U.S. v. Toney
| Citation | 161 F.3d 404 |
| Decision Date | 02 December 1998 |
| Docket Number | No. 97-1138,97-1138 |
| Parties | 50 Fed. R. Evid. Serv. 1010 UNITED STATES of America, Plaintiff-Appellee, v. Maria TONEY, Defendant-Appellant. |
| Court | United States Courts of Appeals. United States Court of Appeals (6th Circuit) |
Stephen L. Hiyama, Asst. U.S. Attorney (argued and briefed), Office of U.S. Attorney, Detroit, MI, for Plaintiff-Appellee.
Susan K. Rock (argued and briefed), Dearborn Heights, MI, for Defendant-Appellant.
Before: NELSON, CLAY, and GILMAN, Circuit Judges.
Maria Toney was one of four individuals prosecuted in connection with a scheme to defraud Blue Cross Blue Shield of Michigan ("Blue Cross") by cashing falsified benefit payment checks. A jury convicted Toney on 35 counts of mail fraud pursuant to 18 U.S.C. § 1341, and the district court sentenced her to 21 months in prison. Although Toney does not appeal her sentence, she appeals her conviction based on alleged evidentiary errors committed by both the government and the district court. For the reasons set forth below, we AFFIRM Toney's conviction.
Toney's long-time friend and neighbor, Kristen Armstrong, worked for Blue Cross in the Master Medical Department in Southfield, Michigan. Armstrong handled questions from Blue Cross subscribers about their claims and benefit payments. Through her position, Armstrong fraudulently caused Blue Cross to generate 48 checks that she had mailed either to her own home or to the houses of Toney, Yvette Petty, and Bridget Reardon. Armstrong entered, or caused an unwitting clerk to enter, fraudulent information into the Blue Cross computer system from her home office in Southfield. The information was then transmitted electronically to Blue Cross's headquarters in downtown Detroit, where computer-generated checks were printed automatically, stuffed into envelopes, and delivered to a U.S. Postal Service facility for mailing to the payees.
The first unauthorized check was dated July 20, 1994, and the last was dated February 20, 1995. Armstrong caused 31 of the 48 fraudulent Blue Cross checks to be made payable to Toney and mailed to Toney's house. Four other checks, payable to Deborah Baker (another of Armstrong's neighbors), were mailed to Toney's house. The remaining 13 checks were mailed to the houses of Armstrong, Petty, and Reardon. As part of her fraudulent scheme, Armstrong caused the checks to be issued through several legitimate Blue Cross health insurance accounts without the consent or knowledge of the subscribers.
Toney's father was diagnosed with lung cancer in October of 1991 and died in June of 1992. His insurance carrier was Blue Care Network of Southeast Michigan, an HMO subsidiary of Blue Cross. Blue Care Network paid all of the medical expenses arising from his terminal illness. Toney testified that she received a bill long after her father had died and, because she believed the bill to be a mistake, she approached her neighbor and friend, Armstrong, for advice on how to proceed. According to Toney, Armstrong then suggested that Toney might be eligible for money from Blue Cross for the full-time care she had provided her father. The first Blue Cross check issued to Toney, allegedly for the care she provided to her father, was dated August 3, 1994. Toney never submitted any claim forms or provided Armstrong with any supporting details as a backup for the checks she received.
Toney endorsed and cashed 27 of the 31 checks payable to herself. She cashed six of the checks at the Viceroy Market and the other 21 checks at various branches of Michigan National Bank, the bank on which the checks were drawn. The Viceroy Market charged Toney between 1 1/2 and 4% of the face amount to cash the checks. None of the checks was deposited in Toney's own checking account.
The fraudulent scheme began to unravel on February 22, 1995, when Toney encountered difficulties negotiating one of the checks. On February 23, 1995, Southfield Police Department officers arrested Armstrong for a probation violation connected to an unrelated felony conviction in Washtenaw County. On that same date, Special Agents Jerry Craig and James Hoppe of the Federal Bureau of Investigation obtained a waiver of Armstrong's Miranda rights and proceeded to interview her about the Blue Cross checks.
Also on February 23, 1995, the Michigan National Bank's security personnel and Detroit police officers briefly detained Toney while she was attempting to negotiate one of the checks. They informed her that the check was fraudulent and that the FBI wanted to speak with her about it. Toney was given the name and telephone number of an FBI agent to call, this agent being one of the two who had interviewed Armstrong earlier that day. Just before Toney phoned the FBI agent, she received a telephone call from Armstrong in jail. After speaking with Armstrong, Toney phoned the FBI agent and set up an appointment for the following morning. At that time, Toney denied any wrongdoing.
