United States v. Paradies

United States Court of Appeals,
Eleventh Circuit.
No. 94-8485.
UNITED STATES of America, Plaintiff-Appellee,
v.
Daniel M. PARADIES, The Paradies Shops, Inc., Paradies Midfield
Corporation, Ira Jackson, Defendants-Appellants.
Sept. 23, 1996.
Appeals from the United States District Court for the Northern
District of Georgia. (No. 1:93-cr-310), Anthony A. Alaimo, Judge.
Before TJOFLAT, Chief Judge, COX, Circuit Judge, and WELLFORD*,
Senior Circuit Judge.
WELLFORD, Senior Circuit Judge:
Defendants Ira Jackson,1 Daniel Paradies, The Paradies Shops,
2
Inc., and Paradies Midfield Corp., were convicted pursuant to a
133 count indictment charging them with various offenses arising
out of the operation of the concessions at the Atlanta Hartsfield
International Airport. The bulk of the charges involved mail fraud
*
Honorable Harry W. Wellford, Senior U.S. Circuit Judge for
the Sixth Circuit Court of Appeals, sitting by designation.
1
Ira Jackson was the first black person elected to the
Atlanta City Council and served from 1970 to 1990. In the
1960's, Jackson opened several retail stores, including grocery
stores, auto parts stores, and tire dealerships, but went
bankrupt in 1978 and 1979. As councilman, he developed close
ties with the Atlanta political power structure, especially with
airport operations and with the law firm utilized by the mayor.
2
Daniel Paradies, the individual, will be referred to herein
as "D. Paradies." The Paradies Shops will be referred to as
"Shops," and Paradies Midfield will be referred to as "Midfield."
D. Paradies, Shops, and Midfield, collectively, will generally be
referred to as "the Paradies defendants." The Paradies companies
and D. Paradies filed separate briefs, and each have adopted the
others' arguments by reference. Therefore, unless specifically
stated otherwise, we deem the arguments raised by one to be made
by and to inure to the benefit of the others.
(18 U.S.C. §§ 1341, 1346, and 2), conspiring to make corrupt
payments to public officials (18 U.S.C. §§ 371, 666), and tax fraud
(26 U.S.C. § 7206). The defendants challenge their convictions and
their sentences on several grounds which were imposed after a
lengthy jury trial.
Two fraudulent schemes were involved in the indictment. In
the first, the government alleged that Jackson and D. Paradies, the
largest subconcessionaire at the Atlanta airport, conspired to
profit from Jackson's influence as an Atlanta City Council member
and as the Commissioner of Aviation. According to the government's
theory, Jackson used his political position to reduce the rent of
the concessionaires, including the Paradies defendants, by very
substantial amounts. In return Jackson, who allegedly owned an
interest in the Paradies businesses, reaped benefits through
payments from D. Paradies, which purported to be fees and
dividends. In the second alleged scheme, which was much less
complicated, D. Paradies and another subconcessionaire, Harold
Echols, regularly gave cash to Jackson and other City Council
members for favorable votes in matters before the Council in which
the Paradies defendants (and other concession operators) had an
interest.
The particular circumstances surrounding the fraudulent
schemes were fervently disputed at trial. The facts set out below
are those which the jury might reasonably have found from the
evidence properly admitted at trial.
I. STATEMENT OF THE CASE
A. The Airport Concessions Program
The City of Atlanta owns and controls the Atlanta airport.
From its opening in 1980, Dobbs Paschal Midfield Corp. ("Dobbs")
was the principal concessionaire, managing all the airport
concessions under contract with the City. Dobbs contracted with
various subconcessionaires, including the Paradies defendants, to
provide food, merchandise, and services. The subconcessionaires
paid rent to Dobbs based on the greater of a percentage of sales or
a guaranteed minimum. In turn, Dobbs agreed to pay the city a
percentage of sales or a guaranteed minimum of $240 million over
the first 15 years of operation. Dobbs' agreement with the City
required that at least twenty percent of the total dollar volume of
the concessions program be produced or controlled by minority
controlled enterprises. That contractual provision provided the
defendants an incentive to work out their schemes.3
D. Paradies was president and principal shareholder of Shops,
a major gift shop chain at airports across the country. D.
Paradies was also president of Midfield, a company which contracted
to operate exclusively the gift shops in the airport in 1979.
Shops owned sixty-five percent of Midfield's stock, and the other
thirty-five percent was owned by minority controlled businesses in
4
accordance with the minority participation requirement. That
3
Wilbourn, a McDonalds franchisee, was greatly enriched by
these and other private affirmative action and set-aside programs
in becoming involved as an MBE participant in several Atlanta
operations and with D. Paradies in airport operations across the
country. Although intended to benefit a segment of Atlanta's
population the set-aside, unfortunately, resulted in pollution of
the political process insofar as the lucrative airport concession
business was concerned.
4
Dobbs required a thirty-five percent minority interest in
Midfield for reasons unexplained.
thirty-five percent was comprised of three corporations that were
wholly owned by black persons, Mack Wilbourn,5 Nathaniel Goldston,
and Joanne McClinton. Wilbourn's business, Kinley Enterprises,
Inc. ("Kinley"), held 18.3% of Midfield stock; Goldston's
business, Airport Enterprises, Inc. ("AEI"), held 13.7%; and
McClinton's business, Estate Management ("Estate"), held 3%. As
was provided for in the shareholder agreements, the minority
members supposedly received a management fee of 1.1% of Midfield's
gross receipts. Midfield also paid Shops a management fee of 9% by
mailing checks on a monthly basis.
B. Jackson's Loan/Purchase from Goldston and Wilbourn
By the spring of 1985, D. Paradies' relationship with the
first minority shareholders group soured. At that point, the
government contends, D. Paradies sought to include defendant
Jackson as a minority participant in Midfield. D. Paradies and
Jackson were close personal friends. In 1980, Paradies and Echols
hosted the wedding reception for Jackson and his bride, Maudestine
"Mimi" Simmons.6
In April of 1985, Paradies wrote a "personal and confidential"
letter to Jackson requesting Jackson's assistance in obtaining
space for additional shops in the airport. If the space was
obtained by October 1, 1985, Paradies stated, the minority
5
Wilbourn was a defendant in this case, but was acquitted at
trial. His role in the fraud will be set out below.
6
Additionally, Mimi and D. Paradies' wife, Billie Paradies,
were close friends. One of the alleged fraudulent "loans" was
put in Mimi's maiden name. When the fraud was uncovered, D.
Paradies claimed that he did not know that Maudestine Simmons and
Mimi Paradies were one and the same person.
shareholders would receive an increase in management fees to 2%.
If the space were not obtained, the fee would remain at 1.1% for
those shareholders. Under the government's theory, D. Paradies'
letter was an invitation to Jackson to capitalize on a near
doubling of the minority participants' management fee increase.
Soon thereafter, Jackson began to negotiate with Goldston to
purchase his interest in Midfield.
Goldston told Jackson that he was experiencing financial
difficulty, and purportedly offered to sell Jackson his stock in
Midfield for $50,000. Jackson made a "loan" to Goldston for
$50,000 through his wife Mimi, operating as Metro Consultants,
Inc.7 The government maintained that the purported loan was, in
fact, a purchase by Jackson of Goldston's interest. Indeed,
Jackson's check to Goldston on his personal checking account
specified: "For Metro Consultants—Purchase Stock." The government
also introduced agreements which purportedly transferred Goldston's
Midfield stock in the name of AEI to Metro Consultants. On October
1, 1985, moreover, Midfield terminated its management agreement
with Goldston and entered into a new comparable agreement with
Jackson's wife. Mrs. Jackson was to render administrative
assistance in return for her portion of the 1.1% management fee.
Also, in order to qualify as a minority business, Metro Consultants
had to be certified as a minority-owned company. Jackson asked the
Atlanta Office of Contract Compliance to expedite the certification
for Metro Consultants because his wife wanted to "buy out" Goldston
7
All the participants in the schemes formed separate
corporate entities to engage in airport operations.
and Wilbourn.
After Jackson had already distributed the "loan proceeds," he
appeared before the City's Board of Ethics for an opinion on the
propriety of his "loan." Jackson told the Board that he had loaned
$50,000 to Goldston, and that his wife wished to purchase
Goldston's and Wilbourn's interests in Midfield. He also stated
that Wilbourn's "asking price" was $275,000. Jackson also
testified that he had discussed the matter with D. Paradies.
Jackson assured the Board that if the transaction were approved, he
would not vote on any airport concessions matters, and that he
wanted to be "up front" with the Board. Noting, among other
things, that subconcessionaires issues came before the Council
frequently, and that Jackson's interest could have at least an
indirect influence on Council decisions, the Ethics Board
disapproved of the proposed purchase. Such an acquisition by
Jackson and his wife, the Board concluded unanimously, would
violate the Code of Ethics and would result in a breach of
Jackson's fiduciary duty to the City.8 According to the Ethics
8
The "Disclosure of Interest" section of the Atlanta Code of
Ethics provides in part:
[A]ny council member ... who has a private
interest, direct or indirect, in any proposed
legislation or any decision pending before such
person or the body of which the person is a member
or employee, shall not vote for or against,
discuss, decide or in any way participate in
considering the matter, but shall publicly
disclose, on the official records of the body, the
nature and extent of such interest, prior to any
determination of the matter.
Section 18-2008 of the Atlanta City Code, entitled
"Investments in Conflict with Official Duties," provides in
part:
director, Jackson told him that he disagreed with the Board's
decision, but that he would "not undertake to do indirectly what
[the] board had told him could not be done directly."
After the Ethics Board's decision, Jackson entered into
another disputed transaction with Wilbourn, who, according to
Jackson, was experiencing financial difficulty.9 Purportedly,
Jackson "loaned" Wilbourn $275,000 (the exact asking price
identified by Jackson in his Ethics Board testimony) from Options
International, Inc. ("Options"), a corporation created in the name
of his son, Ira Jackson, Jr., but controlled by Jackson himself.10
The transaction was to be effected in two installments: $150,000
immediately, and $125,000 payable on May 1, 1987. Wilbourn used
$50,000 of the proceeds to buy Goldston's stock, and transferred
all of his and Goldston's interest in Midfield to Hartsfield
Concessions, Inc. ("Hartsfield"), a company purportedly wholly
owned by Wilbourn. The loan from Options was secured by all the
revenue from Wilbourn's interest in Midfield. The stock in
Midfield, Jackson claims, was never transferred to him as security
[No] ... council member ... shall invest, or hold
any investment directly or indirectly, in any
financial, business, commercial or other private
transaction which creates a conflict with or
adversely affects his official duties to the
detriment of the city.
9
The Paradies Companies maintain that Wilbourn needed the
money to finance another minority enterprise opportunity in the
Atlanta underground.
