U.S. v. Hove, 93-10219

• Decision Date: 06 April 1995
• Docket Number: No. 93-10219,93-10219
• Citation: 52 F.3d 233
• Parties: 41 Fed. R. Evid. Serv. 1266 UNITED STATES of America, Plaintiff-Appellee, v. Richard E. HOVE, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 233

52 F.3d 233

41 Fed. R. Evid. Serv. 1266

UNITED STATES of America, Plaintiff-Appellee, v. Richard E. HOVE, Defendant-Appellant.

No. 93-10219.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 13, 1994.

Decided April 6, 1995.

Sanford Svetcov, Landels, Ripley & Diamond, San Francisco, CA, for defendant-appellant.

Geoffrey A. Anderson, U.S. Dept. of Justice, San Francisco, CA, for plaintiff-appellee.

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

Before: HUG, CANBY, and HAWKINS, Circuit Judges.

CANBY, Circuit Judge:

Richard Hove appeals his jury convictions for structuring currency transactions in violation of 31 U.S.C. Secs. 5322(a) and 5324(3). Hove contends that the jury was not instructed properly and that the court made a variety of evidentiary errors. In light of the Supreme Court's decision in Ratzlaf v. United States, --- U.S. ----, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994), we reverse Hove's conviction and remand for a new trial. ¹

I BACKGROUND

Between May 19, 1987, and June 29, 1987, Richard Hove, an attorney, purchased $38,000 worth of cashier's checks. The checks were all under $10,000, and all made out to Chicago Title Company. Three of the checks were purchased on the same day from three different banks. During this same time, Hove made $42,500 worth of cash deposits. The deposits were all under $10,000, and a check was written on this account to Chicago Title Company for $42,500.

The cash all came from one of Hove's clients, Norman Heifner, whom Hove allegedly believed to be putting together a land deal for several investors to purchase property in Happy Valley, Arizona. In fact, Heifner--a convicted drug dealer with large sums of cash--was purchasing the property himself and wanted to avoid filing cash transaction reports in connection with the purchase.

Hove was convicted of two counts of "structuring" currency transactions (breaking up a single cash transaction of $10,000 or more to avoid triggering the filing of a cash transaction report) in violation of 31 U.S.C. Secs. 5322(a) and 5324(3). On appeal, Hove contends that the district court erred by failing to instruct the jury that they must find that Hove knew that the structuring in which he engaged was illegal. Hove also contends that the district court erred in a number of its evidentiary rulings.

II THE JURY INSTRUCTIONS

We review de novo whether the jury instructions properly stated the law. United States v. Sterner, 23 F.3d 250, 252 (9th Cir.1994). Ratzlaf v. United States makes clear that, in order to establish that Hove was guilty of willfully structuring currency transactions, the government had to prove, and the jury had to be instructed, that Hove knew that the structuring he undertook was unlawful. Ratzlaf, --- U.S. at ----, 114 S.Ct. at 663. Although Ratzlaf was decided after Hove's trial, Ratzlaf's holding is controlling and must be applied to Hove's direct appeal. Griffith v. Kentucky, 479 U.S. 314, 322, 107 S.Ct. 708, 712, 93 L.Ed.2d 649 (1987).

The district court did not instruct the jury that, in order to convict, it had to find that Hove "acted with knowledge that his conduct was unlawful." Ratzlaf, --- U.S. at ----, 114 S.Ct. at 657. The jury instructions therefore omitted the willfulness element

of currency structuring. By omitting an essential element of the offense, the district court erred. This error is plain and cannot be harmless. United States v. Stein, 37 F.3d 1407, 1410 (9th Cir.1994); United States v. Gaudin, 28 F.3d 943, 952 (9th Cir.), cert. granted in part, --- U.S. ----, 115 S.Ct. 713, 130 L.Ed.2d 621 (1995). We therefore reverse Hove's conviction for Ratzlaf error, and remand for retrial. Accord United States v. Retos, 25 F.3d 1220, 1230 (3rd Cir.1994); United States v. Rogers, 18 F.3d 265, 268 (4th Cir.1994); United States v. Garza, 42 F.3d 251, 253 (5th Cir.1994); United States v. Bencs, 28 F.3d 555, 564 (6th Cir.1994); United States v. Jones, 21 F.3d 165, 172-73 (7th Cir.1994). ²

III THE EVIDENTIARY RULINGS

Hove also maintains that the district court erred in admitting a variety of evidence. Because we are remanding for retrial, we address those issues that are likely to arise again. See United States v. Rodriguez, 45 F.3d 302, 306 (9th Cir.1995).

