U.S. v. Graham

• Citation: 484 F.3d 413
• Decision Date: 20 April 2007
• Docket Number: No. 05-2347.,No. 05-2332.,05-2332.,05-2347.
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Kenneth J. GRAHAM (05-2332); Kyle Dresbach (05-2347), Defendants-Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

484 F.3d 413

UNITED STATES of America, Plaintiff-Appellee, v. Kenneth J. GRAHAM (05-2332); Kyle Dresbach (05-2347), Defendants-Appellants.

No. 05-2332.

No. 05-2347.

United States Court of Appeals, Sixth Circuit.

Argued: December 6, 2006.

Decided and Filed: April 20, 2007.

ARGUED: Albert J. Krieger, Miami, Florida, Joan Ellerbusch Morgan, Sylvan Lake, Michigan, for Appellants. John Hinton, III, United States Department of Justice, Washington, D.C., for Appellee. ON BRIEF: Albert J. Krieger, Susan W. Van Dusen, Miami, Florida, Joan Ellerbusch Morgan, Sylvan Lake, Michigan, for Appellants. John Hinton, III, Alan Hechtkopf, United States Department of Justice, Washington, D.C., for Appellee.

Before: BATCHELDER, GILMAN, and ROGERS, Circuit Judges.

ROGERS, J., delivered the opinion of the court, in which GILMAN, J., joined. BATCHELDER, J. (pp. 422-424), delivered a separate dissenting opinion.

OPINION

ROGERS, Circuit Judge.

The criminal defendants in this appeal contend that the failure of the Government's cooperating witness to produce fifteen boxes of evidence until late in the trial constituted a violation of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Defendants Kenneth Graham and Kyle Dresbach were convicted of conspiracy to commit mail fraud and to file false tax returns, conspiracy to commit money laundering, money laundering, and subscribing false tax returns. These charges were based on a kickback scheme in which the defendants caused Thyssen, Inc., a steel processing company, to overpay for equipment while a portion of the amount fraudulently charged was funneled back to the defendants through shell entities created by their attorney, Jerome Allen. Allen was an unindicted co-conspirator who acted as a cooperating witness for the Government pursuant to a plea agreement.

Near the end of the defendants' trial, Allen produced fifteen boxes of documents, some of which pertained to his representation of Graham. Graham and Dresbach argue that the district court erred by failing to find that the Government violated its obligations under Brady by not causing these documents to be produced earlier. The Government responds that these documents were not material under Brady and that there was no violation of Brady because the evidence was in the exclusive control of a cooperating witness and not the Government. Dresbach also raises issues involving alleged ineffective assistance of counsel, improper failure to sever the two cases, and error in the giving of a supplemental jury instruction after the jury had indicated that it had reached a verdict.

Because the cooperating witness here was not acting on behalf of the Government, and the defendants' other contentions do not warrant reversal, the convictions of both defendants are affirmed.

I. General Background

On May 20, 2003, a federal grand jury returned a ten-count indictment against Graham and Dresbach, charging both with conspiracy to commit mail fraud and to file false tax returns, conspiracy to commit money laundering, money laundering, and subscribing false tax returns. The Government filed a superseding indictment on September 18, 2003. The essence of the Government's case was that Graham and Dresbach conspired to defraud Thyssen, Inc., a steel processing company headquartered in Detroit, Michigan, of $6.5 million in a kickback scheme spanning from 1991 to 2001.

Graham was Thyssen's chief executive officer until 2001, and Dresbach was the company's executive vice president until he retired in 1996. The Government alleged that Graham and Dresbach used their positions at Thyssen to cause the company to purchase machinery at fraudulently inflated prices. The inflated prices included higher commissions for an equipment broker, who then funneled the excess commissions to Jerome Allen, an accountant and attorney who worked for Graham and Dresbach. Allen then distributed part of the money to Graham and Dresbach, primarily by writing checks to pay for personal expenses as directed by the defendants.

Graham and Dresbach were tried jointly before a jury in a trial that began on July 22, 2004. Allen was an unindicted co-conspirator in the case and testified against the defendants pursuant to a plea deal with the Government. On August 12, 2004, the jury convicted Graham and Dresbach on all counts charged in the superseding indictment. Both defendants filed motions for a new trial. The district court denied those motions on June 8, 2005. On August 30, 2005, the district court sentenced both defendants. These timely appeals followed.

