U.S. v. Hemphill

• Decision Date: 08 February 2008
• Docket Number: No. 07-3016.,No. 06-3089.,No. 06-3088.,06-3088.,06-3089.,07-3016.
• Parties: UNITED STATES of America, Appellee v. Gwendolyn M. HEMPHILL and James Odell Baxter, Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

514 F.3d 1350

UNITED STATES of America, Appellee v. Gwendolyn M. HEMPHILL and James Odell Baxter, Appellants.

No. 06-3088.

No. 06-3089.

No. 07-3016.

United States Court of Appeals, District of Columbia Circuit.

Argued November 15, 2007.

Decided February 8, 2008.

Appeals from the United States District Court for the District of Columbia (No. 03cr00516-01) (No. 03cr00516-03).

Nancy Luque argued the cause for appellant Gwendolyn M. Hemphill. With her on the briefs was Arthur F. Fergenson.

Lisa Alexis Jones argued the cause and filed the briefs for appellant James Odell Baxter II.

Suzanne. G. Curt, Assistant U.S. Attorney, argued the cause for appellee. With her on the brief were Jeffrey A. Taylor, U.S. Attorney, and Roy W. McLeese, III and Anthony Alexis, Assistant U.S. Attorneys.

Before: GARLAND and BROWN, Circuit Judges, and SILBERMAN, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge BROWN.

BROWN, Circuit Judge:

Defendants Gwendolyn" Hemphill and James Baxter appeal their convictions on multiple counts including embezzlement, money laundering, false pretenses, and conspiring to commit such crimes. We affirm the district court's judgments as to both defendants.

I

A

The charges arose from a seven-year orgy of greed during which Hemphill, Baxter, and several others stole millions of dollars from the Washington Teachers Union (WTU). Barbara Bullock, WTU's president during this period, and her chauffeur, Leroy Holmes, both pled guilty before trial.

For approximately seven years, Bullock, Hemphill, Baxter, and friends appropriated for their own benefit much of the money union members paid as dues. They embezzled these funds through several channels, including American Express (Amex) cards issued on WTU's account, checks written for fraudulent purposes and for excessive amounts, and payments to a front company, Expressions Unlimited. All union checks required two signatures, those of Bullock and Baxter, the union's president and treasurer respectively. These two, therefore, had the key to the union treasury.

Initially, Bullock and Baxter simply used their WTU Amex cards for personal expenses, and they spent quite a lot. But the thefts became more audacious when Hemphill was hired as Bullock's secretary and then also became the union's bookkeeper. Spending increased so dramatically that Baxter placed a $5,000 per month limit on Bullock's Amex spending. In response, the two opened a separate Amex account with WTU's credit, billed to Hemphill's home address. To pay the rapidly escalating bills on this account, they wrote checks to Expressions Unlimited, and they also passed money through Bullock's chauffeur, Holmes. Hemphill wrote him checks for about double his salary, and he returned the excess directly to her bank account.

The conspirators' thefts increased so significantly that in 2001, WTU paid $925,000 in credit card bills; by 2002, the union was broke and could not pay its membership fees for the American Federation of Teachers. Bullock and Baxter, WTU's officers, were forced to file fraudulent accounting and tax forms with the Department of Labor and the IRS. To cover the shortfall, they and Hemphill agreed to change a pending dues assessment of $16.09 per teacher to $160.09, reasoning that should questions arise, they could explain the discrepancy as a clerical error.

Between 1995 and 2002, the conspirators stole millions of dollars from WTU and spent it on such things as a $50,000 silver set for Bullock's house, a wedding reception for Hemphill's son, $29,000 in dental work for her and her husband, $19,000 in Washington Wizards tickets for Baxter and Bullock, car insurance for him, and art for his house. Sometimes they simply wrote themselves checks from the union treasury. After WTU received an infusion of cash from the inflated assessment in 2002, Hemphill and Baxter wrote themselves more checks totaling $18,805 and $31,000, respectively. In the end, the dues overcharge attracted so much attention the American Federation of Teachers alerted the federal government to WTU's suspicious finances.

B

Bullock pled guilty in 2003, and a grand jury indicted Hemphill and Baxter in November. The government filed a motion to exclude time to stay the seventy-day deadline imposed by the Speedy Trial Act, and the district court granted the motion on February 20, 2004. Trial began on May 31, 2005, and ended August 31. The jury convicted Hemphill and Baxter on all counts, while acquitting WTU's accountant. At the sentencing hearing, Hemphill's counsel first learned Holmes had a "history of minor thefts." The government knew Holmes had been arrested twice in Maryland for theft, but not whether indictments or convictions resulted-from those arrests. Hemphill moved for a new trial, arguing Holmes's arrests were material information withheld by the government in violation of Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). The district court denied her motion on October 18, 2005.

