U.S. v. Picciandra

• Decision Date: 31 March 1986
• Docket Number: Nos. 84-1707,84-1708,s. 84-1707
• Citation: 788 F.2d 39
• Parties: 86-1 USTC P 9322, 20 Fed. R. Evid. Serv. 20 UNITED STATES of America, Appellee, v. Michael A. PICCIANDRA, Defendant, Appellant. UNITED STATES of America, Appellee, v. A. Russell LUCID, Jr., Defendant, Appellant.
• Court: U.S. Court of Appeals — First Circuit

Page 39

788 F.2d 39

86-1 USTC P 9322, 20 Fed. R. Evid. Serv. 20

UNITED STATES of America, Appellee, v. Michael A. PICCIANDRA, Defendant, Appellant.

UNITED STATES of America, Appellee, v. A. Russell LUCID, Jr., Defendant, Appellant.

Nos. 84-1707, 84-1708.

United States Court of Appeals, First Circuit.

Argued Jan. 6, 1986.

Decided March 31, 1986.

Robert H. Astor with whom Odierna, Beaumier & Minardi was on brief, for Michael A. Picciandra.

Edward J. Lee with whom Hale, Sanderson, Byrnes & Morton was on brief, for A. Russell Lucid, Jr.

Robert S. Mueller, III, First Asst. U.S. Atty., with whom William F. Weld, U.S. Atty., was on brief, for U.S.

Before BREYER, Circuit Judge, ALDRICH and ROSENN, ^* Senior Circuit Judges.

ROSENN, Circuit Judge.

A jury convicted the defendants, Michael Picciandra and Russell Lucid, Jr., of conspiracy to defraud the United States. 18 U.S.C. Sec. 371 (1982). The jury also convicted Picciandra of income tax evasion. 26 U.S.C. Sec. 7201 (1982), and Lucid of aiding and abetting Picciandra in the income tax evasion, 18 U.S.C. Sec. 32 (1982). On appeal, the defendants raise a due process objection based on pre-indictment delays and challenge a number of evidentiary rulings of the district court. Additionally, Lucid challenges two jury instructions. We affirm.

I. The Facts

In 1974 Picciandra, counselled by his attorney, Lucid, established Natural Enterprises, Inc. (NEI) for the purpose of engaging in real estate ventures. The articles of incorporation designated Lucid's law office as the company's principal office. NEI did not become activated until 1977. Giving the Government the benefit of all inferences in light of the jury verdict, the record establishes that on June 26, 1977, Picciandra participated in smuggling approximately 10,000 pounds of marijuana into Buzzard's Bay, Massachusetts, aboard the yacht MUSCAVADO. On June 29, 1977, the Coast Guard boarded and seized the yacht, but did not find Picciandra aboard. Later that summer, Picciandra told Juliette Picciandra, his wife (subsequently divorced and now Julie Davis), that he had received $240,000 from drug smuggling. Beginning in July 1977, Picciandra delivered $112,000 in cash in shopping bags to Lucid at his law offices. Juliette Picciandra delivered an additional $33,660 to Lucid in January 1978. Lucid deposited most of the money in his client trust fund account and disbursed it, on Picciandra's behalf, to purchase real estate, a boat, and an airplane. At trial, Lucid testified that when asked about the source of the money, Michael Picciandra told him, "don't worry, it's legal." Lucid also testified that he consulted a fellow attorney and the Massachusetts Bar Association with respect to his suspicions and was told merely to document the receipt of the money. Julie Davis, however, testified that Lucid knew about the smuggling and agreed to launder the cash through NEI.

The Picciandras discussed their 1977 tax returns with Lucid and apparently agreed to report only $25,000 of income on their personal return, purportedly from Picciandra's fishing business. Lucid communicated with an accountant who prepared Picciandra's personal and corporate returns. Lucid received the returns and sent them to the Picciandras, then living in Maine. They filed the returns. The personal return reported total income of $25,472 from Picciandra's "lobster and fish" business.

Following the Coast Guard seizure of the MUSCAVADO, the Drug Enforcement Agency (DEA) initiated an investigation. DEA Special Agent Francis Dever, acting in the role of a drug dealer, met twice with Picciandra, in December 1977 and June 1978. Dever's report of the 1977 conversation, introduced at the 1984 trial, stated that Picciandra admitted his participation in the MUSCAVADO smuggling venture. On October 31, 1978, the Government filed a complaint in federal court charging Picciandra and three crew members with conspiracy to import marijuana into the United States. Picciandra was arrested but the complaint was later dismissed.

