United States v. Morris

UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT

No. 96-1251

UNITED STATES OF AMERICA,
Appellee,

v.

IRVIN R. MORRIS,
Defendant, Appellant.

No. 96-1252

UNITED STATES OF AMERICA,
Appellee,

v.

STUART L. SMITH,
Defendant, Appellant.

APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE

[Hon. Gene Carter, U.S. District Judge]

Before

Selya, Circuit Judge,

Coffin and Bownes, Senior Circuit Judges.

William Maselli for appellant Morris.

Theodore A. Barone, with whom William F. Sullivan, Sullivan

and Largey, and Perkins, Smith & Cohen were on brief, for

appellant Smith.
F. Mark Terison, Assistant United States Attorney, with whom

Jay P. McCloskey, United States Attorney, and Jonathan A. Toof,

Assistant United States Attorney, were on brief, for appellee.

November 6, 1996

SELYA, Circuit Judge. These interlocutory appeals
SELYA, Circuit Judge.

question whether the acquittal of appellants Irvin R. Morris and

Stuart L. Smith on charges of conspiracy to distribute marijuana

bars the government from now prosecuting them on charges of

conspiracy to defraud the Internal Revenue Service (IRS). The

district court answered this question in the negative.

Concluding, as we do, that neither double jeopardy nor collateral

estoppel principles preclude continued prosecution of the tax

conspiracy charge, we affirm.

I.
I.

Background
Background

In 1994, a federal grand jury returned a three-count

indictment against the appellants and seven other persons.1

Count 1 charged the appellants (and others) with conspiracy to

distribute and to possess with intent to distribute marijuana, in

violation of 21 U.S.C. 841(a)(1) & 846 (1994). Count 2 sought

criminal forfeiture of property used in or derived from the

marijuana conspiracy. See 21 U.S.C. 853 (1994). Count 3

charged the appellants (and others) with conspiracy to defraud

the IRS in the determination and collection of income taxes, in

violation of 18 U.S.C. 371 (1994).

The district court severed count 3 and proceeded to

trial on the other counts. The jury returned a "not guilty"

verdict on count 1, putting an end to that charge and also

1Because these appeals do not involve any of the seven
codefendants, we minimize further references to them in
describing the indictment and ensuing trial.

2

eviscerating count 2. The appellants then moved to dismiss count

3 on double jeopardy and collateral estoppel grounds. The

district court denied the motions. These interlocutory appeals

ensued. See Abney v. United States, 431 U.S. 651, 662 (1977)

(holding that pretrial orders rejecting double jeopardy claims

premised on successive prosecutions are immediately appealable).2

Inasmuch as the appeals challenge the district court's

application of the law rather than its factfinding, our review is

plenary.

II.
II.

Double Jeopardy
Double Jeopardy

The Double Jeopardy Clause provides that no person

shall "be subject for the same offence to be twice put in

jeopardy of life or limb . . . ." U.S. Const. amend. V. The

Clause has three aspects: it shields a defendant from a second

prosecution for the same offense after either conviction or

acquittal, and it also prohibits multiple punishments for the

same offense. See United States v. Stoller, 78 F.3d 710, 714

2Abney involved multiple prosecutions. 431 U.S. at 662.

Cases that implicate multiple punishments arguably raise
different jurisdictional concerns for appellate courts. See

United States v. Ramirez-Burgos, 44 F.3d 17, 18-19 (1st Cir.

1995) (dismissing for want of jurisdiction an interlocutory
appeal stemming from the rejection of a multiple punishments
claim asserted in connection with parallel counts contained in a
single indictment); see also United States v. Stoller, 78 F.3d

710, 715 & n.2 (1st Cir. 1996) (indicating uncertainty as to the
continued vitality of Ramirez-Burgos in light of emergent Supreme

Court precedent), petition for cert. filed, 64 U.S.L.W. 3823 (May

29, 1996) (No. 95-1936). Because these appeals, like Abney

itself, involve the successive prosecution branch of the Double
Jeopardy Clause, we have jurisdiction to hear and determine them
prior to trial.

