# Petition — James v. United States

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1566%3A1

## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition
- **Published:** January 1, 1980
- **Citation:** 445 U.S. 905

## Text

—

(7 Spreme Court, v,
FILE De

—JAN 19 1989

IN THE __MICHAEL RODAK, JR., CLERK

Supreme Court of the United States
October Term 1979

No. 4 9-=-] 1 1 5

LEONARD JAMES,

Petitioner,
— pn

UNITED STATES OF AMERICA,
Respondent.

——

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
SECOND CIRCUIT AND APPENDIX

FREDERICK TOWNSEND DAVIS
Patterson, Belknap, Webb & Tyler
30 Rockefeller Plaza

New York, New York 10020

(212) 541-4000

Counsel for Petitioner

January 17, 1980

a

INDEX

PAGE
I 1
SE a 1
ee 2
Constitutional Provision Involved ................. 2
Oe ey 2
ee Ee 2
at, Te Deceien eb Agee! .................... 5

Reason for Granting the Writ:
The Court of Appeals’ Decision that the Trial
Court’s Erroneous Restriction of Cross-Exam-
ination did not Require Reversal, Raises a Sub-
stantial and Important Question of Constitu-

Ee GS at a 6
Re ey ps he a 11
APPENDIX:

Opinion of Smith, Circuit Judge ............. la

Judgment of the Court of Appeals ........... 29a

CITATIONS
Cases:
Chambers v. Mississippi, 410 U.S. 284 (1978) .... 7
Chapman v. California, 386 U.S. 18 (1967) ....... 6

0 Nn ne Tn nn Nees ng te

ii

Clancy v. United States, 365 U.S. 312 (1961) ...... 7
Goldberg v. United States, 425 U.S. 94 (1976) .... 7
United States v. Blackwood, 456 F.2d 526 (2d Cir.),
cert. denied, 409 U.S. 863 (1972) ........... 7
United States. v. Corey, 566 F.2d 429 (2d Cir. 1977) 6
Umited States v. Harvey, 547 F.2d 720 (2d Cir.
Es kha cig cewek uae OL ere 5, 10
United States v. Quinto, 582 F.2d 224 (2d Cir. 1978) 6
Washington v. Texas, 388 U.S. 14 (1967) ........ 6

ee eee gee wer ne

IN THE
Supreme Court of the United States
October Term 1979
Me et rs

LEONARD JAMES,
Petitioner,
— |

UNITED STATES OF AMERICA,
Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
SECOND CIRCUIT

The petitioner Leonard James respectfully prays that
a writ of certiorari issue to review the judgment and
opinion of the United States Court of Appeals for the
Second Circuit entered in this proceeding on September
6, 1979.

Opinion Below

The opinion of the Court of Appeals, not yet reported,
appears in the Appendix.

Jurisdiction

The judgment of the Court of Appeals for the Second

_ Circuit was entered on September 6, 1979. A timely

petition for rehearing and suggestion for rehearing en

2

bane was denied on December 18, 1979. This petition for
certiorari was filed within 30 days of that date. This
Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1).

Question Presented

Whether the trial court’s denial of petitioner’s right
to call witnesses and elicit testimony bearing on facts
fundamental to a determination of guilt or non-guilt

violated petitioner’s fnudamental right to present a de-
fense?

Constitutional Provision Involved

United States Constitution, Amendment 6:

In all criminal prosecutions, the accused shall enjoy
the right . . . to be confronted with the witnesses against

him ; to have compulsory process for obtaining witnesses
in his favor.

Statement of the Case

I. The Trial

The Government attempted to show that petitioner,
Leonard James, an official of Tri-State Energy, Ince.
(“Tri-State”) together with other Tri-State Officials and
additional alleged accomplices, engaged in a scheme to
obtain some $475,000 in loans from the Bankers Trust
Company (“Bankers Trust”) by means of false and

fraudulent statements, reports and represenattions. ( Slip
Op. 4534).*

The Government’s case against James depended in
very large measure upon the testimony of an accomplice,

* “Slip Op.” refers to the opinion of the Court of Appeals.

3

Raymond Starns. The Court of Appeals determined that
Starns had given considerable testimony implicating
James in Tri-State’s fraudulent activities. Starns iden-
tified James as an international money broker or financier
who was involved in multi-million dollar transactions; he
claimed that James was acquainted with Deaton, a co-
defendant, when Deaton was serving a sentence in federal
prison on a fraud conviction; he reported James’ famili-
arity with Tri-State’s financial statements, including his
knowledge that two $100,000 personal checks drawn by
Starns without sufficient funds and held by Deaton were
reflected in a statement submitted to Bankers Trust by
James; and he claimed further that James knew that
certain stock pledged to Bankers Trust on a representa-
tion that they were freely tradeable were in fact re-
stricted. (Slip Op. 4542-43.)

On cross-examination, James attempted to demonstrate
that Starns had an intense motive to testify against James
at trial because at the very moment Starns was testifying,
he was awaiting trial in a separate, unrelated matter in
federal court in North Carolina, in which he hoped that
his cooperation in the present case would be of assistance.
To develop this motive, counsel for James questioned
Starns about conversations with Rabideau Wilder, the
prosecutor in North Carolina. In response to these ques-
tions, Starns asserted—falsely, as evidence subsequently
demonstrated—that he had been told by Wilder prior to a
North Carolina grand jury appearance that Wilder had
no intention of prosecuting him. (Slip Op. at 4547).

Starns’ false statement was, of course, of critical im-
portance in assessing his credibility. If left unrebutted,
it would allow the jury to conclude that Starns had no
motive to testify against James because, regardless of
his testimony in the present trial, he had already been
assured that he would not be prosecuted and thus had
nothing to gain from testifying for the Government. On

4

the other hand, if Starns’ false statement could be exposed,
he would not only have been shown to be an unreliable
witness, but would have had a specific reason for testify-
ing against James, and his crucial testimony could be
discounted by the jury. Consequently, counsel for James
attempted to rebut his false statement in two ways, each
of which was rebuffed by the trial court. First, James
attempted to call the North Carolina prosecutor who,
counsel represented, would testify that he had made no
promise to Starns. Initially, both the Government and
the trial court agreed with this proposal, and the trial
court ruled that Wilder could be called as a witness. (Slip
Op. 4547). Subsequently, the Government reversed itself
and took the position that the proffered testimony of
Wilder was barred by F.R. Evid. 608(b). The trial court
in turn agreed with this new position, and James was not
allowed to call the North Carolina prosceutor. Second,
James sought to have the Government produce the tran-
script of Starns’ testimony before the North Carolina
grand jury on the supposition that the testimony would
refute his claim that he had, in effect, been promised
immunity.* The trial court apparently accepted the Gov-
ernment contention that since it could not persuade the
North Carolina prosecutor to make the transcript avail-
able, James was not entitled to the document. Thus,
Starns’ false assertion that he had been promised he would
not be prosecuted in North Carolina remained unrebutted
at trial.

* After trial, the transcript was produced by the Government,
and was included by agreement in the Appendix on appeal. A
review of the transcript shows that, had it been produced, it
would have totally refuted Starns’ claim that he had been promised
immunity. Before the Grand Jury, Starns admitted that he had
“some culpability in this,” but pleaded for leniency on the ground
that “my co-operation, my complete co-operation will off-set that,”
hardly the remark of one who had just been told that he would
not be prosecuted.

5

ll. The Decision on Appeal

On appeal, the United States Court of Appeals for the
Second Circuit held that each of these rulings was in-
correct. With respect to the testimony of the North
Carolina prosecutor, the Court of Appeals rejected the
contention that the issue was one of a “bad act” governed
by the provision of F. R. Evid. 608(b), excluding extrinsic
proof of such facts, as the Government argued both at
trial and on appeal. Rather, the issue was one of bias or
motive to testify. Since “bias of a witness is not a col-
lateral issue and extrinsic evidence is admissible to prove
that a witness has a motive to testify falsely,” United
States v. Harvey, 547 F.2d 720, 722 (2d Cir. 1975), the
Court of Appeals correctly concluded that the “testimony
was being offered to show, not that Starns had lied and
therefore should not be believed, but that Starns had never
been prmoised immunity and that he, therefore, had a
motive to falsify testimony in this particular case.” (Slip
Op. at 4550). With respect to the failure to produce the
Grand Jury testimony, the Court of Appeals noted that
the testimony “related” to Starns’ direct testimony within
the meaning of 18 U.S.C. § 3500. (Slip Op. at 4554). In
addition, it apparently concluded that the mere fact that
the transcript was held by a federal prosecutor in a
different district did not excuse its non-production, since
the Court of Appeals proceeded to address the test of
whether the non-production required reversal.*

With respect to both the proffered testimony of the
North Carolina prosecutor and to the grand jury testi-

* See Slip Op. at 4555 and n. 16. The Court of Appeals con-
cluded that even though the non-production was not literally “‘in-
advertent,” its effect upon the trial should be judged by the
standard governing “inadvertent” rather than “willful” non-
production.

