USCA1 Opinion
United States Court of Appeals
For the First Circuit
No. 97-1927
UNITED STATES OF AMERICA,
Appellee,
v.
STUART L. SMITH,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Gene Carter, U.S. District Judge]
Before
Lynch, Circuit Judge,
Coffin and Bownes, Senior Circuit Judges.
Theodore A. Barone with whom William F. Sullivan was on brief
for appellant.
F. Mark Terison, Assistant U.S. Attorney, with whom Jay P.
McCloskey, United States Attorney, and Jonathan A. Toof, Assistant
U.S. Attorney, were on brief for appellee.
June 10, 1998
COFFIN, Senior Circuit Judge. A three-count indictment
charged Stuart L. Smith with drug conspiracy, criminal forfeiture
on the drug count, and tax conspiracy. After severance of the tax
conspiracy charge, Smith was acquitted of drug conspiracy and
therefore forfeited no property. Smith was then tried for tax
conspiracy, i.e., conspiracy to defraud the Internal Revenue
Service (IRS). Evidence of drug trafficking was admitted in the
tax conspiracy trial to demonstrate receipt of revenue that was not
reported to the IRS. Smith was convicted and now appeals. He
argues that the district court erred in refusing to inform the jury
of his acquittal on the drug conspiracy charge and in barring his
cross-examination of prosecution witnesses on their knowledge of
his acquittal. Finally, Smith contends that the district court
should have instructed the jury that failure to file tax returns
was an insufficient basis upon which to convict him of tax
conspiracy. We find no error and affirm.
I. Relevant Facts
We have described the procedural background of this case
before, see United States v. Morris, 99 F.3d 476, 478 (1st Cir.
1996), and present only a review of the relevant facts here.
In the tax conspiracy trial, the government introduced
evidence that Smith paid no taxes from 1986 through April 1994, the
period charged in the indictment. The government's theory was that
during this period Smith derived substantial income from
distributing marijuana and had a tacit agreement with the others
involved in the drug distribution activity not to report this
income to the IRS. To prove its theory, the government relied
heavily on evidence of Smith's participation in the drug
trafficking. Much of this evidence duplicated that introduced in
the drug conspiracy trial. In addition, a number of witnesses who
did not testify in the earlier trial testified to their involvement
in the marijuana distribution. They identified Smith as either an
active participant in marijuana trafficking or a recipient of drug
proceeds. Other evidence introduced by the government in support
of its case against Smith included: (1) a cash purchase by Smith
of a boat and equipment for $17,000; (2) flights in which Smith had
first class tickets; (3) a calendar showing periodic payments by a
codefendant to Smith of money that witnesses linked directly to
drug proceeds; (4) a check signed by Smith for a stock purchase of
$10,000; (5) a bank account with an initial deposit in 1990 of
$10,000 and another with an initial deposit in 1993 of $30,000; and
(6) an IRS agent's testimony that a search of IRS records revealed
that Smith filed no individual tax returns during the charged
period.
Smith admitted that he did not file individual tax returns
during the charged period and that he derived income during this
period. He denied, however, receiving money from or having
knowledge of a drug conspiracy. He testified that he generated
income in legitimate ways, such as renting and buying property,
selling antiques, frames and collectibles, and investigating
building lots and delivering money for a codefendant's real estate
business. His former wife confirmed that Smith generated cash
income from his lawful businesses, and testified that she had never
seen evidence that he was involved in a drug conspiracy.
II. Analysis
We begin with Smith's claim that the court erred in refusing
his request for a jury instruction on his acquittal in the earlier
drug conspiracy trial. We review challenges to jury instructions
for abuse of discretion. United States v. Mitchell, 85 F.3d 800,
809 (1st Cir. 1996). "We must look at the instructions in light of
the evidence and determine whether they fairly and adequately
submit the issues in the case to the jury." Id. (citations
omitted).
In its instructions to the jury, the district court declined
to inform the jury of Smith's acquittal on drug conspiracy charges,
but the court did provide fairly comprehensive instructions
concerning the drug conspiracy evidence. In its preliminary
instructions, the court stated, "What I want you to clearly
understand is that [the defendant] is not on trial here for having
committed any drug offense, any conspiracy or any trafficking or
possession, or anything of that kind." And, in final instructions
after argument from both parties, the court stated:
I want to make it very clear to you that you cannot
consider that this defendant is or was in the past guilty
of a drug conspiracy offense, that is, the subject of
another count of the superseding indictment and about
which you have heard some testimony.
You have heard some references in this evidence to
these other proceedings against this defendant . . . ,
and I instruct you again in the strongest terms that you
may not consider in any way or indulge in any speculation
whatsover about those proceedings in deliberating upon
your verdict in this case . . . . Anything that happened
with respect to that charge including the disposition is
wholly irrelevant to the disposition of the charge of
participation by this defendant in a tax conspiracy. . .
.
. . . .
