Petition — Parker v. United States
Supreme Court brief1981
Ask Donna
What actually matters in this document.
Text
8 0 = 2 () 0 9 | ottice- Supreme Court, U.S.
INO ennicun Ae aaw
MAY 29 1981
IN THE aaa
Supreme Court of the United |Statea:..
OCTOBER TERM, 1981
WILLIAM L. PARKER,
Petitioner,
v.
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
NINTH CIRCUIT
PETER J. HUGHES
1010 Second Avenue, Suite 1917
San Diego, California 92101
Telephone: (714) 234-6695
Attorney for Petitioner
INTERIM PRINTING & MAILING COMPANY
1105 West MORENA BOULEVARD, SAN DiEGO, CALIFORNIA 92110 — 275-3050
ys
QUESTIONS PRESENTED FOR REVIEW
1. Must a federal grand jury be given at least minimal instructions
concerning the law applicable to the violations concerning which the
jurors are being requested to return an indictment?
2. Was it improper for the Acting Secretary of the United States
Navy to communicate ex parte with the trial judge concerning the
sentence to be imposed?
3. When specifically requested, should a trial court give elaborating
and clarifying instructions on the elements of a conspiracy, and in
particular the agreement required?
TOPICAL INDEX
QUESTIONS PRESENTED FOR REVIEW ...........
OPINION BELOW ...ccccccccccccccccccccccccccccces
JURISDICTION .cccccccccccvcvccccccccvccccccccccecs
CONSTITUTIONAL PROVISIONS INVOLVED.......
STATEMENT OF THE CASE .......ccccscsccccceees
REASONS FOR GRANTING THE WRIT............
1. The opinion of the Circuit constitutes a significant
step toward rendering the Fifth Amendment require-
ment federal felony cases be presented to a grand
jury a meaningless formality ..........0eeee000
2. This Court should announce clearly and unequivo-
cally that ex parte communications by a high
government official to a judge concerning the
sentence he should impose is impermissible ......
3. The Court should direct that when specifically
requested a jury must be given elaborating
instructions on the fundamental elements of a
conspiracy and in particular the agreement which
must be found to have existed ...........sse00.
~~ we WwW NY WN
13
15
TABLE OF AUTHORITIES
CASES
Costello v. United States, 350 U.S. 359 (1956)..........
Haller v. Robbins, 409 F.2d 857 (Ist Cir. 1969) ........
Holt v. United States, 218 U.S. 245 (1910).............
Kotteakos v. United States, 328 U.S. 750 (1946)........
Meyers v. United States, 435 U.S. 944 (1978) ..........
Mitchell v. United States, 394 F.2d 767 (D.C. Cir. 1968)
United States v. Huff, 512 F.2d 66 (Sth Cir. 1975)......
United States v. Kennedy, 564 F.2d 1329 (9th Cir. 1977)
United States v. Leverage Funding,
tam Wome aoe Cr Ge. GH SD, TER voccccccccss
United States v. Lozaw, 427 F.2d 911 (2nd Cir. 1970)...
United States v. Rosner, 585 F.2d 1213 (2nd Cir. 1973) .
United States v. Solomon, 422 F.2d 1110 (7th Cir. 1970)
STATUTES
Title 18 United States Code
SY MUUINED 5 canedab cavestavcosechesvavess
Es dared bkwanddsahedbheseeebncene
Title 28 United States Code
EE BEUEED sku beecenccdvccscadevedcescaces
« iy -
TABLE OF AUTHORITIES (Continued)
Page
CONSTITUTIONS
United States Constitution
a. oe eves anpeehsneeeeeesese 3,7,8
IE BO cb bs doeketeneyddeebeoeavéenercs 3
BOO deeiininenen
IN THE
Supreme Court of the United States
OCTOBER TERM, 1981
WILLIAM L. PARKER,
Petitioner,
v.
UNITED STATES OF AMERICA,
Respondent.
PETITION FOR WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPFALS FOR THE
NINTH CIRCUIT
Petitioner, WILLIAM L. PARKER, respectfully prays that a writ of
certiorari issue to review the judgment of the United States Court of
Appeals for the Ninth Circuit entered on January 23, 1981 and as to
which a Petition for Rehearing and Suggestion for Hearing En Banc
was denied on April 30, 1981.
one
OPINION BELOW
On January 23, 1981 the United States Court of Appeals, Ninth
Circuit, filed an opinion affirming the judgment of convictions entered
in the District Court for the Southern District of California as to
petitioner William L. Parker and in the cases of codefendants
TRENTON P. OELBERG and JOHN E. KENNY, who were also
appellants in the case which was consolidated by the Circuit, resulting
in one opinion being filed. A copy of the slip opinion attached hereto as
Appendix “A”.
A timely Petition for Rehearing and Suggestion for Rehearing En
Banc was filed on February 6, 1981. By order dated April 30, 1981 the
Petition for Rehearing and Suggestion for Hearing En Banc was
denied. A copy of that order is attached hereto as Appendix “B”.
JURISDICTION
The Court of Appeals affirmed a judgment of conviction of petitioner
for violations of Title 18 United States Code Sections 371, 287, and
201(c)(1) and has denied a petition for Rehearing and Suggestion for
Hearing £n Banc. Jurisdiction to review the judgment of the Court of
Appeals is conferred upon this Court by Title 28 United States Code
Section 1254(1).
a Bin
CONSTITUTIONAL PROVISIONS INVOLVED
United States Constitution, Amendment V:
“No person shall be held to answer for a capital or other-
wise infamous crime unless on a presentment or indict-
ment of a grand jury .. . nor shall any person .. . be
deprived of life, liberty, or property without due process
i a
United States Constitution, Amendment VI:
“In all criminal prosecutions, the accused shall enjoy the
right to a... trial, by an impartial jury... .”
STATEMENT OF THE CASE
On November 16, 1978 a 23-count indictment was returned against
petitioner William Parker naming as codefendants John E. Kenny
(appellant in case number 79-1544, who has already filed a Petition for
Writ of Certiorari with this Court); Trenton P. Oelberg (appellant in
case numbers 79-1545 and 79-1735). [ECRP 1-36; references to tabs of
the Clerks record will be designated CR, to Excerpt of Clerk’s Record
filed by petitioner Parker as ECRP, and to Excerpt of Clerk’s Record
filed by appellant now petitioner Kenny as ECRK, and excerpts from
the Reporter’s Transcript will be referred to as RT.] Petitioner Parker
was named as a defendant in Counts 1, 2, 3, 8, and 15 of the indictment
as originally numbered. On July 17, 1979 the jury returned a verdict of
guilty as to petitioner Parker with respect to Count | [conspiracy to
defraud the United States in violation of Title 18 United States Code
Section 371]; Counts 3, 6, 8 and 9 [causing false claims to be submitted
to the United States in violation of Title 18 United States Code Section
287]; and Count 15 [bribery in violation of Title 18 United States Code
Section 201(c)(1)].
7
On August 6, 1979 the Honorable Wiiiiam B. Enright cornmmitted
petitioner Parker to the custody of the Attorney General for a period of
five years pursuant to Title 18 United States Code Section 4205(b)(2).
The sentences on each count were ordered to run concurrently. [CR 61;
ECRP 51.] On August 10, 1979 a timely notice of appeal was filed on
behalf of petitioner Parker [CR 79; ECRP 54].
Pretrial motions were filed on behalf of petitioner Parker and his
codefendants, which were joint requests made to the trial court [CR
Vol. 1; tab 22]. Included was a motion to dismiss the indictment on the
ground that:
“No directions or instructions were given to the grand
jury relative to:
a. The applicable law to the offenses which the grand
jury was considering. . . .” [CR 22, Motion to Dismiss,
page 2, no. 7.]
This request for relief was denied [Minute Order March 19, 1979; CR
28].
The trial court’s instructions to the jury concerning conspiracy are
found at pages 7940 to 7947 of the Reporter’s Transcript. With respect
to the nature of the conspiracy being an agreement, the only direction
given was the following:
“The gist of the offense is the combination or agreement
to disobey or disregard the law.” [TR 7941-7942]
“In order to establish that a conspiracy existed, the
evidence in the case must show beyend a reasonable
doubt that the members willfully in some way or manner
positively or tacitly, came to a mutual understanding to
try to accomplish a common and unlawful plan.
“However, the evidence in the case need not show that
the members entered into any express or formal
A
agreement or that they directly, by words or writing,
stated between themselves what their object or purpose
was to be, or the details or means by which the object or
purpose was to be accomplished.
“To act or participate willfully means to act or participate
voluntarily and intentionally. So if a person, with under-
standing of the unlawful character of a plan, knowingly
encourages, advises or assists, for the purpose of
furthering the undertaking or scheme, he becomes a
willful participant--a conspirator.” [TR 7943-7944]
Counsel for petitioner Parker specifically directed the court’s
attention to defects in the instructions on conspiracy which the court
was going to give concerning the agreement and why the specifically-
requested elaborating instructions were required:
“THE COURT: Thank you, sir.
“Now, gentlemen, moving to the special instructions, |
would intend to give the composite conspiracy instruc-
tion, which is a compilation of Devitt and Blackmar,
and also intend to give 27.16, which deals with separate
conspiracy. Those are the two conspiracy instructions |
intended to give. Are there any objections to those?
“MR. HUGHES: Yes, your Honor. We object and
request that Defendants’ Jointly Requested Instructions
21 through 38 be given, and Defendant Kenny’s Supple-
ment Number 11, in lieu of 27.16.
“THE COURT: What number in lieu of 27.16?
“MR. HUGHES: Defendant Kenny’s Supplement
Request Number 11.
“May I be heard briefly, your Honor?
“THE COURT: Certainly.
~ -6-
“MR. HUGHES: The instruction we requested, I think,
put to the jury the requirement that an agreement in fact
be reached. I understand the law that it can be tacit, et
cetera; but nevertheless, instructions that we have
requested put to the jury be requirement that that in fact
occur; that there be a specific intent; and the instructions
which the Court proposed to give, I think, diminish the
requirement of agreement, and also, rather than using
the words ‘specific intent,’ in characterizing the mens
rea, as we characterized it in our instructions, talks in
terms of generalities such as ‘wealthy,’ et cetera.
“THE COURT: Is there anything in the composite
instruction that you feel is not adequately covered? In
other words, can you point me to any of your proposed
instructions that aren't dealt with in the composit [sic]?
“MR. HUGHES: Your Honor, | don't think it
adequately sets for [sic] the requirement in fact--particu-
larly under the Halderman case that analyzes this very
carefully so far as what is the mens rea required so far as
the conspiracy is concerned.
“THE COURT: You know, this instruction has been
upheld. I have given it in numerous conspiracy cases,
and it has been upheld just as it is given, Mr. Hughes.
That’s the reason I hesitate to deviate.
“MR. HUGHES: |! understand it, your Honor. I am
responding to the Court’s question. I think it’s inappro-
priate to single out an illustration of an overt act being
the use of a telephone or walking across the street, et
cetera. My more serious concern is with the failure to
highlight adequately the requirement of an actual agree-
ment, meeting of the mind, and that there has to be a
specific intent to agree.” [TR 7499-7500]
The Court refused the elaborating instructions which were requested
[ECRP 46, 47, 49; KT 7525].
os
During the sentence hearing, the fact that the Acting Secretary of the
Navy had communicated with the trial judge concerning the sentence
which the Court should impose came to light when government counsel
made the following statement:
“I think the court has received a letter from the Depart-
ment of the Navy itself from the Acting Secretary of the
Navy, and I would just briefly like to read what I think is
significant in the last paragraph of Mr. Woolsey’s letter
in which he says ‘it is essential to the Navy indeed to all
the nation’s citizens that other men and women who
have the power to sacrifice the public trust for public
gain know not just yielding to such temptation is wrong
but also that it will be discovered and punished’.” [TR
805]
REASONS FOR GRANTING THE WRIT
1. The opinion of the Circuit constitutes a significant step toward
rendering the Fifth Amendment requirement federal felony cases be
presented to a grand jury a meaningless formality.
Petitioner is not unmindful of the opinions by this Court in Costello
v. United States, 350 U.S. 359, 363 (1956), relied on by the Circuit and
in Holt v. United States, 218 U.S. 245 (1910). It is submitted, however,
that those decisions should not be interpreted so as to reduce the
constitutional mandate that felony cases be screened by a grand jury to
a meaningless formality. In relying on cases which dealt with the quality
of evidence before the grand jury, the Circuit misses the point. The fact
that Costello v. United States, supra, permitted an indictment based on
hearsay testimony and the same Circuit’s opinion in United States v.
Kennedy, 564 F.2d 1329, 1338 (9th Cir. 1977), cert. denied sub nom
Meyers v. United States, 435 U.S. 944 (1978), held that an indictment
would not be invalidated because of failure to adduce exculpatory
evidence before the grand jury, did not mandate the result reached by
the Ninth Circuit in the instant case. Under the present state of the law
petitioner concedes that the quantum and type of evidence on which the
grand jury acted is not ordinarily reviewable. It is submitted, however,
that the importance of the grand jury as conceived by the framers of our
constitution of necessity must have been premised on the assumption
the grand jury’s decision to indict or not indict would be an informed
choice. That function cannot be performed in a meaningful fashion
unless those lay grand jurors are given at least minimal instructions
concerning the offenses they are considering. That is particularly true in
a case such as this where the charges involve a complex conspiracy. The
opinion of the Circuit in the instant case when considered in connection
with the same Circuit’s recent decision in United States v. Leverage
Funding, —— F.2d 258 (9th Cir. Oct. 3, 1980), indicates that a funda-
mental constitutional right is being relegated to nothing more than a
formality. These decisions for all practical purposes hold that pre
indictment review has come to rest solely with the United States
Attorney’s Office rather than the grand jury. That procedure simply
cannot be reconciled with the clear mandate of the Fifth Amendment. It
is therefore important for this Court to grant petitioner's request for a
hearing and to consider this issue in depth.
2. This Court should announce clearly and unequivocally that ex
parte communications by a high government official to a judge con-
cerning the sentence he should impose is impermissible.
