Opposition Brief — Mohney v. United States

| Sup Court, US.

t a Y

No. 91-1378 .

2 © 4 1992

OFFICE OF THE CLERK )

Iu the Supreme Court of the United Sietes——

OCTOBER TERM, 1991

HARRY V. MOHNEY, PETITIONER

U.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORAR

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

KENNETH W. STARR

Solicitor General

JAMES A. BRUTON

Acting Assistant Attorney General

ROBERT E.. LINDSAY

ALAN HECHTKOPF

KAREN QUESNEL

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 514-2217

QUESTION PRESENTED

Whether the district court erred in refusing to or-

der immunity for a prospective defense witness.

TABLE OF CONTENTS

Page

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I vc cunkunnanvanenands PE See ORE 1

UMCeMeNt ................... £2 Ik te ONE Es EO ERE UC IO 1

| me EAE EE SORE TT TAIT 4

I inno, dens chunanoonsans SD ilcgteadauituieraaareumpiathicusanaeedeiens 10

TABLE OF AUTHORITIES

Cases:

Autry V. Estelle, 706 F.2d 1394 (5th Cir. 1983),

cert. denied, 465 U.S. 1085 (1984) .......000000000022.. 5

Government of Virgin Islands Vv. Smith, 615 F.2d

I OS OOD so hctrnasccesekeseaneivcasnectassersnnebvesnsoncna 6

Mattheson Vv. King, 751 F.2d 1432 (5th Cir. 1985),

cert. dismissed, 475 U.S. 1138 (1986) .........0........ 5

Pillsbury Co. v. Conboy, 459 U.S. 248 (1983) ........ 5

United States v. Alessio, 528 F.2d 1079 (9th Cir.),

cert. denied, 426 U.S. 948 (1976) ..............00.00000000. 5

United States Vv. Angiulo, 897 F.2d 1169 (1st Cir.),

cert. denied, 111 S. Ct. 180 (1990) ...........000000000... 8

United States v. Caldwell, 543 F.2d 1333 (D.C. Cir.

1974), cert. denied, 423 U.S. 1087 (1976) .......... 5

United States v. Capozzi, 883 F.2d 608 (8th Cir.

1989), cert. denied, 495 U.S. 918 (1990) _.......... 5

United States Vv. Chagra, 669 F.2d 241 (5th Cir.),

cert. denied, 459 U.S. 846 (1982) ........0.0000000... 8,9

United States v. Doe, 465 U.S. 605 (1984) _....000..... 5

United States v. Eagle Hawk, 815 F.2d 1213 (8th

Cir. 1987), cert. denied, 484 U.S. 1012 (1988) ..... 5

United States v. Graham, 548 F.2d 1302 (8th Cir.

entree aa ee Sg ne Cee 5

United States v. Heffington, 682 F.2d 1075 (5th

Cir. 1982), cert. denied, 459 U.S. 1108 (1983) ..... 5

United States v. Hooks, 848 F.2d 785 (7th Cir.

RN Sag RUN eR ee PAN eR Dears le 5, 7-8

United States v. Karas, 624 F.2d 500 (4th Cir.

1980), cert. denied, 449 U.S. 1078 (1981) .......... 5

(IIT)

IV

Cases—Continued : Page

United States v. Lord, 711 F.2d 887 (9th Cir.

eee aces ee aac re ee ee, See 8

I"nited States v. Lowell, 649 F.2d 950 (3d Cir.

EE ues cekacoiantoncaddcestektaaanamanginateabtesaieiie 7

United States v. Minarik, 5 F.2d 1186 (6th Cir.

United States v. Mohney, 949 F.2d 899 (6th Cir.

Sean Os ears CST OO SIND ACNE oa 3

United States Vv. Pe nnell, 737 F.2d 521 (6th Cir.

1984), cert. denied, 469 U.S. 1158 (1985) 5, 7

United States v. Pinto, 850 F.2d 927 (2d Cir.),

cert. denied, 488 U.S. 867 (1988) ........2..000200000.... 7

United States Vv. Thevis, = F.2d 616 (5th Cir.),

cert. denied, 459 U.S. 825 (1982) .............00000.... 7

United States V. Sontag 623 F.2d 769 (2d Cir.

