Opinion ID: 747628
Heading Depth: 3
Heading Rank: 6

Heading: Admission of Statements of a Co-Conspirator

Text: 80 The District Court, over defense objection, allowed Finn to testify to statements made by Joel Arnold, Phar-Mor's Senior Vice President of Operations. The District Court held that these statements were admissible under Federal Rule of Evidence 801(d)(2)(E), which states that a statement by a coconspirator ... during the course and in furtherance of the conspiracy is not hearsay. Finn testified that Arnold told him that he had discussed the situation several times with [defendant]. He was trying to prod [defendant] to get out of the subledger. He knew [defendant] was authorizing this and was behind it all along. Defendant argues that a new trial must be granted because the District Court erroneously decided that Arnold's statements fell within the scope of 801(d)(2)(E). 81 Before a district court may admit statements of a co-conspirator under FED. R. EVID. 801(d)(2)(E), it must determine that the conspiracy existed, that the defendant was a member of the conspiracy, and that the co-conspirator's statements were made 'in furtherance of the conspiracy.'  United States v. Gessa, 971 F.2d 1257, 1261 (6th Cir.1992) (en banc) (quoting United States v. Vinson, 606 F.2d 149, 152 (6th Cir.1979), cert. denied, 444 U.S. 1074, 100 S.Ct. 1020, 62 L.Ed.2d 756 (1980)). The party offering the contested statements into evidence bears the burden of proving these three factors by a preponderance of the evidence. Bourjaily v. United States, 483 U.S. 171, 176, 107 S.Ct. 2775, 2779, 97 L.Ed.2d 144 (1987). The Court, in Bourjaily, also held that a district court may consider the hearsay statements themselves when inquiring into the existence of a conspiracy. Id. at 181, 107 S.Ct. at 2781-82. We review the District Court's conclusions for clear error. Gessa, 971 F.2d at 1261. 82 Defendant does not challenge the District Court's determinations that a conspiracy existed and that defendant was a participant. Defendant argues, as he did in his motion for a new trial, that Arnold's statement should not have been admitted under the co-conspirator exception to the hearsay rule for two other reasons: first, he argues that the court committed clear error in deciding that Arnold was a participant in the conspiracy; second, he argues that the statement admitted was not made in furtherance of the conspiracy. We find that the District Court's factual determinations on these issues were not clearly erroneous. 83 There was sufficient evidence at trial to establish that Arnold had agreed to join the conspiracy or actually participated in it. This evidence included Finn's testimony that Arnold, as Phar-Mor's Senior Vice President of Operations, received both the accurate financial statements and the falsified David Reports. Finn also testified that he and Arnold went to London to make presentations to potential investors regarding the 1991 sale of $112 million of Phar-Mor stock. At those meetings, Phar-Mor's representatives distributed the falsified financial statements to the potential investors. Finn also testified that after being questioned by Shapira and Rubenstein about an $80,000 payment to the WBL, he became worried that they would be unable to conceal all the other payments to the WBL. Finn testified that in this state of anxiety, he asked Arnold, when this all blows up, are you going to come forward and tell the truth and say that [defendant] was behind this and authorizing this, directing this all along[?] Finn then testified that Arnold replied that he knew [defendant] was authorizing this and was behind it all along. Later, Finn had more concerns about their ability to continue concealing the unauthorized payments from internal and external auditors. He testified at trial that, at this point, Arnold told him that all I needed to do was one more Houdini act, and we were back in business. In light of this evidence, we agree with the District Court's conclusion that Arnold was a co-conspirator. 84 We also agree with District Court's determination that Arnold's statement was made in the furtherance of the conspiracy. A statement is 'in furtherance of' a conspiracy if it is intended to promote the objectives of the conspiracy. United States v. Clark, 18 F.3d 1337, 1342 (6th Cir.1994). We have recognized that statements which prompt a listener to act in a manner that facilitates the carrying out of the conspiracy are admissible under (d)(2)(E). United States v. Jerkins, 871 F.2d 598, 606 (6th Cir.1989). Statements that identify participants and their roles in the conspiracy also qualify as statements made in furtherance of the conspiracy. Clark, 18 F.3d at 1342. Arnold's statement to Finn, that he knew [defendant] was authorizing this and was behind it all along, was intended to quell Finn's fears that their plans were about to unravel and to prod him to continue working to conceal the unauthorized payments. It also identified defendant as a key participant and explained his role in the conspiracy. This statement was clearly made in the furtherance of the conspiracy.