1998 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

7-9-1998

United States v. Moses

Precedential or Non-Precedential:

Docket 96-3632

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Recommended Citation

"United States v. Moses" (1998). 1998 Decisions. Paper 152.

http://digitalcommons.law.villanova.edu/thirdcircuit_1998/152
Filed July 9, 1998 

UNITED STATES COURT OF APPEALS 

FOR THE THIRD CIRCUIT 

No. 96-3632 

UNITED STATES OF AMERICA 

v. 

JOSEPH P. MOSES 

Appellant 

ON APPEAL FROM THE 

UNITED STATES DISTRICT COURT 

FOR THE WESTERN DISTRICT OF PENNSYLVANIA 

(D.C. Crim. No. 95-00067-1) 

Argued: January 26, 1998 

Before: MANSMANN, COWEN, and ALITO, Circuit Judges 

(Opinion Filed: July 9, 1998) 

 J. ALAN JOHNSON (Argued) 

 1550 Koppers Building 

 436 Seventh Avenue 

 Pittsburgh, PA 15219 

 Counsel for Appellant 

 LINDA L. KELLY 

 United States Attorney 

 JAMES Y. GARRETT (Argued) 

 Assistant U.S. Attorney 

 633 U.S. Post Office & Courthouse 

 Pittsburgh, PA 15219 

 Counsel for Appellee 
OPINION OF THE COURT 

ALITO, Circuit Judge: 

Joseph Moses appeals his criminal convictions for 

willfully failing to file corporate tax returns, willfully filing 

false personal tax returns, and conspiring to defraud the 

United States by obstructing the lawful functions of the 

Internal Revenue Service (IRS). Moses assigns as error the 

district court's denial of his post-trial motion for a 

judgment of acquittal, as well as its admission of certain 

hearsay statements. We affirm. 

I 

While Director of the Allegheny County Maintenance 

Department, Joseph Moses accepted kickbacks from 

Edmond Gaudelli, a commercial vendor who did business 

with the County. These kickbacks were routed through 

Catherine Jean Ronschke, an employee of the Department, 

to conceal the source and nature of the payments. With the 

aid of the kickbacks from Gaudelli, Moses was able to meet 

the financial obligations of Sadies Place, Inc., a private 

corporation he had formed in 1985. Between 1985 and

1993, Moses failed to file several corporate tax returns for 

Sadies Place and failed to report his kickback income on 

his personal tax returns. Meanwhile, Gaudelli deducted the 

kickbacks as business expenses on his returns. When

called before a grand jury in May 1994 to discuss these 

matters, Gaudelli and Ronschke both made false 

statements regarding their financial dealings with Moses. 

Based on these and other events, Moses, Gaudelli and 

Ronschke were indicted for conspiring to defraud the 

United States by obstructing the lawful functions of the 

IRS. See 18 U.S.C. S 371. In addition, Moses was indicted 

for willfully filing a false personal income tax return, in 

violation of 26 U.S.C. S 7206(1), and willfully failing to file 

four corporate tax returns for Sadies Place, in violation of 

26 U.S.C. S 7203. 

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At trial, Moses objected to the admission of several 

hearsay statements made by Gaudelli and Ronschke. The 

district court overruled these objections, concluding that 

some of the statements were admissible because they were 

against the declarant's penal interest, see Fed. Rule Evid. 

804(b)(3), and others were admissible because they were 

made in furtherance of the conspiracy. See Fed. Rule Evid. 

801(d)(2)(E). After the jury convicted Moses on all counts, 

he moved for a judgment of acquittal on the ground that 

there was insufficient evidence to convict him of willfully 

failing to file the Sadies Place returns. The district court 

denied the motion, and Moses brought this appeal. 

II 

A 

Moses's primary contention on appeal is that the district 

court erroneously admitted out-of-court statements made 

by Edmond Gaudelli. Gaudelli's statements, which 

implicated Moses in the kickback scheme, were presented 

through the testimony of Michael Tutro, a government 

witness who had been a friend and colleague of Gaudelli's. 

According to Tutro, Gaudelli said on several occasions that 

he was "tak[ing] care" of Moses "moneywise." App. 434-37. 

Tutro further testified that Gaudelli would tell him where 

he was meeting with Moses to make these payments. The 

district court concluded that Gaudelli's statements were 

admissible under Federal Rule of Evidence 804(b)(3) as 

statements against penal interest, and further held that 

admission of Gaudelli's statements would not violate the 

Confrontation Clause. Moses challenges both of these 

rulings on appeal. 