6

mony, however, the Court of Appeals in effect concluded
that the acknowledged errors were harmless.*

REASON FOR GRANTING THE WRIT

The Court of Appeals’ Decision that the Trial
Court’s Erroneous Restriction of Cross Examination
did not Require Reversal, Raises a Substantial and
Important Question of Constitutional Law.

The decision of the Court of Appeals in this case denied
James his fundamental right to present, a defense. This
Court has emphasized that “the [Sixth Amendment] right
to offer testimony of witnesses, and compel their attend-
ance as necessary, is in plain terms the right to present a
defense.” Washington v. Texas, 388 U.S. 14, 19 (1967).

*The Court of Appeals chose not to refer to the harmless
error doctrine itself. Rather, it stated that since James had
alternative means of attacking Starns’ credibility, the “exclusion
of Wilder’s testimony was not error, certainly not reversible error.”
Slip Op. at 4553. As demonstrated in the following portion of the
text, however, the rulings left James with no means of rebutting
Starns’ key assertion that he had nothing to fear in North Caro-
lina, and deprived James of any factual basis for asserting motive
or bias. Thus, the admittedly incorrect rulings should have been
judged by the harmless error standard. Since the errors amounted
to a denial of James’ constitutional right to present a defense, the
verdict should have been reversed unless the Court of Appeals
concluded “beyond a reasonable doubt that the error[s] complained
of did not contribute to the verdict obtained.” Chapman v. Cali-
fornia, 386 U.S. 18, 24 (1967). However, even under the more
lenient standard for non-constitutional errors—variously phrased
as whether it is “‘highly probable’ that the error did not con-
tribute to the verdict,” United States v. Corey, 566 F.2d 429, 432
(2d Cir. 1977), or whether “our conviction is sure that the error
did not influence the jury or had but very slight effect,” United
States v. Quinto, 582 F.2d 224, 235 (2d Cir. 1978)—the errors in
this case undoubtedly contributed to the verdict, since they de-
prived James of his only factual basis for showing bias or motive
on the part of a key government witness.

7

Indeed, the Court has stated that “few rights are more
fundamental than that of an accused to present witnesses
in his own defense.” Chambers v. Mississippi, 410 U.S.
284, 302 (1973). By concluding that the errors com-
mitted by the trial court with respect to the Starns testi-
mony did not deny James a fair trial, the Court of Appeals
simply overlooked the fact that James was entirely pre-
cluded from calling a witness or introducing testimony to
impeach a crucial witness against him. This Court has
observed that “[s]ince courts cannot ‘speculate whether
[Jencks material} could have been utilized effectively’ at
trial, Clancy v. United States, 365 U.S. 312, 316 (1961),
the harmless-error doctrine must be strictly applied in
Jencks Act cases.” Goldberg v. United States, 425 U.S.
94, 111 n. 21 (1976); this observation should obviously
apply a fortiori to blanket exclusions of impeachment
material. Rather than “strictly applying” the harmless
error doctrine, however, the Court of Appeals allowed the
doctrine to mask both prosecutorial self-contradiction and
the total preclusion of a crucial element of James’ defense.

The Court of Appeals erred in concluding that the
rulings did not affect James’ ability to impute to Starns a
motive and bias to testify against him. The Court of
Appeals held that “although it would have been preferable
to allow Wilder’s testimony, ‘[w]e are satisfied that the
circumstances from which the jury could decide whether
[the witness] might have been inclined to testify falsely

in favor of the government were adequately presented to

the jury....’”, quoting from United States v. Blackwood,
456 F.2d 526, 530 (2d Cir.), cert. denied, 409 U.S. 863
(1972). In support of this conclusion that the credibility
of this crucial witness could be adequately determined
from other evidence, the Court of Appeals noted the
following:

“The jury knew that Starns was under indictment
in North Carolina. It had in its possession the
indictment that set forth the charges against him.

8

The jury knew that Starns had not been indicted
in this case, despite his involvement in at least some
aspects of the scheme. Finally, and perhaps most
importantly, the jury was aware that Starns had
cooperated with the government in another case
four years earlier and had been rewarded with a
substantial reduction of his sentence on a previous
conviction.” Slip Op. at 4550-51.

In fact, each element of the Court of Appeals’ attempt to |

show that James already had a sufficient basis for chal-
lenging Starns’ credibility squares with neither logic nor
the evidence. The mere fact that the jury “knew that
Starns was under indictment in North Carolina” was
offset by Starns’ false and unrebutted Statement that he
had been provided assurances, prior to and independent of
his involvement in the present case, that he would not be
prosecuted. The fact that the.jury knew that Starns “had
not been indicted in this case” was explained to the jury
on the ground that the statute of limitations had run;
indeed, as the Court of Appeals itself admitted, Starns
was so confident in this regard that he did not even have
an agreement with the Government that he would not be
prosecuted. Slip op. at 4543. Finally, the fact that Starns
had cooperated in “another case four years earlier’—
viewed by the Court of Appeals as being “perhaps the
most important” consideration—was absolutely irrelevant:
the mere fact that he had successfully reached a coopera-
tion agreement in another case in the past did not provide
any impleation that he had a motive to testify against
James, particularly since he falsely claimed that he had
assurances that the only case presently pending against
him would not be prosecuted irrespective of his testimony.

In short, the testimony of the North Carolina prose-
cutor was the indispensable lynchpin in James’ attempts
to show that Starns’ testimony against him was the
product of a motive to please the Government. Only if

a

9

Wilder’s testimony were presented to the jury could James
demonstrate that Starns’ motive in the present case was
to testify against James. Its admittedly erroneous ex-
clusion was reversible error.*

Having been precluded from rebutting Starns’ false
claims by the trial court’s erroneous ruling with regard to
the North Carolnia prosecutor, the non-production of
Starns’ grand jury testimony took on particular sig-

* As further support for its conclusion, the Court of Appeals
notes that “Judge Motley [the trial judge] carefully instructed the
jury” on the issue of motivation. In fact, the four examples of
bias or motive given by the trial judge—in a portion of the
charge set forth in the slip op. at 4551, n. 13—make absolutely no
sense in the absence of Wilder’s testimony. The trial court stated:

For example, (1) a witness may fear being prosecuted by
the Government in this case; (2) a witness may hope for
leniency in a related case in which he had pleaded guilty to
a related crime; (3) a witness may be awaiting trial in
another jurisdiction on unrelated charges and may hope his
cooperation here will be made known to the Government and
the Judge in that unrelated case; or (4) a witness may
actually have been a co-conspirator in this case but has not
been named as such but has testified for the Government,
or he may be a person who could have been but who has not
been indicted * this case.

Example (1) had no bearing on Starns, since the statute of
limitations had run in the Tri-State case; Example (2) did not
apply to Starns,: since he did not plead guilty in the North
Carolina case, see slip op. at 4544, n. 7: and Example (4) was
really a restatement of Example (1), having nc application to
Starns. Example (3) precisely described Starns’ situation with
respect to the North Carolina indictment, but would be entirely
discounted by the jury if they believed that Starns had been
promised that he would not be prosecuted prior to and independent
of his testimony in this case. In the absence of any evidence
rebutting Starns’ false assertion that he had such an assurance,
this portion of the charge, although legally accurate, was useless.

