U.S. v. Marchini

• Decision Date: 18 August 1986
• Docket Number: No. 84-1279,84-1279
• Citation: 797 F.2d 759
• Parties: -5621, 86-2 USTC P 9701, 21 Fed. R. Evid. Serv. 511 UNITED STATES of America, Plaintiff/Appellee, v. Albert MARCHINI, Defendant/Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 759

797 F.2d 759

58 A.F.T.R.2d 86-5621, 86-2 USTC P 9701,

21 Fed. R. Evid. Serv. 511

UNITED STATES of America, Plaintiff/Appellee, v. Albert MARCHINI, Defendant/Appellant.

No. 84-1279.

United States Court of Appeals Ninth Circuit.

Argued and Submitted April 16, 1986.

Decided Aug. 18, 1986.

Stanley W. Parry, Las Vegas, Nev., for plaintiff/appellee.

Albert A. Newton, Law Offices of Michael T. Kenney, Santa Ana, Cal., for defendant/appellant.

On appeal from the United States District Court for the District of Nevada.

Before WALLACE, FARRIS and BOOCHEVER, Circuit Judges.

BOOCHEVER, Circuit Judge:

Albert Marchini appeals his conviction on fifteen counts of violating 26 U.S.C. Sec. 7206(1) (1982), which proscribes the willful making and subscribing of any tax return, statement, or other document which the maker does not believe to be true and correct. Marchini raises the following issues on appeal: (1) Did the district court (a) abuse its discretion or (b) violate appellant's right to confrontation by admitting under Fed.R.Evid. 804(b)(5) grand jury testimony of the appellant's wife after she invoked her spousal and marital privileges not to testify against her husband? (2) Did a guilty verdict on count XIII violate the Due Process Clause of the Fifth Amendment in light of an arguably inconsistent verdict of acquittal on count I? (3) Did the district court abuse its discretion by admitting the testimony and summary exhibit of the government's "expert summary witness"? (4) Was the jury's finding of sufficient evidence to establish that appellant willfully and knowingly failed to report cash wages clearly erroneous? (5) In light of appellant's failure to object, was it plain error for the district court to give an Allen instruction? (6) Has appellant established that the district court abused its discretion by denying four pretrial motions? We address these issues seriatum, and affirm.

FACTS

Albert Marchini was the owner and operator of Marchini Construction Company, Inc., a Las Vegas, Nevada corporation, from 1968 to late 1980. Marchini employed between 100 and 300 construction employees at any given time, a bookkeeper, and a general office secretary/payroll clerk (Kathleen Anne Snyder, who married Marchini in 1983). He admits that he regularly paid his employees' weekly wages partially by check and partially by cash. He also admits that he did not report the cash wages on his Employer's Quarterly Federal Tax Return Form 941 or on his Employer's Annual Federal Unemployment Tax Return Form 940. His defense is that he believed it was the responsibility of the employees to report wages paid by cash. He did not report the cash wages he paid to himself, however.

After a prolonged investigation by the Justice Department and a grand jury hearing, the grand jury charged Marchini with twelve counts (I-XII) of willfully and knowingly making and subscribing a United States Employer's Quarterly Federal Tax Return Form 941, substantially underreporting total wages subject to withholding. Each count corresponded to a calendar year quarter beginning with the fourth quarter of 1977 and continuing through the third quarter of 1980. He was also charged with four counts (XIII-XVI) of willfully and knowingly making and subscribing a United States Employer's Annual Federal Unemployment Tax Return Form 940, substantially underreporting total taxable wages. Each count corresponded to a calendar year, 1977 through 1980. All sixteen counts charged him with violation of 26 U.S.C. Sec. 7206(1). The total amount alleged to have been underreported was between one and one-and-one-half million dollars.

Marchini was tried by jury on July 16-19, 1984. He was found not guilty on count I and guilty on all remaining fifteen counts. He was sentenced to two years imprisonment on count II, with imprisonment suspended on counts III-XVI, and a special five year probationary period was imposed to begin after his release from prison.

ANALYSIS

I. Grand Jury Testimony

At the grand jury proceedings conducted June 22, 1982, Marchini's secretary, Kathleen Snyder, testified concerning her duties and various office and payroll procedures of Marchini Construction Company. She subsequently married Marchini in February 1983. During Marchini's July 1984 trial, she was called as a witness by the prosecution, and she invoked her spousal and marital privileges not to testify against her husband.

The district court held a hearing to determine whether her grand jury testimony could be admitted under Fed.R.Evid. 804(b)(5), and without violating Marchini's confrontation rights. The district court ruled that she was "unavailable" as a witness within the meaning of Rule 804. The court set forth its detailed analysis and ruled that her testimony was admissible under Rule 804(b)(5). Further, the court ruled that no confrontation violation resulted. Portions of her testimony were read to the jury. Marchini argues that the admission of her grand jury testimony was both an abuse of discretion under Rule 804(b)(5) and a violation of his right to confront witnesses against him.

