U.S. v. Swindall

• Decision Date: 31 August 1992
• Docket Number: Nos. 89-8746,91-8329 and 91-9017,s. 89-8746
• Citation: 971 F.2d 1531
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Patrick L. SWINDALL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1531

971 F.2d 1531

61 USLW 2184

UNITED STATES of America, Plaintiff-Appellee, v. Patrick L. SWINDALL, Defendant-Appellant.

Nos. 89-8746, 91-8329 and 91-9017.

United States Court of Appeals Eleventh Circuit.

Aug. 31, 1992.

Robert G. Fierer, Atlanta, Ga., for Swindall.

Charles Tiefer, Steven R. Ross, Washington, D.C., for amicus curiae Speaker & Bipartisan Leadership Group of the U.S. House of Representatives.

William P. Gaffney, Asst. U.S. Atty., Drug Task Force, Atlanta, Ga., Mervyn Hamburg, U.S. Dept. of Justice, Crim. Div., Washington, D.C., for U.S.

Appeals from the United States District Court for the Northern District of Georgia.

Before KRAVITCH, Circuit Judge, GODBOLD and JOHNSON ^*, Senior Circuit Judges.

KRAVITCH, Circuit Judge:

A Northern District of Georgia jury convicted Patrick L. Swindall ("Swindall"), a former member of the U.S. House of Representatives, on nine counts of making false material declarations before a grand jury, in violation of 18 U.S.C. § 1623. ¹ In essence, the indictment charged that Swindall had discussed money-laundering transactions with an undercover agent and an intermediary, and then falsely testified to a grand jury to conceal the extent of his involvement in these discussions. Swindall was not charged with any substantive money-laundering offenses. The district court sentenced Swindall to a concurrent twelve-month sentence on each count and imposed a fine of $30,000.

In the first of three consolidated appeals, Swindall argues a number of grounds for reversal of his convictions. Swindall first contends that his Speech or Debate Clause privilege was violated when (a) the government, to establish that Swindall had knowledge of statutes that would have informed him of the illegality of the money-laundering transactions, questioned him before the grand jury about his memberships on the Banking and Judiciary Committees of the U.S. House of Representatives; (b) he was indicted on the basis of evidence of these committee memberships; (c) he was convicted on the basis of the same information; and (d) he was convicted on the basis of committee reports introduced by the government at trial. Second, Swindall contends that an ex parte conference between the prosecutor and the district judge violated Swindall's Fifth and Sixth Amendment rights. Third, Swindall argues that the district court improperly struck the testimony of defense witness Congressman Barney Frank ("Representative Frank"). Fourth, Swindall claims that his right against self-incrimination was violated when the prosecution improperly commented to the jury regarding Swindall's decision not to testify at trial. Finally, Swindall claims that the elements of perjury were not present because his declarations to the grand jury were (1) literally true, (2) in response to fundamentally ambiguous questions, and (3) not material to the grand jury's investigation. ²

We reverse Swindall's convictions on Counts One, Nine, and Ten because of violations of his Speech or Debate privilege, and instruct the district court on remand to vacate the convictions and to dismiss these counts with prejudice. We affirm Swindall's convictions on the remaining six counts.

In both the second and third appeals consolidated here, Swindall argues that he

                is entitled to either dismissal of the indictment or a new trial because of newly discovered evidence and governmental misconduct.   The district court denied Swindall's motions for dismissal or new trial, and we affirm
                

BACKGROUND

A. Background Relevant to the First Appeal

In 1987, the Internal Revenue Service's Criminal Investigation Division was conducting an investigation, called Operation Boots, of money-laundering activities throughout the nation. In one facet of the investigation, undercover agent Mike Mullaney ("Agent Mullaney") was posing as Mike Martinez, a representative of Colombian drug dealers. Agent Mullaney began to launder money through Charles LeChasney ("LeChasney") and others.

Swindall, who knew LeChasney from various Republican Party fundraising events, believed him to be a wealthy financial consultant, not the least because LeChasney lived in an historic mansion in an affluent section of Atlanta and appeared to own a fleet of antique and luxury cars. In fact, he was a bankrupt con artist whose fraudulent schemes had left a trail of victims. LeChasney, who was himself under investigation and who was later arrested and convicted, was not cooperating with the government and was unaware that the person he knew as Mike Martinez was in fact undercover agent Mike Mullaney.

