Opinion
No. 00 Cr. 209 (RWS)
January 10, 2001
Att. Honorable Mary Jo White, United States Attorney for the Southern District of New York, Boyd M. Johnson, III, Esq., Assistant US Attorney, New York, NY, Attorney for United States of America.
Stephanie M. Carvlin, Esq., New York, NY, Attorney for Defendant.
OPINION
Defendant Randall Zandstra ("Zandstra") has moved pursuant to Rule 29 for the entry of a judgment of acquittal on the ground that a conversation between his alleged co-conspirators was improperly admitted pursuant to Rule 801(d)(2)(E), and that absent this evidence, no reasonable jury could convict him of the crimes charged. The government opposes the motion. For the reasons set forth below, the motion is denied.
Prior Proceedings
On March 3, 2000, Zandstra was indicted for conspiracy to commit mail fraud in violation of 18 U.S.C. § 371 and for committing mail fraud in violation of 18 U.S.C. § 1341. The indictment alleged that Zandstra, with several other co-conspirators, worked for a Manhattan-based company, High Market Vending Associates ("High Market"), that operated a scheme to sell nonexistent vending machines to unsuspecting buyers.
Zandstra filed an in limine motion on October 3, 2000, seeking to preclude the government from offering as evidence a tape recording and transcript of a June 24, 1999 conversation between Gary Taylor, a confidential informant (the "CI"), Rick Savard ("Savard"), a co-conspirator, and other High Market employees. Zandstra alleged that the June 24 conversation was inadmissible under Federal Rule of Evidence 801(d)(2)(E) because the statements therein were not made "in furtherance of" the conspiracy. The government responded on October 6, 2000, opposing the motion upon the theory that the conversation was "in furtherance of" the conspiracy because it was an attempt both to foster the cohesiveness of the conspiracy and to ensure the secrecy of the operation. At oral argument on October 11, 2000, the government offered an additional justification for admitting the June 24 conversation, namely that it was an attempt by Savard to "continue to try to recruit" the CI. (Oct. 11, 2000 Tr. at 37.)
Recognizing that the admissibility of the tape under Rule 801(d)(2) (E) was "rather a close question" (Tr. at 170), this Court denied the motion to suppress and rule that those portions of the tape which supported the conclusions that Savard was seeking to maintain the cohesiveness and secrecy of the conspiracy, or that Savard was attempting to recruit the CI into the conspiracy, would be admitted. The parties were invited to offer a proposed redacted version of the conversation in compliance with the ruling.
The defense objected to the inclusion of two portions of the tape in the government's proposed version, and sought to have them redacted, arguing that they did not fall within the parameters of the Court's ruling. Upon consideration, the objected-to portions were held to be relevant background information establishing the context of the call, and classic "cohesiveness" statements falling within Rule 801(d)(2) (E), respectively. In addition, the defense sought to include several portions of the tape that the government had proposed to redact, which the government consented to include. The objections were overruled and redacted versions of the tape and transcript were introduced as evidence at trial.
These portions were in the transcript of the June 24, 1999 conversation, at lines 27-36, which established that the phone call was placed to Rick at High Market; and 219-235, in which Rick assures other co-conspirators that Taylor "don't remember none of you's."
The sections the defense successfully sought to include were at lines 37-107, 158-218, and 254-281.
A jury convicted Zandstra of both counts on October 20, 2000. Zandstra was granted leave to file a post-trial motion after the specified 7-day period specified in Rule 29, Fed.R.Crim.P. On November 21, 2000, Zandstra filed the instant motion for entry of a judgment of acquittal on the grounds that the June 24 conversation was improperly admitted, and that absent that tape, the government lacked sufficient evidence to convict at a new trial. The government opposed the motion by letter brief filed on November 28, 2000. Oral argument was heard on December 13, 2000, whereupon the motion was deemed fully submitted.
