U.S. v. Cowley, s. 82-1741

• Decision Date: 15 November 1983
• Docket Number: Nos. 82-1741,82-1742,s. 82-1741
• Citation: 720 F.2d 1037
• Parties: 14 Fed. R. Evid. Serv. 1274 UNITED STATES of America, Plaintiff-Appellee, v. Victor COWLEY and Michael St. Clair, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1037

720 F.2d 1037

14 Fed. R. Evid. Serv. 1274

UNITED STATES of America, Plaintiff-Appellee, v. Victor COWLEY and Michael St. Clair, Defendants-Appellants.

Nos. 82-1741, 82-1742.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Aug. 10, 1983.

Decided Nov. 15, 1983.

Sandra Teters, Asst. U.S. Atty., San Francisco, Cal., for plaintiff-appellee.

Anne Flower Cumings, John W. Keker, Christopher J. Hunt, David Meadows, Keker & Brockett, San Francisco, Cal., for defendants-appellants.

Appeal from the United States District Court for the Northern District of California.

Before TUTTLE, ^* PREGERSON and REINHARDT, Circuit Judges.

PREGERSON, Circuit Judge:

Appellants St. Clair and Cowley were convicted of violating 18 U.S.C. Sec. 1623 for willfully and knowingly making material false declarations before a grand jury (perjury). St. Clair was convicted under counts 2 and 3; Cowley was convicted under count 4. Both appeal their convictions. St. Clair's conviction is affirmed as to count 2 and reversed as to count 3. Cowley's conviction is reversed.

FACTS

St. Clair conducted business in the field of international finance as Channel Associates, located in Santa Barbara. Cowley was employed in that business. In late 1979 or early 1980, James Paige, controller of Holland Oil Company, telephoned St. Clair and explained that he wanted two cashier's checks to be cashed abroad. St. Clair agreed to cash the checks for a $25,000 fee. On February 11, 1980, Paige purchased two cashier's checks from a San Francisco bank, one for $432,946.44 and another for $670,051.00 and, at St. Clair's suggestion, designated "Templeton Company" as payee. On the same day, Paige flew to Santa Barbara and delivered the checks to St. Clair. On February 27, 1980, St. Clair and Cowley flew to Anguilla in the British West Indies, where St. Clair made an initial $50 deposit in a "Templeton Company" account at the International Investment Bank. On February 28, St. Clair and Cowley deposited the two cashier's checks in the Templeton account and instructed the bank manager to send a deposit receipt to a Mr. Andrew Templeton at a Tokyo address.

When problems arose in clearing the checks, the bank manager from the International Investment Bank tried unsuccessfully to contact Mr. Templeton. He attempted to call Templeton and sent a cable and a letter to his address in Tokyo, but was never able to locate or reach him. The manager testified that before the two cashier's checks cleared he received two letters purporting to be from Mr. Templeton, one of which bore a "Santa Barbara" postmark. When the checks finally cleared in April 1980, St. Clair advised Paige that the money was in a Swiss bank account.

The pivotal factual dispute centers on Andrew Templeton's role in the banking transaction. Appellants contend that while they were at the airport on the island of Antigua, they happened to meet Templeton, who, after learning that they were on their way to Anguilla, asked them if they would deposit the contents of an envelope at the International Investment Bank. Cowley contends that he first met Templeton at that meeting, while St. Clair testified that he had met Templeton once previously in Nassau. The government contends that Templeton does not exist except as a fictional character in a money laundering scheme devised by appellants and Paige. There was evidence indicating that no one by the name of Templeton arrived in Anguilla between December 1, 1979 and April 30, 1980. The evidence, however, did show that on February 27, 1980, St. Clair and Cowley entered Anguilla Island by air. On that date an account in the name of the Templeton Company was opened at the International Investment Bank. The first deposit was $50.00. The next day the two cashier's checks were deposited in that account.

In December 1981, St. Clair and Cowley were subpoenaed to appear before a federal grand jury investigating Holland Oil Company. Shortly after appearing, they were jointly indicted for perjury in connection with their grand jury testimony. They moved for separate trials, and their motions were granted. Thereafter, the government went before the grand jury and obtained a In these consolidated appeals, appellants contend that their convictions should be reversed because (1) they were prejudicially misjoined; (2) the prosecutor's questions were ambiguous, and therefore their answers were not perjurious; (3) it was error to admit hearsay testimony concerning the Santa Barbara postmark; and (4) they were unlawfully denied the opportunity to examine statements made by Paige, the key government witness, to the Federal Bureau of Investigation (FBI).

superseding indictment charging appellants under 18 U.S.C. Sec. 371 with conspiracy to obstruct justice and to make false statements to a grand jury. The superseding indictment also charged appellants with substantive perjury violations. Appellants again moved for severance, but their motions were denied. After the government presented its case, the court granted appellants' motions for judgment of acquittal on the conspiracy count. Appellants again moved for severance but were unsuccessful. At the conclusion of a seven-day trial, the jury found St. Clair guilty of two counts of perjury and Cowley guilty of one count of perjury.