In mid-1987, Swindall asked LeChasney for financial advice concerning a million-dollar note he held, which matured in four years and was earning eight-percent interest. The note represented part of the proceeds of the sale of commercial real estate in downtown Atlanta. Swindall, who was in need of funds to pay for cost overruns on a home he was having built, wanted to sell the note or use it to obtain a loan, whichever generated the most favorable tax consequences. LeChasney informed Swindall that he knew of investors who might be willing to buy the note, but who would pay only in cash. He explained that the cash was "flight capital" smuggled from Central American countries by refugees fleeing oppression, and that the investors needed to hide their assets and conceal their identities to protect themselves from the governments of these countries.

According to the government, Swindall was aware of two particular money-laundering statutes because of his membership on the House Banking and Judiciary Committees. One statute prohibited laundering funds that are the proceeds of unlawful activities such as selling drugs. ³ The other statute, enacted in response to money launderers who engaged in transactions of less than $10,000 to avoid triggering reporting requirements, prohibited structuring a transaction to cause a financial institution not to file a report that would otherwise be required. ⁴ Both bills were part of the Anti-Drug Abuse Act of 1986 and each was considered by either the Banking or In July 1987, LeChasney reported to Agent Mullaney that Swindall wanted to sell a million-dollar note and, according to LeChasney, was interested in selling it offshore to evade taxes. Agent Mullaney reported this information to superiors, who opened a tax-evasion and currency-reporting investigation of Swindall.

Judiciary Committee during Swindall's tenure in Congress.

1. The Marriott Meeting

On August 28, 1987, Swindall, LeChasney, and Agent Mullaney met at the Marriott Hotel in Atlanta. The government secretly videotaped the meeting. Swindall told Agent Mullaney that, because of changes in the tax laws, he was no longer interested in selling the note, but he was interested in obtaining a loan. Agent Mullaney--mentioning nothing about Colombian drug dealers--told Swindall that he represented South American investors who wished to dispose of cash, hide their assets, and conceal their identities. He informed Swindall that any deal would be in cash.

Swindall stated that he was interested in a mortgage loan and suggested a scheme whereby LeChasney would form a mortgage company, secretly funded by the agent's investors, that would lend Swindall money. Swindall would sign the million-dollar note over to LeChasney's newly formed corporation, which the agent's investors would eventually purchase. The advantages of this scheme included that (1) Swindall could have use of the money without realizing an immediately taxable gain from sale of the note; (2) the investors could anonymously dispose of their cash; and (3) Swindall could point to LeChasney's corporation as the source of the loan and deny that he had ever made a deal with Agent Mullaney.

Although the deal would be made to appear to be a mortgage loan from LeChasney to Swindall, Swindall and the undercover agent negotiated the price of the actual deal--a sale of the note for cash. They discussed a price in the range of $850,000, which was $80,000 higher than the present value of the note.

Swindall asked why he could not simply deposit the cash in a bank in one lump sum. Agent Mullaney explained that currency transaction report forms ("CTRs" or "bank forms") would require, inter alia, that Swindall reveal the source of the funds, which would be unacceptable to the agent's investors. It was therefore imperative that the bank forms either not be filed or be filed falsely. LeChasney--who was to receive a large commission from the deal--informed Swindall that it would take him at least three weeks to convert such a large amount of cash into cashier's checks without triggering the currency-reporting requirements. No agreement was reached because, among other reasons, Swindall refused to accept delivery of the cash personally, and neither Swindall nor the undercover agent was willing to assume the risk of loss during the three weeks required to convert the cash into cashier's checks.

2. Further Discussions

The government then closed its investigation of Swindall as he had not indicated an intention to evade his taxes. On September 3, however, the government reopened the investigation, this time with regard to money-laundering and transaction-structuring violations, because LeChasney had advised Agent Mullaney that Swindall was now willing to accept the cash personally. LeChasney informed the agent that Swindall was in immediate need of $100,000 because of the cost overruns on his home. Swindall's increasingly pressing need for funds eventually resulted in the inclusion of an advance payment of $150,000 in the proposed deal.

During the course of negotiations, Agent Mullaney spoke several times on the telephone with LeChasney and occasionally with Swindall. The agent recorded these conversations. On September 7, Swindall related to the agent his fear that the cash came from drug sales. The agent responded that he had been told the cash was flight...