10

nificance.* As previously indicated, the transcript itself,
when finally produced, would have allowed an effective
rebuttal of Starns’ claims that he would not be prosecuted
in North Carolina, and thus would have allowed a sig-
nificant demonstration that he had a motive to testify for
the Government at James’ trial. While the Court of
Appeals agreed that “such an inference might be drawn
from the transcript,” slip op. at 4555, it nonetheless con-
cluded that its non-production was harmless for the same
reasons as it had given on ruling on the exclusion of
Wilder’s testimony. Since either Wilder’s testimony or
the grand jury testimony would have allowed James his
only effective attempt to establish that Starns had a
present motive to testify against him, the exclusion of
both clearly “cut off completely a probative inquiry that
bears on a feasible defense,” United States v. Harvey,
supra, 547 F.2d at 723, and was reversible error.

* James was also hampered in his attempt to show that Starns
had a motive to testify by the trial court’s refusal to allow him
to introduce copies of statements Starns made to the F.B.I, about
the North Carolina case. The trial court ruled that these reports
were barred by F.R. Evid. 608(b). The Court of Appeals, how-
ever, explicitly noted that this ruling was error, since the reports
would have been useful to show “the strength of the case against
Starns in North Carolina” and thus the strength of “his motive
to cooperate with the government in the hope of receiving more
lenient treatment should he ultimately be convicted in North
Carolina.” Slip op. at 4549, Particularly in view of the Court
of Appeals’ intimation that the evidence might have been ex-
cludable under F.R. Evid. 403, see slip op. at 4549, n. 11, we do
not claim that the exclusion of the reports itself mandates re-
versal. However, the cumulative effect of his erroneous ruling,
which—like the two rulings discussed in the text—were all found
to be harmless error, clearly deprived James of an adequate op-
portunity to defend himself.

11

CONCLUSION

For these reasons, a writ of certiorari should issue
to review the judgment and opinion of the Court of
Appeals for the Second Circuit.

Respectfully submitted,

FREDERICK TOWNSEND DAVIS
Patterson, Belknap, Webb & Tyler
30 Rockefeller Plaza

New York, New York 10020

(212) 541-4000

Counsel for Petitioner

January 17, 1980

APPENDIX

la

Opinion of Smith, Circuit Judge
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT

a

Nos. 710, 725—August Term, 1978
(Argued March 5, 1979 Decided September 6, 1979)
Docket Nos. 78-1346, 78-1353

$$$

UNITED STATES OF AMERICA,
Appellee,
an | eae

LEONARD JAMES and OTTO SEBOLD,
Appellants.
—_—_—_—EE

Before:

FRIENDLY, SMITH and MANSFIELD,
Circuit Judges.

eee

Appeal from convictions on trial to the jury in the
United States District Court for the Southern District
of New York, Constance Baker Motley, Judge, on charges
of conspiracy, false statements in connection with bank
loans and securities fraud, in violation of 18 U.S.C. §§ 371,
1014 and 15 U.S.C. § 77q.

Affirmed.

2a
Opinion of Smith, Circuit Judge

JOHN H. Doy e, III (Anderson, Russell,
Kill & Olick, P.C., New York, N.Y.,
Randy Paar and Robert P. Reichman,
of counsel), for Appellant James.

HENRY PUTZEL, III, New York, N.Y., for
Appellant Sebold.

RHEA KEMBLE NEUGARTEN, Assistant U.S.
Attorney (Robert B. Fiske, Jr.,
United States Attorney for the
Southern District of New York, An-
drew N. Karlen, Special Assistant
U.S. Attorney, Richard D. Weinberg
and Howard W. Goldstein, Assistant
U.S. Attorneys, of counsel), for Ap-
pellee.

—————— — ————
SMITH, Circuit Judge:

This is an appeal by Leonard James and Otto Sebold
from judgments of conviction entered after trial to a
jury in the United States District Court for the Southern
District of New York, Constance Baker Motley, Judge, on
conspiracy and substantive counts involving the making
of false statements in connection with bank loans and
securities fraud. We find no reversible error and there-
fore affirm the judgments.

A three-count indictment was filed on January 27,
1978 against James and Sebold, together with Peter
Crosby, William Rubin and C. W. Deaton. Count One
alleged that all five individuals engaged in a conspiracy
to make false statements to banks for the purpose of
obtaining loans and extensions of credit and renewals
thereof, and to commit mail fraud, wire fraud and
securities fraud, in violation of 18 U.S.C. § 371. Count
Two charged James, Sebold, Deaton and Rubin with sub-

34a
Opinion of Smith, Circuit Judge

stantive offenses involving the making of false statements,
in violation of 18 U.S.C. § 1014. Count Three charged
James, Crosby, Deaton and Rubin with substantive securi-
ties fraud violations, in violation of 15 U.S.C. § 77q.

Prior to trial, the district court granted the govern-
ment’s motion to sever Rubin’s trial from that of
the other defendants. He was tried in May, 1978 and
convicted on Count One, but acquitted on Count Three.
The government’s motion to dismiss Count Two, was
granted when the jury was unable to reach a verdict.
Rubin’s conviction was affirmed on appeal. United
States v. Rubin, slip op. . Deaton was not tried,
because an earlier extradition order by which his presence
in the United States had been obtained had not related to
the events alleged in the indictment. The district court
granted the government’s application for an order nolle
prosequi in March, 1978.

The trial of James, Sebold and Crosby began on
May 31, 1978 and continued until June 29, 1978. The
jury found James and Sebold guilty on Counts One and
Two, acquitted James on Count Three and acquitted
Crosby on both counts in which he had been named. The
district court sentenced James to 18 months in prison.
Sebold received a suspended sentence of one year in
prison and was placed on probation for three years.

Since there is no challenge to the sufficiency of the
evidence, we. shall merely summarize the events which
gave rise to this indictment and trial. The proof at trial
tended to demonstrate that James, Rubin and Deaton en-
gaged in a scheme to obtain financing fraudulently from
the Bankers Trust Company (“Bankers Trust”) for their
company, Tri-State Energy, Inc. (“Tri-State”). Through
their efforts, and with the assistance of Sebold, who was
a mining engineer, Tri-State obtained short-term loans
totaling $475,000 from Bankers Trust. The scheme in-

4a
Opinion of Smith, Circuit Judge

volved the use of false reports regarding Tri-State’s chief
asset (a coal mine), fraudulent sales contracts with
Roland Werkstatten, GmbH, a German corporation for
which Sebold was an agent, misrepresentations that stock
of various companies which was pledged as collateral was
unrestricted, and cash payments to two loan officers of
Bankers Trust, Raymond Ludwig and John Keating. In
addition, James, Rubin and Deaton painted a rosy, but
falsé, picture of Tri-State’s future in order to obtain ex-
tensions of some of the loans as they came due. All the
outstanding loans eventually were consolidated into one
note, payable on demand. The defendants continued to
put off the day of reckoning by reassurances that Tri-
State’s business soon would improve. The scheme fell
apart only when Bankers Trust received inquiries about
Deaton and Tri-State from the Justice Department. The
bank finally demanded full payment of the loans. When
payment was not forthcoming, Bankers Trust commenced
a lawsuit against Tri-State. Only about $2,500 was
recovered. |

The appellants allege numerous grounds for reversal
of the judgments. Although we agree that some of the
rulings attached constitute error, we conclude that none
of the errors, whether considered separately or cumula-
tively, requires reversal, and we therefore affirm.

Sebold testified in June, 1976 before the first grand
jury * that investigated the events that led to his indict-

1A grand jury heard testimony from nine witnesses in 1975
and two more in 1976. The investigation was suspended while
the IRS and the Tax Division of the Justice Department decided
whether to bring a criminal tax prosecution in the Southern
District. By the time a tentative decision not to bring tax
charges in the district was made, the original grand jury had
expired. A new presentation was made to a second grand jury
in January, 1978.

5a
Opinion of Smith, Circuit Judge

ment. The attorney for the Strike Force on Organized
Crime davised Sebold of his right to counsel and his’
right against self-incrimination. He further informed
Sebold that the grand jury was “inquiring into possible
violations of federal law on the part of Tri-State Energy
and certain of its officers... .” Sebold was not an officer’
of Tri-State.

