United States v. Donn L. Hill, Jr., United States of America v. Donn L. Hill, Jr.

322 F.3d 301, 61 Fed. R. Serv. 203, 2003 U.S. App. LEXIS 4255

• Court: Court of Appeals for the Fourth Circuit
• Decided: March 12, 2003
• Docket: 01-4083, 01-4288
• Status: Published

Opinions

Affirmed by published opinion. Judge GREGORY wrote the majority opinion, in which Judge DIANA GRIBBON MOTZ joined. Judge TRAXLER wrote a concurring opinion.

OPINION

GREGORY, Circuit Judge:

Donn L. Hill, Jr. was convicted of posing as an investment advisor and defrauding Michael Emmanuel out of more than $100,000 in cash, stocks, and annuities. Hill insists that the assets were delivered to him as gifts. He further contends that Emmanuel recharacterized the gifts as investments only after their personal relationship soured. Hill principally appeals the district court’s exclusion of evidence that Emmanuel made a gift of $10,000 to another man, Suman Shrestha, and later sued Shrestha, claiming the money was a loan. Finding no error, we affirm.

I.

On October 18, 2000, Donn L. Hill, Jr. was charged in a six-count superceding indictment, which included three counts of wire fraud, two counts of money laundering, and one count of mail fraud. Hill was accused of misrepresenting himself as a financial advisor of two investment firms, Shardon International, and the Manus Group. Hill convinced Michael Emmanuel, a retired history professor, to invest virtually aE of his savings with these two firms. Between July 1997 and December 1998, HiU took over Emmanuel’s investment portfolio valued at approximately $82,000, as well as an annuity worth $25,000. He transferred the funds into accounts that only he controlled, and that were not kept in Emmanuel’s-name. Hill then used the money to pay off his credit card biUs, make rent payments, and cover other personal debts. Following a four-day jury trial, Hill was found guilty of two counts of wire fraud and two counts of money laundering. He was acquitted of the remaining two counts.

Hill’s defense was that he had a personal relationship with Emmanuel, and that the $107,000 was a gift. He contends that Emmanuel relabeled the gifts as investments only after their personal relationship dissolved. In support of this defense, HiR sought to introduce evidence of an allegedly similar situation. The evidence consisted largely of two documents: a “gift letter” and a civil complaint filed in the district court of Maryland for Montgomery County. The gift letter read, “I, Michael Emmanuel, ... do hereby certify that I have given/will give a gift of $10,000 to ... Suman Shrestha.” The lawsuit, filed by Emmanuel against Shrestha, sought repayment of a “personal loan” of $15,000, which had been advanced in two installments, one for $5,000 and another for $10,000. In addition to these documents, the defendant sought to cross-examine Emmanuel about the documents, and introduce the testimony of Mr. Shrestha.

At trial, the government filed a motion to exclude this evidence. Hill contended that it went to Emmanuel’s motive to fabricate the charges. The district court ruled in favor of the government, reasoning:

To bring in another incident that, in my judgment, is dissimilar and hasn’t been proven to be similar would have the effect of confusing the jury....

And the jury, in my mind, should not be given testimony of some prior incident involving a dispute between Mr. Emmanuel and some other guy that has no connection with this case at all. We’re speculating and assuming that the reason for the termination of the relationship [between Shreshta and Emmanuel] and the ultimate suit was similar to what we had here, and that’s not what this case is about....

On appeal, Hill argues that this ruling was one of four reversible errors. Hill also challenges the district court’s decisions to: (1) permit the introduction of relevant evidence that was obtained as part of a search that unlawfully exceeded the scope of the warrant; (2) permit the introduction of misstatements made by the defendant about the Manus Group; and (3) apply the “vulnerable victim” and “abuse of position of trust” enhancements, U.S.S.G. §§ 3A1.1, 3B1.3, in calculating Hill’s sentence.

II.

This Court reviews evidentiary rulings for abuse of discretion. United States v. Weaver, 282 F.3d 302, 313 (4th Cir.2002); United States v. Turner, 198 F.3d 425, 429 (4th Cir.1999). In reviewing a district court’s denial of a Fourth Amendment motion to suppress, this Court “reviews questions of law de novo and findings of fact and reasonable inferences drawn from those findings for clear error.” United States v. Yang, 286 F.3d 940, 944 (7th Cir.2002); Ornelas v. United States, 517 U.S. 690, 699, 116 S.Ct. 1657, 134 L.Ed.2d 911 (1996). This Court will overturn a trial court’s factual determinations regarding the sentencing guidelines only for clear error. United States v. Nale, 101 F.3d 1000, 1003 (4th Cir.1996).

III.

A.

Hill first challenges the district court’s decision to exclude evidence of the victim’s prior relationship with Suman Shreshta. He contends that the exclusion of the evidence violated his Sixth Amendment right to confront the government’s witnesses against him. In the alternative, he insists that the evidence was admissible under the Federal Rules of Evidence, and that its exclusion affected his substantial rights. We find, however, that the district court properly applied the Federal Rules of Evidence, and that there is no error, constitutional or otherwise.