Discussion
I. The Legal Standard for Entry of a Judgment of Acquittal Pursuant to Rule 29
In order to warrant a post-trial judgment of acquittal pursuant to Rule 29, Zandstra must prove that (1) the admission of the June 24 conversation was erroneous pursuant to Fed.R.Evid. 801(d)(2)(E); and that (2) absent the June 24 conversation, the balance of evidence, when viewed in the light most favorable to the government, is insufficient to support a finding of guilty beyond a reasonable doubt. See Fed.R.Crim.P. 29(a) (district courts "shall order the entry of judgment of acquittal . . . if the evidence is insufficient to sustain a conviction of such offense or offenses."); United States v. Medina, 944 F.2d 60, 66 (2d Cir. 1991) ("A conviction must be upheld if, after viewing the evidence in the light most favorable to the government, and drawing all reasonable inferences in its favor, "any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.'") (quoting Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979)), cert. denied, 503 U.S. 949 (1992).
II. The June 24 Conversation
A. Admissibility of Co-Conspirator Statements Pursuant to Rule 801(d)(2)(E)
An out-of-court statement is nonhearsay under Rule 801(d)(2)(E), Fed.R.Evid., if the district court determines by a preponderance of the evidence that (1)(a) a conspiracy existed; (b) that included the defendant; and that (2) the hearsay statement was made during the course of, and in furtherance of, the conspiracy. See United States v. Diaz, 176 F.3d 52, 83 (2d Cir.), cert. denied, 120 S.Ct. 181, 314, 315, 386 (1999); United States v. Gigante, 166 F.3d 75, 82 (2d Cir. 1999),cert. denied, 120 S.Ct. 931 (2000); United States v. Tellier, 83 F.3d 578, 580 (2d Cir. 1996). See also Bourjaily v. United States, 483 U.S. 171, 15 (1987).
Rule 801(d)(2)(E) provides: "(d) Statements which are not hearsay. A statement is not hearsay if — (2) Admissions by party-opponent. The statement is offered against a party and is (E) a statement by a co-conspirator of a party during the course of and in furtherance of the conspiracy."
1. Existence of a Conspiracy Including the Defendant
In making the preliminary determination that a conspiracy including the defendant existed pursuant to Rule 801(d)(2)(E), district courts may take into account the proffered out-of-court statements themselves, if those statements are sufficiently reliable in light of independent corroborating evidence. See id. United States v. Daly, 842 F.2d 1380, 1386 (2d Cir. 1988). The stronger the reliability of the out-of-court statements, the less corroborating independent evidence is necessary to find that a conspiracy existed. See Tellier, 83 F.3d at 162 ("Where . . . the hearsay evidence itself so convincingly implicates the defendant, a district court may require less corroboration to find by a preponderance of the evidence that the defendant participated in the conspiracy for purposes of admitting co-conspirators statements against him."). However, the out-of-court statement may not be admitted if the statements themselves are the only evidence of the defendant's participation in a conspiracy. United States v. Padilla, 203 F.3d 156, 161 (2d Cir. 2000) (citing Tellier, 83 F.3d at 580).
2. In Furtherance of the Conspiracy
Ascertaining whether a statement was made during the course of a conspiracy is straightforward, where, as here, the statement was consensually recorded and dated. As the conspiracy was alleged to have existed from on or about May 1999 through July 29, 1999, the June 24, 1999 conversation took place during the course of the conspiracy.
Deciding whether the statement was made "in furtherance of the conspiracy," on the other hand, is more complex. For out-of-court declarations to be "in furtherance of" a conspiracy pursuant to Rule 801 (d)(2)(E),
the statements must in some way have been designed to promote or facilitate achievement of the goals of the conspiracy, as by, for example, providing information or reassurance to a conspirator seeking assistance from a co-conspirator, or by communicating with a person who is not a member of the conspiracy in a way that is designed to help the conspirators to achieve the conspiracy's goals.United States v. Rivera, 22 F.3d 430, 436 (2d Cir. 1994). More recently, the Second Circuit clarified that this rule includes statements to co-conspirators that serve "to foster trust and cohesiveness, or informing co-conspirators as to the progress or status of the conspiracy." Diaz, 176 F.3d at 85 (citing United States v. Tracy, 12 F.3d 1189, 1196 (2d Cir. 1993)). Statements admitted under Rule 801 (d)(2)(E) must constitute more than "merely narrative" descriptions by one co-conspirator of the acts of another. See United States v. Beech-Nut Nutrition Corp., 871 F.2d 1181, 1199 (2d Cir.), cert.denied, 493 U.S. 933, 100 S.Ct. 324, 107 L.Ed.2d 314 (1989); United States v. Paone, 782 F.2d 386, 390 (2d Cir.) (Mere "idle chatter" does not satisfy the rule), cert. denied, 479 U.S. 882, 107 S.Ct. 269, 93 L.Ed.2d 246 (1986).
