U.S. v. August

• Decision Date: 09 October 1984
• Docket Number: 83-1466,Nos. 83-1465,s. 83-1465
• Citation: 745 F.2d 400
• Parties: 16 Fed. R. Evid. Serv. 731 UNITED STATES of America, Plaintiff-Appellee, v. Irving AUGUST and Kathleen Bogoff, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 400

745 F.2d 400

16 Fed. R. Evid. Serv. 731

UNITED STATES of America, Plaintiff-Appellee, v. Irving AUGUST and Kathleen Bogoff, Defendants-Appellants.

Nos. 83-1465, 83-1466.

United States Court of Appeals Sixth Circuit.

Argued May 3, 1984.

Decided Oct. 9, 1984.

Albert J. Krieger (argued), Miami, Fla., for defendant-appellant august.

J. Leonard Hyman (argued), Hyman, Gurwin, Nachman, Friedman, & Winkelman and Richard Bisio, Southfield, Mich., for defendant-appellant Bogoff.

Leonard R. Gilman, U.S. Atty., Patricia G. Reeves (argued), Asst. U.S. Atty., Detroit, Mich., for appellee.

Before CONTIE, WELLFORD and TIMBERS , ^* Circuit Judges.

TIMBERS, Circuit Judge.

Appellants Irwin August and Kathleen Bogoff appeal from judgments of conviction entered June 28, 1983 after a seven week jury trial in the Eastern District of Michigan, Ralph M. Freeman, District Judge.

During the period covered by the indictment, August was a Detroit attorney who specialized in bankruptcy matters; Bogoff was a bankruptcy court "intake clerk". The crimes of which they were convicted involved a scheme to circumvent the blind draw case assignment system operated by the bankruptcy court clerk's office in Detroit so that very few of August's Chapter 11 bankruptcy cases would be assigned to a particular bankruptcy judge.

Both August and Bogoff were convicted of conspiring to defraud the United States of the due administration of justice, in violation of 18 U.S.C. Sec. 371 (1982) (Count One). Both were convicted of impeding the due administration of justice by manipulating the blind draw system in the bankruptcy court, in violation of 18 U.S.C. Sec. 1503 (1982) (Count Two). August was convicted of attempting to influence Bogoff in the discharge of her official duties as a court clerk, in violation of 18 U.S.C. Sec. 1503 (1982) (Count Three). ¹ August was sentenced to three concurrent two-year prison terms on each of the counts upon which he was convicted. Bogoff was sentenced to two concurrent one-year prison terms on each of the counts upon which she was convicted. Both appellants are at liberty on bail pending appeal.

The chief issue raised on appeal relates to the district court's reference in the presence of the jury, on the last day upon which testimony was taken, to a prior ruling concerning the admissibility of hearsay statements made by a co-conspirator. Other subordinate claims of error are raised.

For the reasons stated below, we affirm the judgments of conviction of both appellants on all counts upon which they were convicted.

I.

We shall summarize those facts and prior proceedings believed necessary to an understanding of our rulings on the issues raised on appeal.

The relevant period of time is that covered by the counts of the indictment related to this appeal--from October 3, 1979 to October 30, 1980. During this period, three bankruptcy judges sat in the Eastern District of Michigan, Southern Division: Judge Hackett, Judge Brody, and Judge Patton. Judge Patton took all of the Chapter 13 cases. A blind draw system was designed to assign to him approximately 30% of the Chapter 7 and Chapter 11 cases. The system was operated by using decks of 100 3"' X 5"' index cards, each typically containing 30 marked for Judge Patton and 35 marked for each of Judges Brody and Hackett. The cards were shuffled, numbered, and sealed on three sides so that the judge's name was not visible. In eighteen of the seventy-two packs used while Bogoff was an intake clerk, the order of the cards was adjusted so that no two cards bearing the same judge's name were next to each other; in other cases, the cards were randomly mixed. When a bankruptcy petition was filed, the intake clerk removed the top card from a judge assignment deck, turned it over to reveal the name of the judge to whom the case was assigned, and stamped that judge's name on the petition.

August's law firm filed about one-half of the Chapter 11 cases in the Eastern District of Michigan during the period here involved. August had a romantic relationship during this period with intake clerk Bogoff. ² Although she was not the only clerk in the office and filed only about half of all bankruptcy petitions, she arranged matters so that she handled almost all of the judge assignments in cases involving August's firm. She allowed members of that firm to come behind the counter to drop off filings without waiting in line. She permitted August to leave on her desk his briefcase containing filings.

