Opinion ID: 16332
Heading Depth: 3
Heading Rank: 2

Heading: Ex parte examination of materials in support of

Text: application for stay. Generally, the power to stay a pending matter derives from a trial court’s wide discretion to control the course of litigation. In the present case, however, this inherent discretion has been explicitly circumscribed by statute. The plain language of both 18 U.S.C. § 981(g) and 21 U.S.C. § 881(i) requires a district court to find two elements in order to grant a stay: (1) that forfeiture proceedings be “related to” an offense for which there has been an indictment,9 and (2) that the Government show “good cause” for the stay. See In re Ramu, 903 F.2d 312, 319 (5th Cir. 1990) (considering appropriateness of stay in context of 21 U.S.C. § 881(i)). Fifth Circuit precedent additionally mandates that a district court make express findings of fact and conclusions of law concerning the existence of the statutory prerequisites. See Id. The district court granted a stay of litigation until the conclusion of the Abrego trial on the basis of oral argument by both the Government and Massieu, as well as two sealed affidavits which the court examined ex parte. Massieu argues that the district court’s denial of his request for copies of the two 9 21 U.S.C. § 881(i) requires that the indictment be for a drug offense. 18 U.S.C. §981(g) mandates that the indicted offense be a violation of federal, state, or local law. 25 sealed affidavits deprived him of the opportunity to rebut meaningfully the contentions of the Government at the May 31, 1996, hearing. It is well established in this Circuit that district courts have an inherent power to receive in camera evidence and place such evidence under seal. See United States v. De Los Santos, 810 F.2d 1326, 1331-1333 (5th Cir. 1987). In the criminal context, we have recognized that the receipt of evidence ex parte permits the court to balance the interests of the Government--in safeguarding its confidential informants and in ensuring viability of its ongoing investigations--against the interests of defendants in confronting adverse witnesses. See United States v. Singh, 922 F.2d 1169, 1172 (5th Cir. 1991) (holding that district court’s in camera review was appropriate, and that furnishing the appellant with a copy of the transcript of that review “would defeat the very purpose of the in camera procedure.”). Unlike criminal defendants, civil forfeiture claimants are not afforded the protections of the Sixth Amendment’s Confrontation Clause. See Austin v. United States, 509 U.S. 692, 608 n.4, 113 S.Ct. 2801, 2804 n.4 (1998). As a result, submission of evidence ex parte is more readily justified in a civil forfeiture action than in a criminal case. Because courts routinely balance the interests of the Government in anonymity against that of civil litigants in full disclosure and have permitted the submission of evidence ex 26 parte, see, e.g., Abell v. Potomac Insurance Co., 858 F.2d 1104, 1143 (5h Cir. 1988), vacated on other grounds, 492 U.S. 914, 109 S.Ct. 3236 (1989) (sealing the record of in camera discussions with FBI agent about attempts to bribe jury members); In re Grand Jury Witness, 835 F.2d 437, 441 (2d Cir. 1988) (permitting Government to file a sealed ex parte affidavit and to adjourn to chambers for ex parte discussion in closed civil contempt hearing), we find no abuse of discretion in the present case. Moreover, Massieu has not demonstrated any prejudice to his “substantial rights” that resulted from the imposition of the stay. See Fed.R. Civ.P Rule 61. In particular, it is interesting to note that less than one month after he unsuccessfully sought a writ of mandamus from this Court to be relieved of the hardship of what he deemed court-indulged blanket non-disclosure by the Government, Massieu moved the district court for a speedy trial. Upon agreement of the parties, the case was set for trial on March 10, 1997, approximately three months following the district court’s lift of the stay. 3. Failure to exclude testimony of last-minute witnesses. Massieu’s next point of error is that the district court erred in failing to exclude the trial testimony of Cesar Dominguez10 and Raul Macias,11 who were two of the four 10 Cesar Dominguez was a city policeman commissioned by the MFJP until 1995. As a police officer assigned to the MFJP, Dominguez would deliver “quotas” (payoffs in the form of either 27 prospective witnesses that the Government disclosed less than five full days before trial. According to Massieu, the lastminute witness disclosure violated Federal Rule of Civil cash or drugs) from drug traffickers to the MFJP office. He testified that drug traffickers also delivered money to the office in boxes, briefcases, or bags. The money was wrapped in cellophane or secured by rubber bands. The most money Dominguez was involved in counting was a little more than $6 million. Beginning in 1991, Dominguez began working for the Amado Carillo Fuentes organization. In 1993, Dominguez on four different occasions transported money to the airport. Once at the airport the money would be loaded onto a plane belonging to the Attorney General’s office. While Dominguez was a police officer, money continued to be brought to the airport destined for the Attorney General’s office regardless of who held the position. Dominguez quit in 1995 because over 17 of his coworkers were murdered. 