U.S. v. Martin

• Decision Date: 16 April 1990
• Docket Number: No. 89-5528,89-5528
• Citation: 897 F.2d 1368
• Parties: 29 Fed. R. Evid. Serv. 910 UNITED STATES of America, Plaintiff-Appellee, v. Steven D. MARTIN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1368

897 F.2d 1368

29 Fed. R. Evid. Serv. 910

UNITED STATES of America, Plaintiff-Appellee, v. Steven D. MARTIN, Defendant-Appellant.

No. 89-5528.

United States Court of Appeals, Sixth Circuit.

Argued Nov. 13, 1989.

Decided March 1, 1990.

Rehearing and Rehearing En Banc Denied April 16, 1990.

Joseph M. Whittle, U.S. Atty., Randy W. Ream, Asst. U.S. Atty. (argued), Terry Cushing, Louisville, Ky., for plaintiff-appellee.

Thomas E. Clay (argued), Alan S. Rubin, Louisville, Ky., for defendant-appellant.

Before MERRITT, Chief Judge, KENNEDY, Circuit Judge, and McRAE, Senior District Judge. ^*

McRAE, Senior District Judge.

Defendant-appellant Steven D. Martin appealed his conviction on two counts of filing a false statement with a government agency in violation of 18 U.S.C. Sec. 1001. For the reasons set forth below, the Court affirms the convictions.

I

In 1987, the United States Secret Service and the Office of the Inspector General of the U.S. Department of Agriculture ("USDA") began an investigation of suspected illicit trafficking in food stamps. Appellant was general manager of Project Management Systems, Inc. ("PMS"), a corporation under contract with the Commonwealth of Kentucky for the distribution of USDA food stamps in four populous Kentucky counties.

Working undercover, Secret Service Special Agent Don Bell met with appellant for lunch at a Louisville restaurant on October 23, 1987. At that meeting, Bell and appellant discussed, in a tape recorded conversation, the possibility of a sale to Bell of a minimum of 5,000 food stamps. In that conversation, the appellant stated:

Well, really the safest way to do it is not report that I have the food stamps, and I can only do that at the end of every month.

Appellant further indicated that he was not prepared to make a deal at that time, but would contact Bell in the future.

On November 11, 1987, a search warrant was executed at a Louisville bank on a lock box in the name of PMS. Inside the box, investigators found part of the regular food stamp inventory of PMS, including eight hundred $50 denomination books valued at $40,000.

According to the testimony of Rhonda Martin, who was also a PMS employee, appellant personally picked up the eight hundred $50 books from the armored car company which distributed the stamps, and then brought them home where appellant stored them in a concrete wall from August to October, 1987, when he took the eight hundred $50 books to the lock box and placed them with the regular inventory. Thus, appellant knew of the whereabouts of the eight hundred $50 books of food stamps when he made his monthly reports.

Each month PMS submitted a food stamp accountability report ("FNS-250") to the appropriate Kentucky agency, who then forwarded it to the USDA Food and Nutrition Service ("FNS"). The FNS-250's filed by PMS for July and August, 1987, did not show the possession of the eight hundred $50 books. These two forms were signed by appellant, and each contained a printed statement above his signature certifying the truth and accuracy of the report.

The discrepancy was not discovered by the FNS until early 1988. After PMS was notified of the shortage, appellant submitted revised and corrected FNS-250's.

In August, 1988, an indictment was returned against appellant and Michael T. Moran. In Count 5, the appellant alone was charged with having knowingly used, transferred, acquired and possessed eight hundred $50 books in an unauthorized manner in violation of 7 U.S.C. Sec. 2024(b). Appellant, as the sole defendant, was further charged with two counts of knowingly and willfully making a false statement on the FNS-250 forms in violation of 18 U.S.C. Sec. 1001. In counts 3 and 4, appellant and Moran were charged with a conspiracy to violate or substantive violations of 7 U.S.C. Sec. 2024(b).

Moran pleaded guilty and testified as a government witness. Among other things, Moran testified that he sold small amounts of food stamps to appellant in October, 1986, and September, 1987.

Special Agent Don Bell also testified. The prosecutor, AUSA Ream, began his direct examination of Bell by attempting to "set the scene" for the investigation. This prompted a bench conference at which prosecutor Ream assured the court that no incriminating hearsay about appellant's activities would be elicited. When the questioning resumed, the following critical testimony ensued:

Mr. Ream [prosecutor]: So what did the Secret Service do, and did anyone else cooperate with you in this investigation?

