Opinion ID: 746455
Heading Depth: 4
Heading Rank: 4

Heading: the evidence would likely produce an acquittal.

Text: 184 Id. at 640. However, when the defendant asserts that the new evidence at issue is exculpatory evidence which the government failed to turn over in violation of Brady, he should not have to satisfy the severe burden of demonstrating that newly discovered evidence probably would have resulted in acquittal. Id. at 641 (quoting United States v. Agurs, 427 U.S. 97, 111, 96 S.Ct. 2392, 2401, 49 L.Ed.2d 342 (1976)). Rather, the defendant must show only that the favorable evidence at issue was material, with materiality defined according to opinions interpreting the Brady doctrine. See id.; see also United States v. Schledwitz, 86 F.3d 73, 75 (6th Cir.) (Merritt, J., dissenting from denial of petition for rehearing en banc )(defendant faces different and more lenient standard if new trial motion rests on Brady claim), cert. denied, --- U.S. ----, 117 S.Ct. 357, 136 L.Ed.2d 249 (1996). 185 The Supreme Court recently has described in detail the analysis applicable to a Brady claim. See Kyles v. Whitley, 514 U.S. 419, 115 S.Ct. 1555, 131 L.Ed.2d 490 (1995). The Kyles Court explained that Brady, 373 U.S. at 87, 83 S.Ct. at 1196-97, requires the prosecution to provide evidence which is favorable to the accused and material to guilt or innocence, regardless of the good or bad faith of the prosecution. See Kyles, 514 U.S. at 432, 115 S.Ct. at 1565. A Brady claim may arise when the government has introduced trial testimony which was known to be, or should have been recognized as, perjury; when the government has not honored a defense request for specific exculpatory evidence; or when the government has not volunteered exculpatory evidence not requested by the defense, or requested only generally. See id. at 433, 115 S.Ct. at 1565. Any favorable evidence, regardless of whether requested or not, is material if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different. Id. at 433-34, 115 S.Ct. at 1565 (quoting United States v. Bagley, 473 U.S. 667, 682, 105 S.Ct. 3375, 3383-84, 87 L.Ed.2d 481 (1985))(emphasis added). 17 Whether evidence is material does not depend upon whether the defendant would more likely than not have received a different verdict with the evidence, but whether in its absence he received a fair trial, understood as a trial resulting in a verdict worthy of confidence. Id. at 434, 115 S.Ct. at 1566. Accordingly, a Brady claim does not require a showing that introduction of the exculpatory evidence would have rendered the overall evidence insufficient to convict. See id. at 434-35, 115 S.Ct. at 1565-66. 186 The doctrine of harmless error does not apply once a court has found a Brady violation, because a Brady analysis necessarily includes a determination of whether the evidence at issue might have affected the verdict. See id. at 435, 115 S.Ct. at 1566. Finally, courts should evaluate the material effect of exculpatory evidence by examining the evidence collectively, not item-by-item. See id. at 436, 115 S.Ct. at 1566-67. 187 The District Court rejected the motion for new trial because it believed that FED.R.EVID. 704(b) would have barred Dailey from testifying that Frost lacked the requisite intent to deceive. The District Court also found that Dailey could not have testified that small businesses like FWG often bill the federal government in ways which they believe are correct but which technically are not allowable because, [i]n the absence of a proper foundation showing personal knowledge, Dailey would not be permitted to testify about his mere opinion as to the intent and motives of other government contractors and their billing practices. Further, the District Court found that the proposed testimony that Frost knew that the billings at issue would be audited does not necessarily prove that Frost lacked the requisite intent to defraud; the District Court also stated that [t]here is nothing in Dailey's affidavit which indicates that he had personal knowledge of what Frost knew or was thinking on the subject of an audit. Finally, the District Court stressed that the proposed testimony by Dailey favored the prosecution to the extent that it confirmed the basic claim that Frost could not have billed the bonuses as direct labor costs. 18 188 We find that the District Court abused its discretion by not holding an evidentiary hearing on the motion for new trial. As noted, the court relied in part upon Federal Rule of Evidence 704(b), which states: 189 (b) No expert witness testifying with respect to the mental state or condition of a defendant in a criminal case may state an opinion or inference as to whether the defendant did or did not have the mental state or condition constituting an element of the crime charged or of a defense thereto. Such ultimate issues are matters for the trier of fact alone. 190 See FED.R.EVID. 704(b). The District Court is correct that Rule 704(b) would bar Dailey from testifying that Frost lacked an intent to defraud. However, the affidavit by Dailey stated that there was no evidence that Frost billed the bonuses in a deceptive manner. Although it is unclear precisely what Dailey meant by this statement, he presumably was asserting that Frost used a billing method which made it obvious what he was doing. If so, this is a fact which would have allowed the jury to infer a lack of intent to defraud. Given the lack of strong evidence supporting the convictions, see infra, as well as the fact that Dailey would have been an effective defense witness as the government official who oversaw the MDA contract, the contract in issue, the District Court should have permitted an evidentiary hearing to develop Dailey's testimony as to why the bonuses had not been billed in a deceptive manner. 