STANDARD OF REVIEW

In reviewing the trial court's rulings on misjoinder, admission of hearsay testimony concerning the Santa Barbara postmark, and Paige's statements to the FBI, we are governed by the abuse of discretion standard. ¹ In reviewing the perjury counts, we apply a de novo standard. ²

MISJOINDER

The trial court originally ruled that defendants were misjoined under Fed.R.Crim.P. 8(b) ³ and ordered a severance. The government then filed a superseding indictment charging appellants with conspiracy to obstruct justice and to make false statements to a grand jury in violation of 18 U.S.C. Sec. 371. The addition of the conspiracy count to the earlier perjury counts made joinder proper under Rule 8(b). The appellants' renewed motion for severance was denied. However, at the close of the government's case, the district court granted appellants' motion for judgment of acquittal on the conspiracy count. Appellants again moved for severance. The district court denied the motion on two grounds. The court found no evidence of bad faith on the government's part in bringing the additional conspiracy charge and also concluded that appellants suffered no prejudice as a result of the joinder.

Appellants contend that bringing a conspiracy charge after the court granted severance is prima facie evidence of the government's bad faith requiring reversal of their convictions. From a review of the record, however, we are unable to say that the trial judge abused his discretion when he denied severance. It appears that the government did not act in bad faith, as it had a reasonable expectation that sufficient proof of a conspiracy would be forthcoming at trial. See United States v. Ong, 541 F.2d 331, 337 (2d Cir.1976), cert. denied, 429 U.S. 1075, 97 S.Ct. 814, 50 L.Ed.2d 793 (1977). ⁴

Further, appellants argue that they were prejudiced by the joinder so as to require reversal.

The party seeking reversal of a decision denying severance under Rule 14 has the burden of proving "clear," "manifest," or "undue" prejudice from the joint trial. (Citations omitted.) Such a party must show more than that a separate trial would have given him a better chance for acquittal. (Citations omitted.) He must also show violation of one of his substantive rights by reason of the joint trial: unavailability of full cross-examination, lack of opportunity to present an individual defense, denial of Sixth Amendment confrontation rights, lack of separate counsel among defendants with conflicting interests, or failure properly to instruct the jury on the admissibility of evidence as to each defendant. (Citations omitted.) In other words, the prejudice must have been of such magnitude that the defendant was denied a fair trial. (Citations omitted.) Clearly, this is not an easy burden to meet.

The prime consideration in assessing the prejudicial effect of the joint trial is whether the jury can reasonably be expected to compartmentalize the evidence as it relates to separate defendants, in view of its volume and the limited admissibility of some of the evidence. (Citations omitted.) The prejudicial effect of evidence relating to the guilt of codefendants is generally held to be neutralized by careful instruction by the trial judge. (Citations omitted.)

United States v. Escalante, 637 F.2d 1197, 1201 (9th Cir.1980), cert. denied, 449 U.S. 856, 101 S.Ct. 154, 66 L.Ed.2d 71 (1980).

Appellants have not shown the requisite prejudice. Their stories were similar, thus the risk of the jury confusing the evidence with respect to each appellant was minimal. No violation of a substantive right by reason of a joint trial was shown. Furthermore, during the course of the trial, the judge was careful to give limiting instructions advising the jury that certain evidence was admitted only against a particular defendant. We therefore conclude that the trial judge did not abuse his discretion when he denied severance.

PERJURY COUNTS

Appellants contend that the perjury counts are fatally flawed for two reasons: (1) the prosecutor's grand jury questions, restated in the indictment, are ambiguous; and (2) the statements in the indictment's truth paragraph are not in stark contrast with appellants' answers before the grand jury. For the reasons set forth below, we affirm the conviction on Count 2 and reverse on Counts 3 and 4.

Bronston v. United States, 409 U.S. 352, 93 S.Ct. 595, 34 L.Ed.2d 568 (1973), clearly states the basic ingredient of a successful perjury prosecution: "Precise questioning is imperative as a predicate for the offense of perjury." Id. at 362, 93 S.Ct. at 602. Stated another way: "The burden is on the questioner to...