Sebold asserts that he was a target of the investigation.
at the time he testified. He contends that the failure to
warn him that he was a target violated the rule established,
by this circuit in United States v. Jacobs, 531 F.2d 87
(2d Cir.) (“Jacobs I”), vacated and remanded, 429 U.S..
909, original decision adhered to, 547 F.2d 772 ( 2d. Cir.
1976) (“Jacobs IT’), cert. granted, 481 U.S; 937 (1977),
cert. dismissed as improvidently granted, 436 U.S. 31.
(1978). Sebold concedes, however, that his trial counsel
failed to object when the testimony was offered at trial.’
Thus Sebold now is forced to argue that admission of the
testimony was “plain error” that requires reversal despite
the failure to object at trial.

We cannot agree. It is true that Rule 52(b), Fed.:
R. Crim. P., which simply restates the pre-existing law;
United States v. Del Llano, 354 F.2d 844 (2d Cir. 1965 ),:
provides that “[P]lain error or defects affecting substan-
tial rights may be noticed although they were not brought
to the attention of the court.” (Emphasis added.) It is
clear, however, that the defect of which Sebold complains
affected no rights that he possessed. The Supreme Court

* Sebold’s counsel on appeal suggests that trial counsel may
have failed to object because he was from New Jersey and thus
unaware of this court’s decision in Jacbos I. We decline to
engage in unsupported and irrelevant speculation that counsel
who appear pro hac vice in this circuit fail to familiarize them-
selves with the decisions of its courts. In any case Sebold
assumed that risk in hiring a lawyer from outside the circuit.

6a
Opinion of Smith, Circuit Judge

held in United States v. Washington, 431 U.S. 181 (1977),
that failure to advise a witness before a grand jury that
he was a “potential defendant” did not violate any con-
stitutional right, and thus did not require suppression of
the witness’ testimony. Our decision in Jacobs I and IJ to
Suppress such testimony was intended as “a one-time
sanction to encourage uniformity of practice (whatever
the practice might be) between the Strike Force and the
United States Attorney. ...” Jacobs II, supra, 547 F.2d
at 773. (Emphasis added.) The establishment of such
uniformity performed the “important function of the ad-
ministration of criminal justice to let our citizens know
that equal justice is available to all... .” Id., at 775. In
addition, it might “bring the Strike Force and the United
States Attorney to closer harmony, a boon for even-handed
law enforcement which often will redound to the benefit
of the prosecution rather than of the defense.” Id., at 778.
Thus Jacobs does not support the argument, rejected in
any event by Washington, that the failure to give a
“target warning” violated any right of a subsequently in-
dicted defendant. We also find no reason again to exercise
our supervisory powers to encourage uniformity. The
Strike Force in the Southern District has been merged
with the United States Attorney’s Office since the events
in question and the decision in Jacobs I.

Sebold also contends that his prosecution was barred
by the five-year statute of limitations provided in 18
U.S.C. § 3282. The indictment, which was filed on Janu-
ary 27, 1978, alleged that the conspiracy lasted from June,
1972 through June, 1973, and that the events involved in

* James also complains of the failure to advise Sebold that he
was a target of the investigation. His contention must be re-
jected for the additional reason that he lacks standing to invoke
Sebold’s rights. See Rakas v. Illinois, 47 U.S.L.W. 4025, 4029 n.
8 (Dec. 5, 1978).

7a
Opinion of Smith, Circuit Judge

Count Two, the substantive false statements charge,
occurred from January 30, 1973 through Mareh, 1978.
As to this latter count, Sebold argues that the government
proceeded on the theory that he was libale for the sub-
stantive crimes of his co-conspirators. Sebold does not
dispute that the evidence established his participation in
the conspiracy. He contends, however, that his withdrawal
from the conspiracy before January 27, 1973 barred prose-
cution on etiher count. We disagree.

Withdrawal from a conspiracy requires “affirmative
action . . . to disavow or defeat the purpose,” Hyde v.
United States, 225 U.S. 347, 369 (1912), of the: ¢on-
spiracy. The burden of proof of withdrawal rests on the
defendant. United States v. Panebianco, 548 F.2d 447
(2d Cir. 1976), cert. denied, 429 U.S.: 1103 (1977) ;
United States v. Borelli, 336 F.2d 376 (2d Cir. 1964),

cert. denied, 379 U.S. 960 (1965). The record here is

totally devoid of any affirmative act by Sebold to dis-
associate himself from the conspiracy. It is not even
clear when Sebold claims to have withdrawn. His brief
makes reference to testimony that he went to Tri-State’s
offices in early February, 1973 and found the doors
padlocked. Such action by Sebold, even if it could be
viewed as suggesting an intention to withdraw from the
conspiracy, falls far short of the “communication of ‘the
abandonment in a manner reasonably calculated to reach
co-conspirators,” required by Borelli, supra, 336 F.2d at
388. Furthermore, withdrawal in early February, 1973
would not bar prosecution for a conspiracy count filed

in January, 1978.

Sebold’s final contention is that the district court
erroneously admitted testimony by Keating concerning
a telephone conversation with a person who purported
to be Sebold. The caller stated that he was acting as a
representative of Roland Werkstatten. Sebold in fact

8a
Opinion of Smith, Circuit Judge

was a representative of the company. The caller sought
to obtain Bankers Trust’s approval of language in a
letter of credit which Roland Werkstatten was to obtain
from a German bank to finance its purported purchases
of coal from, Tri-State, so that Bankers Trust would loan
money to Tri-State on the strength of the German com-
pany’s letter of credit.

~Sebold’s counsel objected at trial that both the sub-
stance of the conversation and the purported identity of
the caller were inadmissible because the conversation was
not properly authenticated.* The Assistant United States
Attorney ‘conceded that Keating did not know who the
caller actually was. The court overruled the objection,
without stating any reason. Keating made clear to the
jury, in response to questions from the prosecutor, that
he had “no idea” whether the caller was in fact Sebold
and that he had not spoken to Sebold on any other occa-
sion, before or after the call. In her summation, the
prosecutor emphasized to the jury that Keating could
not say whether it was “Mayor Koch or Mr. Sebold on
the phone.” . If the prosecutor had stopped there and the
court had given an appropriate limiting instruction,
Sebold’s argument on appeal would present no problem.
The substance of the conversation clearly was admissible
against Sebold as a statement of a co-conspirator, Pinker-
ton v. United States, 328 U.S. 640,-646-47 ( 1946), sub-
ject to subsequent proof, which was provided, of the exist-

paw

* Although the court may have assumed at first that the objec-
tion was directed only to the identification of he caller, counsel
made clear, just before being cut of by the court’s ruling, that
his objection went to the entire conversation::

‘COUNSEL: That’s correct, but I think unless that proper

yee, fouldation [of knowledge of the caller’s iden-
tity] can be laid, the entire testimony will
bn,

THE COURT: Overruled. Let’s proceed.

9a
Opinion of Smith, Circuit Judge

ence of the conspiracy and of Sebold’s participation in it.
Regardless of the identity of the caller, it was apparent
that the call was made in furtherance of the object of
the conspiracy, the obtaining of the bank loans. This
may have been the government’s basis for offering the
evidence, since it conceded that Keating did not know
the caller’s identity. However, the trial judge did not
require the government to state the propounded basis
for admissibility. More seriously, the court did not in-
struct the jury as to any limitation on the purpose for
which the call might be considered. The prosecutor was
left free to suggest in summation, as she subsequently
did, that the caller might have been Sebold, because.he
had acknowledged talking to someone at the bank (al-
though he insisted that the conversation had occurred in
person and was with someone other than Keating or
Ludwig) and had not remembered whether he might have
talked to Keating by telephone. icity

The situation here thus is similar to that dealt with
in United States v. Zane, 495 F.2d 688, 696-97. (2d Cir.),
cert. denied, 419 U.S. 895 (1974). In Zane,:the district
court admitted on alternative theories evidence of two
phone conversations received by a bank officer from ‘a
caller who purported to be one of the defendants. The
court said that the jury might find on the basis of cir-
cumstantial evidence that the defendant made the calls,
or it might find that the calls were made by a co-con-
spirator and. thus were admissible as an act in further-
ance of the conspiracy. On appeal, this court held that
there would have been no error if the conversations had

been admitted only on the second ground. However, the

court concluded that the circumstantial evidence that the
defendant himself had placed the calls was weak and that
it was more likely that a co-conspirator was the caller.
Thus it was error to submit the case on the alternative
hypotheses. The error, however, was not sufficiently

10a
Opinion of Smith, Circuit Judge

serious to warrant a new trial because there was ample
independent proof of the conspiracy, the evidence clearly
was admissible on the other theory, the trial court specifi-
cally noted to the jury that the officer could not identify
the caller, the government did not argue that the de-
fendant was the caller and there was substantial proof
of the defendant’s involvement in the conspiracy.

