U.S. v. Hamilton

• Decision Date: 26 November 1997
• Docket Number: No. 96-6250,96-6250
• Citation: 128 F.3d 996
• Parties: -7623, 48 Fed. R. Evid. Serv. 233 UNITED STATES of America, Plaintiff-Appellee, v. Bill Fred HAMILTON, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 996

128 F.3d 996

80 A.F.T.R.2d 97-7623, 48 Fed. R. Evid. Serv. 233

UNITED STATES of America, Plaintiff-Appellee, v. Bill Fred HAMILTON, Defendant-Appellant.

No. 96-6250.

United States Court of Appeals Sixth Circuit.

Argued Oct. 8, 1997.

Decided Nov. 4, 1997.

Rehearing Denied Nov. 26, 1997.

William M. Scalf (argued and briefed), Corbin, KY, for Defendant-Appellant.

Thomas L. Self (argued and briefed), Asst. U.S. Attorney, Office of the U.S. Attorney, Lexington, KY, for Plaintiff-Appellee.

Before: MARTIN, Chief Judge; CONTIE and DAUGHTREY, Circuit Judges.

CONTIE, Circuit Judge.

OPINION

Defendant-appellant, Bill Fred Hamilton, appeals his jury conviction for failing to file and filing false income tax returns. For the following reasons, we affirm.

I.

This is an appeal of a criminal conviction of Bill Fred Hamilton for willfully filing false United States income tax returns. Defendant was charged with failing to include gross income from the sale of coal on his income tax returns, which he signed under penalty of perjury. His defense was that the cash traced to him by the United States was not income, but rather was "just cash that flowed through his hands."

Bill Fred Hamilton and his wife, Connie Hamilton, were indicted by a federal grand jury on April 7, 1994 for violations of the Internal Revenue laws. Counts One and Two charged defendant and his wife with making and subscribing a false joint United States individual income tax return under penalties of perjury for the calendar years 1987 and 1988 in violation of 26 U.S.C. § 7206(1). Counts One and Two charged that Hamilton and his wife received substantial income for the sale of coal which they failed to report on their returns for the calendar years 1987 and 1988. Count Three charged defendant with failing to make an income tax return for the calendar year 1989 in violation of 26 U.S.C. § 7203.

On May 6, 1994, defendant Hamilton appeared before the district court for arraignment and entered a plea of not guilty to each count of the indictment. On the same date, the court entered an order setting forth orderly procedures to be followed during discovery pursuant to Fed.R.Crim.P. 16(b), which stated specifically:

The defendant within ten days after arraignment, the United States attorney and the defense counsel shall confer and, upon request, the defendant shall produce all items discoverable pursuant to Rule 16(b).

(emphasis added). A trial date was set for September 6, 1994. On October 3, 1994, the first counsel whom defendant retained withdrew, and the trial was continued until October 16, 1995. On October 30, 1995, the second counsel whom defendant retained withdrew. The trial was rescheduled for January 29, 1996. The case was reassigned to a different judge, and the trial was then scheduled for May 21, 1996 before the United States District Court for the Eastern District of Kentucky.

At trial, the United States demonstrated that for 1987, defendant and his wife filed a joint United States income tax return that reported an adjusted gross income of $21,386. In 1988, they filed a joint return which listed total income of $21,840. The Internal Revenue Service ("IRS") had no record of defendant filing a return for 1989. The United States then introduced through corporate officers, bank officials, tellers, and others, evidence establishing that during the years 1987 through 1989, defendant on a regular basis would personally cash checks in amounts of slightly less than $10,000, made payable either to other individuals or to "cash" at various banks. This testimony was given during the first five days of trial and concerned the distribution of proceeds from the sale of coal by various small coal companies. The government alleged that a large amount of the sale proceeds was income for defendant, which he failed to report on an income tax return for the calendar years of 1987, 1988, and 1989.

On May 29, 1996, at the beginning of the sixth day of trial, counsel for defendant announced for the first time that he had an exhibit list to tender to the court. No exhibits by defendant had previously been furnished to the United States although it had been over two years since the United States had requested discovery of any defense exhibits. On the sixth day of trial, defendant proposed to introduce twenty-three cash receipts to prove that he used the cash he received from the Heart and Soul Coal Company checks to pay for coal for the account of the Heart and Soul Coal Company. The amount of the receipts added up to over $240,000. ¹ Defendant provided the United States with a list and copy of the twenty- three proposed exhibits, consisting of twenty-three original receipts dated April 1988 through November 1988. The receipts had the original signatures of seven different persons, none of whom had been called as witnesses at trial, and whose names did not appear on any of the checks introduced by the United States as having been cashed by defendant or his wife.

