Appeal from a judgment of confiction in the United States District Court for the Southern District of New York. Affirmed on all counts. Judge Newman dissents in part.
Newman and Pratt, Circuit Judges, and Kelleher, District Judge. Jon O. Newman, Circuit Judge, dissenting in part.
KELLEHER, Senior District Judge
Solomon Weiss appeals from a judgment of conviction in the United States District Court for the Southern District of New York, Mary J. Lowe, J., entered on March 13, 1984, after a jury trial. Weiss was found guilty of three counts of mail fraud, 18 U.S.C. § 1341, three counts of perjury, 18 U.S.C. § 1623, and one count of racketeering under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962. Weiss asserts on appeal several grounds for reversal: (1) that he was denied a fair trial because of the infiltration of extra-record evidence into the jury deliberations; (2) that the government's theory and proof at trial constituted a constructive amendment of the indictment; (3) that the government failed to establish that the defendant's conduct violated the mail fraud or RICO statutes; (4) that the prosecutor's use of leading questions to present the testimony of the two key prosecution witnesses to the grand jury violated his Fifth Amendment rights; (5) that this perjury conviction should be reversed because of the prosecution's failure to disclose a known conflict of interest or defendant's "target" status at the time of his grand jury testimony; and (6) that the District Court erred by not submitting to the jury the issue of the materiality of his perjurious grand jury testimony to the jury.
Solomon Weiss ("Weiss") was tried under a thirteen count indictment on charges of mail fraud, perjury, racketeering, and tax fraud.
After three weeks of trial and four days of deliberation, the jury found Weiss guilty of seven of the thirteen counts charged in the indictment. Specifically, Weiss was convicted of: (1) one violation of the RICO Act, 18 U.S.C. § 1962(c); (2) three violations of mail fraud, under 18 U.S.C. § 1341; and (3) three perjury violations, under 18 U.S.C. § 1623. Weiss was acquitted of one count of mail fraud and of four counts of tax fraud, 26 U.S.C. § 7206(2).
By various post trial motions, defendant asserted each of the contentions here presented, including alleged contamination of the jury. After an extensive hearing on the prejudicial effects of this alleged contamination, the District Judge ruled that the jury had ample independent evidence to convict Weiss and denied that motion. Additionally, all of the defendant's post trial motions were denied.
On March 13, 1984, Weiss was sentenced to concurrent five-year terms of probation. As part of his conviction under the RICO Act, Weiss was ordered to disgorge 14,898 shares of Warner Communications, Inc. ("Warner") common stock and 359 Warner warrants, valued at approximately $412,000. Finally, Weiss was fined a total of $58,000.
The principal question before the jury was the relatively narrow issue as to which side proved more believable. The government presented testimony of Leonard Horowitz ("Horowitz") and Jay Emmett ("Emmett") that Weiss had arranged for illicit cash rebates to flow from various stock purchases and from false invoices. The evidence revealed that Weiss had taken this cash and created a secret cash fund, and had forged documents to disguise the existence of this fund. The defense put great emphasis on the lack of credibility of Horowitz and Emmett. The jury found in favor of the government upon substantial supportive evidence.
The First Stock Purchase Transaction
In 1972 Horowitz became involved in a plan to establish a live entertainment theater, the Westchester Premier Theatre ("WPT" or "Theatre"). In May and June of 1973, WPT conducted an initial public stock offering in order to raise capital. The stock sold sluggishly so Horowitz offered secret inducements to select purchasers of WPT shares.
Horowitz approached Emmett, a close friend and Vice President of Warner, and offered him 10,000 shares of WPT for $75,000. Emmett chose to decline, but went to Steven Ross, Chairman of the Board of Warner, with the offer. Ross responded that Weiss, at that time the Assistant Treasurer for Warner, might be interested in the transaction. Emmett introduced Weiss to Horowitz, who then proposed the same deal. Weiss proposed a counteroffer where Warner would buy 20,000 shares of WPT stock for $150,000 if WPT would "kick back" $100,000 to Warner. Pursuant to this arrangement, Horowitz gave Weiss $50,000 in cash on the spot and promised to pay Weiss $50,000 at a later date.
Approximately one month later the agreement was modified because WPT was unable to produce an additional $50,000 in cash, the amount owed under the original agreement. Weiss agreed to issue $50,000 in Warner checks to Horowitz in exchange for $20,000 in cash. Weiss directed Horowitz to prepare a false, back-dated invoice, purportedly from Dennis Konner ("Konner"), an attorney, to make it appear that legal services had been performed.
The Second Stock Purchase Transaction
In July of 1973, Horowitz and Weiss entered into a second stock purchase agreement. Under the terms of this new transaction, Warner was to purchase an additional 20,000 shares of WPT stock for $100,750 and, in exchange, receive a $100,000 rebate when the theater opened in early 1974. WPT's plans to open in early 1974 fell through and Horowitz renegotiated the deal with Weiss. Weiss and Horowitz devised a new scheme to garner cash for the fund. Between 1974 and 1977, Weiss would induce Warner to issue ten checks to Horowitz, and then Horowitz would deliver increments of the $100,000 debt to Weiss. Using various modes of operations, Warner issued ten bogus checks totalling $171,950 and Horowitz returned $100,000 in cash to Weiss. To make these payments appear legitimate, Weiss created false documents in Warner's accounting system and had a plagiarized report created and filed with Warner.
