April 25, 1996
United States Court of Appeals
For the First Circuit
No. 95-1190
UNITED STATES OF AMERICA,
Appellee,
v.
CHARLES MARTIN EDGAR,
Defendant, Appellant.
ERRATA SHEET
ERRATA SHEET
The opinion of this Court issued on April 19, 1996, is amended as
follows:
On page 19, delete footnote 9 in its entirety.
United States Court of Appeals
For the First Circuit
No. 95-1190
UNITED STATES OF AMERICA,
Appellee,
v.
CHARLES MARTIN EDGAR,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Edward F. Harrington, U.S. District Judge]
Before
Selya, Stahl, and Lynch,
Circuit Judges.
Frances L. Robinson, with whom Davis, Robinson & White was on
brief, for appellant.
James C. Rehnquist, Assistant United States Attorney, with whom
Donald K. Stern, United States Attorney, was on brief, for the United
States.
April 19, 1996
LYNCH, Circuit Judge. Charles Martin Edgar,
LYNCH, Circuit Judge.
formerly a U.S. Department of Commerce employee, was
convicted of three counts of making false statements on his
federal workers' compensation claims, and of one count of
mail fraud arising from a false automobile accident claim to
an insurer. He was acquitted on other charges, including
bankruptcy fraud.1 Edgar was sentenced to one year and one
day plus two years of supervised release and was fined $5000.
His appeal argues that joinder of the bankruptcy
fraud, workers' compensation fraud and insurance fraud was
improper, as was the refusal to sever. He strongly asserts
reversible error in the testimony of his civil-claim attorney
before the grand jury which, he alleges, violated his
attorney-client privilege. He also argues that the issue of
materiality of the alleged false statements should have been
submitted to the jury under the rule established later in
United States v. Gaudin, 115 S. Ct. 2310 (1995), that denying
him discovery was error, and that the evidence was
insufficient to convict in any event. We affirm.
Two arguments merit close discussion. Edgar argues
that it was improper and harmful for the government to have
1. The court granted Edgar's motions for acquittal on eleven
counts of mail fraud based on the workers' compensation
claims, on one count of using a false social security number
in connection with his bankruptcy, and on eleven counts of
bankruptcy fraud. The jury returned a verdict of not guilty
on one count of making false statements to the Department of
Labor and could not reach a verdict on nine other counts.
-2-
2
joined such disparate charges as workers' compensation fraud,
auto insurance fraud and bankruptcy fraud into a single
indictment, saying the common allegation of fraud is too weak
a thread to sew them all together, and that the counts should
have been severed. While the argument has some force, he was
acquitted on the bankruptcy charge and we find no harm to him
from its joinder with the other charges.
Edgar also argues that the government trampled on
his attorney-client privilege and that this denied him due
process. The government subpoenaed to the grand jury the
lawyer who had represented Edgar on the automobile accident
claim. The lawyer's initial declinations to answer questions
about Edgar's communications on grounds of attorney-client
privilege gave way in the face of continued questioning by
the prosecutor. Edgar says he first learned of his
attorney's grand jury testimony after he was indicted and
before trial. While troubled by what happened, we find that
there was no prejudice to Edgar at trial and therefore his
remedy, if any, is not the vacating of his conviction.
Background
Edgar's checkered reporting on his employment
status undergirds all counts on which he was convicted. In
1984 Edgar filed claims for compensation to the Office of
Workers' Compensation Programs ("OWCP") of the Department of
Labor based on back injuries suffered in a 1981 plane crash,
-3-
3
allegedly work-related. The claim eventually ripened to a
claim of total disability from 1987 on. The federal
government paid him benefits, after objecting, for injury for
the period from 1981 through 1986. It had balked at paying
beyond 1986, but Edgar again won on appeal and he was paid to
1989. In May of 1991, in an effort to get payments for
certain periods between 1989 and 1991, he submitted three
forms CA-8 to the OWCP. These documents formed the basis for
the counts of conviction. On other dates, he submitted other
forms CA-8 as well as forms EN1032-0389 ("1032"). These
forms are important to the OWCP in considering claims for
continuing compensation.
The forms CA-8 required that certain information be
provided if the claimant was working. The employment
information is used by OWCP to determine a claimant's wage
earning capacity, and thus the level of his benefits. Edgar
was in fact working as a self-employed accountant during this
period, but he did not provide the information required. Nor
did he mention that he operated and managed a bar, which he
also owned, from 1985 to 1990.2 Instead, Edgar reported
that he was neither self-employed nor employed by others.
The forms include a warning that any "false statement,
2. During the time for which he claimed disability, Edgar
also attended law school. He eventually became licensed to
practice law in Massachusetts, but was suspended following
his conviction in this case. In the Matter of Edgar, No. 95-
004BD (Bd. of Bar Overseers Jan. 20, 1995).
-4-
4
misrepresentation, [or] concealment of fact" could subject
the submitter to a felony prosecution. Edgar says the forms
were not material, as the department had already turned him
down on this claim. But, based in part on those forms, he
did receive continuing compensation for the post-1989 period.