10
The evidence was overwhelming that Options was a Jackson
alter ego.
for the loan.11
The government argued that this was a sham loan agreement so
that Wilbourn, doing business as Hartsfield, would be the minority
participant in Midfield "on paper" only and that Jackson was the de
facto owner, reaping the full benefits of Wilbourn's interest in
Midfield. There is evidence, together with reasonable inferences,
that supports the government's contention. Jackson admits in his
brief that, upon Wilbourn's counsel's recommendation, Jackson was
given some control over the funds of Hartsfield, and that Jackson
was authorized to accept payments directly from Midfield. Indeed,
evidence showed that Jackson initially went to the Paradies company
offices to pick up the dividend and management checks, which were
made payable to Hartsfield, then later these checks to Hartsfield
were mailed to Jackson directly. The evidence also showed that the
first twenty-three Hartsfield management fee checks were personally
endorsed by Jackson and ultimately deposited into his own personal
bank account.
Between December, 1985, and March of 1992, D. Paradies paid
Jackson, through Hartsfield, fees and dividends, more than
$1,049,000, nearly four times the amount of the original $275,000
"loan." After the minority interests were transferred to
Hartsfield, Wilbourn never received another payment from the
Paradies Companies, and he had no further substantial contact with
Midfield. The government showed that Jackson had complete control
11
D. Paradies states in his brief, however, that Hartsfield
pledged to Option its stock in Midfield, as well as the fees and
dividends. D. Paradies concludes in his brief that "Mr. Jackson
thus came to have a financial interest in Mr. Paradies'
corporation."
over the Hartsfield bank account (making deposits, writing and
signing checks, and making tax returns), despite Jackson's claims
that he never had "control of Hartsfield Concessions, Inc. or
use[d] funds from the corporation for personal loans or payments."
(Jackson's Brief at p. 10.) The proof indicated, however, that
after checks were deposited into the Hartsfield account, Jackson
would immediately transfer the money to his own corporation,
Options, which transacted no business except the receipt of funds
from Hartsfield. Through this "dummy" corporation, Jackson spent
hundreds of thousands on such items as a $350,000 condominium on
Peachtree Road in Atlanta, and another very expensive luxury home
on Hilton Head Island, furnishings for his Atlanta residence,
$100,000 in securities, and a $200,000 investment in a printing
company.
C. D. Paradies' Involvement in the Loan/Purchase Transactions
The Paradies defendants claim that they did not know of
Jackson's interest, and claimed that they were being prosecuted for
making routine business payments to Hartsfield Concessions.
(Paradies Co.'s Brief at pp. 6-7.) The government showed, however,
that when Jackson picked up his check, D. Paradies himself would
occasionally escort Jackson to the pertinent office. Additionally,
D. Paradies' secretary testified that D. Paradies, Jackson, and
others attended a meeting at D. Paradies' office. During the
meeting, she was asked to draw up an agreement wherein Jackson was
named as a minority participant. Later, she was asked to
substitute Wilbourn's name for Jackson's, and to perform the highly
unusual task of destroying the documents that named Ira Jackson.
Perhaps the most damning evidence of D. Paradies' involvement
in this scheme was that which showed that D. Paradies himself
actually helped Jackson fund the $275,000 loan/purchase made
to/from Wilbourn. In April of 1987, the second installment of
$125,000 was due from Jackson to Wilbourn. Around that time, D.
Paradies made a $50,000 loan to Jackson and declared and paid a
$50,000 dividend to Hartsfield Concessions on the same day.
Jackson deposited the $100,000 into the Hartsfield Concessions bank
account and paid off loans that were taken to fund the payment to
Wilbourn. While D. Paradies' brother, Jimmy Paradies, testified at
trial that the loan was made to help out Wilbourn because Wilbourn
was experiencing financial difficulty, Wilbourn testified that he
knew nothing about that loan. D. Paradies and Wilbourn were not
even on speaking terms at the time. Id. Additionally, Jackson
signed a personal guarantee for the repayment of the loan, which
was kept on file at the Paradies offices. Govt. Exhibit 33
(attached to Brief). In July of 1988, D. Paradies paid Hartsfield
Concessions a dividend of $72,000. Jackson deposited the check
and, the very next day, repaid the $50,000 loan to D. Paradies from
the Hartsfield Concessions account.
Evidence also showed that on at least two occasions when
Paradies needed the signatures of the minority participants, D.
Paradies' employee sent the documents to Jackson, instructing him
to obtain the signatures of Goldston or Wilbourn. See Govt.
Exhibits 41, 42. D. Paradies' employee testified that he sent them
to Jackson because at that point "everything was going through
Ira."
D. Jackson's Acquisition of McClinton's 3% Interest Through Help of
D. Paradies
In August, 1988, Hartsfield Concessions purchased McClinton's
interest in Paradies Midfield for $11,000. At trial, McClinton
testified that she was willing to sell because she had made almost
no money from her venture. In fact, D. Paradies had instructed his
employee to withhold McClinton's management fees or dividends
because he "didn't like" McClinton. At the time of the sale,
McClinton had accrued $11,455, of which she had no knowledge.
After Hartsfield Concessions, via Jackson, paid McClinton the
$11,000 purchase price, Midfield (via D. Paradies) paid Hartsfield
Concessions McClinton's $11,455 in back dividends. After the
transfer, the management fees paid to Hartsfield Concessions were
increased to 1.5%.
E. Jackson Uses Political Influence to Help the Paradies Companies
From the early 1980's on, the subconcessionaires were engaged
in efforts to reduce their rent at the airport. Many amendments to
Dobbs' contract with the City were made, reducing the rent that
Dobbs charged the subconcessionaires, and in turn, reducing the
revenues paid to the City from Dobbs. Jackson concealed his
interest in the Paradies Companies, and used his position on the
Council to advance the interests of the subconcessionaires.
In July of 1987, Jackson voted in favor of Amendment Number
Five, which substantially reduced the rent charged to the
subconcessionaires. The government claims that Amendment Five cost
the city about $1 million. D. Paradies received $1.5 million of
the total $2.3 million in rent reduction.
In 1989, Jackson supported another rent-reduction proposal
that came before the board, and it included contract extensions for
the subconcessionaires. Jackson was put on a negotiating team to
represent the City against Dobbs. Some of the members of the team
argued that only the smaller subconcessionaires should receive
further rent reductions. Jackson argued adamantly that the larger
subconcessionaires should also receive reductions. He was
successful, and Amendment Number Six cost the City $7.7 million.
D. Paradies saved over $2.5 million in rent. Interestingly, around
the time Amendment Six was being negotiated, Hartsfield
Concessions' management fees were raised to 2.0%. Richard Dickson,
Paradies' "right hand man," testified that the increase was
financially indefensible.
In October of 1990, the City's Commissioner of Aviation was to
retire. The evidence showed that Jackson approached Mayor Maynard
Jackson and asked to be appointed in the position. The mayor had
heard rumors that Jackson had some kind of interest in an airport
concession, but received assurances from Jackson he owned no such
interest. Jackson was eventually appointed Aviation Commissioner.
Soon after he took his position, Jackson proposed that the
City terminate Dobbs' position as Principal Concessionaire and
allow him, as Commissioner of Aviation, to take over the entire
concessions program. The government claims that the program would
have resulted in over $40 million reduction in revenue to the City.
The proposal encountered substantial opposition, and Jackson became
indignant toward opponents. The government claims that during the
controversy, Paradies and Echols visited the Mayor and the City's
Chief Administrative Officer to "lobby" them to stay close to
Jackson and consider his proposal. (Govt.'s Brief at p. 27.)
Jackson's proposal was put on the Council's agenda, but the CFO
blocked the vote.
F. Jackson's Interest is Discovered
Shortly after the vote was blocked, the City Attorney and
Mayor Jackson confronted Jackson about his interests. Jackson
denied any financial connection with D. Paradies. On March 8,
1992, Jackson resigned his position, stating that "I now find that
a loan which I extended to a sub-concessionaire at the airport some
time ago, and which has long been repaid, has become an issue of
concern."12
Soon thereafter, D. Paradies wrote a letter to Max Walker, the
acting Commissioner of Aviation, stating that he was
surprised and distressed to learn of Mr. Ira Jackson's alleged
interest in and receipt of funds from Hartsfield Concessions,
Inc.... At all times, Paradies Midfield has dealt with
Hartsfield Concessions, Inc. through Mr. Mack Wilbourn, who
represented himself to be the sole owner of Hartsfield
Concessions, Inc.... Paradies is unaware of any alleged
interest of Mr. Jackson in Hartsfield Concessions, Inc.
See Govt. Exhibit 106. The government claims that when the
newspapers learned of the Goldston/Maudestine Simmons transaction,
D. Paradies claimed that he did not know that Maudestine Simmons
was Jackson's wife, even though he had hosted their wedding
reception and "Mimi" was his own wife's close friend.
G. Direct Payoffs to City Council Members
The other scheme involved D. Paradies and his agreement to
make corrupt payments with Echols to Atlanta City Council Members,
12
In fact, Jackson caused papers to be backdated to make it
appear that the "loan" had been paid as the investigation
proceeded.
including Jackson. Echols testified at trial that he and D.
Paradies had been close for 22 years. He testified that he and D.
Paradies had a long-standing agreement that Echols would make
payments to certain council members, and that D. Paradies would
reimburse him.
Echols testified that he made routine payments to Jackson,
Buddy Fowlkes, and less frequent payments to Marvin Arrington,
President of the City Council. Echols explained that between mid-
1980 through 1992 he would meet Jackson for breakfast on Wednesday
mornings at the Castlegate Hotel. Echols always paid for
breakfast, and afterwards would pay Jackson several hundred dollars
folded in a handshake. He had a similar routine with Fowlkes on
Thursday mornings. Further, Echols paid for Fowlkes to fly back
from vacation to vote for Amendment Six. Additionally, Echols paid
for Fowlkes and his family to take a Florida vacation. As for
Arrington, Echols paid him once or twice every two months, usually
at breakfast, depending on what was before the Council. On two
occasions, Echols paid Arrington to appoint Buddy Fowlkes to
Chairman of the Transportation Committee. Echols paid $5,000 on
one occasion, and $6,000 on another.
In 1987 and in 1990, D. Paradies allegedly reimbursed Echols
for the payoffs. In 1987, D. Paradies paid Echols for "consulting
fees" in three payments of $10,000 each. Echols did not do any
counselling for this money. Although consulting agreements were
drawn up, Echols told Ron Wright that the money was not for
consulting, but was for political payoffs.
In 1990, soon after Echols had flown Fowlkes back to vote for
Amendment Six, D. Paradies reimbursed Echols in three payments for
$1,666, $333, and $2,000. That time, no consulting agreements were
drawn up; three "invoices" were sent to account for these
payments.
The evidence also showed that Jackson accepted a $5,000 payoff
from Echols and another subconcessionaire, Dave Gammill. In
December of 1988, Gammill allegedly brought $25,000 in cash to
Echols, who distributed the money to Jackson, Arrington, Fowlkes,
and others.
H. Proceedings Below
On July 9, 1993, a federal grand jury returned a 133-count
indictment charging the defendants with various offenses. Counts
1-83 charged all the defendants with mail fraud (one count for each
check) in violation of 18 U.S.C. §§ 1341, 1346, and 2 based upon
the scheme involving Jackson's interest in Paradies Midfield.