3

(1st Cir. 1996), petition for cert. filed, 64 U.S.L.W. 3823 (May

29, 1996) (No. 95-1936); United States v. Caraballo-Cruz, 52 F.3d

390, 391 (1st Cir. 1995); United States v. Rivera-Martinez, 931

F.2d 148, 152 (1st Cir.), cert. denied, 502 U.S. 862 (1991).

Here, the appellants invoke the Clause's protection against

successive prosecutions. The resolution of their claim turns on

whether the tax conspiracy is the same offense as the marijuana

conspiracy for double jeopardy purposes.

The Supreme Court has authored a black-letter rule for

use in determining when double jeopardy principles prohibit

prosecution under two distinct statutory provisions: "where the

same act or transaction constitutes a violation of [both]

statutory provisions, the test to be applied to determine whether

there are two offenses or only one, is whether each provision

requires proof of a fact which the other does not." Blockburger

v. United States, 284 U.S. 299, 304 (1932). If the crimes

charged are discrete offenses within the contemplation of

Blockburger, the defendant may be prosecuted consecutively for

them, even if the crimes arise out of the same conduct or nucleus

of operative facts. See United States v. Parrilla-Tirado, 22

F.3d 368, 372 (1st Cir. 1994). Thus, the Blockburger rule

depends on statutory analysis, not on evidentiary comparisons.

Having carefully examined the record, we conclude, as

did the court below, that the tax conspiracy and the marijuana

conspiracy are separate offenses. To establish the tax

conspiracy, the government must prove that the conspiracy

4

existed, that the defendants agreed to participate in it, and

that at least one overt act was perpetrated in furtherance of the

goal of defrauding the United States. See United States v.

Cambara, 902 F.2d 144, 146-47 (1st Cir. 1990). To establish the

marijuana conspiracy, the government had to prove that the

conspiracy existed, that the defendants agreed to participate in

it, and that they intended to possess and distribute marijuana.

See United States v. Sepulveda, 15 F.3d 1161, 1173 (1st Cir.

1993), cert. denied, 114 S. Ct. 2714 (1994). Thus, the primary

objects of the two conspiracies are different, and each of the

charged crimes includes an element that the other does not.

These differences are brought home by parsing the

indictment in this case. In respect to count 3, the government

needs to prove at trial that the appellants specifically intended

to defraud the IRS and that they undertook at least one overt act

in furtherance of that conspiracy proof that is extraneous to

establishing the marijuana conspiracy. In respect to count 1,

however, the government needed to prove at trial that the

appellants intended to distribute marijuana proof that is

extraneous to establishing the tax conspiracy. On this basis,

the two charges constitute distinct offenses under Blockburger.

See, e.g., United States v. Gomez-Pabon, 911 F.2d 847, 861-62

(1st Cir. 1990) (holding that a conspiracy to import cocaine and

a conspiracy to possess cocaine with intent to distribute are

distinct offenses because they differ "in what they specify as

the proscribed object of the conspiracy"), cert. denied, 498 U.S.

5

1074 (1991); United States v. Rodriguez, 858 F.2d 809, 817 (1st

Cir. 1988) (holding that conspiracy to distribute cocaine and

aiding and abetting the possession of cocaine with intent to

distribute are distinct offenses and may be charged separately

even if both arise out of the same transaction because each

requires proof of an element that the other does not). Hence,

trying the appellants on count 3 will not violate the Double

Jeopardy Clause.

The appellants decry this analysis as excessively

technical. They hawk three separate, but related, rejoinders:

(1) that the government will introduce at a future trial much the

same evidence which it used in the previous trial; (2) that

despite the proliferation of counts the government in fact

alleged only a single conspiracy involving distribution of

marijuana and concealment of the profits derived therefrom; and

(3) that the district court misapplied this court's gloss on the

test for determining when two separately charged conspiracies are

deemed synonymous for double jeopardy purposes. These

asseverations lack force.

