1998 Decisions

Opinions of the United

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Precedential or Non-Precedential: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
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) 

_________________________________________________________________ 

*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 

_________________________________________________________________ 

1. Carter was sentenced to a prison term of 48 months, a fine of 

$30,000, and 3 years supervised release. 

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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 NolanCooper 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 

_________________________________________________________________ 

2. We exercise jurisdiction pursuant to 28 U.S.C. S 1291 and 18 U.S.C. 

S 3231. 

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 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 NolanCooper and Carter, whereby Carter's recording studio was 

used to launder the proceeds of illegal gambling (videopoker) 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. 

_________________________________________________________________ 

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). 

_________________________________________________________________ 

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 

_________________________________________________________________ 

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 NolanCooper'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 crossexamination 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 

_________________________________________________________________ 

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 

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