On May 22, 2006, the court sentenced Hemphill to 132 months in prison; she appealed on May 30. On June 5, 2006, the court sentenced Baxter to 120 months in prison; he appealed on June 14. Hemphill also appeals the district court's denial of her January 4, 2007, motion for a new trial. We consolidated the three appeals.

II

We address Hemphill's issues first, some of which Baxter joins. Second, we discuss the questions appealed solely by Baxter.

A

At the outset of the investigation, Hemphill agreed to be interviewed by FBI agents. The information she provided appears to have been quite useful to the government, which then obtained financial records detailing bank transactions by her, Bullock, and Expressions Unlimited; credit card activity; and payments to Baxter. Presumably her statements also helped the government negotiate pleas with Bullock and Holmes.

Therefore, Hemphill argues the district court abused its discretion by refusing to hold a Kastigar hearing. "Kastigar" is a misnomer for the hearing she demanded, because that case applies when the government compels a witness to provide incriminating information. Kastigar v. United States, 406 U.S. 441, 453, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972). If the government later prosecutes that witness, it cannot use her information at all, directly or indirectly. United States v. North, 910 F.2d 843, 854 (D.C.Cir.1990), reh'g granted in part, 920 F.2d 940 (D.C.Cir. 1990). In a Kastigar hearing, the government has the significant burden to show its evidence was "derived from a source wholly independent of the compelled testimony." United States v. Rinaldi, 808 F.2d 1579, 1582 (D.C.Cir.1987). By contrast, when, like Hemphill, a witness provides information voluntarily, the government is not obligated to agree to any particular scope of immunity. See United States v. Smith, 452 F.3d 323, 337 (4th Cir.2006). The agreement between the government and the witness determines the scope of immunity. In a subsequent prosecution, the defendant has the burden to prove any government breach of the agreement. United States v. Kilroy, 27 F.3d 679, 684 (D.C.Cir.1994) (citing Santobello v. New York, 404 U.S. 257, 92 S.Ct. 495, 30 L.Ed.2d 427 (1971)).

The terms of Hemphill's voluntary debriefing agreement determine what she had to prove or at least to allege to earn a hearing. We have not had occasion to interpret an agreement like Hemphill's, which permitted the government to "make derivative use of any statements or information provided by Ms. Hemphill during the voluntary, `off-the-record' debriefing(s) ... to pursue its investigation" and barred her from challenging any government evidence obtained through derivative use of her statements. In Kilroy, the government had offered the defendant "use immunity." Kilroy, 27 F.3d at 685. We interpreted that language to incorporate Kastigar, concluding the government had, in effect, promised to assume the burden of proving its evidence was not tainted by immunized testimony. Id. "Use immunity" covered both direct and indirect utilization. In Hylton, the defendant spoke to investigators under an agreement that expressly allowed derivative use, but the interpretation of that clause was not before us because at trial the government had assumed the burden of proving the evidence was untainted. United States v. Hylton, 294 F.3d 130, 132, 135 (D.C.Cir. 2002).

Clearly the immunity Hemphill accepted was narrow. "The Government agree[d] only that no statements ... provided by Ms. Hemphill ... will be used directly against her" except in a prosecution for perjury or obstruction of justice, and the government preserved "[t]he admissibility of any evidence obtained through ... derivative use of Ms. Hemphill's statements." Such language prohibits the government only from attributing to her the statements a defendant made or the information she provided as evidence against her. See United States v. Pielago, 135 F.3d 703, 711 (11th Cir.1998). Hemphill contends the government used her information "directly" twice: first, Special Agent Andrews testified before the grand jury after interviewing her; second, a government auditor, Nicholas Novak, read reports about those interviews before he prepared charts summarizing the fraudulent transactions, about which he testified at trial. However, neither witness attributed any statement to Hemphill, so their testimony was not direct use within the meaning of Hemphill's agreement.

B

Next, Hemphill argues the district court should have granted her motion for dismissal based on the Speedy Trial Act, 18 U.S.C. § 3161. We review a district court's legal determinations under the Speedy Trial Act de novo. United States v. Fonseca, 435 F.3d 369, 371 (D.C.Cir. 2006).

Under the Speedy Trial Act, the government must bring a defendant to trial within seventy days of an indictment. 18 U.S.C. § 3161(c)(1). The seventy-day period excludes "[a]ny period of delay resulting from ... any pretrial motion, from...