Strand v. US, Civ. No. 82-C-1138G.

• Decision Date: 28 September 1987
• Docket Number: Civ. No. 82-C-1138G.
• Parties: Michael William STRAND, Plaintiff, v. UNITED STATES of America, Defendant.
• Court: U.S. District Court — District of Utah

675 F. Supp. 1283

Michael William STRAND, Plaintiff, v. UNITED STATES of America, Defendant.

Civ. No. 82-C-1138G.

United States District Court, D. Utah, C.D.

September 28, 1987.

John T. Caine, Ogden, Utah, D. Frank Wilkins, Salt Lake City, Utah, for plaintiff.

Stewart C. Walz, Salt Lake City, Utah, for defendant.

MEMORANDUM DECISION AND ORDER

J. THOMAS GREENE, District Judge.

This matter came before the court on July 15, 1987, for an evidentiary hearing pursuant to Michael William Strand's ("Strand") Petition for a Writ of Error Coram Nobis. Strand was represented by John T. Caine and D. Frank Wilkins, and the United States of America ("Government") was represented by Stewart C. Walz. The parties presented substantial testimony and offered a number of exhibits. After closing arguments of counsel the court took the matter under advisement. Being now fully advised the court sets forth its Memorandum Decision and Order.

FACTUAL BACKGROUND

The history of this case is, by this time, rather long and complex. The court recites it at length to give perspective to Strand's present petition. On October 14, 1978, a jury found Strand guilty of willfully subscribing a false income tax return in violation of 26 U.S.C. § 7206(1), and of fraud in the sale of securities in violation of 15 U.S.C. §§ 77q(a) and 77x. A third charge, interstate transportation of stolen property was dismissed on Strand's motion at the close of the Government's case. Strand's convictions were affirmed on appeal. United States v. Strand, 617 F.2d 571 (10th Cir.1980) ("Strand I"), cert. denied 449 U.S. 841, 101 S.Ct. 120, 66 L.Ed.2d 48 (1980). The Tenth Circuit summarized the proceedings at trial as follows:

The alleged violations occurred during 1973. Strand was then involved in numerous selling and purchasing stock transactions of Epoch Corporation (Epoch), being traded on the over-the-counter exchange. Strand effectuated these transactions through his own accounts at different brokerage houses. By utilizing both his own and various nominee accounts, (fn. 1) Strand was able to control the purchase and sale "prices" of Epoch stock and create the appearance of an active market for its securities. In summarizing these transactions, Special Agent David Jensen of the Internal Revenue Service estimated Strand's Epoch transactions produced gross receipts of $293,793.37. The Government also established that during this same time frame, Strand was involved in preparations for two mergers for which he received finder's fees of $29,000.00.

Exhibit 27, admitted as a certified copy of Strand's income tax return for 1973, showed zero tax computations and income. It did not contain references to the gross receipts relating to Strand's sale of stocks or the aforesaid finder's fees.

Strand defended the charge that he had subscribed a false income tax return in violation of § 7206(1) on the basis that he had actually suffered a loss of $7,000 in 1973 on the Epoch transactions, that he did not realize he had any tax reporting obligation until after 1973 when he "heard" that even though he did not have income he was obligated to file; and that, accordingly, in January, 1975, he filed a 1973 return.

Strand defended the fraud in the sale of securities charge on the basis that: he took over trading in Epoch corporation when he thought its proposed merger with an insurance company would cause its stock to increase in value; the sale of Epoch stock, giving rise to the charges, was initiated by one Bruce Allen Jensen (Jensen); Jensen managed the entire transactions and was the principal actor throughout the whole transaction; he (Strand) was not aware that his account had been improperly used by Jensen; and when, as here, the alleged defrauded party, Jensen, was a principal in the transaction and wholly aware of the nature of the fraud, there was no fraud on that person simply because the transaction did not prove to be as beneficial as expected.

(fn. 1) A nominee account is one in which the account is listed in the name of an individual, when in fact the transactions within the account are for someone other than the named individual.

Strand I, 617 F.2d at 572-73.

