U.S. v. Gardner, 74-1311

Decision Date27 May 1975
Docket NumberNo. 74-1311,74-1311
Citation516 F.2d 334
PartiesUNITED STATES of America, Plaintiff-Appellee, v. Michael S. GARDNER, Defendant-Appellant.
CourtU.S. Court of Appeals — Seventh Circuit

Morton Berger, White Plains, N. Y., for defendant-appellant.

James R. Thompson, U. S. Atty., Gary L. Starkman and Ann C. Tighe, Asst. U. S. Attys., Chicago, Ill., for plaintiff-appellee.

Before CASTLE, Senior Circuit Judge, SWYGERT, Circuit Judge, and WYZANSKI, Senior District Judge *.

CASTLE, Senior Circuit Judge.

The defendant Michael S. Gardner was convicted by a jury of wilfully and knowingly receiving, concealing and storing ten $100,000 United States Treasury bills in violation of 18 U.S.C. § 2315. 1 On appeal, Gardner urges reversal because: (1) the Government interfered with the grand jury process; (2) he was not given Miranda warnings prior to his arrest; (3) his in-custodial statements were not voluntary; (4) the Government failed to prove beyond a reasonable doubt that he was not entrapped; (5) the Government failed to prove beyond a reasonable doubt that the securities constituted interstate commerce; (6) the trial court erred in its instructions to the jury; and (7) prejudicial testimony was admitted. We affirm his conviction.

I.

The ten Treasury bills were stolen by an unknown person in New York on January 10, 1972. Louis Netzel, an FBI "cooperating individual," contacted the FBI in Chicago with the information that he had met with the defendant in New York, and at that meeting the defendant had sought his aid in disposing of stolen securities. Netzel provided the FBI with a list which he subsequently received from Gardner containing the serial numbers of stolen securities, and these numbers matched the serial numbers of the Treasury bills stolen in New York on January 10.

Subsequently, Gardner called Netzel from Florida and asked Netzel to meet him in either Miami or Panama in order to negotiate the stolen Treasury bills. Pursuant to a plan developed by the FBI, Netzel called Gardner back, and told him that because the Treasury bills were past due, it would be necessary for Gardner to come to a bank in Chicago and prepare a fraudulent Certificate of Ownership, thereby making the securities disposable even though overdue. Netzel informed Gardner that he knew a Chicago banker who had connections with an attorney who would be able to prepare the false Certificate.

Netzel met Gardner at Chicago's O'Hare Airport on October 18, 1972, and they proceeded to a coffee shop in a motel located near O'Hare. While they were in the coffee shop, Gardner recognized a man outside, left the shop and Netzel's view, and then returned to the waiting Netzel, stating that he had the securities. Netzel and Gardner then departed for a downtown Chicago bank, and at some time prior to reaching their destination, Gardner gave Netzel a sealed envelope containing the stolen securities.

They arrived at the bank at approximately 11:00 a.m. According to the FBI's prearranged plan, Netzel entered room 1305 in the bank while Gardner waited in the reception area. In that room, Netzel met with FBI agent Riggs, who had assumed the undercover role of a bank vice-president. He also met with FBI agent Zimms who had assumed the undercover identity of the attorney who was to fraudulently prepare the Certificate of Ownership necessary for negotiation. Netzel gave the envelope containing the securities to agent Riggs and told him that he had received the envelope from Gardner.

Netzel and Riggs left the office and Netzel introduced Riggs to Gardner as bank vice-president Randolph. They then returned to room 1305 where Zimms was introduced as attorney Pasquale. In the office, Riggs explained to Gardner the procedure that was to be used to negotiate the Treasury bills. After Netzel and Riggs had left the room, agent Zimms began to complete the Certificate of Ownership, and stated that he needed to know where the Treasury bills were stolen. Gardner replied that they were stolen in New York.

There was a knock at the door, and in response Gardner placed the envelope containing the Treasury bills in the inside pocket of his suitcoat and then opened the door. FBI agent Birge, who was at the partially opened door, asked Gardner if he was the bank vice-president. Gardner said no, turned his back to the door, took the envelope containing the Treasury bills from his pocket, dropped it to the floor, and kicked it under a lamp table. Agent Birge and two other agents then entered the room, and after identifying himself, Birge stated that he had information that stolen securities were in the room. Gardner stated that he had no knowledge of any stolen Treasury bills. At approximately 11:20 a.m., the agents arrested Gardner and agent Zimms.

