FOR THE ELEVENTH CIRCUIT
_________________________________
DOCKET NO.: 96-4225
_________________________________
DANA SCHEER,
Appellant,
vs.
UNITED STATES OF AMERICA,
Appellee.
On Appeal from the United States District Court
for the Southern District of Florida
Miami Division
________________________________
CORRECTED REPLY BRIEF OF APPELLANT
________________________________
Wm. J. Sheppard, Esquire
Florida Bar No.: 109154
D. Gray Thomas, Esquire
Florida Bar No.: 956041
SHEPPARD AND WHITE, P.A.
215 Washington Street
Jacksonville, Florida 32202
(904) 356-9661
COUNSEL FOR APPELLANT
CERTIFICATE OF TYPE SIZE AND STYLE
The size and style of type used in this
brief is 12 point, Courier 10.
-i-
TABLE OF CONTENTS
Page
CERTIFICATE OF TYPE SIZE AND STYLE . .
. . . . . . i
TABLE OF CONTENTS . . . . . . . . . . .
. . . . . . ii
TABLE OF CITATIONS . . . . . . . . . .
. . . . . . iv
ARGUMENT . . . . . . . . . . . . . . .
. . . . . . 1
I.
THE DISTRICT COURT ERRED IN FAILING
TO DISMISS THE INDICTMENT ON GROUNDS
OF PREJUDICIAL PREINDICTMENT DELAY . . . . . . 1
II.
THE COURT ERRED IN ITS FAILURE TO
DISMISS COUNT ONE PRIOR TO TRIAL
OR LIMIT TESTIMONY IRRELEVANT TO
DEFENDANTS ON TRIAL . . . . . . . . . . . . . 4
III.
THE DISTRICT COURT ERRED IN
FAILING TO DISMISS OR, IN THE
ALTERNATIVE, GRANT A NEW TRIAL
BECAUSE OF THE GOVERNMENT'S
BRADY VIOLATIONS . . . . . . . . . . . . . . 7
A. The Prosecutor's Threat to
Jacoby . . . . . . . . . . . . . . 7
B. Failure to Produce Exculpatory
Grand Jury Testimony . . . . . .
. 13
C. Failure to Produce Result of
Investigation of Professional
Misconduct by Prosecutor . . . .
. 15
D. Brady Violations are Reviewed
for Cumulative Effect on the
Verdict . . . . . . . . . . . .
. . 16
IV.
THE COURT ERRED IN FAILING TO
SEVER COUNTS AND DEFENDANTS . . . . . .
. . . 16
V.
THE COURT ERRED IN JURY SELECTION
AND EXCUSAL AND FAILING TO GRANT
A MISTRIAL . . . . . . . . . . . . . .
. . . . 17
VI.
THE COURT ERRED IN PERMITTING THE
CASE TO BE INCURABLY INFECTED
WITH PROSECUTORIAL MISCONDUCT . . . . .
. . . 18
VII.
THE COURT ERRED IN DENYING
MOTION FOR JUDGMENT OF ACQUITTAL . . .
. . . . 20
CONCLUSION . . . . . . . . . . . . . . . . . . . . 23
CERTIFICATE OF SERVICE . . . . . . . .
. . . . . . 24
-iii-
TABLE OF CITATIONS
Case(s) Page
Brady v. Maryland,
373 U.S. 83 (1963) . . . . . . . . . . . . . . . . 7,9-10,11-
12,16,13-14
Doggett v. United States,
505 U.S. 647 (1992) . . . . . . . . . . . . . . . . 3-4
Kyles v. Whitley,
514 U.S. ___, 115 S.Ct. 1555,
131 L.Ed.2d 490 (1995) . . . . . . . . . . . . . . 12
United States v. Adkinson,
135 F.3d 1363 (11th Cir. 1998) . . . . . . . . . . 5-6,16
United States v. Bagley,
473 U.S. 667 (1985) . . . . . . . . . . . . . . . . 12
United States v. Castro,
826 F.2d 1038 (11th Cir. 1987) . . . . . . . . . . 17
United States v. Foxman,
87 F.3d 1220 (11th Cir. 1996) . . . . . . . . . . . 1
United States v. Jacoby,
955 F.2d (11th Cir. 1992) . . . . . . . . . . . . 19
United States v. Ramsdale,
61 F.3d 825 (11th Cir. 1995) . . . . . . . . . . . 6
United States v. Schlei,
122 F.3d 944 (11th Cir. 1997) . . . . . . . . . . . 10
United States v. Treadwell and Scheer,
No. 96-4319 (11th Cir., October 29, 1996)
. . . . . 3,14
Statutes and Rules
Fed.R.App.P. 4(b) . . . . . . . . . . .