The United States objected to the introduction of this evidence on the grounds that defendant failed to comply with the court's discovery order of May 6, 1994, and Fed.R.Crim.P. 16(b). The district court sustained the United States' objection and ordered that the exhibits could not be introduced. The court also ordered that the exhibits be turned over to the United States for analysis to see if the receipts had been fabricated, based in part on a sealed pleading of one of defendant's former counsel, Ms. Butcher. ² The court stated that it had reason to believe the receipts had been fabricated. The court then read into the record the sealed pleading, which, in part, stated that Ms. Butcher had reason to believe that defendant intended to commit perjury upon testifying at trial.

The jury found defendant guilty on all counts of the indictment on May 21, 1996. On June 7, 1996, defendant filed a motion for a new trial along with an affidavit, which stated that exhibits 1-23 consisted of original receipts obtained by defendant in 1988 when he paid cash for coal purchased by the Heart and Soul Coal Company. The affidavit alleged that he did not find the receipts until after the trial had started.

By opinion and order filed July 16, 1996, the court denied the motion, stating:

The affidavit of Bill Fred Hamilton reveals that the documents in question were within the control of Bill Fred Hamilton, and that he was aware of their existence as early as May 1994. Bill Fred Hamilton waited over two years to obtain and produce the documents. Clearly, his actions were willfully violative of the Court's discovery order, and the sanctions imposed by the Court were appropriate, especially in light of the information contained in pleading # 50. Therefore, Bill Fred Hamilton's motion for a new trial will be denied.

On September 10, 1996, defendant was sentenced to imprisonment for twenty-seven months, a one-year term of supervised release, and a $125 special assessment. The court also ordered that restitution be paid to the IRS for all income taxes to be judged due and owing for the years 1987, 1988, and 1989. Defendant filed a timely notice of appeal on September 17, 1996.

II.

We must first decide whether the district court erred: (1) in admitting into evidence the statements of defendant's prior counsel, Ms. Butcher, indicating that she believed defendant would perjure himself if he testified in his own defense; and (2) in relying on this statement as evidence that the receipts were fabricated.

Defendant alleges that the sealed pleading contained a statement by Ms. Butcher that she had reason to believe that "defendant was going to commit perjury upon testifying at trial." Defendant alleges that the filing of the pleading was a breach of the attorney-client privilege of confidentiality. Defendant also contends that the court's reliance upon Ms. Butcher's unsubstantiated statement, without an evidentiary hearing, was a violation of due process and his Sixth Amendment right to cross-examine witnesses against him.

We review the district court's evidentiary rulings, involving an alleged violation of Sixth Amendment rights, under a de novo standard of review. United States v. Lloyd, 10 F.3d 1197, 1216 (6th Cir.1993), cert. denied, 513 U.S. 883, 115 S.Ct. 219, 130 L.Ed.2d 147 (1994). Although we do not believe that the sealed filing of such a statement was a breach of the attorney-client privilege of confidentiality, we believe the district court erred when it admitted the statement into evidence and relied upon it for his conclusion that the receipts were probably fabricated. In regard to the attorney- client privilege, in Nix v. Whiteside, 475 U.S. 157, 162-63, 106 S.Ct. 988, 991-92, 89 L.Ed.2d 123 (1986), the Supreme Court made it clear that a defendant's Sixth Amendment right to the assistance of counsel is not violated when an attorney refuses to cooperate with a defendant in presenting perjured testimony at trial. The Court then reiterated that a criminal defendant's privilege to testify in his own defense does not include the right to commit perjury, citing Harris v. New York, 401 U.S. 222, 91 S.Ct. 643, 28 L.Ed.2d 1 (1971). Id. at 162, 106 S.Ct. at 991-92. Under Kentucky Rules of Professional Conduct, Supreme Court Rule 3.3, it is provided that:

A lawyer shall not knowingly ... fail to disclose a material fact to the tribunal when disclosure is necessary to avoid a fraud being perpetrated upon the tribunal.

Because Ms. Butcher was under an obligation to disclose to the court a material fact necessary to avoid a fraud being perpetrated upon the court, we do not believe Ms. Butcher's filing of the sealed pleading violated the attorney-client privilege.

However, this does not mean that the district court properly relied on Ms. Butcher's statement that she had reason to believe that defendant was going to commit perjury in concluding that the receipts were fabricated. Ms. Butcher's statement was...