Retrospective statements are not admissible unless they "serve some current purpose in the conspiracy, such as to [promote cohesiveness," or to provide reassurance to a co-conspirator." United States v. Thai, 29 F.3d 785, 813-14 (2d Cir. 1994) (quoting United States v. Simmons, 923 F.2d 934, 945 (2d Cir.), cert. denied, 500 U.S. 919 (1991)). "Entirely retrospective" statements, however, are not admissible. United States v. Lieberman, 637 F.2d 95, 102-03 (2d Cir. 1980).
The primary concern of this distinction between statements with a present conspiracy-related purpose and those merely relating past exploits is that the statements be reliable enough to satisfy the Confrontation Clause of the Sixth Amendment. A conspirator discussing current criminal activity has much more of an interest in being careful about what is said and to whom than a statement about a completed scheme by a braggart who believes he has successfully evaded detection. It is only the former statement that is sufficiently reliable to constitute nonhearsay under Rule 801(d)(2)(E) and to warrant admission for the jury's consideration.
B. Analysis
Excluding the June 24 conversation, the government presented sufficient evidence to prove by a preponderance of the evidence that Zandstra was a member of the High Market conspiracy. This evidence included Zandstra's admission to Postal Inspectors that he worked at High Market; surveillance video showing Zandstra to have been present at High Market day after day during the life of the conspiracy; testimony of victims of the scheme proving that vending machines were never sent despite their payment; the testimony of Postal Inspector Robert Mignona regarding his surveillance of Zandstra's active participation in a "bust-out" of High Market's offices in which all evidence of the scheme was removed; the testimony of two employees of the Inn at Quogue that Zandstra had joined Savard and others, in possession of approximately $30,000 in cash; testimony regarding Zandstra's increased gambling activity at the Taj Mahal casino in Atlantic City, New Jersey, with High Market proceeds; and the fact that High Market never issued a check in Zandstra's name for his employment, and Zandstra's failure to report income received from High Market on tax returns.
The question is therefore whether co-conspirator statements introduced from the June 24 conversation were properly admitted as being made "in furtherance of" the conspiracy pursuant to Rule 801(d)(2)(E). In the redacted version of the June 24 conversation, the jury heard the CI place a call to High Market and ask. for "Rick." Savard and the CI discuss how other High Market employees are "fighting and arguing," "worrying," and "scared." (June 24, 1999 Tr. at 28-35, 108-125.) When the CI asked Savard what was making the co-conspirators scared, Savard replied, "You." (Id. at 126-27.) Savard agreed with the CI's comments about the need for secrecy and the possibility that someone might reveal the existence of the scheme. (Id. at 138-157.) After a redacted section, Savard and the CI discussed the other "players," (Id. at 221-231) and when the CI professed not to remember the identities of the other co-conspirators, Savard assured them, "[h]e don't remember, he don't remember none of you's" (Id. at 232-33). Turning back to the CI, Savard said, "You know how people worry. Just like you're worried that Alan knows, they're worried that you know." (Id. at 239-40.)
Savard's statements in this portion of the tape fall within the parameters of Rule 801(d)(2)(E) in two ways. First, in the context of a discussion about the conspirators' concern at being found out, the statement, "he don't remember none of you's," is a statement of reassurance by a conspirator to other co-conspirators. See Thai, 29 F.3d at 813-14. Moreover, this statement suggested that other co-conspirators in the room were aware that Taylor was on the telephone, and could hear half of the conversation, and that both Savard's statements in this section, and Bobby's in the next, were intended to convey information to the listening co-conspirators.
Second, Savard's statements to the CI agreeing with the comments about the need for discretion, and that "they're worried that you know" qualify as statements by a co-conspirator to a nonconspirator that attempt to further one of the conspiracy's goals, secrecy, so that the scheme could continue uninterrupted by law enforcement intervention. See Rivera, 22 F.3d at 436; Beech-Nut, 814 F.2d at 1199 (statements by co-conspirator to non-conspirator admissible so long as statements were meant to prompt him to respond in a way that promoted or facilitated the carrying out of the goals of the conspiracy).