1980), cert. denied, 449 U.S. 1077 (1981) ...... 5,8

Constitution and statutes:

U.S. Const. Amend. V:

Due Process Clause ... eee Mi 4

Self-Incrimination Clause .................... 3, 7,8

18 U.S.C. 6001 et seq. ee ete aen caer 5

RE Era g EEE cot bict ecasncade cadecaeeencsoncutueteicesentciaatenssenaaaeese 2.3

26 U.S.C. 7206 (1) SA DARE CL OE PDI i,2

26 U.S.C. 7206 (2) 2

Iu the Supreme Court of the United States

OCTOBER TERM, 1991

No. 91-1378

HARRY V. MOHNEY, PETITIONER

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINION BELOW

The opinion of the court of appeals (Pet. App. Al-

A27) is reported at 949 F.2d 1397.

JURISDICTION

The judgment of the court of appeals was entered

on November 27, 1991. The petition for a writ of

certiorari was filed on February 24, 1992. The juris-

diction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

Following a jury trial in the United States District

Court for the Eastern District of Michigan, petitioner

was convicted on three counts of filing false individ-

ual income tax returns, in violation of 26 U.S.C.

7206(1), and on three counts of aiding and assisting

(1)

eee

2

in the filing of false corporate tax returns, in viola-

tion of 26 U.S.C. 7206(2).

1. In 1966, petitioner began acquiring businesses

in the “adult entertainment” industry, such as thea-

ters, bookstores, peep machines, and novelty and film

distributors, all of which featured sex-oriented enter-

tainment. Pet. App. A38. Petitioner ran the busi-

nesses as a sole proprietorship, but organized each

aspect of the business as a separate corporation. Pet.

App. A2-A8. Petitioner formed Modern Bookkeeping

Services (MBS) to handle the bookkeeping and tax

preparation aspects of the businesses, and he hired

Elizabeth Scribner to manage MBS. Pet. App. A3.

In 1984, federal agents executed a search warrant

at MBS headquarters and seized $400,000 in currency

and records indicating that petitioner had failed to

report income that he skimmed from the peep ma-

chines of one of his businesses, International Amuse-

ments, Ltd. (IA). Pet. App. A3. Petitioner’s tech-

nique was to have his “route drivers” collect the pro-

ceeds from the peep machines in coin and convert

some of those proceeds into paper currency. When the

route drivers returned to IA’s offices, they deposited

the coin proceeds into the bank, but retained the cur-

rency. For tax purposes, however, gross income was

calculated based on the bank deposits, which did not

include the currency. See Gov’t C.A. Br. 5-6.

2. Petitioner was charged in a seven-count indict-

ment with conspiring to defraud the United States,

in violation of 18 U.S.C. 371, filing false personal in-

come tax returns, in violation of 26 U.S.C. 7206(1),

and causing the filing of false corporate tax returns,

in violation of 26 U.S.C. 7206(2). Also charged in

the conspiracy count were Elizabeth Scribner, the

manager of MBS, and two other of petitioner’s

associates.

3

Prior to trial, the district court dismissed the con-

spiracy count. Relying on the Sixth Circuit’s decision

in United States v. Minarik, 875 F.2d 1186 (1989),

the court held that the indictment impermissibly

charged the conspiracy under the “defraud” clause of

Section 371, and should have charged the defendants

with conspiracy to commit an offense under the ‘‘of-

fense” clause of Section 371. Petitioner went to trial

alone on the substantive counts, while the government

appealed the dismissal of the conspiracy count

against petitioner and his co-conspirators.’

The government called 52 witnesses during the

trial, many of whom, including former MBS employ-

ees and route drivers, testified under grants of im-

munity. Two witnesses directly involved in keeping

the books of 1A and its predecessor company testified

that one of petitioner’s associates received a two per-

cent bonus based on the revenue of certain peep

machines. A calculation of the bonus revealed that

the peep machines produced income that petitioner

had not declared. Pet. App. A3-A4.