The complaint by petitioner and the other appellants concerning the
conduct of the Acting Secretary of the Navy should not be permanently
characterized as “. . . utterly without merit” [Opinion page 61]. The fact
a district court judge may consider a wide range of matters in sentencing
as noted by the Circuit does not address the vice of what actually
occurred here and the principles which are involved. The executive
branch, through the Department of Justice, was litigating a criminal
case before a United States District Court judge. It is so well settled ex
parte communications with a judge are absolutely impermissible that
the authorities are legion. See, for example:
S
“{N]ot only is it a gross breach of the appearance of
justice when the defendant's principal adversary is given
private access to the ear of the court, it is a dangerous
procedure. However impartial a prosecutor may mean
to be, he is an advocate, accustomed to stating only one
side of the case.”
Haller v. Robbins, 409 F.2d 857, 859 (Ist Cir. 1969). See also: United
States v. Huff, 512 F.2d 66, 71 (Sth Cir. 1975); United States v. Rosner,
585 F.2d 1213, 1231 (2d Cir. 1973); United States v. Solomon, 422 F.2d
1110, 1119-1121 (7th Cir. 1970).
What the Circuit characterized as a complaint “utterly without merit”
involves another department of that same executive branch, to wit the
Navy, through its Acting Secretary communicating with the trial judge.
Petitioner submits it is.clear that the purpose of the letter from the
Acting Secretary was to exert pressure on and influence the sentencing
judge. When taken in conjunction with the fact it was done in an ex
parte manner, a clear and unequivocal condemnation by this Court is
mandated.
3. The Court should direct that when specifically requested a jury
must be given elaborating instructions on the fundamental elements of a
conspiracy and in particular the agreement which must be found to
have existed.
A conspiracy charge is in a large measure sui generis so far as the test
to which it puts a group of 12 lay persons. The law applicable to
conspiracies has given rise to questions with which courts, lawyers, and
legal scholars have found it difficult to deal effectively. For example,
the problem of multiple vs. single conspiracies dates back to Kotteakos
v. United States, 328 U.S. 750 (1946). Because conspiracy cases are
complex, jurors should be not only accurately swt effectively instructed
on the specific requirement of what facts must exist in order to find that
a crime has been proved.
oe
The general rule that if the instructions taken as a whole “adequately
cover the issues then specifically requested accurate instructions need
not be given is simply not realistically applicable to complex conspiracy
prosecutions. In particular, petitioner urges that in a conspiracy case
the presumption should be in favor of giving requested elaborating
instructions which accurately state the law.
Of particular significance were the requested instructions on the
essential element of any conspiracy; to wit, agreement.
“The essence of a conspiracy is an agreement and requires
an actual meeting of the minds in which there is a
mutual understanding reached to accomplish the
unlawful object of the conspiracy. Before a defendant
may be convicted of the conspiracy charge, you must
find that he specifically intended to enter into an agree-
ment with one or more of the co-defendants for the
purpose of accomplishing the unlawful objective of the
conspiracy as alleged in the indictment; namely, to
defraud the United States.
“See: United States v. Haldeman, 559 F.2d 31, 112-13 ftn
223 (CADC 1976); cert. denied 97 S.Ct. 641.”
[ECRP 46] [Defendants’ Jointly Requested Instruction No. 27]
“The essence of a conspiracy charge is not the individual
acts of persons who are charged with being members
thereof. It is the concert of action; that is, common
decision and common activity for a common purpose.
The essential element of conspiracy, therefore, is proof
of an actual agreement to attain the objective alleged in
the indictment by concert of action.
“See: Dennis v. United States, 384 U.S. 855, 860; 16 S.Ct.
973-78 (1966).”
[ECRP 47] [Defendants’ Jointly Requested Instruction No. 28]
“As I have already noted, a conspiracy is an agreement
and what makes it a violation of law is the fact that the
object to be achieved is unlawful; in this particular case,
to defraud the United States. It is important, therefore,
for you to distinguish between an agreement between
two or more people to accomplish a legitimate purpose
and an agreement to defraud the United States. The fact
that two or more individuals join together in a common
enterprise, such as contracting for and contracting with
the United States Na, y, and do so for a common
purpose, such as getting the necessary job done for the
Navy and (from the contractor's point) making a profit,
does not subject them to criminal liability. It is only
when two or more persons reach a common under-
standing that they will act together in achieving a
criminal purpose that an agreement becomes a criminal
conspiracy. In addition, the conspiracy which is charged
in this case is a specific one. Before you can find a
particular defendant guilty of the conspiracy charge,
you must be satisfied beyond a reasonable doubt that
such defendant knowingly joined in an agreement with
the specific purpose of achieving a particular criminal
goal charged in the indictment.”
[ECRP 49] [Defendants’ Jointly Requested Instruction No, 30]
In light of the number of instructions, their length, and complexity,
the instruction that the jury must find “the members [of the alleged
conspiracy] willfully or in some way or manner positively or tacitly
came to a mutual understanding to try to accomplish a common goal
and unlawful plan” was not an effective directive. The specific elabor-
ating instructions which had been proposed [Defendant's Requested
Instructions No. 27, 28, and 30] not only expanded on this critical
concept but more importantly related it to the specific charge in the
indictment rather than making reference to an indefinite “corimon goal
and unlawful plan.”
~
“A jury charge should be drawn with reference to the
particular facts of the case on trial.”
Mitchell v. United States, 394 F.2d 767, 770 (D.C. Cir. 1968).
“We endorse the view that instructions to a jury in appli-
cable law ought not to be conveyed merely in boilerplate
abstractions, but rather, that they should be adapted to
the case in language the jury may more readily
understand.”
United States v. Lozaw, 427 F.2d 911, 916 (2nd Cir. 1970).
The holding of the Ninth Circuit in the instant case therefore cannot
be reconciled with the principles announced by the two other Circuits
which are quoted above. Petitioner therefore submits that this Court
should grant a hearing and reconcile this difference in Circuit philo-
sophy by requiring meaningful instructions to a trier of fact in a
complex conspiracy case when specifically requested.
INCORPORATION BY REFERENCE
Petitioner Parker adopts and incorporates by reference all the points
raised and matters submitted in support thereof by appellant John E.
Kenny in Court of Appeal case number 79-1544, who has filed a
Petiticn for Certiorari with this Court; and any petition filed on behalf
of appellant Trenton P. Oelberg in Court of Appeals cases number 79-
1545 and 79-1735, both of which appeals were consolidated with that of
petitioner Parker.
ee
CONCLUSION
For these reasons, petitioner William L. Parker respectfully prays
that a writ of certiorari issue to review the judgment of the United
States Court of Appeals for the Ninth Circuit in this case.
Respectfully submitted,
PETER J. HUGHES
Attorney for William L. Parker
=_ =
APPENDICES
‘a
A-l
UNITED STATES v. KENNY
UNITED STATES of America,
Plaintiff-Appellee,
v.
John E. KENNY, Trenton P. Oelberg,
and William L. Parker,
Defendants- Appellants.
Nos. 79-1544, 79-1545, 79-1563
and 79-1735.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted Sept. 15, 1980.
Decided Jan. 23, 1981.
Rehearing and Rehearing En Banc
Denied April 30, 1981.
As Amended May 18, 1981.
Defendants were convicted in the United States District Court for the
Southern District of California, William B. Enright, J., of counts of a
multiple-count indictment alleging conspiracy, fraudulent government
contracting activities, bribery and tax evasion. Each defendant
appealed. The Court of Appeals, Nelson, Circuit Judge, held that: (1)
no abuse of discretion was shown in order of proof; (2) evidence was
sufficient to establish wheel-type conspiracy and each defendant's
connection with it; (3) instructions adequately covered defense theory of
“guilt by association”; (4) no error was shown in the playing, before the
grand jury, of a tape recording of a telephone conversation between
government informant and one defenda, nor in the playing of such
recording at the close of prosecutor’s cross-examination of a defendant
who was party to the conversation, even as against contention that
other defendants were prejudiced; (5) no abuse of discretion was shown
in denial of new trial for one defendant on ground of alleged newly
discovered evidence, or in denial of motion to sever income tax evasion
counts; and (6) receipt of a letter by the court prior to sentencing did not
require remand for resentencing, under circumstances of case.
Affirmed.
A-2
1. Criminal Law 427(3)
Order in which parties adduce proof is, in general, matter for triz’
judge to determine, subject to review for abuse of discretion, and
although it might in some cases be appropriate for court to require
Government first to establish prima facie the conspiracy and identify
conspirators, after which evidence of acts and declarations of each in
course of its execution are admissible against all, district court is not
required to adopt such procedure, but, rather, it is matter of discretion.
18 U.S.C.A. § 371; Fed.Rules Evid. Rule 611(a), 28 U.S.C.A.
2. Criminal Law 427(3)
In view of fact that district court had before it trial memorandum
giving summary of evidence Government proposed to introduce that
would establish conspiracy, and proposed order of proof, and it was
argued that many of witnesses necessary to prove conspiracy would
have to be recalled for further testimony in relation to substantive
counts and that defendants’ proposed order of proof was likely to
confuse jury, district court properiy exercised discretion in denying
defendants’ motion as to order of proof and allowing evidence to be
received subject to motion to strike in event of failure to establish
conspiracy. 18 U.S.C.A. § 371; Fed.Rules Evid. Rule 611(a), 28
U.S.C.A.
3. Criminal Law _=1167(1)
If indictment charges jointly tried defendants with participation in
single conspiracy but evidence reveals multiple, discrete conspiracies,
reversal is called for only if variance between indictment and proof
affects substantial rights of the parties. 18 U.S.C.A. § 371.
4. Conspiracy 47(1)
Establishing single conspiracy of wheel-type generally requires proof
that spokes are bound by “rim,” i. e., circumstances must lead to infer-
ence that some form of overall agreement exists. 18 U.S.C.A. § 371.
5. Conspiracy 47(1)
To establish “rim” as necessary element of wheel-type conspiracy,
evidence must show that each defendant was involved, with meeting of
A-3
inferred from defendants’ acts pursuant to fraudulent scheme or other
circumstantial evidence. 18 U.S.C.A. § 371.
6. Conspiracy 47(1)
Once existence of conspiracy has been established, evidence of only
slight connection is necessary to convict particular defendant of
knowing participation in it. 18 U.S.c.A. § 371.
7. Conspiracy 47(1)
Proof of single conspiracy, as opposed to multiple conspiracies, need
be such only that any rational trier of fact could have found essential
elements of crime beyond reasonable doubt, and it is not necessary that
evidence exclude every hypothesis but that of single conspiracy. 18
U.S.C.A. § 371.
8. Conspiracy 47(6)
Evidence including testimony showing that, after navy investigation
began, one defendant removed certain records, another defendant had
certain materials gathered and stored at his house and that other
defendants executed insincere statements that they had no dealings with
outside contractors that would generate any conflict of interest with
navy work was sufficient to support finding of single conspiracy, as
charged by indictment. 18 U.S.C.A. § 371.
9. Criminal Law 427(5)
Threshold of admissibility of evidence relating to coconspirators is
comparatively low, and judge need only make preliminary finding that
prima facie showing of conspiracy and defendants’ membership in it has
been made, and jury can then decide, on basis of evidence, whether
conspiracy exists beyond reasonable doubt, and whether given
defendant participated in it. 18 U.S.C.A. § 371; Fed.Rules Evid. Rule
801(d)(2)(E); 28 U.S.C.A.
10. Criminal Law 427(5), 673(4)
Prima facie standard of proof as to existence of conspiracy and
defendants’ participation in it was adequately met, and all evidence with
respect to which district court denied defense motions to strike was
admissible in connection with the conspiracy as charged, and, in view
also of cautionary instruction to jury that statements or acts of any
conspirator not in furtherance of conspiracy or made before its
A-4
existence or after its termination could be considered as evidence only
against person making them, there was no error in receipt of such
evidence. 18 U.S.C.A. § 371; Fed.Rules Evid. Rule 801(d)(2)(E); 28
U.S.C.A.
11. Criminal Law = 770(2), 829(4)
Jury must be instructed as to defense theory of case, but exact
language proposed by defendant need not be used, and it is not error to
refuse proposed instruction so long as other instructions in their
entirety cover such theory, and court examines instructions as whole,
rather than merely viewing failure to give any one instruction.
12. Criminal Law 822(1)
In conspiracy case, instructions, taken as a whole, were sufficient on
issue of whether there was multiple conspiracy or single conspiracy, and
were also sufficient to guard against “guilt by association.” 18 U.S.C.A.
§ 371.
13. Indictment and Information 10.2(2)
Even if defendant could make out constitutional violation with
respect to manner of obtaining tape recording which was thereafter
played before grand jury, otherwise valid indictment would not be
dismissed. U.S.C.A.Const. Amend. 5.
14. Criminal Law = 412.2(2)
Where there was no “custodial interrogation” of informant, no Fifth
Amendment violation appeared. U.S.C.A.Const. Amend. 5.
15. Criminal Law 641.3
Right to counsel does not attach prior to initiation of adversary
judicial proceedings against an accused, and where case is still in
investigative stage, or in absence of person’s being charged, arrested, or
indicted, such adversary proceedings have not yet commenced, and thus
no right to counsel has attached. Us.C.A.Const. Amend. 6.
16. Searches and Seizures 7(10)
Constitution affords no protection to a wrongdoer’s misplaced belief
that person to whom he voluntarily confides his wrongdoing will not
reveal it, and there was no Fourth Amendment violation though
A-5
substantive conversation which followed initiation of telephone call by
informer did not occur until defendant whom he had called went to
phone booth for “more privacy.” U.S.C.A.Const. Amend. 4.
17. Attorney and Client 32
In view of noncustodial environment, prior to particular defendant's
charge, arrest or indictment, there was no violation of Code of Profes-
sional Responsibility as against contention that prosecutor, through
informant, made prohibited direct contact with client known to be
represented by counsel on subject of the representation and that
product of misconduct should therefore have been excluded at trial.
U.S.C.A.Const. Amend. 5; ABA Code of Professional Responsibility,
DR7—104(A)(1).
18. Witnesses 33114, 337(1)
There is liberal attitude toward range of evidence that may be
admitted for purposes of impeachment, and credibility of testifying
defendant may be impeached and his testimony assailed like that of any
other witness.
19. Criminal Law 406(1)
Witnesses 380(2)
Defendant’s own statements on tape of telephone conversation with
informer constituted admissions of party opponent, defined as “not
hearsay” by rule, and statements appeared independently admissible as
prior inconsistent statements, especially where prosecutor apparently
laid requisite foundation. Fed.Rules Evid. Rules 403, 613, 613(b),
801(d), (d)(2), (d)(2)(A, B), 28 U.S.C.A.