A hearsay statement made by an unavailable declarant 

can be admitted pursuant to Rule 804(b)(3) if, at the time 

of its making, "it so far tended to subject the declarant to 

civil or criminal liability . . . that a reasonable person in the 

declarant's position would not have made the statement 

unless believing it to be true." Since there is no dispute 

over Gaudelli's unavailability, the only question under Rule 

804(b)(3) is whether the admitted statements were 

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sufficiently against Gaudelli's interest so as to be deemed 

reliable. This determination must be made "by viewing [the 

statement] in context" and "in light of all the surrounding 

circumstances." Williamson v. United States, 512 U.S. 594, 

603-604 (1994). 

Moses contends that Gaudelli's statements are not 

admissible under Rule 804(b)(3) because "statements

implicating another person in misconduct are not against 

the interest of the declarant." Reply Br. at 1. While this 

proposition holds true in many cases, it is not a per se rule. 

As the Supreme Court explained in Williamson: 

 There are many circumstances in which Rule 804(b)(3) 

 does allow the admission of statements that inculpate 

 a criminal defendant. Even the confessions of arrested 

 accomplices may be admissible if they are truly self- 

 inculpatory, rather than merely attempts to shift blame 

 or curry favor. 

512 U.S. at 603. 

Under Williamson, the proper approach in cases involving 

out-of-court statements implicating other people is to 

examine the circumstances in which the statements are 

made in order to determine whether they are selfinculpatory or self-serving. In Williamson, where the 

declarant implicated another person while in police custody 

and after already having confessed to the crime, the Court 

concluded that the naming of the defendant did little to 

further implicate the declarant and may have been an effort 

to secure a lesser punishment through cooperation. See 

512 U.S. at 604 (opinion of O'Connor, J., in which Scalia, 

J. joined); id. at 607-08 (opinion of Ginsburg, J., in which 

Blackmun, Stevens, and Souter, J.J., joined). See also 

United States v. Boyce, 849 F.2d 833, 836 (3d Cir. 1988) 

(statement given in custody not reliable because 

circumstances indicated that it may have been "motivated 

by a desire to curry favor"). In the instant case, by contrast, 

Gaudelli made his statements to a friend during lunch 

conversations that took place long before Gaudelli was 

arrested. Under these circumstances, there is no reason to 

believe that Gaudelli was trying to avoid criminal 

consequences by passing blame to Moses.1 Moreover, by 

_________________________________________________________________ 

1. This conclusion is supported by the Notes of Advisory Committee to 

Rule 804(b)(3): 

 4 
naming Moses, as well as the place where he was meeting 

Moses to make payments, Gaudelli provided selfinculpatory information that might have enabled the

authorities to better investigate his wrongdoing. See 

Williamson, 512 U.S. at 603 (explaining that a declarant's 

statement as to where he hid a gun would be selfinculpatory "if it is likely to help the police find the murder 

weapon"). Given the context and content of Gaudelli's 

statements to Tutro, we agree with the district court that 

they were sufficiently self-inculpatory so as to satisfy the 

requirements of Rule 804(b)(3). 

Moses's Confrontation Clause argument presents a more 

complicated question. The Supreme Court has held that an 

out-of-court statement may be barred by the Confrontation 

Clause even if it fits a hearsay exception. Idaho v. Wright, 

497 U.S. 805, 814 (1990). The Wright Court explained that, 

to be admissible under the Sixth Amendment, a hearsay 

statement must either fall within a "firmly rooted" hearsay 

exception or be "supported by a showing of particularized 

guarantees of trustworthiness." Id. at 816-17 (citation 

omitted). While the district court concluded that the 

"statement against penal interest" exception is firmly 

rooted, we decline to address that issue because we believe 

that a hearsay statement that meets the requirements of 

_________________________________________________________________ 

 [A] statement admitting guilt and implicating another person, while 

 made in custody, may well be motivated by a desire to curry favor 

 with the authorities and hence fail to qualify as against interest. 

. . . 

 On the other hand, the same words spoken under different 

 circumstances, e.g., to an acquaintance, would have no difficulty 

in 

 qualifying. 

28 U.S.C.A. Rule 804, p. 449 (1984). While the Supreme Court in 

Williamson concluded that the Advisory Notes are"not particularly clear" 

as to the admissibility of non-self-inculpatory statements that are 

collateral to self-inculpatory statements, see 512 U.S. at 601-02, the 

Notes are perfectly clear as to the difference between custodial and noncustodial circumstances for purposes of determining whether a 

statement is self-inculpatory in the first place. 

