United States v. Ellis

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
9-21-1998
United States v. Ellis
Precedential or Non-Precedential:
Docket 97-1368,97-1369
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Recommended Citation
"United States v. Ellis" (1998). 1998 Decisions. Paper 229.
http://digitalcommons.law.villanova.edu/thirdcircuit_1998/229
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Filed September 21, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NOS. 97-1368 and 97-1369
UNITED STATES OF AMERICA
v.
CARL D. ELLIS,
Appellant
(D.C. Crim. No. 95-cr-00435-4)
UNITED STATES OF AMERICA
v.
ESTER L. CARTER
Ester Carter,
Appellant
(D.C. Crim. No. 95-cr-00435-5)
On Appeal From the United States District Court
For the Eastern District of Pennsylvania
Argued: March 19, 1998
Before: BECKER, Chief Judge, RENDELL and
HEANEY* Circuit Judges.
(Filed September 21, 1998)
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*Honorable Gerald W. Heaney, United States Circuit Judge for the
Eighth Circuit, sitting by designation.
TIMOTHY P. BOOKER, ESQUIRE
(ARGUED)
117 N. 15th Street, Suite 1702
Philadelphia, PA 19102
Attorney for Appellant Carl D. Ellis
MARK S. GREENBERG, ESQUIRE
(ARGUED)
Stephen Robert LaCheen and
Associates
3100 Lewis Tower Building
15th and Locust Streets
Philadelphia, PA 19102
Attorney for Appellant Ester Carter
MICHAEL R. STILES, ESQUIRE
United States Attorney
WALTER S. BATTY, JR., ESQUIRE
Assistant United States Attorney
Chief of Appeals
MAUREEN BARDEN, ESQUIRE
(ARGUED)
Assistant United States Attorney
WILLIAM B. PETERSEN, ESQUIRE
Assistant United States Attorney
615 Chestnut Street - Suite 1250
Philadelphia, PA 19106-4476
Attorneys for Appellee
United States of America
OPINION OF THE COURT
BECKER, Chief Judge.
Ester Carter appeals from a judgment of the district court
convicting him of one count of conspiracy to launder drug
trafficking proceeds in violation of 18 U.S.C. S 1956(h) and
two counts of money laundering in violation of 18 U.S.C.
S 1956(a)(3)(b).1 Carter's conviction was one of several that
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1. Carter was sentenced to a prison term of 48 months, a fine of
$30,000, and 3 years supervised release.
2
arose out of a government undercover operation in which
Special Agent Louis Oubre of the Internal Revenue Service
posed as a drug dealer named "Louis Richard." The
background facts are set forth at length in our opinion in
United States v. Nolan-Cooper, Nos. 97-1171 and 97-1298
(3d Cir. filed September 1, 1998) and in the district court's
opinion denying Carter's Rule 29 motion. See United States
v. Carter, 966 F. Supp. 336 (E.D. Pa. 1997).
The principal issue on the present appeal is whether the
district court committed prejudicial error when it admitted
two statements by Angela Nolan-Cooper, who was Carter's
attorney and was also an alleged coconspirator, pursuant
to Fed. R. Evid. 801(d)(2)(E). In addition, Carter challenges
the district court's failure to charge the jury with his
proposed money laundering instruction, and the limits the
court placed upon his cross-examination of Agent Oubre.
Because all of these challenges are without merit, we will
affirm.2
I. The Coconspirator Statements
Carter first argues that the district court erred in
allowing the government to introduce two statements made
by Nolan-Cooper that were contained in tape recorded
conversations she had with Agent Oubre on February 7 and
9, 1994. The challenged statements were made by Nolan-
Cooper during her initial two meetings with Agent Oubre.
At these meetings Oubre explained that he was a drug
dealer and needed assistance in making it appear that his
drug proceeds came from a legitimate source.
In the first challenged statement, Nolan-Cooper explained
to Oubre how he could launder the drug proceeds by
investing in a recording studio run by one of her "clients"
(Carter does not dispute that he was the person about
whom Nolan-Cooper was speaking):
I have someone who's in a very similar situation with
you ... that ... has a recording studio.... In South
Jersey.... I'll be very honest with you. He has been in
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2. We exercise jurisdiction pursuant to 28 U.S.C. S 1291 and 18 U.S.C.