All told, he received more than $250,000 in benefits from the
government.
In January 1987 Edgar was involved in an automobile
accident and asserted he injured his back and could not work.
Attorney Robert Koditek represented him in his claims for
injury and lost income against the other driver's insurer and
to his own insurance carrier, Commercial Union. Edgar
submitted a form to his own insurer, purportedly executed by
a company bookkeeper but in fact forged by Edgar, stating, as
to lost income, that his accounting company paid him a yearly
salary of $45,600. Attorney Koditek, representing Edgar,
submitted a demand letter to Commercial Union on October 12,
1988, asserting that Edgar had been totally disabled as a
result of the auto accident and demanding the policy limits
be paid him. In support of Edgar's claim for damages for
lost income, the letter attached "copies of Mr. Edgar's
federal income tax returns for the years 1985, 1986, and
1987." Those signed returns showed income for 1985 of
$62,392 and for 1986 of $61,876. But Edgar had never filed
any tax return in either 1985 or 1986; so, the government
-5-
5
charged, the representation was false. On January 16, 1989,
Commercial Union settled Edgar's claim, paying him $75,000.
Attorney Koditek testified at trial that Edgar had supplied
him with the copies of the tax returns given to Commercial
Union to support his claim.
Joinder and Denial of Motion for Severance
The 37 count indictment returned against Edgar
charged three fraudulent schemes. The first 24 counts
charged Edgar with mail fraud, alleging that Edgar had
wrongfully obtained money through the mails (specifically,
the disability checks) and had made false statements to the
Department of Labor. These counts were premised on Edgar's
falsely representing his employment and earning capacity in
connection with his disability claim from 1989 to 1992.
Another count involved Edgar's submission, through Attorney
Koditek, of false documents and a demand letter making false
statements to his automobile insurer in 1988. The remaining
twelve counts charged Edgar with filing documents containing
false statements in 1991 in connection with Edgar's
bankruptcy. The scheme alleged was that Edgar filed a
bankruptcy petition in California, falsely representing
California was his state of domicile, listing a false social
security number and concealing assets and income from his
former wife and other creditors.
-6-
6
Edgar argues that the counts charging these three
schemes should not have been joined because they were
insufficiently similar. He argues that the single common
characteristic, misrepresentation of material facts, was not
enough to satisfy the standards for joinder. He also argues
that evidence of one scheme would not be admissible in a
trial on another scheme and thus the jury could infer from
the evidence of one fraud that Edgar was predisposed to
engage in another fraud.
Edgar's argument that there was an improper joinder
of claims against him in the indictment, which the district
court refused to undo, raises two concerns. Edgar argues
first that there was not sufficient similarity among the
counts of conviction to permit joinder. Second, he
postulates a harmful spillover effect from all of the counts,
even those on which he was acquitted, which prejudiced him
and led to his conviction. He also claims that, apart from
the initial wrongful joinder, the district court should have
allowed his motion for severance.
The standard for joinder is set forth in Rule 8(a),
Fed. R. Crim. P., which provides:
Two or more offenses may be charged in
the same indictment . . . if the offenses
charged . . . are of the same or similar
character . . . .
"Similar" does not mean "identical," United States v. Werner,
620 F.2d 922, 928 (2d Cir. 1980), and similarity must be
-7-
7
analyzed in terms of how the government saw its case at the
time of indictment. United States v. Natanel, 938 F.2d 302,
306 (1st Cir. 1991), cert. denied, 502 U.S. 1079 (1992). As
Judge Friendly commented in Werner, under the mandate of the
Speedy Trial Act, joinder serves the purposes of economy of
resources. 620 F.2d at 928. Denial of a motion for relief
from misjoinder is reviewed de novo. United States v.
Chambers, 964 F.2d 1250 (1st Cir. 1992). Further, a
misjoinder is not reversible if it was harmless. United
States v. Lane, 474 U.S. 438, 444-50 (1986); United States v.
Randazzo, F.3d , , No. 95-1489, slip op. at 6 (1st
Cir. Apr. 8, 1996).
Edgar also argues that even if joinder was proper,
his motion to sever the different schemes should have been
granted. Under Rule 14, Fed. R. Crim. P., "[i]f it appears
that a defendant . . . is prejudiced by a joinder of offenses
. . ., the court may order . . . separate trials of counts."
The denial of a motion for severance is reviewed for abuse of
discretion, and must be affirmed unless there is a "strong
showing of evident prejudice." United States v. O'Bryant,
998 F.2d 21, 25 (1st Cir. 1993).
In determining whether counts are properly joined,
this court considers such factors as "whether the charges are
laid under the same statute, whether they involve similar
victims, locations, or modes of operation, and the time frame
-8-
8
in which the charged conduct occurred." United States v.
Taylor, 54 F.3d 967, 973 (1st Cir. 1995) (internal citations
omitted).3 The government argues that the test is satisfied
because the workers' compensation fraud and the automobile
accident fraud involved the same modus operandi of claimed
total disability following an asserted injury to the back, an
asserted loss of income, the submission of false official
forms, and the misrepresentation of other employment in order
to rake in large sums. As to timing, the workers'
compensation fraud overlapped the auto insurance fraud.
