Opinion ID: 2982493
Heading Depth: 2
Heading Rank: 2

Heading: Admission and Exclusion of Evidence

Text: Defendants assert that the district court erred in excluding several pieces of evidence and in admitting other evidence. We review “the district court’s decision to admit evidence for an abuse of discretion.” United States v. Blanchard, 618 F.3d 562, 569 (6th Cir. 2010). A district court abuses its discretion by making “errors of law or clear errors of factual determination in evidentiary rulings.” United States v. Geisen, 612 F.3d 471, 495 (6th Cir. 2010) (internal quotation marks and citations omitted). First, Coffman maintains that the district court abused its discretion when it refused to let him cross examine Tstatskin about the range of punishment he was facing in the United States. Such information, Coffman contends, would have shown Tsatskin’s motivation for testifying against him. We find no merit in this claim because this question was neither probative of Tsatskin’s bias or motive for testifying nor useful for impeachment. At the time he made the plea deal, Tsatskin did not know the length of any prison term he faced if he were convicted in the United States; he learned only after he had agreed to the deal what his punishment would likely be. Even if Coffman’ s question to Tsatskin were probative of bias or motive, the district court did not abuse its discretion in excluding the testimony because “the jury was otherwise in possession of sufficient information . . . to make a discriminating appraisal of [the] witness’ motives and bias.” United States v. Kone, 307 F.3d 430, 436 (6th Cir. 2002) (internal quotation marks, citations, and brackets omitted); see also United States v. Lanham, 617 F.3d 873, 884 (6th Cir. 2010). The jury heard testimony that Tsatskin made a deal with the United States government in which he agreed to come to Kentucky to testify and the United States agreed to 10 Nos. 12-5574/5611.6090, United States v. Coffinan, et al. have the indictment against him dismissed. This information was sufficient to show Tsatskin’s motive and bias in testif,ring against Coffman. Milby argues that the district court erred when it refused to allow him to cross-examine Tsatskin about an arguably inconsistent statement Tsatskin made during trial, as well as about two unrelated forgery charges. But the jury heard both the testimony that Tsatskin received multiple cease-trade orders based on securities violations and Tsatskin’s admission that the Canadian government prohibited him from selling cars because he did not have a license to do so. This was ample evidence to permit the jury to make a sound appraisal of Tsatskin’ s character. Milby next maintains that the district court erred when it refused to admit into evidence statements attached to a report detailing an investigation into Global by the Ontario Securities Commission and to allow defendants to cross-examine Tsatskin about the statements. But witness statements in a report are hearsay and are not admissible under Rule 803(8) of the Federal Rules of Evidence. See Tranter v. Orick, 460 F. App’x 513, 515 (6th Cir. 2012) (per curiam). We find no abuse of discretion here. Coffman contends that the district court erred in admitting a recording of a civil deposition Coffman gave before a Kentucky state investigator because, at the time of the deposition, Coffman was unaware of any pending criminal investigation against him. Coffman did not raise the issue at trial; moreover, he consented to the introduction of the recording. He has therefore waived this argument, see United States v. Street, 614 F.3d 228, 234 (6th Cir. 2010), and must demonstrate plain error, that is, an error that “was obvious or clear.” United States v. Doyle, 711 F.3d 729, 732 (6th Cir. 2013). Coffman makes no such showing. To prove impermissible commingling of civil and criminal investigations, he must demonstrate “trickery or cloaking of the criminal 11 Nos. 12-5574/5611.6090, United States v. Coffman, et al. investigation as civil.” United States v. Setser, 568 F.3d 482, 493 (5th Cir. 2009) (internal quotation marks omitted). Coffman provided no evidence whatever to support such a claim. Both defendants argue that the district court erred when it admitted investors’ testimony concerning statements by Global and Mid-America salespeople about investments, including testimony that a Global salesperson made misrepresentations to them about oil production amounts and expected returns