Mr. Bell: Yes sir. Based upon--after I'd received initial information from the State of Kentucky Attorney General's office, another individual was arrested for having in his possession stolen USDA food stamps; and on June the 2nd, 1987, that individual gave me information concerning other individuals who he thought were involved in the theft and/or trafficking of USDA food stamp coupons; and among those individuals that he named was a Steve Martin.

Mr. Adams [appellant's counsel]: Objection, Judge, and motion for mistrial.

At the bench, the prosecutor, expressing regret, said he had asked Bell not to refer to specific persons. He argued, however, that the testimony was only offered as background. The trial court overruled the objection and appellant's motion on the basis that the testimony was not hearsay. He determined that he would admonish the jury not to consider this out of court statement of another person for the truth of the matter asserted, but only as information that prompted the investigation. (Tr. 86).

Appellant was acquitted on the trafficking and conspiracy counts, but he was convicted on both counts of making a false statement.

This appeal presents only two issues which require specific consideration: (1) whether the repetition by Special Agent Bell of another individual's statement naming appellant as involved in the stamp trafficking conduct, constituted inadmissible hearsay, a violation of the Sixth Amendment confrontation clause, or unfairly prejudicial evidence, which required a mistrial or now requires a new trial; and (2) whether the verdicts were inconsistent.

II

Clearly the testimony of Agent Bell which repeated the verbal statement that Steve Martin was thought to be involved in the theft and/or trafficking of food stamps should not have been admitted. Counsel for the government acknowledged this when he advised the court that Agent Bell acted contrary to the admonition given by prosecutor Ream. The Court does not conclude, however, that the district court committed reversible error by not granting the motion for a mistrial.

The Federal Rules of Evidence define hearsay as an out of court statement "offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). The hearsay rule does not apply to statements offered merely to show that they were made or had some effect on the hearer. See United States v. Gibson, 675 F.2d 825, 833-834 (6th Cir.1982). In some circumstances, out of court statements offered for the limited purpose of explaining why a government investigation was undertaken have been determined not to be hearsay. United States v. Freeman, 816 F.2d 558, 563 (10th Cir.1987); United States v. Love, 767 F.2d 1052, 1063 (4th Cir.1985), cert. den., 474 U.S. 1081, 106 S.Ct. 848, 88 L.Ed.2d 890 (1985).

The context of Bell's testimony supports the determination that the assertion of the other person was offered for the limited purpose of explaining how and why the investigation began. The prosecution was not trying to use the other person's information due to a lack of evidence on the substantive charges. The prosecution had other, more probative, evidence of trafficking and willful false statements at its disposal.

Therefore, the testimony based upon an out of court statement of an unnamed person in this case was not hearsay per se.

Counsel for the appellant relies heavily upon Stewart v. Cowan, 528 F.2d 79 (6th Cir.1976). In that case, the appellant, Raymond Stewart, challenged his conviction in a Kentucky state court for murder. Stewart claimed a violation of the confrontation clause by the admission during trial of out of court assertions repeated by a police officer and purportedly offered to show the results of the murder investigation. The officer testified to having received five anonymous telephone calls. He further testified that "(a)s a result of our investigation, we learned that everybody in the neighborhood of Hancock and Finzer was saying that Raymond Stewart had shot Robert Benberry." 528 F.2d at 85. This Court held that use of this testimony violated appellant's Sixth Amendment right to confront his accusers. Id. at 88.

It is noted, however, that the Stewart case has limited applicability to the present hearsay issue for the reason that the question whether out of court statements concerning investigative background are hearsay or non-hearsay was not discussed in Stewart.

The Court commented in a footnote, however, that it did not believe the out of court assertions fell within the Kentucky hearsay exception. Id. at 86 n. 4. The reason it gave has some bearing, by analogy, on the analysis in the present case under the Federal Rules of Evidence. The Court in Stewart said, in effect, that even if an out of court statement is purportedly offered to explain an investigation, it nevertheless may be inadmissible hearsay where it goes "to the very heart of the prosecution's case." Id. at 86 n. 4.

In the instant case, however, when the arrestee's assertions are compared with the anonymous out of court assertions in Stewart, the Court does not believe the other person's information goes "to the very heart of the prosecution's case." The out of court statements in Stewart pointed to defendant by name and definitely accused him of committing the specific crime charged. In the present case, the appellant is named, but there is only a general and rather vague statement of a belief that...