A. Standard of Review

We review de novo the district court's interpretation of the Federal Rules of Evidence. United States v. Wilson, 7 F.3d 828, 836 (9th Cir.1993), cert. denied, --- U.S. ----, 114 S.Ct. 2151, 128 L.Ed.2d 877 (1994). We review the district court's evidentiary rulings for an abuse of discretion. United States v. Brooke, 4 F.3d 1480, 1487 (9th Cir.1993). ³

B. The Admissions by Silence

During an investigation into Heifner's activities, Agent North of the Arizona Attorney General's office came across Hove's checks to Chicago Title Company. Agent North confronted Hove with the checks, and asked him to explain the circumstances surrounding them. Hove responded that he would have to get back to North, after researching the checks.

Sometime later, another agent from the Arizona Attorney General's office, Agent McVey, offered to allow Hove to present his side of the story to the grand jury. Hove declined the agent's invitation.

During the trial, North and McVey testified to these inquiries they made of Hove, as well as to Hove's responses. In reference to this testimony, the district court instructed the jury that:

Evidence has been introduced that statements accusing the defendant of the crimes charged in the indictment were made and that the statements were neither denied nor objected to by the defendant. If you find that the defendant actually was present and heard, understood the statements, and that they were made under such circumstances as the statements would have been denied if they were not true, then you may consider whether the defendant's silence was an admission of the truth of the statements.

The government contends that North's and McVey's testimony, as well as the court's instruction, was appropriate, because Hove's responses constitute admissions by silence. We disagree. Rule 801(d)(2)(B) permits a court to allow into evidence a statement as non-hearsay if "[t]he statement is offered against a party and is ... (B) a statement of which the party has manifested an adoption or belief in its truth." Silence may constitute an adoption or belief in the truth of a statement if, under the circumstances, an innocent person would have responded Similarly, it is unreasonable to allow the jury to infer that Hove admitted to structuring by declining to testify in front of Arizona's grand jury. In the first place, structuring was not a crime in Arizona at the time the grand jury met. It would thus be difficult to construe an invitation to testify in front of the Arizona Grand Jury as an accusation of the crimes charged in the indictment. Arizona law aside, declining an invitation to testify in front of the grand jury simply does not constitute an admission by silence. Like agent North's questions, McVey's invitation is not a statement and is certainly not an accusation, of which the failure to deny could constitute an admission.

                to the statement.  United States v. Schaff, 948 F.2d 501, 505 (9th Cir.1991). 4  Here, Hove's actions cannot reasonably be construed as admissions by silence.  Contrary to the district court's suggestion in the jury instructions, North's questioning did not constitute an accusation that Hove himself had committed the crime of structuring.  There is, therefore, no statement accusing Hove of the crimes charged in the indictment to which Hove could have acquiesced.  In these circumstances, Hove's declination to respond until he had done some research cannot constitute an adoptive admission
                

Although we give considerable deference to a trial judge's evidentiary rulings, in this case we are definitely and firmly convinced that the district court made an erroneous ruling. See United States v. Brooke, 4 F.3d 1480, 1487 (9th Cir.1993). The district court therefore abused its discretion in admitting North's and McVey's testimony for the purpose of allowing the jury to infer that Hove admitted to structuring.

C. The 404(b)/801(d)(2)(E) Evidence and Other Evidence

The government also introduced a variety of bad acts committed by others, including evidence that Heifner engaged in currency structuring, tax evasion, and various drug offenses, and that Heifner's real estate agent, Bonertz, engaged in currency structuring. The government contends, citing United States v. McCourt, 925 F.2d 1229 (9th Cir.), cert. denied, 502 U.S. 837, 112 S.Ct. 121, 116 L.Ed.2d 89 (1991), that evidence of Heifner and Bonertz's bad acts is admissible under Fed.R.Evid. 404(b) to prove Hove's motive, opportunity, intent, etc. So, according...