Opposition Brief — Adkins v. United States

Office-Supreme Court, US.

FILED

MAR 29 1985

No. 84-1216

_

In the Supreme Court of the Hniten Stites

ALEXANDER i. STEVAS,

OCTOBER TERM, 1984

GLEN ADKINS AND TOM ADKINS, PETITIONERS

V.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES IN OPPOSITION

Rex E. Lge

Solicitor General

Department of Justice

Washington, D.C. 20530

(202) 633-2201

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TABLE OF AUTHORITIES

Cases:

Anderson v. United States, 417 U.S. 211 ....

Capital Marine Supply, Inc. v. M/V Roland

Bee TE, Fe ae FO ve cccccccvescscs

Dutton v. Evans, 400 U.S. 74 ..............

Japanese Electronic Products Antitrust

Litigation, In re, 723 F.2d 238,

petition for cert. pending, 83-2004 .........

Missouri P. R.R. v. Austin, 292 F.2d

oo de er ee PES. rar ne

| GER RRS 2 a EC Tee a

United States v. Hasting, 461 U.S. 499 ......

United States v. Lovasco, 431 U.S. 783 ......

United States v. Scott, 668 F.2d 384 ........

Constitution, statutes and rules:

U.S. Const. Amend. VI (Confrontation

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Fed. R. Evid. :

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In the Supreme Court of the Hnited States

OCTOBER TERM, 1984

No. 84-1216

GLEN ADKINS AND TOM ADKINS, PETITIONERS

V.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE FIFTH CIRCUIT

MEMORANDUM FOR THE UNITED STATES IN OPPOSITION

Petitioners claim that the district court erred by admit-

ting a Dun & Bradstreet financial report on their business,

on the grounds that the report was inadequately authenti-

cated and was hearsay because the government failed to

identify the source of the information contained in the

report.

1. Following a jury trial in the United States District

Court for the Southern District of Texas, petitioners and

three co-defendants were convicted on five counts of mail

fraud, in violation of 18 U.S.C. 1341. Petitioners were sent-

enced to concurrent terms of five years’ imprisonment on

three of the counts, to be followed by concurrent terms of

five years’ probation on the two remaining counts. Petition-

ers were also fined $5,000. The court of appeals affirmed

(Pet. App. la-13a; 741 F.2d 744).

(1)

2

a. The evidence adduced at trial, the sufficiency of which

is not in dispute, showed that petitioners and their co-

defendants executed a scheme to defraud companies in the

business of financing the purchase of heavy machinery for

firms that needed such equipment, but were unable to pur-

chase it themselves or to obtain an ordinary bank loan. Ina

typical transaction, the leasing company, after determining

that the business was creditworthy, would purchase the

machinery from a vendor and lease it to the business. The

vendor would send the equipment directly to the lessee,

who, in turn, would notify the leasing company that the

machinery had arrived and was in good working condition.

The leasing company would then pay the vendor for the

equipment and receive monthly payments from the lessee

for use of the machinery.

Petitioners owned Southwestern Manufacturing and

Equipment Company, which posed as a vendor company

but in fact was a “shell” corporation with no equipment to

sell (15 R. 545; 17 R. 917).! Using the alias “Alan Perlman,”

petitioner Glen Adkins convinced numerous leasing com-

panies to finance the sale of equipment to a company owned

by co-defendants Walter Cannon and Ron Hawkins, Power-

guard of Texas, which had no use for, and never received,

any of the equipment allegediy supplied to Powerguard by

petitioners. In the first six months of 1981, petitioners

oodtained roughly $511,000 from several finance companies

for machinery that was never delivered to Powerguard.

Powerguard later defaulted on the leases, and, when the

victim companies tried to collect their collateral — the

heavy machinery allegedly purchased from Southwestern

— they discovered that it did not exist and that they had

been duped by petitioners and their co-defendants.

1The citations to the record are taken from the government’s brief in

the court of appeals.

3

b. At trial, John Peyton, a representative of one of the

victimized finance companies, Misco Leasing Company,

testified that before Misco agreed to do business with

Southwestern, it purchased a financial report on South-

western (GX 6EE) from Dun & Bradstreet, Inc. (Pet. App.

19a-21a; 14 R. 294-300). The report identified, among other

things, Southwestern’s corporate officers, the number of its

employees, the amount of its office space, and the firm’s

credit rating. The report further stated that this information

had been provided to Dun & Bradstreet on February 5,

1981, by “Allister Williamson,” the company president, and

that other information had been provided on July 28, 1980,

by “Steven Pronam,” a Southwestern office manager.

However, the report was false in every material respect: the

“Allister Williamson” and “Steven Pronam” who sup-

posedly worked for Southwestern did not exist, and the

other information regarding Southwestern’s office and

financial status was equally false.

Petitioners objected to the introduction of the report on

the ground that the report had been prepared by Dun &

Bradstreet, rather than by Misco Leasing, and the informa-

tion contained in the report did not originate from South-

western. See Pet. App. 20a-21a. The district court overruled

the objection (ibid.). Other witnesses, when shown the

report, testified that the information that it contained was

false (see, e.g., id. at 26a-30a).

b. The court of appeals affirmed petitioners’ convictions

(Pet. App. la-13a). The court rejected petitioners’ claim

that the report was inadmissible hearsay, reasoning that the

government did not use the report to prove the truth of the

information it contained, but simply to show that the report

contained statements describing petitioners’ corporation

that the government proved were false through independent

evidence (Pet. App. 3a-4a).

