Court Opinion

ID: 1006818
Source: CourtListenerOpinion
Date Created: 2013-07-04 19:16:31.981822+00
Date Added: 2024-06-11T15:38:17.078271
License: Public Domain

UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

UNITED STATES OF AMERICA,              
                 Plaintiff-Appellee,
                 v.                               No. 01-6562
DANIEL I. COLTON,
               Defendant-Appellant.
                                       
UNITED STATES OF AMERICA,              
                 Plaintiff-Appellee,
                 v.                               No. 01-4348
DANIEL I. COLTON,
               Defendant-Appellant.
                                       
          Appeals from the United States District Court
           for the District of Maryland, at Baltimore.
                 Benson E. Legg, District Judge.
                          (CR-97-377-L)

                      Argued: January 24, 2002
                      Decided: February 25, 2002

   Before WILKINS, LUTTIG, and MICHAEL, Circuit Judges.

Affirmed by unpublished per curiam opinion.

                             COUNSEL

ARGUED: Jonathan D. Hacker, O’MELVENY & MYERS, L.L.P.,
Washington, D.C., for Appellant. Dale Preston Kelberman, Assistant
2                      UNITED STATES v. COLTON
United States Attorney, Baltimore, Maryland, for Appellee. ON
BRIEF: Walter E. Dellinger, Jeremy Maltby, O’MELVENY &
MYERS, L.L.P., Washington, D.C., for Appellant. Thomas M.
DiBiagio, United States Attorney, Baltimore, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

                              OPINION

PER CURIAM:

  Daniel I. Colton appeals the denial of his motion for a new trial,
which alleged that the Government withheld information that could
have been used to impeach its key witness. We affirm.

                                   I.

                                  A.

   In 1998, a jury found Appellant Daniel Colton guilty of conspiracy,
see 18 U.S.C.A. § 371 (West 2000), and three counts of bank fraud,
see 18 U.S.C.A. § 1344 (West 2000). Colton’s convictions arose from
transactions involving a corporation called Colton and Laskin (C&L),
which Colton co-owned with Dennis Laskin. Laskin also participated
in the schemes giving rise to Colton’s convictions; as a result, he was
charged with and pled guilty to bank fraud and concealing assets from
the Resolution Trust Corporation, see 18 U.S.C.A. § 1032 (West
2000). The proceedings against Laskin, including his sentencing, con-
cluded before Colton was indicted. Laskin then served as a key wit-
ness against Colton.

   After Colton was convicted but before sentencing, he moved for a
new trial on the basis of newly discovered evidence. See Fed. R.
Crim. P. 33. He maintained that, prior to and during his trial, the Gov-
ernment was investigating a Laskin-owned company called AIS. Col-
                       UNITED STATES v. COLTON                        3
ton asserted that the existence of this investigation should have been
disclosed as impeachment evidence pursuant to Brady v. Maryland,
373 U.S. 83 (1963), and its progeny.

   The district court reserved decision on this motion and entered
judgment against Colton, and Colton appealed. This court vacated
two of the three bank fraud convictions for reasons not relevant here,
but otherwise affirmed. See United States v. Colton, 231 F.3d 890,
908-10, 912 (4th Cir. 2000).

  While Colton’s appeal was pending, proceedings regarding his
Rule 33 motion continued in the district court. Ultimately, the district
court denied this motion and Colton’s accompanying request for dis-
covery. Colton now seeks review of this order.

                                  B.

   In order to resolve Colton’s claim, we must examine the underlying
facts in some detail. Laskin founded AIS "to enable foreign nationals
to obtain permanent residency in the United States through invest-
ments." J.A. 242. AIS and its clients sought to take advantage of a law
making immigrant visas available to foreign investors who provided
at least $500,000 to establish businesses employing 10 or more people
in the United States. See 8 U.S.C.A. § 1153(b)(5) (West 1999).
Laskin recruited several former officials from the State Department
and the Immigration and Naturalization Service (INS) to promote this
enterprise.