1. Same Evidence. The Supreme Court has never
1. Same Evidence.

endorsed a blanket rule prohibiting the government from using the

same evidence to prove two different offenses against a single

defendant. To be sure, at the high-water mark for double

jeopardy protection the Court briefly adopted a "same conduct"

test. See Grady v. Corbin, 495 U.S. 508, 521 (1990). But the

Court laid waste to Grady in fairly short order and confirmed

6

that the performance of a Blockburger analysis completes the

judicial task in a successive prosecution case. See United

States v. Dixon, 509 U.S. 688, 712 (1993) (overruling Grady).

Consequently, the appellants' "same evidence" argument fails.

2. Singularity of the Conspiracy. The appellants'
2. Singularity of the Conspiracy.

assertion that the government alleged only one overarching

conspiracy is no more than a play on words. Even if the

transactions on which the charges rest are intertwined the

"best case" assumption for the appellants, and a matter on which

we need not opine this datum would not alter the outcome of a

Blockburger inquiry. "It is well settled that a single

transaction can give rise to distinct offenses under separate

statutes without violating the Double Jeopardy Clause," and this

tenet "is true even though the `single transaction' is an

agreement or conspiracy." Albernaz v. United States, 450 U.S.

333, 344 n.3 (1981).

Whether a particular course of conduct involves one or

more distinct offenses depends on congressional choice, and the

Double Jeopardy Clause offers little limitation on that choice.

See Sanabria v. United States, 437 U.S. 54, 69-70 (1978). This

principle readily disposes of the appellants' argument. As we

already have shown, Congress defined the tax conspiracy and the

marijuana conspiracy such that each requires proof of a fact that

the other does not.

3. Segregating Distinct Conspiracies. Finally, the
3. Segregating Distinct Conspiracies.

appellants urge us to find that they are shielded from

7

prosecution for the tax conspiracy because of the imbrication

between it and the marijuana conspiracy. In framing this

exhortation the appellants pin their hopes on United States v.

Booth, 673 F.2d 27, 29 (1st Cir.), cert. denied, 456 U.S. 978

(1982), in which we set out a five-part test for determining

whether two conspiracies are synonymous for double jeopardy

purposes. Here, four-fifths of the test falls neatly into place:

it is undisputed that the tax and marijuana conspiracies took

place contemporaneously (or nearly so); that they involved

essentially the same personnel; that they occurred at much the

same places; and that most of the evidence that the government

introduced in its failed effort to prove the marijuana conspiracy

will be offered anew in a future endeavor to prove the tax

conspiracy. Nevertheless, there is a missing link; the

appellants cannot pass the fifth part of the test because the two

conspiracies are premised on separate statutory provisions.

This divagation is fatal to the appellants' contention.

The rationale underlying Booth stems from a recognition of the

danger that, in conspiracy cases, the government might comply

with the letter of Blockburger while evading its spirit by

partitioning a single conspiracy into separate prosecutions. See

id. The Booth test is thus aimed at limiting prosecutorial

abuse, not at circumscribing congressional power to define

multiple offenses that occur during a single course of conduct.

Because separate statutory provisions are involved in the two

conspiracies limned in this case, a subsequent prosecution on

8

count 3 will not offend the Double Jeopardy Clause. See Gomez-

Pabon, 911 F.2d at 861-62.

