaming others was not geared to mislead but rather to
attack Matsa’s direct testimony, a proper function of cross-examination. Matsa had an opportunity
to respond—and did respond—to the notion that he was shifting responsibility. Moreover, the judge
provided a cure by striking one comment from the record. Argumentative questioning of this nature
is not the sort of commentary that has required reversal in the past. Cf. United States v. Carter, 236
F.3d 777 (6th Cir. 2001) (requiring new trial where prosecutor’s closing argument mischaracterized
evidence and accused defense counsel of lying). The prosecutor’s style of cross-examination may
not have been ideal, but it did not render the trial so unfair as to create reversible error.
2. Questioning of Ross Gillespie. Gillespie was a former Matsa employee who testified
for the government. During direct examination, the prosecutor played portions of tapes in which
Matsa discussed his firm’s handling of a particular trust and Gillespie’s role as an employee at the
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firm. The prosecutor then elicited Gillespie’s testimony that statements in the recordings were not
truthful. Matsa argues that this questioning was improper because “credibility determinations are
meant for the jury, not witnesses.” United States v. Dickens, 438 F. App’x 364, 370 (6th Cir. 2011).
There is indeed a body of case law establishing that one witness should not be asked directly
whether another witness is lying—particularly where a prosecutor seeks to pit a testifying defendant
against a law enforcement officer’s inculpatory testimony. See id. at 369–70. However, the
questioning at issue here did not approach the line drawn by that case law. The prosecutor did not
ask Gillespie to comment on the veracity of Matsa’s trial testimony. Rather, he questioned Gillespie
about practices of Matsa’s firm based on Gillespie’s personal knowledge. If Gillespie’s testimony
punctured Matsa’s credibility, that is because the charges put Matsa’s honesty at issue. There was
nothing improper about this line of questioning.
C. Cumulative Effect
Matsa claims the cumulative effect of the behavior discussed above requires reversal. He
raised this claim in a motion for a new trial, which the district court rejected. When a defendant
raises a claim of cumulative prosecutorial misconduct, a new trial will not be granted unless the
defendant can show “that the combined effect of individually harmless errors was so prejudicial as
to render his trial fundamentally unfair.” United States v. Trujillo, 376 F.3d 593, 614 (6th Cir.
2004). Matsa cannot satisfy this standard. Matsa has identified some possible isolated improprieties
in the prosecutor’s conduct at trial, but this conduct was not so pervasive as to require a new trial.
Moreover, Matsa’s argument that the prosecutor’s pretrial conduct rendered the entire five-week
trial unfair is unconvincing. The district court did not err by refusing to grant a new trial.
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IV. Suppression of Evidence
Acting pursuant to a search warrant, law enforcement agents removed about sixty boxes of
documents from Matsa’s home and office. Matsa moved to suppress this evidence for lack of
probable cause to support the warrant and moved also for a hearing under Franks v. Delaware, 438
U.S. 154 (1978). The request for a Franks hearing was based on the claim that the warrant
application contained false and misleading information from a confidential source whose identity
was not revealed to the magistrate. This source turned out to be Matsa’s wife at the time. The
district court took some testimony but ultimately declined to hold a complete Franks hearing and
rejected the motion to suppress.
Though Matsa cites Franks in his brief, he does not claim the district court erred by refusing
to hold a Franks hearing. Rather, he argues that “this Court should find that the totality of the
circumstances do not support a finding of probable cause” because the agent who submitted the
warrant application knew Matsa’s wife was unreliable yet failed to corroborate her information.
Therefore, the only question before us is whether the warrant application established probable cause.
Cf. United States v. Thomas, 605 F.3d 300, 307 (6th Cir. 2010).
When this court reviews a denial of a motion to suppress, it reviews the district court’s
conclusions of law de novo and its findings of fact for clear error. United States v. Brown, 715 F.3d
985, 989 (6th Cir. 2013). However, a magistrate’s probable cause determination will only be
reversed if the magistrate’s decision to issue the warrant was arbitrary. Id. There is probable cause
to issue a warrant when there is a fair probability, given the totality of the circumstances, that
evidence of a crime will be found in the place to be searched. Id.
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When a warrant affiant depends on a confidential informant who is not known to be reliable,
the affiant should corroborate the informant’s story. See Thomas, 605 F.3d at 307. Matsa argues
that the affiant here failed in this duty, but the district court made a factual finding to the contrary.
There is no apparent error in this finding. Though Matsa mines discrepancies between the
informant’s story and the affiant’s corroboration, this smacks of the sort of “hypertechnical” analysis
of probable cause that this court has clearly rejected. See, e.g., United States v. Woosley, 361 F.3d
924, 926 (6th Cir. 2004).
More importantly, review of the warrant application as a whole reveals that there was ample
cause to issue the warrant. The informant’s information amounted to two pages of a thirty-six page
application, which also relied on the affiant’s personal surveillance, documentary evidence, and
interviews with other named Matsa associates, including one who admitted lying to the grand jury
at Matsa’s behest. The magistrate’s decision to issue the warrant was not arbitrary and the district
court did not err by refusing to suppress the evidence.
V. Conclusion
The district court did not improperly remove Matsa’s attorney, because that attorney was
likely to become a witness at trial. Moreover, the prosecutor’s conduct does not warrant reversal
and Matsa’s suppression argument is meritless. Accordingly, the judgment of the district court is
affirmed.
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