Opinion ID: 477762
Heading Depth: 2
Heading Rank: 3

Heading: Marc Schultz

Text: 50 Appellant Schultz suggests that the charges against him were joined improperly with the count of obstruction of justice against Maureen Murphy, which also was pleaded as one of the predicate acts of racketeering against Murphy in the RICO counts. 51 A. Joinder of Counts Against Schultz with Obstruction of Justice Counts Against Others 52 Schultz points out that the obstruction charge referred to an alleged attempt by Maureen Murphy and Norman Teitler to tamper with a grand jury investigation of the Teitler law firm. This aspect of the investigation centered on the firm's representation of two clients--Gertrude Jarrette and Camilla Gorin. No trial evidence indicated that Schultz participated in the representation of those clients and the government conceded that Schultz never participated in the obstruction of justice. In fact, Schultz had left the firm nearly two years before the alleged grand jury tampering occurred. The thrust of Schultz's argument is that the acts of Norman Teitler and Maureen Murphy that allegedly obstructed justice would have been part of a separate conspiracy from the conspiracy charged against Schultz. Schultz claims that this is a classic Grunewald situation in which there is a separate conspiracy in which the object is to avoid prosecution for another criminal conspiracy. Grunewald held that an agreement to conceal a conspiracy is not necessarily part of the predecessor conspiracy. See Grunewald v. United States, 353 U.S. 391, 399-406, 77 S.Ct. 963, 971-75, 1 L.Ed.2d 931 (1957); see also Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790 (1949). There instead may be a separate conspiracy to conceal the predecessor conspiracy. Members of the original conspiracy may not be convicted for the conspiracy to conceal unless they actually participated in the conspiracy to conceal. Grunewald, supra. Fed.R.Crim.P. 8(b) states: 53 Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count. 54 (emphasis added). The pivotal question raised by Schultz is whether the obstruction of justice allegedly engaged in by Murphy and Norman Teitler was in the same series of acts or transactions as the acts for which Schultz was charged and convicted. 55 We note initially that participation in a series of transactions does not require participation in each transaction. United States v. Bagaric, 706 F.2d 42, 69 (2d Cir.), cert. denied, 464 U.S. 917, 104 S.Ct. 283, 78 L.Ed.2d 261 and 464 U.S. 840, 104 S.Ct. 134, 78 L.Ed.2d 128 (1983); United States v. Barton, 647 F.2d 224, 239-40 (2d Cir.), cert. denied, 454 U.S. 857, 102 S.Ct. 307, 70 L.Ed.2d 152 (1981); United States v. Weisman, 624 F.2d 1118, 1129 (2d Cir.), cert. denied, 449 U.S. 871, 101 S.Ct. 209, 66 L.Ed.2d 91 (1980). If a series of transactions constitutes a pattern of predicate acts in a RICO conspiracy, they can properly be joined in one indictment. Weisman, 624 F.2d at 1129. Whether the proof establishes one or multiple conspiracies is a question of fact for the jury. United States v. Alessi, 638 F.2d 466, 472 (2d Cir.1980). 56 In this case, the jury found Maureen Murphy guilty of participating in a RICO enterprise through a pattern of racketeering activity. Because Murphy was convicted of only two counts that served as predicate acts of racketeering, and because one of those counts was grand jury obstruction, one of the predicate acts on which the trial jury based its finding had to be Murphy's participation in the grand jury tampering. Therefore, the jury undoubtedly found that Murphy's obstruction was part of the same enterprise in which Marc Schultz participated. Such a finding cannot be considered unreasonable in light of the extensive evidence of Murphy's participation in the enterprise and the evidence that the grand jury obstruction was related to the activities of the enterprise. Viewing Murphy's grand jury obstruction as part of the activities of the enterprise, it was part of the same series of transactions as the crimes charged against Schultz and can be charged in one indictment. See Weisman, 624 F.2d at 1129 (if series of transactions constitute a RICO pattern, they can properly be joined in one indictment). 57 Schultz counters by arguing that a defendant who simply associates with a legal entity enterprise does not impliedly authorize unforseeable criminal acts to be committed on his behalf. This kind of enterprise, it is posited, differs from an association in fact enterprise, in which the defendant may not know of the specific act, but is aware of the overall scheme because he chose to associate with a criminal enterprise. See United States v. Castellano, 610 F.Supp. 1359, 1400-02 (S.D.N.Y.1985). We are asked to conclude from this that because Schultz did not participate in or authorize the obstruction of justice, he should not have been held responsible for that crime. The argument fails because Schultz was neither charged nor convicted of conspiring to obstruct justice. Rather, he was convicted of participating in the criminal enterprise through his own criminal acts--the same enterprise in which Murphy participated through her criminal acts. The pivotal issue here is joinder. We hold that the indictment did not improperly join the counts against Marc Schultz with the obstruction of justice count against Maureen Murphy and Norman Teitler and that it was proper to combine all the counts for the purpose of a single trial. 58 Even if joinder had been improper, the Supreme Court has held that misjoinder in violation of Fed.R.Crim.P. 8(b) will not result in a reversal of the conviction if the misjoinder amounts to harmless error. United States v. Lane, --- U.S. ----, 106 S.Ct. 725, 729-32, 88 L.Ed.2d 814 (1986). The inquiry to be made is whether misjoinder caused prejudice because it had substantial and injurious effect or influence in determining the jury's verdict. Kotteakos v. United States, 328 U.S. 750, 776, 66 S.Ct. 1239, 1253, 90 L.Ed. 1557 (1946); see Lane, 106 S.Ct. at 732; United States v. Carson, 702 F.2d 351, 362 (2d Cir.), cert. denied, 462 U.S. 1108, 103 S.Ct. 2457, 77 L.Ed.2d 1335 (1983). 