Here, as in Zane, some circumstantial evidence sug-
gests that the caller was in fact the defendant. He
accurately described Sebold’s role as an agent of Roland
Werkstatten and the arrangements which he was at-
tempting to make for that company’s purchases of coal
from Tri-State. However, the other conspirators also
were aware of Sebold’s efforts, and, as the government’s
brief concedes, one of them could have placed the call in
his name. The evidence was probably insufficient to
allow the jury to speculate that Sebold was the caller,
and therefore not admissible for the unlimited purposes
for which the government later attempted, albeit half-
heartedly, to use it.°

The ruling, although erroneous, nonetheless does not
warrant reversal. There was substantial other evidence
of Sebold’s role in the conspiracy, particularly in connec-
tion with the proposed sales to Roland Werkstatten.
For example, Sebold admitted signing the name of Roland
Werkstatten’s president to a letter addressed to James,
which purported to report progress in the resale of some
of the coal covered by the fraudulent purchase orders.
The letter also mentioned the letter of credit that was
the subject of the telephone call to Keating. Sebold’s

° We do not suggest that there was anything improper about
the government’s summation. Once the district court failed to
limit the use of the evidence, the Assistant U.S. Attorney was

not prohibited from suggesting that the jury infer that Sebold
actually was the caller.

lla
Opinion of Smith, Circuit Judge

contention that the conversation was the only evidence
from which the jury could infer that he knew of or sought
to further the fraud against the bank is contradicted by
the record. Sebold testified that he knew that Tri-State
was seeking financing. He conceded that he prepared
numerous erroneous or fraudulent documents which could
be used to obtain financing. His grand jury testimony,
which was admitted as part of the government’s case,
acknowledged that the purchase orders could be used as
“window dressing” in an application for a bank loan.
Thus there was plentiful evidence from which the jury
could infer that Sebold actively participated in defraud-
ing Bankers Trust. The evidence provided by the tele-
phone conversation was merely cumulative and affected
no substantial rights of the appellant.

James’ attack on his conviction * focuses on testimony
given by Raymond Starns, an individual who was not
indicted in this case but was named as a co-conspirator
in a bill of particulars submitted by the government.
Starns, who shared office space at Tri-State during part
of 1972, gave considerable testimony that implicated
James in Tri-State’s fraudulent activities. He identified
James and Deaton as “international money brokers or
financiers” who were involved in multi-million dollar
transactions. He testified that James was acquainted
with Deaton during 1971 and early 1972, when Deaton
was serving a sentence in federal prison on a fraud con-
viction, Starns reported James’ familiarity with Tri-
State’s financial statements, including his knowledge that
two $100,000 personal checks drawn by Starns without
sufficient funds and held by Deaton were reflected in the
October, 1972 statement. Rubin and Deaton gave this

*As allowed by Fed. R. App. P. 28(i), Sebold adopts the
arguments advanced by James, insofar as they are applicable to
him.

i
j

|

|

|

12a
Opinion of Smith, Circuit Judge

statement to Bankers Trust in support of Tri-State’s
financing application. Starns also placed James at a
series of meetings during which Starns and Deaton in-
sisted that certificates of stock of All States Life Insur-
ance Company of Alabama should not bear any legend
indicating that they were restricted. These shares later
were pledged to Bankers Trust, which was assured by
Rubin and Deaton that the stock was freely tradeable.

The trial transcript shows Starns to have been a
quick-witted and, at times, éntertaining witness. Un-
fortunately, Starns had, on several occasions in the past,
put his engaging manner to use in ways which the law
frowns upon. Thus, the government thought it advisable
to elicit, in its direct examination, several facts of which
defense counsel had knowledge and which could reflect
adversely on Starns’ credibility and his motive for testify-
ing. Among these facts were: (1) Starns had been con-
victed in Louisiana in 1974 on eight counts involving
possession of forged government checks. He was sen-
tenced to seven years in prison, but, as a result of his
cooperation with the government in the trial of a co-
defendant, the sentence was reduced to time served ( about
two months) and Starns was placed on probation. (2)
An injunction had been entered against Starns in con-
nection with an SEC enforcement proceeding. (8) Starns
had made no agreement with respect to his possible in-
dictment in the Tri-State affair, but claimed that his
understanding of the statute of limitations had led him
to conclude that he faced little threat of indictment. ( 4)
Starns was under federal indictment in North Carolina
in connection with an alleged scheme to defraud that in-
volved the issuance of millions of dollars of worthless
bank instruments. This indictment was admitted into
evidence, Starns acknowledged that he had testified be-
fore the grand jury in North Carolina. He also stated
that he hoped, but had “little expectation,” that his testi-

13a
Opinion of smith, Circuit Judge

mony about Tri-State would help him in connection with
the North Carolina prosecution.

James’ counsel did not cross-examine Starns about the
Tri-State matter, but sought to explore further the extent
to which the pending indictment in North Carolina might
provide him with a motive to testify against James.
James now contends that the court erroneously restricted
his cross-examination of Starns.

James argues first that Starns improperly was allowed
to invoke selectively his privilege against self-incrimina-
tion. Before Starns took the stand, the government in-
formed the court and defense counsel that Starns intended
to assert his privilege as to any matter which might ex-
pose him to criminal liability, including the events in-
volved in the North Carolina indictment. The defense
argued that he should be barred from testifying under
that restriction. The trial judge and counsel then con-
ducted a voir dire examination of Starns, out of the jury’s
presence. Starns said that he had given extensive state-
ments to the FBI and the North Carolina grand jury.
He stated that he did not know whether he would plead
guilty in that case." The trial judge ruled that defense
counsel would be allowed to inquire into Starns’ “hopes
and expectations” in testifying, but that he could invoke
his privilege as to any collateral matters that involved
only his credibility. The judge further ruled that Starns
had not waived his privilege in this trial by making state-
ments in North Carolina.

During cross-examination before the jury, Starns
denied that his statements to the FBI amounted to con-
fessions in the North Carolina case. He would not agree

‘A plea of not guilty was entered in North Carolina for Starns
by his attorney while Starns was testifying in this case. This in-
formation was elicited during re-direct examination. f

14a
Opinion of Smith, Circuit Judge

that there was “not the remotest possibility that [he
could] escape conviction” in that case. But he declined
to answer questions involving the contents of his state-
ments to the FBI and whether he had signed a waiver of
rights before talking to the FBI.

James rightly does not challenge the district court’s
original ruling that Starns had not waived his privilege
by making his previous statements to the FBI and the
grand jury. A waiver of the privilege in one proceeding
does not affect a witness’ rights in another proceeding,
Ottomano v. United States, 468 F.2d 269, 273 (1st Cir.
1972), cert. denied, 409 U.S. 1128 (1973) ; United States
v. Miranti, 253 F.2d 135, 189-40 (2d Cir. 1958). Like-
wise, the ruling that Starns could invoke his privilege
against questions involving collateral matters going only
to his credibility was correct. United States v. Cardillo,
316 F.2d 606, 611 (2d Cir.), cert. denied, 375 U.S. 822
(1963). James insists, however, that Starns waived his
privilege by selectively answering certain questions. We
disagree. Although it is true, as James asserts, that
“where criminating facts have been voluntarily revealed,
the privilege cannot be invoked to avoid disclosure of the
details,” Roger v. United States, 340 U.S. 367, 373 (1951)
(footnote omitted), our examination of Starns’ testimony
shows that he disclosed nothing that might be character-
ized as incriminating. Therefore, he did not waive his
privilege, which he properly invoked in response to other
questions. Id.; McCarthy v. Arndstein, 262 U.S. 355, 359
(1923).

James next argues that the district court improperly
refused to admit copies of certain FBI reports and to
allow testimony by an Assistant United States Attorney
in North Carolina. The FBI reports contained state-
ments made by Starns concerning the North Carolina
case. The government attorney was called to testify as

15a
Opinion of Smith, Circuit Judge

to whether Starns had been promised immunity from
prosecution.

