Source: https://law.justia.com/cases/federal/appellate-courts/F3/55/1289/579179/
Timestamp: 2019-08-21 04:45:35
Document Index: 443159142

Matched Legal Cases: ['§ 7206', '§ 7212', '§ 1503', '§ 371', '§ 16211', '§ 1621', '§ 3714', 'art, 971', '§ 371', '§ 1503', '§ 371', '§ 1503', '§ 1621', '§ 1623', '§ 1503']

United States of America, Plaintiff-appellee, v. Charles W. Lahey and John P. Currens, Defendants-appellants, 55 F.3d 1289 (7th Cir. 1995) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Seventh Circuit › 1995 › United States of America, Plaintiff-appellee, v. Charles W. Lahey and John P. Currens, Defendants-ap...
United States of America, Plaintiff-appellee, v. Charles W. Lahey and John P. Currens, Defendants-appellants, 55 F.3d 1289 (7th Cir. 1995)
US Court of Appeals for the Seventh Circuit - 55 F.3d 1289 (7th Cir. 1995)
Argued Feb. 13, 1995. Decided May 22, 1995. Rehearing Denied June 23, 1995
Janet K. Jones, Robert E. Lindsay, Dept. of Justice, Tax Div., Appellate Section, Alan Hechtkopf, Yoel Tobin (argued), U.S. Dept. of Justice, Tax Div., Washington, DC, for U.S. in No. 94-2203.
Anthony V. Luber, South Bend, IN (argued), for Charles W. Lahey.
Janet K. Jones, Robert E. Lindsay, Dept. of Justice, Tax Div., Appellate Section, Alan Hechtkopf, Yoel Tobin (argued), U.S. Dept. of Justice, Tax Div., Edward F. Cronin, Dept. of Justice, Tax Div., Washington, DC, for U.S. in No. 94-2204.
Philip Skodinski, South Bend, IN (argued), for John P. Currens.
Currens testified before a grand jury investigating Lahey on March 3, 1993. Currens testified that Lahey had loaned him $10,000 in 1976 by check. Currens did not repay any portion of this interest-free loan until 1986. Currens made several cash payments to the Laheys from 1986 to 1988 totalling $25,000, including a $10,000 payment to Jennifer Lahey, Currens' sister, in 1988. As a result of these payments, the Laheys owed Currens $15,000. Lahey repaid this loan by check in the fall of 1991 or in the spring of 1992. Currens testified that there were no documents reflecting the $10,000 loan to Currens in 1976, a claimed $5,000 cash repayment by Currens to the Laheys in 1986, or Currens' subsequent $15,000 loan to the Laheys. Currens denied telling the IRS agents that the $15,000 check from Lahey was a loan to Currens on which Currens would be paying interest. Currens also testified that he did not tell the IRS agents about these transactions because they had not asked him about anything from 1986 to 1988. Currens testified that he had spoken with Lahey the night before his appearance before the grand jury but did not discuss his testimony.
The grand jury returned an indictment against Lahey and Currens on April 8, 1993. Counts One through Three of the six-count indictment charged Lahey with filing false income tax returns for the years 1986, 1987, and 1988, respectively. 26 U.S.C. § 7206(1). Count Four charged Lahey with corruptly obstructing the due administration of the internal revenue laws. 26 U.S.C. § 7212(a). Count Five charged Lahey with obstructing the due administration of justice by failing to comply with the grand jury subpoena and by destroying subpoenaed records. 18 U.S.C. § 1503 (1988). Count Six charged Lahey and Currens with conspiring to obstruct the due administration of justice by agreeing that Currens would provide false testimony to the grand jury. 18 U.S.C. §§ 371, 1503 (1988).
The defendants first challenge the sufficiency of the evidence to support their conspiracy convictions. In reviewing their challenge, we must determine " 'whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.' " United States v. Johnson, 26 F.3d 669, 684 (7th Cir.) (quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979)), cert. denied, --- U.S. ----, 115 S. Ct. 344, 130 L. Ed. 2d 300 (1994). We will not reweigh the evidence or judge the credibility of witnesses in making this determination. United States v. Maholias, 985 F.2d 869, 874 (7th Cir. 1993). We may reverse a conviction " 'only when the record is devoid of any evidence, regardless of how it is weighed, from which a jury could find guilt beyond a reasonable doubt.' " Johnson, 26 F.3d at 684 (citation omitted).