On October 28, 1980, Strand filed a motion for new trial in the district court. The basis of Strand's motion was the discovery of new evidence which purportedly established the government's failure to disclose, prior to trial, exculpatory evidence, as required by Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1983) and the Jencks Act, 18 U.S.C. § 3500 (1976). In particular, Strand argued that the Government had not turned over the following: (1) a memorandum of an interview I.R.S. Special Agent Ronald Harrington ("Harrington") had on March 23, 1976 with Bruce Jensen, a witness who testified for the government at trial, and (2) the transcript of a tape recorded interview Harrington had on April 7, 1976 with Carl Martin, who did not testify at trial. The district court denied Strand's motion, finding that neither the memorandum, nor the transcript was Brady or Jencks material. The court's decision was affirmed on appeal. United States v. Strand, No. 81-1697, slip op. at 2 (10th Cir. Aug. 27, 1982) ("Strand II"). The Tenth Circuit stated:

In the instant case, it is arguable that neither Jensen's nor Martins' statements to Harrington are within the purview of the Jencks Act or the Brady v. Maryland rule. Jensen's statement to Harrington, as memorialized by Harrington, is, to us, unclear and difficult to follow and is not necessarily inconsistent with Jensen's testimony at trial. But when these two statements are placed in the context of the earlier trial, we agree with the district court that any possible error in this regard was harmless and would not have changed the outcome of the trial.

Motions for new trial based on newly discovered evidence are generally not regarded with favor and should only be granted with great caution. The grant, or denial, of a motion of this type is within the sound discretion of the trial court, and, on review, should not be reversed absent a plain abuse of discretion.... We have also said that before a new trial may be granted on the ground of newly discovered evidence, the defendant must show, inter alia, that the newly discovered evidence is not merely cumulative or impeaching in nature, but is so material and of such character that a new trial would probably produce a different result.... Here, the newly discovered evidence, which, incidentally, related primarily to the tax fraud charge contained in count one of the indictment, and had no direct relationship to the securities fraud charge contained in count two, was impeaching and cumulative in its character, and, as did the district court, we believe disclosure of the evidence would not have changed the outcome of the trial.

Strand II, No. 81-1697, slip op. at 6-7 (10th Cir. Aug. 27, 1982) (citations omitted).

On November 23, 1982, Strand filed a petition for relief from conviction under 28 U.S.C. § 2255, and a motion for reduction of sentence under Rule 35 of the Federal Rules of Criminal Procedure. The basis of Strand's § 2255 petition was again the Government's alleged failure to turn over prior to trial exculpatory evidence as required by Brady and the Jencks Act. In particular Strand asserted the Government had failed to turn over to the defense a letter dated April 28, 1976 from F.B.I. Special Agent Ronald L. Maley to C. Evan Wride, who was then chief of the Intelligence Division of the Internal Revenue Service. The letter, the court notes, "contains the description of an interview conducted by the F.B.I. with Peter James Gushi, an individual supposedly involved in some of the transactions forming the basis of the government's case against Mr. Strand at trial." Order, Nos. CR78-0091, C82-1138A, at 2 (D. Utah Aug. 3, 1983). Strand also filed a supplemental memorandum in support of his motions and attached thereto a "green folder" containing items numbered 1-26. At the hearing on the matter the Government argued that the court should not consider the items in the green folder because they had never been formally offered into evidence. The court took the entire matter under advisement. In a memorandum order the court denied Strand's motion under § 2255, having concluded that the Gushi letter was "not of such character that it is at all likely to produce a different result at a new trial." Id. The court did not discuss the items in the green folder in any way. Strand appealed, alleging that the court had erred (1) in failing to consider documentary evidence (the green folder) of governmental misconduct, and (2) in applying the wrong burden of proof in denying Strand's § 2255 petition. The Tenth Circuit affirmed the district court's order. With respect to the materials in the "green folder" the court stated,

Neither the "green folder" nor the 26 exhibits are in the record before us; nor for that matter, does the record contain all of Strand's many § 2255 pleadings which we earlier chronicled. Under such circumstance we cannot consider Strand's allegations that the district court failed to consider certain documentary evidence.

Strand v. United States, 780 F.2d 1497, 1500 (10th Cir.1985) ("Strand III").

On October 23, 1986, Strand filed another motion for new trial under § 2255. In this motion Strand again argued that the documents in the green folder should be considered as Brady material not provided the defense prior to trial. At this time Strand was no longer "in custody," having been discharged from probation on August 20, 1986. Since Strand was not in custody, the court concluded it was without jurisdiction to consider a § 2255 petition, see 28 U.S.C. § 2255; United States v. Condit, 621 F.2d 1096, 1098 (10th Cir.1980), and denied the motion without prejudice to proceeding in another way. Finally, on January 6, 1987, Strand filed the Petition for Writ of Error Coram Nobis which is now before...