Court Opinion

ID: 2980401
Source: CourtListenerOpinion
Date Created: 2015-09-22 19:09:57.726728+00
Date Added: 2024-06-11T12:46:23.339846
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                             File Name: 11a0882n.06

                                           No. 08-5461
                                                                                          FILED
                             UNITED STATES COURT OF APPEALS                          Dec 22, 2011
                                  FOR THE SIXTH CIRCUIT
                                                                               LEONARD GREEN, Clerk

UNITED STATES OF AMERICA,                                )
                                                         )        ON APPEAL FROM THE
       Plaintiff-Appellee,                               )        UNITED STATES DISTRICT
                                                         )        COURT FOR THE EASTERN
v.                                                       )        DISTRICT OF KENTUCKY
                                                         )
SHELBY J. COLEMAN,                                       )                           OPINION
                                                         )
       Defendant-Appellant.                              )

BEFORE:        DAUGHTREY, COLE, and ROGERS, Circuit Judges.

       COLE, Circuit Judge. Shelby Coleman, the Defendant-Appellant, appeals her jury conviction

of two counts of violating 18 U.S.C. § 666 for stealing, embezzling, and otherwise defrauding her

employer, the Johnson County Board of Education. She argues that the district court abused its

discretion when it excluded the testimony of Coleman’s co-Defendant, Peggy VanHoose, after

VanHoose repeatedly invoked her Fifth Amendment privilege in response to the prosecution’s

questions on cross-examination. We AFFIRM the judgment of the district court.

                                       I. BACKGROUND

       Shelby Coleman was the payroll clerk for the Johnson County Board of Education for

nineteen years. In this capacity, she administered the payroll and issued checks to all employees of

the Johnson County school system. Coleman, along with her supervisor Peggy VanHoose, the

finance director, controlled all aspects of the payroll software system, known as “MUNIS.”
No. 08-5461
United States v. Coleman

       After the death of the school superintendent Orville Hamilton, the Board hired Stephen

Trimble as Hamilton’s replacement. One of Trimble’s first acts as superintendent was to get a grasp

on the school system’s finances, and he requested an updated list of all employees’ salaries from

VanHoose. VanHoose previously furnished such a list to the Board, but her and Coleman’s

information was left off that list. Trimble submitted the new list to the Board, and some members

suspected that Coleman and VanHoose’s information was incorrect.

       Trimble then contacted the Kentucky Department of Education, which also kept records on

Kentucky school system employees’ salaries. The information from the state agency alerted Trimble

to possibly fraudulent behavior. The list VanHoose gave to Trimble did not include her son,

Michael, who did appear on the state’s payroll list. VanHoose also appeared to be receiving a full

salary and retirement benefits at the same time. The most concerning indication of fraud was that

VanHoose and Coleman’s salaries on the list given to Trimble were substantially less than the

amount the state agency reported that they earned. Trimble notified members of the school board

and turned the information over to the state police, the Commonwealth Attorney, and the state

Department of Education.

       A federal grand jury jointly indicted Coleman and VanHoose on two counts of violating 18

U.S.C. § 666, and separately indicted VanHoose on two additional counts of violating 18 U.S.C. §

666. Count 1 alleges that Coleman and VanHoose issued money in excess of $5,000 to Michael

VanHoose at times when they knew that he was not an authorized employee of the Johnson County

School District. Count 2 alleges that Coleman and VanHoose arbitrarily, and without authority, gave

themselves substantial pay raises in excess of $5,000.

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No. 08-5461
United States v. Coleman

       The district court granted Coleman and VanHoose’s motion to sever their trials. VanHoose

pleaded not guilty, and after a five-day trial, a jury convicted her of three of the four counts.

Coleman, during her jury trial, sought to call VanHoose as a defense witness, but the district court

noted that “there is a question that was raised as to whether or not [VanHoose] would seek to invoke

a Fifth Amendment privilege as it relates to her testimony.”