20. Criminal Law 419%1)
Scope of rule providing that statement is not hearsay if it is offered
against party and is his own statement, in either his individual or repre-
sentative capacity, is not impliedly limited by rule providing limitations
upon admissibility of extrinsic evidence of prior inconsistent statement
by witness. Fed.Rules Evid. Rules 403, 613, 613(b), 801(d), (d)(2),
(d)(2)(A, B), 28 U.S.C.A.
A-6
21. Witnesses 396(2)
Where statements by informant, included in tape recording of his
telephone conversation with defendant, would have been hearsay if
offered solely for truth of their assertions but were in fact essential part
of conversation used to impeach defendant with whom he was talking,
and no one could follow conversation if only half were played, entire
conversation was admissible subject only to trial judge’s discretion to
exclude evidence if its probative value is substantially outweighed by
danger of unfair prejudice. Fed.Rules Evid. Rule 403, 28 U.S.C.A.
22. Criminal Law 407(1)
Government informant’s half of telephone conversation to extent
adopted by defendant with whom he was conversing could be treated as
group of adoptive admissions by defendant, admissible under rule.
Fed.Rules Evid. Rule 801(d)(2)(B), 28 U.S.C.A.
23. Criminal Law 661
Government could legitimately choose to use tape for impeachment
rather than presenting it during case-in-chief, though government was
thereby able to play it to jury at later and perhaps more effective point
in trial. Fed.Rules Evid. Rule 611(a), 28 U.S.C.A.
24. Criminal Law 673(4)
In joint trial of various defendants for conspiracy, inter alia, tape
recording of telephone conversations between particular defendant and
government informant was properly played before jury in entirety, in
view of cautionary instruction given before and after admission that it
was being admitted only against particular defendant, in view of
admissibility of references to codefendants for impeachment of
particular defendant who in his testimony had denied wrongdoing by
codefendants, and in view of their being no Bruton confrontation pro-
blem being presented. Fed.Rules Evid. Rules 403, 403 note,
801(d)(2)(E), 28 U.S.C.A.; 18 U.S.C.A. § 371.
25. Criminal Law 1014
Separate appeals should be brought where, after judgment of
conviction, motion for new trial on grounds of newly discovered evi-
dence has been denied, and latter appeal will normally be consolidated
with direct appeal of the conviction. Fed.Rules Cr.Proc. Rule 33, 18
U.S.C.A.
A-7
26. Criminal Law 938(1)
Significant burden rests on party moving for new trial on ground of
newly discovered evidence, to show abuse of discretion, and evidence
must be in fact newly discovered, facts must be alleged from which
court can infer diligence on part of movant to secure evidence, evidence
must be more than merely cumulative or impeaching, and it must be
material to issues involved and must be such as, on new trial, would
probably produce acquittal. Fed.Rules Cr.Proc. Rule 33, 18 U.S.C.A.
27. Criminal Law 938(2)
Resolution of conflicting factual contentions on which rested deter-
mination whether evidence was in fact “newly discovered” evidence, for
purposes of new trial motion, was part of district court’s duty in ruling
on the motion and was reviewable only for abuse of discretion.
Fed.Rules Cr.Proc. Rule 33, 18 U.S.C.A.
28. Criminal Law 945(1)
Court was entitled to weigh defendant's own performance on stand in
ruling on whether additional evidence, allegedly newly discovered,
would probably produce an acquittal, and, in light of such considera-
tion, denial of a new trial was not an abuse of discretion. Fed. Rules
Cr.Proc. Rule 33, 18 U.S.C.A.
29. Criminal Law 620(6)
Tax evasion charges were properly joined with other charges where
tax evasion charges arose directly and solely out of unreported income
flowing from illicit contracting activities, proof of which constituted
substantial portion of proof of the joined tax evasion charges, and
district court was neither required as matter of law to sever tax counts
nor did it abuse discretion in refusing to sever. Fed.Rules Cr.Proc.
Rules 8(b), 14, 18 U.S.C.A.; 26 U.S.C.A. §§ 7201, 7206.
30. Criminal Law 620(1)
Test of joinder of counts is whether joinder is so manifestly prejudi-
cial that it outweighs dominant concern with judicial economy and
compels exercise of court’s discretion to sever, and burden is on defen-
dants to make strong showing of prejudice in order to obtain relief
under rule providing, in case of prejudice from joint trial, that court
may order election or separate trials of counts, grant severance of
A-8
defendants or provide whatever other relief justice requires. Fed.Rules
Cr.Proc. Rules 8(b), 14, 18 U.S.C.A.; 26 U.S.C.A. §§ 7201, 7206.
31. Criminal Law 554
When defendant elects to testify, he runs risk that, if he is disbelieved,
trier of fact may conclude that opposite of his testimony is the truth,
and in light of such permissible inference, together with independent
evidence, particular defendant’s testimony formed adequate basis for
jury’s verdicts against him on charges of conspiracy, presenting false
claims and receiving illegal gratuity. 18 U.S.C.A. §§ 287, 371; 26
U.S.C.A. § 7201.
32. Indictment and Information 10.1(1)
Indictment returned by legally constituted and unbiased grand jury,
like information drawn by prosecutor, if valid on its face, is enough to
call for trial of charge on its merits. U.S.C.A.Const. Amends. 5, 6.
33. Grand Jury 23
Constitution does not impose requirement that grand jurors receive
legal instructions. U.S.C.A.Const. Amends. 5, 6.
34. Indictment and Information 144.1(1)
Where any destruction of defendant’s records was part of normal
housekeeping functions of naval laboratory and such destruction was
unrelated to and prior to commencement of criminal investigation
against defendant and where no record was made of what was
destroyed, motion for dismissal of indictment on ground that
Government destroyed certain records that might have been exculpa-
tory was properly denied.
35. Criminal Law 1153(3)
Abuse of discretion was proper standard for review of issues whether
trial court improperly allowed witness to qualify answers on cross-
examination, thereby limiting pursuit of certain inquiries in cross-
examination, and whether trial court improperly overruled “valid hear-
say objections.”
A-9
36. Witnesses 246(5)
District court was not shown to have abused its discretion in refusing,
at urging of defense counsel, to recall prosecutor's first witness as
court’s own witness.
37. Criminal Law = 986.2(1)
Generally, district court may consider wide range of information in
determining a defendant's sentence. 18 U.S.C.A. § 3577.
38. Criminal Law 986.5
Where letter was received by court prior to sentencing hearing, it
would have been better practice to disclose same to defendants, but
where it came from outsider and contained no factual allegations nor
any actual sentence recommendations but only “hortatory” language
and it was disclosed to defendants at hearing and there was no objection
by defendants and no indication that judge relied upon it in sentencing,
and record showed ample grounds for sentences imposed, sentences
were affirmed. 18 U.S.C.A. § 3577.
AMENDED OPINION
Appeal from the United States District Court for the Southern
District of California.
Before TRASK and NELSON, Circuit Judges, and SOLOMON’,
District Judge.
NELSON, Circuit Judge:
The earlier opinion in this matter, dated January 23, 1981, is with-
drawn, and the following is substituted.
After a lengthy jury trial, appellants Kenny, Parker and Oelberg were
found guilty on 14, 4 and 3 counts, respectively, of a multiple-count
indictment alleging conspiracy, fraudulent government contracting
*The Honorable Gus J. Solomon, Senior United States District Judge,
District of Oregon, sitting by designation.
A-10
activities, bribery, and tax evasion.' Each has brought a direct appeal,
asserting numerous errors. In addition, Oelberg has appealed the denial
of his motion for new trial on grounds of newly-discovered evidence.
The appellants have assailed almost every facet of this prosecution,
from the pre-indictment to post-trial stages. For the reasons set forth
1. Appellant Kenny was originally charged with seventeen counts in the 23-
count indictment of November 16, 1978, subsequently reduced to sixteen by
the Government's pretrial motion to sever one count of income tax evasion.
Kenny was convicted of fourteen of the sixteen remaining as follows: one
count of conspiracy (18 U.S.C. § 371); seven counts of presenting false
claims to the United States (18 U.S.C. § 287); four counts of paying bribes
(18 U.S.C. §§ 201(b)(1), 201(c)(1)); and two counts of income tax evasion
(26 U.S.C. § 7201). The jury found Kenny not guilty on two false claim
counts, The remaining tax evasion count was dismissed on the Government's
motion at sentencing.
Appellant Parker was charged with five counts, and was convicted of four
as follows: one count of conspiracy, two counts of presenting false claims,
and one count of accepting bribes. The jury found Parker not guilty on one
false claim count.
Appellant Ocelberg was initially charged with five counts, subsequently
reduced to four on the Government's motion to dismiss one false claim
count. Oelberg was convicted of three of the four counts as follows: one
count of conspiracy, one count of presenting false claims, and one count of
accepting an illegal gratuity, as a lesser included offense under the bribery
count. The jury found Ocelberg not guilty on one false claim count.
Of the two other persons charged in the same indictment, only one was
jointly tried with the appellants. This defendant, George J. Warren, has not
appealed his convictions. Warren was charged with five counts, and was con-
victed of four as follows: one count of conspiracy, two counts of presenting
false claims, and one count of accepting an illegal gratuity, as a lesser in-
cluded offense under the bribery count. The jury found Warren not guilty on
one false claim count,
The other, Louis F. Lab, cooperated with the Government and testified
extensively at trial as a government witness. Lab also made a surreptitious
recording of a telephone conversation with Kenny, which was introduced at
trial. Prior to trial, on the Government's motion, the case and counts against
Lab were severed,
Appellants and Warren were sentenced on August 6, 1979, as follows:
Kenny was concurrently sentenced to a total term of nine years imprison-
ment and concurrently fined a total of $50,000; Parker was sentenced to
concurrent terms of imprisonment for five years, with possibility of parole;
Ocelberg and Warren were each sentenced to concurrent terms of imprison-
ment for two years, with possibility of parole.
A-Il
below, however, we find that none of these contentions has merit, and
we therefore affirm all convictions.
FACTS
Kenny was the proprietor of a now-defunct firm in San Diego known
as Ocean Market Consultants (“OMC”). OMC provided a variety of
research, technical writing and document preparation services to
government and industrial clients in the area.
The remaining defendants were civilian employees at the Naval
Electronics Laboratory Center (““NELC”) at nearby Point Loma.
During the time period covered by the indictment, appellant Parker was
the supervisor of NELC’s Security Systems Programs Office, a section
internally designated “Code 1500.” Appellant Oelberg, along with
defendants Warren and Lab, worked under Parker as members of the
Code 1500 staff.
OMC obtained a substantial quantity of business from NELC,
primarily through contracts let and supervised by Code 1500 personnel.
A typical OMC-NELC contract, billed on a “time and materials” basis,
called for OMC to prepare studies or manuals concerning Navy pro-
jects using raw data provided by the Navy. Once the final product,
known as the “deliverable,” was prepared and presented to NELC, an
invoice would be sent showing the total hours worked at various billing
rates, along with charges for materials and expenses.
Oelberg, Lab, and Warren shared adjoining offices at NELC, a few
doors away from Parker’s office, during most of their employment
there. All four of these Code 1500 employees worked closely together
and frequently signed for each other on NELC contracting documents.
OMC personnel frequently visited Code 1500, and vice versa. OMC
employees testified to seeing Parker, Oelberg, Lab, and Warren meet
with Kenny individually in closed-door sessions.
From time to time during the period covered by the indictment, all
four had contracting relationships with OMC. Navy records showed
total payments to OMC totalling approximately $1.5 million between
1972 and 1976. The evidence indicated that many of these contracts and
tasks were false in various respects, resulting in overcharges to the
Navy, and consequent illicit profits to Kenny and OMC, of substantial
sums of money. The evidence further indicated that in consideration for
the issuance and approval! of the fraudulent contracts and tasks, Kenny
paid cash and check bribes to the defendants employed in Code 1500, as
well as furnishing them with other items of value.
A-12
A. Parker's Acitivities.
Parker, in his role as head of Code 1500, set the stage for later illegal
activities by arranging for the Navy to award three major contracts to
OMC. Parker assured that OMC would receive the contract awards by
representing to Navy contracting officials that OMC was a uniquely
qualified “sole source” for the services required, bypassing any competi-
tive bidding procedures. With respect to one contract, Parker was able
to obtain the Navy’s approval in about ten days, when normal contract-
ing procedures would have take between 90 and 120 days, by misrepre-
senting that the contract was of extremely high priority calling for
“Quick Reaction Capability.” Similar misrepresentations were made
with respect to the other two.
Under these contracts, Code 1500 personnel had at their disposal
lump sums of money, out of which they contracted for individual
“tasks” from time to time. OMC, in turn, would bill the Navy for “time
and materials.”
The evidence showed that OMC could quote on and bill for services
under these tasks with very little scrutiny outside of Code 1500, and
painted a devastating picture of overcharges and sharp practices by
OMC, at Navy expense. The Government showed instances where bill-
able hours invoiced on an OMC project vastly exceeded both the
reasonable time required to complete such a project and the hours
actually devoted to it by OMC. Other evidence showed forged and al-
tered time cards, billings for employees that did not exist, and multiple
billings for the same subcontractors’ or employees’ charges on several
contracts. It appeared that Kenny had diverted a substantial amount of
OMC revenues to his personal use.”
Kenny, testifying in his own defense, admitted that the employee
manhours reflected on OMC’s cost summary sheets were false, but
claimed that this “paperwork adjustment” was necessary because OMC
either started work before a task was actually issued or had cost over-
runs on issued tasks. Parker, in turn, asserted that slow government
contracting procedures hindered his efforts to provide fast response to
2. Because Kenny has disclaimed any challenge to the sufficiency of the
evidence relating to his convictions, we have omitted considerable detail of
the evidence against Kenny from this factual summary. While this may do
less then complete justice to the Government's case, it allows us to address
the questions actually raised in this appeal within manageable bounds.
A-13
contracting procedures hindered his efforts to provide fast response to
his “customers” within the government, requiring him to employ
previously existing contracts to finance new projects. This factor, along
with ominous references to national security needs, purportedly
accounted for task statements and invoices that did not match work
done. However, neither Kenny nor any of the Code 1500 employees had
any records to substantiate the claims of early starts or cost overruns,
nor could they explain or justify the charges reflected on the OMC
invoices.