Count 84 charged defendant Wilbourn, who was acquitted, of witness
tampering in violation of 18 U.S.C. § 1512(b)(1). Count 85 charged
D. Paradies with conspiring with Echols to violate 18 U.S.C. § 666by making corrupt payments to public officials in violation of 18
U.S.C. § 371. Counts 86-128 charged Jackson with the receipt of
corrupt payments from Echols in violation of 18 U.S.C. § 666.
Counts 129-133 charged Jackson with subscribing to false income tax
returns underreporting his income in violation of 26 U.S.C. §
7206(1).
At trial, Jackson denied the charges against him, maintaining
that his dealings with Wilbourn, D. Paradies, and others were
neither illegal nor fraudulent. He claimed he acted upon the
advice of his attorney and his accountant. D. Paradies and his
companies claimed that under their concession contracts at the
Atlanta airport under Atlanta ordinances they were required to
enter into minority participation agreements with persons such as
Wilbourn and others in their business enterprises. They denied
knowingly doing anything unethical, illegal, or fraudulent, or
having knowledge of Jackson's allegedly fraudulent activity and
conflicts of interest. D. Paradies and his companies particularly
contended that they only made contractually obligatory payments of
dividends and fees to Jackson and others.
The jury was sequestered, and the case was tried for three
straight weeks, including weekends. After six hours of
deliberations, the jury returned a verdict of guilty for all
defendants on all counts, except for Jackson's acquittal as to
Count 129, and Wilbourn's acquittal. Jackson received 42 months in
prison, a $7,500 fine and a special assessment of $6,500. Paradies
received 33 months in prison, a $7,500 fine and a special
assessment of $4,200. The Paradies Shops was fined $1,500,000 and
assessed $16,600. Paradies Midfield was assessed $16,600. Jackson
and D. Paradies remain free on appeal bonds. The fine imposed on
the Paradies Shops was stayed pending appeal.
II. ANALYSIS13
A. Jury Selection
13
In addition to the issues discussed in this opinion, the
defendants raised other less meritorious ones. We find that
those issues do not warrant discussion, and "summarily affirm the
district court as to all issues not herein discussed." See
United States v. Waymer, 55 F.3d 564, 568 (11th Cir.1995), cert.
denied, --- U.S. ----, 116 S.Ct. 1350, 134 L.Ed.2d 519 (1996).
According to the Jury Selection and Service Act ("the Jury
Selection Act"), 28 U.S.C. §§ 1861, et seq., the court may excuse
a potential juror (1) upon a showing of undue hardship or extreme
inconvenience, or (2) if the potential juror may be unable to
render impartial jury service or that his service as a juror would
be likely to disrupt the proceedings. 14 See 28 U.S.C. § 1866(c).
In this case, the district court sent a 25-page, 108-question jury
questionnaire to over 250 potential jurors. 15 The court reviewed
the returned questionnaires and excused over 70 potential jurors
pursuant to § 1866(c) and in accordance with the Local Plan for the
Northern District of Georgia ("Local Plan"). Jackson and the
Paradies defendants argue that the district court committed a
"substantial violation" of the Jury Selection Act by excusing those
jurors sua sponte prior to voir dire, because the questionnaires
14
Section 1866(c) provides in pertinent part:
[A]ny person summoned for jury service may be (1)
excused by the court ... upon a showing of undue
hardship or extreme inconvenience, ... or (2) excluded
by the court on the ground that such person may be
unable to render impartial jury service or that his
service as a juror would be likely to disrupt the
proceedings, or (3) excluded upon peremptory challenge
as provided by law, or (4) excluded pursuant to the
procedure specified by law upon a challenge by any
party for good cause shown, or (5) excluded upon
determination by the court that his service as a juror
would be likely to threaten the secrecy of the
proceedings, or otherwise adversely affect the
integrity of jury deliberations.
28 U.S.C. § 1866(c).
15
While the district court entered an Order on July 11,
1994, stating that there were "approximately 250" jurors in the
venire, this court found two groups of juror questionnaires, one
included approximately 150 jurors, and the other included an even
larger number. Whatever the actual number, it was an unusually
large venire.
provided insufficient evidence of actual bias and undue hardship.16
The district court's determinations regarding bias and undue
hardship are reviewed for an abuse of discretion. See United
States v. North, 910 F.2d 843, 909-10 (D.C.Cir.1990), modified on
other grounds, 920 F.2d 940 (D.C.Cir.1990), cert. denied, 500 U.S.
941, 111 S.Ct. 2235, 114 L.Ed.2d 477 (1991).
A party challenging the jury selection process under the Jury
Selection Act must make his challenge "before the voir dire
examination begins, or within seven days after the defendant
discovered or could have discovered, by the exercise of diligence,
the grounds therefor, whichever is earlier." 28 U.S.C. § 1867(a)
(emphasis added). The timeliness requirement "is to be strictly
construed, and failure to comply precisely with its terms
forecloses a challenge under the Act." United States v. Bearden,
659 F.2d 590, 595 (5th Cir. Unit B 1981), cert. denied, 456 U.S.
936, 102 S.Ct. 1993, 72 L.Ed.2d 456 (1982). Therefore, once voir
dire begins, Jury Selection Act challenges are barred, even where
the grounds for the challenge are discovered only later. See
United States v. Hawkins, 566 F.2d 1006, 1013 (5th Cir.), cert.
16
Jackson stated in his brief that the court's excusal of
certain jurors violated his "Sixth Amendment right to a fair
trial." The substance of his brief, however, refers only to the
Jury Selection Act, not to the Sixth Amendment. See Jackson's
Brief at pp. 16-21. His reference to the Sixth Amendment may be
a method by which Jackson seeks to avoid the strict timeliness
requirements of a statutory claim. United States v. Grisham, 63
F.3d 1074, 1077 (11th Cir.1995) (allowing constitutional claims
even though statutory claim is untimely), cert. denied, --- U.S.
----, 116 S.Ct. 798, 133 L.Ed.2d 746 (1996). In any event, we
will address only the merits of Jackson's statutory claim. Any
constitutional claim raised by Jackson would fail for the same
reasons as does the same claim made by the Paradies defendants.
See, infra, note 28 and accompanying text.
denied, 439 U.S. 848, 99 S.Ct. 150, 58 L.Ed.2d 151 (1978); United
States v. Kennedy, 548 F.2d 608, 613 (5th Cir.), cert. denied, 434
U.S. 865, 98 S.Ct. 199, 54 L.Ed.2d 140 (1977). Jackson admits in
his brief that his counsel learned of the juror excusals during the
weekend immediately before trial and that, therefore, he did not
make his challenge to the jury selection process until the first
day of trial. Jackson does not attempt to excuse his failure to
comply with the timeliness requirements of the statute. Under
these circumstances, Jackson's challenge is barred.17
The Paradies defendants, however, filed a timely motion under
the Jury Selection Act and submitted an affidavit in support
thereof. The Act requires that any motion filed pursuant thereto
be accompanied by "a sworn statement of facts which, if true, would
constitute a substantial failure to comply with the provisions of
[the Act]." 28 U.S.C. § 1867(d). When that requirement is not
satisfied, the challenge to the selection process must fail,
because "Congress left no room for ad hoc review of the usefulness
of compliance with [the sworn statement] requirement." Kennedy,
548 F.2d at 613; see also United States v. Maldonado, 849 F.2d
522, 523 (11th Cir.1988) (the Act's "sworn statement" requirement
is to be strictly construed); United States v. Green, 742 F.2d
609, 612 (11th Cir.1984) (compliance with the Act's procedural
requirements is necessary to challenge the validity of a jury
selection plan).
17
Even if we were to consider Jackson as having impliedly
joined with the Paradies defendants' timely motion, his challenge
under the Jury Selection Act would fail for the same reasons as
does the challenge of his codefendants.
The "sworn statement" submitted by the Paradies defendants
was the affidavit of a rejected juror, Dana Shepherd. Shepherd's
affidavit showed, by tracking the statutory language, that she was
excused from serving on the jury in this case despite the fact that
(1) she would have met the basic requirements to serve on the
"qualified wheel" of potential jurors, (2) she was not a member of
an occupational class or group of persons who are exempted from
jury service, and (3) she did not have a basis on which she could
have individually requested excusal from jury service.18 In other
words, she has met the minimum requirements to be placed on the
qualified wheel of potential jurors. The affidavit does not show,
however, that there could be no other reason upon which the court
could have based its decision to excuse her, e.g., undue hardship
or bias. Therefore, the affidavit does not state facts which, if
18
Shepherd showed that she met the minimum requirements
under the Local Plan by attesting that she (1) is over the age of
18, (2) is competent to fill out the affidavit, (3) received,
completed, and returned the jury questionnaire sent to her by the
court, (4) had been excused from serving on the Jackson case but
was to remain on call for a two-week term, (5) is a citizen of
the United States and has been a resident of Atlanta, Georgia,
for over one year, (6) is able to read, write, and understand the
English language with sufficient proficiency to fill out the
questionnaire, (7) is able to speak the English language, (8) has
not been convicted of a felony, (9) is not in active service in
the armed forces, (10) is not a member of the Fire or Police
Department, (11) is not a public officer, (12) has not served on
a grand or petit jury in the federal court in the past two years,
(13) does not have active care and custody of small children,
(14) is not essential to the care of aged or infirm persons, (15)
is not over 70 years of age, and (16) is not a part of volunteer
safety personnel. The language of her affidavit almost exactly
tracks the language in the Local Plan. See N.D.Ga.Local Rule
120-1, Appendix A, §§ VI, VII, & VIII (incorporating 28 U.S.C. §
1865).
19
true, would constitute any violation of the Jury Selection Act.
Consequently, the Paradies defendants failed to satisfy the "sworn
statement" prerequisite to a claim under the Act, and their
challenge thereunder is precluded.
Even if we were to assume that Shepherd's affidavit satisfied
the requirements of § 1867(d), we would find that the district
court did not "substantially fail" to comply with the Jury
Selection Act. See 28 U.S.C. § 1867(d) (allowing relief under the
Act "[i]f the court determines that there has been a substantial
failure to comply with the [Act]"). A Jury Selection Act violation
is substantial only if it frustrates the Act's two basic goals:
"(1) random selection of juror names; and (2) use of objective
criteria for determination of disqualifications, excuses,
exemptions, and exclusions."20 United States v. Gregory, 730 F.2d
692, 699 (11th Cir.1984), cert. denied, 469 U.S. 1208, 105 S.Ct.
1170, 1171, 84 L.Ed.2d 321 (1985).
The Paradies defendants claim that thirteen jurors,
individually, were improperly excused for bias, and eight jurors
19
The Paradies defendants do not even claim that the
district court's excusal of Dana Shepherd was improper. In fact,
she stated in her questionnaire that she "regularly" saw H. Lamar
Mixon (a named partner in the law firm representing Paradies
Midfield), with whom she had a "godmotherly" relationship.
