U.S. v. Reed

• Decision Date: 11 February 1999
• Docket Number: 97-1957,No. 97-1860,97-1860
• Citation: 167 F.3d 984
• Parties: 51 Fed. R. Evid. Serv. 551 UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v. Rosalind K. REED, Defendant-Appellant/Cross-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 984

167 F.3d 984

51 Fed. R. Evid. Serv. 551

UNITED STATES of America, Plaintiff-Appellee/Cross-Appellant, v. Rosalind K. REED, Defendant-Appellant/Cross-Appellee.

No. 97-1860, 97-1957.

United States Court of Appeals Sixth Circuit.

Argued Dec. 9, 1998.

Decided Feb. 11, 1999.

Neil H. Fink (briefed), David A. Koelzer (briefed), Law Offices of Neil H. Fink, Birmingham, Michigan, Mark J. Kriger (argued and briefed), Law Offices Of Mark J. Kriger, Detroit, Michigan, for Defendant-Appellant/Cross-Appellee.

Wayne F. Pratt (argued and briefed), Ronald W. Waterstreet, Assistant U.S. Attorney (briefed), Detroit, Michigan, for Plaintiff-Appellee/Cross-Appellant.

Before: WELLFORD, BOGGS, and MOORE, Circuit Judges.

MOORE, Circuit Judge.

Rosalind K. Reed was convicted in the district court of conspiracy to commit money laundering pursuant to 18 U.S.C. § 1956(a)(1)(A)(i) and received a sentence of forty-six months. On appeal Reed argues, inter alia, that certain evidence was impermissibly excluded from her trial, that the district court gave the jury a coercive Allen charge, and that the evidence regarding her intent was insufficient to sustain her conviction. For the reasons discussed below, we AFFIRM Reed's conviction.

The government cross-appeals the sentence imposed, which reflected a downward departure of seventy-five months. We conclude that the district court abused its discretion in granting this departure. Accordingly, we VACATE the sentence imposed and REMAND the case for resentencing.

I. FACTS AND PROCEDURAL HISTORY

This case arises out of a large marijuana distribution conspiracy. Principals in the conspiracy included Richard Sumpter, who supplied marijuana from California, and Jerome Maddox, who acted as Sumpter's Detroit distributor. The testimony of Sumpter and Maddox, who ultimately cooperated with the authorities after their arrests, and others established the following:

Reed, a criminal defense attorney, was a friend and neighbor of Maddox. Sumpter was arrested in Detroit in January 1994, and Reed, at Maddox's request, undertook Sumpter's representation. Sumpter, while in custody, told Reed that he could not pay her legal fees unless Maddox paid off his drug debt (something in excess of $400,000). Reed agreed to act as a conduit for the flow of money and information between Sumpter and Maddox. On two occasions Maddox delivered large quantities of cash to Reed's law office and was met by Diana Fitch, Sumpter's wife. After Maddox and Fitch counted the money and gave a portion to Reed for legal fees, the remainder was left in Reed's office for subsequent pick up by Sumpter's courier, David "Flyboy" Delacour. On instructions from Reed, Selecia Wright, Reed's receptionist, gave the first bag of money to Delacour. A second receptionist, Diane McElroy, gave the second bag to Delacour on instructions from Fitch when Delacour arrived while Reed was out of the country. On his return to California from this second trip, Delacour was arrested, and the bag was found to contain $90,000 in currency.

In addition to her knowingly facilitating this transfer of cash, the testimony indicated that Reed delivered notes from Sumpter to Maddox while Sumpter was jailed, that she discussed with Maddox Sumpter's plan to continue running the drug operation while he was jailed, and that she discussed Maddox's drug debt with Fitch. Eventually, Sumpter and Maddox agreed to cooperate with the authorities, and as part of that cooperation both men recorded conversations with Reed in which they attempted to capture Reed making inculpatory statements. Instead, Reed persistently denied involvement in or knowledge of any criminal activity.

On October 6, 1994 Reed was indicted on charges of money laundering, conspiracy to commit money laundering, and conspiracy to distribute marijuana. Pretrial, the government asked for a jury instruction that the delivery of cash could constitute a "financial transaction" for the purposes of the federal money laundering statute. Believing that the instruction was foreclosed by circuit precedent and given the prosecution's admission that no other transaction could be proven, the district court dismissed the money laundering counts. On appeal this court, sitting en banc, overruled contrary precedent and held that the delivery of cash as alleged in the indictment did constitute a "financial transaction." See United States v. Reed, 77 F.3d 139 (6th Cir.) (en banc) ("Reed I "), cert. denied, 517 U.S. 1246, 116 S.Ct. 2504, 135 L.Ed.2d 194 (1996).