The prosecution presented evidence showing that a group of tasks
issued by Parker to OMC, totalling nearly $158,000, was largely fraudu-
lent. In one case, involving a $58,000 contract to produce manuals for a
pair of information-gathering devices on Navy submarines, the
Washington, D.C. sponsor for the programs testified that he had never
heard of OMC or Kenny, that the manuals called for were not appro-
priate at that point in time, and that he had neither authorized the tasks
nor received any of the deliverables called for in the task. In another, a
Washington D.C. sponsor for Navy nuclear intelligence projects review-
ed three tasks (the subjects of three false claims counts), totalling
$24,000, relating to underseas nuclear intelligence. He testified that no
funds were ever made available to Parker for nuclear intelligence, that
he had never heard of OMC or Kenny nor was he aware of any work
done by OMC in that field and that he had never authorized the tasks
nor received the deliverables mentioned in the task statements. Both
witnesses found it unusual that the tasks called for “one original—no
copies.” Furthermore, none of the OMC employees who testified could
recall working on any of the tasks.
Although the record does not disclose the exact nature of any
arrangement Kenny and Parker may have had, the Government
brought out a number of questionable facts indicating kickbacks or
bribery. Parker was given an OMC telephone credit card, on which,
from the partial telephone records available, he was shown to have
charged over $1,000 worth of long-distance calls.3 Both Kenny and
3. In October, 1976, a federal grand jury subpoena was served at NELC,
seeking the production of all NELC records relating to OMC. NELC em-
ployees testified that Parker became physically upset as a result of the service
of the subpoena. Two employees testified that when Parker visited their
office later that day, he was “gasping and distraught” about the subpoena. In
response to their observation that if Parker had not committed any impro-
priety, he had nothing to worry about, Parker admitted that he had
A-14
Parker testified that Parker had repaid the bills in cash, although there
was no evidence that any such repayment had occurred.
The Governmei also showed that Parker received business cards
and stationery for a personal stamp trading business, magazine sub-
scriptions, and a safe, all purchased for Parker by OMC, for which
there was no evidence of repayment.
Parker purchased at least $18,000 worth of stamps between late 1971
and 1974. This activity coincided with the time period in which OMC
received expanded business from NELC. Three witnesses recalled that
once during 1974, they saw Parker in possession of a large sum of cash
following a luncheon engagement with Kenny that preceded a
scheduled trip by Parker to the East Coast. The prosecutor implied that
cash converted into stamps would be difficult to trace.
B. Activities of Oelberg, Lab, and Warren.
As part of their official duties at NELC, Oelberg, Lab, and Warren
each handled various projects for the government and arranged to
contract for outside services—such as those provided by OMC—to aid
in completing the projects. More significant, however, was an after-
hours enterprise engaged in by these defendants.
1. Self Control Systems and Gray Gryphon Associates.
In March, 1972, Lab and Oelberg formed a partnership named “Self
Control Systems” (“SCS”) as a moonlight business to develop and
market bio-feedback machines. Warren initially acted as an employee
of SCS; later, in April, 1973, Lab withdrew from the partnership and
Warren took his place.
possessed and used the telephone credit card. He told one that he needed the
credit card for his private stamp business.
The next day, Parker visited the office of another NELC official and dis-
closed his possession of the credit card. He advised the official that he
needed the credit card because of the highly classified projects he handled at
NELC.
At trial, Parker testified that as a “matter of convenience” he used the
OMC credit card when making long-distance calls from his home phone,
despite the higher cost of operator-assisted calls.
A-15
Kenny, approached by the SCS principals, offered his assistance. At
various times Kenny paid for materials or services supplied to SCS,‘
primarily through checks drawn on a shell corporation of Kenny's
named “Gray Gryphon Associates,” operated by Kenny using funds
from OMC and another shell known as ITS. It maintained two bank
accounts and a post office box, but had no actual employees. Gray
Gryphon appeared as a subcontractor to OMC on some NELC contract
invoices, fraudulently represented as a consulting firm. The funds paid
out of the Gray Gryphon bank accounts were used to pay for services
provided to SCS5 and for personal expenses of Kenny, including several
payments for the construction of his house.®
2. The Investigation of SCS.
In early 1973, an investigation was triggered when one of the SCS
suppliers, a manufacturer of printed circuit boards substantially
identical to a Navy design it had earlier produced as part of a Code 1500
project. Navy officials and the FBI began inquiries into Gray Gryphon
and SCS.
The complaint about SCS was referred to Parker, in his capacity as
supervisor of Code 1500. It was through Parker’s handling of this
matter that the prosecutor linked Parker with the remaining defend-
ants.
4. The Government established the following payments by Kenny on behalf
of SCS: Gray Gryphon checks in December 1972 and January 1973 to a
printing company ($819.75); OMC checks for approximately $750 to the
same printing company for work done in July 1973; Gray Gryphon checks
between April 1973 and August 1973 to “Dyna Pac” in San Diego for ser-
vices to SCS ($2,776.22); a Gray Gryphon check to SCS in July 1973 for
purchase of two SCS machines ($1,090). In addition, OMC’s art department
performed free services for SCS.
5. The manager of Dyna Pac, see note 4, supra, questioned Oelberg and
Warren about Gray Gryphon. He testified that he was informed by Oelberg
and Warren that Gray Gryphon was a psychologist who had funded their
company.
6. Kenny testified that Gray Gryphon was formed by him to write a book
about “special warfare.” Later on, he used the company only for “special
events.” The phony Gray Gryphon invoices submitted to OMC, he said,
were used to repay Kenny for loans he had made to the company. Kenny
testified that he used Gray Gryphon checks to pay for SCS bills because
“OMC checks would have been totally inappropriate.”
A-16
Witnesses testified that in late February or early March 1973, Kenny
ordered his bookkeeping employees to gather up all Gray Gryphon
records on the OMC premises, which he removed. One of the employees
testified that Kenny told her that Parker had called and alerted him to
the official investigation.
Parker, meanwhile, called Lab back from Washington to a March
Sth meeting with Oelberg and Warren to discuss the investigation. He
told them that the FBI and the Navy were investigating SCS, and told
Lab in the presence of the others that “if this investigation gets into
OMC’s books” he would kill him. Parker testified that at the meeting,
he was aware that Kenny had helped SCS in both marketing advice and
art/design work. He testified that he “chewed them out royally” and
told the three that he did not want them doing business with Kenny
because he was a government contractor. Warren and Oelberg, how-
ever, had no recollection of being chewed out by Parker because of the
SCS-Kenny relationship.
After the meeting, Parker ordered Oelberg and Warren to gather all
SCS material and store it in Parker’s home. Two days later, he allowed
them to reclaim the material, stating that he had “killed” the investiga-
tion.
Despite the implications of a moonlight busienss sponsored by a
government contractor, the only official action taken by Parker with
respect to these employees was to require them to fill out “Statements of
Outside Employment.” This they did, falsely certifying that they had no
conflicting interests with firms contracting with the government.
Parker, as their supervisor, approved the statements as “considered to
be fully proper,” and made no further entry or memorandum regarding
the incident.
3. Fraudulent Contracting Activities.
The prosecution presented evidence to show that Lab, Oelberg and
Warren had all engaged in fraudulent activities during this period. Lab,
as a Government witness, testified at length about an elaborate scheme
to funnel government money through a legitimate government contrac
tor to a dummy subcontractor set up by Kenny (the so-called MRL-ITS
transaction), in which Lab was to receive $30,000 out of the $80,000
contract price. He testified further about a second incident in which he
and Warren agreed to issue a phony contract in the amount of $25,000
to Kenny, so that Kenny could meet obligations on a $75,000 line of
A-17
credit (“factoring”) secured by OMC invoices, many of which were
false.’
Oelberg’s primary activity during the relevant time period was a
project known as “IOIC-SUPRAD Integration,” involving computer-
ized communications aboard aircraft carriers. Coincident with the
period in which Kenny was paying for SCS services, Oelberg awarded
three IOIC-SUPRAD tasks to OMC totalling $80,000. Oelberg stated
that he had no difficulty separating business from personal activities
during this period, and saw no impropriety in Kenny's “investment” in
SCS. Nonetheless, Oelberg had considerable difficulty remembering
which OMC employees worked on the assigned tasks.* He claimed that
as a government employee he had never heard of Gray Gryphon, and
7. Again we note our omission of detail. Lab’s testimony was a major part of
the Government case against Kenny, but we need not relate it in great length
to explain our decision because Kenny has not argued insufficient evidence.
8. Ina particularly telling exchange, Oelberg was cross-examined by the pro-
secutor with respect to a task he had arranged to give to OMC:
Q. Who was the [OMC] employee in September of ’72 that was work-
ing on the IOIC/SUPRAD project?
. I don't know.
. This was a $46,000 task?
. That's right.
. Who was the person you met and dealt with in this task?
. I don't recall.
. But it was your task? Was it a number of people?
THE COURT: Do you want an answer?
MR. HOFFMAN: I'll try again.
Q. Was it a number of people, Mr. Ocelberg?
A. I don't know. I don't know, Mr. Hoffman.
Q. Mr. Oelberg, you have testified on direct that the IOIC/SUPRAD
was your project.
A. Yes, it was.
Q. It was in effect your pride and joy?
A. ‘That's right.
Q. Now who, in effect, from OMC was working on this project along
with you, or was anybody working?
A. Oh, I'm sure somebody was working, but I don't recall.
DP>O>r>O>
Q. You don't recall, then, who it was that you worked with on this task?
A. No, I do not.
R.T. 6755-57.
A-18
had no knowledge that Gray Gryphon checks were being used to pay
for SCS expenses. However, it was established that the day after SCS
received a check from Gray Gryphon for $1,090,9 Oelberg approved an
OMC invoice listing Gray Gryphon as performing $1,554 in consulting
services for OMC on a “Fleet Satellite Communications” contract.
With respect to the total of $6,100 billed by OMC for Gray Gryphon
consulting services udner that contract, Oelberg claimed that the
consulting fees actually represented anticipated travel costs, despite a
separate travel cost allocation of $7,500 on the same task.
Lab testified that Oelberg had told him of an arragnement to “split”
three “stubs”—the nickname for below-$2,500 contracts—with Kenny,
and the prosecution presented evidence with respect to two, represent-
ing two false claims counts. The first called for an operating procedures
manual for IOIC—SUPRAD, was placed with OMC on May 15, 1974,
and specified delivery on May 31 at a cost of $2,489.20. The second
called for a “program specification report” for the same project, was
placed two days before the program funds would expire (June 28, 1974),
and specified delivery less than a month later at a cost of $2,441.40.
The Washington, D.C. sponsor for IOIC-SUPRAD testified that
although Oelberg had managed the earlier stages of the project, the last
work done at NELC was a prototype demonstration in January 1974.
The project was then transferred to Philadelphia. With respect to the
two tasks above, the witness testified that an acceptable manual and
report could not be produced for $2,500, that the manual and report
were not logical items to be produced in May and June 1974 since the
activity center in Philadelphia used incompatible equipment that
required different documentation, that he never authorized or discussed
either task with Oelberg, that he never received a deliverable on either
task, that he was unaware of any prior work by OMC on IOIC-
SUPRAD, and that he found the contract requirement of one original,
no copies, unusual. OMC employees who testified could not recall
working on either task.!°
9. Kenny issued this Gray Gryphon check for the purchase of two SCS bio-
feedback machines at $545 apiece. Oelberg’s wife testified that the day these
machines were sold she had packed them up, then accompanied Oelberg to
Kenny's office where Oelberg carried them inside. Oelberg, who had earlier
testified that Kenny was an “investor” in SCS, could not explain why an
investor would pay retail price to buy products of his own company.
10. O6clberg was acquitted on one count and convicted on the other.
A-19
The prosecution presented evidence concerning several fraudulent
contracts issued to OMC by Warren. In one particularly egregious
example, OMC was awarded an $18,000 contract to prepare a printed
instruction manual for the Army regarding a voice scrambler device
developed for the Navy. The Navy had named the device Voice
Activated Crypto Controller, or VACC, whereas the Army wished to
call it Radio Wire Integration Device, or RWID. An OMC employee
testified that the only work OMC had to do to prepare the Army
manual was to alter each reference to “VACC” in an earlier Navy
manual to “RWID”. The internal cost summary for this project showed
12 hours work, and together with printing costs, the total cost of the
RWID manual could not have exceeded $700.'!
I. THE CONSPIRACY COUNT
From the beginning, from pretrial motions through this appeal, the
defendants have maintained that no single conspiracy could be, or was,
shown at trial. The Government has consistently taken the opposite
view. The District Court's rulings generally favored the Government's
position. The appellants now point to these rulings as error.
Taken together, the appellants’ arguments regarding the conspiracy
aspects of this case amount to four major contentions: that the District
Court should have limited the government's proof, requiring that a
single conspiracy be proved prior to reception of other evidence; that
the evidence proved multiple conspiracies, in a prejudicial (and thus
fatal) variation from the indictment; that the District Court, in denying
defendants’ motions to strike, erroneously admitted evidence relating to
the conspiracy; and that the jury was inadequately instructed on the law
of conspiracy. We find none of these contentions persuasive.
A. Order of Proof.
The defendants moved initially to require the Government to prove
the existence of the alleged single conspiracy prior to introducing other
evidence relating to the defendants’ participation in the conspiracy. The
District Court rejected this plan, and ruled that the Government could
proceed in its desired order and present evidence subject to a motion to
strike. The appellants claim this was “prejudicial error.”
11. Warren was acquitted on one count and convicted on two counts involv-
ing three tasks.
A-20
The appellants have urged upon us, as they did the District Court,
Justice Jackson's concurring remark in Krulewitch v. United States, 336
U.S. 440, 453, 69 S.Ct. 716, 723, 93 L.Ed. 790 (1949): “Strictly speaking,
the prosecution should first establish prima facie the conspiracy and
identify the conspirators, after which evidence of acts and declarations
of each in the course of its execution are admissible against all.”
Experience indicates, however, that a rigid requirement of this nature
would impose substantial and needless burdens on the criminal trial
process. Witnesses would frequently have to be called at least twice,
with considerable hazard of confusing the jury and prolonging the trial.