Witnesses and testimony would also overlap. Evidence as to
the auto accident fraud would be used on the claimed
disability from a back injury from the plane crash, and to
establish that Edgar misrepresented his earnings and earning
capacity. We believe there were sufficient similarities
between the workers' compensation and insurance fraud schemes
to permit joinder of those counts.
3. An earlier case in this circuit applied an arguably more
stringent standard for the government to join two or more
offenses under Rule 8(a). See United States v. Yefsky, 994
F.2d 885, 895 (1st Cir. 1993) (finding proper joinder where
there was "'substantial identity of facts or participants'"
underlying two charged schemes, quoting United States v.
Levine, 546 F.2d 658, 662 (5th Cir. 1977)). Given that Edgar
used the same basic mechanism, misrepresenting earning
capacity in seeking compensation lost due to a back injury,
in both the workers' compensation and auto insurance fraud,
we believe that joinder of the counts underlying these
schemes would have been proper even under the test applied in
Yefsky. Given our disposition of this issue, we need not
decide whether Yefsky set a more rigid test for joinder of
offenses than the language of Rule 8(a) warrants.
-9-
9
However, like the district court, we are disturbed
by the joinder of the bankruptcy fraud.4 We discern no
"common scheme or plan." See Randazzo, F.3d at , No.
95-1489, slip op. at 5. The bankruptcy fraud charges,
relating to events in 1991, were brought under different
statutes and the supposed victim was Edgar's ex-wife (and
possibly other unspecified creditors). The location was
different. The bankruptcy filings were all with the court in
California, while the other frauds took place primarily in
Massachusetts. The modes of operation were different. In
the workers' compensation and automobile insurance frauds,
Edgar asserted an injury to his back, which resulted in the
loss of earnings. The alleged bankruptcy fraud did not
involve an attempt to obtain payment for an injury. Rather,
it was allegedly an attempt to avoid obligations to his ex-
wife, with whom he had an acrimonious relationship, and to
force her to press her claim in an inconvenient forum.
Edgar claims he was prejudiced because the evidence
for each scheme had a harmful spillover effect, and the jury
convicted him not because of specific evidence showing his
4. The district judge, in granting the motion for acquittal
on the bankruptcy charges after the government had presented
its case, noted the potential problems with the joinder of
the bankruptcy fraud. He said, "[T]his type of indictment
looks like you are piling it on . . . ." He also thought
that "th[e] bankruptcy case was transferred here to boost up
the other false statement cases" and that there was an
"unusual" number of schemes alleged.
-10-
10
guilt, but because of its perception that he was a dishonest
man.5 Specifically, Edgar posits that the jury heard
evidence that (1) he collected $75,000 in settlement for the
auto insurance claim; (2) he had an extremely acrimonious
divorce; (3) he filed for bankruptcy in California and made
false statements that he resided there; (4) he has owned
various properties and has established trusts at different
times; (5) he filed false information in the bankruptcy court
regarding his assets and social security number.
Even assuming the bankruptcy count was improperly
joined, any error was harmless. It did not result in "actual
prejudice" because it did not have a "substantial and
injurious effect or influence in determining the jury's
verdict." Lane, 474 U.S. at 449 (internal quotations
omitted); see also O'Neal v. McAninch, 115 S. Ct. 992, 995
(1995). Edgar was acquitted by the court of the bankruptcy
fraud and of several counts of mail fraud in the workers'
compensation scheme before the matter went to the jury. Of
the remaining thirteen workers' compensation counts, the jury
proved itself capable of making distinctions: it acquitted
Edgar of one, could not reach a verdict on nine and convicted
5. Edgar also claims that, had the schemes been severed, he
may have testified for one, but not another. Edgar does not
expand upon this claim of prejudice, and an "unexplicated
assertion" that he would have testified at one trial is not
enough to establish prejudicial joinder. United States v.
Werner, 620 F.2d 922, 930 (2d Cir. 1980).
-11-
11
on three. The jury thus showed itself clearly capable of
discriminating among the evidence applicable to each count,
even within the workers' compensation fraud, thus reducing
the risk of any prejudice from evidence on the bankruptcy
count. See United States v. Stackpole, 811 F.2d 689, 694
(1st Cir. 1987) (jury's acquittal on one of several counts
suggests jury not confused by joinder). Moreover, the court
gave appropriate limiting instructions.6 See Chambers, 964
F.2d at 1251; United States v. Attanasio, 870 F.2d 809, 815
(2d Cir. 1989) (misjoinder can be rendered harmless by proper
limiting instruction); cf. Lane, 474 U.S. at 450 (analyzing
joinder of defendants under Fed. R. Crim. P. 8(b)7). The
exhibits relating solely to the bankruptcy fraud were struck.