. . . . . . 3
-v-
ARGUMENT
I.
THE DISTRICT COURT ERRED IN FAILING TO DISMISS THE INDICTMENT ON GROUNDS OF PREJUDICIAL PREINDICTMENT DELAY.
As it must, the Government concedes sub silentio, (Answer Brief at 21-24), that the indictment in this case was delayed by deliberate Government conduct designed to gain a tactical advantage over one or more defendants.(1) See United States v. Foxman, 87 F.3d 1220, 1222 (11th Cir. 1996). As a result, the only pertinent issue disputed by the Government is the quantum of prejudice that Mr. Scheer must establish under the applicable legal standards, and whether the record meets that standard. Proper application of the correct legal principles to the facts of this case requires reversal and dismissal of the indictment.
Mr. Scheer has identified substantial actual prejudice. First, contrary to the Government's contention that deceased witnesses have not been identified, (Answer Brief at 22), Mr. Scheer has specifically identified such deceased witnesses (Initial Brief at 16). Particularly, Lake Lytal and Allen Keiser, who died between 1989 and 1993, could have provided significant exculpatory testimony for Mr. Scheer. Lytal, who died in 1992, was the Sunrise director most knowledgeable about the facts underlying the indictment. He testified in civil litigation that Sunrise employed highly principled attorneys to help protect the institution's best interests. [R. 2 - 648 - 18-19]. Keiser, the Sunrise board's audit committee chairman, who died in 1991, would have testified that Mr. Scheer was not involved with working with outside auditors, would not have benefitted from a favorable audit opinion and had no knowledge what steps Sunrise was taking to satisfy the auditors. [R. 2 - 648 - 19-20].
Memory loss by witnesses also clearly infected the trial; ironically, although the court below found that loss of memory had no prejudicial effect as to Mr. Scheer, the trial court cited precisely the same proof of memory loss in support of its decision to dismiss the indictment against Foxman on remand following the Government's appeal. [R. ___ - 1029-5 n.8]. Moreover, the Government does not even attempt to dispute the out of court, personal prejudice suffered by Mr. Scheer (Initial Brief at 16), and the prejudice from deaths of witnesses, numerous memory failures and unavailability of indicted co-defendants cumulatively demonstrate substantial actual prejudice to Mr. Scheer as a result of the delay.
In criticizing the state of the record with regard to the unavailability of former co-defendants Foxman and Treadwell, the Government ignores that both individuals were subject to continuing Government attempts to prosecute them until after Mr. Scheer's opportunity to develop the record regarding their potential testimony had closed. Treadwell continued to be subject to criminal prosecution by the Government until October 20, 1996, when this Court dismissed the Government's appeal of the trial court's dismissal and acquittal as to Treadwell. See United States v. Treadwell and Scheer, No. 96-4319 (11th Cir., October 29, 1996). Foxman remained in criminal jeopardy even longer, until expiration of the time for the Government to appeal, Fed.R.App.P. 4(b), following the district court's dismissal as to Foxman on June 25, 1997. [R. ___ -1028]. Clearly, it is inappropriate for the Government to fault Scheer for his inability to obtain affidavits from two critical individuals who faced ongoing criminal action by the Government itself until after the trial court record in this case was closed.
Moreover, the Fifth Amendment due process
considerations upon which issues of preindictment delay turn implicate
the same concern, that trials be reliable, as a Sixth Amendment speedy
trial inquiry. Such concern can give rise to the existence of intangible
prejudice that simply cannot be objectively quantifiable and so constitutes
a factor that must be considered, with increasing importance based on the
length of delay, as in a Sixth Amendment speedy trial analysis. SeeDoggett
v. United States, 505 U.S. 647, 655-56 (1992). The circumstances warrant
consideration in resolving this issue, where Mr. Scheer was indicted in
1993 on the basis of his alleged conduct, knowledge and intent in 1984.
Particularly in a case in which most of the key disputes turned on Mr.
Scheer's subjective knowledge and intent, actual prejudice is far less
capable of objective, tangible quantification than in the ordinary case,
rendering a presumption of prejudice applicable to the unusual circumstances
of this case. See id.