       Coleman’s attorney informed the district court that he expected VanHoose to testify “that Ms.

Coleman did nothing knowingly wrong,” and merely “followed the directives of the supervisor.”

Moreover, that even though Coleman issued checks to Michael VanHoose while he was actually in

jail, she “wasn’t aware of the water cooler talk about [Michael VanHoose’s] problems . . . [and] she

believed that he was on a work release program.” After hearing argument on whether VanHoose

waived her Fifth Amendment rights by testifying in her own trial, the district court, outside the

presence of the jury, permitted a voir dire of VanHoose.

       During VanHoose’s direct testimony during the voir dire, she answered questions on whether

Coleman ever knowingly assisted her in stealing funds from the Johnson County School Board;

whether Michael VanHoose had been incarcerated and whether she discussed his legal problems

generally, or with Ms. Coleman specifically; whether Coleman ever received a raise, and more

generally, how other employees within the school district received raises; and whether Coleman

worked overtime, and whether there was paperwork that VanHoose reviewed when approving her

overtime. VanHoose invoked her Fifth Amendment right against self-incrimination numerous times

on direct, in response to questions about whether Coleman assisted in embezzling funds to

VanHoose’s son; whether VanHoose told Coleman that her son was in a work-release program; and

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No. 08-5461
United States v. Coleman

whether VanHoose approved the overtime Coleman worked. Coleman’s counsel twice asked

VanHoose whether she approved Coleman’s overtime hours. She answered it once and invoked her

Fifth Amendment rights the second time it was asked.

       On cross-examination, the prosecution asked a number of questions to which VanHoose

responded by invoking her Fifth Amendment rights: whether VanHoose went into the MUNIS

system, under Coleman’s username, to manipulate her or Michael VanHoose’s salary information;

whether VanHoose was trying to protect Coleman; whether VanHoose embezzled money from the

Johnson County School District; and whether VanHoose awarded herself sick days to which she was

not entitled. The prosecution argued that it would be severely hampered if VanHoose were permitted

to answer questions posed by defense counsel, but was unamenable to cross-examination.

Obviously, if VanHoose denied Coleman’s involvement, but then invoked the Fifth Amendment in

response to questions about her own complicity, the jury would be left with the impression that

VanHoose’s invocation was an admission of culpability.

       The district court noted that if VanHoose had invoked her privilege in response to questions

on collateral matters on cross-examination, the prosecution would not be prejudiced because it would

still have the ability to cross-examine her on her direct testimony. Concluding that VanHoose

invoked the privilege in response to questions within the scope of the direct examination on non-

collateral matters, the district court barred VanHoose from appearing as a witness.

                                               -4-
No. 08-5461
United States v. Coleman

       The jury convicted Coleman on both counts of violating 18 U.S.C. § 666, and the district

court sentenced Coleman to twenty-seven months in prison and ordered her to pay $161,387.28 in

restitution. Coleman filed her timely notice of appeal.

                                           II. ANALYSIS

       Coleman asserts two arguments in support of her contention that the district court erred in

excluding VanHoose’s testimony in its entirety. First, she argues that VanHoose invoked her

privilege only in response to questions outside the scope of the direct examination, so that the

prosecution was in no way prejudiced, given the ample opportunity to cross-examine VanHoose on

non-collateral matters.    Second, Coleman argues that even if the exclusion prejudiced the

prosecution, district courts may exclude privileged testimony only if its inclusion would prejudice

the defendant. A district court’s decision to admit or exclude evidence will be upset only if the

district court abused its discretion. See United States v. Baldwin, 418 F.3d 575, 579 (6th Cir. 2005).

Under this standard, we will reverse “only if we are firmly convinced of a mistake that affects

substantial rights and amounts to more than harmless error.” Id. For this to be the case, the district

court must have relied “on clearly erroneous findings of fact, improperly applie[d] the law, or

employ[ed] an erroneous legal standard.” Id. (internal citations, quotation marks, and punctuation

omitted).

