U.S. v. Swan

• Decision Date: 08 May 2007
• Docket Number: No. 06-1417.,06-1417.
• Citation: 486 F.3d 260
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Shelia SWAN, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

486 F.3d 260

UNITED STATES of America, Plaintiff-Appellee, v. Shelia SWAN, Defendant-Appellant.

No. 06-1417.

United States Court of Appeals, Seventh Circuit.

Argued November 29, 2006.

Decided May 8, 2007.

Andrew C. Porter (argued), Office of the United States Attorney, Chicago, IL, for Plaintiff-Appellee.

Adam Bourgeois, Barbara Klein (argued), Bourgeois & Klein, Chicago, IL, for Defendant-Appellant.

Before BAUER, CUDAHY, and ROVNER, Circuit Judges.

CUDAHY, Circuit Judge.

The defendant, Shelia Swan, was convicted by a jury of mail fraud and sentenced to 22 months of imprisonment. She appeals her conviction, claiming that the district court erred in admitting an attorney's statement as an admission by a party and in limiting the testimony of a witness. The defendant also argues that the district court erred in denying her motion for judgment of acquittal and motion for a new trial. We affirm her conviction and the denial of her motion for a new trial.

I. Background

On September 25, 2003, a federal grand jury returned an indictment against the defendant and her husband and codefendant, Seutter Swan, charging Shelia with two counts of mail fraud in violation of 18 U.S.C. § 1341 and one count of obstruction of justice in violation of 18 U.S.C. § 1505.¹ The latter charge was later dismissed. The indictment alleged that Shelia and her husband were participants in a scheme to defraud Medicare by submitting fraudulent claims for reimbursement. The government's theory was that the Swans sought reimbursement for compensation allegedly paid to three family members, Bettie Starling, Veronica Alexander and Cedric Alexander, who did little or no work for A-1 Home Health Care ("A-1"), the business wholly owned by Shelia and her husband. The government further charged that when federal agents began to investigate the Swans, Shelia attempted to cover up the fraud.

The government presented evidence at trial that A-1 submitted cost reports to Medicare seeking reimbursement of $32,885 in 1996 and $14,160 in 1998 for wages paid to Bettie Starling, Shelia's aunt. Starling testified that she had never worked for A-1. She also testified that Shelia sent her the checks and told her that the checks were to pay off a loan to Greentree Financial to purchase a mobile home in Benton, Mississippi for the defendant's parents. The address listed for Starling on the W-2 form was a Chicago address with which Starling was not familiar. In 1998, Starling testified that she was under financial strain and asked Shelia for a loan. Shelia again put Starling on A-1's payroll and sent her checks. In an interview with FBI agents in the summer of 2000, Starling said the defendant had told her to say that she was an employee of A-1. Later in 2000, the Swans sent Starling a job description dated November 29, 1995 through the mail. It listed five different duties performed by Starling, none of which she testified she performed.

A-1 also sought reimbursement from Medicare in 1996 for $42,600 in wages paid to Veronica Alexander, Seutter's sister. A-1 provided a job description to a Medicare auditor reporting that Veronica Alexander was the "Quality Management Coordinator" for A-1 in 1996. Testimony at trial suggested that other A-1 employees and consultants performed the responsibilities listed in the job description for this position. Veronica Alexander's ex-husband also testified that she only worked for A-1 for one week while on spring break during college.

In 1997, A-1 sought reimbursement from Medicare for $18,880 in wages paid to Cedric Alexander, Seutter's half-brother. Cedric Alexander's wife testified that he lived in Mississippi until their separation in August 1997 and that he had never worked at A-1 while they were together. Checks issued to Cedric Alexander listed an address in Richton Park, Illinois, where an employee of A-1 lived in 1997.

Relevant to this appeal, the government called FBI Agent Mike Miller to testify about his investigation into A-1. As to the investigation of Veronica Alexander's wages, Agent Miller testified that he sent a subpoena to A-1's lawyer at the time (the James Montgomery Group) seeking documents relating to the qualified management coordinator position. Agent Miller testified that he received a call from an attorney, Tom Marszewski, in response to the subpoena. Agent Miller further testified that Marszewski informed him that the defendants "used the [quality management coordinator] description submitted to Medicare so that they could be reimbursed at a higher rate per that job description." (R. 75-3 at 353.) Both Shelia's attorney, Charles Shepherd, and her husband's attorney, Adam Bourgeois, objected on hearsay grounds to the admissibility of Agent Miller's testimony.² The district court allowed the testimony as an admission of a party opponent pursuant to Federal Rule of Evidence 801(d)(2)(D).