   According to newspaper articles furnished by Colton in support of
his Rule 33 motion, AIS came under scrutiny for two reasons. First,
for much of the 1990s, the INS allowed AIS and other companies to
obtain visas for clients who had not yet invested the minimum amount
required by § 1153(b)(5). See William Branigin, INS Probes Md.
Firm in Possible Visa Fraud, Washington Post, Jan. 8, 1999, at A3;
Walter F. Roche Jr. & Gary Cohn, INS Insiders Profit on Immigrant
Dreams, Baltimore Sun, Feb. 20, 2000, at 24A-25A. Second, there
were questions about whether AIS actually used the money it received
from clients to support job-creating businesses. See Branigin, supra;
Roche & Cohn, supra, at 26A.
4                      UNITED STATES v. COLTON
   These concerns resulted in two separate probes of AIS. The first
investigation was precipitated by a qui tam suit filed in 1996 by a for-
mer AIS employee. The complaint does not appear in the record, but
a news report stated that the relator who initiated the suit alleged that
AIS not only sought visas for clients who had not made the requisite
investment but also delivered only a small proportion of its clients’
funds to needy businesses; of the remaining funds, a portion was
placed in escrow and the rest was kept by AIS as compensation for
its services.1 See Roche & Cohn, supra, at 26A.

    When the qui tam action was filed, the Government opened an
investigation to determine whether to intervene. See 31 U.S.C.A.
§ 3730(b)(2) (West Supp. 2001). The investigators ultimately deter-
mined that AIS had disclosed the relevant business practices to the
INS. In addition, the relator revealed to investigators that he had very
little knowledge about AIS practices. The Government consequently
opted not to intervene. An Assistant United States Attorney advised
the INS of this decision in a letter mailed the same day that Laskin
was sentenced for his participation in schemes involving C&L.

  After the Government’s decision, the relator dismissed his suit
without prejudice. At that point, according to the relator’s attorney,
none of the qui tam defendants had been served with the complaint
or otherwise informed of its contents. Furthermore, the senior vice
president of AIS at the time of the Government’s investigation
averred that he had no knowledge of any inquiry into AIS practices.

   The Government’s second investigation of AIS was opened in
response to an anonymous letter that accused AIS of "‘selling’ . . .
visas through mail fraud, internet fraud and personal face to face
pitchmen." J.A. 698. The letter further alleged that the companies
supported by clients’ investments were "phony corporations that were
computer generated." Id. Although this investigation began in Sep-
tember 1998, the Government did not issue its first subpoena until
    1
   Colton contends that "the allegation of wrongdoing was that Laskin
had set up false companies that did not actually employ the requisite ten
people." Br. of Defendant-Appellant at 29 n.6. Allegations of this nature
arose later, but there is no evidence that the qui tam complaint alleged
such conduct.
                        UNITED STATES v. COLTON                           5
October 21, 1998, two days after Laskin completed his testimony in
Colton’s trial. Ultimately, the investigation was

      administratively closed. No charges have been filed or are
      contemplated against AIS or any individual associated with
      that company at this time. Dennis Laskin was never advised
      he was personally a target or subject of the investigation. No
      evidence was uncovered that Dennis Laskin personally
      made any false statements or representations to the INS.

Id. at 700.

                                    II.

   Colton contends that the district court erred in ruling that the Gov-
ernment’s failure to disclose these two investigations did not violate
due process. He further asserts that the court should have reviewed
the Government’s investigatory materials in camera or allowed Col-
ton to examine them.

                                    A.

