### 1998 D e c i sion s O p inion s of the U nit e d

S t a t e s C our t of Appe al s for the Thir d C ir c uit

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D ock e t 97-1368,97-1369

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. e du/thir dc ir c uit_1998/229Filed 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 distric t court convicting him of one count of conspiracy to launde r drug trafficking proceeds in violation of 18 U.S.C. S 19 56(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 se veral that

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1. Carter was sentenced to a prison term of 48 mont hs, a fine of $30,000, and 3 years supervised release.

2arose out of a government undercover operation in w hich

Special Agent Louis Oubre of the Internal Revenue S ervice posed as a drug dealer named "Louis Richard." The background facts are set forth at length in our opi nion in United States v. Nolan-Cooper, Nos. 97-1171 and 97- 1298 (3d Cir. filed September 1, 1998) and in the distri ct 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 whethe r the district court committed prejudicial error when it admitted two statements by Angela Nolan-Cooper, who was Cart er's attorney and was also an alleged coconspirator, pur suant to Fed. R. Evid. 801(d)(2)(E). In addition, Carter challenges the district court's failure to charge the jury wit h his proposed money laundering instruction, and the limi ts the court placed upon his cross-examination of Agent Ou bre. Because all of these challenges are without merit, we will
affirm.2

I. The Coconspirator Statements

Carter first argues that the district court erred i n allowing the government to introduce two statements made by Nolan-Cooper that were contained in tape recorde d conversations she had with Agent Oubre on February 7 and 9, 1994. The challenged statements were made by Nol anCooper during her initial two meetings with Agent O ubre. At these meetings Oubre explained that he was a dru g dealer and needed assistance in making it appear th at his drug proceeds came from a legitimate source.

In the first challenged statement, Nolan-Cooper exp lained 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 abo ut whom Nolan-Cooper was speaking):

I have someone who's in a very similar situa tion 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.

3it and he's lost money.... He's lost money b ecause he

was involved with somebody he shouldn't have been involved with.... But even in losing the mon ey... it's helped him to legitimize everything else.... So he hasn't had any problems. And he's another person th at I'm back and forth. I do the same thing with him .... So I mean, that's the one thing that's already es tablished here, if you wanted to become an investor in something
like that....

[App. 244-45].

In the second recorded conversation, Nolan-Cooper a gain discussed with Oubre the possibility of investing i n 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 m illions and millions of dollars on those poker machi nes... 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 thin k ... but he was very smart true old man.

[App. 248-49]

It is not seriously disputed that, prior to the eve nts leading to the present indictment, a money launderi ng operation had been established involving at least N olanCooper and Carter, whereby Carter's recording studi o was used to launder the proceeds of illegal gambling (v ideopoker) activities.3 The evidence also established t hat the recording studio was later used as a false address in order to legitimize a sham corporation set up by Nolan-Co oper to launder Agent Oubre's purported drug proceeds, and that, to this end, Carter and Oubre both signed a backdat ed lease, and Carter accepted "rent" payment totaling several thousand dollars. The office space was never used b y Oubre.

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3. At all events, such a conclusion is supported by a preponderance of
the evidence.

4Fed. R. Evid. 801(d)(2)(E) excepts from the definit ion of

hearsay "a statement by a coconspirator of a party during the course and in furtherance of the conspiracy." I n order for an out-of-court statement to be admissible purs uant to Rule 801(d)(2)(E), the district court must find by a preponderance of the evidence that: (1) a conspirac y existed; (2) the declarant and the party against wh om the statement is offered were members of the conspiracy ; (3) the statement was made in the course of the conspir acy; and (4) the statement was made in furtherance of th e conspiracy. See United States v. McGlory, 968 F.2d 309, 333-34 (3d Cir. 1992). Where the district courtfind s that a conspiracy existed, we review the district court'sf indings as
to these elements for clear error. See United State s 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 th e ultimate basis for its decision is not entirely cle ar, we find the core of the court's reasoning to be contained i n findings of fact made at the conclusion of the government's case. There, in accordance with the requirements set fort h in McGlory, the district court, in essence, found that the statements were admissible since they were made dur ing the course and in furtherance of a conspiracy that existed in February 1994 among Nolan-Cooper, Carter, and ot hers to launder the proceeds of illegal transactions. Se e Carter, 966 F. Supp. at 347. We conclude, based on our revi ew of the record, that these findings are not clearly err oneous and thus that the statements were properly admitted

.

We pause, however, to consider the effect of a diff erent view of the evidence urged upon us by Carter. Accor ding to Carter, when Nolan-Cooper made these statements in February 1994, there was at best a conspiracy in pl ace solely to launder video poker money. He claims that in February 1994 he had not yet authorized Nolan-Coope r to extend the conspiracy to launder the proceeds of il legal drug activity, and that he did not give this author ization until his first conversation with Agent Oubre on Ma rch 11, 1994. Thus, in Carter's view, there were two differ ent conspiracies -- one the charged conspiracy to laund er drug proceeds, and the other a conspiracy to launder vid eo poker

5proceeds. Based on this view, he contends that it w as

clearly erroneous for the district court to have ad mitted these statements because they were made in the cour se of and in furtherance of a conspiracy that was not cha rged in his indictment. While we agree with Carter that, fo r analytic purposes, the continuum of events might be viewed a s containing two conspiracies, adopting such a view w ould not change the result.