II.
THE COURT ERRED IN ITS FAILURE TO DISMISS COUNT ONE PRIOR TO TRIAL OR LIMIT TESTIMONY IRRELEVANT TO DEFENDANTS ON TRIAL.
Even on the face of the indictment, the conspiracy charge should have been dismissed prior to trial for absence of any adequate nexus between the alleged Crusader and Frederick conspiracies. The only interaction between Sunrise and Crusader alleged in the indictment involves alleged diversion of funds from Sunrise to Crusader by Foxman, Gitomer and Jacoby. [R. 1 - 436 - 6]. The alleged conduct relating to Crusader, on the face of the indictment, sets forth no nexus between the alleged Crusader and Frederick conspiracies. [R. ___ - 1029 - 14-16 (order on Foxman remand)].
The Crusader matter is alleged to have transpired in substance between February 17, 1982 and summer 1983. [R. 1 - 436 -10-12]. The substantive alleged conduct regarding the Frederick matter is alleged to have spanned from approximately September 1, 1983 to September 28, 1984. [R. 1 - 436 - 12-18]. Clearly, the indictment was framed as it was solely in an attempt to evade the statute of limitations applicable as to Foxman.
The trial court even acknowledged that it had concluded prior to trial that a single conspiracy could not be established by the Government. [R. 4 - 817 - 32]. The court below, however, permitted presentation of otherwise inadmissible evidence on the basis of the Government's false representations that it could link the two matters into a single conspiracy, and later found that the substantial rights of the defendants were heavily prejudiced by the Government's misconduct. [R. 4 - 817 - 33-38].
This circumstance duplicates the high risk strategy of the Government in United States v. Adkinson, 135 F.3d 1363 (11th Cir. 1998). In Adkinson, the Government assumed the risk of proceeding on a conspiracy count even after the trial court had expressed doubts about the count's legal validity, in a case involving allegations of bank fraud, conspiracy to violate loans to one borrower rules and shifting positions of the Government and its witnesses. Id. at 1368-71. This Court declined to reach the issue of claimed error for failure to dismiss the conspiracy count prior to trial because the inclusion of the invalid count and its improper allegations, "coupled with their subsequent dismissal after the Government's case created a unique set of circumstance which rendered the trial of Count I fundamentally unfair and denied these defendants due process of law." Id. at 1372. Although the Court in Adkinson "could find no other case in which such a sequence of events occurred," id. at 1372 n. 24, such unique circumstances are precisely those posed in the present appeal. The Court specifically rejected the Government's contentions in Adkinson, as it should in this case, that the invalid evidence was admissible as being sufficiently intertwined with valid charges to be admissible. Id. at 1372-74.
The evidence introduced as to count one prejudiced Mr. Scheer by involving not only the Crusader matters in which even the Government concedes he was not involved, but also vast numbers of transactions involving Frederick and Moye in which Mr. Scheer was not involved. Moreover, the Government grossly mischaracterizes a subsequent aspect of the issue as the trial court's ultimate finding that Jacoby's testimony was unpersuasive as to a connection between the Crusader and Frederick matters. Answer Brief at 32. The Government's characterization in this regard is flatly belied by Jacoby's own testimony that the Crusader and Frederick matters were unrelated. [R. 4 - 87 - 32; R. 13 - 1195; R. 14 - 1682]. The Government, with which Jacoby had been cooperating since 1992, clearly was on notice of what Jacoby's testimony would be yet proceeded in bad faith in arguing that it could establish a nexus between the Crusader and Frederick matters. As a result, the prosecutor's representations about a single conspiracy were knowingly and conclusively false.
In addition, the Crusader matters in no
way constituted relevant background that would have been admissible in
a trial of the Frederick matters. For instance, the intertwined background
evidence at issue in United States v. Ramsdale, 61 F.3d 825, 829-30
(11th Cir. 1995), involved the defendant's possession of the same drug
he was accused of conspiring to manufacture, during the period of the conspiracy.
That is a far cry from any authority supporting admission of the Crusader
evidence as background for the Frederick matters.
III.
THE DISTRICT COURT ERRED IN FAILING TO DISMISS OR, IN THE ALTERNATIVE, GRANT A NEW TRIAL BECAUSE OF THE GOVERNMENT'S BRADY VIOLATIONS.