Moreover, she virtually admitted her inability to render
impartial service when she stated that she had met D. Paradies
several times and "would feel funny" being in the courtroom with
him. Under these circumstances, it would have been difficult for
Ms. Shepherd to execute an affidavit that would have satisfied
the requirements of § 1867(d).
20
The relief to be afforded for a "substantial violation"
under the Act is not reversal, but it is a stay of the
proceedings for the court to make a determination regarding the
propriety of the jury selection process. See 18 U.S.C. §
1867(d).
were improperly excused for undue hardship.21 They argue that the
questionnaires of the jurors excluded for bias did not contain
sufficient evidence of actual bias, citing United States v.
Calabrese, 942 F.2d 218 (3d Cir.1991), and that the questionnaires
of the jurors excluded for hardship did not show that the potential
jurors would suffer hardship for the reasons listed in the Local
Plan. Additionally, they claim that seventeen questionnaires are
"missing" for unknown reasons, and that their lack of access to
those documents impedes their ability to assess whether the trial
court acted in an appropriate manner.
This court has carefully reviewed all of the questionnaires
challenged by the defendants, and we find that the district court
did not commit a substantial violation of the Act in excluding
those jurors. With respect to those who were excused for bias,
every potential juror either professed that they were badly
prejudiced against one side, or they described a relationship that
the court deemed inappropriate for a juror in this case.22 We find
21
The Paradies defendants did not claim that the basic
process for choosing jurors in the Local Plan was
unconstitutional. See United States v. Pepe, 747 F.2d 632, 648-
49 & n. 17 (11th Cir.1984) (citing Duren v. Missouri, 439 U.S.
357, 99 S.Ct. 664, 58 L.Ed.2d 579 (1979)). In order to
substantiate a claim that the process was defective, the
defendants would have had to show, among other things, that the
district court was excluding a distinctive group in the community
from the jury venire, and that the underrepresentation of that
group was due to the systematic exclusion of the group in the
selection process. Id. These defendants could not support such
a claim, because they do not even identify any specific group
that is excluded due to the process outlined in the Local Plan.
22
The jurors listed the following circumstances relating to
bias: (# 27) stepfather was married to Jackson's sister; (# 66)
husband is prosecuting attorney in Cobb County; (# 84) friend of
and worked for Jackson; (# 87) worked for Paradies; (# 113)
worked as consultant to the city and Mr. Cook (attorney for
that this action by the district court was not, nor was it alleged
to have been, directed to any ethnic, racial, or national origin,
nor did it constitute any arbitrary, unreasonable exclusion of
discrete segments of the venire. Nor did the court's action in
this respect cause the venire to consist of anything other than a
fair cross-section of the community. This court has rejected a
similar challenge to a district court's excusal of jurors "who
merely acknowledged their acquaintance" with the defendant. United
States v. Bailey, 468 F.2d 652, 658 (5th Cir.1972) (quoting Dennis
v. United States, 339 U.S. 162, 168, 70 S.Ct. 519, 521, 94 L.Ed.
734 (1950)). The Bailey court relied on the district court's
"serious duty to determine the question of actual bias and a broad
discretion in its rulings" in dismissing the defendant's challenge
to the jury composition.23 Id. (finding "nothing abusive or
prejudicial in the excusal of jurors admittedly acquainted,
regardless [of] how remotely, with one of the parties to the
proceedings"). The Paradies defendants rely on Calabrese wherein
the Third Circuit rejected the notion that the district court has
Paradies) is son-in-law's friend; (# 128) mother works for Judge
Shoob (niece of Paradies); (# 138) works for IRS; (# 153)
parents are friends of Paradies; (# 270) had clear perception
that dishonest business was involved at airport; (# 297) first
cousin of district attorney; (# 343) prejudiced, but requested
excusal for medical reasons; (# 376) prejudiced against the
defendants. Only one "bias" juror's questionnaire, (# 89), was
not found in the record. The district court, however, stated
that that juror suspected shenanigans at the airport, and this
court has been given no reason to discount that finding of the
court.
23
We recognize that Bailey dealt with challenges, rather
than sua sponte action, but the decision establishes that the
district court had broad discretion in dismissing jurors who have
friendships, acquaintances, and other connections with parties to
the lawsuit.
the broad discretion allowed by the Fifth Circuit in Bailey.
Calabrese is not binding on this court, however, and it is our view
that the reasoning in Bailey governs this case.24 See United States
v. Perkins, 748 F.2d 1519, 1532-33 (11th Cir.1984) ("A relationship
between a juror and defendant, albeit a remote one, can form the
basis of a challenge for cause."); see also North, 910 F.2d at
909-10 (upholding excusal of jurors before voir dire based on juror
questionnaires); United States v. Redmond, 546 F.2d 1386, 1389
(10th Cir.1977) (upholding excusal of jurors who were acquainted
with any attorneys in the case); cert. denied, 435 U.S. 995, 98
S.Ct. 1645, 56 L.Ed.2d 83 (1978).
Similarly, the court did not err in excluding the eight
jurors for undue hardship. The Paradies defendants argue that the
court allowed some jurors to use a hardship excuse for reasons
other than those named in the statute. For example, juror # 290
was excused for having two small children, but her two children
were sixteen years old. The Local Plan, however, allows a hardship
excuse to potential jurors with children under ten years of age.
The defendants also criticized the court for excusing some of these
24
In any event, Calabrese is clearly distinguishable on its
facts. In that case, the district court judge sent out a form
letter to approximately 300 jurors, and asked two main questions,
(1) Do you know the defendants, and (2) Will you be able to serve
on a four to six week trial. All of the potential jurors who
answered "yes" to the first question were excused. The Third
Circuit found that this "acquaintance-based excusal" was
inappropriate under the Act. Calabrese, 942 F.2d at 226. The
method of the district court in Calabrese was notably different
from the method of the district court in this case. Here, the
jurors' questionnaire was 25 pages long and consisted of over 100
questions, and explanations for each answer was requested
therein. Therefore, this case involved "far more compelling
connection than mere acquaintance." Id. (distinguishing cases
involving more than mere acquaintance).
jurors even though the jurors did not request excusal. Again, this
court has reviewed all of the available questionnaires, and we find
no substantial error in the court's actions.25 While the court may
have violated some of the technical provisions of the Local Plan in
dismissing some jurors and without one of the enumerated hardships,
none of the excusals frustrated the goals of the Act. See United
States v. Gregory, 730 F.2d 692, 700 (11th Cir.1984) (technical
violations alone do not give rise to a substantial violation of the
Act), cert. denied, 469 U.S. 1208, 105 S.Ct. 1170, 1171, 84 L.Ed.2d
321 (1985); see also United States v. Barnette, 800 F.2d 1558,
1568-69 & n. 14 (11th Cir.1986) (upholding district court's
granting of hardship excuse to 245 out of 249 jurors after a
personal, pre-voir dire review of juror questionnaires), cert.
denied, 480 U.S. 935, 107 S.Ct. 1578, 94 L.Ed.2d 769 (1987).
Additionally, under § 1869(j) of the Jury Selection Act, "undue
hardship and extreme circumstances" includes "any other factor
which the court determines to constitute an undue hardship or
extreme inconvenience to the juror." In the instant case, where
the jury would be sequestered for several weeks, the court has
broad discretion in determining whether a particular juror could be
excluded because of undue hardship. Finally, defense counsel's
25
The jurors listed the following circumstances relating to
undue hardship: (# 7) mother is 87 years old and in nursing
home; (# 60) has hearing problems, needs hearing aid; (# 195)
has three children seven years and younger; (# 254) has two
children, ages four and two; (# 276) no questionnaire, judge
released him on grounds of hardship; (# 290) two small children,
both sixteen years old; (# 294) sent note in lieu of
questionnaire, has two children, ages five and two; (# 340)
requested excusal for business hardship, but also professed that
he "assume[d] Jackson and other defendants are guilty."
failure to locate a small portion of the juror questionnaires (some
of which were never returned), from literally hundreds of
questionnaires comprising several boxes in the record of this case,
is no basis for a finding of failure on the part of the district
court to follow legal procedures in jury selection.26
We note that the district court in this case was faced with an
onerous burden in arriving at an impartial jury in this
high-profile case that was originally estimated to last four to six
weeks.27 With great care, the court reviewed all of the returned
jury questionnaires to rule out those jurors who would have been
unduly burdened by serving on a case of that duration who
admittedly would have been unable to render impartial jury service.
Under these circumstances, the district court in no way hindered
the random selection of juror names or the use of objective
criteria in excusing jurors. Nor did the process result in
impermissible discrimination or arbitrariness, and the defendants
do not make such an allegation. In sum, the court did not commit
a substantial violation of the Jury Selection Act, and the Paradies
defendants are not entitled to a reversal on that basis.28
The Paradies defendants also claim, as a separate basis for
26
The Paradies defendants did not object to the jury finally
impaneled. They did, however, make an unsuccessful challenge
based on Batson v. Kentucky, 476 U.S. 79, 106 S.Ct. 1712, 90
L.Ed.2d 69 (1986), but the district court's ruling on that issue
was not asserted as an error on appeal.
27
Indeed, the Paradies defendants moved for a change of
venue because of claimed widespread prejudicial publicity in
Atlanta.
28
For the same reasons, any argument based on the Sixth
Amendment right to a fairly selected and impartial jury would
also fail. See Green, 742 F.2d at 611.
reversal, that the district court violated their unqualified right
to inspect the jury records in order to substantiate their claim
under the Jury Selection Act. At about 8:00 on the morning of voir
dire, after approximately 115 potential jurors had been summoned to
appear in court at 11:00 a.m. for the proceedings, the Paradies
defendants moved the court to stay the proceedings on the ground
that the court possibly committed a substantial failure to comply
with the provisions of the Act. The district court denied the
motion for the stay, rejecting the defendants' argument that the
exclusion of Dana Shepherd from the jury venire may have been a
violation of the Jury Selection Act. Later that same day, the
court read into the record its reasons for excusing the jurors that
it dismissed sua sponte. The court thereafter, upon defendants'
request, made the jury questionnaires a part of the record.
Additionally, after trial, the court allowed the defendants to
supplement the record with additional jury selection materials. At
no time did the court preclude defense counsel from inspecting the
record and finding out which jurors the court had excused. On the
contrary, the record shows that the court entered an order on
November 8, 1993, directing all counsel not to disclose answers of
prospective jurors because that information was deemed to be
privileged. From that date on, counsel for both sides were
presumably aware that the questionnaires existed and that counsel
would be entitled to review them. At most, the court denied the
Paradies defendants additional time to formulate their argument.
Therefore, we find, after careful examination of this record, that
these defendants were not denied access to the jury selection
documents.
B. Propriety of the Convictions Pursuant to 18 U.S.C. § 1346Jackson and the Paradies defendants challenge their
convictions pursuant to 18 U.S.C. § 1346 on several grounds.
