United States v. France

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 97-4892
EDGAR FRANKLIN FRANCE,
Defendant-Appellant.
Appeal from the United States District Court
for the Middle District of North Carolina, at Greensboro.
James A. Beaty, Jr., District Judge.
(CR-96-262, CR-97-101)
Argued: September 22, 1998
Decided: December 29, 1998
Before WILKINSON, Chief Judge, WIDENER, Circuit Judge, and
MAGILL, Senior Circuit Judge of the United States Court of
Appeals for the Eighth Circuit, sitting by designation.
_________________________________________________________________
Affirmed by published opinion. Judge Widener wrote the opinion, in
which Chief Judge Wilkinson and Senior Judge Magill joined.
_________________________________________________________________
COUNSEL
ARGUED: Edward Jennings, Winston-Salem, North Carolina, for
Appellant. Paul Alexander Weinman, Assistant United States Attor-
ney, Winston-Salem, North Carolina, for Appellee. ON BRIEF: Wal-
ter C. Holton, Jr., United States Attorney, Winston-Salem, North
Carolina, for Appellee.
_________________________________________________________________
OPINION
WIDENER, Circuit Judge:
Edgar France appeals following his conviction on two counts of
perjury pursuant to 18 U.S.C. § 1623(a) and one count each of money
laundering, 18 U.S.C. § 1956(a)(1)(A)(i), and conspiracy, 21 U.S.C.
§ 846. We affirm.
I.
Evidence indicated that France's involvement in the drug trade in
and around Mount Airy, North Carolina continued for a number of
years throughout the 1980s and 1990s. One of his co-conspirator's in
that endeavor was Tommy McBride; another was Judy King. During
the course of a federal investigation into McBride's illegalities,
France gave immunized testimony before a grand jury three times in
1996; once on July 30, again on August 27, and finally on October
28. On two of those occasions, France denied prior statements made
to investigators in 1991 and in 1993 naming McBride as his source
of drugs. Those denials served as the basis for France's perjury con-
victions.
Mrs. King's participation in the conspiracy gave rise to France's
money laundering charge. In addition to introducing some of the drug
conspiracy's key players to one another, Mrs. King traveled to New
York to purchase cocaine which she supplied to France and McBride.
While returning from one such trip, in February 1995, New Jersey
police arrested Mrs. King on state drug charges. France helped her
post bail, securing her release during the pendency of those charges.
The government based France's money laundering charge on the
financial transaction relating to Mrs. King's bail.
France's first trial addressed the two perjury charges. On February
12, 1997, the jury found him guilty on both counts. Following another
trial on July 7, 1997, a second jury returned a guilty verdict on the
conspiracy and money laundering counts. On September 30, 1997, the
court sentenced France for all four offenses. France filed one notice
of appeal for all of the four convictions, and we consider the four here
as one case.
2
France raises five issues on appeal: (1) whether sufficient sources,
independent of his immunized grand jury testimony, existed for the
evidence presented against France in his second trial; (2) whether the
evidence supported the verdict and whether the perjury indictment
was sufficient as alleged; (3) whether there was sufficient evidence to
convict France of money laundering; (4) whether the district court
erred in enhancing France's sentence; and (5) whether the district
court's evidentiary rulings were erroneous.
II.
A.
On June 30, 1997, the district court held an evidentiary hearing on
France's motion to dismiss his indictment pursuant to the Supreme
Court's decision in Kastigar v. United States , 406 U.S. 441 (1972),
that the government must establish an independent source for all evi-
dence used to prosecute a witness who had previously testified under
a grant of immunity. See United States v. Harris , 973 F.2d 333 (4th
Cir. 1992). France's motion was denied on July 3, 1997, and on Sep-
tember 10, 1997, the court entered an order making factual findings
that a sufficient independent source existed for all of the evidence
presented by the government at France's trial.
France's complaint regarding the evidence used to indict and even-
tually try him appears to be two fold. First, he contends that the testi-
mony resulting from his prior grand jury appearances, all of which
was immunized, contained common threads which were used by the
government, albeit indirectly, in the context of the investigation
which led to his indictment and prosecution. Next, France contests the
government's direct use at trial of a series of checks which he pro-
duced before the grand jury and the testimony which accompanied
them in support of the money laundering charge against him. With
respect to most of the evidence in question, that which France claims
was indirectly used against him, we are of opinion that the district
court's determination that the government proved a sufficient inde-
pendent source for that evidence was not clearly erroneous. The gov-
ernment did, however, introduce the series of checks in support of the
money laundering charge. Sixteen checks, as well as the identity of
France's brother who cashed them, were identified by a government
3
witness and admitted into evidence. The record demonstrates not only
did the same prosecutor who obtained those checks from France dur-
ing the course of his grand jury testimony introduce them into evi-
dence, the government also acknowledged, prior to trial, that it had
no independent source for the information concerning France's
brother and would, therefore, be unable to introduce such at the trial.