. . . [W]hat you cannot do is to reach or use any
conclusion that the defendant is guilty of a drug
conspiracy offense in determining whether he is guilty of
this tax conspiracy offense. You must treat the
defendant as not guilty of any offense of drug conspiracy
throughout your deliberations.
. . . .
Accordingly, you may use any evidence that you have
heard about drug trafficking in this case as you see fit
to find the facts of the case as that evidence is
relevant to the issues generated by all the evidence and
the instructions in this tax conspiracy case, as long as
you do not treat the defendant as guilty of participating
in a conspiracy with intent to distribute marijuana.
(emphasis added).
Smith objects specifically to the court's statements, "you
cannot consider that this Defendant is or was in the past guilty of
a drug conspiracy claim," and "You must treat the Defendant as not
guilty of any offense of drug conspiracy throughout your
deliberations." He argues that this language, combined with the
plentiful evidence of his participation in drug trafficking,
created a substantial risk that the jury believed he had been found
guilty of drug conspiracy in the earlier trial and that it
convicted him for tax conspiracy on those grounds. Smith maintains
that this risk could have been avoided by an instruction informing
the jury of his acquittal.
In support of this position, Smith relies heavily on Dowlingv. United States, 493 U.S. 342 (1990), in which the district court
allowed the introduction of evidence relating to an earlier trial
of the defendant, Reuben Dowling, but also instructed the jury that
the trial had resulted in an acquittal. Dowling was a bank robbery
case in which a witness, Vena Henry, identified Dowling as the
person who burgled her home on a previous occasion. She had
testified to the same in the trial in which Dowling was acquitted.
On appeal, Dowling argued that admission of the burglary testimony
therefore violated his double jeopardy and due process rights. The
Supreme Court disagreed. The Court explained, inter alia, that the
category of infractions that violate fundamental fairness is very
narrow. It then stated, in language upon which Smith hooks his
argument, "Especially in light of the limiting instructions
provided by the trial judge, we cannot hold that the introduction
of Henry's testimony merits this kind of condemnation." Dowling,
493 U.S. at 353. Directly thereafter, the Court reviewed carefully
Dowling's arguments, dispelling each in turn; none of these
arguments concerned the acquittal instruction. The Court did not
directly refer to the acquittal instruction in any portion of its
due process discussion, and mentioned the limiting instruction only
in the above quoted sentence.
Smith reads Dowling as holding that an acquittal instruction
is essential to avoid fundamental unfairness to a defendant against
whom evidence of acquitted conduct has been introduced at trial.
Dowling, however, cannot bear the weight Smith assigns to it. We
emphasize, as the Seventh Circuit has recently done in United
States v. Tirrell, 120 F.3d 670, 677 (7th Cir. 1997), that the
Supreme Court's holding in Dowling does not require that the jury
be told of an acquittal. As the acquittal instruction was given
rather than excluded by the district court, Dowling never addressed
the issue now before us.
Moreover, the sentence in Dowling that begins, "Especially in
light of the limiting instructions," does not identify the language
to which "limiting instruction" refers. We know only, from the
section of the opinion laying forth the background of the case,
that "[w]hen Henry left the stand, the District Court instructed
the jury that petitioner had been acquitted of robbing Henry, and
emphasized the limited purpose for which Henry's testimony was
being offered. The court reiterated that admonition in its final
charge to the jury." Dowling, 493 U.S. at 346. In referring to
"limiting instructions," the Court may have meant only the
instructions on the limited purpose of Henry's testimony and not
the portion on acquittal. In any case, the opinion does not say
that without the instructions a due process violation would have
occurred. The Court simply observes that the limiting instructions
-- however they may be defined -- reinforce the conclusion that the
defendant's rights were not violated.
Dowling therefore does not foreclose us from concluding, like
the Seventh Circuit in Tirrell, 120 F.3d 670, and the Eighth
Circuit in United States v. Riley, 684 F.2d 542, 546 (8th Cir.
1982), that an acquittal instruction is not required when evidence
of acquitted conduct is introduced. Stating that it "'afford[ed]
substantial deference to a district court's decision to exclude'
evidence of an acquittal," the court in Tirrell found no abuse of
discretion in the trial court's exclusion of the acquittal
instruction. 120 F.3d at 678 (quoting United States v. Jones, 808
F.2d 561, 566-67 (7th Cir. 1986)). The court reasoned that the
fact of acquittal was irrelevant to the present charge and
commented that the trial court excluded references to the earlier
trial and to defendant's conviction in yet another trial. Id. In
Riley too, the court found no abuse, reasoning that defendant's
acquittal on one charge of violating the Mann Act on a date not
charged in the present case was not relevant. Riley, 684 F.2d at
546.