Immediately after arresting Gardner, agent Birge orally gave Gardner his Miranda warnings and handed Gardner a waiver of rights form. Gardner read the form, but declined to sign it. He stated, however, that he understood his rights. Although informed of his right to the presence of an attorney, the evidence was conflicting as to whether Gardner requested one at that time.

The defendant was then taken to the offices of the FBI where he arrived at 11:45 a.m. Upon entering an FBI interview room, agent Birge again advised Gardner of his constitutional rights and repeated his request that Gardner sign a waiver of rights form. Gardner stated that he understood his rights, but refused to sign the form. Again, the evidence was disputed as to whether Gardner requested an attorney. The defendant was then urged to make a statement, but he responded that he was not certain what he wanted to do. Gardner thought about the matter uninterruptedly for about ten minutes, and at the end of that interval announced that he wanted to make a statement and wished to cooperate fully. After once more responding that he understood his rights, and after repeating his refusal to sign the waiver of rights form, Gardner gave a statement of his participation in the crime charged. He was brought before a magistrate and arraigned at approximately 4:00 p.m.

II.

Gardner's first attack is that the indictment returned by the grand jury should be dismissed because the Government interfered with the grand jury process. Gardner initially appeared before the grand jury and refused to testify, claiming his fifth amendment privilege against self-incrimination. Subsequently, an immunity order was entered. After the grant of immunity was obtained, circumstances led the Government to believe that Gardner would abuse the order of immunity by lying before the grand jury. The Government therefore declined to call Gardner to testify.

The grand jury is "accorded wide latitude to inquire into violations of criminal law," and it "may compel the production of evidence or the testimony of witnesses as it considers appropriate . . .." United States v. Calandra, 414 U.S. 338, 343, 94 S.Ct. 613, 617, 38 L.Ed.2d 561 (1974). Its inquiry, however, determines only whether there is probable cause to believe that a crime has been committed. Id. Thus, the Government on its own need not produce evidence that undermines the credibility of its witnesses, Jack v. United States, 409 F.2d 522, 524 (9th Cir. 1969), United States v. Addonizio, 313 F.Supp. 486, 495 (D.N.J.1970), aff'd 451 F.2d 49 (3d Cir.), cert. denied 405 U.S. 936, 92 S.Ct. 949, 30 L.Ed.2d 812 (1972), and the defendant has no absolute right to appear before the grand jury. United States ex rel. McCann v. Thompson, 144 F.2d 604, 605-606 (2d Cir.), cert. denied 323 U.S. 790, 65 S.Ct. 313, 89 L.Ed. 630 (1944); United States v. Kernodle, 367 F.Supp. 844, 854 (M.D.N.C.1973). Recognizing this, Gardner nevertheless claims that the Government interfered because it was the grand jury itself that requested him to testify, and therefore by failing to call him, the Government compromised the grand jury's function of "standing between the accuser and the accused," Wood v. Georgia, 370 U.S. 375, 390, 82 S.Ct. 1364, 1373, 8 L.Ed.2d 569 (1962), and frustrated its inquiry.

Contrary to Gardner's claim, the record does not show that it was the grand jury that wanted him to testify. There is no indication as to who initially called Gardner before the grand jury, but the defendant does not argue that it was that body. Further, a review of the record and of the immunity order itself shows that the order was entered upon the Government's request. There is no evidence to suggest that the order represented a desire on the part of the grand jury itself that Gardner testify before it, and the Government did not call Gardner only because of its subsequent belief that Gardner would lie. Accordingly, we cannot find any interference with the grand jury process.

III.

Gardner contends that the court erred by admitting into evidence admissions, both verbal and those implicit in his actions, made at the bank prior to his arrest and before the Miranda warnings were given. He argues that because at the time he made these admissions the focus of the investigation was on him and the agents had probable cause to arrest him, he should have received the Miranda warnings, and in their absence, any admissions he made were not admissible.

Gardner, however, overlooks the reason for the Miranda rules. Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). Miranda was designed to effectuate the right against compulsory self-incrimination by guarding against the inherent pressures to speak present in the face of governmental authority. Where there is no governmental authority present, there can be no compulsion which the Miranda rules were structured to shield against. Thus, the Court in Hoffa v. United States, 385 U.S. 293, 304, 87 S.Ct. 408, 17 L.Ed.2d 374 (1966), after noting that "a necessary element of compulsory self-incrimination is some...

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