On March 20, 1996 Reed was re-indicted. After the district court denied Reed's motion to dismiss on the basis of an ex post facto prosecution under the money laundering statute, the case proceeded to trial. After lengthy deliberations, described below, the jury convicted Reed of conspiracy to commit money laundering, acquitted her of conspiracy to distribute marijuana and of one substantive money laundering count, and deadlocked over the remaining money laundering count, as to which a mistrial was declared. Following sentencing, Reed appealed her conviction, while the government cross-appealed the sentence imposed.

II. ANALYSIS

In appealing her conviction, Reed asserts a number of trial errors. We have jurisdiction to consider her appeal pursuant to 28 U.S.C. § 1291. In its cross-appeal, the government claims that the district court erred in sentencing Reed. Jurisdiction to hear this appeal is provided by 18 U.S.C. § 3742.

A. The Admissibility of Certain Recorded Conversations

Reed sought to introduce a tape recording of a conversation between Sumpter and herself and arguably would have sought to introduce a recording of a similar conversation between Maddox and herself, if not for the district court's ruling that the Sumpter recording was inadmissible as hearsay. In reviewing a trial court's evidentiary determinations, this court reviews de novo the court's conclusions of law, e.g., the decision that certain evidence constitutes hearsay, see United States v. Branham, 97 F.3d 835, 851 (6th Cir.1996), and reviews for clear error the court's factual determinations that underpin its legal conclusions. See United States v. Clark, 18 F.3d 1337, 1341 (6th Cir.), cert. denied, 513 U.S. 852, 115 S.Ct. 152, 130 L.Ed.2d 91 (1994).

In the taped conversation with Sumpter, Reed stated that she was not involved in the transportation of drug money and that she had no knowledge that her office was being used to facilitate such transfers. J.A. at 215-26. Because Sumpter did not refute these assertions and generally responded "yeah" or "I understand," Reed argued at trial that portions of the conversation should have been admitted pursuant to Federal Rule of Evidence 613(b) in order to impeach Sumpter's trial testimony that helped to establish that Reed was a knowing participant in the transportation and laundering of drug money. ¹

The district court determined that Sumpter's utterances on the tape were not statements as such. Rather than signaling agreement with Reed's statements, Sumpter's responses of "yeah" and "I understand" merely indicated his attentiveness and participation in the conversation. Moreover, citing United States v. Hale, 422 U.S. 171, 176, 95 S.Ct. 2133, 45 L.Ed.2d 99 (1975), the court determined that Sumpter's failure to refute Reed's assertions was not probative because under the circumstances it would not have been natural for Sumpter to have contested Reed's denial of involvement.

The district judge did not clearly err in finding Sumpter's utterances not to be statements and in finding his failure to refute Reed's assertions not to be probative. In the taped conversation Sumpter was attempting to capture Reed making inculpatory admissions. Taking an adversary position toward Reed would have risked tipping Reed off to Sumpter's cooperation with the authorities or, at the least, would have risked alienating her and causing her to cut short the phone call. Even if Sumpter's surveillance tactics were not exemplary, the circumstances of the call were not natural, and Sumpter's responses cannot be taken at face value. The cases cited by Reed on this point are not to the contrary and simply reinforce the rule "that the determination of whether statements are in fact inconsistent is committed to the sound discretion of the district court." United States v. Agajanian, 852 F.2d 56, 58 (2d Cir.1988); see also United States v. Causey, 834 F.2d 1277, 1282 (6th Cir.1987), cert. denied, 486 U.S. 1034, 108 S.Ct. 2019, 100 L.Ed.2d 606 (1988).

On appeal Reed argues additionally that the tape of her conversation with Maddox was improperly excluded from evidence and that both tapes should have been admitted into evidence pursuant to Rule 801(d)(2)(D) as admissions by a party opponent. Neither contention is meritorious.

Reed did not attempt to introduce the Maddox tape after the court ruled the Sumpter tape inadmissible. At one point the prosecution noted at a sidebar that it intended to ask the court to exclude the Maddox tape and that it assumed that the ruling on the Sumpter tape would apply. It is clear, however, that the district judge did not rule on the matter at this time. ² Citing Douglas v. Alabama, 380 U.S. 415, 422, 85 S.Ct. 1074, 13 L.Ed.2d 934 (1965), Reed argues that she was not required to object to the government's suggestion that the Maddox tape be excluded, because such an objection would have been futile in light of the ruling on the Sumpter tape. The exclusion of that tape, however, turned on the court's factual determination that the utterances of Sumpter were not statements. The district court made no such ruling regarding the purported statements of Maddox. ³

We decline to consider Reed's argument regarding the admissibility of the Maddox tape. Federal Rule of Criminal Procedure 52(b) permits this court to notice "[p]lain errors or defects affecting substantial rights ... although they were not brought to the attention of the [dis...