The District Court would face numerous difficult rulings based on nice
distinctions between evidence going to the existence of the conspiracy
and evidence of a defendant’s acts in perpetration of the conspiracy. In
a case such as the present one, where one of the alleged conspirators
testifies for the Government, such distinctions would become nearly
impossible to draw.!?
-[1] The order in which parties adduce proof is, in general, a matter
for the trial judge to determine, subject to review for abuse of discre-
tion. Geders v. United States, 425 U.S. 80, 86, 96 S.Ct. 1330, 1334, 47
L.Ed.2d 592 (1976); Fed.R.Evid. 611(a). This rule reflects the need for
flexibility and judgment on the part of the District Court in response to
the particular nature of each case before it. The procedure requested by
the defendants does have the virtue of being “fail-safe”: If proof of the
conspiracy fails and the danger of prejudice in a continued joint trial
appears great, the District Court can at an early stage declare a mistrial
and order separate retrials. Indeed, cases may well arise in which the
court entertains sufficient doubt about the Government's ability to
establish a conspiracy as to make such a procedure appropriate. But the
District Court need not adopt this procedure; it is a matter of discre-
tion.
12. Taken in context, Justice Jackson's observations about the problems at-
tending conspiracy trials make clear that even he doubted whether his
“strict” order of proof was capable of implementation, as he noted that “the
order of proof of so sprawling a charge is difficult for a judge to control.”
336 U.S. at 453, 69 S.Ct. at 723.
A-21
[2] In this case, the District Court had before it a trial memorandum
giving a summary of the evidence the Government proposed to intro-
duce that would establish a conspiracy, and the proposed order of
proof. In addition, the court had before it arguments that many of the
witnesses necessary to prove the conspiracy would have to be recalled
for further testimony in relation to the substantive counts, and that the
defendants’ proposed order of proof was likely to confuse the jury. The
District Court had an adequate basis on which to make its ruling, and
properly exercised its discretion in denying the defendants’ motion and
allowing evidence to be received subject to a motion to strike. See, e. g.,
United States v. Vargas- Rios, 607 F.2d 831, 835-37 (9th Cir. 1979);
United States v. Watkins, 600 F.2d 201, 204-05 (9th Cir. 1979), cert.
denied, 444 U.S. 871, 100 S.Ct. 148, 62 L.Ed.2d 96 (1980); United States
v. Eubanks, 591 F.2d 513, 519 (9th Cir. 1979); United States v. Weiner,
578 F.2d 757, 768 (9th Cir. 1978); United States v. Testa, 548 F.2d 847,
852 (9th Cir. 1977).
B. Multiple versus Single Conspiracy.
The appellants have here renewed their argument made below that
the Government failed to establish one overall conspiracy at trial. They
argue that, at most, separate conspiracies involving NELC defendants
transacting individually with Kenny were shown. Both Parker and
Oelberg claim substantial prejudice to their respective defenses as a
result, owing to the danger of “guilt by association” in a joint trial with
Kenny, as well as the inadmissibility of large portions of Lab’s testi-
mony against them if they were not co-conspirators.
[3] It is true that if the indictment charges jointly tried defendants
with participation in a single conspiracy, but the evidence reveals
multiple, discrete conspiracies, such a variance of proof may be so pre-
judicial as to require reversal. Reversal is called for “if the variance
between the indictment and the proof affects the substantial rights of
the parties.” United States v. Friedman, 593 F.2d 109, 116 (9th Cir.
1976); see Kotteakos v. United States, 328 U.S. 750, 66 S.Ct. 1239, 90
L.Ed. 1557 (1946); Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79
L.Ed. 1314 (1935). Thus the review of such a case involves two inquiries:
was there a variance, and if so, was it prejudicial. United States v.
Durades, 607 F.2d 818, 819 (9th Cir. 1979).
A-22
[4] The conspiracy alleged here takes the form of a wheel, with one
central hub—Kenny—dealing with the “spokes”—the other
defendants—in individual transactions. See Kotteakos v. United States,
328 U.S. 750, 66 S.Ct. 1239, 90 L.Ed. 1557 (1946). Without more, we
agree that such a fact pattern may suggest at most a cluster of separate
conspiracies, rather than the “concert of action, all the parties working
together understandingly, with a single design for the accomplishment
of a common purpose” found in a single conspiracy. United States v.
Monroe, 552 F.2d 860, 862-63 (9th Cir.), cert. denied, 431 U.S. 972, 97
S.Ct. 2936, 53 L.Ed.2d 1009 (1977). To follow the wheel metaphor,
establishing a single conspiracy in a case such as this generally requires
that the Government supply proof that the spokes are bound by a
“rim”; that is, the circumstances must lead to an inference that some
form of overall agreement exists.
[5, 6] The nature of that “rim” defies precise statement, but general
principles are well established. The evidence must show that each of the
defendants was involved. United States v. Beecroft, 608 F.2d 753 (9th
Cir. 1979). A meeting of the minds must be demonstrated. United States
v. Peterson, 549 F.2d 654 (9th Cir. 1977). Mere association and activity
with a conspiracy is insufficient. United States v. Basurto, 497 F.2d 781,
793 (9th Cir. 1976). However, a formal agreement between the
conspirators is not necessary. United States v. Camacho, 528 F.2d 464,
469 (9th Cir. 1976). The agreement may be inferred from the
defendants’ acts pursuant to the fraudulent scheme or other circumstan-
tial evidence. United States v. Thomas, 586 F.2d 123, 132 (9th Cir.
1978); United States v. Oropeza, 564 F.2d 316, 321 (9th Cir. 1977);
United States v. Anderson, 532 F.2d 1218 (9th Cir. 1976). “The
government need not show direct contact or explicit agreement between
the defendants. It is sufficient to show that each defendant knew or had
reason to know of the scope of the conspiracy and that each defendant
had reason to believe that their own benefits were dependent upon the
success of the entire venture.” United States v. Kostoff, 585 F.2d 378,
380 (9th Cir. 1978). Once the existence of a conspiracy has been esta-
blished, evidence of only a slight connection is necessary to convict a
defendant of knowing participation in it. United States v. Dunn, 564
F.2d 348, 357 (9th cir. 1977).
[7] In applying the foregoing legal standard to this case, we view the
question of whether a single conspiracy has been proved, rather than
multiple conspiracies, as essentially that of sufficiency of the evidence.
A-23
The evidence need not be such that it excludes every hypothesis but that
of a single conspiracy, cf. United States v. Nelson, 419 F.2d 1237, 1240
(9th Cir. 1969); rather, it is enough that the evidence adequately sup-
ports a finding that a single conspiracy exists. Thus, the critical inquiry
is “whether, after viewing the evidence in the light most favorable to the
prosecution, any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt.” Jackson v. Virginia,
443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis
in original); United States v. Melchor-Lopez, 627 F.2d 886, 890 (9th
Cir. 1980); United States v. Bailey, 607 F.2d 237, 243 (9th Cir. 1979). In
the instant case, this Court would have to be able to say that no rational
trier of fact could have found a single conspiracy on this evidence before
we could disturb the jury’s finding, implicit in its guilty verdict, that a
single conspiracy had been proved.
[8] We are persuaded, in reviewing the evidence presented below,
that it amply supports a finding of a single conspiracy. The wheel, as it
were, has been adequately “rimmed.” In particular, we feel that the
events surrounding Self Control Systems and the 1973 investigation
provide a substantial basis for the inference that “each defendant knew
or had reason to know of the scope of the conspiracy and that each
defendant had reason to believe that their own benefits were dependent
on the success of the entire venture.” Kostoff, supra, 585 F.2d at 380. At
the time the Navy investigation began, Kenny removed Gray Gryphon
records from OMC, Parker had SCS materials gathered and stored at
his house, and the other defendants executed insincere statements that
they had no dealings with outside contractors that would generate any
conflict of interest with Navy work. The defendants’ actions strongly
suggest both an awareness of improper dealings between OMC and the
NELC defendants, and a belief that an investigation of OMC must be
avoided at all costs, lest it reveal past wrongdoing and jeopardize future
schemes. The evidence indicates that illicit activities continued after the
1973 investigation, after the Navy investigation had been “killed” by
Parker. The jury had sufficient evidence from which to find a single
conspiracy.
Because the evidence was sufficient to support a finding of a single
conspiracy, no variance from the indictment has been shown. It is thus
unnecessary for us to decide whether any such variance would have
been prejudicial.
A-24
C. Admission of Evidence.
Following the government's case-in-chief, each defendant moved to
strike wholesale quantities of evidence as to him. The defendants argued
that the existence of a single conspiracy had not been adequately
shown, so tht the acts and admissions of alleged co-conspirators could
not be admitted against them. The District Court ruled that four aspects
of the evidence were admissible only as to specific defendants,'? and
requested that a cautionary instruction be drafted concerning that evi-
dence. The defendants, however, evidently thinking that such an
instruction might draw too much attention to that evidence, decided
they did not want such an instruction, and none was given.
[9] The defendants’ broad motion covered a substantial amount of
direct, nonhearsay evidence that was plainly relevant to show the nature
of the conspiracy, as well as such things as motive, intent, and know-
ledge of participants. The motion also covered out-of-court statements
by co-defendants (all of whom testified) that might be considered hear-
say as to the remaining co-defendants in the absence of a conspiracy.
The threshold of admissibility of evidence relating to co-conspirators
is comparatively law. United States v. Watkins, 600 F.2d 201, 204 (9th
Cir. 1979), cert. denied, 441 U.S. 871, 100 S.Ct. 148, 62 L.Ed.2d 96
(1980); Carbo v. United States, 314 F.2d 718, 735-37 (9th Cir. 1963); see
United States v. Peterson, 549 F.2d 654, 657 (9th Cir. 1977). The judge
need only make the preliminary finding that a prima facie showing of
conspiracy, and defendants’ membership in it, has been made; the jury
can then decide, on the basis of the evidence, whether the conspiracy
exists beyond a reasonable doubt, and whetiver a given defendant
participated in it. United States v. Testa, 548 F.2d 847, 853 (9th Cir.
1977).
[10] The District Court specifically ruled that the Government had
established, by sufficient independent evidence, the existence of the
conspiracy and the defendants’ membership in it. R.T. 5337. We are
13. The four areas were (1) Parker's reaction to the NELC grand jury sub-
poena in 1976; (2) Parker's stamp collection and trading activities; (3) the
costs of building Kenny's home; and (4) certain conversations by Lab with
Kenny and Parker after he was interviewed by the FBI in early 1978.
A-25
satisfied that at the close of the Government's case-in-chief, the prima
facie standard was adequately met, and that all of the evidence with
respect to which the District Court denied appellants’ motions to strike
was admissible in connection with the charged conspiracy. We note
further that even though the defendants declined to draft a cautionary
instruction, the jury was instructed that “statements or acts of any
conspirator, which are not in furtherance of the conspiracy, or made
before its existence, or after its termination, may be considered as
evidence only against the person making them.” R.T. 7945-46. Thus we
find no error in receipt of this evidence.'4
D. Jury Instructions on Conspiracy.
The appellants have made two arguments relating to the trial jury
instructions. First, the appellants argue that the jury was insufficiently
instructed on the multiple conspiracy/single conspiracy issue. Second,
the appellants argue that the instructions, by not elaborating on the
unlawful nature of the conspiratorial agreement, were inadequate to
guard against “guilt by association,” where the defendants worked
closely together and the jury might have inferred from that a conspira-
torial relationship.
[11] When a defendant's jury instructions have been refused, the fol-
lowing principles apply. The jury msut be instructed as to the defense
theory of the case, but the exact language proposed by the defendant
need not be used, and it is not error to refuse a proposed instruction so
long as the other instructions in their entirety cover that theory. The
court examines the instructions as a whole, rather than merely viewing
the failure to give any one instruction. United States v. Sibley, 595 F.2d
1162, 1165 (9th Cir. 1979); United States v. Kaplan, 554 F.2d 958, 968
(9th Cir. 1977), cert. denied, 434 U.S. 956, 98 S.Ct. 483, 54 L.Ed.2d 315
(1978).
14. Kenny and the other appellants have specifically objected to the admis-
sion of so-called “factoring” evidence, as well as evidence that Kenny's
personal expenses were “run through” OMC, on the grounds that the evi-
dence was both irrelevant to the charges in the indictment and prejudicial.
The evidence was relevant to the conspiracy charge, however, in showing
Kenny's motive for arranging the false transactions, and was properly ad-
mitted.
A-26
[12] We have examined the instructions given by the District Court,
and we find them adequate viewed as a whole. As to the single/ multiple
conspiracy question, the instruction given specifically stated that
“proof of several separate conspiracies is not proof of the single, overall
conspiracy charged in the indictment.” R.T. 7946. The instruction fur-
ther directed the jury to acquit any defendant not found a member of
the conspiracy charged in the indictment. In the context of the remain-
ing instructions, this one adequately covered the defense theory.
Similarly, the jury was instructed that “mere similarity of conduct
among various persons, and the fact that they may have assembled
together and discussed common aims and interests, does not necessarily
establish the existence of a conspiracy,” and that “the evidence in the
case must show beyond a reasonable doubt that the members willfully
or in some way or manner positively or tacitly, come to a mutual under-
standing to try to accomplish a common and unlawful plan.” R.T. 7943.
Again, we find that this instruction, viewed in the context of the
remaining instructions, adequately covered the defense theory,
guarding against guilt by association.
Il. THE KENNY—LAB TAPE RECORDING
One of the more dramatic items of evidence offered by the prosecutor
at trial was a tape recording made by Lab of a telephone conversation
he had had with Kenny prior to Kenny’s indictment. The tape was
played before the grand jury that returned Kenny’s indictment; later, it
was played before the trial jury, at the close of the prosecutor's cross-
examination of Kenny, for purposes of impeachment. In the taped con-
versation, Kenny and Lab discuss a number of aspects of the then-
pending investigation into OMC-NELC contract improprieties, and
make detrimental references to the other codefendants and their role in
the matter.
The defendants below advanced a variety of arguments against use of
the tape in whole or part, all of which were rejected. On appeal they
argue that the recording, made by Lab as a government informant,
violated Kenny’s constitutional rights and constituted a breach of ethics
by the prosecutor, and that it was error to admit the complete tape
against Kenny for impeachment purposes. We find neither of these
contentions meritorious.