6. The court instructed the jurors that they should "put
out of [their] minds any reference or evidence concerning
Counts 1 through 11 charging mail fraud and Counts 26 through
36 charging bankruptcy fraud and the use of a false Social
Security number, because [the court has] ruled, as a matter
of law, that the government has failed to prove all of the
necessary elements of each of those charges." The court
further instructed, "You must decide the remaining charges as
if those charges that I have removed from your consideration,
mail fraud and bankruptcy fraud, were never made and as if no
evidence was submitted in support of those charges. You must
limit your consideration. . . . And you must determine if
the government has sustained its burden of proof beyond a
reasonable doubt, excluding all references to or evidence
concerning Counts 1 through 11 and 26 through 37."
7. Fed. R. Crim. P. 8(b) allows for the joinder of two or
more defendants if "they are alleged to have participated in
the same act or transaction or in the same series of acts or
transactions constituting an offense or offenses."
-12-
12
Some of the evidence as to the bankruptcy and
insurance schemes was admissible as to the workers'
compensation scheme, thus resulting in no prejudice. See
Stackpole, 811 F.2d at 694; cf. Lane, 474 U.S. at 450
(analyzing joinder of defendants under Rule 8(b)). Any
statements that Edgar filed with the bankruptcy court stating
his income for the years encompassed by the workers'
compensation fraud would have been admissible on the latter
issue. The statements made to the insurance company in
connection with the insurance fraud were admissible on the
workers' compensation issue, particularly as they related to
Edgar's back injury and his loss of earnings. Finally, there
was substantial independent evidence on the counts of
conviction. The fraud against the insurance company and the
three counts of submitting falsified documents to the
Department of Labor were supported by evidence unrelated to
the bankruptcy.
Thus, Edgar cannot meet his burden of showing
prejudice on the denial of the motion for severance as to any
of the counts. Garden-variety arguments of spillover -- such
as if the jury found defendant guilty of A, that alone would
lead to the conclusion that he was guilty of B -- without
more, are insufficient to require severance. Taylor, 54 F.3d
at 973. Appellants must demonstrate actual prejudice. That
is a particularly difficult burden for Edgar to meet, because
-13-
13
the spillover from his acquittal on the bankruptcy count and
certain of the workers' compensation counts could just as
easily be posited to have worked to his benefit. The law of
severance and joinder is a stricter master than Edgar's
claimed error. See Natanel, 938 F.2d at 307-08.
The Grand Jury Testimony
On June 1, 1993, Attorney Koditek testified under
subpoena before the grand jury. Edgar says that neither the
government nor Attorney Koditek notified him that Koditek
would testify under subpoena.
Edgar complains that he did not learn of the grand
jury testimony of his civil-claim lawyer until after he was
indicted. Even then, the prosecution denied Edgar's requests
for a copy of Attorney Koditek's testimony. Ten days prior
to trial, the new prosecutor assigned to the case
appropriately provided the transcript to the defendant. This
is what the transcript8 showed:
AUSA: Do you recall at some point making, as
part of your claim to Commercial Union
Insurance Company -- submitting tax
returns to commercial Union evidencing
Mr. Edgar's income for the years prior to
the accident?
KODITEK: I may have.
AUSA: Well, what's your recollection, sir?
KODITEK: I don't recall.
AUSA: Mr. Koditek, if you'd look at Exhibit 22
[the October 12, 1988, demand letter] and
8. The district court allowed the government's motion to
disclose certain portions of Attorney Koditek's grand jury
testimony for purposes of responding to this appeal.
-14-
14
if you could read that carefully to
yourself.
KODITEK: (Witness looking at document)
AUSA: Have you looked at that document
carefully, sir?
KODITEK: Yes, I have.
AUSA: Does that refresh your recollection at
all as to whether you submitted tax
returns to Commercial Union Insurance
Company as evidence of Mr. Edgar's wage-
earning ability?
KODITEK: It appears that I did.
AUSA: Do you recall any discussions with Mr.
Edgar concerning those tax returns?
KODITEK: Any discussions would be subject to the
attorney/client privilege.
AUSA: Well, what I'm asking you is not what, in
fact, was said, but I'm asking whether
the subject of the tax returns ever came
up.
KODITEK: I would presume the subject came up.
AUSA: Did Mr. Edgar say to you at any time, in
connection with your submission of those
tax returns to Commercial Union Insurance
Company, that those tax returns were not,
in fact, identical to the ones filed with
the Internal Revenue Service?
KODITEK: Any conversation would be subject to the
attorney/client privilege.
AUSA: Well, I think that in this particular
instance, sir, they would not. What I'm
asking you is whether Mr. Edgar indicated
to you, in substance or in fact, that he
was submitting or having you submit to
the Commercial Union Insurance Company
tax returns which were not the same.
That is to say that they were fraudulent
tax returns that were not submitted to
the Internal Revenue Service.
KODITEK: No, he never said that to me.
AUSA: Was it your understanding, sir, that the
tax returns that he submitted were, in
fact, genuine tax returns as filed with
the Internal Revenue Service?
KODITEK: That would be my understanding.