The government did not call as witnesses any of

the co-conspirators charged in the conspiracy count

of the indictment, and refused to grant Ms. Scribner

immunity. When petitioner attempted to call Ms.

Scribner as a witness, she filed an affidavit stating

that she would invoke her Fifth Amendment privi-

lege and refuse to testify. Pet. App. A5. The jury

convicted petitioner on all counts.

2. The court of appeals affirmed. The court re-

jected petitioner’s argument that he was denied a

' After petitioner’s trial, the Sixth Circuit reversed the

dismissal of the conspiracy count, holding that the indict-

ment properly charged the defendants with a conspiracy to

defraud the United States. United States v. Mohney, 949

F.2d 899 (1991).

4

fair trial when the prosecution and the district court

declined to immunize Scribner and the two other co-

conspirators so that they could testify as defense

witnesses. Pet. App. A6-A11.° The court held that

federal courts do not have the inherent power to

immunize defense witnesses. Pet. App. A7. It fur-

ther held that even if the courts had such power, im-

munity was not available in this case because the

government had a legitimate interest in prosecuting

the co-conspirators. Pet. App. A8. The court also

held that the prosecutor had not engaged in miscon-

duct that violated petitioner’s right to due process

and required immunity as a remedy. Pet. App. A9-

All.

ARGUMENT

Petitioner argues (Pet. 6-15) that the district

court’s refusal to order immunity for Scribner vio-

lated the Due Process Clause. Petitioner urges that

immunity should have been granted on one of two

theories: first, the district court should have granted

Scribner immunity because her testimony was essen-

tial to an effective defense; second, the district court

should have ordered the government to grant statu-

tory immunity to Scribner to prevent the government

from deliberately distorting the fact-finding process.

* The court of appeals also rejected petitioner’s arguments

that the district court (1) erred in denying a motion to

suppress evidence seized pursuant to the search warrant

(Pet. App. Al2-A14); (2) abused its discretion in ruling

on the testimony of the summary witnesses (Pet. App. Al4-

A21); (3) erred in denying a motion for a judgment of

acquittal (Pet. App. A21-A24); (4) erred in denying peti-

tioner’s motion to dismiss based on a closing agreement with

the Internal Revenue Service (Pet. App. A24-A26); and

(5) erred in refusing to permit cross-examination concern-

ing the closing agreement (Pet. App. A26-A27). Petitioner

does not pursue any of those issues in his petition.

5

A district court does not have authority to im-

munize a witness absent a request from the govern-

ment. The federal immunity statute, 18 U.S.C. 6001

et seq., vests the power to seek immunity in the Ex-

ecutive Branch. In discussing the immunity statutes,

this Court has explained that the authority to im-

munize witnesses “‘is peculiarly an executive one, and

enly the Attorney General or a designated officer of

the Department of Justice has authority to grant use

immunity.” Pillsbury Co. v. Conboy, 459 U.S. 248,

261 (1983); see also United States vy. Doe, 465 U.S.

605, 616-617 (1984). Not surprisingly, the great

majority of the courts of appeals, like the court be-

low, have held that judges may not immunize defense

witnesses without a request from the prosecution."

Petitioner’s claim (Pet. 9-12) that the decision in

this case conflicts with a decision of the Third Cir-

cuit is mistaken. The Third Circuit has held that

* See, ¢.g., United States v. Hool:s, 848 F.2d 785, 803 (7th

Cir. 1988) ; Mattheson v. King, 751 F.2d 1432, 1443 (5th Cir.