With respect to the immunized testimony which France argues
indirectly supported the conspiracy count, the court found that an
independent investigation conducted by the investigating agents
revealed the extent of France's involvement in the drug conspiracy at
issue. The court relied on evidence of interviews with witnesses, other
than France, conducted prior to France's grand jury testimony, which
established his involvement with Mrs. King and Charles Hairston.
Mrs. King then became the government's primary witness against
France. Furthermore, the court emphasized that nothing in France's
grand jury testimony bore any relevance to the conspiracy charge.
The district court found that, because France lied about the nature of
his involvement with his co-conspirators, the information that he gave
the grand jury was not, itself, helpful to the government, nor did it
provide the government with any investigative leads.
It also found that, regardless of when Mrs. King and Hairston were
actually interviewed, the government knew of their involvement with
France before he ever took the witness stand. These findings of the
district court were not clearly erroneous, nor was its determination
that this knowledge constitutes a sufficient independent source for
Kastigar purposes.
Establishing an independent source for the money laundering count
is more difficult, but once again, with respect to the evidence claimed
by France to have indirectly impacted his prosecution, the district
court was not clearly erroneous in finding one. The government pre-
sented evidence at France's Kastigar hearing that a Currency Trans-
action Report filed in early 1996 provided the government with much
of the critical information connecting France to Mrs. King's New Jer-
sey bail. Interviews with two other witnesses named in that report
filled in the gaps. Government agents cooperated with local officers
to determine where France did his banking. All of this occurred prior
to France's testimony before the grand jury. Furthermore, Chris Grif-
4
fen, the I.R.S. agent who worked on France's case, testified that he
received France's bank statements for the period in question and the
signature card from his account pursuant to a subpoena issued to
France's bank. Griffin testified that he did not know of France's grand
jury testimony when he procured the subpoena. Based on Agent Grif-
fin's testimony, the district court determined that the government had
a sufficient independent source. That determination was not clearly
erroneous.
France's principal claim of error at this point, however, is over evi-
dence pertaining to the money laundering count and rests on the series
of checks, cashed by his brother, which the government obtained
through France's grand jury testimony and then introduced at trial.
The district court made no specific fact finding with respect to this
evidence. Furthermore, France failed to object to its introduction at
the time of trial. Thus, if we are to review this issue at all, we must
review it for plain error under Fed. R. Cr. P. 52. See Johnson v.
United States, 65 U.S.L.W. 4305, 4306 (U.S. May 12, 1997) (No. 96-
203). Plain error review requires us to analyze the issue under the four
part test set out by the Supreme Court in United States v. Olano, 507
U.S. 725 (1993), and discussed in Johnson, 65 U.S.L.W. at 4307. See
United States v. Jarvis, 7 F.3d 404, 412-13 (4th Cir. 1993). First,
there must indeed be error. Johnson, 65 U.S.L.W. at 4307 (quoting
Olano, 507 U.S. at 732). Second, that error must be plain. Johnson,
65 U.S.L.W. at 4307 (quoting Olano, 507 U.S. at 732). Third, it must
"affect substantial rights," and finally, it must "seriously affect the
fairness, integrity, or public reputation of judicial proceedings."
Johnson, 65 U.S.L.W. at 4307 (quoting Olano , 507 U.S. at 732 (cita-
tions omitted)).
There is no question that the government's introduction of the
checks at issue and the accompanying reference to France's brother's
participation constitute error. France delivered the checks to the gov-
ernment and referred to his brother's participation during his immu-
nized grand jury testimony. The government put forth no evidence
tending to establish an independent source for this evidence at
France's Kastigar hearing, and in fact, admitted that it had no inde-
pendent source for the information regarding France's brother. The
government then proceeded to introduce that evidence at trial.
Undoubtedly, that action violated the rule set forth in Kastigar, and
5
thus, constituted error under the first prong of the plain error analysis.
Because the Supreme Court has interpreted "plain" as "synonymous
with ``clear' or, equivalently, ``obvious,'" the government's conduct in
this instance easily meets the second prong of the plain error test as
well. Johnson, 65 U.S.L.W. at 4307 (quoting Olano, 507 U.S. at 734).
Having established error, which is plain, we must also consider
whether it "affect[s] substantial rights." Johnson, 65 U.S.L.W. at
4307. In Olano, the Supreme Court expounded on this prong of the
plain error analysis, saying "in most cases it means that the error must
have been prejudicial: It must have affected the outcome of the dis-
trict court proceedings." 507 U.S. at 734. The Court likened this
inquiry to the harmless error analysis provided for by Rule 52(a). See
Olano, 507 U.S. at 734.