What is clear is that Attorney Koditek was
questioned about the substance of his conversations with his
-15-
15
client, that he asserted attorney-client privilege twice,
that the prosecutor responded that the matter was not covered
by privilege and that Koditek then answered. This was
apparently done without the client, Edgar, being aware of the
testimony. Nor was there any judicial review of whether the
testimony was indeed privileged.
At trial Edgar did object on grounds of attorney-
client privilege to any testimony from Attorney Koditek. The
court rejected the privilege claim. Attorney Koditek
testified that he represented Edgar in connection with the
Commercial Union claim, that he wrote two letters to
Commercial Union in connection with the claim, and that the
tax returns were enclosed with one of the letters. Attorney
Koditek authenticated the letters, but declined to answer on
grounds of privilege the question of who gave him the
material (including the tax returns) to be enclosed with the
demand letter to the insurer. The district court ruled that
because the tax returns were disclosed to the insurance
company, the fact that Edgar gave the returns to Koditek was
not privileged. Attorney Koditek answered that he received
the tax returns from Mr. Edgar. Edgar chose not to cross-
examine on this point and never asserted a defense of advice
of counsel or that the attorney's actions were not
authorized. At trial, Attorney Koditek did not testify, as
he did to the grand jury, about whether Edgar had ever told
-16-
16
him that the tax returns submitted to Commercial Union had
not been submitted to the IRS. The government did put on
independent evidence that these returns were never filed with
the IRS.
Edgar filed several motions regarding his
attorney's testimony. He argued a fruit-of-the-poisonous-
tree theory that Attorney Koditek's testimony before the
grand jury was illegal and so the indictment should be
dismissed or evidence should be suppressed. There is
precedent for an argument that a court may quash an
indictment based upon evidence directly obtained from or
derived from breach of the attorney-client privilege. See
United States v. Omni International Corp., 634 F. Supp. 1414,
1421 (D. Md. 1986) (but doubting that dismissal was an
appropriate remedy under United States v. Morrison, 449 U.S.
361 (1981)); People v. Fentress, 425 N.Y.S.2d 485 (Dutchess
Co. Ct. 1980); Baltes v. Doe I, 57 U.S.L.W. 2268 (Fla. Cir.
Ct. 1988). Some federal courts have held that if the
prosecutor induces the breach, suppression of evidence
derived from the breach is the appropriate remedy, unless
prejudice would remain, in which case the indictment may be
dismissed. See, e.g., United States v. Rogers, 751 F.2d
1074, 1079 (9th Cir. 1985) (no dismissal when any prejudice
to defendant could be neutralized by excluding at trial
confidential communications wrongfully obtained from
-17-
17
defendant's former attorney). But "[w]hen a federal court
uses its supervisory power to dismiss an indictment it
directly encroaches upon the fundamental role of the grand
jury. That power is appropriately reserved, therefore, for
extremely limited circumstances." Whitehouse v. United
States Dist. Ct., 53 F.3d 1349, 1359 (1st Cir. 1995)
(internal citation omitted). Indeed, the Supreme Court has
said that prejudice is required to dismiss an indictment for
prosecutorial misconduct. Bank of Nova Scotia v. United
States, 487 U.S. 250, 263 (1988). Edgar also sought
discovery as to whether the proper procedures were followed
to subpoena Attorney Koditek. And, he argued that the
government had failed to follow the procedures in United
States v. Zolin, 491 U.S. 554 (1989). Those motions were all
denied.
Attorney-Client Privilege and Due Process Arguments
Edgar argues on appeal that the questioning of
Attorney Koditek before the grand jury violated his rights to
due process and to the assistance of counsel. We will
assume, arguendo, that Edgar did not waive his rights under
the attorney-client privilege and that those rights were
violated by Attorney Koditek's testimony before the grand
jury. But even with those assumptions it does not follow
that the appropriate remedy is to vacate his conviction.
-18-
18
Contrary to Edgar's arguments, no Sixth Amendment
right to counsel is even implicated here, as the lawyer
called to the grand jury was not criminal defense counsel.
See, e.g., Rogers, 751 F.2d at 1077-78. Nonetheless, we are
troubled by what happened and seek guidance in case law
discussing the district court's adoption of Rule 3:08 of the
Rules of the Supreme Judicial Court of Massachusetts, and in
the teachings of United States v. Zolin, 491 U.S. 554 (1989).
A long simmering dispute in Massachusetts over
prosecutors serving grand jury subpoenas on counsel resulted
in the affirmance by this court, equally divided en banc, of
a district court opinion that approved the Local Rule that
adopted the disciplinary rules of the Supreme Judicial Court,
particularly S.J.C. Rule 3:08, Prosecutorial Function 15 ("PF
15"). See United States v. Klubock, 832 F.2d 664 (1st Cir.
1987) (en banc by an equally divided court) ("Klubock II")
(plaintiff prosecutors sought a declaratory judgment against
the Board of Bar Overseers that the rule was invalid as
applied to federal prosecutors), aff'g 639 F. Supp. 117 (D.