on their investments. Coffman first maintains that this testimony violated the parol evidence rule. Coffman, however, waived this argument because he did not raise it in the district court. See, e.g., United States v. Murphy, 241 F.3d 447, 450—5 1 (6th Cir. 2001). At trial, Coffman’s objections to the testimony related solely to hearsay and the right to confrontation. We therefore review this objection for plain error, see Doyle, 711 F.3d at 732, and we find none. “Parol evidence is admissible to show that the making of a contract was procured by fraudulent representations.” Waidman v. Stone, 698 F.3d 910, 923 (6th Cir. 2012) (citing Radioshack Corp. v. ComSmart, Inc., 222 S.W.3d 256, 260 (Ky. App. 2007)). Coffman and Milby also argue, however, that the district court erred by admitting this testimony because the statements are hearsay. “Out-of-court statements constitute hearsay only when offered in evidence to prove the truth of the matter asserted.” United States v. Hathaway, 798 F.2d 902, 904 (6th Cir. 1986) (quoting Anderson v. United States, 417 U.S. 211, 219 (1974)). These false statements were offered not to prove the truth of the expected returns or profitability of the oil wells, but to prove that the salespersons’ oral promises were false and misleading. Because these statements are not hearsay, the district court did not abuse its discretion in admitting them. See Hathaway, 798 F.3d at 905. 12 Nos. 12-5574/5611.6090, United States v. Coffman, et al. Both defendants contend that the district court abused its discretion when it allowed Manning Warren, a securities law professor, to testify as an expert witness concerning the duties of a securities lawyer. Properly qualified expert testimony is admissible if it “will help the trier of fact to understand the evidence or to determine a fact in issue.” Fed. R. Evid. 702(a). Defendants maintain first that Warren’s testimony about a securities lawyer’s role was incorrect and not reliable. Warren testified that: A securities lawyer is there to independently investigate. He’s not entitled to believe what his client said. That’s when I mean, you usually find yourself -- adverse to your client; sometimes it’s not particularly pleasant, because you are supposed to be a skeptic, a devil’s advocate with your client. And you want to hear what your client has to say, but then you want to go out there and independently verify it. Because defendants did not object to this testimony at trial, we review only for plain error. See Un ited States v. Ham, 628 F.3d 801, 804 (6th Cir. 2011). While defendants dispute the accuracy of Warren’s testimony, the district court did not plainly err in admitting it. Defendants’ arguments “go to the weight the jury should afford the evidence, not to its admissibility.” United States v. Crosgrove, 637 F.3d 646, 658 (6th Cir. 2011). Defendants were “able to raise each of [their] points at trial, both through cross examination and closing arguments.” Id. In fact, Coffman’s counsel vigorously questioned Warren on his views. Admitting expert testimony that is debatable is not plain error. Defendants also argue that the district court erred when it admitted Warren’s testimony about what constitutes “materiality” for purposes of securities law. Warren testified that part of the duty of the securities lawyer is to insure his clients’ compliance with the securities law’s prohibition against making “any material misrepresentations of fact.” The prosecutor asked 13 Nos. 12-5574/5611.6090, United States v. Coffman, etal. Warren to provide the “standard definition” for “what is material.” Warren explained that information is “material” if there is a “substantial likelihood that the information is information that an investor would find important in making his or her investment decision.” The prosecutor then asked Warren to explain categories of material disclosures based on the usual and customary practice of a securities lawyer. In response to defense counsel’s objection, the district court instructed the jury that the court would instruct them as to the meaning of the law, and that they were to limit their consideration of Warren’s testimony to “determining what is ordinarily and customarily done by securities lawyers in their practices.” Defendants assert that an expert cannot testify on legal questions at all, citing United States v. Zipkin, 729 F.2d 384 (6th Cir. 1999). In Zipkin the court held inadmissible expert testimony about the meaning of the