As well as introducing the checks France complains about, the gov-
ernment introduced the bank statement from France's checking
account which covered the very withdrawals accomplished by those
checks. That statement noted a series of nine thousand nine hundred
dollar withdrawals from France's bank account. Therefore, any fur-
ther reference to the amounts of the withdrawals was merely cumula-
tive. The jury had access, via France's bank statement, to the very
same information that the checks revealed. We hold that the introduc-
tion of the sixteen checks was not prejudicial because merely cumula-
tive and harmless beyond a reasonable doubt. Harris, 973 F.2d at 338.
Likewise, the government's referral to France's brother's participa-
tion during the introduction of those checks does not meet the require-
ment of affecting substantial rights for plain error review. France's
brother's participation simply does not tend to establish guilt. There-
fore, its mention was harmless beyond a reasonable doubt and not
reversible error.
As plain error has not been established, we do not reach the final
hurdle for an appellate court seeking to correct plain error which
involves a determination that "the forfeited error ``seriously affect[s]
the fairness, integrity, or public reputation of judicial proceedings.'"
Johnson, 65 U.S.L.W. at 4308 (quoting Olano, 507 U.S. at 736 (cita-
tions omitted)).
6
We hold that the factual findings made by the district court in
accordance with Kastigar were not clearly erroneous. That being so,
and the introduction of the two items of evidence (the checks and the
reference to France's brother) in violation of Kastigar, being harmless
beyond a reasonable doubt, the district court correctly did not dismiss
the indictment.
B.
France also questions the sufficiency of both counts of his perjury
indictment and as well the sufficiency of the evidence to support the
conviction. The indictment was under 18 U.S.C. § 1623(a), which
provides that a statement under oath before a grand jury if false, mate-
rial, and knowingly made, constitutes a crime.
The indictment charged that on August 27, 1996, before the federal
grand jury in Greensboro, France testified that he had not named
Tommy McBride as the person who had gotten him the cocaine that
he had sold to Jackie Stewart, and further, that he had not told one
of the investigating officers that he had gotten cocaine from Tommy
McBride. It also charged that, on or about October 28, 1996, before
the Greensboro grand jury, France testified that he had not told the
investigating officers that he had gotten cocaine from Tommy
McBride. At trial, however, the officers testified that France had told
them as charged that he had received cocaine from McBride.
The jury convicted, simply believing the officers. We are of opin-
ion the testimony of the officers was sufficient to support the convic-
tions and that France's objection to the indictment is without merit.
C.
France also questions the sufficiency of the evidence against him
regarding the money laundering count arising out of the procurement
of Mrs. King's appearance bond. If, when viewed in the light most
favorable to the government, substantial evidence supports the jury's
verdict, that verdict must be upheld. Glasser v. United States, 315
U.S. 60, 80 (1942).
7
Money laundering under 18 U.S.C. § 1956 requires: (1) that the
defendant conduct a financial transaction with at least a de minimis
effect on interstate commerce; (2) that the transaction involved the
proceeds of a specified unlawful activity; (3) that the defendant knew
that those proceeds were derived from that specific unlawful activity;
and (4) that the defendant engaged in the transaction intending to pro-
mote that unlawful activity. See United States v. Wilkinson, 137 F.3d
214, 220 (4th Cir. 1998). The government's evidence showed that
France posted bond for Mrs. King to secure her release during the
pendency of her New Jersey drug charges. The posting of bond con-
stitutes a sufficient financial transaction for money laundering pur-
poses. See United States v. Laurenzana, 113 F.3d 689, 692 (7th Cir.
1997). The legality of posting bond is irrelevant. The statute requires
only that the proceeds used in that transaction be derived from unlaw-
ful activity and that the defendant's intent be to promote the unlawful
activity in question. 18 U.S.C. § 1956(a)(1)(A)(I). In this case, the
government put on evidence of France's involvement with Mrs. King
and McBride in illegal drug trafficking. In fact, Mrs. King made regu-
lar trips to New York to buy drugs for France and McBride. The gov-
ernment's evidence further tended to show that even though McBride
claimed ownership of the $180,000 in question, that France handled
the money and ran it through his bank account, and that France was
not reporting enough legitimate income to establish a legal source for
that sum of money. Taken together, this constitutes substantial, albeit
circumstantial, evidence that France used drug money to post Mrs.
King's bail and that he did so in furtherance of his drug trafficking
activity. The jury's verdict is sustained.
D.
