U.S. v. Holloway

• Decision Date: 13 November 1984
• Docket Number: No. 83-1490,83-1490
• Citation: 740 F.2d 1373
• Parties: 16 Fed. R. Evid. Serv. 178 UNITED STATES of America, Plaintiff-Appellee, v. Quema HOLLOWAY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1373

740 F.2d 1373

16 Fed. R. Evid. Serv. 178

UNITED STATES of America, Plaintiff-Appellee, v. Quema HOLLOWAY, Defendant-Appellant.

No. 83-1490.

United States Court of Appeals Sixth Circuit.

Argued Jan. 18, 1984.

Decided Aug. 2, 1984.

Certiorari Denied Nov. 13, 1984.

See 105 S.Ct. 440.

Kenneth T. Saukas (argued), Grand Rapids, Mich., for defendant-appellant.

John A. Smietanka, U.S. Atty., Jeanine Nemesi LaVille (argued), Grand Rapids, Mich., for plaintiff-appellee.

Before ENGEL, MARTIN and CONTIE, Circuit Judges.

CONTIE, Circuit Judge.

In this appeal we address for the second time the conviction of Quema Holloway for making a false, fictitious or fraudulent claim upon the United States government, in violation of 18 U.S.C. Sec. 287. ¹ The necessary factual background of this case is provided by our earlier decision. See United States v. Holloway, 731 F.2d 378 (6th Cir.1984). For the purposes of the present opinion we need note only the following facts. Holloway was charged with participating in a scheme in which certain prison inmates filed false tax returns. Holloway's participation in this scheme consisted of cashing the refund checks generated by these false returns. At trial, the government sought to introduce evidence of out of court statements made by Holloway's alleged coconspirator, Mickey Scarborough. Holloway objected to this evidence as being hearsay. The government responded to this objection by arguing that the evidence would be admissible under the coconspirator exception to the hearsay rule. See Fed.R.Evid. 801(d)(2)(E). Although the trial court noted the objection, it failed to make the preliminary finding necessary for admissibility under United States v. Enright, 579 F.2d 980 (6th Cir.1978). We therefore remanded the case "to the district court to make the appropriate Enright finding." Holloway, 731 F.2d at 382. We also retained jurisdiction in order to "review the trial judge's Enright finding as well as defendant Holloway's other assignments of error." Id.

I.

In United States v. Enright, 579 F.2d 980 (6th Cir.1978), we held that in order to use the coconspirator exception to the hearsay rule the government must prove by a preponderance of the evidence that a conspiracy existed, that the defendant against whom the evidence is offered was a member of the conspiracy, and that the hearsay statement was made in the course and in furtherance of the conspiracy. See id. at 986. See also Holloway, 731 F.2d at 381.

The testimony in question was given by Charles Daniel, a member of the scheme and a government witness. He testified as to several statements made by an alleged coconspirator, Mickey Scarborough, which implicated Quema Holloway in the scheme. Following this court's remand, the district court reviewed the record and found that the government had proved the threshold requirements for admitting a coconspirator's out of court statements by a preponderance of the evidence. We find no error in this ruling. ²

The finding that there was a conspiracy and that Holloway was a member of it is well supported. The record indicates that the conspiracy existed at least as long ago as early 1980, when Holloway cashed an income tax refund check for Eddy Connor, one of the inmates involved in the scheme. A letter from Connor to Holloway told Holloway how to distribute the proceeds from Connor's check as well as from the checks of two other inmates. Two parts of this letter are highly significant. First, one of the checks was from "Mickey." Second, Holloway was to retain part of the proceeds of the checks for herself. This letter thus supports a finding not only that there was a conspiracy, but that Holloway and Mickey Scarborough were members of it.

Also supporting this finding is the testimony of Holloway's ex-husband, Robert Holloway. Robert Holloway testified that Quema Holloway offered to help him obtain money by means of a tax fraud scheme. Robert Holloway also testified that Quema Holloway stated that before implementing this plan, she would need to contact Mickey Scarborough.

Finally, the court's finding is supported by the testimony of Charles Daniel, one of the inmates who participated in the scheme. Daniel testified that he was asked by a fellow inmate in 1980 and 1981 if he wanted to join the scheme. He agreed to do so in 1981 and was told that he would need an address "in the free world" to which the check could be sent. Lacking such an address, Daniel approach Scarborough. According to Daniel, Scarborough gave Daniel an address and told him that he could send his check there to be cashed. Daniel recalled that the address was in Blanchard, Michigan, where Quema Holloway resided. Scarborough told Daniel that this person was named Quema Holloway and that she had performed similar services in the past for him and in particular that she had cashed a check in 1980 for Scarborough as a part of the same scheme. Scarborough also told Daniel that he would have to pay Quema Holloway for her help.