S 3231.
3
it and he's lost money.... He's lost money because he
was involved with somebody he shouldn't have been
involved with.... But even in losing the money... it's
helped him to legitimize everything else.... So he hasn't
had any problems. And he's another person that I'm
back and forth. I do the same thing with him.... So I
mean, that's the one thing that's already established
here, if you wanted to become an investor in something
like that....
[App. 244-45].
In the second recorded conversation, Nolan-Cooper again
discussed with Oubre the possibility of investing in Carter's
recording studio:
[T]he gentleman who's still involved ... in this business
now, ... he started out, he bought some bars ... and he
put the poker machines ... and he has made millions
and millions of dollars on those poker machines... in
his bars. And he doesn't show for it, if you saw him...
and, I mean, he's an older man. He's just in his sixties
.... he drives around in a 1971 Chevy Impala.... He
wears old clo[thes] ... you would never think ... but he
was very smart true old man.
[App. 248-49]
It is not seriously disputed that, prior to the events
leading to the present indictment, a money laundering
operation had been established involving at least Nolan-
Cooper and Carter, whereby Carter's recording studio was
used to launder the proceeds of illegal gambling (video-
poker) activities.3 The evidence also established that the
recording studio was later used as a false address in order
to legitimize a sham corporation set up by Nolan-Cooper to
launder Agent Oubre's purported drug proceeds, and that,
to this end, Carter and Oubre both signed a backdated
lease, and Carter accepted "rent" payment totaling several
thousand dollars. The office space was never used by
Oubre.
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3. At all events, such a conclusion is supported by a preponderance of
the evidence.
4
Fed. R. Evid. 801(d)(2)(E) excepts from the definition of
hearsay "a statement by a coconspirator of a party during
the course and in furtherance of the conspiracy." In order
for an out-of-court statement to be admissible pursuant to
Rule 801(d)(2)(E), the district court must find by a
preponderance of the evidence that: (1) a conspiracy
existed; (2) the declarant and the party against whom the
statement is offered were members of the conspiracy; (3)
the statement was made in the course of the conspiracy;
and (4) the statement was made in furtherance of the
conspiracy. See United States v. McGlory, 968 F.2d 309,
333-34 (3d Cir. 1992). Where the district courtfinds that a
conspiracy existed, we review the district court'sfindings as
to these elements for clear error. See United States v. Cruz,
910 F.2d 1072, 1081 n.11 (3d Cir. 1990).
While the district court offered alternative bases for its
decision to admit the challenged statements, and the
ultimate basis for its decision is not entirely clear, we find
the core of the court's reasoning to be contained in findings
of fact made at the conclusion of the government's case.
There, in accordance with the requirements set forth in
McGlory, the district court, in essence, found that the
statements were admissible since they were made during
the course and in furtherance of a conspiracy that existed
in February 1994 among Nolan-Cooper, Carter, and others
to launder the proceeds of illegal transactions. See Carter,
966 F. Supp. at 347. We conclude, based on our review of
the record, that these findings are not clearly erroneous
and thus that the statements were properly admitted.
We pause, however, to consider the effect of a different
view of the evidence urged upon us by Carter. According to
Carter, when Nolan-Cooper made these statements in
February 1994, there was at best a conspiracy in place
solely to launder video poker money. He claims that in
February 1994 he had not yet authorized Nolan-Cooper to
extend the conspiracy to launder the proceeds of illegal
drug activity, and that he did not give this authorization
until his first conversation with Agent Oubre on March 11,
1994. Thus, in Carter's view, there were two different
conspiracies -- one the charged conspiracy to launder drug
proceeds, and the other a conspiracy to launder video poker
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proceeds. Based on this view, he contends that it was
clearly erroneous for the district court to have admitted
these statements because they were made in the course of
and in furtherance of a conspiracy that was not charged in
his indictment. While we agree with Carter that, for analytic
purposes, the continuum of events might be viewed as
containing two conspiracies, adopting such a view would
not change the result.
