USA. v. Hoaibao

• Decision Date: 16 August 1999
• Docket Number: No. 98-50308,98-50308
• Citation: 189 F.3d 860
• Parties: (9th Cir. 1999) UNITED STATES OF AMERICA, Plaintiff-Appellee, v. HOAI BAO, Defendant-Appellant
• Court: U.S. Court of Appeals — Ninth Circuit

Page 860

189 F.3d 860 (9th Cir. 1999)

UNITED STATES OF AMERICA, Plaintiff-Appellee, v. HOAI BAO, Defendant-Appellant.

No. 98-50308

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted April 15, 1999

Filed August 16, 1999

[Copyrighted Material Omitted] Alan Rubin, Epstein, Adelson & Rubin, Los Angeles, Califor-nia, for the defendant-appellant.

Charlaine Olmedo, Assistant United States Attorney, Los Angeles, California, for the plaintiff-appellee.

Appeal from the United States District Court for the Central District of California. D.C. No. CR-97-00634- ABC.

Before: Diarmuid F. O'Scannlain and A. Wallace Tashima, Circuit Judges, and Edward C. Reed, Jr.,^* District Judge.

TASHIMA, Circuit Judge:

Hoai Bao appeals his conviction for conspiracy to traffic in, and trafficking in, counterfeit computer documentation and packaging in violation of 18 U.S.C. SS 371 and 2318. Bao argues that an exculpatory statement he made to a newspaper reporter was erroneously excluded at trial. He also contends that his sentence was miscalculated because the district court overvalued the software manuals he illegally copied. We have jurisdiction under 28 U.S.C. S 1291, and we affirm in part and reverse and remand in part.

I.

Bao was at the lowest rung of a conspiracy to counterfeit Microsoft "Windows 95" packages, including the software on CD-Rom and a manual. The conspiracy's ringleader, Jerry Mao, first approached printer John Tran and offered to pay him $80,000 to print 40,000 counterfeit Microsoft manuals. After learning that the print-job was illegal, John Tran referred the order to Huy Tran, who owned Vy's Printing shop. Because Huy Tran could not print the entire job at his shop, he subcontracted some of the work out to Huy Nguyen, who managed Newest Printing Shop, and to Bao's print shop, Mission Graphics. In addition to copying 5,000 manuals, Bao also printed other accompanying counterfeit packaging materials, including CD-Rom inserts and product registration cards with counterfeit pre-paid postage stamps.

When the police came to investigate Mission Graphics on May 1, 1997, after receiving information that an illegal print job was taking place there, Bao was present in the shop and identified himself as the owner. He refused to consent to a search of the shop, and Detective Marcus Frank left to get a search warrant while other officers remained to secure the location. After Detective Frank returned with a warrant, a cursory search confirmed that counterfeit Microsoft materials were being printed in the shop. Bao then told Detective Frank that Huy Tran of Vy's Printing had placed the order and paid him $5,000. Bao also disclosed that Huy Tran was actually in the shop at that moment.

Detective Frank approached Huy Tran who in turn told the detective that he had originally been approached by John Tran about the printing order. Huy Tran agreed to take Frank to John Tran's residence. Detective Frank and Huy Tran then left, leaving several agents behind at the scene. Bao had still not been arrested. A newspaper reporter, Mai Tran, arrived at Bao's shop and interviewed him in Vietnamese. In Vietnamese, Bao told her, "I didn't know it was illegal. If I did, I wouldn't have accepted the order." This statement was printed in an article in the Orange County Register.

Upon Detective Frank's return approximately one hour later, he and Detective Tom Rackleff interviewed Bao in English, in the presence of a civilian police interpreter, Jenny Truong. According to the government, Bao told the detectives he knew it was illegal to print the manuals. Soon after, Bao was placed under arrest.

Before trial Bao moved to suppress the inculpatory statements he made to the officers at his shop, contending that he had not been advised of his Miranda rights before he made the statements. The government argued that Bao was not "in custody" for purposes of the Miranda rule at the time he made the statements and thus was not entitled to have his rights read to him. The district court denied the motion to suppress the evidence.

At trial, Bao's primary defense was that he did not know the printing job was illegal. During the government's case-inchief, Detective Rackleff and the interpreter both testified that Bao admitted to the officers that he knew the printing job was illegal. Subsequently, Bao attempted to introduce the exculpatory statement he had made to the newspaper reporter, but the district court excluded the statement as inadmissible hearsay. Bao took the stand in his own defense and testified that he did not know that the printing job was illegal.