191 Similarly, Rule 704(b) does not prohibit the proposed evidence that small businesses like FWG often bill costs in ways that they believe are correct but which technically are not allowable: 192 Decisions applying Rule 704(b) to the expert testimony of law enforcement officials have found it significant whether the expert actually referred to the intent of the defendant or, instead, simply described in general terms the common practices of those who clearly do possess the requisite intent, leaving unstated the inference that the defendant, having been caught engaging in more or less the same practices, also possessed the requisite intent. 193 United States v. Lipscomb, 14 F.3d 1236, 1239 (7th Cir.1994). In this case, Frost wishes to demonstrate the converse of the above principle by showing through expert testimony that he engaged in the same common practices of those who clearly lack the requisite criminal intent. Although the District Court questioned whether Dailey, whose job is to oversee government contracts, has personal knowledge of the motives and billing practices of contractors in general, his affidavit indicates that he has such knowledge. The proposed testimony that Frost knew that the government would audit the billings and discover that he had billed the bonuses as direct labor is yet another fact from which the jury could infer that Frost lacked an intent to defraud: generally, people are less inclined to lie if there is a likelihood that they will be caught. 194 We believe that Frost may be able to show a reasonable probability that the verdicts would have been different with Dailey's testimony, and therefore show entitlement to a new trial on Counts Twenty-Five through Twenty-Nine. Crucial to our holding is the fact that the evidence supporting the convictions for these counts is not strong. Ultimately, the government relies upon three transcript pages of testimony by a government auditor who, after describing the difference between direct and indirect labor, answered no when the prosecution asked whether the government would have allowed Frost to double his money if Frost first had asked the government whether he could bill the bonuses as direct labor. 195 We do not hold that there is insufficient evidence to support a verdict of guilty. It remains unclear from the record, including the direct and cross-examination testimony of Frost and his experts, whether Frost in fact complied with regulations by establishing an informal bonus plan. Further, and after viewing the record in the light most favorable to the prosecution, there is substantial evidence which would allow a jury to infer that Frost had the intent to defraud the government. See United States v. DeCastris, 798 F.2d 261, 263 (7th Cir.1986)(affirming mail fraud convictions by observing that the concealment of information known to be pertinent to a proper decision may be a fraudulent scheme, even when the defendant could have shown that he in fact is entitled to a favorable decision). Nonetheless, the evidence of an intent to defraud is equivocal, and an evidentiary hearing may reveal a reasonable probability that the undisclosed testimony of Dailey would have resulted in different verdicts. 196 Frost and Turner vaguely suggest that the new testimony of Dailey requires a new trial or hearing for every count related to improper billing, including Counts Twenty-One through Twenty-Four. The new testimony, however, is related only to Counts Twenty-Five through Twenty-Nine, the counts based upon the billing of bonuses as direct costs. It is unrelated to Frost's convictions of Counts Twenty-Three and Twenty-Four, which are based upon his billing the government for trips to Las Vegas and Reno, Nevada. Likewise, the testimony is unrelated to Frost's and Turner's convictions of Counts Twenty-One and Twenty-Two, which are based upon their billing the work of an FWG employee not according to which government contract he actually worked on, but according to which contract would enable Frost and Turner to request the most money. Although Potter moved to adopt the assertion by Frost on appeal that the undisclosed testimony by Dailey requires a new hearing or trial, the testimony of Dailey is similarly unrelated to any of the counts for which Potter stands convicted. 197 Faulkner appeals the denial of his motion for a new trial, which also was based on exculpatory evidence contained in the Dailey affidavit regarding the role of Faulkner in the extension of the MDA contract. We do not address this claim, however, because we already have vacated the convictions of Faulkner which rest upon his alleged act of modifying the MDA contract on behalf of Frost. 198 We further note that additional motions for new trials, which allege that the government suppressed an internal investigative report which concluded that FWG did not receive contract work from the student defendants in exchange for advanced degrees, remain pending before the District Court. We leave it to the District Court to dispose of these motions in light of this opinion.