11 Raul Macias was a police officer in Mexico from 1989 to 1995. In 1994, he was assigned to work under the direction of Commander David Grajeda Lara in Zacatecas, Mexico. Macias testified that on August 4, 1994, an airplane loaded with cocaine landed at an airstrip near the city of Sombrerete, Mexico, where the cocaine was unloaded and taken to the local MFJP’s office in two trucks. At the office the cocaine was weighed. Eight tons of the approximately 10 tons of cocaine were loaded into a truck and driven away by Commander Lara under escort. The remaining two tons along with bricks of fake cocaine were taken elsewhere and burned the next day. Macias returned to the airport that same night and observed approximately 15 Suburbans parked near the airport entrance. Lara instructed Macias to load 12-15 suitcases into Lara’s Suburban. While guarding two of the suitcases at a hotel that night, Macias opened the suitcases and saw that they contained United States Currency in denominations of 50's, 20's, and 10's. The following day, Lara picked up Macias, the suitcases, two other agents and they went to Mexico City. The next morning the men drove to the offices of the MFJP where Lara began talking to the passenger of a blue Marquis. Lara signaled to Macias, who took the suitcases with the currency from the Suburban and placed them in the trunk of the Marquis. Macias recognized the passenger who Lara was speaking with in the blue Marquis as Massieu. 28 Procedure 26(a)(3)(A)12 and should have prompted mandatory exclusion under Rule 37. Specifically, he complains that the late disclosure forced inadequate depositions of other witnesses and precluded investigation of the witnesses’ allegations as well as development of impeachment and rebuttal testimony. Federal Rule of Civil Procedure 37(c)(1) provides that a party who “without substantial justification fails to disclose information required by Rule 26(a) or 26(e)(1) shall not, unless such failure is harmless, be permitted to use as evidence at a trial, at a hearing, or on a motion any witness or information not so disclosed.” Fed.R. Civ.P. 37(c)(1). In determining whether a violation of Rule 26(a) or (e)(1) is harmless, the trial court’s discretion is to be guided by the consideration of four factors: (1) the importance of the witness's testimony; (2) the prejudice to the opposing party of allowing the witness to testify; (3) the possibility of curing such prejudice by granting a continuance; and (4) the explanation, if any, for the party's failure to identify the witness. See Bradley v. United States, 866 F.2d 120, 125 (5th Cir. 1989). We uphold the district court’s decision not to exclude the witness testimony. First, the applicable standard of review for 12 According to Rule 26(a)(3)(A), a party shall provide to other parties the name, address, and telephone number of each witness that it may present at trial other than solely for impeachment purposes, “separately identifying those whom the party expects to present and those whom the party may call if the need arises . . . .” Fed.R. Civ.P. Rule 26(a)(3)(A). 29 a trial court’s decision in a matter relating to discovery is abuse of discretion. See Harris v. Amoco Production Co., 768 F.2d 669, 684 (5th Cir. 1985). We will not substitute our judgment for that of Judge Atlas; instead, we must only decide whether the district court “could have entered the order which [it] did.” See id. Second, neither Rule 37 and the Advisory Committee Notes to Rule 37 nor Fifth Circuit case law requires that a district court make express findings of fact or conclusions of law concerning the existence of substantial justification or harmless failure to disclose. Accordingly, Judge Atlas’ statements in open court on March 10, 1997, regarding witness safety concerns and minimal prejudice as well as the reasons asserted by the Government in justification for its three week delay in providing the discovery, which was nonetheless disclosed in advance of trial, are sufficient to support the district court’s determination that Rule 37 sanctions were not in order.13 4. Failure to bifurcate the trial. A motion to bifurcate “is a matter within the sole discretion of the trial court, and we will not reverse the court’s decision absent an abuse of that discretion.” First Tex. 13 Before the district court, the Government justified its tardy disclosure of Cesar Dominguez and Raul Macias as follows: (1) the loss of anticipated trial witnesses as a result of the leaked “Processo” story and (2) the difficulty in arranging the lawful entrance of Dominguez and Macias, both Mexican citizens, into the United States. 