The CI then told Savard to "put one of them fuckers on," and another co-conspirator, "Bobby" answered the phone. (Id. at 250-53.) After another redacted portion, the CI attempted to reassure Bobby that the conspirators were in no danger of being exposed by him, but warned him not to let Savard "broadcast it all over the fucking place." (Id. at 282-94.) Bobby replied, "[w]ell that's what we're afraid of, don't you understand, it's not that we love him and everything like that but, you know, the big mouth is is not helpful and it's not . . . And it's nothing personal against him or you." (Id. at 295-97, 299.) The CI cut in and said, "[i]t's personal against me when he says they're afraid of you," to which Bobby replied:
No, nobody saying that, it's just that we have to make him understand that no matter who it is, unless there's something to gain for our protection, there's no reason to speak about it . . . That's all, it's got nothing with who it is . . . It could be his mother, it could by my mother . . . It doesn't matter. Why should we tell anybody that doesn't need to know . . . I mean no disrespect to you, but personally we felt as though we had it in our hands, we didn't need any outside help.
(Id. at 302-21.) These statements by Bobby emphasized that neither Savard nor the CI should disclose their knowledge about the operation, and therefore constitute statements to a non-conspirator (and, perhaps indirectly, to Savard, a co-conspirator) intended to further the conspiracy's inherent goal of secrecy. See Rivera, 22 F.3d at 436;Beech-Nut, 814 F.2d at 1199.
In the next section, Bobby and the CI discussed the danger of High Market's telephone lines being tapped. Bobby asked the CI whether he is concerned that the telephone might be monitored, and said, "why take the chance if you don't have to?" (June 24, 1999 Tr. at 427-444.) When the CI suggested that in the future he call Savard on his cellphone rather than High Market's line, Bobby responded, "That's perfect. I'm just letting you know that we're here to do something the right way, that's all, and you should be able to respect that because nobody wants, you know, to leave themselves open to anything they shouldn't have to?" (Id. at 449-55.) Both men then stated — most likely for the benefit of any unwanted listeners — that they were each "running a legit business," (id. at 463-64, 479-81) and discussed ways to explain the calls from the CI to High Market, (id. at 468-74). Again, Bobby's statements in this part of the conversation were an attempt to protect the conspiracy by having Taylor call on a telephone line that they believed was less likely to be monitored by law enforcement; the statements also served to foster cohesiveness among the listening High Market co-conspirators by reassuring them that the scheme would not be discovered.
The conversation then turned to the subject of Alan, another person who had been included in the circle of those who knew about the conspiracy. Bobby stated,
My gut tells me that I don't have anything to worry about with him because he knows that he had meetings with me that could have very easily been recorded or whatever it is — I mean I could prove that he had exposure to this. So he knows not to say anything . . . And he knows how to keep his mouth shut because he knows we know where to find him and his family. So there's no problem with that . . . So as far as that's concerned, the only people that know are him, Burke, and you, and that's it . . . Believe me, if I had to do this all over again, nobody would have known except the five people in this room.
(Id. at 492-503, 514-15.) Like the previously discussed statements, this statement sent a clear message to both Taylor and the High Market co-conspirators listening to the conversation that they could suffer a severe penalty for going to the police. This combination of reassurance and threat assured that no person who heard the statement would jeopardize the goals of the conspiracy, and therefore was "in furtherance of" the conspiracy pursuant to Rule 801(d)(2)(E). This section of the conversation ended with a discussion of others who had knowledge of the conspiracy and the importance of secrecy. (Id. at 507-513, 517-31.)
One exchange in this section is arguably exculpatory. The CI asked, "why didn't that fat little fuck get in on it?" Bobby replied, "I know why, because [Savard] thinks that everybody here — I don't know about everybody, but he thinks certain people here have a big mouth and don't know how to carry themselves when they're doing something like this." (Id. at 522-28.) However, there is no evidence that Zandstra is the person referred to in this exchange, and the defense did not argue this point either to the jury or in this motion. Moreover, such an interpretation is inconsistent with Bobby's prior statement that if he had control, nobody would have known except the five people in this room," which implies that Zandstra was in the room and knew, given that the government's evidence placed Zandstra at High Market every day during the course of the conspiracy. In any case, the jury heard this exchange and was free to consider it. As discussed below, there was sufficient evidence aside from this conversation to find that Zandstra was a member of the conspiracy.