Shelia filed a post-trial motion for a mistrial on October 27, 2005 based on the admission of Agent Miller's testimony. The district court denied the motion the same day. An affidavit prepared by Attorney Marszewski was submitted in support of a subsequent motion for a new trial or judgment of acquittal. In the affidavit, Marszewski denied making the statements attributed to him by Agent Miller: "I did not tell either Agent Miller or prosecutor Porter that A-1 used the job description to get reimbursed at a higher hourly rate of pay for Veronica Alexander." (Appellant's Br., App. F at ¶ 3.) Marszewski also stated that he has not "at any time represented Seutter or Shelia Swan with respect to the federal criminal prosecution" and that he was "only involved with the investigation for the very limited purpose of responding to the grand jury subpoena." (Id. at ¶ ¶ 5, 6.) He stated that he "had no authority to act for Seutter or Shelia Swan in any other capacity." (Id. at ¶ 7.) Lastly, Marszewski stated that he "never considered myself — factually or legally—to be the agent of either Seutter or Shelia Swan." (Id. at ¶ 8.)

Also relevant for the purposes of this appeal is the testimony of Attorney Charles MacKelvie. During the trial, Shelia and Seutter filed a joint motion in limine to admit the expert testimony of Attorney MacKelvie. The memorandum in support of the motion stated that "[t]he defendant is offering Mr. MacKelvie as an opinion witness either under FRE 701 or FRE 702." (Appellant's Br., App. D at 3.) The memorandum also listed the areas in which Attorney MacKelvie could offer testimony. The district court, however, did not rule on this motion since Attorney Bourgeois, Seutter's attorney, effectively withdrew the motion when he conceded at the hearing on the motion that Attorney MacKelvie would not be providing opinion testimony.

At trial, Attorney Bourgeois attempted to solicit testimony from MacKelvie about his opinion whether the defendant had violated Medicare regulations with respect to the charges for which she was being tried. The prosecutor objected as to foundation, among other grounds, and the district court sustained this objection, thereby limiting Attorney MacKelvie's testimony.

On October 27, 2005, the jury found the defendant guilty of two counts of mail fraud. On November 28, 2005, Shelia and Seutter filed a joint motion for a new trial or for judgment of acquittal. The court denied the motion and sentenced Shelia to 22 months in prison. The defendant appeals her conviction, as well as the denial of her motion for a new trial or for judgment of acquittal.

II. Discussion

The defendant offers three grounds for reversal. First, she argues that the district court erred in admitting the testimony of Agent Miller concerning Attorney Marszewski's statement as an admission by an agent under Federal Rule of Evidence 801(d)(2)(D). Second, she contends that the district court erred in limiting the testimony of Attorney MacKelvie. Third, she argues that the district court erred in denying the defendants' joint motion for a new trial or for judgment of acquittal. We address each argument in turn.

I. Agent Miller's Testimony

Before turning to the substance of Shelia's claim, we must first determine the appropriate standard of review. In order to preserve a ruling on the admission of evidence for appeal, a party must make "a timely objection or motion to strike [which] appears of record, stating the specific ground of objection, if the specific ground was not apparent from the context." Fed. R.Evid. 103(a)(1); see also United States v. Wynn, 845 F.2d 1439, 1442 (7th Cir.1988). We review the district court's decision to admit evidence for abuse of discretion if the party contesting its admissibility objected to it at trial. United States v. Sanders, 979 F.2d 87, 92 (7th Cir.1992); United States v. Medina, 755 F.2d 1269, 1274 (7th Cir.1985). If no objection was made, the standard of review is plain error. United States v. Jaimes-Jaimes, 406 F.3d 845, 849 (7th Cir.2005); Wynn, 845 F.2d at 1443.

The defendant argues that we should review the district court's decision to admit the evidence for abuse of discretion. The government counters that plain error should be the standard of review because the defendant's counsel failed to object to the government's question. In order to determine the appropriate standard of review, we must examine the relevant testimony.

Q. [Ms. Noller, Prosecutor] Who is Tom Marszewski?

A. [Agent Miller] He was an associate for the James Montgomery group representing A-1.

Q. So, Mr. Marszewski was also an attorney representing A-1; is that correct?

A. Correct.

Q. Was he also representing [Seutter] Tyrone Swan and Shelia Swan, as far as you know?

A. To the best of my knowledge, yes.

Q. What did he say to you?

MR. SHEPHERD [attorney for Shelia Swan]: Objection. Hearsay.

MS. NOLLER: It's an admission of a party opponent.

THE COURT: Overruled. You may answer.

BY MS. NOLLER:

Q. What did Mr. Marszewski tell you in response to the subpoena?

A. He informed me that...