A. The Prosecutor's Threat to Jacoby.
The Government, (Answer Brief at 36), mischaracterizes this issue as a matter of newly-discovered evidence. The prosecutor's threat to the key Government witness, Jacoby, is a quintessential Brady(2) issue. This is so because the information at issue was the prosecutor's own misconduct in "preparing" a critical witness for his testimony, which conduct was known only to the Government. The standards applicable to issues of newly-discovered evidence simply have no application to a circumstance where the favorable evidence was specifically known to the Government, particularly where the issue relates to the prosecutor's own misconduct toward a Government witness. The standards applicable where the prosecution has withheld favorable evidence clearly are applicable to this issue.
Furthermore, the Government mistakenly contends that the threat to Jacoby was known by the defense during the trial. The record discloses otherwise.
Counsel for Treadwell advised the trial court that the defense heard during the third week of jury deliberations an unsubstantiated allegation that Jacoby had told Frame that he had been coerced by the prosecutor. [R. 64 - 12]. However, for a matter of months, the defense was unable to obtain any substantiation because the defense had no ability to secure a statement either from the prosecutor or from Jacoby, who repeatedly refused to meet with defense counsel. [R. 64 - 12]. As counsel for Mr. Scheer advised the trial court, defense counsel made every effort to substantiate the rumor. [R. 64 - 15-16]. Mr. Scheer's trial counsel was only able to obtain any substantiation shortly prior to the filing of the appropriate post-trial motion. [R. 64 - 15-16]. Prior to securing such substantiation, the facts were not known to the defense because the only information that the defense possessed prior to Skubal's affidavit was an substantiated rumor that surfaced late during jury deliberations in a long and contentious trial.(3)
Even under the inapplicable standard upon which the Government relies for the first time on appeal, the evidence was unknown to the defense at the time of trial; the evidence was material in that it demonstrated one of the most critical aspects of prosecutorial misconduct even beyond its ability to have impeached Jacoby; in light of the absence of overwhelming evidence of guilt, disclosure of this evidence to the jury probably would have produced an acquittal; and the defense exercised utmost diligence in attempting to substantiate what otherwise was mere rumor. Even under this standard, the judgment below must be reversed.
Of greater significance, however, the Government simply applies the wrong standard. The existence of the prosecutor's threat to Jacoby is uncontroverted, and Jacoby's self-serving denial of having committed perjury during Mr. Scheer's trial must be understood in its context in the presence of the prosecutor who made the threat and other Government officers at a time when he remained on probation. Jacoby remained subject to additional charges of perjury and of violating his probation had his post-trial testimony been less satisfactory to the Government.
This information favorable to the accused was unknown to the defense (even as rumor until the third week of jury deliberations), was diligently pursued by the defense until corroboration was obtained and, even more importantly, was actually known by the prosecutor early in the trial, on October 30, 1994, when the threat occurred. The standard of Brady and its progeny is applicable to this issue and requires reversal.
Brady claims, which are reviewed de novo, require a showing that the Government possessed evidence favorable to the defense, including impeachment evidence; that the defense neither possessed nor reasonably could have obtained the evidence with reasonable diligence; that the prosecution withheld the evidence; and that disclosure of the evidence would have created a reasonable probability of a different outcome of the proceedings. United States v. Shlei, 122 F.3d 944, 989 (11th Cir. 1997) (citations omitted). In this case, it is undisputed that the Government possessed and withheld the evidence of the threat by the prosecutor to the key witness, Jacoby. It is also uncontroverted that the defense possessed not even a rumor suggesting the existence of this evidence until after the close of the all the evidence. After being apprised of the rumor, the defense diligently pursued the matter until substantiation was obtained, leading to the filing of an appropriate motion. The only element in dispute is the matter of probability of a different outcome had the evidence been disclosed.
No doubt can exist that Jacoby was the
keystone witness in the Government's case. This is particularly so where
the jury's verdict so specifically tracked the portion of his testimony
that summarized the balance of his testimony. The Government's reliance
on Virginia Valosin and the hostile Merle Wood as the "compelling evidence"
of Mr. Scheer's guilt (Answer Brief at 37), is misplaced. As more fully
set forth in Argument VII of Mr. Scheer's briefs, this evidence was not
compelling or overwhelming.