First, the Paradies defendants claim that in order to be convicted
for aiding and abetting in the fraudulent scheme, an independent
duty to the victim must first exist and that duty must have been
breached. Second, they claim that § 1346 is unconstitutionally
vague, or, in the alternative, that the district judge should have
given the jury a "fair warning" instruction to allow the jury to
make the vagueness determination. Finally, Jackson claims that his
convictions under § 1346 violated the ex post facto clause of the
Constitution. We will discuss each issue in turn.
(1) Independent Duty
The Paradies defendants argue that because the Paradies
companies had no legal duty to anyone to prevent Jackson's scheme
from succeeding, then they cannot be held liable for aiding and
abetting him in that scheme. The defendants rely heavily on Dirks
v. S.E.C., 463 U.S. 646, 103 S.Ct. 3255, 77 L.Ed.2d 911 (1983), and
Chiarella v. United States, 445 U.S. 222, 100 S.Ct. 1108, 63
L.Ed.2d 348 (1980), wherein the Supreme Court found that a
defendant cannot be convicted for securities fraud (Dirks ), or for
aiding and abetting securities fraud (Chiarella ), unless he
breached a legal duty. Because the Paradies companies claim that
they merely made routine, lawful fee and dividend payments to
Hartsfield Concessions and had no independent duty to disclose
anything about their shareholder's fraudulent scheme, they cannot
be convicted for helping Jackson in that scheme. They contend that
"without access to the opinion of the Ethics Board, the Paradies
defendants were lulled into a false sense of security that there
was nothing inherently improper about the relationship between
Wilbourn and Jackson." The government readily admits that the
Paradies defendants were not fiduciaries to the City. They claim,
however, that this circuit does not require that an independent
duty exist in order to be convicted of aiding and abetting in a
mail fraud scheme.
This court has addressed this issue in a recent case, United
States v. Waymer, 55 F.3d 564, 568 (11th Cir.1995), cert. denied,
--- U.S. ----, 116 S.Ct. 1350, 134 L.Ed.2d 519 (1996). In Waymer,
the defendant was a member of the Atlanta Board of Education, and
he used his status to award service contracts to certain companies
in return for monetary benefits. Waymer was convicted of mail
fraud, because he mailed payments to the contractors for the
services they rendered. He contended that because the school
system had a legal obligation to make those payments, the mailing
of the checks to pay a legal debt could not provide a basis on
which to satisfy the mailing requirement of § 1341. In upholding
his conviction, this court relied on Schmuck v. United States, 489
U.S. 705, 710, 109 S.Ct. 1443, 1447, 103 L.Ed.2d 734 (1989),
wherein the Supreme Court found that mailings that furthered the
overall scheme to defraud would satisfy the mailing requirement of
§ 1341, even though the mailings may have been otherwise legal.
The Waymer court found that it was presented with an even stronger
case than in Schmuck, because the checks mailed to the contractor
were the very source of the illegal payments to Waymer; if the
contractors did not get paid, neither did Waymer.29 Waymer, 55 F.3d
at 570.
Although the Paradies companies routinely mailed out fee and
dividend checks, the government showed that those payments were
made in exchange for Jackson's political influence. Under the
reasoning in Waymer, those mailings can serve as the basis for a
conviction under § 1341. Additionally, the Paradies defendants do
not cite to one mail fraud case to support their theory that an
independent duty must exist between the defendant and the victim.
This court stated in Waymer that "[a] defendant's breach of a
fiduciary duty may be a predicate for a violation of the mail fraud
statute where the breach entails the violation of a duty to
disclose material information." Id. at 571 (emphasis added). That
predicate is inapplicable to the facts of this case, however,
because the Paradies defendants were not charged with a failure to
disclose a material fact; they were charged with aiding and
abetting by actively participating in the crime. Jackson certainly
had a fiduciary duty to the City. Using the mails to deliver
dividend checks and fees, if intentionally designed as a payoff to
Jackson, is clearly sufficient to convict the Paradies defendants
for aiding and abetting the fraud under § 1346.
(2) Vagueness
The Paradies defendants also argue that § 1346, which brings
29
Furthermore, the Waymer court also held specifically that
the required element of " "mailing' ... need not be an essential
element of the scheme." Waymer, 55 F.3d at 569 (citing Schmuck,
489 U.S. at 710, 109 S.Ct. at 1447).
schemes to defraud another of the intangible right of honest
services, is unconstitutionally vague. Whether a statute is vague
is a question of law to be reviewed de novo. Dodger's Bar & Grill,
Inc. v. Johnson County Bd. of County Comm'rs, 32 F.3d 1436, 1443
(10th Cir.1994).
This question was also addressed by the Waymer court, and it
rejected the same challenge on strikingly similar facts. First,
the court reasoned that "[a] statute is not unconstitutionally
vague if it "define[s] the criminal offense with sufficient
definiteness that ordinary people can understand what conduct is
prohibited and in a manner that does not encourage arbitrary and
discriminatory enforcement.' " Waymer, 55 F.3d at 568 (quoting
Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 1858, 75
L.Ed.2d 903 (1983)). It should be plain to ordinary people that
offering and accepting large sums of money in return for a city
councilman's vote is the type of conduct prohibited by the language
of § 1346.30 This is a specific intent crime, and the jury was
30
The contentions of defendants who claim that it is unclear
whether their conduct is covered by § 1346 have a hollow ring,
because until the Supreme Court's decision in McNally v. United
States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987),
federal courts had uniformly construed the mail fraud statute to
cover the situation where public officials received bribes and
kickbacks thereby depriving the citizenry of their "intangible
rights" to good and honest government. See, e.g., United States
v. Holzer, 816 F.2d 304 (7th Cir.), rev'd, 828 F.2d 21 (7th
Cir.1987), cert. denied, 484 U.S. 1076, 108 S.Ct. 1054, 98
L.Ed.2d 1016 (1988); United States v. Silvano, 812 F.2d 754 (1st
Cir.1987); United States v. Clapps, 732 F.2d 1148 (3d Cir.),
cert. denied, 469 U.S. 1085, 105 S.Ct. 589, 83 L.Ed.2d 699(1984); United States v. Barber, 668 F.2d 778 (4th Cir.), cert.
denied, 459 U.S. 829, 103 S.Ct. 66, 74 L.Ed.2d 67 (1982); United
States v. Margiotta, 688 F.2d 108 (2d Cir.1982), cert. denied,
461 U.S. 913, 103 S.Ct. 1891, 77 L.Ed.2d 282 (1983); United
States v. Diggs, 613 F.2d 988 (D.C.Cir.1979), cert. denied, 446
S.Ct. 982, 100 S.Ct. 2961, 64 L.Ed.2d 838 (1980); United States
properly instructed on that intent. See discussion, infra, at pp.
3672-74. Additionally, the evidence was overwhelming that these
defendants "intended to defraud the citizens of Atlanta of
[Jackson's] honest services." Id. at 569. Therefore, the
vagueness challenge must fail.
We acknowledge that a recent Fifth Circuit decision, United
States v. Brumley, 79 F.3d 1430 (5th Cir.1996), may indicate to the
contrary. We agree, however, with the views of the dissenting
opinion by Judge Harlington Wood, Jr.:
By enacting § 1346, Congress expressly extended the reach
of the wire fraud statute to "include[ ] a scheme or artifice
to deprive another of the intangible right of honest
services." I agree with the majority that the term "another"
should be given its ordinary meaning and that the most common
usage of "another" as a pronoun is "an additional one" or "one
more." Under my ordinary reading of § 1346, however,
"another" can easily be read to refer to a state citizen where
the perpetrator of the fraud is a governmental official acting
in his or her official capacity.
Brumley, 79 F.3d at 1452. This circuit in Waymer has so held and
the Fourth Circuit has agreed with that rationale in United States
v. Bryan, 58 F.3d 933 (4th Cir.1995). See also United States v.
Martinez, 905 F.2d 709, 715 (3d Cir.), cert. denied, 498 U.S. 1017,
v. States, 488 F.2d 761 (8th Cir.1973), cert. denied, 417 U.S.
909, 94 S.Ct. 2605, 41 L.Ed.2d 212 (1974); Shushan v. United
States, 117 F.2d 110 (5th Cir.1941), cert. denied, 313 U.S. 574,
61 S.Ct. 1085, 1086, 85 L.Ed. 1531, 1532 (1941); see also,
United States v. McNally, 790 F.2d 1290 (6th Cir.1986) (per
curiam). According to the dissent in McNally, the Supreme Court
decision reversed "the accumulated wisdom of many distinguished
federal judges who have thoughtfully considered and correctly
answered" the "intangible rights" questions as did the Sixth
Circuit, which was reversed. McNally, 483 U.S. at 376, 107 S.Ct.
at 2890. Government officials, including defendant Jackson, were
on notice, then, until June 24, 1987, the date of the McNally
decision—and after November 18, 1988—that such intentional
actions as are charged in the indictment now at issue were deemed
illegal under the mail fraud statute.
111 S.Ct. 591, 112 L.Ed.2d 595 (1990), for a further observation
that "Congress' purpose in enacting § 1346 was to restore the mail
fraud statute to its pre-McNally position by allowing mail fraud
convictions to be predicated on deprivations of honest services."31
The Paradies defendants claim that even if § 1346 is not
vague as a matter of law, they were entitled to a "fair warning"
instruction to allow the jury to make the determination regarding
vagueness. They requested that the court ask the jury whether the
terms of the statute were "so vague that men of common
intelligence" in the position of the Paradies defendants would have
had fair warning of a change in the law and that they were
prohibited from paying dividends or management fees to Hartsfield
Concessions after the effective date of the statute. The court
rejected that request, deciding the vagueness issue as a matter of
law. We agree that the issue of whether a statute is void for
vagueness is a question of law for the court to determine. See,
e.g., Dodger's Bar & Grill, Inc., 32 F.3d at 1443; United States
v. Nevers, 7 F.3d 59, 61 (5th Cir.1993), cert. denied, 510 U.S.
31See also the legislative history comments of
Representative Conyers in 134 Cong.Rec. H11, 108-01 (daily ed.
Oct. 21, 1988), quoted in Brumley, 79 F.3d at 1436:
This amendment restores the mail fraud provision to
where that provision was before the McNally
decision....
The amendment adds a new section to 18 U.S.C. 63 that
defines the term "scheme or artifice to defraud to
include a scheme or artifice to defraud another of the
intangible right of honest services." Thus, it is no
longer necessary to determine whether or not the scheme
or artifice to defraud involved money or property.
This amendment is intended merely to overturn the
McNally decision.
1139, 114 S.Ct. 1124, 127 L.Ed.2d 432 (1994). Therefore, the
Paradies defendants were not entitled to a "fair warning"
instruction to the jury.
(3) The Ex Post Facto Clause
Jackson claims that his convictions pursuant to § 1346
violated his rights under the ex post facto clause of the
Constitution, because the crimes for which he was convicted were
committed prior to the effective date of § 1346 (November 18,
1988), a time when the mail fraud statute (§ 1341) applied only to
fraudulent schemes that deprived individuals of property rights,
not intangible rights.32 See McNally v. United States, 483 U.S.