30 Sav. Ass’n v. Reliance Ins. Co., 950 F.2d 1171, 1174 n.2 (5th Cir. 1992). Massieu asserts that the district court abused its discretion when it failed to bifurcate the proceeding into a bench trial to determine probable cause and a subsequent jury trial on defenses to the forfeiture. Massieu argues that, as a result of the one proceeding, hearsay evidence offered to show probable cause was placed before the jury. According to Massieu, the admission of this otherwise inadmissible evidence was highly prejudicial and deprived him of a fair trial. Massieu’s argument is without merit. Judge Atlas restricted hearsay before the jury to only those instances where an exception under Rules 803 or 804 of the Federal Rules of Evidence applied. All hearsay, which was not otherwise admissible but for purposes of probable cause, was heard outside the presence of the jury. Accordingly, the district court’s failure to bifurcate Massieu’s forfeiture proceeding was not an abuse of discretion. 5. 0 + 0 + 0 + 0 =0 In order for cumulative error analysis to apply, Massieu must have “ . . . [some]thing to cumulate.” Derden v. McNeel, 938 F.2d at 609. Because the foregoing analysis has revealed no ground for reversal, he has nothing to cumulate. Accordingly, we deny Massieu relief on his cumulative due process claim. E. Admissibility of Ortiz and Iglio Testimony 31 Massieu additionally claims that the district court erred in admitting the testimony of two witnesses: Government informant “Tony” Ortiz and money laundering expert Agent Vincent Iglio. Evidentiary rulings are accorded considerable deference on appeal; “error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected.” Fed.R. Evid. 103(a); see General Electric Co. v. Joiner, 118 S.Ct. 512 (1997); Mills v. Beech Aircraft Corp., 886 F.2d 758 (5th Cir. 1989). We first examine the testimony of Tony Ortiz. 1. Testimony of Tony Ortiz Massieu argues that the district court erred by failing to exclude “Tony” Ortiz’s testimony and that the admission of such testimony invited the conclusion that all Mexican law enforcement officials are corrupt. Specifically, he asserts that Ortiz’s testimony was irrelevant and unfairly prejudicial. See Fed.R. Evid 402 and 403. At trial, Ortiz testified about the payment of drug proceeds to Mexican officials for the purpose of facilitating the movement of cocaine through Mexico into the United States. He explained that he had joined the Juan Garcia Abrego drug trafficking organization in 1989 and had been in charge of a transportation arm of the organization until his arrest in 1993. According to Ortiz, his job included responsibility for transporting cocaine from Brownsville to Houston and then to New York as well as 32 responsibility for transporting the drug proceeds from the United States to Matamoros, Mexico. Ortiz also testified that his ability to move drugs without incident in Mexico depended upon paying commandants and other Mexican officials. He testified that there were times that he would have to wait for cocaine to arrive in Brownsville because the commandants of the district had not yet been paid. According to Ortiz, when commandants changed, payment would not stop. Other arrangements would be made. As to the mode of payment, Ortiz explained that commandants would be paid from the drug proceeds which Ortiz would collect in the United States. He testified that he knows that Abrego continued to move cocaine after Ortiz’s arrest and that the only way to stay in business was to pay bribes “all the way to the top.” Rule 401 of the Federal Rules of Evidence defines relevant evidence as evidence “having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Fed.R. Evid. 401. Rule 403, however, provides that “[a]lthough relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice . . . .” Fed.R. Evid. 403. In United States v. Pace, 10 F.3d 1106, 1115-16 (5th Cir. 1993), the Fifth Circuit explained, however, that “[u]nless trials are to be conducted on scenarios, on unreal facts tailored and sanitized for the 33 occasion, the application of Rule 403 must be cautious and sparing. Its major function is limited to excluding matters of scant or cumulative probative force, dragged in by the heels for the sake of its prejudicial effect.” Id. There is no doubt that the testimony of Tony Ortiz was relevant to the forfeiture proceeding. Under 18 U.S.C. § 981(a)(1), the seized currency would be forfeitable if it was involved in a transaction violating 18 U.S.C. § 