Mr. Scheer did not prepare or assemble the closing documents but merely witnessed Frederick's signature on guaranty documents and was present at the Wood closing. He was not even present for the Valosin transaction. He was aware of the financial resources of Valosin and Wood only by those individuals' access to wealth either through association with Frederick and stock ownership (Valosin), [R. 40 - 3879-89, 3913-15], or receipt of large commissions from yacht sales (Wood), [R. 39 - 3633-39; R. 43 -4442-45, 4464-68]. Other witnesses present at the Wood closing failed to support Wood's testimony that Mr. Scheer instructed Wood not to read documents he was signing and laughed at him when he asked for copies, and even Wood admitted he received copies. [R. 39 - 3727]. Moreover, the Government's citations to testimony that Valosin and Wood never received cash proceeds of the loans at issue simply is irrelevant; both acknowledged that they knew the loan proceeds were used in full to purchase property, and people who purchase property with borrowed money simply walk away with mortgages, not cash. Whether Valosin ultimately was sued for non-payment likewise is irrelevant because she admitted that she gave back a deed in lieu of foreclosure. [R. 40 - 3922]. Similarly, Wood admitted that he pursued the transaction because of his desire to profit from the real estate development involved, later was sued by Sunrise to recover on the loan and ultimately gave back a deed. [R. 39 - 3725, 3728-29; R. 43-4450-52, 4458-59, 4461].
Brady and its progeny establish the standard to be applied to this issue. The authorities criticized by the Government (Answer Brief at 37), as proposing random standards are simply the authorities applying the Brady doctrine to non-disclosure of favorable evidence possessed by the Government, including United States v. Bagley, 473 U.S. 667 (1985), which "disavowed any difference between exculpatory and impeachment evidence for Brady purposes...." Kyles v. Whitley, 514 U.S. ___, ___, 115 S.Ct. 1555, ___, 131 L.Ed.2d 490, 505 (1995).
The remaining issue is whether the suppressed evidence was material, creating a reasonable probability of a different result had the evidence been disclosed; merely a probability sufficient to undermine confidence in the outcome. Kyles, 514 U.S. at ___, 115 S.Ct. at ___, 131 L.Ed.2d at 506 (quoting Bagley, supra). The materiality inquiry "is not a sufficiency of evidence test." Id. at ___, 115 S.Ct. at ___, 131 L.Ed.2d at 506. The undisclosed favorable evidence is material where it puts the case in a light sufficiently different "to undermine confidence in the verdict," and once that standard is met, the error simply cannot be found harmless. Id. at ___, 115 S.Ct. at ___, 131 L.Ed.2d at 506-07. That standard is met in this case.
Where the Government's evidence against
Mr. Scheer is not overwhelming, the uncontroverted evidence that the prosecutor
threatened to imprison the single most critical witness, if his testimony
did not conform with the desire of the prosecutor, clearly undermines confidence
in the outcome of trial. The evidence was suppressed by the prosecutor,
who himself had made the threat. The defense and the jury clearly were
entitled to know that the threat had been made, from which the jury would
have been permitted to draw the imminently reasonable and even inescapable
inference that Jacoby had shaped his decisive testimony to remain sufficiently
in the good graces of the prosecutor to avoid the prosecutor carrying out
his threat to return Jacoby to prison. The verdict precisely tracked Jacoby's
summary of who was culpable for which transactions. Although the Public
Integrity Section declined to pursue a criminal action against the prosecutor,
[R. 64 - 10], the impact on the verdict of governmental subornation of
perjury cannot be overstated. Under these circumstances, confidence in
the verdict below not only is undermined, but is nonexistent.
B. Failure to Produce Exculpatory Grand Jury Testimony.
The Government, appropriately, does not challenge the incontrovertible record proof of the prosecution's repeated violations of orders below to disclose Brady material. The Government's conduct was found "inexcusable" by the trial court. [R. 4 - 817 - 39]. The prosecutor's evaluation of what constitutes Brady material was so legally incorrect as to "emasculate" Brady and raise questions of whether other favorable evidence remains suppressed even to this day. [R. 4 - 817 - 25-26 & nn. 12, 13]. Accordingly, the Government is left to argue only that its violations did not harm the defense.
The prejudice, however, is manifest. The favorable grand jury testimony of Jacoby and Fitzgerald was not disclosed until after the defense had been forced to describe its case to the jury during opening statements, which opening statements would have been substantially stronger, and even factually different, if the defense had been aware of the prior favorable testimony of these two witnesses. Opening statement is a critical part of the trial of the case, and opening statements rendered false or ineffectual solely because of the Government's misconduct prejudice the jury from the very outset of trial.