The government's theory was that Bogoff would take several petitions to the counter, draw a card and look at the judge's name. If Judge Patton's or Judge Hackett's name appeared, she would file the Chapter 11 petition presented by the August firm. ³ Sixty-eight Chapter 11 cases were filed by August's firm during this period, of which 92% were handled by Bogoff and only nine initially were assigned to Judge Brody. If multiple petitions were filed involving the same parties, the cases were eventually consolidated and assigned to the judge to whom the first of the petitions had been assigned. After consolidations, only four Chapter 11 cases filed by the August firm remained assigned to Judge Brody. ⁴

At trial, the government adduced circumstantial evidence that it was possible to manipulate the blind draw system; that Bogoff had filed almost all of August's cases; and that a disproportionately low percentage of August's cases were assigned to Judge Brody. Professor David Doane, an expert statistician, testified that there was a 99.97% chance that more August cases would have been assigned to Judge Brody if the blind draw system were truly random.

The chief issue raised on appeal, referred to above, arose during the government's examination of rebuttal witness Ronald Mellish (chief deputy clerk of the bankruptcy court) on the last day of testimony. A question was asked concerning a conversation between Bogoff and the witness. Counsel for August objected to the question on the ground that it called for an answer which would be hearsay as to August. ⁵ In addressing this objection, the court stated, "Well, as to count one I have ruled on that, I think, as to the conspiracy time, and I have made findings earlier out of the presence of the jury that the conspiracy existed and that the defendants were members of the conspiracy, including Mr. August, and that any statement made at that time [January of 1980] would be in furtherance of the conspiracy." ⁶ At this point, government counsel started to make a comment, but the court added, "I am talking now about the admissibility of evidence."

Counsel for August asked to make an application outside the presence of the jury. The jury left the courtroom at 11:25 a.m. Counsel for August then requested a mistrial, arguing that no corrective instruction or charge could remove the prejudice resulting from the court's comment. The court denied the motion for a mistrial. It agreed, however, at counsel's request, to instruct the jury that the court makes certain evidentiary rulings concerning what evidence is admissible and what evidence the jury may consider; that the court's remarks were directed solely to the issue of the admissibility of evidence and not to the factual determination; and that it is left solely to the jury to determine whether or not a conspiracy existed and who were the members.

A recess was taken, during which the court conferred with counsel regarding the language of the proposed cautionary instruction. Counsel took exception only to the court's reciting in substance the remarks which occasioned the motion for a mistrial. In accordance with counsel's request, these remarks were not repeated to the jury. The jury was brought back in at 1:49 p.m. The court then gave the jury the following cautionary instruction:

"THE COURT:

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* * *

I would like to say that during the direct examination of the Government's rebuttal witness, Mr. Mellish, Mr. Reisig asked the witness to relate a conversation he had had with the Defendant Bogoff, to which Mr. Krieger objected to it being hearsay as to the Defendant August.

At that time I indicated I had previously ruled on the issue and made certain remarks about the conspiracy charge.

I want to caution you that I was only ruling on the admissibility of the evidence as I am required to do out of the presence of the jury. I instruct you now to completely disregard my statements. My finding was made only with and in connection with an issue concerning the admission of certain evidence, applying principles of law with which you need not concern yourselves. Those principles of law which I apply in ruling on the admissibility of evidence at this stage of the trial are different than the principles that I will instruct you on at the end of the trial to apply in determining the guilt or innocence of the defendants.

I emphasize to you that the question of whether a conspiracy existed and whether Mr. August or Miss Bogoff were members of the conspiracy are questions of fact for you to decide based on all of the evidence in the case.

You are the sole judges of those questions of fact, and as I stated at the outset of this trial and as I will instruct you at the end of this trial, the defendants are presumed to be innocent until their guilt is proven beyond a reasonable doubt.

Now, is there any one of you who would not be able to completely disregard those remarks made by the Court that I have referred to?"

(No response from the jury.)

"THE COURT: No one has responded to that. So, I assume you can completely disregard those remarks.

Is there any one who feels that he or she could not apply the instructions as given by the Court at the conclusion of the case in light of the remarks which I have made and to which I made reference? All of you feel that you could, then, apply the instructions to be given to you by the Court at the conclusion of the case regardless of any remarks I made at the time and...