A-27
A. Exclusion Because of the Manner of Obtaining the Tape.
Lab alone was indicted by the grand jury in May 1978. Shortly after
that he agreed to cooperate with the Government. After learning that
Lab had had several telephone conversations regarding the OMC
investigation with Kenny, Parker, and Warren, the prosecutor arranged
for the FBI to provide Lab with telephone recording equipment. Lab
received the equipment on September 15, 1978.
On September 20, 1978, Lab recorded a telephone conversation with
Kenny. Although Lab initiated the call, the substantive conversation
which followed did not occur until Kenny had gone to a phone booth
for “more privacy.” This tape recording, which contains a number of
damaging admissions by Kenny, was given to the FBI, and was later
played before the grand jury. On November 16, 1978, the grand jury
returned the indictment underlying this prosecution, which marked the
first time Kenny had been indicted, arrested or charged.
Kenny argues on four fronts that his indictment based on the record-
ing was tainted and should have been dismissed, and that the recording
itself should have been excluded at trial. Kenny’s arguments are (1) that
his Fifth Amendment rights against self-incrimination were violated; (2)
that the tape recording was obtained in derogation of his Sixth
Amendment right to counsel; (3) that the electronic recording of a
telephone booth conversation violated his Fourth Amendment rights,
and (4) that the recording was the product of an ethical violation by the
prosecutor, who had, in effect, made direct contact with a client known
to be represented by counsel. We can discern no merit in these argu-
ments.
[13] As to his indictment, it is clear that even if Kenny could make
out a constitutional violation with respect to the manner of obtaining
the tape recording, an otherwise valid indictment would not be
dismissed. United States v. Calandra, 414 U.S. 338, 343, 94 S.Ct. 613,
617, 38 L.Ed.2d 561 (1973); see Costello v. United States, 350 U.S. 359,
363, 76 S.Ct. 406, 408, 100 L.Ed. 397 (1956).
As to exclusion at trial, the District Court correctly rejected these
arguments, as the following discussion indicates.
1. Fifth Amendment Argument.
[14] Because there was no “custodial interrogation,” no fifth amend-
ment violation appears here. Oregon v. Mathiason, 429 U.S. 492, 97
A-28
S.Ct. 711, 50 L.Ed.2d 714 (1977); Beckwith v. United States, 425 U.S.
341, 344-46, 96 S.Ct. 1612, 1615-16, 48 L.Ed.2d 1 (1976).
2. Sixth Amendment Argument.
Kenny argues, and the government readily concedes, that the
government was aware that Kenny was represented by counsel at the
time the telephone conversation was recorded. Thus aware, Kenny
argues, the government was required to notify Kenny’s counsel prior to
any questioning by a government agent, citing such cases as Brewer v.
Williams, 430 U.S. 387, 97 S.Ct. 1232, 51 L.Ed.2d 424 (1977); Massiah
v. United States, 377 U.S. 201, 84 S.Ct. 1199, 12 L.Ed.2d 246 (1964).
[15] At the time the recording was made, Kenny had not yet been
charged, arrested or indicted. The short answer to Kenny’s contention
that his right to counsel was breached is that the right to counsel is not
viewed to attach prior to the initiation of adversary judicial proceedings
against an accused. Kirby v. Illinois, 406 U.S. 682, 688, 92 S.Ct. 1877,
1881, 32 L.Ed.2d 411 (1972). Where a case is still in the investigative
stage, or in the absence of a person’s being charged, arrested, or
indicted, such adversary proceedings have not yet commenced, and thus
no right to counsel has attached. E. g., United States v. De Vaughn, 541
F.2d 808, 809 (9th Cir.), cert. denied, 429 U.S. 984, 97 S.Ct. 501, 50
L.Ed.2d 594 (1976).
Furthermore, as the District Court observed, the right to counsel
sought by Kenny would severely cripple the use of undercover methods
to investigate crimes. Those engaged in ongoing criminal activity would
be encouraged to obtain “house counsel,” who would have to be in-
formed prior to government use of informants in the presence of the
clients; this would largely destroy the effectiveness of such informants.
See United States v. Masullo, 489 F.2d 217, 222-24 (2d Cir. 1973).
We feel, therefore, that Kenny has failed to demonstrate any
violation of his sixth amendment right to counsel in the obtaining of the
tape recording.
3. Fourth Amendment Argument.
[16] Kenny argues briefly that the Lab recording violated the rule in
Katz v. United States, 389 U.S. 347, 349, 352-53, 88 S.Ct. 507, 509, 511-
12, 19 L.Ed.2d 576 (1967), delineating a reasonable expectation of pri-
vacy for those using public telephone booths. He further argues that a
warrant should have been obtained prior to this “search.” This line of
A-29
argument, however, ignores Lab’s knowing participation in the
recording of the conversation. As the Supreme Court has noted, the
Constitution “affords no protection to ‘a wrongdoer’s misplaced belief
that a person to whom he voluntarily confides his wrongdoing will not
reveal it.’” United States v. White, 401 U.S. 745, 749, 91 S.Ct. 1122,
1125, 28 L.Ed.2d 453 (1971), quoting Hoffa v. United States, 385 U.S.
293, 302, 87 S.Ct. 408, 413, 17 L.Ed.2d 374 (1966). We can perceive no
fourth amendment violation here.
4. Ethical Violation Argument.
[17] Kenny argues that Lab’s contact with Kenny amounted toa vio-
lation of DR 7—-104(A)(1) of the ABA Code of Professional Responsi-
bility." He argues that the prosecutor, through Lab, made a prohibited
direct contact with a client known to be represented by counsel on the
subject of the representation. The product of the misconduct, the tape,
should therefore have been excluded at trial.
The identical contention was raised and rejected in United States v.
Lemonakis, 485 F.2d 941, 955, 956 (D.C.Cir. 1973), cert. denied, 415
U.S. 989,94 S.Ct. 1586, 39 L.Ed.2d 885 (1974), and we reject it here. We
again emphasize the factual setting of the tape recording: a non-
custodial environment, prior to Kenny's charge, arrest, or indictment.
In our view, the Government's use of such investigative techniques at
this stage of a criminal matter does not implicate the sorts of ethical
problems addressed by the Code. While the present case provides no
opportunity for us to say just when the ethical line might be crossed, cf.
United States v. Henry, 447 U.S. 264, 275 n. 14, 100 S.Ct. 2183, 2189 n.
14, 65 L.Ed.2d 115 (1980), we do not believe it has been crossed here.
B. Admissibility of the Tape for Impeachment.
The tape recording was played at the close of the prosecutor's cross-
examination of Kenny, for purposes of impeachment. Kenny argues
that the use of the tape was improper as impeachment, and the other
15. “During the course of his representation of a client a lawyer shall not:
(1) Communicate or cause another to communicate on the subject of the
representation with a party he knows to be represented by a lawyer in that
matter unless he has the prior consent of the lawyer representing such
other party or is authorized by law to do so.”
DR 7--104A)(1), ABA Code of Professional Responsibility.
A-30
appellants argue that references to them contained in the tape should
have been edited out before it was played. We are unmoved by these
arguments.
1. Admissibility as to Kenny.
Assuming the tape recording was not the product of a violation of
Kenny’s rights, it was admissible against him on a variety of theories.
[18] Under the rule of Brown v. United States, 356 U.S. 148, 154-55,
78 S.Ct. 622, 626-627, 2 L.Ed.2d 589 (1958), the credibility of a testify-
ing defendant “may be impeached and his testimony assailed like that of
any other witness.” We have found no authority, and none is cited in the
briefs suggesting that a tape recording otherwise admissible cannot be
used for this purpose. Indeed, the cases reflect a liberal attitude toward
the range of evidence that may be admitted for purposes of impeach-
ment. E. g., United States v. Palmer, 536 F.2d 1278, 1282 (9th Cir.
1976); United States v. Stanfield, 521 F.2d 1122, 1128 (9th Cir. 1975).
Thus the only genuine issue with respect to admitting the tape against
Kenny is whether some other rule of evidence rendered the tape inad-
missible.
[19] We think not. His own statements on the tape constitute admis-
sions of a party opponent, defined as “not hearsay” by Fed.R.Evid.
801(d)(2).'° They appear independently admissible as prior inconsistent
statements, particularly in view of the fact that the prosecutor appears
to have laid the requisite foundation under Fed.R.Evid. 613.'’
[20] Kenny argues that the scope of Rule 801(d)(2) is impliedly
limited by Rule 613, so that prior statements cannot be introduced
16. “(d) A statement is not hearsay if—
(2) The statement is offered against a party and is (A) his own statement,
in either his individual or a representative capacity ... .”
Fed.R.Evid. 801(d)(2)(A).
17. “Extrinsic evidence of a prior inconsistent statement by a witness is not
admissible unless the witness is afforded an opportunity to explain or deny
the same and the opposite party is afforded an opportunity to interrogate
him thereon, or the interests of justice otherwise require. This provision
does not apply to admissions of a party-opponent as defined in Rule
801(d)(2).”
Fed.R.Evid. 613(b).
A-31
unless they are inconsistent with testimony on the stand. Following this
logic, he offered to put Kenny on the stand at trial and have him admit
to all of the statements on the tape. The tape, he reasoned, would cease
to be inconsistent, and thus cease to be admissible.
This reading of Rule 801(d)(2) is plainly wrong, especially in light of
the final sentence in Rule 613 expressly exempting Rule 801(d) from its
provisions, and we reject it. Kenny's statements were admissible.
[21] The statements by Lab on the tape present a more difficult
problem, but not a formidable one. If they were offered solely for the
truth of their assertions, they would be classed as hearsay. They are,
however, an essential part of the conversation used to impeach Kenny—
no one could follow the conversation if only Kenny’s half were played —
and thus integral to the impeachment evidence, admissible subject only
to the judge’s discretion as expressed in Fed.R.Evid. 403 (allowing
exclusion of evidence where the probative value is substantially out-
weighed by the danger of unfair prejudice).
[22] Furthermore, as other Circuits have observed, Lab’s half of the
conversation, to the extent “adopted” by Kenny, can be treated as a
group of adoptive admissions by Kenny, admissible under Fed. R. Evid.
801(d)(2)(B). United States v. Lemonakis, 485 F.2d 941, 949 (D.C.Cir.
1973), cert. denied, 415 U.S, 989, 94 S.Ct. 1586, 39 L.Ed.2d 885 (1974);
United States v. Metcalf, 430 F.2d 1197, 1199 (8th Cir. 1970)
(“reciprocal and integrated utterance between the two.”).
Finally, there is no confrontation problem involving non-testifying
codefendants as in Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620,
20 L.Ed.2d 476 (1968). Lab was available for cross-examination by
Kenny, under an express understanding with the prosecutor, alleviating
the confrontation problem. Nelson v. O'Neil, 402 U.S. 622, 626, 91
S.Ct. 1723, 1726, 29 L.Ed.2d (1971). In our view, therefore, no barrier
existed to admitting the tape aginst Kenny as was done below.'*
(23] It is true that the Government, by using the tape for
impeachment rather than presenting it during its case-in-chief, was able
18. We would point out that “even if the conspiracy had ended prior to the
recorded conversations, evidence of subsequent acts may be admitted ‘to
elucidate the nature of the prior conspiracy.’” United States v. King, 587
F.2d 956, 962 (9h Cir. 1978), quoting United States v. Testa, 548 F.2d 847,
852 (9th Cir. 1977).
A-32
to play it to the jury at a later and perhaps more effective point in the
trial. This choice of tactics was legitimately available to the Govern-
ment, however, and indeed was a prudent one. Had the tape been
played earlier, Kenny might have chosen not to testify, creating Bruton
problems with respect to Parker, Oelberg, and Warren.
2. Prejudice to Parker and Oelberg.
[24] rhe tape contained damaging references to Parker and Oelberg,
many of them uttered by Lab.'? Both objected strenuously to the
19, The pertinent portions of the conversation are reporduced below:
LL [Louis Lab]: This is something that I have always wanted to know,
is how deeply Parker was involved, just for my own benefit.
JK [John Kenny]: Oh, we had—he was—he had some s_—. going on.
LL:
Yeah.
JK: But it was always under—he never was straight about it. He always
had this that he had to do or that that he had to do.
LL:
JK:
LL:
Yeah.
And I don't really know, uh, whether it was true or not.
Yeah.
JK: Okay. I mean like I, you know, did some things for some, uh, a
company back there, that I don’t know whether it was true or not.
LL:
: And I didn't care. He toid me it was, and I did it.
: Yeah, yeah.
Yeah.
: What company was it back there?
: Taur—the Taurus Company.
: Taurus?
: Yeah.
: Ill be Goddamned.
: Uh—it looks like they're really sponging into everything, John.
: Yeah.
: And uh—I—I—just—
: Listen, when this f__ing thing pops, it’s going to be so big.
: Yeah.
: And so f__ing messy.
: Right. So, you know Bill. You know, see, the thing is, it was so
screwed up about Bill was that he was buying all these stamps, you know,
huge blocks of stamps.
JK:
LL:
Yeah.
And it was obvious he didn't have the resources to do that.
A-33
admission of those statements, arguing that they did not go to Kenny’s
credibility, and that their value as impeachment was strongly out-
weighed by their prejudicial impact on Parker and Oelberg. They
JK: Yeah.
LL: And so, you know—you know, everybody was speculating.
JK: Yeah.
LL: You know, and they said—they—they asked me at the time what—
“What, if anything—do you know anything about Bill’s stamps?” And I
just basically said, “No.”
JK: Yeah.
LL: So—so apparently, uh, John (sic) was getting stamp money, and
big stamp money, because he was showing the purchases of anywhere
from two to ten thousand dollars.
JK: Who?
LL: Bill was.
JK: Oh, well—well, I could tell you this. Okay. I want to make this clear
to you. .
LL: Yeah.
JK: There was never anything that transpired between he and I that was
of any magnitude close to what transpired between you and I.
LL: Yeah.
JK: I mean, this is penny-ante s__.
LL: Right.
JK: Okay?
LL: Right.
JK: So, two to ten thousand, don't know anything about it.
LL: Yeah. Yeah, I wonder—did any big sums of money go to Taurus?
JK: No. Nickel, dire s__.
LL: Yeah.
JK: Nickel, dime s__. You know, $600, $700, that kind of crap.
LL: I think he had a lot of agreements then.
JK: Then he must have.
JK: [Y]Jou see, if what he told me was the truth, okay?
LL: Yeah.