Furthermore, the Government's criticism
that Mr. Scheer was unable to proffer in the trial court record the favorable
nature of Treadwell's testimony constitutes a governmental whipsaw of Mr.
Scheer. Government misconduct as to Treadwell's immunity agreement and
its Brady violations caused the trial court to deny dismissal of
Treadwell prior to trial. [R. 4 - 817 - 23-27]. The Government continued
to keep Treadwell in jeopardy until long after Scheer's trial record was
closed, see supra at 2-3, depriving Mr. Scheer not only of
Treadwell's favorable testimony at trial, but also of even the ability
to secure Treadwell's affidavit before the record was closed. Indeed, the
Government's misconduct in this regard was so egregious that the Solicitor
General ordered dismissal of the Government's appeal of the post-trial
dismissal as to Treadwell and acquittal as to the conspiracy count. See
United States v. Treadwell and Scheer, No. 96-4319 (Government's
Motion to Dismiss Appeal With Prejudice, served October 1, 1996). The Government
can assert that this aspect of the issue is speculative only because the
Government's misconduct itself affirmatively precluded Mr. Scheer from
developing a record in this regard.
C. Failure to Produce Result of Investigation of Professional Misconduct by Prosecutor.
The record in this case clearly reflects
that defense concerns arising from the conduct of the prosecutor in the
trial of this case resulted in an investigation by the Department of Justice,
Office of Professional Responsibility, which conducted its own investigation
of Mr. Genge's conduct after the Public Integrity Section declined to pursue
a criminal matter on the issue. [R. 64 - 9 - 11, 13-15; R. _____ - 1030].
The Government admits that the investigation occurred and has been completed
relating to the conduct of the prosecutor in this case. [R. ___ - 1030
(Exh. B, F)]. Furthermore, as set forth in the parties' responses to the
Court's jurisdictional inquiry in No. 97-5962, this matter should be construed
as being properly consolidated before the Court, or in the alternative,
the Court should await proceedings in the district court on the issue of
excusable neglect prior to determining the procedural posture of the issue.
The evidence sought, moreover, simply cannot be immaterial where the Government
claims disclosure could "interfere with an enforcement proceeding;" Mr.
Scheer's case is the only such action remaining. The report cannot be completely
favorable to the prosecutor, who left Government service shortly following
completion of the report, and so constitutes evidence favorable to Mr.
Scheer.
D. Brady Violations are Reviewed for Cumulative Effect on the Verdict.
Insofar as the Government acknowledges
the appropriateness of evaluating the cumulative impact of Brady
violations on the outcome of a proceeding, (Answer Brief at 40), and the
Government's denial of the existence of any Brady violations is
refuted above, no further argument is necessary as to this aspect of the
issue.
IV.
THE COURT ERRED IN FAILING TO SEVER COUNTS AND DEFENDANTS.
The Government inapplicably argues, (Answer Brief at 25-26), the generalized legal standards for joinder and severance. However, these standards are "inapplicable where the count justifying the joinder was not alleged by the Government in good faith, i.e., with the reasonable expectation that sufficient proof will be forthcoming at trial." United States v. Adkinson, 135 F.3d 1363, 1374 (11th Cir. 1998). As set forth in Argument II, supra, the Government knew that Jacoby's testimony would not only fail to link the Crusader and Frederick matters into a single conspiracy, but affirmatively would deny such a nexus. Where the Government possesses such knowledge in a case of the magnitude as the present appeal, prejudicial spillover from otherwise inadmissible evidence, and guilt by association, result from bad faith joinder, rendering the trial fundamentally unfair. Id.
In this case, the curative power of the
trial court's cautionary instructions was non-existent. With a lengthy
trial involving multiple defendants, multiple previously convicted defendants,
multiple immunized witnesses and pervasive governmental misconduct, the
prejudice as to all counts simply was incurable. The Government's knowing,
bad faith crafting of the conspiracy count and false assurances to the
district court resulted in a joint trial of counts, allegations and defendants
that would not have occurred absent the invalid conspiracy count. The district
court's instruction to the jury to limit the effect of improper evidence
simply was ineffectual in the face of the Government's misconduct. This
is particularly true because spillover prejudice clearly affected the outcome
where proof of guilt on the substantive counts as to Mr. Scheer was not
overwhelming. See United States v. Castro, 826 F.2d 1038,
1047 (11th Cir. 1987). Accordingly, the trial of all counts as to Mr. Scheer
was impermissibly prejudiced by the Government's bad faith conduct with
respect to the conspiracy count and the trial court's resulting denial
of severance.