III.
III.

Collateral Estoppel
Collateral Estoppel

It is settled beyond cavil that the Double Jeopardy

Clause encompasses the doctrine of collateral estoppel. See Ashe

v. Swenson, 397 U.S. 436, 444-45 (1970); United States v. Dray,

901 F.2d 1132, 1135 (1st Cir.), cert. denied, 498 U.S. 895

(1990). This doctrine ensures that "when an issue of ultimate

fact has once been determined by a valid and final judgment, that

issue cannot again be litigated between the same parties in any

future lawsuit." Ashe, 397 U.S. at 443. In a criminal case, a

defendant who wishes to wield this doctrinal weapon against the

government bears the burden of demonstrating that the issue he

seeks to foreclose was in fact settled by the first proceeding.

See Dowling v. United States, 493 U.S. 342, 350-51 (1990).

The appellants thus face a formidable task: they must

show that the first trial necessarily decided that they were not

involved in the tax conspiracy. See Schiro v. Farley, 510 U.S.

222, 236 (1994). Of course, we must interpret this statement of

the appellants' task in a practical manner: a criminal defendant

who raises a potential collateral estoppel bar should not be

and is not held to a standard of absolute certainty. A court's

approach must be pragmatic in order to prevent the rejection of a

collateral estoppel defense in every case in which the prior

judgment was based on a general verdict of acquittal. See Ashe,

9

397 U.S. at 444 (warning against courts being too "technically

restrictive"). If all proffered explanations for why a jury's

verdict does not decide an issue are frankly implausible,

collateral estoppel ought to bar relitigation of the issue. See

Dray, 901 F.2d at 1137.

It is against this legal backdrop that we inspect the

particulars of the case at bar. To determine whether the

appellants can clear the collateral estoppel hurdle, we must

undertake whole-record review. See, e.g., Rossetti v. Curran, 80

F.3d 1, 4 (1st Cir. 1996). After all, collateral estoppel cases

necessarily "require an examination of the entire record to

determine whether the jury could have `grounded its verdict upon

an issue other than that which the defendant seeks to foreclose

from consideration.'" Schiro, 510 U.S. at 236 (quoting Ashe).

The appellants argue vehemently that the jury at the

first trial must have determined that they were not involved in

the conspiracy described in count 1 a conspiracy which they

visualize as encompassing three facets: obtaining marijuana,

distributing it, and hiding the proceeds from the government. We

think that this characterization misstates the conspiracy that

the government alleged. We explain briefly.

Our explanation starts with an acknowledgement that the

premise implicit in the appellants' argument is sound. Under an

indictment alleging that a defendant's role in the marijuana

conspiracy was to conceal the proceeds, that defendant

potentially could be found guilty of conspiracy to distribute and

10

possess with intent to distribute marijuana even though he did

not personally deal drugs. See generally United States v. David,

940 F.2d 722, 735 (1st Cir.) (noting that, in a chain conspiracy,

the law holds a conspirator "accountable for the earlier acts of

his coconspirators in furtherance of the conspiracy"), cert.

denied, 502 U.S. 989 (1991); United States v. Baines, 812 F.2d

41, 42 (1st Cir. 1987) (similar). But count 1 of the indictment

in this case is too narrowly drawn to animate that premise it

alleged in effect that Smith and Morris were directly involved in

marijuana distribution and the trial judge instructed the jury

that the government must prove "the conspiracy described in the

indictment." Thus, the jury would have been bound under count 1

and the district court's elucidation of it to acquit a defendant

whose only involvement was to launder the funds generated by the

principals' operation of the marijuana conspiracy.

Equally as important, count 1 of the indictment sets

out a conspiracy to distribute and possess with intent to

distribute marijuana, not a conspiracy to defraud the IRS. In

it, the government avers that the appellants "consigned,

entrusted, and distributed marijuana," but the count nowhere

attempts to describe how the conspirators concealed the proceeds

of the marijuana distribution from prying eyes.3 This lack of

3The closest count 1 comes to stating that the appellants
conspired to defraud the IRS is its averment that they "used
cash, bank checks, and money orders to further the objectives of
the conspiracy, to wit, the acquisition, receipt, storage,
consignment and distribution of large amounts of marijuana,
thereby deriving substantial cash proceeds." But this allegation
falls far short of specifying whether (and if so, how) the