specific provision of law the defendant was accused of violating. Id at 387. Here, however, Warren was testifying about the lawyer’s duty to protect his client from civil liability in the securities context. He was not testifying about the legal standard the jury was to employ in deciding the instant case. The court made this clear in its limiting instruction. Moreover, in its final instructions to the jury, the court defined “material” in terms nearly identical to those used by Warren. Defendants also assert that the district court erred because it permitted Warren to testify regarding the ultimate issue of defendant’s guilt. They point to Warren’s responses to hypothetical questions posed by the prosecutor regarding misrepresentations in PPMs and warnings of risk contained in documents such as subscription agreements, and to his statement that Coffman was subject to criminal liability. But hypothetical questions to an expert witness are permissible, see 14 Nos. 12-5574/5611.6090, United States v. Coffrnan, et al. United States v. Collins, 78 F.3d 1021, 1037 (6th Cir. 1996), and as this court explained in Collins, hypothetical questions to an expert do not withdraw the issue of guilt from the jury. Id. Warren’s opinion regarding Coffman’s criminal liability was merely part of his explanation of a hypothetical dealing with a different criminal charge related to securities law. It was not an opinion on the ultimate question of guilt at issue in the case. Defendants argue that the district court erred when it admitted testimony from John Cullen, a Kentucky state investigator, which, defendants complain, amounted to legal conclusions. During the cross-examination of Cullen, Coffman sought to establish that Cullen’s office did not have authority to investigate Global because Global had no Kentucky investors. On redirect, in order to establish that Cullen’s office did have jurisdiction to investigate Global, the Government asked Cullen whether a Global representative’s taking an investor to a well site in Kentucky to induce him to invest in the program would constitute an offer of securities in Kentucky. The district court ruled the Government’s question was merely an effort to refute Coffman’s suggestion that Cullen’s office lacked jurisdiction to investigate Global, and that Coffman’s attorney had “opened the door for the government’s line of inquiry.” United States v. Ramos, 861 F.2d 461, 468-69 (6th Cir. 1988). We find no abuse of discretion here. Defendants next argue that four witnesses provided lay opinion testimony in violation of Federal Rule of Evidence 701, which states: If a witness is not testifying as an expert, testimony in the form of an opinion is limited to one that is: (a) rationally based on the witness’s perception; (b) helpful to clearly understanding the witness’s testimony or to determining a fact in issue; and (c) not based on scientific, technical, or other specialized Imowledge within the scope of Rule 702. 15 Nos. 12-5574/5611.6090, United States v. Coffman, et al. A foundational requirement of Rule 701 is that the witness have “personal knowledge of the outward events” that supports assertions made in testimony. Torres v. County of Oakland, 758 F.2d 147, 150 (6th Cir. 1985). Coffman has failed to develop his argument that Government witnesses gave improper lay opinion testimony, simply claiming in summary fashion, with no explanation whatsoever, that four statements contained lay opinions. Thus, Coffman has waived the issue. See, e.g., United States v. Catalan, 499 F.3d 604, 606 (6th Cir. 2007) (“We require parties to develop their arguments in a non-perfunctory manner at the risk of having them deemed waived.”). But even if Coffman has not waived the issue, his argument has no merit. The first witness Coffman mentions, Shiping Chen, invested in Mid-America after hearing Milby’s sales pitch, and after Coffman assured him that Milby was successful and that Chen’s money would be secure. Chen testified that after he failed to receive returns on his investment in Mid-America, he decided that Coffman was “the key criminal in this scam.” Because Coffman did not object to this testimony at trial, our review is for plain error. See Ham, 628 F.3d at 804 (6th Cir. 2011). Chen’s testimony is arguably rationally based on his perceptions because it is founded on his interactions with Coffman and Milby. Furthermore, the entirety of Chen’ s testimony covers 125 transcript pages. Even if this one statement, upon