The Internal Revenue Service (IRS) then began to investigate Picciandra for tax violations. On March 3, 1981, it assigned Special Agent Fredheim to investigate Picciandra's tax liability. Between March 24, 1981, and October 22, 1982, Fredheim contacted over sixty witnesses and obtained and analyzed voluminous documents. In the course of his investigation, Fredheim received information that Lucid had represented Picciandra and NEI and had issued checks on their behalf. On September 29, 1981, Fredheim caused three summonses to be issued to Lucid requesting production of records in Lucid's possession pertaining to financial transactions of Picciandra and NEI. Lucid claimed attorney-client privilege, and refused to comply with the summonses. Fredheim requested that summons enforcement proceedings be initiated. On September 7, 1982, the United States district court ordered Lucid to produce any records of Picciandra and NEI that remained in his possession. On September 29, 1982, Lucid made available relevant checks written on his trustee accounts and a summary of relevant deposits.

In April 1982, Julie Davis told Fredheim of Lucid's knowing involvement in Picciandra's activities. On October 15, 1982, Fredheim recommended that Lucid be documented as a subject in the Picciandra investigation for having participated in a conspiracy to defraud the Government by concealing Picciandra's true federal income tax liability for 1977.

After having been indicted in the District of Maine on one count of income tax evasion, Picciandra moved to have the case removed to Massachusetts, his state of residence. The court granted the motion and the Government obtained a superseding indictment in the United States District Court for the District of Massachusetts on April 11, 1984, naming both Picciandra and Lucid as defendants. Count I charged them with conspiring to defraud the United States by concealing from the IRS the $240,000 in cash received from the MUSCAVADO smuggling. Count II charged Picciandra with evading income taxes by omitting the $240,000 from his 1977 return, and Lucid with aiding and abetting this evasion. A jury found the defendants guilty as indicted and they appeal.

On appeal, the defendants raise numerous objections, arguing first that the undue length of the pre-indictment delays violated their due process rights. Second, they raise several evidentiary issues and, finally, Lucid argues that the trial court erred in two of its rulings on the jury instructions. We turn to the first issue, the pre-indictment delay.

II. Pre-Indictment Delay

The Supreme Court has held that a prosecutor is not obliged to file charges as soon as probable cause exists. United States v. Lovasco, 431 U.S. 783, 791, 97 S.Ct. 2044, 2049, 52 L.Ed.2d 752 (1977).

The prosecution has wide discretion in deciding to delay the securing of an indictment in order to gather additional evidence against an individual. That discretion is limited only by the requirement that it not violate those "fundamental conceptions of justice which lie at the base of our civil and political institutions."

United States v. Ciampaglia, 628 F.2d 632, 639 (1st Cir.) (quoting Lovasco, 431 U.S. at 790, 97 S.Ct. at 2048), cert. denied, 449 U.S. 956, 101 S.Ct. 365, 66 L.Ed.2d 221 (1980). To prove that a delay violated those "fundamental conceptions of justice" a defendant must prove that (1) pre-indictment delay caused substantial prejudice to his right to a fair trial and, (2) the Government intentionally delayed indictment in order to gain a tactical advantage over the accused. United States v. Marion, 404 U.S. 307, 324-25, 92 S.Ct. 455, 465-66, 30 L.Ed.2d 468 (1971); United States v. Crooks, 766 F.2d 7, 11 (1st Cir.), cert. denied, --- U.S. ----, 106 S.Ct. 421, 88 L.Ed.2d 362 (1985); United States v. Marler, 756 F.2d 206, 215 (1st Cir.1985).

Picciandra and Lucid assert that prejudicial and intentional delay violated their fifth amendment rights to due process. Picciandra was first indicted on November 15, 1983, and he argues that the Government should have commenced tax proceedings against him in 1978, the DEA having learned of the drug conspiracy at that time. As for Lucid, the Government recommended that he be documented as a subject for investigation on October 15, 1982. He was not indicted, however, until April 11, 1984. He asserts that the Government should have begun proceedings in April 1982 when Julie Davis supplied information about his involvement, and possibly as early as July 1981 when the Government could have obtained records directly from the bank at which he maintained his escrow accounts.

Defendants argue that the delays had several prejudicial effects. First, they claim that the passage of time caused DEA agent Dever to forget the content of his 1977 report so that the Government introduced the report as past recollection recorded and effectively denied the defendants the right to confront and examine Dever. Second, they note that an informant who was present at the 1977 meeting died before the trial, and, third, that the Government could not produce records of grand jury testimony given by Picciandra after his arrest on drug charges. The defendants would like to believe, but state no basis therefor, that one of these sources might have produced exculpatory evidence.

At the time of the trial, Dever could not remember the substance of his report that detailed a 1977 conversation in which Picciandra admitted his participation in the MUSCAVADO smuggling venture. Over Picciandra's objection, the trial court applied the past recollection recorded exception to allow the Government to read portions of Dever's 1977 report as recorded recollection after he testified that he could no longer remember the contents.

The introduction of Dever's report under the past recollection recorded exception did not legally prejudice the defendants. The Notes of the Advisory Committee on Federal Rules...