II. Graham's Appeal

Graham's appeal arises from Allen's production of fifteen boxes of financial and legal documents three weeks into the trial. Because Allen was not acting on behalf of the prosecution, this late production of evidence was not a Brady violation.

Graham asserts that, approximately one year prior to the start of trial, his attorneys demanded that Allen turn over all documents in Allen's possession pertaining to Graham. Graham alleges that he received a total of five boxes from Allen's counsel and was told that they contained all of the files and records related to Graham that Allen possessed. On March 15, 2004, the prosecutors and case agent again interviewed Allen as part of their final trial preparation. The prosecutors' notes from that interview included the following comment: "Haven't turned over old files, 1980s, to Graham's attorney. We want to review them first." Despite this note, nothing in the record indicates that the Government ever had possession of these files.

On June 29, 2004, the Government sent a letter to Graham's attorney, erroneously indicating that the notes pertaining to the Allen interview were enclosed. Graham's attorney informed the Government of the missing enclosures during the final pretrial conference on July 19, 2004. On that day, the Government provided Graham copies of the notes and the district court granted a two-day adjournment.

On July 22, 2004, prior to the commencement of opening statements, Graham moved to dismiss the indictment based on the fact that Allen possessed files that had not been turned over to Graham. During oral argument on the motion, the Government explained the nature of the interview notes turned over to the defendants only a few days earlier and stated that the Government had already provided Graham with all the documents that it had received from Allen. The court denied the motion.

On the evening of August 5, 2004, three weeks into trial, the Government notified Graham's attorney that Allen had produced copies of four previously undisclosed promissory notes from the early 1990s. The next day, Graham moved for a mistrial based on the late disclosure of that evidence. During the hearing on the motion, Allen's attorney reported that the new documents were found in a previously undiscovered box of Graham documents. In response to a subsequent subpoena, Allen produced fifteen boxes of documents.

Defendants again moved for dismissal of the charges and, in the alternative, for a mistrial. When Allen was questioned about the fifteen boxes, he testified that he had actually found the boxes "a month, a month and a half ago" while cleaning out some storage lockers containing old client files. At least some of these boxes were marked "Graham." Allen thought that he had informed the Government of the existence of these boxes at that time, though he himself "hadn't looked at them" and did not know about the contents of the boxes until August 5, 2004, when the Government asked Allen's attorney to inquire as to whether Allen had any old tax returns going back to 1974. The district court denied the motion for mistrial because there was no evidence of concealment by the Government; the court noted that the defendants could renew the motions if exculpatory material were found in the fifteen boxes.

The trial continued, and on November 15, 2004, three months after the jury had returned guilty verdicts on all counts, Graham renewed his motions for a mistrial, dismissal, and a new trial, attaching twenty-seven exhibits culled from the fifteen boxes. The district court denied Graham's motion for a new trial under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), because it found that the Government had not suppressed the fifteen boxes in Allen's possession. The district court also denied Graham's motion for a new trial under Rule 33(a). Graham now challenges the district court's Brady determination.

Graham cannot show that the Government suppressed the evidence upon which he bases his appeal; therefore, he cannot establish a violation of due process under Brady. Because Allen was not "acting on the government's behalf," the Government cannot be said to have suppressed the fifteen boxes of documents in Allen's control. See Kyles v. Whitley, 514 U.S. 419, 437, 115 S.Ct. 1555, 131 L.Ed.2d 490 (1995).

This court reviews denial of a motion for new trial based on Brady violations under an abuse of discretion standard. United States v. Jones, 399 F.3d 640, 647 (6th Cir.2005). However, the district court's determination as to the existence of a Brady violation is reviewed de novo. United States v. Miller, 161 F.3d 977, 987 (6th Cir.1998).

To establish a Brady violation, Graham has the burden of showing that the Government suppressed evidence, that such evidence was favorable to the defense, and that the suppressed evidence was material. Carter v. Bell, 218 F.3d 581, 601 (6th Cir.2000). "`Brady is concerned only with cases in which the government possesses information which the defendant does not.' Further, there is no Brady violation if the defendant knew or should have known the essential facts permitting him to take advantage of the information in question, or if the information was available to him from another source." Id. (quoting United States v. Mullins, 22 F.3d 1365, 1371 (1994)).

Graham's claim fails to satisfy the...