V.
THE COURT ERRED IN JURY SELECTION AND EXCUSAL AND FAILING TO GRANT A MISTRIAL.
Although certain portions of the jury selection
process are not in the record, apparently not having been transcribed,
no dispute exists that the prosecutor exercised a peremptory challenge
to exclude the only remaining Jewish potential juror because her husband
was a retired attorney, while not challenging a non-Jewish juror whose
sister was an active attorney. This demonstrates a pretextual challenge
by the Government, requiring reversal per se. Additionally,
the prejudicial comment by prospective juror Pritchard to the effect of
"hang the rich," was made in the presence of other jurors, [R. 30 - 37-38],
according to the juror who reported the comment, and the trial court inadequately
developed the record and erroneously found no prejudice. Finally, the excusal
of juror Hill was reversible error where his absence was the fault of the
trial court itself. [R. 44 - 4771-97]. For that reason, the absence casts
absolutely no doubt on that juror's ability to perform his duties, and,
as with unlawful discrimination in jury selection, specific prejudice resulting
from such an excusal can never be objectively quantified and so simply
requires reversal.
VI.
THE COURT ERRED IN PERMITTING THE CASE TO BE INCURABLY INFECTED WITH PROSECUTORIAL MISCONDUCT.
In its brief, the Government once again does not contest that the prosecutor engaged in misconduct but rather only contends that the misconduct was not egregious enough to have deprived Mr. Scheer of a fair trial. In so doing, the Government overlooks that the misconduct pervaded the case before trial in a manner that critically and prejudicially shaped the entirety of trial, and that the further incidents of misconduct before the jury were so continuous and pervasive as to defy cure by the instructions given by the trial court at times to the jury. The Government also falsely claims a likeness between these issues and those addressed in United States v. Jacoby, 955 F.2d 1527, 1540-42 (11th Cir. 1992), see Answer Brief at 47, but even the most superficial review of Jacoby demonstrates that the matters at issue in this case are far more substantial and prejudicial, and are legally different.(4) The trial of this case was framed by a bad faith duplicitous indictment and knowingly false representations by the prosecutor that he demonstrate a single conspiracy. The Government prejudiced Mr. Scheer's substantial rights by contumacious violations of Brady disclosure orders and other orders restricting the prosecutor's conduct at trial. The prosecutor continually and deliberately flouted the orders of the district court, substantially misleading the jury and prejudicing Mr. Scheer by tainting him with evidence of crimes in which he had no role and allegations of financial gain to which Scheer had never been a party. As set forth in Argument VII, infra, the evidence was not in the least overwhelming against Mr. Scheer.
The curative instructions given by the
district court were insufficient to cure the prejudice from the continuous
misconduct of the prosecutor. Additionally, as with other matters in this
appeal, the Government's conduct placed Mr. Scheer in a Government whipsaw
of, following instances of the prosecutor's misconduct, having no choice
but to ask limited questions of certain witnesses in an attempt to mitigate
the effects of the prosecutor's misconduct. [See, e.g., R.
8 - 1482, 1588; R. 10 - 1869-71]. Although the jury was not so overwhelmed
as to convict Mr. Scheer on eight counts as to which he clearly was entitled
to acquittal, the thinness of the evidence on the remaining four counts
of conviction was overwhelmed by the Government's repeated, pervasive and
deliberate misconduct dating from prior to indictment through closing argument.
VII.
THE COURT ERRED IN DENYING MOTION FOR JUDGMENT OF ACQUITTAL.
Initially, the Government flatly misrepresents the record in certain important regards. Although the Government claims that "Scheer and Gitomer had proposed the use of nominees to Jacoby," (Answer Brief at 5), the citations provided by the Government utterly fail to support the contention in any regard, other than Mr. Scheer being involved in a meeting with Jacoby at which alternative corporate loan structures, not use of nominees, was proposed. [R. ___ - 1023-28]. Likewise, the Government's claim, (Answer Brief at 6), that Jacoby discussed the overdrafts with Treadwell and Scheer several times is unsupported by the record references given by the Government, other than Jacoby providing a mere indication of having discussed the matter on one occasion when Scheer may have been present or involved. [R. ___ - 1198-99]. The Government overlooks that Mr. Scheer was not involved in the meeting at which Sunrise executives and others decided to use loans to borrowers other than Frederick and Moye to cover the overdrafts involved. [R. 37 - 3338-40].
