U.S. v. Hart, 92-2144

• Decision Date: 03 January 1996
• Docket Number: No. 92-2144,92-2144
• Citation: 70 F.3d 854
• Parties: -502, 43 Fed. R. Evid. Serv. 430 UNITED STATES of America, Plaintiff-Appellee, v. William L. HART, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 854

70 F.3d 854

77 A.F.T.R.2d 96-502, 43 Fed. R. Evid. Serv. 430

UNITED STATES of America, Plaintiff-Appellee, v. William L. HART, Defendant-Appellant.

No. 92-2144.

United States Court of Appeals Sixth Circuit.

Argued Jan. 23, 1995.

Decided Nov. 16, 1995.

Rehearing and Suggestion for Rehearing En Banc Denied Jan. 3, 1996.

Jennifer J. Peregord (argued and briefed), Alan M. Gershel, Office of U.S. Attorney, Detroit, MI, for Plaintiff-Appellee.

Arthur Jay Weiss (argued and briefed), Law Offices of Arthur Jay Weiss & Associates, Farmington Hills, MI, for Defendant-Appellant.

Before: JONES, CONTIE, and MILBURN, Circuit Judges.

NATHANIEL R. JONES, Circuit Judge.

In one of the saddest, yet most egregious cases of public corruption to come before this court in recent years, Defendant-Appellant William L. Hart, the former Chief of Police for the City of Detroit, appeals his conviction for embezzlement and filing false income tax returns. Upon careful consideration of the record before this court and the oral arguments, we conclude that appellant's arguments are without merit. Accordingly, we affirm the conviction and sentence in their entirety.

I.

Many of the facts relevant to this case are set out in two previously published opinions of the district court, United States v. Hart, 779 F.Supp. 883 (E.D.Mich.1991), and United States v. Hart, 803 F.Supp. 53 (E.D.Mich.1992), and need not be recounted at length. By way of background, however, William Hart joined the Detroit Police Department ("DPD") as an officer in 1952, and over a twenty-four year period, worked his way up through the ranks of the DPD. In 1976, Hart was appointed to the position of Chief of Police, a post held until February 1991, when he was suspended as a result of the instant offense. Hart's annual salary as Chief of Police was $95,000.

As Chief of Police, Hart administered the DPD's "Secret Service Fund" (the "SSF")--a pool of money that was disbursed at the discretion of the Chief, with little departmental oversight, for the purposes of covert police operations. The SSF operated as a revolving fund. The City Finance Department set a maximum balance for the SSF, and as the balance was depleted, the DPD requested reimbursement in order to bring the SSF back up to its maximum balance. Hart usually made these requests, and the Finance Department issued checks to replenish the SSF. The DPD was required to maintain invoices, receipts, and other documentation of its SSF expenditures.

In July 1982, Hart ordered William Dwyer, the commander of the Chief's Staff Division, to establish a cash fund to finance a covert operation designated as "82-1." Hart revealed the nature of covert operation 82-1 to no one, and during his custodianship of the Fund from July 1982 through 1989, Hart approved a total of ninety-eight fraudulent checks made payable to cash and drawn on the SSF primary account. After Hart signed the checks, a staff member, usually Joe Gilliam, cashed the checks and gave the money to Dwyer, who then gave the cash to Hart. If Hart was not available, Dwyer would secure the cash in his office until Hart was available. Dwyer continued this practice until he left the DPD in 1984.

After Dwyer left, Hart stopped submitting written requests for the SSF checks, and he began to make verbal requests for money from the SSF. Hart also discontinued the practice of providing written documentation for expenditures of SSF money. Meanwhile, the proceeds of these checks continued to go directly to Hart. During the period from 1982-89, Hart received and/or controlled cash in the amount of $1,292,542.

During a joint investigation of Hart by the FBI and IRS, Hart gave the investigating agents various false and contradictory explanations for the expenditures. Hart also provided the agents with a list of several "investigations" that he claimed received money from the 82-1 fund. Hart refused, however, to disclose either the amount of money that was channelled to these alleged investigations or to whom the money was transferred. Hart also refused an audit by the Auditor General. Eventually, the agents learned that many of the investigations included on Hart's list either required no funding or were funded by other divisions, and that of the $1,292,542 in the 82-1 fund, only $237,136 had been used for legitimate law enforcement purposes.