The question of the admissibility of the FBI reports
again illustrates the importance of correctly specifying
the basis claimed for admission of evidence. The reports
first were offered “as to [Starns’] credibility as a wit-
ness.” The court sustained an objection to their admis-
sion and stated, “You can ask him about other miscon-
duct, but you can’t prove it by extrinsic evidence.” This
ruling accorded with the provisions of Fed. R. Evid.
608 (b) :

Specific instances of the conduct of a witness, for
the purpose of attacking or supporting his credi-
bility, other than conviction of crime as provided
in rule 609, may not be proved by extrinsic evi-
dence.

James later asked the court to reconsider its decision.
This time he offered the reports as relevant to Starns’
motive for testifying. The judge adhered to her ruling
that the reports described other misconduct that could not
be proved by extrinsic evidence.

The admissibility of the North Carolina prosecutor’s
testimony also involves the application of Rule 608 (b).
During cross-examination, Starns testified that an _As-
sistant United States Attorney in North Carolina, Rabi-
deau Wilder, had told him, immediately prior to his ap-
pearance before the grand jury in 1976,* that he (Wilder)
did not intend to prosecute Starns. At the conclusion of
Starns’ testimony, James’ counsel represented to the court
that Wilder, if called to the witness stand, would testify

8 Starns testified that his grand jury appearance occurred in
1977, but there appears to be no dispute that the events actually
took place in 1976.

léa
Opinion of Smith, Circuit Judge

that he never promised Starns that he would not be in-
dicted. The following colloquy ensued:

Ms. Neugarten [Assistant United States At-
torney]: That you can bring out, correct?

Court: You can bring out on the defense case.

Mr. Doyle [Counsel for James]: Yes. That
is a specific application that your Honor would
permit that.

Court: All right.

Shortly thereafter, the court again stated: “You can bring
up this prosecutor and show that this man is not telling
the truth.”

After the government rested its case, James sought
to call Wilder to testify. The government, however, re-
versed its previous position and objected that the proffered
testimony was barred by Rule 608(b)’s prohibition of
extrinsic proof of specific instances of conduct for the
purpose of attacking a witness’ credibility. The govern-
ment argued that “since it goes to whether Mr. Starns
was telling a truth or not a truth as to something regard-
ing North Carolina rather than something regarding Tri-
State, [the testimony] falls within that exception for
extrinsic evidence.” ° The judge then reversed her earlier

* The prosecutor also noted that she found herself in the posi-
tion, which she desired to avoid, of potentially setting up a
defense for Starns in North Carolina. If Wilder testified, it
would be nominally in the government’s interest in this case to
cross-examine him to establish that he did promise not to prose-
cute Starns. Starns might then, however, try to challenge the
North Carolina indictment on the ground that his grand jury
testimony was induced by the false promise. The prosecutor
therefore told the court, “Under that circumstance it is wise for
me to bring 608(b) to your Honor’s attention and ask this proof
be excluded.”

Although we see the prosecutor’s dilemma, we are unable to
discern its relevance to the admissibility of the reports, which
we conclude were not covered by Rule 608(b).

17a
Opinion of Smith, Circuit Judge

ruling and agreed that Rule 608(b) barred Wilder’s testi-
mony. After further discussion with counsel, the court
added, as a second reason for excluding the testimony,
that it was not necessary or crucial for the defense be-
cause it was obvious from Starns’ testimony that he had
been indicted and was hoping for lenient treatment.

The district court erred in concluding that Rule 608 (b)
applied to either the FBI reports or Wilder’s testimony.
Although the language of the rule is unfortunately rather
awkward, the Notes of the Advisory Committee show that
it was intended to regulate only the use of specific in-
stances of conduct to prove that the witness is a “bad
person” or is a generally untruthful person who should
not be believed. See 3 J. Weinstein & M. Berger, Wein-
stein’s Evidence J 608[01], [05] (1978). However, “bias
of a witness is not a collateral issue and extrinsic evi-
dence is admissible to prove that a witness has a motive
to testify falsely.” United States v. Harvey, 547 F.2d
720, 722 (2d Cir. 1976). Accord, United States v. Black-
wood, 456 F.2d 526, 580 (2d Cir.), cert. denied, 409 U.S.
863 (1972) ; United States v. Lester, 248 F.2d 329, 334
(2d Cir. 1957).

The strength of the case against Starns in North
Carolina if known by him,” could bear upon Starns’
motive to testify in this case. The stronger the case
against Starns, and the more likely he was to be con-
victed, the stronger would be his motive to cooperate with
the government in the hope of receiving more lenient
treatment should he ultimately be convicted in North
Carolina. Since Starns’ statements to the FBI presum-
ably would be used against him at trial, they were rele-
vant to his motive to testify here. The district court

Cf. United States v. Campbell, 426 F.2d 547, 549 (2d Cir.
1970) (actions evincing government’s intention to trade leniency
for cooperation are relevant only if witness knew of them).

ae

18a
Opinion of Smith, Circuit Judge

therefore erred in ruling that the reports were merely
inadmissible, extrinsic evidence of other misconduct."

Wilder’s testimony also was not excluded by Rule
608(b). “[W]hen attempting to show bias or interest,
as opposed to bad reputation, the examiner is not bound
to accept the witness’ answer, but is free to call addi-
tional witnesses for impeachment.” Moynahan v. Manson,
419 F. Supp. 1139, 1148 (D. Conn. 1976), aff'd mem.,
559 F.2d 1204 (2d Cir.), cert. denied, 484 U.S. 939
(1977). Wilder’s testimony was being offered to show,
not that Starns had lied and therefore should not be be-
lieved, but that Starns had never been promised immunity

‘and that he therefore had a motive to falsify testimony

in this particular case.

Our conclusion that Rule 608(b) did not bar this evi-
dence does not, however, mandate reversal. The exclusion
of some evidence relevant to motive may not require re-
versal of a conviction. The test is whether the jury is in
possession of sufficient information to make a discrim-
inating appraisal of the witness’ possible motives for tes-
tifying falsely in favor of the government. United States
v. Turcotte, 515 F.2d 145, 151 (2d Cir.), cert. denied, 423
U.S. 1032 (1975) ; United States v. Miles, 480 F.2d 1215,
1217 (2d Cir. 1978) (per curiam); United States v.
Blackwood, supra, 456 F.2d at 530; United States v.
Campbell, 426 F.2d 547 (2d Cir. 1970).

Here, as in United States v. Blackwood, supra, 456
F.2d at 530, although it would have been preferable to

™ The judge might have chosen to exclude the reports pur-
suant to Fed. R. Evid. 403, which permits the court to exclude rele-
vant evidence if its probative value is substantially outweighed
by, inter alia, danger of confusion of the issues or considerations
of undue delay, waste of time or needless presentation of cumula-
tive evidence. Admission of the reports might have bogged down
the court in a “mini-trial” of the North Carolina case.

19a
Opinion of Smith, Circuit Judge

allow the testimony, “[wle are satisfied that the circum-
stances from which the jury could decide whether [the
witness] might have been inclined to testify falsely in
favor of the government were adequately presented to
the jury....” The jury knew that Starns was under
indictment in North Carolina. It had in its possession
the indictment that set forth the charges against him.
The jury knew that Starns had not been indicted in this
case, despite his involvement in at least some aspects of
the scheme. Finally, and perhaps most importantly, the
jury was aware that Starns had cooperated with the
government in another case four years earlier and had
been rewarded with a substantial reduction of his sen- —
tence on a previous conviction. Although Starns insisted
that he expected to be acquitted in North Carolina,” he
also conceded that he hoped his testimony in this case
would help him in his dealings with the government.
All these factors, which defense counsel argued vigorously
in summation, put the jury on notice of the compelling
reasons that Starns had for testifying for the govern-
ment. In addition, Judge Motley carefully instructed the
jury that it could consider “any motives the witnesses
may have in testifying for the Government.” *

12 Starns in fact was acquitted of all charges contained in the
North Carolina indictment after a jury trial in January, 1979.
18 The judge instructed the jury as follows:

You are instructed that when you are weighing the
testimony of witnesses who have testified for the Govern-
ment in this case you may take into account any motives the
witnesses may have in testifying for the Government. The
fact that a witness may have a motive for testifying for the
Government does not disqualify the testimony of that wit-
ness, but it may well affect the weight you give his testi-
mony in adjudging the guilt or innocence of a defendant.