A. Fed.R.Evid. 804(b)(5)

"The district court's decision to admit evidence is reviewed for an abuse of discretion." United States v. Winn, 767 F.2d 527, 529 (9th Cir.1985). Rule 804(b)(5) provides for the admission of statements which otherwise would be hearsay if they have circumstantial guarantees of trustworthiness equivalent to the other hearsay exceptions and if the trial court determines (A) the statement is offered as evidence of a material fact; (B) the statement is more probative on the point for which it is offered than any other evidence which the proponent can procure through reasonable efforts; and (C) the general purposes of these rules and the interests of justice will be served by admission of the statement into evidence.

The admissibility of grand jury testimony under this exception has not been addressed by this circuit, but it has been the subject of a number of opinions in other circuits. There appears to be general agreement that such testimony can be admitted under Rule 804(b)(5) in proper circumstances, but the circuits differ as to the precise terms of its admission. Garner v. United States, 439 U.S. 936, 939, 99 S.Ct. 333, 335, 58 L.Ed.2d 333 (Stewart, J., dissenting from denial of cert. to 574 F.2d 1141 (4th Cir.1978)); United States v. Barlow, 693 F.2d 954, 960-63 (6th Cir.1982) (discussing cases), cert. denied, 461 U.S. 945, 103 S.Ct. 2124, 77 L.Ed.2d 1304 (1983); see, e.g., United States v. Boulahanis, 677 F.2d 586 (7th Cir.), cert. denied, 459 U.S. 1016, 103 S.Ct. 375, 74 L.Ed.2d 509 (1982); United States v. West, 574 F.2d 1131 (4th Cir.1978); United States v. Garner, 574 F.2d 1141 (4th Cir.), cert. denied, 439 U.S. 936, 99 S.Ct. 333, 58 L.Ed.2d 333 (1978); United States v. Carlson, 547 F.2d 1346 (8th Cir.1976), cert. denied, 431 U.S. 914, 97 S.Ct. 2174, 53 L.Ed.2d 224 (1977); cf. United States v. Thevis, 665 F.2d 616 (5th Cir.) (avoiding need to determine whether grand jury testimony ever meets reliability standards of Rule 804(b)(5) because testimony admissible on waiver grounds), cert. denied, 456 U.S. 1008, 102 S.Ct. 2300, 73 L.Ed.2d 1303 (1982); United States v. Gonzales, 559 F.2d 1271 (5th Cir.1977) (grand jury testimony inadmissible under Rule 804(b)(5) because it lacked "equivalent guarantees of trustworthiness" under the facts of case, distinguishing United States v. Carlson).

In United States v. Barlow, the Sixth Circuit was presented with a situation strikingly similar to this case. There the court ruled that the admission of the grand jury testimony of defendant's friend was permissible under Rule 804(b)(5), notwithstanding her subsequent marriage to defendant prior to trial and her assertion of her marital privileges. 693 F.2d at 963. The court extensively analyzed the cases from other circuits, and established the following approach, which we adopt.

First, the district court must ascertain whether the witness is "unavailable" within the meaning of the rule. The court held that the assertion of a marital privilege where the marriage was not a sham rendered the witness unavailable. 693 F.2d at 961-62.

Second, the trial court must determine whether the substance of the grand jury testimony possesses "circumstantial guarantees of trustworthiness" equivalent to other exceptions included in Rule 804.

In making this determination the trial court should consider the declarant's relationship with both the defendant and the government, the declarant's motivation to testify before the grand jury, the extent to which the testimony reflects the declarant's personal knowledge, whether the declarant has ever recanted the testimony, and the existence of corroborating evidence available for cross-examination.

Id. at 962.

"Finally, other factors which have no direct bearing on 'circumstantial guarantees of trustworthiness' may be considered to determine whether the 'purposes of [the rules of evidence] and the interests of justice will best be served' by the admission of grand jury testimony." Id. (quoting Fed.R.Evid. 804(b)(5)(C)) (brackets by the court). For example, the court considered as an appropriate factor the defendant's role in marrying the witness and thus making her unavailable, even though the marriage was bona fide. Id.

Another factor to be considered is the subject matter of the evidence. If the testimony is direct evidence of guilt or critical proof of guilt, other factors, such as corroboration, must weigh heavily in favor of admissibility. On the other hand, if the evidence goes to a collateral matter or is circumstantial or cumulative evidence, the other factors need not be as strong. Id. at 962-63.

After ruling that the witness was unavailable, the district court in this case specifically found that the grand jury testimony possessed clear indicia of trustworthiness. The court found that "[a]ll of her testimony is confirmed by every...