A conspiracy is "an agreement to commit a crime." United States v. Lechuga, 994 F.2d 346, 348 (7th Cir.) (en banc), cert. denied, --- U.S. ----, 114 S. Ct. 482, 126 L. Ed. 2d 433 (1993). To prove a conspiracy, the government must establish that (1) there was an agreement between two or more persons to commit an unlawful act; (2) the defendant was a party to the agreement; and (3) an overt act was committed in furtherance of the agreement by one of the coconspirators. United States v. Olson, 978 F.2d 1472, 1478 (7th Cir. 1992) (citation omitted), cert. denied, --- U.S. ----, 113 S. Ct. 1614, 123 L. Ed. 2d 174 (1993). The proper standard of appellate review for an individual defendant's participation in a conspiracy is substantial evidence. United States v. Durrive, 902 F.2d 1221, 1229 (7th Cir. 1990). In meeting its burden of proof, the government may present circumstantial evidence, which may be the sole support for a conspiracy conviction. Id. at 1225. The government, however, must prove a defendant's membership in the conspiracy by the defendant's own words and acts. United States v. Martinez de Ortiz, 907 F.2d 629, 635 (7th Cir. 1990) (en banc), cert. denied, 498 U.S. 1029, 111 S. Ct. 684, 112 L. Ed. 2d 676 (1991).
The defendants contend that the government presented insufficient evidence to prove that Currens perjured himself before the grand jury in violation of 18 U.S.C. §§ 16211 or 1623.2 This argument misapprehends the government's burden of proof. The defendants were not charged with perjury or subornation of perjury under 18 U.S.C. §§ 1621, 1622,3 or 1623; they were charged with conspiracy to obstruct justice in violation of 18 U.S.C. §§ 3714 and 1503.5 See United States v. Langella, 776 F.2d 1078, 1082 (2d Cir. 1985) (perjury and obstruction of justice are distinct offenses and each requires proof of elements that the other does not), cert. denied, 475 U.S. 1019, 106 S. Ct. 1207, 89 L. Ed. 2d 320 (1986). Although the government was required to prove that an overt act was committed in furtherance of the conspiracy by one of the coconspirators, "overt acts do not have to be substantive crimes themselves." United States v. Crabtree, 979 F.2d 1261, 1267 (7th Cir. 1992), cert. denied, --- U.S. ----, 114 S. Ct. 216, 126 L. Ed. 2d 173 (1993); accord United States v. Jackson, 33 F.3d 866, 870 (7th Cir. 1994) ("A conviction under Sec. 371 ... does not require that the government prove a violation of a separate substantive statute."), cert. denied, --- U.S. ----, 115 S. Ct. 1316, 131 L. Ed. 2d 197 (1995). The overt acts alleged in Count Six consisted of ten instances of false testimony by Currens before the grand jury. These allegations did not transform Count Six into a substantive perjury charge.