59 The evidence against the appellant Schultz is certainly strong. See Lane, 106 S.Ct. at 732. He was the law firm's trial counsel for four and one half years. Many of the events at issue took place during that time. The law firm with which he was associated was small and the likelihood of his awareness of firm practice was commensurately high. Further, witnesses testified that Schultz counseled them to testify falsely in judicial proceedings in support of the false medical bills supplied by Dr. D'Javid. Later, aware of the false bills supplied by D'Javid, Schultz signed an affidavit in support of restoring D'Javid's medical license, which had been revoked. That affidavit characterized D'Javid as a very conscientious and dedicated physician. 60 Schultz contends that he was prejudiced by spill-over evidence. However, the evidence of obstruction was clearly relevant only to Murphy. Because only three defendants were on trial, we believe the jury was able to consider the evidence of the grand jury tampering separately, as instructed. See Carson, 702 F.2d at 363; United States v. Ricco, 549 F.2d 264, 271 (2d Cir.), cert. denied, 431 U.S. 905, 97 S.Ct. 1697, 52 L.Ed.2d 389 (1977). Chief Judge Weinstein instructed the jury that 61 [t]here is no evidence that Marc Schultz or Jay Teitler had anything at all to do with the obstruction of justice count and you may not consider that count in determining the guilt or innocence of Marc Schultz or Jay Teitler on any charge in the case. 62 The jury is presumed to have heeded this instruction. See United States v. Rivera, 496 F.2d 952, 953 (2d Cir.1974). Therefore, even if joinder had been improper, in our view, the error would have been harmless. 63 B. Count Seven: Schultz's Representation of Hanousek 64 Schultz contends that the government effectively amended count seven of the indictment which charged mail fraud in connection with Schultz's representation of Hanousek. Schultz claims that the indictment charges that he counseled Hanousek to testify falsely regarding Dr. D'Javid's medical services. The government, Schultz contends, shifted its theory at trial and tried to prove that he settled a lawsuit based on a false medical bill. This is an amendment of the indictment, it is claimed, which violates the Fifth Amendment's guarantee to be tried only on charges contained in an indictment returned by a grand jury. Further, Schultz claims that the government failed to prove count seven beyond a reasonable doubt. 65 In formulating his argument, Schultz has misperceived count seven of the indictment and has lost sight of the record as a whole, see United States v. Weiss, 752 F.2d 777, 788 (2d Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 308, 88 L.Ed.2d 285 (1985). Count seven sets forth the scope of the charged fraudulent scheme employed in Hanousek's case. The indictment charges that Schultz counseled William Hanousek to testify falsely regarding medical services purportedly rendered to him by the defendant ISMAIL F. D'JAVID, and that the third-party action was settled by the defendants NORMAN E. TEITLER and MARC SCHULTZ, and on or about April 9, 1980 a settlement draft in the amount of $2250 was mailed to the offices of the Teitler firm. Thus, the indictment alleges both that Schultz counseled Hanousek to testify falsely and that Norman Teitler and Schultz settled the lawsuit based on the false bill. Furthermore, the jury had sufficient evidence to convict Schultz on this count. The government presented evidence that in preparing Hanousek for trial of his personal injury claim, Schultz showed him D'Javid's medical bill; Hanousek announced that he would not testify concerning it because the bill was false; Schultz replied [y]ou really worry me Reverend. Schultz then met with Norman Teitler and thereafter told Hanousek that the case was or would be settled. Similarly, prior to Hanousek's preparation, Schultz had been told by McCurdy that McCurdy's D'Javid bill was false. Based on the foregoing, a reasonable juror could conclude that Schultz was aware of the fraudulent scheme charged and sought to employ it. 66 Next, Schultz argues that he did not commit a crime by settling the case because not to do so would somehow have disclosed a confidential communication of his client. Appellant cites Whiteside v. Scurr, 744 F.2d 1323, 1327-31, reh'g denied, 750 F.2d 713, 714 (8th Cir.1984), for this proposition. However, even if the principles ennunciated by the Eighth Circuit in Whiteside applied to Schultz's conduct, this argument would fail because the Supreme Court reversed Whiteside after this appeal was argued. Nix v. Whiteside, --- U.S. ----, 106 S.Ct. 988, 89 L.Ed.2d 123 (1986). The Court held that a lawyer has a duty to prevent and to disclose frauds on the court and may disclose confidential communications to do so. Id. at 995-96. Thus, the Eighth Circuit's Whiteside rule no longer stands. In any event, it was the lawyer, not the client, who sought to promote false testimony herein. 67 C. The Admission of the Out-of-Court Statements of Co-Conspirators 68 Marc Schultz complains that the district court allowed the admission of Dunbar's testimony concerning statements made to him by co-conspirators regarding some of the firm's fraudulent practices. Schultz argues for the adoption in this circuit of the co-conspirator hearsay rule of United States v. Inadi, which required the government to establish the unavailability of the out-of-court declarant. 748 F.2d 812 (3d Cir.1984). However, the Supreme Court has reversed Inadi and has held that the Confrontation Clause imposes no such burden. United States v. Inadi, --- U.S. ----, 106 S.Ct. 1121, 1125-29, 89 L.Ed.2d 390 (1986). Thus, the evidence was properly admitted under Fed.R.Evid. 801(d)(2)(E), which allows the admission of out-of-court declarations made by co-conspirators during the course and furtherance of a conspiracy. 69 We have considered the appellants' other arguments and we find them to be without merit. To the extent that the arguments of each appellant have been asserted by the other, they are without merit. For the foregoing reasons, we affirm the judgments of conviction.