Wednesday, November 21, 2007

Admissibility of Co-conspirators Statements

In United States v. Weaver, No. 04-3888 (3d Cir. November 7, 2007), the Court of Appeals reversed the district court’s grant of the Defendant Weaver’s motion in limine precluding the Government from introducing a recorded telephone conversation between an alleged co-conspirator and her sister wherein the co-conspirator made statements implicating Weaver in a fraud scheme. The district court granted the motion, without having held a hearing, finding that the statements made by the co-conspirator were not in furtherance of the conspiracy and seemed to "constitute derogatory opinions having no conceivable value." The Court of Appeals rejected those conclusions and found the statements to be admissible under Federal Rule of Evidence 801(d)(2)(E).

Dolores Weaver was the director of an educational program at the Community College of Philadelphia (CCP). She was alleged to have been involved in a scheme with Faridah Ali, the assistant director of the Sister Clara Mohammed School wherein CCP made rental payments to the Sister Clara School for classes that were nonexistent. Weaver and Ali allegedly divided the money. On September 4, 2001, Ali had a conversation with her sister, Zaynah Rasool, discussing various matters involving the school including the arrangement with CCP. Ali complained about Weaver and made reference to problems with a teacher at the school and the potential of jeopardizing "what we got with the college."

The Government appealed the district court’s finding that the conversation between Ali and Rasool was inadmissable hearsay asserting that it was excepted from the definition of hearsay under Rule 801(2)(2)(E). The Court of Appeals began its analysis by first indicating that "In order for an out-of-court statement to meet the co-conspirator exception: the district court must find by a preponderance of the evidence that: (1) a conspiracy existed; (2) the declarant and the party against whom the statement is offered were members of the conspiracy; (3) the statement was made in the course of the conspiracy; and (4) the statement was made in furtherance of the conspiracy." Slip op. at p. 6. Weaver did not contest the district court’s implied findings with regard to the first three requirements and argued that the district court was also correct in finding that the statements were not made in furtherance of the conspiracy. After a detailed review of its prior cases on this issue, the Court of Appeals indicated that Ali’s statements to Rasool served to inform her of the status of the conspiracy and therefore were in furtherance of the conspiracy. The Court noted that Ali’s statements informed Rasool that Ali was dependant on Weaver to make sure that CCP did not discover that her school was a sham site and that Weaver was requesting a 50% kickback from the rent payments. The Court further recognized, however, that the statements explaining the current status of the conspiracy would only be in furtherance of the conspiracy if Rasool was also a member of the conspiracy as the Government alleged. Since the district court did not hold an evidentiary hearing to determine whether the Government can demonstrate Rasool’s involvement in the conspiracy, the Court of Appeals remanded and indicated that if at a hearing Rasool is found by a preponderance of the evidence to be a member of the conspiracy, the statements concerning the status of the conspiracy are admissible.

The Court of Appeals also determined that Ali’s statements to Rasool cautioning Rasool not to upset a certain teacher because that teacher might report that no classes are being taught at the school are admissible whether or not Rasool is determined to be a member of the conspiracy. The Court reasoned that the purpose of Ali’s statements to that regard were for the purpose of concealing the conspiracy so that it may continue thus furthering the conspiracy.
Lastly, the Court of Appeals found that the district court was wrong in finding that the September 4 conversation was irrelevant. The Court held that Ali’s statements to Rasool confirmed the essential elements of the conspiracy and therefore were relevant under Federal Rule of Evidence 401.

Wednesday, November 07, 2007

Jury Instructions in Religious Tax Protestors' Case Constructively Amended Indictment

United States v. McKee, No. 05-3297 (Oct. 29, 2007), involved the prosecution of three members of the Reformed Israel of Yaweh ("RIY") religious sect, which opposes the payment of taxes to support war. Two of the defendants were owners of a small carpentry and home renovation business, and the third was the wife of one of the defendants. The Third Circuit vacated the defendants’ convictions for failing to pay employment taxes because the jury instructions constructively amended the indictment. The indictment charged the defendants with preparing, signing, and causing the filing of false employment tax returns. The instructions listed several examples of conduct sufficient to establish the charged conspiracy, including falsifying records and failing to report wages to an accountant. Although the government introduced evidence that the defendants falsified books and records and withheld information from the company’s accountant, this conduct was never charged in the indictment. Thus, the Court held, the instructions had the effect of broadening the indictment to include uncharged conduct. The Court further noted how difficult it is for a defendant to prove actual prejudice in this situation and went on to find that the government failed to rebut the presumption of prejudice arising from the constructive amendment.

The Court rejected most of the defendants’ other arguments. It held that the government established sufficient evidence on the conspiracy and tax evasion charges and rejected the defendants’ challenges to the admission of certain evidence. Notably, the Court found sufficient proof of an agreement to conspire from evidence of RIY’s anti-tax teachings, the defendants’ commitment to those teachings, and their positions within RIY. However, the Court found insufficient evidence to sustain the wife’s conviction for failing to file individual tax returns. The government claimed that this defendant, who served as the company’s bookkeeper, had a tax obligation (despite the fact that she did not receive a salary from the company) because she used the proceeds of three company checks to purchase two cars and paint her house. The Third Circuit rejected this argument and held that the government did not prove that the proceeds were intended as compensation for her bookkeeping work---they were just as likely to have been contributions of marital support or a gift from her husband. Moreover, there was no evidence that the defendant knew that the checks were intended as income.

Third Circuit Finds Defendant Was Not Seized Where He Briefly Paused and Raised Hands Before Fleeing

In United States v. Amos , ---F. 4th---, 2023 WL 8636910 (3d Cir. Dec. 14, 2023), the Third Circuit affirmed a district court's denial o...