The law is well settled that out-of-court statements may
be admissible under Rule 801(d)(2)(E) even if the defendant
is not formally charged with any conspiracy in the
indictment. See United States v. Trowery, 542 F.2d 623,
626 (3d Cir. 1976); United States v. Godinez, 110 F.3d 448,
454 (7th Cir. 1997); United States v. Rivera, 68 F.3d 5, 7
(1st Cir. 1995). Thus, so long as the requirements set forth
in McGlory are satisfied (as they are here), Nolan-Cooper's
statements to Oubre are non-hearsay regardless of whether
they were made in a conspiracy separate from that charged.
See United States v. Arce, 997 F.2d 1123, 1128 (5th Cir.
1993) ("[t]he conspiracy that forms the basis for admitting
coconspirators' statements need not be the same
conspiracy for which the defendant is indicted"). 4 Of course,
not all nonhearsay is admissible in court -- only that which
is relevant -- and thus the introduction of statements from
an uncharged conspiracy might be precluded by application
of Article IV of the Federal Rules of Evidence. Cf. In re
Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 263 (3d
Cir. 1983) ("Rule 402 affords adequate protection against
admission of statements in furtherance of joint
undertakings that are remote and unrelated to the
conspiracy relied upon as a basis for liability."), rev'd on
other grounds sub nom., Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574 (1986).
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4. The cases relied on by Carter, Anderson v. United States, 417 U.S. 211
(1974), and Krulewitch v. United States, 336 U.S. 440 (1949), are
inapposite, as they applied the pre-Federal Rules common law of
evidence, which did include a requirement that the coconspirator's
statement be made in furtherance of a charged conspiracy. See
Anderson, 417 U.S. at 218. Rule 801(d)(2)(E) contains no such explicit
requirement and, as noted in the text, courts (including this one) have
uniformly read the Rule as not containing such a requirement.
6
In this vein, some courts require that in order for a
coconspirator statement to be admitted, the conspiracy
during which the statements were made must be "factually
intertwined" with the offenses being tried. See United States
v. Stratton, 779 F.2d 820, 829 (2d Cir. 1985); United States
v. Kendall, 665 F.2d 126, 131 (7th Cir. 1981). In our view,
this salutary additional requirement is essentially a
restatement of ordinary relevancy principles. Since the
challenged statements are relevant to the crimes charged,
we hold that they were properly admitted even if Carter's
characterization of the evidence is correct.5
II. Cross-Examination of Agent Oubre
The second error raised on this appeal concerns the
cross-examination of Agent Oubre. Oubre was called to the
stand solely for the purpose of authenticating various tape
recordings of conversations he had with Nolan-Cooper and
other alleged co-conspirators. After the government's direct
examination of Oubre, Carter and his co-defendant, Carl
Ellis, moved to cross examine Oubre concerning the district
court's earlier finding that he had testified falsely at a
hearing concerning possible "outrageous government
conduct" in the course of the investigation.6 Carter argued
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5. We also agree with the district court's conclusion that even if it were
error to have admitted the statements under Rule 801(d)(2)(E), such
error was harmless. Harmless error is "[a]ny error, defect, irregularity
or
variance which does not affect substantial rights." Fed. R. Crim. P.
52(a).
An error is harmless when we are certain "that the error did not
prejudice the defendant[ ]," United States v. Jannotti, 729 F.2d 213, 220
n.2 (3d Cir. 1984), and can say that it is "highly probable" that the
district court's errors did not contribute to the conviction. See
Government of Virgin Islands v. Toto, 529 F.2d 278, 284 (3d Cir. 1976).
Here, the government offered overwhelming evidence of Carter's guilt at
trial. Indeed, much of the evidence came from Carter's own mouth, as
several of his conversations were recorded by Agent Oubre. We must
therefore conclude that even if the court had erred in admitting Nolan-
Cooper's statements, it is "highly probable" that their admission did not
contribute to the conviction.
6. For a fuller discussion of the alleged "outrageous government conduct"
engaged in by Agent Oubre, see Nolan-Cooper, Nos. 97-1171 and 97-
1298 (3d Cir. filed September 1, 1998).
7
that he should he be permitted to cross-examine Oubre in
this manner on the ground that Oubre would be biased in
favor of the government because his earlier false testimony
could subject him to criminal charges.