In sum, Warner paid out over $470,000 for non-performed services and for stock of questionable value. In return, Weiss received $170,000 in cash and 40,000 shares of WPT stock, which cost about $250,000. On paper, Warner's net loss stood at approximately $50,000.
The Basis for the Perjury Charges
After Horowitz received a letter from Weiss, of October 23, 1973, he prepared the Konner bill for unperformed legal services and back-dated it to July 11, 1973. The bill, filed with Warner bears the signature "J. Emmett." At trial, a handwriting expert identified the Emmett signature as written by Weiss. Other experts testified that the signature on the Konner bill was not the signature of Jay Emmett.
At trial Weiss testified that he wrote the October 23 letter prior to realizing that Warner had received the bill. Weiss also claimed that Emmett had directed him to issue a $30,000 check to Konner. Further, Weiss contended that Emmett had instructed him to write to Konner in order to obtain the bill for legal services performed by Konner's firm while working on different deals for Warner. Yet on April 10, 1978, in an appearance before a grand jury, Weiss's testimony contained certain contrary statements. There, Weiss claimed that he had prepared the July 26, 1973 check based directly on the Konner bill of July 11, 1973. Additionally, Weiss denied that Horowitz and the Konner bill were in any way connected. The indictment charged that several of Weiss's statements to the grand jury were perjurious. Substantial evidence, including Weiss's contradictory trial testimony, support these allegations.
Except for his contention that a constructive amendment of the indictment occurred, we find little merit in appellant's contentions. We shall discuss first the lesser grounds before proceeding to consideration of the more substantial issue of whether there existed error in any variation between the charges made and the proof offered by the government.
The Contamination of the Jury
In May of 1983 counsel for the appellant renewed a motion for a new trial, claiming that extra-record evidence had been presented to the jury during their deliberations and that such information may well have contaminated these deliberations. The District Court conducted a hearing on the matter and discovered that information from a standard set of accounting textbooks not received in evidence had found its way into the jury deliberations.
At a hearing before the District Court it appeared that, after the presentation of the evidence but prior to the deliberations, one juror had reviewed a basic text on bookkeeping. He testified that he had read to the jurors an excerpt from the textbook that explained the responsibilities and training of CPA's as distinguished from bookkeepers.*fn1 The court questioned a total of ten jurors, each of whom remembered, with various levels of specificity, the discussion. The court determined that after the textual excerpt was brought up in the discussion, the jury moved on to other matters. After extensive review of this issue, the District Court ruled that the appellant's motion for a new trial should be denied.
Appellant contends that the District Court erred in denying his motion for a new trial. He asserts that his status as a CPA was essential to the jury's determination of what he knew about the ventures, and he contends that this knowledge proved to be critical on the issue of his guilt or innocence. Because the record contained no evidence concerning the duties of a CPA, the appellant argues that the infiltration of textbook definitions into the deliberations deprived him of a fair trial. Specifically, Weiss asserts that the contamination of the jurors by the injection of extra-record evidence fatally prejudiced him in violation of his Fifth Amendment rights to due process and his Sixth Amendment right of confrontation and cross-examination.
We have recognized that "extra-record information that comes to the attention of a juror is 'presumptively prejudicial.'" United States v. Hillard, 701 F.2d 1052, 1064 (2d Cir.), cert. denied, 461 U.S. 958, 103 S. Ct. 2431, 77 L. Ed. 2d 1318 (1983) (citing Remmer v. United States, 347 U.S. 227, 229, 74 S. Ct. 450, 451, 98 L. Ed. 654, 656 (1954)). This presumption may be rebutted, however, by an affirmative showing on the part of the government that the information was harmless. Id. "The touchstone of decision in a case such as we have here is thus not the mere fact of infiltration of some molecules of extra-record matter, . . . but the nature of what has been infiltrated and the probability of prejudice." United States ex rel. Owen v. McMann, 435 F.2d 813, 818 (2d Cir. 1970), cert. denied, 402 U.S. 906, 91 S. Ct. 1373, 28 L. Ed. 2d 646 (1971) (citations omitted).
The trial court should assess the "possibility of prejudice" by reviewing the entire record, analyzing the substance of the extrinsic evidence, and comparing it to that information of which the jurors were properly aware. Sher v. Stoughton, 666 F.2d 791, 794 (2d Cir. 1981). The court may properly conclude that such extra-record information was non-prejudicial if it determines that an abundance of properly admitted evidence relevant to this matter exists. Hillard, supra, at 1064; Sher, supra, at 793-94.
Additionally, the trial court has broad discretion in reviewing the issue of the prejudicial effect of the infiltration of extra-record evidence into the deliberations of the jury. Marshall v. United States, 360 U.S. 310, 312, 79 S. Ct. 1171, 1173, 3 L. Ed. 2d 1250, 1252 (1959); United States v. Panebianco, 543 F.2d 447, 457 (2d Cir. 1976), cert. denied, 429 U.S. 1103, 97 S. Ct. 1129, 51 L. Ed. 2d 553 (1977); United States v. Flynn, 216 F.2d 354, 372 (2d Cir. 1954), cert. denied, 348 U.S. 909, 75 S. Ct. 295, 99 L. Ed. 713 (1955). "[A] trial judge's handling of alleged juror misconduct or bias is only reviewable for abuse of discretion." Panebianco, supra, at 457.*fn2
After an exhaustive evidentiary hearing on the issue of jury contamination, the trial judge concluded that the infiltration of the material from an accounting text into deliberations of the jury was harmless. We find no abuse of discretion in so holding. ...