In considering the Confrontation Clause as it relates to impeachment evidence, the Supreme Court has held that a defendant presents a constitutional violation “by showing that he was prohibited from engaging in otherwise appropriate cross-examination designed to show a prototypical form of bias on the part of the witness, and thereby ‘to expose to the jury the facts from which jurors ... could appropriately draw inferences relating to the reliability of the witness.’” Delaware v. Van Arsdall, 475 U.S. 673, 680, 106 S.Ct. 1431, 89 L.Ed.2d 674 (1986) (quoting Davis v. Alaska, 415 U.S. 308, 318, 94 S.Ct. 1105, 39 L.Ed.2d 347 (1974)). Interpreting Van Arsdall, the Fourth Circuit has explained:

The distinction between impeachment evidence proving bias and impeachment of general credibility is important because generally applicable evidentiary rules limit inquiry into specific instances of conduct through the use of extrinsic evidence and- through cross-examination with respect to general credibility attacks, but no such limit applies to credibility attacks based on motive or bias.

Quinn v. Haynes, 234 F.3d 837, 845 (4th Cir.2000). Thus, to prove that the exclusion of the evidence was unconstitutional, the defendant must show that his evidence went directly to the issue of bias of the witness, or motive of the witness to fabricate.

Hill suggests that the evidence of the Shrestha transaction goes to Emmanuel’s motive to fabricate. He surmises that if Emmanuel invented a story about a $10,000 loan, then he might also fabricate another story about a $100,000 investment.

* In support of his Sixth Amendment argument, Hill cites to the Seventh Circuit case of Redmond v. Kingston, 240 F.3d 590 (7th Cir.2001). In Redmond, a defendant charged with statutory rape wished to introduce evidence that, eleven months before his alleged crime, the victim had fabricated a story that she had been forcibly raped, leading “her mother, a nurse, and the police on a wild goose chase for a rapist merely to get her mother’s attention.... ” Id. at 591-92. The court reversed the district court, finding that the exclusion of this impeachment evidence infringed the defendant’s “constitutional right of confrontation.” 240 F.3d at 592. Hill argues that he, like the defendant in Redmond, is entitled to present impeachment evidence of his supposed victim’s pri- or “fabrication.”

Hill’s evidence is not as specific, clear, compelling or relevant as the Redmond evidence. In Redmond, the government conceded that the victim had fabricated the earlier event. In Hill’s case there is a serious dispute as to the meaning of the Shrestha transaction. Hill insists that Emmanuel gave $10,000 to Shreshta voluntarily and then maliciously recharacterized the gift as a loan. The government, however, does not concede that Emmanuel fabricated anything in his lawsuit against Shrestha. On the contrary, the government insists that the Shrestha incident is evidence of a previous incident of fraud— perhaps a fraud committed by friends of Hill’s. The government notes that Hill’s girlfriend and partner in Shardon International was Sharmila Shrestha, who shares an unusual last name with the alleged do-nee, Suman Shrestha. The government also observes, “The alleged [Shrestha] gift letter was dated in 1994 ... at a time when Emmanuel was suffering the effects of the stroke that disabled him in 1981. Like the documents drafted by Hill in the instant case, the documents in the Shres-tha ‘incident’ were completely typed except for Emmanuel’s signature.” (Br. of Appel-lee, at 19.) Furthermore, unlike the prosecution in Redmond, the government in the present case has buttressed its case with substantial documentary evidence of the fraudulent transactions. Thus, any probative value that the Shrestha incident might have is greatly diminished. See Redmond, 240 F.3d at 592. In short, viewing the Shrestha evidence in its proper context, it is clear that the incident is, at most, peripheral to the question of Emmanuel’s credibility. Thus, Hill’s Sixth Amendment right to confront the witnesses against him is not implicated by its exclusion.

Aside from his constitutionality claim, Hill argues that he was entitled to introduce the evidence under Rule 404(b) (Character Evidence — Other Crimes, Wrongs, or Acts), or alternatively, under Rule 608(b) (Character Evidence — Specific Instances of Conduct). Assuming arguendo that evidence of the Shrestha incident would be admissible under either rule, it still might be properly excluded “if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury....” Fed.R.Evid. 403. A district court’s ruling applying the Federal Rules of Evidence is reviewed for abuse of discretion, and will be upheld so long as it is not “arbitrary or irrational.” Weaver, 282 F.3d at 313.

As explained above, there is no concrete evidence as to what happened with the Shrestha transaction. The government and Hill vehemently dispute the meaning of the gift letter and the Maryland civil lawsuit. As a result, the district court exercised its discretion by excluding this evidence pursuant to Rule 403. To have admitted these documents would have necessitated an exhaustive case within a case that would have confused the jury as to the issues to be decided. At the very least, the jury would have had to: (1) determine what happened between Emmanuel and Shrestha; (2) consider whether the Shrestha event bore any similarity to Emmanuel’s relationship with Hill; and finally, (3) decide whether any similarity would make Emmanuel’s testimony less credible as it pertained to Hill. In rejecting Hill’s invitation to go down this path, the district court acted rationally and reasonably.