The final portion of the conversation between Bobby and the CI was a commentary on Savard and his tendency to be cavalier about the secrecy of his criminal enterprises. The CI noted, "he has a tendency to fucking up [sic]," and Bobby replied,
And I wish you would tell him that . . . Right, right, your mouth is the biggest leak for trouble . . . I would never rob a bank but if I was ever to rob a bank, I wouldn't be around bragging about it . . . I don't need to talk about it. What's there to talk about? You know that, I don't need to convince you.
(Id. at 690-708.) The CI took the hint and said, "I'm never gonna call there fucking again," to which Bobby replied, "beautiful." (Id. at 716-18.) The conversation ended with Bobby stating, "Alright, my friend, listen, let's make some money." (Id. at 732.) Like the other statements addressed previously, these statements attempted both to convince Taylor to be more careful in his communications with High Market employees so the conspiracy would avoid detection, and to reassure co-conspirators within hearing range of Bobby's side of the conversation that steps were being taken to protect them. As such, these statements were "in furtherance of the conspiracy" and were properly admitted pursuant to Rule 801(d)(2)(E).
In sum, the statements by co-conspirators Savard and Bobby were attempts to foster cohesiveness, reassure other co-conspirators that their scheme would not be discovered, and to induce Taylor, a non-conspirator, to preserve the secrecy of the operation in order for it to achieve its substantive goals. The redacted tape and transcript were properly admitted pursuant to Rule 801(d)(2)(E), and therefore there was no violation of the Confrontation Clause.
III. The Government Introduced Sufficient Proof to Convict Absent the June 24, 1999 Conversation
A defendant challenging the sufficiency of the evidence bears a heavy burden. See Diaz, 176 F.3d at 89; United States v. Desimone, 119 F.3d 217 (2d Cir. 1997), cert. denied, 525 U.S. 874 (1998). Viewing all of the evidence excluding the June 24, 1999 conversation in context, and drawing all reasonable inferences in favor of the government, see Diaz, 176 F.3d at 89, the government introduced sufficient independent evidence for a jury to find Zandstra guilty beyond a reasonable doubt.
The relevant question is not whether a conspiracy existed, but whether Zandstra was a member of that conspiracy with knowledge of its criminal goals. The defense argued that although Zandstra worked at High Market, he simply had no knowledge of its criminal purpose, and therefore was not a member of the conspiracy. However, as discussed above, the government introduced evidence not only that Zandstra worked at High Market daily during the life of the conspiracy, but that he assisted in an expedited move, where documents and other materials used by High Market were removed from the office in trash bags. Significantly, the government offered proof that the office in which Zandstra worked alongside the co-conspirators was a very small single room with dimensions totaling approximately four hundred square feet, or twenty by twenty feet. A rational trier of fact could conclude beyond a reasonable doubt that, working at such close quarters with other conspirators, Zandstra knew that High Market was in the business of fraud. See Jackson, 443 U.S. at 319; United States v. Autuori, 212 F.3d 105, 114 (2d Cir. 2000).
Moreover, Zandstra was never paid in the form of a check by High Market, and was seen with $30,000 cash in the company of other High Market employees, including Savard, at a high-end resort on Long Island and gambling at Atlantic City. He never reported his. High Market income to the Internal Revenue Service. Finally, the government introduced the testimony that when United States Postal Inspectors knocked on Zandstra's hotel room door to arrest him, he asked them why he was being arrested. Upon being told that he was wanted in conjunction with his activities at High Market, Zandstra did not respond, and, instead of opening the door, attempted to hide in a closet.
Although the government introduced no incriminating tape recordings of Zandstra's voice, for example, circumstantial evidence is a sufficient basis on which to infer criminal knowledge. See Autuori, 212 F.3d at 115 (finding, in mail fraud case, that "[t]he government may prove fraudulent intent through circumstantial evidence."); United States v. Guadagna, 183 F.3d 122, 129 (2d Cir. 1999) (same). Viewing the evidence in its totality, United States v. Rosenthal, 9 F.3d 1016, 1024 (2d Cir. 1993), there was sufficient evidence aside from the June 24, 1999 conversation for the jury to find beyond a reasonable doubt that Zandstra was a knowing member of the High Market mail fraud conspiracy.
Conclusion
For the foregoing reasons, the Rule 29 motion is denied.
It is so ordered.