Mass. 1986). The net effect is that federal prosecutors in
Massachusetts must comply with PF 15, which provides:
It is unprofessional conduct for a
prosecutor to subpoena an attorney to a
grand jury without prior judicial
approval in circumstances where the
prosecutor seeks to compel the
attorney/witness to provide evidence
concerning a person who is represented by
the attorney/witness.
-19-
19
S.J.C. Rule 3:08, PF 15.
The prosecutor here argues that PF 15 does not
literally apply as Edgar was represented in the past by
Attorney Koditek, but was not represented by him at the time
of the subpoena, as the language of PF 15 requires.
Nonetheless, the prosecution represented to the district
court that it had complied with PF 15 and had obtained prior
judicial approval to serve the subpoena. But, as Edgar
points out, the record is devoid of proof on this point.
The subpoena here did not go to the target's
criminal defense counsel and so does not raise the issues of
potential abuse specific to that situation. See Whitehouse,
53 F.3d at 1354. But Edgar and Attorney Koditek were at
least potentially placed in the hypothetical situation
described in the panel opinion vacated by Klubock II9:
The serving of a subpoena under such
circumstances will immediately drive a
chilling wedge between the
attorney/witness and his client. This
wedge is the natural consequence of
several underlying factors created by
this anomalous situation. Most obvious
is the fact that the client is uncertain
at best, and suspicious at worst, that
his legitimate trust in his attorney may
9. The court in Klubock II produced for publication the
vacated panel opinion, United States v. Klubock, 832 F.2d 649
(1st Cir. 1987) ("Klubock I"), because the members of the en
banc court referred to the panel opinion. Klubock II, 832
F.2d at 665. The opinion in Klubock II affirming the
district court did refer to the portions of Klubock I quoted
here, id. at 667, although neither Klubock I nor Klubock II
is controlling precedent, Whitehouse, 53 F.3d at 1354.
-20-
20
be subject to betrayal. And because the
subpoenaed attorney/witness may himself
feel intimidated, this may in fact take
place if there is not even minimal
ethical control regulating the
subpoenaing of an attorney/witness to
seek evidence against his client.
More subtle, but perhaps more
important in terms of the ethical setting
within which PF 15 is framed, is the
immediate conflict of interests created
between the attorney/witness and his
client by the serving of a subpoena in
the context of what is contemplated by PF
15. As a witness, the attorney/witness
has separate legal and practical
interests apart from those of his client.
These interests may or may not coincide
with those of the attorney/witness and
his client. The mere possibility of such
a conflict is sufficient to create a
problem. A minimal overview by an
impartial observer, as is provided by PF
15, can go far in preventing the creation
of these ethical conflicts between the
attorney/witness and his client.
United States v. Klubock, 832 F.2d 649, 652-53 (1st Cir.
1987) (footnote omitted) ("Klubock I"). We believe these
considerations apply to the relationships with former counsel
as well as with present counsel.
There may be an implicit threat to the attorney
called to testify about a client to the grand jury that the
attorney will become a target himself10 should the
prosecutor think he knowingly participated in the fraud.
10. Indeed, at trial Attorney Koditek indicated an intent to
assert the right under the Fifth Amendment not to incriminate
himself if called to testify. By the time of Attorney
Koditek's trial testimony, he had been granted immunity by
the prosecution.
-21-
21
This is particularly so where the prosecution asserts that
the privilege must give way to the crime-fraud exception.
The lawyer may be tempted to reveal privileged conversations
in order to avoid becoming a target himself.11 Ideally,
counsel receiving a subpoena will give notice to a client and
consistently assert the privilege on behalf of a client.
Ideally, a prosecutor faced with an assertion of privilege by
an attorney witness will seek a judicial determination of
whether the privilege is valid. But we do not live in an
ideal world. See Jerome Frank, If Men Were Angels (1942).
We are loath to say the prosecutor here crossed over the
line. But we are equally loath to say, as the government
urges, that there is no line and there is never a remedy.12
11. While an attorney may, under the self-defense doctrine
set forth in S.J.C. Rule 3:07, Code of Prof. Resp., DR 4-
101(C)(4), reveal information without prior notice to the
client, the doctrine does not apply unless there is an
"accusation" of wrongful conduct. We do not think the
prosecutor here made an "accusation" against counsel that
would have triggered this provision.
12. Indeed, other courts have concluded that there are
limits to how far government investigators may go in
attempting to induce a breach of the attorney-client
privilege. In Omni, the district court chastised the
government for interviewing an attorney's secretary. 634 F.
Supp. at 1431, 1439. See also United States v. Valencia, 541
F.2d 618 (6th Cir. 1976) (improper for government to pay
attorney's secretary for information about the attorney's
clients). But, attorneys are themselves responsible for
protecting the client by asserting the privilege when it
applies. See, e.g., United States v. Rasheed, 663 F.2d 843,
854 (9th Cir. 1981), cert. denied, 454 U.S. 1157 (1982);
Omni, 634 F. Supp. at 1422-23, 1431.