The other primary member of the conspiracy alleged to have profited from Hart's embezzlement scheme was Kenneth Weiner, a former Deputy Chief in the DPD. Hart and Weiner were friends before Weiner was appointed to the DPD, and during the time they served together at the DPD, Hart maintained close working and social relationships with Weiner. ¹ Weiner ran several bogus corporations to which Hart funneled $1,292,305 from the SSF. The government's investigation revealed that the SSF funds forwarded to Weiner's entities supported no legitimate law enforcement operations and that these funds were converted for Hart's and Weiner's personal use. Hart, however, claimed that he believed Weiner subcontracted for various security projects, and during the course of his trial, Hart unsuccessfully attempted to introduce evidence that Weiner was a skilled con-man who had successfully deceived government agents on numerous occasions.

Federal agents prepared a financial profile of Hart for the years of 1971-1984. This profile showed that from 1971-1981, Hart's income did not exceed his expenditures, but from 1982--the year the 82-1 covert fund was created--through 1984, Hart's provable expenditures exceeded his income by $210,000. Hart reported none of the SSF money as income on his tax returns from 1982-1989.

During the time of Hart's embezzlement scheme, several units in the DPD experienced serious financial difficulties, as a result of their inability to obtain reimbursement from the SSF for their sub-accounts. For instance, during 1987, the year in which Hart embezzled the most money, lack of reimbursement hindered operations in the Internal Affairs and Organized Crime Sections. In 1986 and 1987, officers in the Narcotics Division were forced to use their own money for drug buys. In fact, the checks to Weiner were such a drain on the SSF that in April 1987, the SSF actually went into overdraft status when Weiner cashed a check too soon. To correct this problem, Weiner promptly wired $7,000.00 to the DPD from one of his bogus corporations.

On June 17, 1991, Hart was indicted and charged with three counts of embezzlement, one count of tampering with a witness, and three counts of tax fraud. ² Following a three-and-a-half month trial, the jury convicted Hart of two counts of embezzlement and two counts of tax fraud. Hart was subsequently sentenced to a ten-year term of imprisonment and ordered to pay restitution in the amount of $2,347,710.90.

II.

A.

We first address Hart's argument that he should have been permitted to examine testifying government agents on the issue of Kenneth Weiner's alleged "cons" of the United States Attorney's Office, the FBI, and the IRS in an unrelated criminal matter. As part of his defense, Hart maintained that Kenneth Weiner had conned him into believing that the cash payments to Weiner's companies were being used for legitimate law enforcement purposes. During cross-examination of FBI Agent Justin Fox, the defense attempted to elicit testimony that Weiner had misled government agents on a previous occasion. The government objected, and following an evidentiary hearing, the district court prohibited this line of questioning on three grounds. First the court ruled that, under Federal Rule of Evidence 404(a), ³ such questions were impermissible character evidence; second, the court found that under Federal Rule of Evidence 401, ⁴ Weiner's alleged ability to mislead government agents in an unrelated criminal matter was irrelevant to Hart's prosecution; and third, the court ruled that even if the evidence were relevant, its introduction would be substantially more prejudicial than probative under Federal Rule of Evidence 403. ⁵ See J.A. at 374-400.

On appeal, Hart argues that the exclusion of this evidence denied him his right to present a defense. As we have noted in numerous prior decisions, "a trial judge has broad discretion on evidentiary rulings, because this type of decision turns upon the evidence as developed during the course of a trial." United States v. Todd, 920 F.2d 399, 403 (6th Cir.1990). This deferential standard of review applies to a district court's determinations of the relevance of evidence under Rule 401, see United States v. Hawkins, 969 F.2d 169, 174 (6th Cir. 1992), cert. denied, --- U.S. ----, 113 S.Ct. 1021, 122 L.Ed.2d 168 (1993), as well as determinations under Rule 403 that the prejudicial value of evidence outweighs its probative value. See United States v. Ushery, 968 F.2d 575, 580 (6th Cir.), cert. denied, 506 U.S. 946, 113 S.Ct. 392, 121 L.Ed.2d 301 (1992); United States v. Dabish, 708 F.2d 240, 243 (6th Cir.1983). Because the district court observes the trial first hand, it is in "the best position to assess the impact of the testimony within the context of the proceedings." Ushery, 968 F.2d at 580.

We find that the district court properly exercised its discretion by refusing to allow the defense to question government agents regarding misleading statements that Weiner made in an unrelated case. First the district court properly found that evidence of Weiner's alleged prior deceptions of FBI and IRS agents was inadmissible character evidence. Hart's claim was that Weiner's past success in conning federal agents made it more likely that he would have succeeded in conning Hart in the instant case. This amounts to no more than an attempt to establish that Weiner possessed a deceptive character and to demonstrate that he acted in conformity with this character trait in his dealings with Hart. Federal Rule of Evidence 404 prohibits the introduction of character...