350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), discussed supra at note
30. We find this argument to be meritless. There was sufficient
evidence upon which the jury could have found that Jackson's
fraudulent scheme began in 1985 but continued until the end of his
tenure as a councilman (1990). In the ex post facto analysis,
"[t]he critical question is whether the law changes the legal
consequences of acts completed before its effective date." Weaver
v. Graham, 450 U.S. 24, 31, 101 S.Ct. 960, 965, 67 L.Ed.2d 17(1981) (emphasis added). Several circuits have upheld convictions
under similar circumstances. See United States v. Garfinkel, 29
F.3d 1253, 1259-60 (8th Cir.1994) (upholding conviction under §
1346 when scheme began in 1986 and continued through 1989); United
States v. Hammen, 977 F.2d 379, 385 (7th Cir.1992) (upholding
conviction under § 1346 when bank fraud scheme spanned effective
32
It is undisputed that each of the mailings that served as
a basis for Jackson's convictions were mailed after November 18,
1988, the effective date of the statute.
date of the statute); United States v. Alkins, 925 F.2d 541, 549
(2d Cir.1991) (convictions for mail fraud upheld because defendants
permitted the mailings to occur after the effective date of the
statute). Accordingly, Jackson's mail fraud convictions for
conduct that continued after the effective date of § 1346 do not
violate the ex post facto clause.
C. Jury Instructions
The Paradies defendants claim that the district court erred in
instructing the jury on "specific intent" and in failing to give
the "theory of the defense" instruction that it proposed at trial.
We will address those issues separately.
(1) Specific Intent
The Paradies defendants first argue that the district court
erred in charging the jury on specific intent, because it failed to
require the jury to find that the defendants knew that their
conduct was against the law, and that "ignorance of the law" is a
valid defense because mail fraud is a specific intent crime. The
court refused to instruct the jury in this fashion and, instead,
instructed the jury that the defendants must have had the specific
intent to defraud, rather than an intent to violate the law.
Again, the Paradies defendants do not cite one mail fraud case to
support their position. Instead, they cite to precedent that
supports the general proposition that ignorance of the law may be
a defense to a specific intent crime. See Ratzlaf v. United
States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994)
(antistructuring law); United States v. Schilleci, 545 F.2d 519(5th Cir.1977) (wire fraud conspiracy); United States v. Davis,
583 F.2d 190 (5th Cir.1978) (conspiracy to export).
While mail fraud can be classified as a "specific intent"
crime, it is clear from a review of the pertinent case law that the
defendants' contention is unfounded. In mail fraud cases, the
government need only prove that the defendant had the intent to
deceive, and ignorance of the law is no defense. See Waymer, 55
F.3d at 568 (defendant need only show the "specific intent to
defraud"); United States v. Hooshmand, 931 F.2d 725, 731 (11th
Cir.1991) (intentional participation in a scheme to defraud);
Pelletier v. Zweifel, 921 F.2d 1465, 1499 (11th Cir.) ("conscious
knowing intent to defraud"), cert. denied, 502 U.S. 855, 112 S.Ct.
167, 116 L.Ed.2d 131 (1991); United States v. Williams, 728 F.2d
1402, 1404 (11th Cir.1984) (specific intent to defraud); United
States v. O'Malley, 707 F.2d 1240, 1247 (11th Cir.1983) (same).
The Second Circuit stated specifically, "The specific intent
required under the mail fraud statute is the intent to defraud, ...
and not the intent to violate a statute." United States v.
Porcelli, 865 F.2d 1352, 1358 (2d Cir.), cert. denied, 493 U.S.
810, 110 S.Ct. 53, 107 L.Ed.2d 22 (1989). Also, the Tenth Circuit
has specifically held under similar circumstances that the district
court did not err in instructing the jury that "every person is
presumed to know what the law forbids." United States v. Hollis,
971 F.2d 1441, 1451-52 (10th Cir.1992), cert. denied, 507 U.S. 985,
113 S.Ct. 1580, 123 L.Ed.2d 148 (1993). In light of the foregoing,
we must reject the Paradies defendants' argument on this point.
Next, they argue that the court gave, in substance, a general
intent instruction rather than a specific intent instruction. The
district court instructed the jury as follows:
Now, fraudulent intent is necessary to sustain a charge
of a scheme to defraud.
Now, in that regard, intent and motive should not be
confused. Motive is what prompts a person to act while intent
refers to the state of mind with which the act is done.
So, if you find beyond a reasonable doubt that the acts
constituting the crime charged were committed by the defendant
under consideration voluntarily, with a specific intent to do
something the law forbids, then the element of "willfulness",
as defined in these instructions has been satisfied even
though the defendant may have believed his conduct was either
religiously, politically, morally or otherwise required, or
that ultimate good would result from such conduct.
On the other hand, if you have a reasonable doubt as to
whether the defendant acted in good faith, sincerely believing
himself to be exempt by the law, then he did not intentionally
violate a known legal duty; that is, he did not act
"willfully," and that essential part of the offense has not
been established.
The court reiterated the specific intent requirement in other
parts of the charge. See, e.g., these instructions: "What must be
proved and proved beyond a reasonable doubt is that the defendant
knowingly and willfully devised or intended to devise a scheme to
defraud substantially the same one that is alleged in the
indictment, and that the use of the United States mail was closely
related to the scheme." (R48-4252). "[T]he question is, did the
defendant intend to deceive and defraud?" (R48-4252-53); "Now,
the Government must prove beyond a reasonable doubt that these
[Paradies] defendants aided, abetted, counseled, or caused mail
fraud to be committed with the specific intent that each and every
element of the crime of mail fraud be committed by some person."
(R48-4261). "Now, in this case good faith is a complete defense
... because good faith on the part of the defendants is
inconsistent with the intent to defraud or willfulness, which is an
essential part of the charges." (R48-4268).
The government claims that the above-quoted portion of the
jury instructions was requested by the defendants. Having asked
for the charge, the government claims, they cannot now complain
about it. See United States v. Chandler, 996 F.2d 1073, 1084 (11th
Cir.1993) (appellant cannot complain of a jury instruction that he
submitted), cert. denied, --- U.S. ----, 114 S.Ct. 2724, 129
L.Ed.2d 848 (1994); Leverett v. Spears, 877 F.2d 921, 924 (11th
Cir.1989) (doctrine of invited error precludes appellate claim that
jury instruction requested by the appellant was erroneous). The
Paradies defendants claim that the charge was not accepted as they
requested it verbatim, but that they strenuously objected to the
amended version given by the district court.
Assuming that the defendants are not barred from complaining
about the instructions, the court must look at "the charges as a
whole" to determine whether the jury was "sufficiently instructed
... so that it understood the issues involved and were not misled."
See Hooshmand, 931 F.2d at 731. The portions of the instructions
about which the defendants complain might potentially be deemed
confusing.33 However, after reviewing the instructions are read in
their entirety, we find that they were legally sufficient,
particularly in light of the other instructions pointed out by the
government. The court explained many times that the defendants
must have acted with the specific "intent to defraud," which
33
For example, the last part instructs that if the jury
doubts the defendant's good faith, then it should find that the
defendant did not violate his duty. It would seem that the law
is the converse (i.e., if you doubt that the defendants acted in
good faith, then you should find that they violated the law.).
constituted a correct assessment of the law.34
(2) Theory of Defense
The refusal to give an instruction is reviewed for an abuse
of discretion. United States v. Turner, 871 F.2d 1574, 1578 (11th
Cir.), cert. denied, 493 U.S. 997, 110 S.Ct. 552, 107 L.Ed.2d 548(1989), and is reversible error if (1) the requested instruction
was a correct statement of the law, (2) its subject matter was not
substantially covered by other instructions, and (3) its subject
matter dealt with an issue in the trial court that was so important
that failure to give it seriously impaired the defendant's ability
to defend himself. United States v. Sirang, 70 F.3d 588, 593 (11th
Cir.1995).
Almost three months before trial, D. Paradies submitted a
requested jury charge labeled "Theory of the Defense." The
submitted charge consisted only of two introductory paragraphs, and
then explained in brackets that "the remainder of this proposed
charge will be submitted to the Court after the defense rests." At
some point just before the court instructed the jury, D. Paradies
submitted the remainder of the proposed charge, which basically
summed up the his defense theory: that he had no duty to supervise
the financial arrangements between his co-defendants; that he had
34
The Paradies defendants claim that the evidence was
insufficient to convict them of mail fraud because there was no
evidence that the Paradies defendants knew of the illegal nature
of the relationship between Wilbourn, Hartsfield Concessions, and
Jackson. In light of the fact that ignorance of the law is an
invalid defense, and because of the overwhelming amount of
evidence that showed the defendants' knowledge of and involvement
in the fraudulent scheme, we reject that argument. We do not
construe United States v. Sanchez-Corcino, 85 F.3d 549 (11th
Cir.1996), as requiring a different result on the issue of
requisite intent.
no specific intent to defraud because his duty was to pay the
dividends and management fees as required by the City of Atlanta's
Ordinances on Minority Participation; and that there was no
illegal conspiracy because his agreement with Echols had a
legitimate purpose. Now D. Paradies claims that failure to give
that charge was reversible error.
The district court disallowed the "revised" version of the
proposed instruction because it was untimely and because "it wasn't
any good anyhow." D. Paradies argues that his proposed jury charge
was, in fact, timely because he filed the first proposed charge
long before trial, putting the court and the government on notice.
While the timeliness of this proposed jury instruction is highly
suspect because the substance of it was not submitted until just
before the court delivered the charges, we will assume that the
instruction was timely filed and is properly reviewable by this
court.35
Paradies argues that a defendant is entitled to a theory of
defense charge for which there is any evidentiary foundation, "even
35
Fed.R.Crim.P. 30 requires the filing of written responses
"[a]t the close of the evidence or at such earlier time during
the trial as the court reasonably directs." The Local Rules of
the court below directed the parties to file written jury
instruction requests "no later than 9:30 a.m. on the date on
which the case is calendared...." See N.D.Ga. Local Rules 255-2
and 525-6. Paradies did not file this instruction in accordance
with the local rule, but he claims that "[t]he Local Rules cannot
sensibly be read to require the pretrial submission of charges on
issues whose substance is unknown before trial." While the
defendants claim that they did not know whether their theory of
defense would be supported by the evidence, they make no
persuasive argument that they did not know of the substance of
their defense prior to trial. See United States v. Johnson, 713
F.2d 633, 652-53 (11th Cir.1983), cert. denied, 465 U.S. 1081,
104 S.Ct. 1447, 79 L.Ed.2d 766 (1984).
though the evidence may be weak, insufficient, inconsistent, or of
doubtful credibility." United States v. Opdahl, 930 F.2d 1530,
1535 (11th Cir.1991) (quoting United States v. Lively, 803 F.2d
1124, 1126 (11th Cir.1986)). See also United States v. Edwards,
968 F.2d 1148, 1153 (11th Cir.1992) ("[i]t has long been
established in this Circuit that it is reversible error to refuse
to charge on a defense theory for which there is an evidentiary
foundation and which, if believed by the jury, would be legally
sufficient to render the accused innocent"), cert. denied, 506 U.S.