Currens' grand jury testimony was also inconsistent with his other prior representations to the IRS. Currens filed financial statements with the IRS in July 1988 and in July 1989 (in connection with an unrelated tax liability of Currens') which did not include any debts owed to or from the Laheys. Currens filed another financial statement with the IRS in July 1990 which reported that Currens owed Lahey $20,000 and that Currens had repaid $7,500 of this debt in 1988 and $7,500 in 1989. Currens' grand jury testimony was further contradicted by the trial testimony of Jennifer Lahey that Currens paid her only $2,500 in cash in 1988, rather than the $10,000 in cash to which Currens testified. Jennifer Lahey also testified at trial that the $15,000 check to Currens from the Laheys in 1991 or 1992 was a gift, not a loan repayment. Finally, Lahey told Hoyt during the IRS audit that he received a $7,500 loan repayment from Currens in 1988, not a $10,000 cash loan from Currens in 1988, and Lahey did not mention that Currens was a source of cash in 1986 and in 1987. This evidence, when viewed in the light most favorable to the government, was more than sufficient for the jury to conclude that Currens committed the overt acts charged in the indictment.6
IRS revenue agent Harry Bigda testified at trial that Lahey understated the gross receipts from his law practice by at least $11,869.65 on his 1986 federal income tax return, $15,312.22 on his 1987 return, and $17,478.75 on his 1988 return. Bigda's testimony was based on an analysis of Lahey's bank deposits in his legal fees account and was consistent with Hoyt's conclusion during the audit that Lahey had underreported his income.7
The defendants' history of using each other as sources of cash when convenient also supports an inference that Currens' lies to the grand jury were coordinated with Lahey. When Lahey needed to resolve the IRS audit quickly and without penalties, he told Hoyt that he received a $7,500 loan repayment from Currens in 1988 based on an undocumented debt from the 1970s. Similarly, Currens, while attempting to resolve his own tax liability with the IRS, filed a financial statement in July 1990 which reported that Currens owed Lahey $20,000 and that Currens had repaid $7,500 of this debt in 1988 and $7,500 in 1989. This purported $20,000 debt was more than two-thirds of the total liability which Currens claimed on the IRS form. Yet in October 1991, when Currens was attempting to purchase a house, Currens submitted a mortgage application to a bank which stated that Jennifer Lahey owed him $15,000 and which did not include any purported debt owed by Currens to the Laheys.
The defendants assert that evidence that Lahey destroyed records of fee payments and invented sources of nontaxable income was inadmissible as to Count Six under Federal Rule of Evidence 404(b).8 The defendants did not object to the admission of this evidence at trial, did not move to strike this evidence after the district court had granted Lahey's motion for judgment of acquittal on Counts One through Five, and did not request that the district court give a limiting instruction to the jury that this evidence should not be considered with respect to Count Six. See Fed.R.Evid. 105. We therefore review the defendants' claim for plain error only. United States v. Olano, --- U.S. ----, ---- - ----, 113 S. Ct. 1770, 1776-79, 123 L. Ed. 2d 508 (1993).
No error was committed, plain or otherwise. " [E]vidence of uncharged criminal activity is not considered 'other crimes' evidence" under Rule 404(b) if the evidence is "inextricably intertwined with the evidence regarding the charged offense," or is "necessary to complete the story of the crime [on] trial." United States v. Roberts, 933 F.2d 517, 520 (7th Cir. 1991) (citation and internal quotation marks omitted). The conspiracy between Lahey and Currens to provide false testimony to the grand jury was the culmination of Lahey's continuous efforts to conceal the gross receipts from his law practice from 1986 through 1988 from the IRS and the grand jury. The evidence that Lahey destroyed records of fee payments and created fictitious sources of nontaxable income was clearly "necessary to complete the story of the crime [on] trial" and "inextricably intertwined" with the conspiracy. Id. The admission of this evidence was therefore not subject to Rule 404(b) analysis. Jackson, 33 F.3d at 873. The district court also did not abuse its discretion in concluding that the probative value of this evidence outweighed any possible prejudice under Federal Rule of Evidence 403. See id. at 873-74.
The defendants contend that Lahey's acquittal on the first five counts of the indictment collaterally estopped the government from proving their guilt on Count Six with evidence which also proved Lahey's guilt on Counts Four and Five. Currens' argument is directly foreclosed by Standefer v. United States, 447 U.S. 10, 21-25, 100 S. Ct. 1999, 2006-08, 64 L. Ed. 2d 689 (1980), which held that nonmutual offensive collateral estoppel cannot be applied against the government in criminal cases. The Supreme Court in Standefer affirmed the conviction of a defendant for aiding and abetting in the commission of a federal offense who was prosecuted after the alleged perpetrator of the offense had been acquitted. Standefer, 447 U.S. at 11-14, 100 S. Ct. at 2001-03. Lahey's argument is equally without merit. A criminal defendant convicted by a jury on one count cannot attack that conviction simply because it was inconsistent with the jury's verdict of acquittal on another count. United States v. Powell, 469 U.S. 57, 62-69, 105 S. Ct. 471, 475-79, 83 L. Ed. 2d 461 (1984); Dunn v. United States, 284 U.S. 390, 52 S. Ct. 189, 76 L. Ed. 356 (1932); cf. Dowling v. United States, 493 U.S. 342, 347-52, 110 S. Ct. 668, 671-74, 107 L. Ed. 2d 708 (1990). Although Lahey was acquitted by the district court through a motion for judgment of acquittal rather than by a jury, this distinction is irrelevant. Harris v. Rivera, 454 U.S. 339, 345-47, 102 S. Ct. 460, 464-65, 70 L. Ed. 2d 530 (1981) (per curiam) .