For example, (1) a witness may fear being prosecuted
by the Government in this case; (2) a witness may hope for
leniency in a related case in which he had pleaded guilty to

[Footnote continued on following page]

20a
Opinion of Smith, Circuit Judge

Ths case is unlike Uwited States v. Harvey, supra,
547 F.2d 720, cited by James, in which the district court
refused to admit extrinsic evidence that the government’s
sole identification witness had once accused the defendant
of fathering and then failing to support her child. This
court noted that “it is rarely proper to cut off completely
a probative inquiry that bears on a feasible defense,” id.,
at 723 (emphasis added), and reversed the conviction
because “appellant was denied an important opportunity
to raise a reasonable doubt about his participation in the
[crime].” Jd. James’ contention that the exclusion of
extrinsic proof of Starns’ motive “completely foreclosed
defendant from introducing any meaningful proof on
these critical areas and permitted Starns to perpetrate
a fraud on the jury” is simply unsupported by the record.
To the contrary, James was given “full opportunity to
bring out just what favors the witness had already re-
ceived from the government and what further ones he may
be expecting.” United States v. Campbell, supra, 426 F.2d
at 554 (Fr‘ondly, J., dissenting).

James further suggests that, although the jury knew
that Starns had an incentive at the time of trial to testify

a related crime; (3) a witness may be awaiting trial in
another jurisdiction on unrelated charges and may hope that
by cooperating with the Government in this case his co-
operation here will be made known to the Government and
the Judge in that unrelated case; or (4) a witness may
actually have been a co-conspirator in this case but has not
been named as such but has testified for the Government,
or he may be a person who could have been but who has not
been indicted in this case. It may be that such witnesses
hope that by testifying for the Government they will not
be indicted in this or some other case, or it may be that
they agreed to testify in exchange for not being indicted,
or it may be that they have testified in exchange for an
agreement to notify the sentencing Judge of such coopera-
tion,

Zila
Opinion of Smith, Circuit Judge

for the government, the exclusion of Wilder’s testimony
left the jury with the impression that he had no such
motive to falsify when he began to cooperate with the
government in May, 1978 before he was indicted in
North Carolina. The government, however, did not even
Suggest such a theory to the jury, the prosecutor conceded
in her summation that Starns had “every motive in the
world to help the Government.” She then attempted to
convince the jury that, despite his motives to falsify,
Starns had given truthful testimony. In light of the
overwhelming evidence going to motive, and the natural
skepticism with which the jury could be expected to
receive Starns’ explanation of his cooperation,“ we con-
clude that exclusion of Wilder’s testi “ny was not error,
certainly not reversible error.

James, in his final point relating to Starns’ testimony,
argues that the transcript of Starns’ grand jury testimony
in North Carolina should have been turned over to the
defendants, as material covered by the Jencks Act, 18
U.S.C. § 3500. He contends that the testimony was
Jencks material because Starns testified on direct exam-

‘*Starns contendtd that his original cooperation had nothing
to do with the North Carolina case, but instead resulted from a
decision by him, his wife and his mother that they “were tired
of living the past few years leading the type of life I had been
leading.”

We do not doubt the possibility that a convicted criminal can
reform himself, but merely recognize that a self-serving declara-
tion of rehabilitation is unlikely to win unquestioning acceptance
from a jury.

'°18 U.S.C. § 3500 provides, in relevant part:

(b) After a witness called by the United States has testi-
fied on direct examination, the court shall, on motion of the
defendant, order the United States to produce any statement
(as hereinafter described) of the witness in the possession
of the United States which relates to the subject matter as
to which the witness has testified.

22a
Opinion of Smith, Circuit Judge

ination that he had appeared before and been indicted by
the North Carolina grand jury and because it allegedly
would have contradicted his statement on cross-examina-
tion that he had been promised immunity from prosecution.

Before Starns testified, the government disclosed to
the defendants and the court that it had requested a copy
of the transcript from the North Carolina prosecutor, that
the prosecutor had applied to the chief judge of the
Western District of North Carolina for an order releasing
the transcript, as allowed by Rule 6(e) of the Federal
Rules of Criminal Procedure, and that the judge had
rejected the application as well as a suggestion that he
transmit the transcript directly to Judge Motley. Judge
Motley’s subsequent efforts to make contact with the
North Carolina judge were unsuccessful. Thus the court
was left with the government’s assertion, based on the
representations of the North Carolina prosecutor, that
Starns’ grand jury testimony did not relate to the Tri-
State matter or any persons involved therein.

Since the conclusion of the trial (and apparently
upon the completion of the North Carolina trial), the
government obtained a copy of the transcript, which
the parties agreed to include as part of the record on
appeal. As the government represented at trial, Starns’
grand jury testimony did not deal with any of the events
involving Tri-State to which he testified on direct exam-
ination. His mere mention of his grand jury appearance
is not a sufficient basis to conclude that the transcript
“relate[d] to the subject matter as to which [he] testi-
fied.” 18 U.S.C. § 3500(b). See United States v. Pacelli,
491 F.2d 1108, 1120 (2d Cir.), cert. denied, 419 U.S. 826
(1974). - However, this court has held that a statement
may “relate,” within the meaning of § 3500(b), not only
to the witness’ factual narrative, but also to impeach-
ment of his direct testimony by showing bias and interest.

23a
Opinion of Smith, Circuit Judge

United States v. Birnbaum, 337 F.2d 490, 497-98 (2d Cir.
1964) ; United States v. Borelli, supra, 336 F.2d 376.

The transcript might have been admissible to show
interest or motive through the strength of the case against
Starns. But as our earlier discussion of the FBI reports
indicates, there is not “a significant chance that this
added item, developed by skilled counsel, could have in-
duced a reasonable doubt in the minds of enough jurors
to avoid a conviction.” United States v. Hilton, 521 F.2d
164, 166 (2d Cir. 1975), cert. denied, 425 U.S. 939
(1976).*° The same conclusion applies to use of. the
transcript to demonstrate that Wilder had not promised
Starns that he would not be indicted.” Although such
an inference might be drawn from the transcript, Wilder’s
own testimony would have been as or more probative, and.
we already have held its exclusion to have been harmless.

James’ attack upon the procedure followed by the gov-
ernment in presenting the case to the grand jury is with-
out merit. He complains that there was excessive and
unnecessary use of hearsay and that the grand jury was
pressured into voting an indictment without adequate con-
sideration because of the impending expiration of the
limitations period.

6 Although the government’s failure to disclose might better
be characterized as “unavoidable” rather than “inadvertent,” -we
believe this to be the appropriate test to determine whether a
new trial is required. James has not suggested and the record
does not indicate that the government deliberately suppressed,
the material.

7 Since Starns testified to this alleged promise during the
cross-examination, it might be argued that impeachment in this
regard would not relate to Starns’ direct testimony. But if we
assume, as we do, that possible use of the transcript to show the
strength of the North Carolina case brought the material within
§ 8500, it is appropriate to consider in determining whether a
new trial is required, whatever use defense counsel then could
have made of the transcript under the rules of evidence.

24a
Opinion of Smith, Circuit Judge

We have dismissed indictments in the exercise of our
supervisory powers because of improper use of hearsay
testimony, United States v. Estepa, 471 F.2d 1132 (2d
Cir. 1972), although generally “an indictment valid on
its face is not subject to challenge on the ground that the
grand jury acted on the basis of inadequate or incom-
petent evidence,” United States v. Calandra, 414 USS.
338, 345 (1974). In this case, unlike Estepa, the prose-
cutor clearly informed the grand jury that much of the
evidence presented to it was hearsay, in the form of
transcripts of testimony before the earlier grand jury.”
The prosecutor also told the grand jury that it could have
the witnesses brought before it to testify, if it so desired.
In addition, substantial non-hearsay testimony was given
by Keating, one of the bank loan officers. Finally, Judge
Motley questioned the Assistant United States Attorney
and the grand jury foreman to determine whether im-
proper time constraints affected the grand jury’s actions.
We see no reason to reverse her decision not to dismiss
the .indictment.