4

2. Petitioners claim (Pet. 4-7) that the Dun & Bradstreet

report (GX 6EE) was inadequately authenticated (see Fed.

R. Evid. 901) and was hearsay (see Fed. R. Evid. 801)

because the government failed to identify the source of the

information contained in the report. For several reasons,

petitioners’ claims lack merit.

a. To begin with, petitioners did not object in the district

court on the ground that the report was inadmissible under

Rule 901 (see Pet. App. 20a-21a); they therefore may not

assert that claim on appeal. See Fed. R. Evid. 103(a)(1). In

any event, Rule 901 simply requires “evidence sufficient to

support a finding that the matter in question is what its

proponent claims.” Here, the government established a

prima facie case that GX 6EE was a Dun & Bradstreet

report of Southwestern, petitioners’ corporation, that was

based upon information supplied to Dun & Bradstreet by

petitioners.

The report identified itself as a Dun & Bradstreet report,

and John Peyton, a representative from Misco Leasing

Company, which had received the report, identified the

report as the one that Misco Leasing had received from Dun

& Bradstreet (Pet. App. 20a-21a; 14 Tr. 294-300). It is also

well established that Dun & Bradstreet prepares financial

reports on commercial businesses based largely upon

information received from the subject companies. See

United States v. Beecroft, 608 F.2d 753, 761 (9th Cir.

1979); Missouri P. R.R. v. Austin, 292 F.2d 415, 420 (Sth

Cir. 1961). The report also identified the source of the

information it contained as Southwestern employees “Allis-

ter Williamson” and “Steven Pronam.” Because other

evidence at trial showed that no such persons existed and

that petitioners were the only employees of Southwestern, it

was entirely reasonable for the district court to conclude

that petitioners had provided Dun & Bradstreet with the

description of Southwestern contained ‘n the report. The

5

district court therefore did not abuse its discretion in find-

ing that GX 6EE had been sufficiently authenticated to

permit the report to be admitted. Petitioners’ objection goes

only to the weight that the report should have received, not

to its admissibility. See, e.g., In re Japanese Electronic

Products Antitrust Litigation, 723 F.2d 238, 284-285 (3d

Cir. 1983), petition for cert. pending, 83-2004;? Capital

Marine Supply, Inc. v. M/V Roland Thomas, II,719 F.2d

104, 106 (Sth Cir. 1983).?

b. Petitioners’ hearsay objection to the Dun & Brad-

street report (Pet. 7-8) also lacks merit. As the court of

appeals recognized (Pet. App. 3a-4a), the government used

the report for the purpose of showing that it contained

statements describing Southwestern, petitioners’ corpora-

tion, not to prove that those statements were true. On the

contrary, the government showed through independent

evidence that the statements in the report were false. Using

the report for this purpose raises no hearsay issue, because a

declarant’s out-of-court statements constitute hearsay only

if they are offered to prove the truth of the matters asserted

therein. See Fed. R. Evid. 801(c); Anderson v. United

States, 417 U.S. 211, 219-220 (1974); Dutton v. Evans, 400

*Because the petition in No. 83-2004 does not raise either of the

questions presented by the petition in this case, there is no occasion tu

hold this case pending the Court’s disposition of that petition.

3None of the cases cited by petitioners (Pet. 6) conflicts with the court

of appeals’ decision in this case or supports their position. In United

States v. Beecroft, supra, the court held that a Dun & Bradstreet

financial report was properly admitted at trial. 608 F.2d at 760-761.

United States v. Scott, 668 F.2d 384 (8th Cir. 1981), is not relevant to

petitioners’ claim. And any alleged intra-circuit conflict between the

Fifth Circuit’s decision in this case and the earlier Fifth Circuit decisions

cited by petitioners is for the Fifth Circuit, not this Court, to resolve.

6

U.S. 74, 88 (1970) (plurality opinion).* Review by this Court

of petitioners’ claims is thus unwarranted.°

It is therefore respectfully submitted that the petition for

a writ of certiorari should be denied.

Rex E. LEE

Solicitor General

MARCH 1985

‘Petitioners also argue (Pet. 7-8) that admission of the report violated

their rights under the Confrontation Clause. Petitioners did not raise

this claim in the district court (see Pet. App. 20a-21a) or in the court of

appeals, however, and thus may not assert it here. See United States v.

Lovasco, 431 U.S. 783, 788 n.7 (1977). In any event, petitioner’s con-

frontation claim suffers from the same flaw as their hearsay contention.

See Dutton v. Evans, 400 U.S. at 88 (plurality opinion) (“{njeither a

hearsay nor a confrontation question would arise had [an out-of-court

declarant’s] testimony been used to prove merely that the statement had

been made”).

5Moreover, any error was harmless. Representatives from eight of the

leasing companies victimized by petitioners testified at trial that, after

Powerguard defaulted on its lease agreements, the leasing companies

attempted to repossess the machinery that they had supposedly pur-

chased from Southwestern, but discovered that the equipment was

either worthless or non-existent. See 14 R. 101-126, 176-197, 230-254,

289-316; 15 R. 368-378, 459-467, 475-482, 500-519. The Dun & Brad-

street report was a minor item of evidence admitted at trial. Given the

testimony of the victims of petitioners’ scheme, the report could not

have materially affected the jury’s verdict. See generally United States

v. Hasting, 461 U.S. 499 (1983).

DOJ-1985-03