The law is well settled that out-of-court statement s may be admissible under Rule 801(d)(2)(E) even if the d efendant 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 w hether they were made in a conspiracy separate from that c harged. See United States v. Arce, 997 F.2d 1123, 1128 (5th Cir. 1993) ("[t]he conspiracy that forms the basis for a dmitting 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 t hat which
is relevant -- and thus the introduction of stateme nts from an uncharged conspiracy might be precluded by appli cation
of Article IV of the Federal Rules of Evidence. Cf. In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 23 8, 263 (3d Cir. 1983) ("Rule 402 affords adequate protection a gainst 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. Unite d States, 417 U.S. 211 (1974), and Krulewitch v. United States, 336 U.S. 4 40 (1949), are inapposite, as they applied the pre-Federal Rules c ommon law of evidence, which did include a requirement that the coconspirator's statement be made in furtherance of a charged consp iracy. See Anderson, 417 U.S. at 218. Rule 801(d)(2)(E) contai ns no such explicit requirement and, as noted in the text, courts (incl uding this one) have uniformly read the Rule as not containing such a re quirement.

6In this vein, some courts require that in order for a

coconspirator statement to be admitted, the conspir acy during which the statements were made must be "fact ually intertwined" with the offenses being tried. See Uni ted States v. Stratton, 779 F.2d 820, 829 (2d Cir. 1985); Unit ed States v. Kendall, 665 F.2d 126, 131 (7th Cir. 1981). In o ur view, this salutary additional requirement is essentially a restatement of ordinary relevancy principles. Since the challenged statements are relevant to the crimes ch arged, we hold that they were properly admitted even if Ca rter'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 vari ous tape recordings of conversations he had with Nolan-Coope r 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 false ly at a hearing concerning possible "outrageous government conduct" in the course of the investigation.6 Carte r argued

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5. We also agree with the district court's conclusi on that even if it were
error to have admitted the statements under Rule 80 1(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. Janno tti, 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 c onviction. 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 Carte r'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 t heir admission did not
contribute to the conviction.

6. For a fuller discussion of the alleged "outrageo us government conduct" engaged in by Agent Oubre, see Nolan-Cooper, Nos. 9 7-1171 and 97- 1298 (3d Cir. filed September 1, 1998).

7that he should he be permitted to cross-examine Oub re in

this manner on the ground that Oubre would be biase d in favor of the government because his earlier false t estimony could subject him to criminal charges.

The district court sustained the government's objec tion to this line of inquiry on the ground that the proffer ed crossexamination exceeded the scope of direct examinatio n and did not involve matters of credibility, see Fed. R. Evid. 611(b), and on the basis that its probative value w as substantially outweighed by the danger of unfair pr ejudice,
see Fed. R. Evid. 403. We review the court's decisi on to limit cross-examination for abuse of discretion, se e 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 exami nation "to the subject matter of the direct examination an d matters affecting the credibility of the witness." Fed. R. Evid. 611(b). It is clear that the proposed questio ning by Carter exceeded the very limited scope of Agent Oub re'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 bas is of Fed. R. Evid. 403, which grants the district court discretion to exclude evidence if "its probative value is subs tantially outweighed by the danger of unfair prejudice, confu sion of the issues, or misleading the jury . . . ." Fed R. Evid. 403. The district court reasoned that, because Oubre's t estimony 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 wo uld be of little or no probative value. On the other hand, th e court reasoned that "the proffered cross-examination ques tions would have had a tendency to inflame the jury resul ting in

8significant prejudice." Carter, 966 F. Supp. at 353 . The

court concluded, therefore, that "the probative val ue of the proffered cross-examination is substantially outwei ghed by the danger of unfair prejudice." Id. Because Oubre' s testimony was limited to authenticating the tape re cording,
the district court did not abuse its discretion und er 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 t hat he requested regarding the "intent to conceal" element of the mo ney laundering charge. This argument is patently without merit.

When charging the jury, the district court must pro vide it with "a clear articulation of the relevant legal criteria." Unite d 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 o r misleading the jury. See United States v. Simon, 995 F.2d 1236, 1243 n.1 1 (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 launder ing charge was that his actions in dealing with Agent Oubre were s o open and notorious that he did not have the requisite intent to concea l or disguise the source of Oubre's "drug money," he requested a mone y laundering instruction that underscored the government's burde n of proof in this regard. The district court concluded that Carter's proposed instruction was merely "redundant in emphasizing the intent ele ment of the crime" and instead opted to give the jury instruction prop osed by the government on this issue (which did explain the gov ernment's burden). That instruction, in relevant part, required the ju ry to find that:

. . . the defendant conducted a financial tr ansaction with the
intent to conceal or disguise the nature, location, source, ownership, or control of the property which defendant beli eved to be the proceeds of the buying, selling and dealing in narcot ic and dangerous drugs.

Carter, 966 F. Supp. at 350. Since this instruction clearly articulated

the relevant legal criteria and fairly and adequately p resented the issues of the case, we conclude that the court's failure to t ender Carter's requested instruction did not constitute an abuse o f discretion.9The 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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