1064, 113 S.Ct. 1006, 122 L.Ed.2d 155 (1993). In determining
whether the record contains any evidentiary foundation to support
the charge, the evidence must be viewed in the light most favorable
to the defendant. United States v. Hedges, 912 F.2d 1397, 1406
(11th Cir.1990); United States v. Lewis, 592 F.2d 1282, 1285 (5th
Cir.1979). We find that the district court was correct in finding
that the requested jury charge was partisan and that it aspired "to
place the Paradies defendants' desired factual findings into the
mouth of the court." See United States v. Barham, 595 F.2d 231,
245 (5th Cir.1979) (affirming district court's failure to give
"theory of defense" jury instruction when "the requested
instruction was more in the nature of a jury argument than a
charge"), cert. denied, 450 U.S. 1002, 101 S.Ct. 1711, 68 L.Ed.2d
205 (1981); see also United States v. Silverman, 745 F.2d 1386,
1399-1400 (11th Cir.1984) (affirming district court's refusal to
give "theory of defense" argument because the instruction merely
emphasized a certain phase of the evidence). Also, the proposed
instruction included legal theories which we have rejected supra
(e.g., the "duty" theory, the "ignorance of the law" defense).
Indeed, a charge must have "legal support" as well as foundation in
the evidence. United States v. Morris, 20 F.3d 1111, 1115 (11th
Cir.1994) (finding that a defendant is entitled to a theory of
defense instruction as long as it has legal support); Silverman,
745 F.2d at 1399 ("the requested instruction must be a legally
cognizable defense to the indictment"). The instructions given by
the district court fairly and adequately presented Paradies'
defense theories to the jury. See Barham, 595 F.2d at 245 (finding
that the instructions given adequately and fairly presented the
defendant's theory without the "theory of defense" instruction).
Therefore, we find that D. Paradies is not entitled to a reversal
based on the district court's failure to give the proposed
instruction.
D. Propriety of the Convictions Pursuant to § 666
D. Paradies and Jackson contest their convictions under 18
U.S.C. § 666, which criminalizes the following acts:
[C]orruptly giv[ing], offer[ing], or agree[ing] to give
anything of value to any person, with intent to influence or
reward an agent of an organization or of a State, local or
Indian tribal government, or any agency thereof, in connection
with any business, transaction, or series of transactions of
such organization, government, or agency involving anything of
a value of $5000 or more.
18 U.S.C. § 666(a)(2). The statute applies, however, only where:
the organization, government, or agency receives, in any one
year period, benefits in excess of $10,000 under a Federal
program involving a grant, contract, subsidy, loan, guarantee,
insurance, or other form of Federal assistance.
18 U.S.C. § 666(b). D. Paradies argues that the district court
misconstrued § 666 not to require two essential elements: (1) that
the corrupt payments be made in connection with the administration
of programs receiving federal funds, and (2) that the payments be
made as a "quid pro quo" for an official act. He argues that those
errors led the district court impermissibly to deny his motions to
dismiss, for judgment of acquittal, and for a new trial, and that
they also caused the court to reject the proposed jury charges
relating to those issues. Jackson relies only on the first
argument, and not the "quid pro quo" argument, in support of his
claim. The government, on the other hand, claims that "[t]he plain
language of § 666 does not impose these limitations, nor has any
court ever engrafted these limitations on the clear statutory
text." We will discuss each argument in turn.
(1) Does § 666 Require that the Corrupt Payment Be Directly
Connected to the Administration of Federal Funds?
The defendants argue that they cannot be convicted pursuant
to § 666 because the corrupt payments that were the subject of
those convictions were not shown to be connected to any federally
funded program. They argue, relying on legislative history, that
the purpose of the statute was to protect the integrity of monies
distributed through federal programs. Because the corrupt
transactions at issue affected only private or local monies, their
conduct was not intended to be covered under § 666. In addition to
legislative history, the defendants cite authority from other
jurisdictions that purport to apply this restriction to crimes
under § 666. See United States v. Wyncoop, 11 F.3d 119 (9th
Cir.1993); United States v. Coyne, 4 F.3d 100 (2d Cir.1993), cert.
denied, 510 U.S. 1095, 114 S.Ct. 949, 127 L.Ed.2d 221 (1994);
United States v. Cicco, 938 F.2d 441 (3d Cir.1991); and United
States v. Westmoreland, 841 F.2d 572 (5th Cir.), cert. denied, 488
U.S. 820, 109 S.Ct. 62, 102 L.Ed.2d 39 (1988). The government
claims, however, that "[e]very court to have considered this issue
has rejected defendant's argument attempting to limit the scope of
the statute." Further, it argues that Westmoreland actually
supports its position. We agree.
First, in construing § 666, we agree with the following
expression of the Fifth Circuit:
[W]e find the relevant statutory language plain and
unambiguous. By the terms of § 666, when a local government
agency receives an annual benefit of more than $10,000 under
a federal assistance program, its agents are governed by the
statute, and an agent violates subsection (b) when he engages
in the prohibited conduct "in any transaction or matter or
series of transactions or matters involving $5,000 or more
concerning the affairs of" the local government agency. 18
U.S.C. § 666(b) (Supp.1984) (emphasis added). Subsection (b)
contains nothing to indicate that "any transaction involving
$5,000" means "any federally funded transaction involving
$5,000" or "any transaction involving $5,000 of federal
funds," and other subsections of the statute contain no
inconsistent provisions that might suggest such a
qualification.
Westmoreland, 841 F.2d at 576 (emphasis added).
Other circuits have followed this approach and have
established that the government is not required under § 666 to
trace the flow of federal funds and assistance to any particular
project, such as the airport concession programs. See United
States v. Bonito, 57 F.3d 167, 172-73 (2d Cir.1995) (rejecting
argument that there must be a link between the corrupt transaction
and the protection of federal funds), cert. denied, --- U.S. ----,
116 S.Ct. 713, 133 L.Ed.2d 667 (1996); Coyne, 4 F.3d at 108-09(stating that the plain language of § 666 "neither explicitly nor
implicitly requires that the $10,000 be directly linked to the
program that was the subject of the bribe"); United States v.
Simas, 937 F.2d 459 (9th Cir.1991) ("The broad language of [§ 666]
does not require a tracing of federal funds to the project affected
by the bribe."). Furthermore, the plain language of the statute
merely requires that the payments be made to an agent of the State
which "receives benefits in excess of $10,000 in any one year
period." Because the language in the statute is clear, it would be
improper to look to the legislative history for clarification.
Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 254, 112 S.Ct.
1146, 1149-50, 117 L.Ed.2d 391 (1992). We find the cases cited by
defendants to be distinguishable or inapplicable.36 Accordingly,
we decline the invitation to include the suggested "connection to
federal funds" element as a requirement to convictions under § 666.
(2) Does § 666 Require a Quid Pro Quo?
A quid pro quo is simply a specific official act in exchange
for a specific corrupt payment. D. Paradies claims that this
element is required in order to convict him under § 666, as is
evidenced by the amendment of § 666, and that the district court
erred in failing to give an appropriate jury charge to that effect.
Further, he argues that the government did not produce evidence
that the 1990 reimbursement to Echols was connected in any way to
an official act or benefit.
The government claims that, because this is the appeal from
the district court's failure to give a "quid pro quo" jury charge,
and the defendant neither requested nor objected to the absence
36
United States v. Cicco, 938 F.2d 441, 444 (3d Cir.1991)
(finding that the test of § 666 is ambiguous); United States v.
Wyncoop, 11 F.3d 119, 121-23 (9th Cir.1993) (discussing whether §
666 applies to employees of entities that receive only indirect
benefits from a federal program).
thereof, this court reviews this issue for plain error.
Fed.R.Crim.P. 52(b). Specifically, the government argues that,
even in jurisdictions that require a quid pro quo, jury
instructions that merely track the language of the statute is not
error. The court in United States v. Medley, 913 F.2d 1248, 1260
(7th Cir.1990), cert. denied, 510 U.S. 1013, 114 S.Ct. 604, 126
L.Ed.2d 569 (1993), stated that "[t]he essential element of a § 666
violation is a "quid pro quo[.]" The court opined, however, that
the defendant did not object to the jury instructions given in the
district court, which instructions "set forth the offense using the
language in the body of § 666." Id. at 1259. In light of that
fact, the instructions did not constitute error.
We have carefully reviewed the jury charges given in this
case, and we are persuaded that the district court did not commit
reversible error under the reasoning in Medley. The jury charges
tracked the statutory requirements, and the evidence at trial was
sufficient for a jury to find that Jackson accepted payments for
his votes and his influence upon the City Council and the
administration. Such a finding would satisfy any quid pro quo
requirement under the statute. Therefore, the court's instructions
were not plainly erroneous, and they would not serve as a basis for
reversal under these circumstances.
E. Evidentiary Issues
The Paradies defendants also raise numerous evidentiary
issues.37 Particularly, they claim that the district court abused
37
Generally, all of the defendants argue that the
government's trial evidence was insufficient to convict them on
various counts. In reviewing that claim, we have examined the
its discretion in excluding certain testimony of their legal
expert, in admitting a tape recording of a payoff to Echols, and in
admitting evidence against D. Paradies under Rule 404(b). We have
carefully considered those arguments and, as is explained below, we
find that the district court did not abuse its discretion in any
respect.
(1) Limitation of Testimony of Legal Expert
The district court's exclusion of expert testimony is subject
to an abuse of discretion standard, United States v. Lankford, 955
F.2d 1545, 1550 (11th Cir.1992), and constitutes reversible error
if the defendant establishes that the error had a "substantial
impact on the outcome." United States v. Sellers, 906 F.2d 597,
601 (11th Cir.1990).
The Paradies defendants called Thomas O. Marshall, a former
Chief Justice of the Georgia Supreme Court, to testify as a legal
expert. He testified about the City's MBE program and the
management and shareholder's agreements. The district court
refused to allow Judge Marshall to testify about the enactment of
§ 1346 and how it changed the law. The Paradies defendants
objected, claiming that this witness would support their defenses
evidence in the light most favorable to the government to
determine whether "any rational trier of fact could have found
the essential elements of the crime beyond a reasonable doubt."
Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61
L.Ed.2d 560 (1979); see United States v. Dynalectric Co., 859
F.2d 1559, 1574 (11th Cir.1988). Using that standard, we have
evaluated this evidence de novo in order to determine whether the
district court erred in denying the defendants' motions for
acquittal. See United States v. Busacca, 936 F.2d 232, 239 (6th
Cir.), cert. denied, 502 U.S. 985, 112 S.Ct. 595, 116 L.Ed.2d 619(1991). After a thorough review of the record in this case, we
reject all of the defendants' "sufficiency of the evidence"
contentions.
of ignorance of the law and lack of fair notice as an element of
the vagueness defense. He would have testified that a reasonable
man would not have been put on notice that § 1346 precluded the
Paradies defendants from making the payments to Jackson, even if
Paradies knew that the arrangement between Wilbourn and Jackson was
illegitimate. United States v. Garber, 607 F.2d 92 (5th Cir.1979)
(reversing conviction because trial court did not allow expert
legal testimony on tax laws).