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Rule 804(b)(3) by definition possesses "particularized 

guarantees of trustworthiness."2 

Rule 804(b)(3) does not allow the admission of all 

statements that could be interpreted as against the

declarant's penal interest. Rather, the rule permits the use 

of a statement only if it "so far tended" to subject the 

declarant to criminal liability "that a reasonable man in his 

position would not have made the statement unless he 

believed it to be true." Fed. Rule Evid. 804(b)(3). As 

discussed above, this language requires courts to examine 

"all the surrounding circumstances" in order to determine 

whether a statement is "truly self-inculpatory." Williamson, 

512 U.S. at 603-04. This examination parallels the inquiry 

required under the Confrontation Clause. See Wright, 497 

U.S. at 820 (courts must examine "the totality of 

circumstances that surround the making of the statement" 

to determine whether the declarant's statement is 

"particularly worthy of belief ").3 Accordingly, we conclude 

that a statement that meets the requirements of Rule 

804(b)(3) also meets the requirements imposed by the 

Confrontation Clause. Accord Williamson, 512 U.S. at 605 

(opinion of O'Connor, J., in which Scalia, J., joined). Since 

Gaudelli's statements were made under circumstances that 

render them particularly worthy of belief for purposes of 

Rule 804(b)(3), we affirm the district court's ruling that the 

statements are not barred by the Confrontation Clause. 

_________________________________________________________________ 

2. We note that there is disagreement among the circuits as to whether 

the "statement against penal interest" exception is firmly rooted. 

Compare United States v. Flores, 985 F.2d 770, 775-776 (5th Cir. 1993) 

(not firmly rooted) with United States v. Saccoccia, 58 F.3d 754, 779 (1st 

Cir. 1995) (firmly rooted); United States v. York, 933 F.2d 1343, 1363 

(7th Cir. 1991) (same); United States v. Seeley, 892 F.2d 1, 2 (1st Cir. 

1989) ("[T]he exception for declarations against penal interest would 

seem to be `firmly rooted.' "). 

3. In examining the totality of the circumstances, courts cannot rely on 

corroborating evidence to conclude that a hearsay statement is 

trustworthy for purposes of the Confrontation Clause. Wright, 497 U.S. 

at 822-823. Moses correctly points out that the district court erred by 

relying on corroborating evidence in the instant case. See App. at 425. 

This error was harmless, however, given that the circumstances 

surrounding the making of Gaudelli's statements are alone sufficient to 

render them trustworthy. 

 6 
B 

Moses's next contention is that the district court 

erroneously admitted the grand jury testimony of Jean 

Ronschke and Edmond Gaudelli as non-hearsay under 

Federal Rule of Evidence 801(d)(2)(E).4 That rule provides: 

 A statement is not hearsay if . . . [t]he statement is 

 offered against a party and is . . . a statement by a 

 coconspirator of a party during the course and in 

 furtherance of the conspiracy. 

Moses argues that the statements made by Ronschke and 

Gaudelli are not admissible under Rule 801(d)(2)(E) because 

they were made after the object of the charged conspiracy 

had been accomplished and, thus, were not statements in 

furtherance of the conspiracy. In making this argument, 

Moses relies on the Supreme Court's instruction that "after 

the central criminal purposes of a conspiracy have been 

attained, a subsidiary conspiracy to conceal may not be 

implied from circumstantial evidence showing merely that 

the conspiracy was kept a secret and that the conspirators 

took care to cover up their crime in order to escape 

detention and punishment." Grunewald v. United States, 

353 U.S. 391, 401-02 (1957). Moses contends that the 

central purpose of the instant conspiracy was to "avoid 

declaring . . . additional income for the years 1985-88." 

Appellant's Br. at 31. Since Gaudelli and Ronschke did not 

provide their testimony until 1994, Moses argues that, 

under Grunewald, it was improper to admit their 

statements as being in furtherance of the original 

conspiracy. However, contrary to Moses's characterization, 

the conspiracy charged in the indictment was not limited to 

the years 1985-1988. Rather, the indictment explicitly 

charged a conspiracy to defraud the IRS lasting until June 

30, 1994, App. at 26, and it alleged that the conspirators 

engaged in more than 50 overt acts in furtherance of the 

_________________________________________________________________ 

4. A review of the district court's order reveals that much of the grand 

jury testimony was admitted because it did not meet the definition of 

hearsay. See Supp. App. at 1-5 (holding that"some of the testimony is 

not being offered to prove the truth of the matter asserted, and therefore 

is not hearsay"). Moses has not appealed this portion of the district 

court's ruling. 

 7 
conspiracy between 1989 and 1994. App. at 37-43. Thus, 

this case is wholly distinguishable from Grunewald, where 

the main objective of the conspiracy was to obtain "no 

prosecution" letters from the IRS in 1948 and 1949, but the 

government sought to imply a subsidiary conspiracy to 

conceal in the 1950s. 353 U.S. at 398. 