Lahey asserts that the district court erred by failing to inform the jury that the district court had granted Lahey's motion for judgment of acquittal on Counts One through Five. The district court merely instructed the jury that " [t]he other counts of this indictment are no longer before you and you must consider only the remaining Count 6." Tr. at 829. Lahey did not object to this instruction or to the district court's admonition that the defendants were not to mention the acquittals during closing argument. Tr. at 718-19. We therefore review Lahey's claim for plain error only. Olano, --- U.S. at ---- -----, 113 S. Ct. at 1776-79. No error was committed. A judgment of acquittal is only relevant to whether a prosecution is barred by double jeopardy or collateral estoppel. United States v. Jones, 808 F.2d 561, 566 (7th Cir. 1986), cert. denied, 481 U.S. 1006, 107 S. Ct. 1630, 95 L. Ed. 2d 203 (1987); see also Prince v. Lockhart, 971 F.2d 118, 122 (8th Cir. 1992), cert. denied, --- U.S. ----, 113 S. Ct. 1394, 122 L. Ed. 2d 768 (1993). A judgment of acquittal is not admissible to rebut inferences that may be drawn from the evidence "because it does not prove innocence but rather merely indicates that the prior prosecution failed to meet its burden of proving beyond a reasonable doubt at least one element of the crime." Jones, 808 F.2d at 566 (citation and internal quotation marks omitted); accord Prince, 971 F.2d at 122.
The defendants assert that the district court's conspiracy instructions did not properly instruct the jury on the elements of the offense. The defendants did not object to these instructions below, so we again review their claim for plain error only. Olano, --- U.S. at ---- - ----, 113 S. Ct. at 1776-79. And again, no error was committed, plain or otherwise. The defendants claim that Count Six of the indictment, which was read to the jury, did not specify whether they were charged with a conspiracy to defraud the United States or a conspiracy to commit an offense against the United States under 18 U.S.C. § 371. See Jackson, 33 F.3d at 870 (section 371 of title 18 proscribes both types of conspiracies in the disjunctive). This argument is without merit. Count Six charged that the defendants "did unlawfully, willfully and knowingly, conspire, combine, confederate, and agree, together and with each other ... to obstruct the due administration of justice in the federal grand jury investigation of CHARLES W. LAHEY." Count Six thus clearly charged the defendants with conspiring to commit an offense against the United States. See 18 U.S.C. § 1503 (1988). The defendants also contend that the district court should have instructed the jury on the elements of perjury. Because, as we have already explained, the defendants were not charged with either perjury or subornation of perjury, they were not entitled to receive this instruction.
During oral argument, inquiry was made as to whether the district court had a broader view of what the government could prove to establish the defendants' guilt than what was alleged in Count Six. The district court's jury instructions do not reflect any such misunderstanding. The district court gave this circuit's pattern jury instruction defining conspiracy, Federal Criminal Jury Instructions of the Seventh Circuit Sec. 5.11 (1980),9 Tr. at 829-30, and read Count Six to the jury verbatim. Tr. at 824-29. The district court also read the relevant portions of the conspiracy statute, 18 U.S.C. § 371, and the obstruction of justice statute, 18 U.S.C. § 1503 (1988), to the jury.10 Tr. at 829, 831. The district court's instructions accurately stated the law of conspiracy in this circuit and conveyed to the jury the elements the government was required to prove on Count Six. The instructions therefore do not impair the defendants' convictions.