   A claim arising under Brady and its progeny has three elements:
"(1) the evidence at issue must be favorable to the defendant, whether
directly exculpatory or of impeachment value; (2) it must have been
suppressed by the state, whether willfully or inadvertently; and (3) it
must be material." Spicer v. Roxbury Corr. Inst., 194 F.3d 547, 555
(4th Cir. 1999). Evidence is material "if there is a reasonable proba-
bility that, had the evidence been disclosed to the defense, the result
of the proceeding would have been different." Kyles v. Whitley, 514
U.S. 419, 433-34 (1995) (internal quotation marks omitted). We hold
that none of the evidence described in Colton’s Brady complaint
meets this standard.2
  2
    Colton asserts that the district court used the wrong standard when it
ruled that Brady does not apply to "preliminary, challenged, or specula-
tive information." J.A. 62 (internal quotation marks omitted). Colton is
correct that evidence may be subject to disclosure under Brady even if
its reliability has not been conclusively established. If nothing else, mere
6                       UNITED STATES v. COLTON
   Colton offers four unpersuasive theories of materiality. The first
theory is that the investigations created a motive for Laskin to lie on
the witness stand. There is no evidence, however, that Laskin was
ever aware of the investigations or even had any suspicion that they
might be undertaken. Moreover, the burden of producing evidence on
this issue lay with Colton, not the Government.3 See United States v.
Stokes, 261 F.3d 496, 502 (4th Cir. 2001), petition for cert. filed,
No. 01-7296 (U.S. Nov. 15, 2001).

   Colton’s next theory is that the undisclosed evidence suggested an
inappropriate relationship between Laskin and the prosecutor.
According to Colton, the prosecutor curtailed his investigation of AIS
in order to preserve Laskin’s credibility for Colton’s trial, "despite the
qualms of INS’ [sic] officials." Br. of Defendant-Appellant at 34. This
theory fails for several reasons. First and foremost, it is not the task
of the jury to assess the motivations of the prosecutor. Also, the
"qualms" referred to arose from the actions of the INS, not any
attempt by AIS to mislead the INS. See Roche & Cohn, supra, at 26A
(quoting an INS memorandum concluding that the INS had granted
applications that, on their face, did not comport "the letter or spirit"
of § 1153(b)(5) (internal quotation marks omitted)). Moreover, there
is nothing suspicious about the prosecutor’s decision to terminate his

allegations may be fodder for cross-examination. See United States v.
Bowie, 198 F.3d 905, 909 (D.C. Cir. 1999). On the other hand, there is
a correlation between the materiality of exculpatory information and the
extent to which that information has been verified. See id. at 911 (noting
that prior conviction for perjury would have impaired witness’ credibility
more than perjury investigation).
   3
     Colton suggests that Laskin’s awareness of the first investigation can
be inferred from the parallel timelines of the investigation and Laskin’s
plea and sentencing. In particular, Colton notes that "Laskin’s prosecutor
did not formally decline intervention in the qui tam action immediately,
but waited until the very day that Laskin was sentenced." Br. of
Defendant-Appellant at 28-29. But it was not "Laskin’s prosecutor" who
opted not to intervene; it was another Assistant United States Attorney.
Also, even if the prosecutor was involved in the decision not to inter-
vene, and even if the Office of the United States Attorney deferred a final
decision on this matter pending Laskin’s sentencing, this does not estab-
lish that Laskin was aware of the investigation.
                       UNITED STATES v. COLTON                        7
investigation upon determining that the conduct challenged in the qui
tam suit (as described in news reports) was fully disclosed to the INS
and was consistent with INS policy.

   In his third and fourth theories, Colton asserts that the evidence in
question would have helped the defense to prove Laskin’s dishonest
tendencies and his predilection for using innocent associates to further
fraudulent schemes. Of course, the mere fact that Laskin was investi-
gated reveals nothing at all about him. Instead, the allegations under-
lying the investigations may have had value, but only to the extent
that Colton could have used those allegations during cross-
examination or introduced evidence tending to prove the allegations.
We have reviewed the materials provided in the joint appendix and
we conclude that there is no reasonable likelihood that disclosure of
the allegations against Laskin would have altered the outcome of Col-
ton’s trial.