Furthermore, even if it could be proven that Hill did lie with regard to the Shres-tha case, that would not necessarily make the exclusion of the evidence reversible error. “[0]ne episode of lying does not bear on [the victim’s] credibility at [the defendant’s] trial so clearly that it would be an abuse of discretion for the district court to exclude reference to it.” United States v. Piche, 981 F.2d 706, 714 (4th Cir.1992). Accordingly, the district court’s evidentiary rulings on this question are affirmed.

B.

The defendant makes two other assignments of error related to the admission of evidence, both of which are without merit. First, Hill contends that the district court erred in permitting the introduction of relevant evidence obtained during a partially unlawful search. Hill correctly notes that special agents searching his home seized documents that were later determined to be outside the scope of the search warrant. The defendant argues that because some of the seized evidence was beyond the scope of the warrant, any lawfully obtained evidence must also be excluded. This Circuit has ruled, “In extreme circumstances even properly seized evidence may be excluded when the officers executing the warrant exhibit a ‘flagrant disregard for its terms.’ The general rule, however, is that items properly seized may still be admitted even when they are obtained at the same time as improperly seized items.” United States v. Ruhe, 191 F.3d 376, 383 (4th Cir.1999).

In the present case, the search warrant was limited to “all file folders” and “all documents” “that are identifiable with the Manus Group, aka The Manus Foundation, Shardon International and/or Donn L. Hill and which contain, among other things, the documents listed below....” That is, the search was generally limited to items related to Mr. Hill’s businesses. The special agents, in searching the defendant’s home, seized documents such as a program guide for the Washington, D.C. Stage Guild and instructions for Mr. Hill’s voice mail system. These documents, along with several other items, were later determined to be outside the scope of the search warrant.

At the time, however, it was plausible for the agents to view these items as within the scope of the search. For example, the agents might have suspected that Hill entertained prospective clients at the theater and then billed his theater expenses to his firms. As such, the program guide could have been viewed as “identifiable with the Manus Group, aka The Manus Foundation, Shardon International and/or Donn L. Hill_” Similarly, Hill might have saved voice mail messages related to his businesses, or forwarded messages to another number. As such, the agents might infer that the voice mail instructions would be within the scope of the search warrant. In sum, the agents’ violations of the warrant were not so flagrant as to require the exclusion of the lawfully seized evidence.

Second, Hill argues that documents which “purported to contain statements made by Mr. Hill and the Manus Group, which the government used to attempt to show that Mr. Hill had made sharply conflicting statements about the volume of business done by the company” should have been excluded as irrelevant. Of course, the issue of Hill’s businesses, and misleading statements he made about those businesses, were directly relevant to the government’s case in chief. Thus, the evidence was properly admitted.

C.

Hill’s final challenge is to the district court’s application of the sentencing guidelines. He challenges two upward adjustments made by the district court at sentencing. First, Hill claims that he should not have received the “vulnerable victim” enhancement under U.S.S.G. § 3A1.1. Second, he insists that he should not have received an upward enhancement for “abuse of a position of trust” under U.S.S.G. § 3B1.3. For a sentencing enhancement to apply, the government must prove the facts underlying the enhancement by a preponderance of the evidence. In this case, the government met its burden as to both § 3A1.1 and § 3B1.3.

A defendant should receive a two-level enhancement if he “knew or should have known that a victim of the offense was a vulnerable victim.” § 3A1.1(b)(1). A vulnerable victim is defined as one who “is unusually vulnerable due to age, physical or mental condition, or who is otherwise particularly susceptible to criminal conduct.” § 3A1.1, cmt. n. 2. In this case, the evidence was that Emmanuel was in his mid-sixties, had suffered a stroke, and “lived like a hermit.” J.A. at 113. There was more than enough evidence to support the district court’s finding that § 3A1.1 applied.

A defendant is subject to a two-level increase in his offense level if his conviction involved the abuse of a “position of public or private trust.” § 3B1.3. The evidence in this case is that Emmanuel sought and received investment advice from Hill. Hill managed several companies that he claimed were investment companies, and Emmanuel believed Hill to be involved in the business of “stocks.” Thus, the district court properly applied the enhancement.

IV.

For the foregoing reasons, the district court’s orders are affirmed.

AFFIRMED.

At trial, Hill hinted at a scorned lover defense, suggesting that he and Emmanuel might have had a romantic relationship. The trial court, however, excluded this evidence, ruling, ''[B]oth of you have been dancing around some issues about relationships that at this point I don't believe are really that relevant.” Hill does not appeal that ruling. Thus, if he contemplated a scorned lover defense in the past, Hill has now abandoned that litigation strategy.