The Government also overlooks that Mr.Scheer did not prepare the closing documents for the August 30th transactions and was not even present for the Valosin closing, and the Government cites, (Answer Brief at 7), nothing in the record to support that "Scheer was familiar with Valosin's personal circumstances" or define the circumstances with which Mr. Scheer allegedly was familiar. Indeed, Mr. Scheer was familiar with Valosin on the basis of her associations with her wealthy cousin, Frederick, and her substantial stock ownership in various corporations. [R. 40 - 3879-89, 3913-15]. Furthermore, the Government again is simply wrong is claiming, (Answer Brief at 7), that Mr. Scheer was closing attorney for other loans in which Valosin served as Frederick's nominee; the portions of the record upon which the Government relies reflect that these loans were to corporations in which Valosin held a substantial interest as shareholder.
The Government also grossly overstates,
(Answer Brief at 16), what Scheer's trial counsel conceded in closing argument.
The concession was not simply to all conduct alleged by the Government
in the August 30th transactions, but rather was an observation that a significant
amount of Mr. Scheer's conduct was not disputed among the various witnesses.
[R. 58 - 7980]. The Government also overlooks that Edward Fitzgerald proposed
certain ways to restructure loans by bringing other business partners into
the ventures to which the funds had been loaned. [R. 54 - 7271-72]. Also
of significance, the Government, (Answer Brief at 18), cites to nothing
in the record that supports that Mr. Scheer had knowledge that Wood and
Valosin could not or would not service their loans; to the contrary, the
evidence demonstrated that Scheer was aware that Valosin had access to
substantial wealth through her stock ownership and her relationship with
Frederick, and that Wood received huge commissions from yacht sales and
was actively pursuing real estate development. [R. 39 - 3633-39; R. 43
- 4442-45, 4446-68; R. 40 - 3879-89, 3913-15]. Furthermore, the Government
completely ignores that the August 30th transactions had the effect of
removing the problems loans from any potential bankruptcy estate of Frederick
by securing the loans with real property and other security. [R. 40 - 3890].
In other words, from any reasonable viewpoint that Scheer could have had
as a young associate, the August 30th transactions were beneficial to Sunrise
by converting unsecured credit into secured loans, and the transactions
ultimately resulted in Valosin giving Sunrise a deed in lieu of foreclosure
and in a collection lawsuit against Wood. [R. 40 - 3922; R. 43 - 4450-61].
The evidence is insufficient to support the guilty verdicts below, and
insufficient to render harmless the numerous instances of error by the
trial court and misconduct by the Government.
CONCLUSION
The judgment below should be reversed. The indictment should be dismissed, or Mr. Scheer acquitted. Alternatively, the judgment should be vacated and the case remanded for a new trial.
Respectfully submitted,
______________________________
Wm. J. Sheppard, Esquire
Florida Bar No.: 109154
D. Gray Thomas, Esquire
Florida Bar No.: 956041
Sheppard and White, P.A.
215 Washington Street
Jacksonville, Florida 32202
Phone: (904) 356-9661
Facsimile: (904) 356-9667
ATTORNEY FOR APPELLANT
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing
has been furnished to Thomas M. Gannon, Esquire, Appellate Section, Criminal
Division, Department of Justice, Patrick Henry Building, Room 6206, 601
D. Street, N.W., Washington, D.C. 20044; and to Adalberto Jordan, Esquire,
Assistant United States Attorney, 99 N.E. 4th Street, Miami, Florida 33132,
by United States Mail, this _____ day of April, 1998.
_____________________________
ATTORNEY
1. 0 The Government's claim, Answer Brief at 10, that the grand jury investigation continued between Jacoby's trial in 1989 and the affirmance of his conviction in 1992 is factually unsupported.
2. Brady v. Maryland, 373 U.S. 83 (1963).
3. 0 The matter assumes amplified significance insofar as the record contains sworn statements of the same prosecutor having intimidated, or attempted to intimidate, witnesses Powell, McDonald and Taber, as well as former co-defendant Treadwell. [See R. 64 - 18-20].
4. 0 Jacoby claimed misconduct for a prosecution closing argument, and Skubal complained of denial of his severance motion based merely on the differential in the amount of evidence against him and Jacoby. 955 F.2d at 1540-42. The indictment in Jacoby was limited to the Frederick conspiracy. Id. at 1530-31.