JK: Of the dealings with him. He didn’t have a f__ing thing to worry
about.
LL: Yeah.
JK: You know, he might have got his hands slapped.
LL: Yeah.
JK: Uh, for instance, the Taurus thing, where, uh, I was supposed to be
hiring cleaning services and other s__, where there was, you know,
minute little pieces of fifteen-hundred dollar s__ for this or that.
A-34
argued that those portions of the tape should have been edited out
before it was played for the jury.
The District Court, having reviewed the tape and a transcript of it,
denied the requests to redact the tape, and allowed it to be played in its
entirety, with cautionary instructions before and after to the jury that it
LL: Yeah.
‘JK: You know. And on most of these there was always—there was
always a hardware story with it or something like that.
LL: Yeah.
JK: So it—it didn’t amount to piddly s_—.
LL: Yeah.
JK: And then, I don't think it amounted to, uh, ten grand the whole
time.
LL: Yeah.
JK: So you know, worth piddly s__, but it had to be something else.
Elsewhere in the conversation:
JK: Have they—let me ask you a question. There’s no way that this can
be tapped, right?
LL: Yes, not that I—no. From what the uh—uh—my attorney said,
I'd—you know, I'd—I—I—
JK: Well, I'm going to turn around so nobody can see my face when I
say this (laughing).
LL: Right. Can't read your lips.
JK: Has anybody talked about Trent Oelberg?
LL: Well, I—that’s one thing I don't know. I know that when they came
out to—to—to, uh, talk to me—
JK: Yes.
LL: —they asked in depth about Self Control Systems.
JK: Yeah.
LL: And they mentioned Dynapac.
JK: Yeah.
LL: And, uh—and so, you know, there was a tie-in there with—
JK: Yeah.
LL: —with Dynapac and George and Trent.
JK: Yeah.
LL: And I—my guess is that they're onto Trent, because they asked me,
you know, what was my relationship with Trent—
JK: Yeah.
A-35
was being admitted only against Kenny. While we recognize the
potential for prejudice in a case such as this, we feel the District Court
acted within its discretion in admitting the entire tape recording as it
did.
First of all, the references to Parker and Oelberg were germane to
Kenny’s credibility, and thus fair game for impeachment, because
Kenny had denied any wrongdoing with respect to them when he testi-
fied. The discussion on the tape strongly undermined Kenny’s position.
Second, the court took some pains to instruct the jury that the tape
was being admitted solely against Kenny. The District Court acted
properly to minimize the danger of prejudice through cautionary
instructions. See, e. g., United States v. Vargas- Rios, 607 F.2d 831, 835
(9th Cir. 1979).
Finally, there seems to be no Bruton confrontation problem with
respect to Parker and Oelberg. Both Lab and Kenny were available for
cross-examination. Nelson v. O’Neil, 402 U.S. 622, 626, 91 S.Ct. 1723,
1726, 29 L.Ed.2d 222 (1971); United States v. Olander, 584 F.2d 876,
886 (9th Cir. 1978).?°
Ultimately, therefore, the issue is merely whether the District Court
abused its wide discretion, United States v. Martin, 599 F.2d 880, 889
(9th Cir. 1979), in refusing to exercise its power under Fed. R. Evid. 403
to exclude evidence where the probative value is substantially out-
weighed by the danger of unfair prejudice.
The potential for prejudice appears to be more than minimal here,
even though the Government had presented considerable evidence
inculpating Parker and Oelberg. But Rule 403 sets a fairly stringent
20. The Government suggests that the statements on the tape may well have
been substantively admissible against Parker and Oelberg, obviating the
need either for cautionary instructions or our review of prejudicial effects.
This proposition raises complex questions under the “in furtherance” re-
quirements of the co-conspirator hearsay provisions in Fed. R. Evid.
801(d)(2)(E), however, which we need not reach to resolve the issues in this
appeal. Compare United States v. King, 587 F.2d 956, 962 (9th Cir. 1978)
and United States v. Smith, 623 F.2d 627, 630 (9th Cir. 1980) with United
States v. Fielding, 630 F.2d 1357, 1364-69 (9th Cir. 1980) and United States
v. Eubanks, 591 F.2d 513, 518-21 (9th Cir. 1979).
A-36
standard. In determining whether to exclude evidence under Rule 403,
the District Court must look not merely for prejudice, but unfair pre-
judice, defined in the Advisory Committee’s Note to Rule 403 as “an
undue tendency to suggest decision on an improper basis, commonly,
though not necessarily, an emotinal one.” Weinstein’s Evidence par.
403[03] at 403-15 (1979) suggests that “[e]vidence that appeals to the
jury’s sympathies, arouses its sense of horror, provokes its instinct to
punish, or triggers other mainsprings of human action” may fall within
this disfavored category of evidence. By contrast, the passing references
to Parker and Oelberg in the recorded conversation do not even
colorably approach the category.
To demonstrate an abuse of discretion, however, the appellants have
the further burden of establishing that any danger of unfair prejudice
substantially outweighed the probative value of the evidence. That
burden has not been met here.
We thus find that the District Court did not abuse its discretion in
admitting those portions of the telephone conversation that mentioned
Parker and Oelberg. United States v. Castillo, 615 F.2d 878, 886 (9th
Cir. 1980); United States v. Sigal, 572 F.2d 1320, 1323 (9th Cir. 1978).
III. OELBERG’S MOTION FOR NEW TRIAL
[25] Five weeks after the judgment of his conviction, Oelberg filed a
motion for new trial, under Fed. R. Crim. P. 33, on the grounds of newly
discovered evidence. Following a hearing, the motion was denied.
Oelberg has separately appealed this ruling in No. 79—1735.?!
The newly discovered evidence relates to the charge that a 1974
purchase order authorized and approved by Oelberg was false, in that
no “deliverable” had ever been produced. At trial, the government had
presented various witnesses who testified that no deliverable could be
located in the government’s files, and that in any case the work required
under the ocntract did not ring true. Oelberg maintained that the work
had been performed, and that the deliverable must have been destroyed
21. This Circuit follows the rule that a separate appeal should be brought
where, after a judgment of conviction, a motion for new trial on grounds of
newly discovered evidence has been denied. The latter appeal will normally
be consolidated with a direct appeal of the conviction. United States v. Hays,
454 F.2d 274, 275 (9th Cir. 1972); Balestreri v. United mm 224 F.2d 915,
916 (9th Cir. 1955).
A-37
routinely along with other obsolete classified documents. The jury
found Ocelberg guilty on this count.
Oelberg has now obtained an affidavit from a former typist at OMC,
on which he founded his motion. At the time of trial the typist had told
both defense and prosecution counsel that she could not remember the
content of the projects she had worked on at OMC in sufficient detail to
recognize them now, and thus neither side called her to testify as to
whether OMC had actually prepared the questioned deliverables. Ac-
cording to the affidavit, however, on further examination of a draft of a
Navy manual involved, she could identify her handwritten notations of
tab settings and the like, indicating that she must have typed at least
some portion of the final copy. She also now recognized some flow
chart illustrations that accompanied the manual. Oelberg proposed to
introduce her testimony at a retrial to rebut the charge that no deliver-
able had ever been produced, observing that he had been acquitted on
an analogous count (Count 6) when a Navy official testified that he
recalled reading the deliverable under that contract.
[26] The decision to grant or deny a motion for new trial based on
newly discovered evidence falls within the sound discretion of the trial
judge, United States v. Krasny, 607 F.2d 840, 845 (9th Cir. 1979), and a
significant burden rests on the moving party to show an abuse of discre-
tion, United States v. Brashier, 548 F.2d 1315, 1327 (9th Cir. 1976). Five
criteria must all be satisfied in order for the movant to prevail: the
evidence must be, in fact, newly discovered; the motion must allege facts
from which the court can infer diligence on the part of the movant in
attempting to secure the evidence; the evidence msut be more than
merely cumulative or impeaching; it must be material to the issues
invoived; and it must be such as, on a new trial, would probably
produce an acquittal. Brashier, 548 F.2d at 1327 & cases cited.
The District Court found that Oelberg had not met his burden on at
least three of the five requirements: the evidence was not newly dis-
covered; diligence had not been shown; and the evidence would not
probably produce an acquittal on retrial.
[27] On review, it appears that the first two issues presented fairly
close questions for the judge to resolve. Oelberg argues that the
evidence was new (and therefore newly discovered) because it did not
exist until the moment the typist recognized her notations on the
manual. He further presents a version of his actions with respect to
A-38
obtaining the manual and interviewing the typist that would uphold «
finding of due diligence. The Government disputed his version of tne
events, however, particularly with respect to the timing of his examina-
tion of the document and interview with the witness. Resolution of
these conflicting factual contentions was part of the District Court's
duty in ruling on the motion, and reviewable only for abuse of discre-
tion. No such abuse appears here.
[28] Even if the District Court was in error as to the first two factors,
however, the denial can readily be sustained in light of the third: pro-
bability of acquittal. The District Court found that the evidence would
be subject to substantial impeachment, and lacked sufficient probative
force to acquit. Further, and more significant, it found that the jury
verdict against Oelberg was essentially resolved upon his own credibility
as a witness; it noted that Oelberg was not a credible witness on material
questions, that the jury did not believe him, and that the court shared
that disbelief.
The record abundantly supports the court's observation. Oelberg’s
testimony appears to us evasive, contentious, and generally implausible.
He displayed those qualities even on direct examination by his own
attorney. Certainly the court is entitled to weigh the defendant's own
performance on the stand in ruling on whether additional evidence
would probably produce an acquittal.”
It is apparent to us that Oelberg did not meet his burden under
Brashier. Thus the District Court's ruling was not an abuse of discre-
tion.
22. This consideration answers one of appellant Oelberg’s arguments on this
score, in which he rails against the trial court's “bias”:
Judge Enright clearly shows his bias against defendant by stating his
belief that Mr. OELBERG was not a credible witness. Mr. OELBERG's
credibility, or lack thereof, is used by Judge Enright in his finding that a
third party's supporting testimony probably would not produce an acquit-
tal. It appears that if God himself verified Mr. OELBERG that Judge
Enright would not believe defendant.
As the discussion above shows, however, Oelberg’s credibility is entirely
germane in gauging whether retrial with the new evidence would probably
produce an acquittal, inasmuch as Oelberg would almost surely have to testi-
fy again at such a retrial.
A-39
IV. SEVERANCE OR TAX EVASION COUNTS.
[29, 30] The appellants have argued that the income tax evasion
counts against Kenny should have been severed, asserting various
claims of prejudice and, in Kenny's case, lack of preparation. We find
noe of these arguments persuasive.
The income tax evasion counts were eligible for joinder in this indict-
ment under Fed.R.Crim.P. 8(b), on the basis that the defendants were
“alleged to have participated in the same act or transaction or in the
same series of acts or transactions constituting an offense or offenses.”
This court, in addressing and upholding joinder of tax charges similar
to those here in a conspiracy case similar to this one, observed that “{i]t
is implicit in the language of Rule 8(b) that so long as all defendants
participate in a series of acts constituting an offense or offenses, the
offenses and defendants may be joined even though not all defendants
participated in every act constituting each joined offense. Rule 8(b)’s
‘goal of maximum trial convenience consistent with minimum
prejudice’ is best served .by permitting initial joinder of charges against
multiple defendants whenever the common activity constitutes a sub-
stantial portion of the proof of the joined charges.” United States v.
Roselli, 432 F.2d 879, 899 (9th Cir. 1970), cert. denied, 401 U.S. 924, 91
S.Ct. 883, 27 L.Ed.2d 828 (1971) (footnotes omitted). We feel that the
tax evasion charges here fit the category, inasmuch as they arose
directly and solely out of unreported income flowing from the illicit
contracting activities. Proof of those activities indeed constituted “a
substantial portion of the proof of the joined [tax evasion] charges.”/d
In light of “our stated policy that Rule 8(b) should be construed broadly
in favor of initial joinder,” United States v. Ford, 632 F.2d 1354, 1373
(9th Cir. 1980), the District Court was not required, as a matter of law,
to sever the tax counts.” United States v. Satterfield, 548 F.2d 1341,
1344 (9th Cir. 1977), cert. denied, 439 U.S. 840, 99 S.Ct. 128, 58
L.Ed.2d 138 (1978); United States v. Friedman, 445 F.2d 1076, 1082
(9th Cir.), cert. denied, 404 U.S. 958, 92 S.Ct. 326, 30 L.Ed.2d 275
(1971).
23. We can see no distinction, for joinder purposes, between the charge in-
volved in Roselli, filing a false tax return (26 U.S.C. § 7206), and the charge
of tax evasion involved here (26 U.S.C. § 7201), despite the appellants’ asser-
tion that “a crucial difference” exists. What that crucial difference might be
the appellants do not say.
A-40
The appellants seem to argue further, however, that the District
Court should have exercised its discretion to sever the tax counts in
accordance with Fed.R.Crim.P. 14, and that failure to do so was an
abuse of discretion. Kenny argues that he was prejudiced in having to
defend tax counts simultaneously with the other counts, and had
inadequate time to prepare a defense. The other appellants argue that
evidence prejudicial to them was admitted because of the tax counts.
Rule 14 provides that if it appears that prejudice will result from a
joint trial, the court may order an election or separate trials of counts,
grant a severance of defendants, or provide whatever other relief justice
requires. This determination is a matter within the District Court's dis-
cretion, and the proper standard of review is abuse of discretion. United
States v. Brashier, 548 F.2d 1315, 1323 (9th Cir. 1976); United States v.
Campanale, 518 F.2d 352, 359 (9th Cir. 1975), cert. denied, 423 U.S.
1050, 96 S.Ct. 777, 46 L.Ed.2d 638 (1976). The test is whether joinder is
so manifestly prejudicial that it outweighs the dominant concern with
judicial economy and compels the exercise of the court’s discretion to
sever. Brashier, supra, 548 F.2d at 1323; Campanale, supra, 518 F.2d at
359. The burden is on defendants to make a strong showing of prejudice
in order to obtain relief under the Rule. Williamson v. United States,
310 F.2d 192, 197 (9th Cir. 1962).
As we observed above, the tax counts in this case arose directly out of
the substantive counts. In other words, the Government argued that the
money fraudulently obtained by Kenny constituted the unreported
income in the tax counts. The evidence used to establish fraudulent con-
tracting essentially established the tax violations; the Government
needed only to show that the income had not been reported.