We agree with the district court that this case is 

controlled by Forman v. United States, 361 U.S. 416 (1960), 

overruled in part on other grounds by Burks v. United 

States, 437 U.S. 1, 18 (1978). In Forman, the defendant 

was charged with conspiracy to evade income taxes that 

were owed for the period of 1942-45. Id. at 417-19.

Although the last false income tax form was filed in 1946, 

the government contended that the conspiracy embraced 

"subsequent efforts . . . to evade those taxes." Id. at 420. 

The Supreme Court agreed, noting that "the indictment 

specifically alleged that the conspiracy extended from 1942 

to 1953" and charged overt acts "committed as late as 

1953." Id. at 423. The Court continued: 

 The correct theory, we believe, was indicated by the 

 indictment, i.e., that the conspiracy was a continuing 

 one extending from 1942 to 1953 and its principal 

 object was to evade the taxes of [the defendant] and his 

 wife for 1942-1945, inclusive, by concealing their 

 `holdout' income. This object was not attained when the 

 tax returns for 1945 concealing the `holdout' income 

 were filed. . . . The concealment of the`holdout' income 

 must continue if the evasion is to succeed. It must 

 continue until the action is barred and the evasion 

 permanently effected. 

Id. at 423-24. Like the indictment in Forman, the 

indictment in this case specifically alleges a continuing 

conspiracy to evade taxes that included overt acts of 

concealment after the taxes were due. In order for this 

conspiracy to succeed, Moses and his co-conspirators had 

to conceal his failure to pay taxes until any action was 

barred and the evasion was "permanently effected." Id. at 

424. Since this object had not yet been achieved when 

Gaudelli and Ronschke testified before the grand-jury,5 the 

_________________________________________________________________ 

5. We take as accurate the government's statement that "Moses' liability 

for taxes owed on unreported kickbacks . . . remained open" at the time 

of the grand jury testimony. Appellee's Br. at 41. Moses did not dispute 

this factual assertion. 

 8 
district court was entitled to conclude that Gaudelli and 

Ronschke made their statements in furtherance of the 

conspiracy. Accordingly, we affirm the order of the district 

court admitting the statements of Edmond Gaudelli and 

Jean Ronschke under Rule 801(d)(2)(E). 

C 

Moses's final contention is that the government presented 

insufficient evidence to demonstrate that he willfully failed 

to file tax returns for the Sadies Place business in violation 

of 26 U.S.C. S 7203. To prove willfulness in a criminal tax 

case, the government must show "that the law imposed a 

duty on the defendant, that the defendant knew of this 

duty, and that he voluntarily and intentionally violated that 

duty." Cheek v. United States, 498 U.S. 192, 201 (1991). 

Viewing the evidence in the light most favorable to the 

government, we agree with the district court that a

reasonable juror could have concluded that Moses acted 

willfully. 

The evidence presented at trial revealed that Moses was 

the sole owner of the Sadies Place business and exercised 

complete control over the business. The evidence also 

revealed that Moses was aware of his obligation tofile tax 

forms for Sadies Place as he hired an accountant, Joseph 

Jacobs, to complete tax forms for Sadies Place and submit 

them to a lending institution. Nevertheless, Moses never 

signed any of the Sadies Place tax forms during the years 

in question and did not cause the forms to be submitted to 

the IRS until after he was indicted. Moreover, the 

government demonstrated that Moses had a motive to 

withhold the Sadies Place tax forms from the IRS. At the 

time the Sadies Place forms were due, Moses was trying to 

settle a previous liability to the IRS on favorable terms. This 

effort might have been jeopardized, however, had the IRS 

learned from the Sadies Place returns that Moses possessed 

additional assets. Under these circumstances, a reasonable 

juror could conclude that Moses knew of his duty tofile the 

Sadies Place returns and intentionally refrained from doing 

so. 

Notwithstanding this strong circumstantial evidence, 

Moses contends that his conviction was unreasonable in 

 9 
light of Jacobs' testimony. Jacobs, who appeared as a 

government witness, testified that Moses insisted the 

Sadies Place returns be filed. After reviewing the record, we 

agree with the district court that "the jury was not obligated 

to accept Jacobs' testimony . . . and in light of Jacobs' 

demeanor as a witness and his close association with 

Moses personally, professionally and in the criminal 

scheme, obviously had abundant reason to disregard it." 

Supp. App. at 25. Accordingly, we affirm the district court's 

denial of Moses's motion for acquittal on Counts Five, Six, 

Seven and Eight of the indictment. 

A True Copy: 

Teste: 

 Clerk of the United States Court of Appeals 

 for the Third Circuit 

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