Turning to the specific language used by the district court in
instructing the jury on how it should weigh the evidence of Smith's
drug trafficking, we do not agree that the phrases identified by
Smith created a misimpression curable only with an acquittal
instruction. The phrase that gives us pause is "you cannot
consider that this Defendant is or was guilty of any offense of
drug conspiracy throughout your deliberations." Had the court used
"whether" in place of "that," or "is not" in place of "was," there
would be no cause whatever for concern. Standing alone, the
sentence might be understood to indicate that Smith had been found
guilty of drug conspiracy. But in context, and given the court's
warning to the jury that it "should not indulge in any speculation
whatsoever about . . . [the drug] proceedings," we do not think
such an interpretation reasonable. Smith also objects to the
court's statement that the jury "must treat the defendant as not
guilty of any offense of drug conspiracy throughout your
deliberations," apparently reading "treat" as analogous to
"pretend." In fact, "treat" means "to act or behave toward a
person in some specified way" or "to consider or regard in a
specified way." Random House Dictionary 2015 (2d ed. 1983).
Simply put, the court emphasized that the jury could not view Smith
as guilty of a drug conspiracy, and could not allow speculation on
the outcome of the drug conspiracy trial to affect deliberations in
the tax conspiracy case.
We have no reason to believe that the jury did anything other
than follow the directives given by the trial court. We "must
presume that jurors, conscious of the gravity of their task, attend
closely the particular language of the trial court's instructions
in a criminal case, and that they follow those instructions."
United States v. Houlihan, 92 F.3d 1271, 1287 (1st Cir. 1996)
(citations omitted). We therefore find no abuse.
Smith also argues that the court erred in barring him from
cross-examining prosecution witnesses on their knowledge of his
prior acquittal. Determining the scope of cross-examination is a
matter within the district court's discretion, and will not be
disturbed absent abuse. See United States v. Morla-Trinidad, 100
F.3d 1, 4 (1st Cir. 1996). "When a witness' credibility is in
issue, the trial court may impose limits on cross-examination as
long as the court grants the defendant sufficient leeway to
establish 'a reasonably complete picture of the witness' veracity,
bias, and motivation.'" United States v. Laboy-Delgado, 84 F.3d
22, 28 (1st Cir. 1996) (quoting United States v. Boylan, 898 F.2d
230, 254 (1st Cir. 1989)).
Smith's impeachment theory was that the witnesses, who were
friends and co-conspirators, testified against him in the tax
conspiracy trial after not having done so in the earlier case
because they knew that he faced a lesser penalty as a result of the
acquittal. Assuming that Smith had developed this theory, for
which he provided no support, cross-examination on acquittal would
have opened the discussion to complicated sentencing issues.
Also, the jury would have had to sort through the meaning of a
legal judgment of acquittal. See United States v. Kerley, 643 F.2d
299, 300-01 (5th Cir. 1981) (no abuse of discretion in barring
cross-examination on a prior acquittal because an acquittal does
not demonstrate innocence, and because the probative value of the
evidence was outweighed by the danger of unfair prejudice or
confusion). Most importantly, that the witnesses may have been
more inclined to testify because they believed the remaining risk
to Smith to be relatively small is not itself a motive to testify.
Rather, the motive was lesser punishment for the witnesses
themselves. As the district court allowed Smith to cross-examine
the witnesses on incentives they received from the government,
Smith was able to provide the jury with a reasonably complete
picture of their motivation to testify, without unduly complicating
the issues. The limitation on the cross-examination was therefore
a reasonable way of avoiding confusion without prejudicing the
defendant, and was entirely within the court's discretion.
Finally, Smith argues that the district court erred in
refusing to instruct the jury that it could not convict based only
on the failure to file tax returns. A full reading of the
instructions on tax conspiracy and a review of the evidence
presented at trial reveal that the instructions given adequately
explained the law. Mitchell, 85 F.3d at 809. The instructions
could not reasonably be construed to permit a finding of guilt
based only on the failure to file. For example, the court
emphasized the conspiracy aspect of the charge, defining conspiracy
as "a kind of partnership for criminal purposes in which each
member becomes the agent of every other member of the conspiracy,"
and explaining, "[t]he gist or core of the offense is a combination
or an agreement to disobey or to disregard the law," and "[w]e
cannot conspire with ourselves." And, in describing the crime with
which Smith was charged, the court stated,
[T]he purpose of the statute which makes it a crime to
impair, impede or obstruct the lawful functions of, in
this case the Internal Revenue Service, or to wilfully
agree to do so is to prohibit taxpayers or other persons
from hindering the efforts of the Internal Revenue
Service to obtain information potentially available to it
and to which it is entitled in the performance of
governmental functions.
Finally, Smith's failure to file by no means made up the bulk of
the government's evidence. Rather, the government's case
emphasized large cash payments, receipt of money connected to drug
distribution, a fairly expensive lifestyle, and limited or no
apparent legitimate income. Given the emphasis on these facts and
the language of the instructions, we do not believe that the jury
reasonably could have concluded that it could convict on the basis
of failure to file alone.
For the reasons stated above, the judgment of the district
court is affirmed.