Opinion ID: 2974374
Heading Depth: 2
Heading Rank: 1

Heading: I think Mike Kotula was with us early.

Text: .... Q. [W]hat do you believe his occupation to be? A. Actually, he used to be an administrative assistant. Q. For? A. A number of companies that I was involved in.[5] 5 The government also introduced an excerpt from Harris’s August 12, 2002, deposition in another prior state civil case: Q. Mr. Harris, you’ve testified that you’re the trust manager of Asset Management. A. That’s correct. Q. What is Asset Management? A. It’s a business holding trust organization. .... Q. [A]t some point in the early ‘90s, 1994, you were looking into trust entities? A. Yes. Yes, actually, in the ‘80s it started, but it ended up in the ‘90s with Crown Enterprises. Q. Now, the Crown Enterprises is the company that you went to to have these documents prepared for the trust? A. Yes. Q. What type of work did Crown Enterprises do with regard to the formation or creation of Asset Management? A. Well, they were the administrators for the trust. They actually promote the trust as a tax shelter.    Q. Did Crown Enterprises have the documents prepared to create Asset Management? A. Yes. Q. Did Crown Enterprises obtain the people who would act as trustees for the 70 No. 04-3996 / 04-3997 / 04-4030 US v. Harris, US v. Schwentker-Harris, US v. Kotula trust? A. Yes. They organized the trust. . . . just the same as a trust lawyer would do. Q. Now, it identifies – there’s a signature on that page identified as Douglas J. Carpa, trust officer. Was Mr. Carpa someone you communicated with in regard to the trust? A. Yes. I have talked with him. I don’t recall the dates I talked to him, but I had talked to him and I had letters from him. But the main person I’ve talked to was Bloomquist. .... A. He was the trust administrator. Q. Let’s focus now on the events that led up to the August 1997 conveyance of the land of the park. [S]et the stage what led you to suggest . . . some type of conveyance . . . . A. . . . . I’d been indicted for one count of tax evasion for 1987. . . . I was at that time found guilty. I appealed. The Sixth Circuit confirmed [sic] my conviction. . . . . Q. What was . . . the anticipated function or purpose of this newly formed corporation, trustees of Conneaut Lake Park, Incorporated? A. [A] board of honorary members of the community . . . that would . . . make sure that it maintained itself as an amusement park. They had absolutely no control over the operation nor the assets. They only owned the land and the land, in our view, was at risk because of my involvement with the government. Q. And did your trust have involvement in operating the park in ‘98? A. In 1998 we helped select Conneaut Lake Park, Inc., the entity that was established to operate the park . . . at my direction, [it] opened the park after one of the previous people that had been selected by the board left. [W]e would have had no problem with them finding an operator after the settlement . . . . It was in our best interest. And the only reason the settlement . . . called for an operator [was] because they knew that I was going to go to jail, so we all knew that we needed a good operator. It wasn’t that I was giving up rights to operate it. I could have operated it under my lease, but I knew that I would not be there 71 No. 04-3996 / 04-3997 / 04-4030 US v. Harris, US v. Schwentker-Harris, US v. Kotula At trial, the prosecutor offered Harris’s civil testimony as coconspirator statements against all three defendants. The judge admitted the testimony for these reasons: First of all, it appears . . . that the testimony is [in the nature] of a statement made by a co-conspirator of a party during the course and in furtherance of the conspiracy. ... These are preliminary findings . . . . They are certainly not – not final determinations, but based upon the state of the evidence of this case, the Court does believe that there has been a sufficient showing that there was a conspiracy in existence; that Mr. Harris and/or Mr. Kotula at least arguably were members . . . . [T]he defendant against whom this statement is offered is both Mr. Kotula and Mr. Harris, and again arguably at this point there has been some showing that they were members of a conspiracy. That the statement was made in furtherance of the conspiracy, I believe there’s been sufficient evidence to show the same. The government has alleged overt acts related to Conneaut Park, the operation of the park, and other transactions related to same so there’s been a sufficient showing of that fact. We conclude it was not an abuse of discretion for the trial court to rule that Harris’s civil testimony was a coconspirator statement admissible against Schwentker and Kotula. and I wanted them to feel that they were participating in it. These people wanted arm’s length. These people didn’t even know me and this tax, you know, investigation was really tainting the park and it was tainting them they felt. Q. You testified that you determined the land was at risk so you determined to donate it to the Conneaut Lake Park Preservation Fund. And then, subsequently, that didn’t materialize and you determined to donate it to the trustees of Conneaut Lake Park. Why did you believe the land was at risk? A. [T]o be quite honest, I was dealing with a government agency, you know, and at that point, with my incarceration coming . . . . [I]t’s possible they could have . . . seized it . . . . The government then rested and trial concluded. 72 No. 04-3996 / 04-3997 / 04-4030 US v. Harris, US v. Schwentker-Harris, US v. Kotula Kotula contends that Harris’s civil testimony could not have been made “in furtherance of” this conspiracy because “[t]he last overt act referenced in the indictment was dated April 24, 2002, prior to Harris’s testimony.” This argument lacks merit. “[A] statement that simply informs a listener of the declarant’s criminal activities is not made in furtherance of the conspiracy; instead, the statement must somehow advance the objective of the conspiracy.” US v. Manfre, 368 F.3d 832, 838 (8th Cir. 2004) (quotation marks and citations omitted). The district court could reasonably find that Harris intended to advance this conspiracy through his depositions in civil actions that he instituted to regain operational control over the park. As Kotula acknowledges,“Conneaut Lake Park was a part of the Count 1 conspiracy alleged by the government and a significant part of the tax loss.” For its part, the government emphasizes Agent Torbic’s testimony that the park was a source of cash for Harris, as well as Agent Fisher’s testimony that the park was virtually audit-proof and that Harris failed to document and deposit some cash received by the park. As the government points out, Harris admitted that he had not signed a federal income-tax return since 1981, and that he created the non-profit Trustees and transferred the park grounds to them in August 1997 because he was concerned that the government might seize the property to satisfy his delinquent tax obligations. The government’s theory, which is not inconsistent with the record, is that Harris deliberately gave the appearance of conveying the entire amusement park – grounds, assets, and operating rights – to the Trustees, so that the government could not seize it to satisfy his tax liabilities. 73 No. 04-3996 / 04-3997 / 04-4030 US v. Harris, US v. Schwentker-Harris, US v. Kotula Just a few weeks later, the U.S. Attorney approved the 1997 plea resolving the previous tax charges against Harris, which apparently led Harris to believe that the government no longer posed much risk of seizing the park. Harris began asserting that he had given the Trustees only the park’s land, not its assets or the right to control and operate the park, and he sued the Trustees accordingly. In sum, the government presented evidence sufficient to permit the jury’s findings that the amusement park was used as part of an ongoing scheme to evade federal income taxes properly owed by Harris and/or GH Group. Harris intended his civil testimony to help restore his control of the park’s assets and day-to-day operations – in other words, to regain a tool that had been useful to him and the alleged conspiracy. Thus, it was not clear error to conclude that Harris made the civil statements during the course of and in furtherance of the instant conspiracy. See US v. Franklin, 415 F.3d 537, 552 (6th Cir. 2005) (district court’s determination whether a statement was made in furtherance of conspiracy is reviewed for clear error, not abuse of discretion like the ultimate 801(d)(2)(E) admissibility ruling) (citation omitted). In turn, it was not an abuse of discretion to admit Harris’s civil statements as non-hearsay coconspirator statements under Rule 801(d)(2)(E).