11

connectedness is critical, for, as we mentioned earlier, the

district court instructed the jury that the government had to

prove beyond a reasonable doubt "that the conspiracy described in

[count 1] was willfully formed and was existing at on or about

the time alleged in the indictment." Hence, the jury's decision

that the appellants were not guilty of the conduct described in

count 1 does not rule out the possibility that the appellants

nonetheless may have conspired to defraud the IRS as alleged in

count 3.4 Because the record as a whole (i.e., the indictment,

the evidence, the arguments of counsel, and the jury

instructions) reveals more than one plausible basis for the

appellants conspired to launder drug proceeds and deprive the
government of tax revenue.

4This point is driven home by a reading of count 3 of the
indictment, which discusses in detail the conspirators' actions
to hide the income that flowed their way, alleging, for example,
that Morris and Smith used marijuana-generated cash to renovate
and improve real property (a specie of money laundering that is
not mentioned in count 1).
In fairness, we also note that count 3 contains some
allegations tending to blur the distinction between the marijuana
conspiracy and the tax conspiracy. Thus, Count 3 accuses Morris
and Smith of "earn[ing] income by acquiring, receiving,
possessing, storing, repackaging, transporting, consigning,
entrusting, and distributing marijuana, and fail[ing] to report
such sums to the Internal Revenue Service." To the extent that
such evidence is probative of the appellants' participation in
the tax conspiracy, the government is free to introduce it in a
subsequent trial, despite the previous acquittal. See Dowling,

493 U.S. at 348 (declining to extend the doctrine of collateral
estoppel to require exclusion of relevant evidence "simply
because it relates to alleged criminal conduct for which a
defendant has been acquitted"). However, nothing in this opinion
is intended to circumscribe the district court's discretion
either in making in limine orders or in fashioning appropriate

limiting instructions regarding how (if at all) evidence of the
appellants' putative involvement in the marijuana conspiracy may
now be used. See Dray, 901 F.2d at 1141.

12

acquittals, we must reject the appellants' collateral estoppel

claim. See Dray, 901 F.2d at 1139 (explaining that there is no

collateral estoppel if an inquiring court is "left with a choice

among a variety of plausible theories" as to why the jury

acquitted at an earlier trial).

To put some meat on the bare bones of this conclusion,

we sketch the scenarios that in our judgment suffice to leave

open the possibility that the appellants may yet be found guilty

of conspiracy to defraud the IRS without doing violence to their

earlier acquittals on drug-related charges. In the course of

this exercise, we treat Smith and Morris separately.

1. Smith's Collateral Estoppel Claim. The district
1. Smith's Collateral Estoppel Claim.

court properly instructed the jury that the government must prove

"the specific offense charged in the indictment," and, thus, that

Smith had the specific intent to further the distribution or

possession of marijuana. The record leaves room for at least one

substantial possibility consistent with permitting Smith to be

tried on the tax conspiracy charge.

The proof showed that Smith engaged in a variety of

entrepreneurial ventures, including buying and selling coins,

antiques, posters, prints, stamps, collectibles, and real estate.

At trial, his own counsel described him as "a hustler." Smith

conducted his affairs largely in cash and kept no records. Of

particular pertinence for present purposes, he had close business

connections with Gary Dethlefs, a central figure in the marijuana

conspiracy.

13

Both the evidence and the jury's verdict are consistent

with a finding that Dethlefs made enormous profits buying and

selling marijuana. Smith worked as the general manager of G & A

Development Corporation, a construction company owned by

Dethlefs. Smith had direct responsibility for the firm's land

acquisitions. He also teamed with Dethlefs to acquire

restaurants, and he joined Dethlefs on at least one sojourn to

Los Angeles in regard to a venture in the music recording

industry.