-22-
22
The first line of defense to protect Edgar's
privilege lay in the hands of his lawyer. A lawyer has an
obligation not to reveal client confidences. S.J.C. Rule
3:07, Code of Prof. Resp., DR 4-101. A lawyer also has an
obligation to assert privilege on behalf of a client. Id.;
see also In re Impounded Case (Law Firm), 879 F.2d 1211, 1213
(3d Cir. 1989). Generally, an attorney has an obligation to
assert the privilege on behalf of the client and not to
disclose confidential information until there is a judicial
determination that there is no privilege. ABA/BNA Lawyers
Manual on Professional Conduct 55:1307-08 (1989). Even if
there is an assertion that there is no privilege because the
crime-fraud exception applies, the attorney is required to
give notice to the client. S.J.C. Rule 3:07, Code of Prof.
Resp., DR 7-102(B)(1). If the attorney violates these
duties, he is at risk at least of a malpractice suit and of
professional discipline.
Concomitantly, a prosecutor has certain obligations
beyond zealous representation of the government when the
prosecutor interrogates witnesses before the grand jury. For
example, if a witness invokes the privilege against self-
incrimination, the prosecutor should cease questioning as to
the particular subject to which the privilege was addressed.
United States v. Mandujano, 425 U.S. 564, 581 (1976). But
see United States v. Benjamin, 852 F.2d 413, 420 (9th Cir.
-23-
23
1988) (testing validity of reliance on privilege not
prosecutorial misconduct unless prosecutor harangued witness
or improperly commented on assertion of privilege), vacated
on other grounds, 490 U.S. 1043 (1989). Thus, the second
line of defense is that the prosecutor will not harangue a
witness, but will promptly bring the issue to a court.
The third line of defense is that there will
ultimately be a disinterested judicial determination of the
issue.13 In United States v. Zolin, 491 U.S. 554
(1989), the Supreme Court set forth the procedure for
obtaining judicial review when the attorney-client privilege
is consistently asserted and the government opposes the
privilege. Id. at 572. The government may obtain in camera
review of the information alleged to be privileged, at the
discretion of the court, upon a "'showing of a factual basis
adequate to support a good faith belief by a reasonable
person' . . . that in camera review of the materials may
reveal evidence to establish the claim that the crime-fraud
exception applies." Id. (quoting Caldwell v. District Court,
664 P.2d 26, 33 (Colo. 1982)). Apparently, no such showing
was made in this case because Attorney Koditek so quickly
13. The judicial protection of rights inherent in PF 15 does
not resolve this situation. That a judge has ex parte
authorized issuance of a subpoena to counsel does not mean
that a determination has been made that any assertion of
privilege before the grand jury has been decided in the
prosecution's favor.
-24-
24
succumbed to the prosecutor's questioning. Under Zolin, a
prosecutor may not obtain disclosure, or even judicial
review, of the privileged information upon a simple assertion
that the crime-fraud exception applies, as happened before
the grand jury here. See id. at 571.
Nevertheless, Edgar ultimately had the benefit of
that third line of defense. On the facts of this case we see
no prejudice, and therefore no basis to vacate the
conviction. See Fed. R. Crim. P. 52; Bank of Nova Scotia,
487 U.S. at 254-55 (requiring prejudice). Edgar does not now
assert that the trial testimony by Koditek invaded his
privilege. The district court instructed the prosecutor to
limit his questions to what was disclosed to the insurance
company and to avoid the communications between Edgar and
Attorney Koditek. On the significant point as to whether
Edgar had or had not confided to Koditek that the tax returns
to be provided to Commercial Union had not been filed with
the IRS, Attorney Koditek did not so testify at trial, as he
had to the grand jury. Indeed, the evidence that the tax
returns had not been filed was introduced independently
through a Certification of Lack of Record from the custodian
of federal tax returns. On the point that Edgar provided the
tax returns to Attorney Koditek, Edgar does not claim on
appeal that the trial court erred in holding that information
was not privileged.
-25-
25
Edgar argues there was prejudice in that he was
deprived of the choice as to whether to assert an advice of
counsel defense. Edgar chose not to assert that the false
tax returns were prepared and submitted on advice of counsel.
He was free to have made such an argument, if supported, at
trial, whatever Koditek's grand jury testimony. Had he made
such an argument, of course, he would have waived any claim
that the attorney-client privilege protected those
discussions. See Glenmede Trust Co. v. Thompson, 56 F.3d
476, 486-87 (3d Cir. 1995); Saint-Gobain/Norton Indus. v.
General Elec. Co., 884 F. Supp. 31, 33 (D. Mass. 1995).
Moreover, there was no argument or evidence that Koditek's
actions in connection with the demand letter were not
authorized. The choice as to whether to make such arguments
was not foreclosed to him and was a strategy choice by trial
counsel.
Nor is this a fruit-of-the-poisonous-tree situation
that would require suppression of evidence or quashing the
indictment. Cf. Rogers, 751 F.2d at 1078-79. Edgar has not
convinced us that he would not have been indicted but for his
attorney's testimony. Edgar argues that the only reason the
government knew that Attorney Koditek obtained the tax
returns from Edgar was because of Koditek's grand jury
testimony. However, that inference was self-evident.