Kenny makes much of the fact that an I.R.S. expert was put on the
stand to testify “concerning numerous exhibits and summaries he had
made from the exhibits.” He seems to imply that without the tax counts,
tht testimony would not have been admissible. That position is clearly
incorrect, however; much of this testimony related to the substantive
counts of fraudulent contracting and bribery, and would have been
admissible in any event. It appears from the record that it would have
made little difference to Kenny’s trial had the tax counts been severed.
For the same reason, it is hard to perceive any special prejudice to
Parker and Oelberg due to the joinder of the tax counts; again, most of
the evidence would have come in anyway. “Some prejudice necessarily
inheres when defendants are joined for trial. However, {i}f all that was
necessary to avoid a joint trial were a showing of prejudice, there would
A4l
be few, if any, multiple defendant trials.’” United States v. Mc Donald,
576 F.2d 1350, 1355 (9th Cir. 1978), quoting 8 Moore's Federal Practice
par. 14.04{1]}, at 14-14.1 (1977). The District Court did rule that some of
the evidence, including some at issue here, was admissible only against
Kenny, but, as noted earlier, the defendants elected to forego a caution-
ary instruction to that effect. Under the circumstances, we feel that the
appellants have failed to demonstrate prejudice rising to the level that
would compel severance under Rule 14.
Finally, the argument of Kenny’s counsel that he was misled into lack
of preparation for defense of the tax counts borders on the frivolous.
The record makes clear that the District Court went to great lengths to
accommodate this concern.” It further indicates that despite requests
by the District Court for Kenny’s counsel to set forth the nature of the
defense and reasons why preparation would require more time, this
was never done. Indeed, we lack any such explanation in this court.
The indictment clearly indicated that tax offenses would be proved in
the Government's case..The trial date was set some three months in
advance and almost five months from indictment, with “open
discovery” of the Government's case on the tax counts available three
months before tria!. In our view, if Kenny’s counsel was unprepared to
defend the tax counts under those circumstances, it was a situation of
his own making.
The District Court did not abuse its discretion in denying the motion
to sever the tax counts.
V. S’ FFICIENCY OF THE EVIDENCE AGAINST OELBERG
[31] Uelberg argues that the evidence was insufficient to convict him
on any of three counts on which guilty verdicts were returned against
him. We find no merit in the contention.
24. At the pretrial hearing at which the motion to sever was considered, the
District Court noted the following factors in denying that motion: the
Government agreed to produce the entire report of the IRS special agent to
assist Kenny's counsel in preparing the defense; the Government agreed not
to present any specific tax evidence (summary witness testimony) until the
conclusion of its case in chief; the court would allow Kenny to recall any
Government witnesses for further cross-examination relating to the tax
counts; and the anticipated trial schedule called for a two-week break which
would allow for further preparation by Kenny's counsel.
A-42
Our inquiry on review of the sufficiency of the evidence to support a
criminal conviction is whether, “viewing the evidence in the light most
favorable to the prosecution, any rational trier of fact could have found
the essential elements of the crime beyond a reasonable doubt.” Jackson
v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560
(1979) (emphasis in original); United States v. Melchor-Lopez, 627 F.2d
886, 890 (9th Cir. 1980); United States v. Bailey, 607 F.2d 237, 242 (9th
Cir. 1979).
We have already observed that the evidence was sufficient to support
the jury’s verdict on the conspiracy count. We are similarly satisfied that
Oelberg’s convictions for presenting a false claim and receiving an
illegal gratuity are founded on sufficient evidence. His arguments on
appeal amount largely to assertions about the weight and creditibility of
the evidence presented by the Government, but it is the jury’s role, not
ours, to assess credibility of witnesses and resolve conflicts in the
evidence. We think that the evidence, reflected in the statement of facts
at the beginning of this opinion, supports a finding by a rational trier of
fact that the elements of the charged offenses had been proved beyond a
reasonable doubt.
Significantly, the jury in this case had the opportunity to consider not
only the evidence presented in the prosecution’s case, but the testimony
of the defendants themselves. Oelberg testified in detail, and was cross-
examined in detail, regarding the OMC-NELC contracts and the SCS/
Gray Gryphon activities. When the defendant elects to testify, he runs
the risk that if disbelieved, the trier of fact may conclude that the
opposite of his testimony is the truth. See, e. g., United States v.
Martinez, 514 F.2d 334, 341 (9th Cir. 1975); United States v. Chase, 503
F.2d 571, 573 (9th Cir. 1974). Coupled with the independent evidence
presented, Oelberg’s testimony forms an adequate basis for the jury’s
verdicts.?5
25. We note in passing the applicability of this Circuit’s “concurrent sentence
doctrine . . . under which a federal appellate court, as a matter of discretion,
may decide that it is unnecessary to consider arguments advanced by an
appellant with regard to his conviction under one count of an indictment if
he was validly convicted under another count and concurrent sentences were
imposed,” United States v. Walls, 577 F.2d 690, 699 (9th Cir. 1978), to
Oclberg’s situation. We are satisfied that the evidence is sufficient as to each
count on which Oelberg was convicted, but had we doubts as to any one
count we would incline toward invoking the concurrent sentence doctrine as
to it.
A-43
VI. OTHER ARGUMENTS
Challenges to the Indictment. Both Kenny and Oelberg have attacked
the indictment underlying this prosecution. Kenny argues that the indict-
ment should have been dismissed by the District Court because the
“grand jury did not receive any instructions as to the applicable law in
this case.” Oelberg argues that the indictment should have been dismissed
because the Government deliberately destroyed exculpatory evidence.
We find neither argument persuasive.
(32, 33] Kenny suggests that “in a case such as this no Federal Gr. ad
Juror could knowlingly [sic] return an indictment against the Appellant
Kenny without some instruction as to the applicable law.” This novel
argument, based loosely on the fifth and sixth amendments, seeks to
introduce into grand jury proceedings an analogue to petit jury instruc-
tions given at the end of trial. Kenny has not elaborated on what he
means by “applicable law,” however, nor does he seem to argue that the
evidence before the grand jury was insufficient to support the allegations
in the indictment. ,
We find no authority, and Kenny has cited none, that would support
this argument. To the contrary, as the Supreme Court has stated, “{aJn
indictment returned bya legally constituted and unbiased grand jury, like
an information drawn by the prosecutor, if valid on its face, is enough to
call for trial of the charge on its merits.” Costello vy. United States, 350
U.S. 359, 363, 76 S.Ct. 406, 409, 100 L.Ed. 397 (1956); see United States
v. Kennedy, 564 F.2d 1329, 1338 (9th Cir. 1977), cert. denied sub nom.
Myers v. United States, 435 U.S. 944, 98 S.Ct. 1526, 55 L.Ed.2d 541
(1978). That indictment is normally prepared by the prosecutor, who is
presumably acquainted with the “applicable law.” See United States v.
Chanen, 549 F.2d 1306, 1312 (9th Cir.), cert. denied, 434 U.S. 825, 98
S.Ct. 72, 54 L.Ed.2d 83 (1977). We are not persuaded that the Constitu-
tion imposes the additional requirement that grand jurors receive legal
instructions.
Furthermore, the giving of such instructions portends protracted
review of their adequacy and correctness by the trial court during
motions to dismiss, not to mention later appellate review. This is not an
auspicious case from which to launch courts on the journey through such
a toilsome mire, and we decline to do so. It was not error for the District
Court to deny Kenny’s motion.
A-44
[34] Oelberg, on the other hand, argues that his indictment should
have been dismissed on the ground that the Government had destroyed
certain records that have been exculpatory. The prosecution's case
against Oelberg included allegations that no “deliverable” was ever
produced under certain of the fraudulent contracts. Oelberg claims that
when he retired from NELC in 1975, he left records and OMC
deliverables in a secure area of NELC, and that these records and deliver-
ables were intentionally destroyed by government agents at a time when
Ocelberg was a known target of the investigation.
The record contradicts Oelberg’s contentions, showing that (1) any
destruction of Oelberg’s records was part of the normal housekeeping
functions of NELC (a policy of destroying obsolete classified materials),
(2) such destruction was unrelated to and prior to the commencement of
the criminal investigation (long before Oelberg became a target), and (3)
since no record was made of what was destroyed, no one could be sure
that any exculpatory materials were included among the destroyed
records. There is ample support for the District Court’s denial of
Ocelberg’s motion.
Trial Moderation. Out of the 46-volume trial record, appellants
Kenny and Oelberg have pointed to a handful of instances where the
District Court allegedly made incorrect rulings on evidence. Specifically,
Kenny complains of instances of the court's allowing witnesses to qualify
answers on cross-examination, limiting the pursuit of certain inquiries in
cross-examination, and overruling “valid hearsay objections.” Oelberg
complains of a brief episode where the court restricted the answers of his
character witness to “good” or “bad”.
[35] These arguments have no merit. Our review of the record indi-
cates that the District Court treated both sides evenhandedly during the
trial, and was generous in allowing each attorney to proceed as he wished.
In each area complained of, the standard of review is abuse of discretion.
See Rogers v. United States, 609 F.2d 1315, 1318 (9th Cir. 1979); United
States v. Weiner, 578 F.2d 757, 766 (9th Cir. 1978), cert. denied, 439 U.S.
981, 99 S.Ct. 568, 58 L.Ed.2d 651 (1979); United States v. Trapnell, 512
F.2d 10, 12 (9th Cir. 1975). To the extent there may even have been any
error in the District Court’s rulings, the record reflects no abuse of dis-
cretion.
[36] Similarly, we find no error in the District Court's refusal, despite
the urging of defense counsel, to recall the prosecutor's first witness as
A-45
the court’s own witness. Defense counsel were offered the opportunity to
recall the witness themselves, which they declined. The misstatement at
issue—when the witness had first reported OMC irregularities to the
authorities—-was inconsequential.
The calling of witnesses by the court is a matter of discretion, Estrella-
Ortega v. United States, 423 F.2d 509, 510 (9th Cir. 1970), and the
appellants have failed to show even a colorable abuse of that discretion,
nor any resulting prejudice to them. The contention that the District
Court committed “plain error” here is frivolous.
(37, 38] Sentencing. Finally, the appellants argue that it waserror for
the District Court to receive and consider a letter from the Acting Secre-
tary of the Navy at the time of sentencing.”° Asa general rule, the District
Court may considera wide range of information in determining a defend-
ant’s sentence. 18 U.S.C. § 3577; United States v. Martinez- Navarro, 604
F.2d 1184, 1186 (9th Cir. 1979). Appellants do not intimate that the letter
contained false or misieading information, nor that the information in
the letter was demonstrably made the basis for the sentence. See United
States v. Lasky, 592 F.2d 560, 562 (9th Cir. 1979); Farrow v. United
States, 580 F.2d 1339, 1359 (9th Cir. 1978) (en banc).
On the other hand, we must consider whether the receipt of this letter
violates the rule recently set forth in United States v. Wolfson, 634 F.2d
1217, 1221 (9th Cir. 1980), wherein we held “that it is improper for the
prosecution to make, or for the court to receive from the prosecution, an
ex parte communication bearing on the sentence.” Noting the signifi-
cance of sentencing proceedings to defendants in criminal cases, we
observed that “it is of the utmost importance not only that justice be done
but that it appear to be done. Asecret communication by the prosecutor,
an adversary advocate, to the judge, especially when it is invited by the
26. During the prosecutor's sentencing remarks, he made reference to a letter
directed to the court from the Acting Secretary of the Navy:
“I think the court has received a letter from the Department of the Navy
itself, from the Acting Secretary of the Navy, and I just briefly would like to
read what I think is significant in the last paragraph of Mr. Woolsey’s letter
in which he says: ‘It is essential to the Navy, indeed to all the nation’s citi-
zens, that other men and women who have the power to sacrifice the public
trust for private gain know not just that yielding to such temptation is
wrong, but also that it will be discovered and punished.’”
R.T. 8045,
A-46
judge and contains not nly factual statements but also a recommendation
of what the sentence should be, destroys that appearance. We cannot
approve it.” Jd. The sentence in Wolfson was vacated and the cause
remanded for resentencing.
On reviewing the instant case in light of the considerations enumerated
in Wolfson, we feel that the resentencing remedy would be entirely in-
appropriate here. The letter came not from the prosecutor but from an
outsider, and there is no suggestion that it was invited by the judge. The
existence of the letter, and the relevant language in it, was disclosed to the
defendants at the sentencing hearing, evoking no response or objection
from defense counsel. The letter contained no factual allegations nor any
actual sentence recommendations, but merely “hortatory” language.
There is no indication that the judge relied on the letter in sentencing, and
indeed the record shows that the District Court had ample, independent
grounds, which it fully detailed, for imposing the sentences it did.
We do not wish these remarks to be misconstrued as a ringing endorse-
ment of the procedure followed by the prosecutor in this case, however.
We can see no reason why this letter was not disclosed to the defendants.
While we do not believe a remand for resentencing is called for in this
case, we feel that the better practice in future cases would be for the
prosecutor to disclose this kind of material to the defense where possible.
For the foregoing reasons, the convictions of Kenny, Oelberg, and
Parker are hereby AFFIRMED.
Bs FILED
UNITED STATES COURT OF APPEALS [APR 30 1981
FOR THE NINTH CIRCUIT
RICHARD 4. DEANE
US. COURT C7 APPR 3
UNITED STATES OF AMERICA,
ny ) Nos. 79-1544
Plaintiff-Appellee, ‘ 79.1545
v. ) 79-1563
; 79-1735
JOHN E. KENNY, TRENTON P. OELBERG, )
and WILLIAM L. PARKER, ) D.C. Crim. No.
) 78-0792-E
Defendants-Appellants. )
) ORDER
Before: TRASK and NELSON, Circuit Judges, and
SOLOMON, ® District Judge
The panel as constituted in the above case has voted to deny the
petitions for rehearing. Judge Nelson has voted to reject the en banc
suggestions and Judges Trask and Solomon have recommended
rejection of the en banc suggestions.
The full court has been advised of the suggestions for an en banc
hearing, and no judge of the court has requested a vote on the suggestions
for rehearing en banc. Fed. R. App. P. 35(b).
The petitions for rehearing are denied and the suggestions for a
rehearing en banc are rejected.
* Honorable Gus J. Solomon, Senior United States District Judge, District of
Oregon, sitting by designation.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.