1985), cert. dismissed, 475 U.S. 1138 (1986): United States

V. Pennell, 737 F.2d 521, 527 (6th Cir. 1984), cert. denied,

469 U.S. 1158 (1985); Avtry v. Estelle, 706 F.2d 1394, 1401-

1402 (5th Cir. 1983), cert. denied, 465 U.S. 1085 (1984);

United States vy. Heffington, 682 F.2d 1075, 1080-1081 (5th

Cir. 1982), cert. denied, 459 U.S. 1108 (1983): United

States Vv. Karas, 624 F.2d 500, 505 (4th Cir. 1980), cert.

denied, 449 U.S. 1978 (1981): United States v. Turkish,

623 F.2d 769, 771-779 (2d Cir. 1980), cert. denied, 449 U.S.

1077 (1981); United States v. Graham, 548 F.2d 1302, 1315

(8th Cir. 1977): United States v. Caldwell, 548 F.2d 1333,

1356 n.115 (D.C. Cir. 1975), cert. denied, 423 U.S. 1087

(1976) ; United States v. Alessio, 528 F.2d 1079, 1080-1082

(9th Cir.), cert. denied, 426 U.S. 948 (1976) ; see also United

States Vv. Capozzi, 883 F.2d 608, 613 (8th Cir. 1989), cert.

denied, 495 U.S. 918 (1990); United States v. Eagle Hawk,

815 F.2d 1213, 1217 (8th Cir. 1987), cert. denied, 484 U.S.

1012 (1988).

6

immunity may be granted on the court’s initiative

when it is necessary to protect the defendant’s efforts

to mount a defense. Government of Virgin Islands

v. Smith, 615 F.2d 964 (1980). The Third Cir-

cuit has not had occasion since this Court’s deci-

sions in Doe and Conboy to reconsider its ruling in

Smith, and the continued vitality of that decision is

thus uncertain. But even assuming Smith retains

vitality, petitioner would not be entitled to immunity

for Scribner under the Smith approach.

The Third Circuit narrowly limited the scope of

its rule:

[I]mmunity must be properly sought in the dis-

trict court; the defense witness must be avail-

able to testify; the proffered testimony must be

clearly exculpatory; the testimony must be essen-

tial; and there must be no strong governmental

interests which countervail against a grant of

immunity.

Smith, 615 F.2d at 972.' In this case, there was a

strong countervailing governmental interest. As the

court of appeals explained, Pet. App. A8-A9, “[t]he

government here indicted * * * Scribner * * * along

with [petitioner]? and had a legitimate interest in

‘The Third Circuit in Smith made clear that the trial

court should not grant immunity where “the proffered testi-

mony is found to be ambiguous, not clearly exculpatory,

cumulative or if it is found to relate only to the credibility

of the government’s witnesses.” 615 F.2d at 972. Petitioner

asserts that “Scribner’s testimony would have been exculpa-

tory.” Pet. 18. However, when petitioner specifically re-

counts the purposes for which Scribner was to have been

called, see Pet. 4, it appears that her testimony would have

been largely cumulative and not clearly exculpatory, and

thus would not have met the Smith criteria in any event.

7

prosecuting her.’ Compelled judicial use immunity

could have impaired her subsequent prosecution. Pet.

App. AT; see also United States v. Pennell, 737 F.2d

521, 529 (6th Cir. 1984), cert. denied, 469 U.S. 1158

(1985); United States v. Thevis, 665 F.2d 616, 640

(5th Cir.), cert. denied, 459 U.S. 825 (1982). Thus,

the court of appeals correctly held that, even if this

case had arisen in the Third Circuit and been de-

cided under the standards articulated in Smith, peti-

tioner would not have prevailed. Cf. United States

v. Lowell, 649 F.2d 950, 965 (3d Cir. 1981) (up-

holding denial of defense witness immunity in part

because government “may yet” prosecute witness for

whom immunity was sought).

Petitioner’s second theory is also unavailing.

Statutory immunity for Scribner was not required

in order to prevent deliberate distortion of the fact-

finding process. The courts that have addressed that

theory have held that district courts may compel the

government to immunize defense witnesses in only

two circumstances: where government intimidation

provokes a defense witness into invoking his Fifth

Amendment privilege, thereby withholding testimony

that otherwise would have been available to the de-

fense, or where the government withholds immunity

from a defense witness for the sole purpose of keep-

ing exculpatory evidence from the jury. See, C..,

United States vy. Pinto, 850 F.2d 927, 932 (2d Cir.),

cert. denied, 488 U.S. 867 (1988): United States y.