The district court sustained the government's objection to
this line of inquiry on the ground that the proffered cross-
examination exceeded the scope of direct examination and
did not involve matters of credibility, see Fed. R. Evid.
611(b), and on the basis that its probative value was
substantially outweighed by the danger of unfair prejudice,
see Fed. R. Evid. 403. We review the court's decision to
limit cross-examination for abuse of discretion, see United
States v. Casoni, 950 F.2d 893, 902 (3d Cir. 1991), and find
none.
Fed. R. Evid 611(b) limits the scope of cross examination
"to the subject matter of the direct examination and
matters affecting the credibility of the witness." Fed. R.
Evid. 611(b). It is clear that the proposed questioning by
Carter exceeded the very limited scope of Agent Oubre's
direct examination. Carter nonetheless argues that it is
permissible under Rule 611(b) since Agent Oubre's
credibility was at issue. We disagree. Before trial, Carter
waived his right to a Starks hearing and stipulated that the
tape recordings made by the government during the
undercover operation were accurate, authentic, and correct.
Because Oubre testified only as to the foundational basis
required to admit the recordings, his testimony was
undisputed and his credibility was not at issue.
The district court also concluded that the proposed
questioning of Agent Oubre was precluded on the basis of
Fed. R. Evid. 403, which grants the district court discretion
to exclude evidence if "its probative value is substantially
outweighed by the danger of unfair prejudice, confusion of
the issues, or misleading the jury . . . ." Fed R. Evid. 403.
The district court reasoned that, because Oubre's testimony
was limited to authenticating the tapes and Carter had
stipulated as to the authenticity of the recordings, any
questioning regarding the agent's potential bias would be of
little or no probative value. On the other hand, the court
reasoned that "the proffered cross-examination questions
would have had a tendency to inflame the jury resulting in
8
significant prejudice." Carter, 966 F. Supp. at 353. The
court concluded, therefore, that "the probative value of the
proffered cross-examination is substantially outweighed by
the danger of unfair prejudice." Id. Because Oubre's
testimony was limited to authenticating the tape recording,
the district court did not abuse its discretion under either
Rule 611(b) or Rule 403 in prohibiting the proposed line of
questioning.7
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7. Carter's final contention is that he was denied a fair trial when the
district court refused to give a jury instruction that he requested
regarding the "intent to conceal" element of the money laundering
charge. This argument is patently without merit.
When charging the jury, the district court must provide it with "a clear
articulation of the relevant legal criteria." United States v. Goldblatt,
813
F.2d 619, 623 (3d Cir. 1987). However, determining the specific language
used is within the sound discretion of the district court and will be
reviewed only for an abuse of discretion. See id. A jury instruction does
not constitute reversible error if the instruction "fairly and adequately"
presents the issues in the case without confusing or misleading the jury.
See United States v. Simon, 995 F.2d 1236, 1243 n.11 (3d Cir. 1993)
(citations omitted). Nor is a defendant entitled to a jury instruction of
his
own choosing. See United States v. Salerno, 66 F.3d 544, 549 (3d Cir.
1995).
Since Carter's primary defense to the money laundering charge was
that his actions in dealing with Agent Oubre were so open and notorious
that he did not have the requisite intent to conceal or disguise the
source of Oubre's "drug money," he requested a money laundering
instruction that underscored the government's burden of proof in this
regard. The district court concluded that Carter's proposed instruction
was merely "redundant in emphasizing the intent element of the crime"
and instead opted to give the jury instruction proposed by the
government on this issue (which did explain the government's burden).
That instruction, in relevant part, required the jury to find that:
. . . the defendant conducted a financial transaction with the
intent
to conceal or disguise the nature, location, source, ownership, or
control of the property which defendant believed to be the proceeds
of the buying, selling and dealing in narcotic and dangerous drugs.
Carter, 966 F. Supp. at 350. Since this instruction clearly articulated
the
relevant legal criteria and fairly and adequately presented the issues of
the case, we conclude that the court's failure to tender Carter's
requested instruction did not constitute an abuse of discretion.
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The judgment of the district court will be affirmed.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
10