       The scope of the direct examination is construed broadly. United States v. Moore, 917 F.2d
215, 222 (6th Cir. 1990). The subject matter of the direct examination includes “all inferences and

implications arising from such testimony” and, on cross-examination, the prosecutor may ask “any

question which would have elicited testimony that was reasonably related to the inferences that

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No. 08-5461
United States v. Coleman

might reasonably be drawn from [the] direct testimony . . . .” Id. (emphasis added). Coleman argues

that what the prosecution could not obtain because of VanHoose’s assertion of the privilege was not

substantially related to the scope of her direct examination. We cannot agree.

       VanHoose testified during direct examination that Coleman never assisted her in embezzling

funds from the school board. But, previous testimony demonstrated that there were some

irregularities within the school system’s accounting mechanisms, since the Board’s records were

different from the state agency’s. After hearing testimony from VanHoose that Coleman did not

commit illegal acts, a juror would wonder how these irregularities could exist, given that it was

Coleman who administered the Board’s payroll. Similarly, a juror would wonder how VanHoose

could manipulate the MUNIS system without Coleman’s knowledge. When the prosecution

attempted to obtain an answer to this question during the voir dire, they were unable to do so because

VanHoose invoked her right against self-incrimination.

       This is not the only example. A computer expert’s testimony revealed that someone had used

the username “Shelby” on MUNIS to manipulate Michael VanHoose’s payroll information. Again,

had the jury heard from VanHoose that Coleman did not participate in any fraud, they would

naturally wonder who, then, had used the system with that username. These are natural inferences,

and Coleman’s argument that the questions are somehow outside the scope of the direct examination

strains credulity. Such a claim would unnecessarily hamper the scope of cross-examination to only

the words and specific acts articulated during the direct examination, a position this Court has

specifically rejected. See Moore, 917 F.2d at 222. We cannot say that the district court’s

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No. 08-5461
United States v. Coleman

determination that the prosecutor’s questions were within the scope of the direct examination was

outside the range of reasonable conclusions.

       District courts, Coleman insists, may bar a witness from testifying only if there is a

substantial danger of prejudice arising from the defendant’s inability to challenge the testimony. In

support of this claim, she calls our attention to United States v. Clark, which states that “[i]t is up

to the court to weigh the importance of admitting all relevant information versus the prejudice to the

defendant and strike a balance between these competing interests.” 988 F.2d 1459, 1464 (6th Cir.

1993) (per curiam) (citing United States v. Vandetti, 623 F.2d 1144, 1149 (6th Cir. 1980)). But

Clark cannot possibly stand for the proposition that prejudice to the prosecution may never be

considered when deciding whether to exclude a witness under the circumstances here. Were we to

adopt such a theory, a bizarre conclusion would result. A defendant could elicit testimony from a

witness on direct examination, that witness could then invoke his Fifth Amendment right throughout

cross-examination, and because no prejudice would result to the defendant, but only to the

prosecution, the district court would be unable to exclude the witness from testifying. Although the

prosecutor’s interest in cross-examining VanHoose is not rooted in the Constitution, “one of the

legitimate demands of the adversary system is the right of cross-examination.” United States v.

Gary, 74 F.3d 304, 310 (1st Cir. 1996). The district court was within its discretion when it excluded

VanHoose’s testimony because its admission would unduly prejudice the prosecution.

                                        III. CONCLUSION

       The prosecution’s questions to VanHoose during cross-examination were material and not

outside the scope of the direct examination, especially when considering the other testimony that had

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No. 08-5461
United States v. Coleman

been adduced and the inferences that jurors could then draw. And while the right to confront

adversarial witnesses is constitutionally enshrined for defendants, we cannot say that a weaker

iteration of that interest does not extend to the prosecution. The district court did not abuse its

discretion when it determined VanHoose’s testimony to be inadmissible. For the foregoing reasons,

we AFFIRM the judgment of the district court.

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