Because of the scheme's collapse, Toney was unable to cash the last four of the 31 checks payable to her. The 27 Blue Cross checks that Toney did cash totaled $77, 257.76; the four that she did not negotiate were in the cumulative amount of $37,493.00. Altogether, Armstrong's fraudulent scheme resulted in the issuance of 48 Blue Cross checks totaling $149,262.61, of which 44 checks in the amount of $111,769.61 were cashed. Petty, Reardon, and Armstrong negotiated the remaining 17 checks, with Petty and Reardon splitting the proceeds with Armstrong.
On June 8, 1995, the government issued a criminal complaint charging Toney, Armstrong, Petty, and Reardon with mail fraud under 18 U.S.C. § 1341. On October 5, 1995, Petty pled guilty pursuant to a plea agreement. The next day, Reardon entered into a twelve month pretrial diversion agreement with the government.
On February 8, 1996, a federal grand jury in Detroit returned an indictment charging Toney and Armstrong with mail fraud. On the first day of trial, October 3, 1996, Armstrong pled guilty to all 38 counts against her without the benefit of a plea agreement. Toney's trial began the following day. Twelve days later, the jury found Toney guilty on all 35 counts against her. On January 21, 1997, the court sentenced Toney to 21 months' imprisonment and two years' supervised release. The court also ordered Toney to pay restitution to Blue Cross in the amount of $79,233.76 and imposed mandatory special assessments totaling $1,750.00. On January 24, 1997, Toney filed a timely notice of appeal challenging her conviction.
During Toney's trial, Armstrong testified on Toney's behalf. Specifically, Armstrong admitted her own guilt in the scheme to defraud Blue Cross and denied any knowledge or involvement on the part of Toney. Armstrong corroborated Toney's own testimony that, based on Armstrong's representations, Toney believed that she had legitimately received the Blue Cross checks as reimbursement for the full-time care she provided to her father while he was dying of lung cancer. Armstrong also testified that Toney never gave Armstrong any portion of the check proceeds.
The government cross-examined Armstrong regarding inconsistent oral statements that she allegedly had made to the two FBI agents at the time of her arrest. Armstrong was asked to admit that she had told the agents that Toney, Petty, and Reardon knew the Blue Cross checks were fraudulent, and that they had split the proceeds with her. Armstrong denied making any such inconsistent statements. The government never presented any proof that she had.
On redirect examination, Toney's counsel unsuccessfully attempted to introduce two written statements that Armstrong had made prior to the trial that fully exculpated Toney and were consistent with Armstrong's trial testimony. One was a letter dated August 11, 1995, and the other was a virtually identical affidavit dated September 9, 1995 (collectively the "affidavit"). In the affidavit, Armstrong declared that Toney had no involvement in or knowledge of the fraudulent scheme. Armstrong explained in the affidavit that she had led Toney to believe that all of the Blue Cross checks that Toney received were legitimate payments pursuant to her father's insurance benefits for the full-time care that Toney had provided during her father's terminal illness. Additionally, Armstrong stated in the affidavit that Toney never gave Armstrong any of the proceeds from the checks.
Armstrong had also made an oral statement to the district court on October 3, 1996, when she pled guilty the day before Toney's trial began. During her change of plea, Armstrong admitted her own guilt, and also offered numerous statements that fully exculpated Toney. The government objected to the introduction of any of Armstrong's prior consistent statements. The district court sustained the objection, finding that Armstrong had made the statements after a motive to lie had arisen.
On appeal, Toney contends that the district court's exclusion of Armstrong's prior consistent statements constitutes reversible error. Toney argues that the district court should have admitted the statements as substantive evidence under Rule 801(d)(1)(B) of the Federal Rules of Evidence, or if not, then at least admitted them for the limited purpose of rehabilitation.
"A district court's determination of whether evidence constitutes hearsay under the Federal Rules of Evidence is a conclusion of law that is reviewed de novo." Cox v. Treadway, 75 F.3d 230, 238 (6th Cir.1996) (citing Hancock v. Dodson, 958 F.2d 1367 1371 (6th Cir.1992)). Rule 801(d)(1)(B) provides as follows:
A statement is not hearsay if ... [t]he declarant testifies at the trial or hearing and is subject to cross-examination concerning the [prior] statement, and the...
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