Further, the Koditek letter and attached returns came from
-26-
26
Commercial Union's claim file and there was independent
evidence identifying the signature on the unfiled tax returns
as Edgar's. There being no prejudice, there was no
reversible error. Fed. R. Crim. P. 52.
Sufficiency of Evidence of Materiality
In his reply brief14 in this court Edgar makes
the argument for the first time that the jury was not
permitted to decide the issue of materiality of his allegedly
false statements, in violation of the principles announced by
the Supreme Court in United States v. Gaudin, 115 S. Ct. 2310
(1995). Gaudin was decided after his trial but before his
appeal. The issue, not having been raised in his principal
brief to this court, is waived. See United States v.
Gabriele, 63 F.3d 61, 67 n.9 (1st Cir. 1995); United States
v. DeMasi, 40 F.3d 1306, 1318 n.12 (1st Cir. 1994), cert.
denied, 115 S. Ct. 947 (1995); United States v. Brennan, 994
F.2d 918, 922 n.7 (1st Cir. 1993). Had Edgar raised the
Gaudin issue initially on appeal, this court would review the
failure to submit materiality to the jury under the plain
error test because Edgar also failed to raise the issue in
the district court. See Randazzo, F.3d at , No. 95-
14. Edgar filed a motion with this court for leave to
present a claim under United States v. Gaudin, 115 S. Ct.
2310 (1995), in his reply brief. The motion was granted,
"without prejudice, however, to the government's right to
argue, or the court's right to conclude, that the issue ha[d]
been waived."
-27-
27
1489, slip op. at 17; see also United States v. Collins, 60
F.3d 4, 8 (1st Cir. 1995). Edgar argues that we should
nonetheless review the district court's failure to submit the
element of materiality to the jury for "plain error" just as
though the issue were raised in his initial brief. See
Randazzo, F.3d at , No. 95-1489, slip op. at 17.
However, we think a higher standard must be met, and as
review for "plain error" lies "within the sound discretion of
the Court of Appeals," we decline to apply that standard in
the circumstances of this case.15 See United States v.
Olano, 113 S. Ct. 1770, 1779 (1993); Fed. R. Crim. P. 52(b);
Taylor, 54 F.3d at 972 ("appellate courts will notice
unpreserved errors only in the most egregious
circumstances").
Edgar did properly preserve an objection to the
sufficiency of the evidence on materiality, but that we also
reject. Edgar argues that the evidence was insufficient to
establish that his omissions from the forms CA-8 for which he
was convicted were material. A statement is material if it
has a natural tendency to influence or is capable of
affecting or influencing a government function. United
States v. Arcadipane, 41 F.3d 1, 7-8 (1st Cir. 1994). Edgar
15. Even if we were to apply the plain error test, we would
find Edgar had not met his burden. In light of the very
strong evidence of guilt, we do not think there was a
"miscarriage of justice" that would warrant correction of any
error. United States v. Olano, 113 S. Ct. 1770, 1779 (1993).
-28-
28
argues that because the decision not to grant him benefits
had already been made and because the forms were filed late,
his failure to set forth his self-employment was not
material. However, the standard is not whether there was
actual influence, but whether it would have a tendency to
influence. The district director for the OWCP testified that
on a claim for disability, whether one may work or has worked
has considerable influence on the amount of benefits
warranted. Thus, the district court did not err in finding
Edgar's false statements to be material. See id. (affirming
a finding of materiality for false statements of employment
on a Form 1032).
Fair Credit Reporting Act
Edgar's last claim of error is that there was an
abuse of discretion in the denial of his motion for discovery
of the government's compliance with the Fair Credit Reporting
Act, 15 U.S.C. 1681-1681t. Edgar claimed to have needed
this information in order to determine whether a motion to
dismiss the indictment or a motion to suppress evidence was
warranted. Even assuming that the government violated the
FCRA by improperly acquiring data concerning Edgar's
finances, Edgar has not shown how any use of the acquired
information could have prejudiced him in the grand jury to
support dismissal of the indictment. See, e.g., Bank of Nova
Scotia v. United States, 487 U.S. 250 (1988). Nor would
-29-
29
suppression be required for a violation of the FCRA.
Suppression of the evidence is not a mentioned remedy under
the FCRA, nor is discovery of whether the government complied
with the Act. See 15 U.S.C. 1681n; cf. United States v.
Kington, 801 F.2d 733, 737 (5th Cir. 1986) (refusing to
suppress records obtained in violation of the Right to
Financial Privacy Act when Congress did not provide for that
remedy in statute), cert. denied, 481 U.S. 1014 (1987); cf.
also United States v. Payner, 447 U.S. 727, 735 (1980)
(evidence otherwise admissible may not be suppressed on the
ground that it was seized unlawfully from a third party);
United States v. Caceres, 440 U.S. 741 (1979) (evidence
obtained in violation of IRS regulation need not be
suppressed). There was thus no abuse of discretion in the
denial of the motion.
Affirmed.
-30-
30