In his trial testimony, Smith swore that his

involvement with Dethlefs extended only to legitimate businesses

and that he had no knowledge that Dethlefs' seemingly

inexhaustible wealth came from drugs. He stated that he

solicited Dethlefs to back his investments because Dethlefs "had

money." Given the magnitude of Dethlefs' drug dealing and

Smith's close ties with him, the jury certainly could have

believed that marijuana trafficking kept Dethlefs' coffers full

and that Smith knew as much. The jury, however, also could have

concluded that Smith was not involved in trafficking per se, but

simply helped to launder the proceeds of Dethlefs' operation.5

Such a conclusion would be consistent with both an acquittal on

count 1 and a subsequent conviction on count 3.

Of course, the record does not conclusively establish

5Smith's track record as a wheeler-dealer tends to fortify
such a conclusion; the evidence introduced at the first trial
showed that he had an entrepreneurial background in business and
real estate which included other relevant experience in hiding
income from the government.

14

that Smith intended to defraud the United States, but that is not

the issue today. What matters now is that, giving full effect to

the jury's verdict, the record does not foreclose the scenario

spelled out above. Moreover, though the line for determining

whether theories explaining a jury's acquittal are too farfetched

to be given weight in the collateral estoppel calculus is

inherently tenebrous, that imprecision poses no problem where, as

here, the proffered explanation is a plausible one. Much

evidence in the record is consistent with both the jury's verdict

and the appellants' participation in a conspiracy to defraud the

IRS. Smith's collateral estoppel claim therefore founders.

2. Morris' Collateral Estoppel Claim. We are
2. Morris' Collateral Estoppel Claim.

satisfied that Morris, too, failed to carry the burden of showing

that his acquittal on the marijuana conspiracy charge necessarily

decided his lack of involvement in the tax conspiracy. The

record leaves open the realistic possibility of a jury finding

that he did not intend to distribute marijuana.

Morris claims that he does construction work for a

living. He frequently works "under the table"; he accepts

payment in cash for services rendered and does not report the

income. One witness testified that, between 1985 and 1992, he

alone paid Morris $21,000 in cash for work done off the books.

William Hesketh cooperated with the prosecution and

testified at the first trial. He admitted dealing drugs from

1985 through 1988. During that period he bought large quantities

of marijuana (as much as 100 pounds at a time) from Dethlefs. He

15

also testified that he both gave and sold marijuana to Morris

(who worked for him on virtually a full-time basis in 1987 and

1988). Morris built a chimney for Hesketh, remodeled the upper

story of Hesketh's home, and constructed two buildings for D and

S Moulding Company (a business that Hesketh controlled). Hesketh

always paid Morris in cash. While the verdict indicates that the

jurors turned down the government's theory that Morris purchased

marijuana from Hesketh for resale, they nonetheless could have

inferred knowledge on Morris' part that Hesketh's money came from

marijuana sales.

Thus, if the jury thought that Morris, though aware of

the source of Hesketh's funds, had no stake in the success of the

marijuana-purveying enterprise, it would be obliged to return a

"not guilty" verdict on count 1 of the indictment as drawn but

that verdict would not tell us anything of consequence about

Morris' guilt or innocence vis- -vis the tax conspiracy. In all

events, this scenario is sufficient (and sufficiently plausible)

to overcome Morris' argument that collateral estoppel now

prevents his trial on a charge of conspiracy to defraud the IRS.6

IV.
IV.

Conclusion
Conclusion

We need go no further. For the reasons we have

discussed, neither double jeopardy nor collateral estoppel

6If more were needed and we do not think that it is we
note that only count 3 (the tax conspiracy charge), not count 1
(the marijuana conspiracy charge), alleges that Morris renovated
and improved real and personal property with cash.

16

preclude the government from prosecuting the appellants on

charges of conspiracy to defraud the United States in the

determination and collection of income taxes. Consequently, the

district court did not err in refusing to dismiss count 3 of the

indictment.

Affirmed.

17