* As the court of appeals also noted, Pet. App. A8-A9,

while the district court dismissed the conspiracy charge

naming Scribner, the dismissal was subject to a motion to

reconsider throughout the trial and was reversed on appeal.

Moreover, even if the appeal had been unsuccessful, the

prosecution could have pursued charges against Scribner

tor conspiracy to file false returns. Pet. App. A9.

8

Hooks, 848 F.2d 785, 799 (7th Cir. 1988); United

States v. Lord, 711 F.2d 887, 891 (9th Cir. 1983).

Petitioner does not argue that prosecutorial mis-

conduct caused Scribner to assert her Fifth Amend-

ment privilege and withhold testimony that otherwise

would have been available to him. See United States

v. Angiulo, 897 F.2d 1169, 1192 (1st Cir.), cert.

denied, 111 S. Ct. 130 (1990). He merely asserts

(Pet. 12) that it was unfair for the prosecution to

grant immunity to its own witnesses while refusing

to grant immunity to Scribner. Petitioner claims

(Pet. 12-14) that the government refused to grant

Scribner immunity for the purpose of distorting the

fact-finding process.

There is no basis for petitioner’s claim that the

prosecution declined to grant Scribner immunity for

the purpose of keeping exculpatory testimony from

the jury. As previously discussed, the government

provided valid reasons for its objection to immuniz-

ing Scribner—her indictment as a co-conspirator with

petitioner and the desire not to hinder her prosecu-

tion for the very same conduct with which petitioner

was charged. Moreover, petitioner did not have the

right to have Scribner immunized simply because the

prosecution had immunized witnesses in its case

against him. United States v. Hooks, 848 F.2d at

802; United States v. Chagra, 669 F.2d 241, 259 (5th

Cir.), cert. denied, 459 U.S. 846 (1982); United

States v. Turkish, 623 F.2d at 774-775. As the Fifth

Circuit noted in Chagra, 669 F.2d at 259,

the balance between the government’s interest in

prosecuting accused felons and the accused’s in-

terest in presenting exculpatory and otherwise

unobtainable evidence should not be inflexibly

resolved by the fortuity that the government

grants immunity to a particular witness in a

ee

9

particular case. If the government’s prosecu-

torial interest outweighs a defendant’s interest

in presenting such evidence * * * then the gov-

ernment’s interest also outweighs any abstract

concern with symmetry.

In light-of the government’s strong interest in prose-

cuting Scribner, the government’s refusal to immu-

nize Scribner did not violate petitioner’s right to due

process."

* Petitioner repeatedly asserts that the “prosecution af-

firmed to the court and the defense that it intended to

immunize [Scribner] and call her as a witness.” and that

“ftthe prosecution’s stated intention to grant Scribner im-

munity and call her as a witness was relied upon by [peti-

tioner].”’ Pet. 5. See also Pet. 12, 14. Those assertions are

mistaken. As the district court explained, the government

had to include all possible witnesses on its witness list because

“[the prosecutors] have to tell the jury who the witness may

be and find out whether or not anybody knows them.” The

district court added that “if [the government] didn’t put

her name on the list and then made a determination a week

before the end of trial they were going to call her in rebuttal

and give her use immunity they wouldn’t have been able to

do it because she wasn’t on the list.” 4/6/89 Tr. 54-55. At

sentencing, the district court repeated its finding that “[t]here

was never any promise to call Ms. Scribner,” and that ‘“‘[b]e-

cause the government never ‘promised’ [petitioner], the court

or the jury that it would call or immunize Elizabeth Scribner.

[petitioner’s] claim that he relied upon such promise to his

detriment is meritless.” 5/1/89 Tr. 52-53.

10

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

JAMES A. BRUTON

Acting Assistant Attorney General

ROBERT E. LINDSAY

ALAN HECHTKOPF

KAREN QUESNEL

A ttorne Ys

APRIL 1992

GOVERNMENT PRINTING FF E