   In all of the materials within the joint appendix, there is only one
item that might have been useful to the defense—the statement of an
investigator that AIS clients admitted that their investments were not
being used to create real companies with at least 10 employees. See
Branigin, supra. If AIS in fact set up dummy corporations to create
the appearance of compliance with § 1153(b)(5), this would amount
to a serious fraud. Nevertheless, we perceive no Brady violation
because the record does not establish either that the Government
received its information from AIS clients before Colton’s trial ended
or that the outcome of the trial would have been affected by this evi-
dence. As to Laskin’s character for truthfulness, this evidence that
Laskin might have been involved in a fraud involving AIS was cumu-
lative to, and less probative than, the admission that Laskin had
already been convicted of fraud in connection with the activities of
C&L. Furthermore, such evidence would not have meaningfully rein-
forced Colton’s assertion at trial that Laskin had manipulated him into
participating unwittingly in fraudulent transactions involving C&L.
According to a news report, an anonymous official reported that
investigators "are ‘finding blatant fraud,’ although not with the direct
involvement of the high-powered board members listed on [AIS] bro-
chures." Branigin, supra. This allegation does not demonstrate manip-
ulation by Laskin; indeed, it does not mention Laskin at all.
Moreover, even if Laskin did manipulate the "high-powered" individ-
8                      UNITED STATES v. COLTON
uals associated with AIS, it does not follow that he could have done
the same to Colton, whose involvement in C&L was far more exten-
sive than merely being "listed on . . . brochures." Thus, this evidence
would not have materially assisted Colton’s defense. We therefore
hold that the district court did not err in denying Colton’s motion for
a new trial.

                                   B.

   Colton next asserts that he was entitled to have the district court
review the Government’s files in camera to determine whether they
contained Brady evidence. He also contends that the court should
have granted him access to those files. We disagree.

   At the outset, we reject Colton’s request for direct access to the
Government’s files regarding its investigations of AIS. Colton does
not claim an absolute right to such access; instead, he asserts that it
was within the discretion of the district court to order disclosure as
a form of discovery. Assuming for purposes of decision that this is
correct, we hold that the court did not abuse its discretion. In light of
the many reasons for maintaining confidentiality in the course of
investigations, only an extraordinary showing by the defendant would
justify carte blanche access to investigatory files. No such showing
has been made here.

   Whether the district court should have reviewed the files in camera
presents a closer question. To establish the right to such review, a
defendant must make a "plausible showing" that the Government’s
files contain information that "would be both material and favorable
to his defense." Love v. Johnson, 57 F.3d 1305, 1313 (4th Cir. 1995)
(internal quotation marks omitted). Colton asserts that his "plausible
showing" here consists of his more general demonstration that the
Government withheld exculpatory evidence, combined with the pros-
ecutor’s admission that he did not review all the relevant files. As dis-
cussed above, however, there is no evidence that any material
information favorable to Colton was withheld during Colton’s trial.
Furthermore, the record does not support Colton’s assertion that the
prosecutor never examined the relevant files.4 Accordingly, we find
    4
   In the district court, a Government memorandum made the following
representation concerning the prosecutor’s inspection of investigatory
                       UNITED STATES v. COLTON                          9
no error in the refusal of the district court to conduct an in camera
review.

                                   III.

  For the foregoing reasons, we affirm the decision of the district
court denying Colton’s motion for a new trial.

                                                             AFFIRMED

files:
       Prior to Colton’s trial, counsel for the government requested
    and obtained from the investigating agents copies of all of their
    memoranda of witness interviews, investigative reports, docu-
    mentary evidence, and related materials. Thus, there was no rea-
    son for government counsel to review those same materials in
    the files of the FBI and IRS.
J.A. 551. Colton construes the phrase "those same materials" to imply
that the FBI and IRS files also contained other materials. We believe,
however, that the more natural interpretation is that review of the actual
files was unnecessary because copies of everything in them had already
been delivered to the prosecutor.