The defendants contend that improper remarks during the prosecutor's closing argument constitute reversible error. The only remark to which either defendant objected at trial, however, was the prosecutor's statement that "I think the citizens--the grand jurors here in Indiana would have liked to have known that he [Currens] said something different before." Tr. at 746. In evaluating the defendants' claim, we must first examine the remark in isolation to determine if it was proper. United States v. Badger, 983 F.2d 1443, 1450 (7th Cir.), cert. denied, --- U.S. ----, 113 S. Ct. 2391, 124 L. Ed. 2d 293 (1993). If the statement is proper, our analysis ends. Id. If the statement is improper, "our second step is to look at the remark [ ] in light of the entire record to determine if the defendants were deprived of a fair trial." Id. The defendants assert that the prosecutor's statement was improper because it suggested that the grand jury had already concluded that the defendants were guilty. In our view, however, the remark merely emphasized that Currens' grand jury testimony was material to the grand jury's investigation of Lahey and thus was proper.
Because the defendants did not object to any of the other challenged remarks at trial, we review their claims for plain error only. Olano, --- U.S. at ---- - ----, 113 S. Ct. at 1776-79; United States v. Rose, 12 F.3d 1414, 1422 (7th Cir. 1994). The defendants are unable to establish plain error under Olano because they have not shown that any of the prosecutor's remarks was improper or "seriously affect [ed] the fairness, integrity or public reputation" of the trial. Olano, --- U.S. at ----, 113 S. Ct. at 1779.
The defendants contend that the prosecutor argued that during the audit Lahey invented the $7,500 loan repayment in 1988 from Currens because he failed to mention the repayment to Hoyt on September 11, 1989, and January 10, 1990, when Lahey had not been informed that he was under audit for 1988 on those dates. What the prosecutor was arguing, however, was that Lahey's failure to mention Currens as a source of cash until the later stages of the audit showed that Currens' grand jury testimony was false. Tr. at 750. This argument was a reasonable inference from the evidence. See Rose, 12 F.3d at 1424 (" 'counsel may make arguments reasonably inferred from the evidence presented' "). Even if the prosecutor's remarks were ambiguous, "a court should not lightly infer that a prosecutor intends an ambiguous remark to have its most damaging meaning or that a jury, sitting through lengthy exhortation, will draw that meaning from the plethora of less damaging interpretations." Donnelly v. DeChristoforo, 416 U.S. 637, 647, 94 S. Ct. 1868, 1873, 40 L. Ed. 2d 431 (1974).
The defendants argue that the prosecutor committed misconduct by informing the jury that the search warrant for Lahey's office "was approved by a court" during his rebuttal argument. Tr. at 820. The prosecutor's statement was invited by Lahey's attorney, who during his closing argument accused the government of destroying Lahey's law practice by searching every file in Lahey's office. See United States v. Young, 470 U.S. 1, 12-13, 105 S. Ct. 1038, 1044-45, 84 L. Ed. 2d 1 (1985). "It is not only permissible but advisable in closing argument to refute meritless accusations." United States v. Reed, 2 F.3d 1441, 1450 (7th Cir. 1993), cert. denied, --- U.S. ----, 114 S. Ct. 898, 127 L. Ed. 2d 90 (1994). This remark therefore was not plain error. See Young, 470 U.S. at 16-18, 105 S. Ct. at 1046-47.
The defendants contend that the prosecutor's repeated use of the words "we know" during closing argument, to which the defendants never objected, is plain error. The defendants assert that the prosecutor, by repeatedly using this phrase, suggested that the government was aware of additional evidence against the defendants which had not been presented to the jury and that Lahey had been found or pleaded guilty to Counts One through Five. This interpretation is strained and untenable. The prosecutor merely used the words "we know" to refer the jury to the government's evidence and to summarize the government's case against the defendants. In any event, the prosecutor's use of this phrase cannot be plain error because the jury was instructed that it was to consider only the evidence received in the case, it was the sole judge of the facts from all of the evidence, the presumption of innocence was not overcome unless it was convinced beyond a reasonable doubt from all of the evidence in the case that the defendants were guilty, and " [t]he other counts of this indictment are no longer before you and you must consider only the remaining Count 6." Tr. at 821, 824, 829, 832. Jurors are presumed to follow their instructions. E.g., Francis v. Franklin, 471 U.S. 307, 324-25 n. 9, 105 S. Ct. 1965, 1976-77 n. 9, 85 L. Ed. 2d 344 (1985). The defendants' remaining claims of improper prosecutorial remarks during closing argument are without merit and do not require discussion, as none of the challenged remarks was improper or constitutes plain error under Olano.