The foregoing evidence provides ample support for the district court's finding that a conspiracy existed and that Quema Holloway was a member of it.

The finding that Scarborough's statements to Daniel, described above, were in the course and furtherance of the conspiracy is also well supported. Each of the statements explained how the scheme worked. They were thus used to recruit Daniel into the conspiracy and to give him information necessary to achieve its ends. We find no error in the district court's ruling that the statements were made in the course and in the furtherance of the conspiracy.

We now proceed to review Holloway's other assignments of error.

II.

Holloway challenges two evidentiary rulings by the district court. The first relates to the admission of testimony concerning prior similar acts by Holloway. The second relates to the admissibility of character evidence.

The district court allowed the government to introduce evidence that Quema Holloway had cashed fraudulently generated income tax refund checks other than those charged in the indictment. The government contends that this evidence was admissible under Federal Rule of Evidence 404(b), as probative of intent or absence of mistake. ³ Holloway argues that these prior incidents were not admissible for any of the purposes specified in Rule 404(b) and that, even if they were, they should have been excluded under Rule 403 because their prejudicial impact outweighed their probative value. ⁴

Holloway does not contend that she did not cash the checks specified in the indictment. Rather, her defense has been that she did not act with the requisite knowledge that the checks were fraudulently obtained. The issue of Holloway's knowledge was therefore central to the case. This court has on several occasions upheld the introduction of testimony of prior similar acts under Rule 404(b) as probative of the absence of mistake or presence of knowledge. See, e.g., United States v. Grimes, 620 F.2d 587, 588 (6th Cir.1980); United States v. Tarnowski, 583 F.2d 903, 906 (6th Cir.1978), cert. denied, 440 U.S. 918, 99 S.Ct. 1238, 59 L.Ed.2d 468 (1979); United States v. Semak, 536 F.2d 1142, 1144-45 (6th Cir.1976). As we stated in Semak, "the recurrence of similar acts incrementally reduces the possibility that the given instance ... is the result of inadvertence, mistake, or other innocent event." See id. at 1145. The evidence in question here was clearly probative of the absence of mistake and thus came within one of the exceptions stated in Rule 404(b).

Even if evidence of a prior act is probative of one of the issues specified in Rule 404(b), it should be excluded if its prejudicial impact outweighs its probative value. See Fed.R.Evid. 403; United States v. Davis, 707 F.2d 880, 884 (6th Cir.1983); United States v. Vincent, 681 F.2d 462, 465 (6th Cir.1982). A district judge's balancing of prejudicial impact and probative value under Rule 403 is reviewable for abuse of discretion. Davis, 707 F.2d at 884; Vincent, 681 F.2d at 465.

We find no abuse of discretion in admitting the evidence in question in this case. The evidence had a high probative value because Holloway's knowledge was a crucial issue in the case. The prejudicial impact of the evidence was blunted by a properly worded limiting instruction. ⁵ See Davis 07 F.2d at 884 ("Though the chance of prejudice is always present in a 404(b) situation, the district judge greatly reduced this problem by giving the jury a limiting instruction ...."). Moreover, exclusion of evidence under Rule 403 is necessary "only where the probative value of the relevant evidence is substantially outweighed by the danger of unfair prejudice." United States v. Hans, 684 F.2d 343, 346 (6th Cir.1982). In reviewing a district court's ruling on a Rule 403 objection, "we must look at the evidence in a light most favorable to its proponent, maximizing its probative value and minimizing its prejudicial effect." United States v. Brady, 595 F.2d 359, 361 (6th Cir.), cert. denied, 444 U.S. 862, 100 S.Ct. 129, 62 L.Ed.2d 84 (1979). Viewing the prior acts testimony in this light, we cannot conclude that its potential for prejudice substantially outweighs its probative value.

Holloway also asserts that a ruling by the district court on the admissibility of evidence of her association with Ku Klux Klan requires reversal. This issue arises in a somewhat unusual procedural context.

Kathleen Felde, Quema Holloway's former housekeeper, testified for the government. During the course of the trial, defense counsel learned that Felde "might be inclined to testify" about Holloway's relationship with the Ku Klux Klan. He therefore made a motion in limine to exclude any evidence concerning the Klan as irrelevant and prejudicial. The district court ruled that the government's witnesses could not testify during the government's case-in-chief about Holloway's association with the Klan. The court also ruled, however, that if...