James next contends that it was prejudicial error to
admit into evidence a portion of Keating’s 1978 grand
jury testimony. Keating testified on direct examination
that James had told him on February 26, 1973 that Tri-
State was experiencing difficulties in repaying its loans
because of a strike at its coal mines. On cross-examina-
tion, Keating conceded that he had not mentioned this
conversation in his 1975 grand jury testimony. The
government then offered Keating’s 1978 grand jury testi-
mony, in which he spoke of the February 26 conversation,
to rebut the implied charge that Keating had recently
fabricated the testimony.’

18 See note 2, supra.

'°On redirect examination, Keating also testified that he had
not been asked about the coal strike conversation during his 1975
g.and jury appearance.

25a
Opinion of Smith, Circuit Judge

A prior consistent statement made prior to the time
that an alleged motive to falsify arose may now be used,
not only for rehabilitation, as under our earlier cases,
e.g., United States v. DiLorenzo, 429 F.2d 216, 220 (2d
Cir. 1970), cert. denied, 402 U.S. 950 (1971), but, by
virtue of Federal Rule of Evidence 801(d)(1)(B), as
affirmative evidence.” The problem presented here is to
determine what was the alleged motive to fabricate.
James, who agrees that he was charging Keating with
recent fabrication, argues on appeal that the motive for
fabrication was Keating’s desire not to upset the agree-
ment with the government whereby he would not be

2° We need not decide whether Fed. R. Evid. 801(d) (1) (B)
should be construed to limit the use of prior consistent statements
for the purpose of rehabilitation to those circumstances in which
such statements also may be used as direct evidence. Compare
United States v. Rubin, slip op. (2d Cir. , 1979)
(Friendly, J., concurring), with United States v. Quinto, 582 F.2d
224, 232-34 (2d Cir. 1978). The government offered Keating’s
1978 grand jury testimony directly in response to the inference
of recent fabrication of his direct testimony:

MS. NEUGARTEN: Your honor, I believe that the rule is
that if there is a suggestion or infer-
ence of a recent fabrication, that the
prior consistent statement can be
proved.

THE COURT: Yes.

MS. NEUGARTEN: The government contends that the
question addressed to the 1975 grand
jury created the inference of a recent
fabrication.

We conclude, infra at 21-22, that the statement thus qualified
for admission both as direct evidence under Rule 801(d) (1) (B)
and for rehabilitation under our earlier cases.

In any event, neither the parties nor the trial judge sought to
limit the jury’s use of the 1978 grand jury testimony to the
issue of rehabilitation. If the jury was to be allowed to consider
the testimony as direct proof of the coal strike conversation, the
requirements of Rule 801(d)(1)(B) would have to be satisfied.

26a
Opinion of Smith, Circuit Judge

prosecuted. This motive, James insists, already existed
at the time of Keating’s 1978 grand jury testimony.
James’ argument, however, proves too much. Keating
testified in both 1975 and 1978 under the same oral
agreement, which was reduced to writing after the second
grand jury appearance. The motive to which James
points therefore existed even before the 1975 testimony
and cannot be the factor that would have caused Keating
to fabricate testimony between 1975 and the time of the
trial. Cf. United States v. Grunewald, 233 F.2d 556, 566
(2d Cir. 1956), rev’d on other grounds, 353 U.S. 391
(1957) (theoretical possibility that a motive to falsify
may have existed when prior statement was made is in-
sufficient to form basis for rejection of evidence).

One aspect of the agreement, to which James’ counsel
specifically directed Keating’s attention during cross-
examination, did provide a motive for Keating to fabri-
cate testimony against James. This was the requirement
that Keating cooperate at future trials, with the govern-
ment to be the sole judge of whether his testimony was
truthful. While Keating had no motive, during his grand
jury testimony, to implicate James in particular, once
James was brought to trial, such a motive did exist. Thus
his grand jury testimony was admissible as a prior con-
sistent statement made before the motive arose. Cf.
Umited States v. Lombardi, 550 F.2d 827 (2d Cir. 1977)
(per curiam) (motive to obtain conviction of defendant
did not exist when witness testified at co-defendant’s
earlier trial because defendant had not yet been appre-
hended ).

James’ remaining contentions require little discussion.
The government was not required to accept James’ offer
to stipulate that a handwriting expert called by the gov-
ernment would testify that certain items were written by
James. The government generally may refuse an offer

27a
Opinion of Smith, Circuit Judge

to stipulate to facts and instead may offer its proof,
United States v. Brinklow, 560 F.2d 1003, 1006 (10th
Cir. 1977), cert. denied, 484 U.S. 1047 (1978), at least
where the. probative value of the evidence offered is not
substantially outweighed by the danger of unfair preju-
dice. United States v. Cockerham, 476 F.2d 542, 545
(D.C. Cir. 1973) (per curiam). No ‘such siibstantial
danger existed here. | Sie

James complains of the district cour*’s refusal to order
the government to conduct an “all-agency search” * to
determine whether he or his premises had been the ‘sub-
ject of illegal electronic surveillance. James moved for
such an order under the authority of 18 U.S.C. § 3504,
which provides:

(a) In any trial, hearing or on sieiline .

(1) upon a claim by a party aggrieved that
evidence is inadmissible because it is the primary
product of an unlawful act or because it was ob-
tained by the exploitation of an unlawful act, the
opponent of the claim shall affirm or deny the oc-
currence of the alleged unlawful act....

Although it has been said that a claim that illegal sur-
veillance occurred need not be particularized, United
States v. Toscanino, 500 F.2d 267 (2d Cir. 1974), it is
now established that it cannot be based on mere suspicion
but must have at least a “colorable basis” before the
government will be obliged to respond. United States v.
Yanagita, 552 F.2d 940, 943 (2d Cir. 1977) ; In re Millow,
529 F.2d 770 (2d Cir. 1976). James set forth. no. basis

21 James suggests that such a search should involve a review of
the records of eight agencies: the FBI, Internal Revenue Service,
Postal Service, Bureau of Customs, Central Intelligence Agency,
Department of Labor, Department of Defense and Department of
State.

28a
Opinion of. Smith, Circuit Judge

for suspecting the existence of such surveillance other
than a conclusory allegation that the participation of the
Strike Force in the investigation made such an event
more likely than not. This allegation was insufficient to
call for an all-agency search.” James’ attempt to dis-
tinguish Yanagita and Millow because those cases involved
grand jury witnesses rather than a defendant at trial
finds no support either in the plain language of the
statute, which makes no such distinction, or in Alderman
v. United States, 394 U.S. 165 (1969), cited by appellant.

We have examined the portions of the government’s
summation and the court’s instructions to the jury that
James has challenged and find no error.

We therefore affirm the judgments.

\

22.We need not determine whether it was necessary for the
government to file a response, as it did, which stated that no one
who participated in the investigation knew of any electronic
surveillance of any of the defendants. Such a response, even if
not required, was appropriate and is to be encouraged.

29a

Judgment of the Court of Appeals

UNITED STATES COURT OF APPEALS
FOR THE
SECOND CIRCUIT

At a stated Term of the United States Court of Ap-
peals for the Second Circuit, held at the United States
Courthouse in the City of New York, on the sixth day of
September one thousand nine hundred and seventy-nine.

Present: HON: HENRY J. FRIENDLY,
Hon: J. JOSEPH SMITH,
HON: WALTER R. MANSFIELD,
Circuit Judges,
78-1346
78-1353
———EE- ee
UNITED STATES OF AMERICA,
Plaintiff-Appellee,

—V.—_

LEONARD JAMES, OTTO SEBOLD,
Defendants-A ppellants.

——E

Appeal from the United States District Court for the
Southern District of New York.

This cause came on to be heard on the transcript of
record from the United States District Court for the
Southern District of New York, and was argued by
counsel.

ON CONSIDERATION WHEREOF, it is now hereby or-
dered, adjudged, and decreed that the judgments of said
District Court be and they hereby are affirmed in ac-
cordance with the opinion of this court.

A. DANIEL FUSARO,
Clerk

BY ARTHUR HELLER
ARTHUR HELLER
Deputy Clerk

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385006_1566%3A1. Public record. Not legal advice.