MR. MILNER: Thank you, Judge.
Tr. at 797-98. Currens' attorney then continued his attack on the government without objection. Tr. at 798-99.
No evidence was presented that the government had produced the $10,000 check or a copy of the check during discovery. Although the prosecutor's objection to Currens' closing argument was improper, the objection did not " 'so infect [ ] the trial with unfairness as to make the resulting conviction a denial of due process.' " Reed, 2 F.3d at 1450 (quoting Darden v. Wainwright, 477 U.S. 168, 181, 106 S. Ct. 2464, 2471, 91 L. Ed. 2d 144 (1986)); see also Badger, 983 F.2d at 1450-51. The district court reprimanded the government, and Currens' attorney proceeded to continue his attack on the government for failing to produce the check without objection. The check, moreover, was only tangentially relevant to the government's case, and there was a wealth of other evidence establishing that Currens' grand jury testimony was false.
Whoever under oath ... in any proceeding before or ancillary to any court or grand jury of the United States knowingly makes any false material declaration ... shall be fined under this title or imprisoned not more than five years, or both.
Section 1622 provides:
Prior to its amendments in 1994, section 1503 provided in relevant part:
Whoever ... corruptly ... influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice, shall be fined not more than $5,000 or imprisoned not more than five years, or both.
We note that, contrary to the defendants' position, this evidence would also have been sufficient to support a perjury conviction if Currens had been charged with that offense. 18 U.S.C. §§ 1621, 1623; United States v. Waldemer, 50 F.3d 1379, 1380 (7th Cir. 1995) ("In order to convict a grand jury witness of perjury under 18 U.S.C. § 1623, the government must not only prove that the witness's testimony was false, it must also prove that the false testimony was material to a legitimate inquiry of the grand jury.")
The defendants' challenge to Bigda's method of analysis is without merit. See United States v. Lacob, 416 F.2d 756, 759-60 (7th Cir. 1969) (holding that the government's use of the "bank deposit theory" of proof of unreported income did not violate any of the defendant's rights), cert. denied, 396 U.S. 1059, 90 S. Ct. 755, 24 L. Ed. 2d 754 (1970)
Rule 404(b) provides in relevant part:
This instruction states:
that the alleged conspiracy existed, and
that an overt act was committed in furtherance of the conspiracy, and
that the defendant knowingly and intentionally became a member of the conspiracy
A conspiracy is not proved unless the evidence establishes that at least one overt act was committed by at least one conspirator to further the purpose of the conspiracy. It is not necessary that all the overt acts charged in the indictment be proved, and the overt act proved may itself be a lawful act.
In determining whether the defendant became a member of the conspiracy you may consider only the acts and statements of that particular defendant.
The portion of this instruction which states, " [i]n determining whether the defendant became a member of the conspiracy you may consider only the acts and statements of that particular defendant," has been held to be inconsistent with Federal Rule of Evidence 104(a) and Bourjaily v. United States, 483 U.S. 171, 107 S. Ct. 2775, 97 L. Ed. 2d 144 (1987). United States v. Martinez de Ortiz, 907 F.2d 629, 633-35 (7th Cir. 1990) (en banc), cert. denied, 498 U.S. 1029, 111 S. Ct. 684, 112 L. Ed. 2d 676 (1991). The defendants do not challenge the inclusion of this sentence in the district court's conspiracy instructions, which is not plain error because the sentence favors the accused. Id. at 635.
The district court further instructed the jury as follows:
In order to prove the defendant guilty of the charges in Count 6 of the indictment, the government must prove beyond a reasonable doubt that each defendant knew of a pending grand jury proceeding and specifically intended to impede its administration, prior to the commission of an overt act of the conspiracy.
Tr. at 832. This instruction accurately stated the knowledge and intent requirements of 18 U.S.C. § 1503. E.g., United States v. Bucey, 876 F.2d 1297, 1314 (7th Cir.), cert. denied, 493 U.S. 1004, 110 S. Ct. 565, 107 L. Ed. 2d 560 (1989).