which Coffman now focuses, were improper, we have found harmless error where “this error involved only one brief question out of a rather lengthy trial.” Torres, 758 F.2d at 150. The second witness Coffman points to is Eric Taylor, who testified that he suspected that Coffman and Milby were stealing his money after Milby threatened him and Coffman refused to provide information about the money he had invested. Coffman’s attorney attempted to impeach 16 Nos. 12-5574/5611.6090, United States v. Coffman, et al. Taylor by showing that Taylor hoped to recover money in a lawsuit if Coffman were convicted. Coffman’s attorney asked, “You have been advised, though, that if you convict Bryan Coffman you might get some money?” Taylor answered, “Well, when Bryan Coffman has our monies in Panama and the Cayman Islands and — [here Coffman’s attorney objectedJ — and the Bahama islands, yes absolutely.” Later, Coffman’s attorney tried to establish that Taylor knew that his investment was risky. The attorney asked, “Now, again, you were advised over and over about the risk in the stock. Correct?” Taylor said, “Yes.” The attorney then asked, “And where the money would be going?” Taylor responded, “To Gary Milby, not to Bryan Coffman and to Panama, yes.” The defendants then moved for a mistrial. The court denied the motion. The district court, however, almost immediately instructed the jury to disregard that testimony. The court’s limiting instruction “was immediate, clear, and forceful,” and “the remark was only a small part of the evidence against the defendant.” United States v. Caver, 470 F.3d 220, 243, 245 (6th Cir. 2006) (internal citations omitted). Taylor’s testimony was not “so clearly improper and prejudicial” that the court’s instruction could not have “erased” any harm to the defendants. United States v. Howard, 621 F.3d 433, 459 (6th Cir. 2010). At the beginning of the next day of the trial, the district court reminded the jury of the instruction to ignore that testimony, and asked the jurors if they could follow the instruction. Each juror answered affirmatively. Taylor’s statements were a small part of the evidence against Coffman. In the context of “all that happened” in the trial, there is no “reasonable possibility” “that the evidence complained of might have contributed to the conviction.” United States v. Bell, 516 F.3d 432, 447 (6th Cir. 2008). We conclude that this error was harmless. See Torres, 758 F.2d at 150 (finding harmless 17 Nos. 12-5574/5611.6090, United States v. Coffinan, etal. error where “this error involved only one brief question out of a rather lengthy trial.”) The district court did not abuse its discretion in dealing with Taylor’s testimony. Coffman’s remaining claims of lay opinion testimony are also meritless. In response to a question from Coffman’s attorney, Roberta Bottoms testified that, “Mr. Coffman was the true owner” of Global. Coffman “cannot complain about the discussion elicited by his own counsel.” United States v. Lay, 612 F.3d 440, 448 (6th Cir. 2010). Finally, Coffman claims that the Kentucky investigator John Cullen testified that Coffman was involved in criminal activity. In fact, Coffman’s attorney made that statement in a question in which he quoted Cullen’s affidavit. Coffman cannot challenge the admission of evidence he introduced. See Ohier v. United States, 529 U.S. 753, 755 (2000). Finally, defendants argue that the district court abused its discretion when it prohibited the admission of testimony expressing opinions on the quality and accuracy of the Government’s investigation. Citing only one case, defendants maintain that evidence discrediting an investigation may be relevant and material. See Jeffries v. Morgan, 446 F. App’x 777 (6th Cir. 2011). In Jeffries, we addressed a defendant’s claim that the prosecution had failed to disclose exculpatory material. Id. at 778. But here, defendants make no such claim, and a trial court does not abuse its discretion in excluding as irrelevant accusations that the Government’s investigation was not perfect. See United States v. Veal, 23 F.3d 985, 989 (6th Cir. 1994). Relying on Veal, the district court properly prohibited defendants from making unsupported accusations about the Government’s motivation in bringing the case. The defendants were able to attack the quality of the investigation through cross examination of Government witnesses. This argument is meritless. 18 Nos. 12-5574/5611.6090, United States v. Coffinan, et al.