While Garber may be the law for tax cases, ignorance of the
law is not a defense in this mail fraud case, as we have already
discussed supra. See Hollis, 971 F.2d at 1451-52. If the district
court had allowed testimony that ignorance of the law was a defense
would have mislead and confused the jury. "The law would be in a
curious state if jurors received their instructions on the law from
an expert witness as well from the trial judge." United States v.
Brodie, 858 F.2d 492, 497 (9th Cir.1988) (rejecting proffer of an
expert to testify on unsettled points of law). Additionally, as we
have concluded, § 1346 is not vague under these circumstances as a
matter of law, and testimony regarding that issue was properly
excluded. The district court, indeed, gave witness Marshall a
broad scope of opinion testimony over objections of the government.
Accordingly, it was not an abuse of discretion for the district
court to limit that testimony.
(2) Admission of Tape Recorded Payoffs
After he began to cooperate with the government, Echols agreed
to be videotaped and audiotaped at breakfast/bribery meetings held
between Echols and two other councilmembers, Arrington and Fowlkes.
The tapes show the councilmembers accepting bribes, and they also
contain statements by Mr. Echols about Paradies' decision not to
testify before the grand jury. Govt. Exhibit 473T ("They wanted to
talk to Paradies, and at that time Paradies' attorney wouldn't let
Paradies go down."). Paradies filed a motion in limine to exclude
the tapes because they constituted hearsay, and they were
irrelevant and prejudicial. The district court disallowed the
tapes in the governments case-in-chief because they were irrelevant
and unduly prejudicial. He reserved final determination on the
matter, however, because the only basis for admission of the tapes
would have been to rehabilitate Echols' credibility.
After Echols testified on direct at trial, the defense
conducted an aggressive cross-examination of Echols. On redirect,
to rehabilitate their witness, the government again sought to
introduce the tapes. The district court found that the tapes were
admissible under Fed.R.Evid. 801(d)(1)(B), which states that a
statement is not hearsay if it is a prior consistent statement of
a witness that is used to rebut an implied charge of recent
fabrication.38 On appeal, the parties agree that the admission of
the tapes under this rule was error, because the Supreme Court has
recently decided that the prior consistent statement under the rule
must have been made before the alleged influence or motivation to
fabricate arose. Tome v. United States, --- U.S. ----, 115 S.Ct.
696, 130 L.Ed.2d 574 (1995). In this case, the government made the
38
This rule is not a hearsay exception—it is a rule defining
a statement that is not hearsay.
tapes after Echols' agreement to cooperate with the government.39
Therefore, under Tome, the tapes would not constitute nonhearsay
under 801(d)(1)(B), and the district court erred in so finding.
The government correctly argues, however, that "[r]egardless
of the ground for admission of evidence cited by the district
court, this Court will uphold the admission even if the district
court's reasons were erroneous if the admission was proper on other
grounds." United States v. Cardenas, 895 F.2d 1338, 1345 (11th
Cir.1990). The government also correctly points out that the tapes
were not hearsay, because they were not statements offered for the
truth of the matter asserted. Rather, the breakfast conversations
were innocuous, and they were offered merely to rehabilitate
Echols' testimony that the people involved had a familiar
relationship and had regular breakfast meetings.40 See United
States v. Price, 792 F.2d 994, 996-97 (11th Cir.1986) (statements
admitted simply to put other statements into context are not
hearsay). Also, there are no nonverbal hearsay concerns with the
videotape of money being passed, because "[w]hen non-verbal
conduct, like the transfer of money, is ambiguous, contemporaneous
words which characterize the transactions are not hearsay." United
States v. Valentine, 644 F.Supp. 818, 821 (S.D.N.Y.1986).
39
His agreement with the government is presumably the basis
for his motivation to fabricate his testimony.
40
The innocuous nature of the conversations was one reason
the district court initially disallowed the evidence as
irrelevant. For example, although Echols made a statement about
the government wanting to talk to Paradies, the government was
not attempting to show that "the government wanted to talk to
Paradies." They wanted to show that Echols was not lying when he
testified to having a familiar relationship with the councilman
and had regular breakfast meetings with him.
Therefore, because the video and audio tapes became relevant to
rehabilitate Echols, and because the tapes did not constitute
hearsay, the admission of the evidence was proper despite the
court's erroneous ruling.
(3) Admission of Evidence Pursuant to 404(b)
"This court reviews the decision to admit extrinsic act
evidence under Fed.R.Evid. 404(b)41 for "clear abuse of discretion.'
" United States v. Hooshmand, 931 F.2d 725, 736 (11th Cir.1991).
The government must show that "(1) the evidence is relevant to an
issue other than the defendant's character and (2) the probative
value outweighs any prejudicial effect." Id. Also, the "evidence
is admissible only if the jury could reasonably find by a
preponderance of the evidence that the defendant committed the
extrinsic act." Id.The district court admitted two days and seven witnesses
regarding evidence that the Paradies defendants violated the
Michigan Campaign Finance Act ("MCFA") from 1990 through 1993 by
illegally reimbursing employees for contributions to political
candidates and concealing those reimbursements through phony travel
vouchers. D. Paradies claims that the jury could not reasonably
find that he was involved in the extrinsic acts. He takes issue
with the illicit intent attached to the evidence, because he claims
that there was no evidence that the actions of his companies
41
Fed.R.Evid. 404(b) provides that "[e]vidence of other
crimes, wrongs, or acts is not admissible to prove the character
of a person in order to show action in conformity therewith. It
may, however, be admissible for other purposes such as proof of
motive, opportunity, intent, preparation, plan, knowledge,
identity, or absence of mistake or accident...."
violated any laws. He claims that there is no basis for 404(b)
evidence when the extrinsic act involved legal activity. Id. The
government contends that the evidence was sufficient to find that
Mr. Paradies was involved in his companies' illegal contributions
that violated the MCFA. We agree with the government on this
point, in light of the overwhelming evidence regarding the high
degree of control D. Paradies had over his companies and the
intricacy of the reimbursement plan. Specifically, the evidence
showed that on two travel vouchers, the annotation "Per Dan" was
included next to a dinner expense for which there was no dinner.
Also, the evidence showed that Mr. Paradies was active in
attempting to influence, or "lobby," decisionmakers for the benefit
of his companies. The jury could infer from this evidence that Mr.
Paradies was involved in the clandestine scheme to contribute to
political campaigns and influence those in political office who
could control his airport operations.
F. Jackson's Sentence Pursuant to the Sentencing Guidelines
Defendant Jackson raises several objections to the
applications of the sentencing guidelines to his sentence. Review
of the district court's determination that Jackson's sentence
should have been enhanced under U.S.S.G. §§ 2F1.1, 3C1.1, and 2T1.1
is subject to a clearly erroneous standard of review. See United
States v. Cannon, 41 F.3d 1462, 1467 (11th Cir.) (§ 2F1.1), cert.
denied, --- U.S. ----, 116 S.Ct. 86, 133 L.Ed.2d 44 (1995); United
States v. Jones, 32 F.3d 1512, 1519 (11th Cir.1994) (§ 3C1.1). The
district court's determination that the specific offense
characteristic in U.S.S.G. § 2C1.1(b)(2)(B) applies to the
recipient of a payment is a question of law subject to de novo
review.
Jackson first claims that the district court erroneously
calculated the amount of loss under the all-too-familiar U.S.S.G.
§ 2F1.1. The district court used $669,653.03 as the amount of
"loss" involved in the fraud. Jackson claims that this amount
should be reduced by $400,000, which constitutes the "loan
amounts." Curiously, Jackson does not provide any factual or legal
basis on which this reduction should be made. We do not think that
the loss amount, which consisted of the money that Jackson received
from the scheme after November 18, 1988, should be reduced by any
"loan amount," because the loans involved in this case were proven
to be illegitimate. Therefore, Jackson's argument is meritless.
Next, Jackson argues that the district court erred in
enhancing his sentence under § 3C1.1 for committing perjury at his
trial. That section provides that "[i]f the defendant willfully
obstructed or impeded, or attempted to obstruct or impede, the
administration of justice during the investigation, prosecution or
sentencing of the instant offense, increase the offense level by
two levels." U.S.S.G. § 3C1.1. The district court made a factual
finding that Jackson committed perjury during the trial in a number
of instances, particularly when he denied having breakfast meetings
with Harold Echols. On that basis, the district court enhanced his
sentence for obstruction of justice. Defendant Jackson has failed
to establish that the district court was clearly erroneous in its
determination that he testified untruthfully at trial. See Jones,
32 F.3d at 1519 (noting that the comments to § 3C1.1 allow the
enhancement if the defendant commits perjury or provides materially
false information to a judge). While Jackson claims that the
district court erred because it penalized him merely for his
failure to plead guilty, that was not the case. Therefore,
Jackson's "obstruction of justice" challenge must fail.
The district court further found that Jackson used
"sophisticated means" to impede discovery of the existence or
extent of the tax offense. See U.S.S.G. § 2T1.1(b)(2) (allowing
two-level increase if sophisticated means were used to impede
discovery of a tax offense). Jackson claims that the district
court erred in enhancing his sentence under this section because he
claims that the evidence presented in the case did not support a
finding that "sophisticated means" were used. The government
argues, however, that it presented ample evidence that Jackson
routinely transferred money through shell corporations, such as
Options International, Inc., in an attempt to conceal his
transactions. In light of the evidence presented at trial, we
agree with the government and find that the district court did not
clearly err in enhancing Jackson's level based on the use of
"sophisticated means."
Finally, Jackson's offense level was increased under U.S.S.G.
§ 2C1.1, which provides that "[i]f the offense level involved more
than one bribe or extortion, increase by two levels.... If the
offense involved a payment for the purpose of influencing an
elected official or any official holding a high level
decision-making or sensitive position, increase by eight levels."
U.S.S.G. § 2C1.1(b)(1) & (2)(B). Jackson claims that his sentence
should not have been enhanced under this section because he was the
payee, not the payor, of the bribes. The background to that
section of the guidelines directly refutes Jackson's contention,
because it states that "the guideline applies to a public official
who solicits or accepts such a bribe." In light of this background
statement and in the absence of any case law to the contrary,
Jackson's contention must be rejected.
III. CONCLUSION
In sum, we conclude that the district court did not commit
reversible error in connection with any of the convictions or
sentences of these defendants. We repeat the irony in this case
that the thirty-five percent minority participation requirement
imposed by Dobbs,42 which was designed to benefit minority-owned
businesses, served as the underlying vehicle by which Jackson
became involved with the Paradies defendants. In any event, these
parties received a fair trial, and the jury returned a reasonable
verdict. Accordingly, we hereby AFFIRM the district court in all
respects.
42
The City required only 20% minority participation.