767 F.2d 1334 (9th Cir. 1985), 84-3074, United States v. Black

Docket Nº:84-3074.
Citation:767 F.2d 1334
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Charles Ira BLACK, Defendant-Appellant.
Case Date:August 07, 1985
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit
 
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767 F.2d 1334 (9th Cir. 1985)

UNITED STATES of America, Plaintiff-Appellee,

v.

Charles Ira BLACK, Defendant-Appellant.

No. 84-3074.

United States Court of Appeals, Ninth Circuit

August 7, 1985

Argued and Submitted May 7, 1985.

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Robert C. Weaver, Asst. U.S. Atty., Portland, Or., for plaintiff-appellee.

Norman Sepenuk, James Collins, Portland, Or., for defendant-appellant.

Appeal from the United States District Court for the District of Oregon.

Before KILKENNY, WALLACE, and SNEED, Circuit Judges.

SNEED, Circuit Judge:

Black appeals his convictions for 19 counts of mail fraud, in violation of 18 U.S.C. Sec. 1341; 16 counts of aiding and abetting the preparation of false income tax returns, in violation of 26 U.S.C. Sec. 7206(2); one count of failing to file a tax return, and one count of filing a return which materially understated gross receipts, in violation of 26 U.S.C. Sec. 7206(1). Black contends that the trial judge erred in refusing to order corrective action in response to a letter sent by the prosecutor to prospective witnesses and in admitting certain evidence at trial. Black also challenges the award of restitution fixed as a condition of his probation. We affirm Black's conviction, but reverse the restitution order.

I.

BACKGROUND FACTS AND ISSUES

The evidence at trial established that Black sold tax shelters involving commodity straddles in treasury bill (T-Bill) and

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silver futures. Black represented to investors that Oxford Investment Management Company (Oxford), an independent commodity brokerage house located in the Cayman Islands, would actually conduct the straddle transactions. There was evidence that Oxford never made the promised futures transactions. Instead, Black diverted funds invested in Oxford to his own use and benefit. He manufactured the confirmation slips and other records documenting the purported transactions at his office in Portland, Oregon.

Black was convicted after a jury trial. The district judge sentenced Black to a combined total of 8 years imprisonment based on one mail fraud and one false tax return count. The district judge also imposed fines totalling $114,000 and costs of prosecution in the amount of $28,291.91. As a condition of probation on the remaining counts, the judge ordered Black to make restitution in an amount not to exceed $787,000. 1

On appeal, Black does not attack the sufficiency of the evidence underlying the convictions. Rather, he alleges that the district court erred in the following four respects. These are: (1) that the district court erred in failing to order the prosecutor to send a "corrective letter" informing prospective witnesses that they had no obligation to speak with either defense or prosecution attorneys; (2) that the district court should have suppressed evidence obtained from Ms. Grace George; (3) that the district court should not have admitted certain documents pertaining to Oxford and the testimony relating to them; and (4) that the district court erred in ordering restitution in an amount in excess of the specific dollar amounts alleged in the indictment. As indicated above, we find merit only in the last contention. We shall discuss each separately, however.

II.

THE CORRECTIVE LETTER ISSUE

In preparing the government's case for trial, the prosecutor sent a letter to all prospective witnesses. Enclosed with the letter was a subpoena. The letter explained the pretrial and trial procedures and went on to say,

At some point prior to trial you may be contacted by an attorney on behalf of the defendant. You may speak to this person if you choose, but have no obligation to do so.

Black objected that the letter discouraged witnesses from talking to the defense. He requested that the district court order the prosecutor to send a corrective letter, clarifying that the witnesses had no obligation to speak with either defense or prosecution attorneys. Despite statements by defense counsel that prospective witnesses were refusing interviews, the district judge concluded that Black had failed to present "evidence of any substantial weight of any witness who had refused to speak with defense counsel because of receipt of the government's letter." Excerpt at 55. Consequently, the district court denied Black's request for corrective action.

Black contends that the district court erred by conditioning corrective action on a showing that witnesses refused to talk to the defense because of the letter. It is true, as Black contends, that both sides have the right to interview witnesses before trial. See United States v. Cook, 608 F.2d 1175, 1180 (9th Cir.1979), cert. denied, 444 U.S. 1034, 100 S.Ct. 706, 62 L.Ed.2d 670 (1980). Absent a fairly compelling justification, the government may not interfere with defense access to witnesses. Id.; accord United States v. Scott, 518 F.2d 261, 268 (6th Cir.1975). Black relies primarily on Gregory v. United States, 369 F.2d 185 (D.C.Cir.1966), cert. denied, 396 U.S. 865, 90 S.Ct. 143, 24 L.Ed.2d 119 (1969). In Gregory, the prosecutor advised the witnesses not to talk to anyone unless he was present. The court held that such advice effectively denied defense

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counsel access to witnesses except in the presence of the prosecutor, and consequently denied the defendant a fair trial. Black contends that the prosecution in the present case similarly impaired Black's ability to prepare for trial.

Black's reliance on Gregory is misplaced. In the present case, the prosecutor did not insist on being present at the defense interviews; rather, he merely advised the witnesses of their right to decline the defendant's request for an interview. Unlike the advice given in Gregory, the prosecutor's letter constituted a correct statement of the law and was not improper. 2

Black ignores that a defendant's right of access to a witness "exists co-equally with the witnesses' right to refuse to say anything." United States v. Rice, 550 F.2d 1364, 1374 (5th Cir.), cert. denied, 434 U.S. 954, 98 S.Ct. 479, 54 L.Ed.2d 312 (1977); accord Scott, 518 F.2d at 268. The defendant's right of access is not violated when a witness chooses voluntarily not to be interviewed. See, e.g., United States v. Pinto, 755 F.2d 150, 152 (10th Cir.1985); United States v. Bittner, 728 F.2d 1038, 1041 (8th Cir.1984). While the prosecution may not interfere with a witness's free choice to speak with the defense, we agree with courts in other circuits that merely informing the witness that he may decline the interview is not improper. See, e.g., Pinto, 755 F.2d at 152; Bittner, 728 F.2d at 1041-42; United States v. White, 454 F.2d 435, 439 (7th Cir.1971), cert. denied, 406 U.S. 962, 92 S.Ct. 2070, 32 L.Ed.2d 350 (1972). The district court properly refused Black's request for corrective action.

III.

THE GRACE GEORGE DOCUMENTS ISSUE

In September 1979, state and federal agents obtained various documents from Ms. Grace George, who had served as Black's personal assistant from October 1976 until September 1978. George maintained business records relating to Oxford. She stored many of these records at her apartment, for which Black paid the rent. Black maintains that he instructed George to keep these documents hidden and that he did not authorize George to disclose the records to others.

In September 1978, Black terminated George's employment. George removed various Oxford documents from her desk and took them to her apartment as well. Black and George continued a relationship after George's employment was terminated. George continued to store Oxford documents at her apartment, and Black continued to pay her rent.

In early September 1979, an agent of the Oregon Corporation Commission contacted George in the course of investigating Black. They arranged a luncheon meeting, which an IRS agent, Andrew Karamanos, also attended. At the meeting, George produced one or two documents. Karamanos and another IRS agent met George again the following day. George invited them to her apartment, where she turned over 310 Oxford documents, of which the government introduced roughly 100 at Black's trial.

Prior to trial, Black, claiming an unlawful seizure, moved to suppress the evidence...

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