1956. With regard to § 1956(a)(2)(A), the Government must demonstrate that there was a transportation or transfer or attempt to transfer “monetary instruments or funds from a place . . . outside the United States to a place inside the United States with the intent to promote the carrying on of specified unlawful activity.” Ortiz’s testimony was relevant to whether money and cocaine readily flowed between Mexico and the United States and that some Mexican officials were given pay-offs in order to facilitate narcotics trafficking. Additionally, Ortiz provided first-hand knowledge about the operation of the Abrego drug organization-- one of the groups from which the Government alleged Massieu received pay-off money. In order for the district court to properly find Ortiz’s testimony to be relevant, it was not necessary for Ortiz to provide the conclusive link between Abrego and Massieu. Furthermore, Ortiz’s testimony was not so unfairly prejudicial that it should have been excluded. In conducting an 34 inquiry into the prejudicial effect of contested testimony, we have recognized that “[t]estimony presented by the Government will invariably be prejudicial to a criminal defendant or forfeiture claimant. But Rule 403 only excludes evidence that would be unfairly prejudicial to the defendant.” United States v. Townsend, 31 F.3d 262, 270 (5th Cir. 1994). While there is no doubt that Tony Ortiz’s testimony was harmful to Massieu, its prejudicial effect did not substantially outweigh its probative value. For the reasons stated above in analyzing the relevance of Ortiz’s testimony, the district court properly found that it was not unfairly prejudicial. 2. Testimony of Vincent Iglio. Claimant next argues that the district court erred by admitting the testimony of Vincent Iglio as an expert on money laundering. Massieu does not contest Iglio’s qualifications to testify as an expert, rather he asserts that Iglio’s testimony constituted inadmissible legal conclusion. See Fed.R. Evid 702 and 704. The admission or exclusion of expert testimony will not be disturbed on appeal unless it is “manifestly erroneous.” First Natl. Bank of Durant v. Trans Terra Corp. Intl., 142 F.3d 802, 811 (5th Cir. 1998). Rule 702 of the Federal Rules of Evidence states: “If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to 35 determine a fact in issue, a witness qualified as an expert by knowledge, skill experience, training, or education, may testify thereto in the form of an opinion or otherwise.” Fed.R. Evid. 702. With regard to the permissible scope of expert testimony, Rule 704 explicitly provides that “testimony in the form of an opinion or inference otherwise admissible is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.” Fed.R. Evid. 704. This Court, however, has repeatedly held that Rule 704 does not allow an expert to render conclusions of law. See Snap-Drape, Inc. v. Commissioner of Internal Revenue, 98 F.3d 194 (5th Cir.1996). Massieu charges that Iglio’s statement to the jury--that the testimony he had heard so far in the case was consistent with money laundering--supplanted Iglio’s judgment for their own. Where an expert’s trial testimony included the bases for the expert’s conclusion, and the conclusion was supported by the overwhelming evidence, as is true in the present matter, Fifth Circuit case law supports a determination that there was not significant risk that the expert’s testimony supplant[ed the] jury's independent exercise of common sense. United States v. Willey, 57 F.3d 1374, 1389 (5th Cir. 1995) (quoting Scott v. Sears, Roebuck & Co., 789 F.2d 1052, 1055 (4th Cir.1986)). We find no error in allowing Iglio’s testimony. Cases from the Fourth and Eighth circuits bolster the determination that the district court properly allowed Agent 36 Iglio to testify. The Fourth and Eighth Circuits when confronted with the admissibility of expert testimony on questions involving money laundering each found that such testimony was admissible and did not present problems of experts acting as an additional juror. See United States v. Barber, 80 F.3d 964 (4th Cir. 1995) (noting that the district court did not abuse its discretion in allowing the Government’s agent to testify and explain how the defendant’s activities constituted concealment for purposes of money laundering); United States v. Acty, 969 F.2d 652 (8th Cir. 1992), aff’d on other grounds, 511 U.S. 513, 114 S.Ct. 1747 (1994) (admitting, as permissible under rule 704(a), expert testimony that deposited checks affect interstate commerce under § 1956(a)(1)(B), that banks into which defendant deposited money were financial institutions under statute and that defendant’s activities constituted concealment of money under § 1956(a)(1)(B)). Accordingly, we hold that the district court properly admitted the expert testimony of Agent Vincent Iglio.