Amy Auyang, an employee of Microsoft, appeared as a witness for the government. She testified that the "Windows 95" manuals that Bao was printing had no independent value, and that their value came from being part of the complete software package. On cross-examination, Bao's counsel questioned her about the price of independently-sold manuals of comparable length and content published by Microsoft. Auyang testified that a comparable manual sold by itself would have a retail value of $12.

The jury returned a guilty verdict. At sentencing, the district court determined that the manuals had a value of $50 each and sentenced Bao accordingly. Bao received a sentence of three years' probation with a condition that he spend four months in home detention.

II. Exclusion of Evidence Under Hearsay Rule

Whether the district court correctly construed the hearsay rule is a question of law reviewed de novo. See United States v. Collicott, 92 F.3d 973, 978 (9th Cir. 1996). We review for abuse of discretion the trial court's decision to exclude evidence under the hearsay rule. See United States v. Matta Ballesteros, 71 F.3d 754, 767 (9th Cir. 1995), amended by, 98 F.3d 1100 (9th Cir. 1996), cert. denied, 519 U.S. 1118 (1997).

A. Rule 801(d)(1)(B) "Prior Consistent Statement"

Bao contends that his statement to the reporter was not hearsay and therefore should have been admitted because it was a "prior consistent statement" under Federal Rule of Evidence 801(d)(1)(B). An out-of-court statement is not hearsay if the declarant testifies at the trial and is subject to crossexamination concerning the statement, and the statement is "consistent with the declarant's testimony and is offered to rebut an express or implied charge against the declarant of recent fabrication or improper influence or motive. " Fed. R. Evid. 801(d)(1)(B); see United States v. Frederick, 78 F.3d 1370, 1377 (9th Cir. 1996). "Prior consistent statements may not be admitted to counter all forms of impeachment or to bolster the witness merely because she has been discredited . . . . The Rule speaks of a party rebutting an alleged motive, not bolstering the veracity of the story told." Tome v. United States, 513 U.S. 150, 157-58 (1995). In Tome , the Supreme Court "added a `temporal' requirement, holding that prior consistent statements made after the date of the alleged motivation to lie are inadmissible." Frederick , 78 F.3d at 1377; see Tome, 513 U.S. at 167. Therefore, the party offering the statement must establish four elements under Rule 801(d)(1)(B): "(1) the declarant must testify at trial and be subject to cross-examination; (2) there must be an express or implied charge of recent fabrication or improper influence or motive of the declarant's testimony; (3) the proponent must offer a prior consistent statement that is consistent with the declarant's challenged in-court testimony; and, (4) the prior consistent statement must be made prior to the time that the supposed motive to falsify arose." Collicott , 92 F.3d at 979.

The district court concluded that, rather than rebutting any charge of fabrication or motive to lie, Bao's statement to the reporter that he did not know the printing job was illegal would serve only to bolster the veracity of Bao's testimony that he was unaware that he was involved in a counterfeiting operation.

Bao contends that his statement to the reporter was made before any motive to falsify his testimony would have arisen. He argues that, at the time he made the statement, he was not yet under arrest, and was not even an official suspect. Further, he points to the fact that the government had defended itself against Bao's pre-trial motion to suppress his roughly contemporaneous statements to the police on the ground that Bao was not "in custody" for purposes of Miranda , and thus felt free to leave and not pressured by the police. Bao contends that the government is estopped from now arguing that, at the time Bao spoke to the reporter, he would have had a motive to lie to the reporter.

We disagree that Bao made his statement to the reporter at a time when he would have had no motive to fabricate his testimony. At the time Bao spoke to the reporter, it was clear that an investigation of Bao and his printing operation was underway. The police had procured and executed a search warrant when Bao refused to give his consent to a search. They discovered manuals on the premises and questioned him specifically about them. While Detective Frank was off investigating another lead in the case, several agents remained to secure the store. At that point, Bao clearly had a motive to misrepresent to the reporter his knowledge of the crime he had committed. See Collicott, 92 F.3d at 979 (concluding that declarant's motive to fabricate would have existed from the moment she was stopped by the police); United States v. Miller, 874 F.2d 1255, 1274 (9th Cir. 1989) (holding that declarant's motive to fabricate exculpatory testimony was strong because she was under criminal investigation).

We are not swayed by the fact that the government contended that Bao was not "in custody" when he made the statements to the police that Bao moved to suppress. In Lee v. Illinois, 476 U.S. 530 (1986), the Supreme Court held that "[a]lthough . . . the [defendant's] confession was found to be voluntary for Fifth...