France contends that his offense level was erroneously enhanced
both for his role in the offense and for obstruction of justice. Courts
of appeal review applications of the United States Sentencing Guide-
lines that depend on findings of fact under a clearly erroneous stan-
dard; legal determinations are reviewed de novo . United States v.
Jones, 31 F.3d 1304, 1315 (4th Cir. 1994); United States v.
Daughtrey, 874 F.2d 213, 217 (4th Cir. 1989). A sliding scale is used
for issues which are mixed questions of law and fact. Jones, 31 F.3d
at 1315; Daughtrey, 874 F.2d at 217.
8
France makes no argument on appeal as to why he believes the two
point obstruction of justice enhancement to be erroneous. He merely
claims that it is. According to U.S.S.G. (1995)§ 3C1.1, Application
Note 3(b), committing perjury is cause for the enhancement. Factu-
ally, there is no question but that a jury convicted France of perjury.
Legally, Application Note 6 to § 3C1.1, forbids the application of the
enhancement, without evidence of further obstruction, to the offense
level for a perjury conviction. France's guidelines, however, were cal-
culated based on an offense level of 32 for his drug conviction, not
the lesser offense level for his perjury conviction. Therefore, the
enhancement is proper under Application Note 3(b).
Neither is France's contention regarding the impropriety of his
three level enhancement based on his role in the offense justified.
Section 3B1.1(b) of the Guidelines calls for a three level offense level
increase when a defendant "was a manager or supervisor (but not an
organizer or leader) and the criminal activity involved five or more
participants." The government clearly established the participation of
more than five individuals in this drug operation. France, McBride,
Hairston, and Mrs. King make four, and the government presented
evidence of two other men, Barry France and Deemus Chambers, who
accompanied Mrs. King on buying trips for Edgar France and
McBride. Furthermore, Mrs. King testified that Edgar France
recruited her to join the conspiracy, that he along with McBride pro-
vided the money that she used to purchase cocaine in New York City,
and that most of her contact with the conspiracy came through Edgar
France.
Even so, the district court did not, as France suggests, "subscribe
in wholesale fashion to the government's motion for enhancement."
Considering the evidence, the court actually rejected the govern-
ment's suggestion that France's conduct warranted a four level
enhancement for a leader or organizer and instead, applied the three
level enhancement properly attributed to a supervisor. Application
Note 2 to Guideline § 3B1.1 applies this adjustment to a defendant
who acts as the "supervisor of one or more other participants." In light
of the evidence regarding France's relationship with Mrs. King, we
cannot say that the district court's determination that France acted as
a supervisor was clearly erroneous.
9
E.
France's final contention regards the district court's decisions to
admit certain evidence at trial. Evidentiary rulings as to relevancy are
reviewed under an abuse of discretion standard. United States v.
Zandi, 769 F.2d 229, 237 (4th Cir. 1985). We find no abuse of discre-
tion in this case.
The evidence in question concerns the testimony of Darrell Leon-
ard that he sold drugs for McBride and that during the course of their
involvement, McBride assaulted him. This was the extent of Leon-
ard's testimony. He did not know Edgar France, and he never con-
ducted any business with him, illegal or otherwise. Thus, France
contends that this evidence was inflammatory and prejudicial.
The district court, however, limited the introduction of Leonard's
testimony to that concerning the time period during which France and
McBride were conspiring to distribute cocaine. As a co-conspirator,
France is responsible for any acts of McBride within the scope and
in furtherance of the conspiracy. United States v. Irvin, 2 F.3d 72, 75
(4th Cir. 1993). Leonard's testimony may have pertained to points in
the chain of distribution in which France was not directly involved,
but, as part of the overall conspiracy, he bears responsibility for them
nevertheless. The court did not abuse its discretion in admitting Leon-
ard's testimony.
III.
Although it is likely whistling in the wind, we feel it necessary to
remark that many, or perhaps most, of the reversals and new trials fol-
lowing convictions in criminal cases are brought on by overkill or like
overzealous or reckless prosecution on the part of the government. In
this case, the government did not follow the admonition of this court
in Harris, and other courts, that the government show that prosecuting
officials were aware of the immunity problem and follow reliable pro-
cedures for segregating the immunized testimony and its fruits from
officials pursuing any subsequent investigations. See Harris, 973 F.2d
at 336-338.
10
That the Department of Justice recognizes the problem is shown by
the recommendation in its manual that prosecution of a compelled
witness be handled by an attorney unfamiliar with the substance of
the compelled testimony. In the prosecution of France, the govern-
ment took little or no account of these precautions and is saved from
reversal only by our application of the plain error rule.
The convictions and sentence of France are accordingly
AFFIRMED.
11