United States v. Zomber , 299 F. App'x 130 ( 2008 )

Opinions of the United
2008 Decisions States Court of Appeals
for the Third Circuit
11-12-2008
USA v. Zomber
Precedential or Non-Precedential: Non-Precedential
Docket No. 06-1287
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD DISTRICT
_____________
Nos. 06-1287/2230/07-1933
_____________
UNITED STATES OF AMERICA
v.
MICHAEL ZOMBER,
Appellant
_____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 03-cr-046-2)
District Judge: Honorable Cynthia M. Rufe
_____________
Argued July 21, 2008
Before: McKEE, FUENTES, and JORDAN, Circuit Judges
_____________
(Filed: November 12, 2008)
_____________
Gerald B. Lefcourt [ARGUED]
Renato C. Stabile
Gerald B. Lefcourt, P.C.
148 E. 78 th Street
New York, NY 10021
Counsel for Appellant
Patrick L. Meehan
Robert A. Zauzmer
Seth Weber
Joseph F. Minni [ARGUED]
United States Attorney’s Office
615 Chestnut Street - #1250
Philadelphia, PA 19106
_____________
OPINION OF THE COURT
_____________
JORDAN, Circuit Judge.
In this combined direct appeal and collateral proceeding, Michael Zomber
challenges his conviction for conspiracy to commit mail fraud and wire fraud, in violation
of 18 U.S.C. § 371. On direct appeal, he maintains that his conviction and sentence
should be vacated for six reasons: (1) the evidence at trial was insufficient to support his
conviction; (2) he was denied his Sixth Amendment right to effective assistance of
counsel; (3) the government improperly withheld evidence that should have been
produced under the Jencks Act, 18 U.S.C. § 3500, and Brady v. Maryland, 373 U.S. 83
(1963); (4) he was prejudiced by the District Court’s erroneous jury instruction on the
meaning of fraud; (5) the District Court’s calculation of his sentence under the United
States Sentencing Guidelines was erroneous; and (6) the District Court erroneously
ordered him to pay restitution for non-criminal transactions not charged in the indictment.
In his motion under 28 U.S.C. § 2255, Zomber argues that the judgment against him must
be vacated due to the ineffective assistance of his counsel and the same Brady and Jencks
Act violations he alleges in his direct appeal. Because we conclude that the government
2
failed to produce evidence during Zomber’s trial that it was required to produce under the
Jencks Act, we will vacate Zomber’s conviction and sentence and will remand the case
for a new trial.
I. Background
Because we write primarily for the benefit of the parties, we set forth only those
facts pertinent to the issues before us on appeal. Zomber is an antique firearms dealer
who, along with codefendant and fellow antique firearms dealer Richard Ellis, was
indicted on January 23, 2003 for conspiracy to commit mail fraud and wire fraud. The
charges stemmed from three false and misleading letters written by, or at the direction of,
Zomber and Ellis. The letters were intended to induce Joseph Murphy, a collector of
antique firearms made by the Samuel Colt Manufacturing Company, to purchase at
inflated prices four Colt firearms secretly owned by Zomber and Ellis.1 While Ellis pled
1
For example, Zomber admitted the following:
Q: Richard Ellis asked you to write a false letter, making up a story that you
had a buyer willing to pay money for [one of the firearms].
A: He asked me to write a letter, yes.
Q: And that letter stated that you were representing a buyer who was interested
in purchasing the [firearm].
A: Yes.
Q: When, in fact, there was no such buyer, is that right?
A: I had no knowledge of the buyer.
Q: But when you say you had no knowledge of the buyer, I just want to be
clear. No such buyer existed.
A: Not to my knowledge.
(App. at 544.) Zomber also acknowledged that at one point he was concerned about
“unconscionable markups of the prices” that Ellis charged Murphy for guns. (App. at
142.)
3
guilty to the charge in the indictment, Zomber’s case went to trial. At trial, Murphy was
the government’s primary witness, and he testified that he would not have paid what he
did for the firearms had he known their true value. On December 15, 2003, a jury found
Zomber guilty of one count of conspiracy to commit mail and wire fraud.
On March 23, 2004, Zomber filed a motion to vacate his conviction due to
ineffective assistance of counsel and Brady violations. On February 28, 2005, the District
Court denied his ineffective assistance of counsel claim without prejudice because such
claims are typically reserved for collateral attack in a motion under 28 U.S.C. § 2255,
rather than being permitted within the criminal case itself or on direct appeal. The
District Court dismissed Zomber’s other claims on the merits. Three months later,
Zomber filed a second motion to vacate his conviction, in which he alleged an additional
Brady violation by the government. The District Court also denied that motion.
On September 9, 2005, Zomber filed a third motion to vacate his conviction,
alleging Brady and Jencks Act violations by the government for failure to disclose letters
Murphy had written to billionaire Bill Gates (the “Gates letters”) offering to sell his
firearms collection “at cost with no traditional mark-up and no dealer commission.” 2
2
While not entirely clear, the record indicates that the government had the Gates letters
prior to trial. Zomber did not discover the existence of the letters until after trial. Only
one of the letters, dated December 21, 2000, contains the offer to sell; the second letter,
dated January 17, 2001, merely gives Murphy’s contact information, which he had not
provided in the first letter. Because the parties treat the Gates letters as a unit, making no
legal distinction between them, we do so as well.
4
(App. at 172.) The District Court denied that motion from the bench in open court. The
Court sentenced Zomber to thirty months in prison, three years of supervised release, a
$75,000 fine, and a $100 special assessment, and it scheduled a hearing in accordance
with 18 U.S.C. § 3664(d)(5) to determine restitution.3 Zomber then filed a timely notice
of appeal.
Shortly thereafter, Zomber launched his collateral attack with a motion to vacate,
set aside, or correct sentence pursuant to 28 U.S.C. § 2255, alleging, among other things,
that the government had committed Brady and Jencks Act violations prejudicial to his
defense.4 In denying the motion, the District Court held that the government’s failure to
produce the Gates letters did not violate the Jencks Act. It began its analysis of the
Jencks issue with the following view of the legal standard:
3
On March 22, 2006, the District Court conducted an evidentiary hearing to determine
restitution. At the hearing, Zomber and Ellis entered into a stipulation that the District
Court could order restitution in the amount of $2.2 million, where Zomber and Ellis
would each be liable for half, or $1.1 million. Because Ellis had already paid Murphy
more than the restitution amount, pursuant to a civil settlement agreement between them,
the Court did not order Ellis to pay restitution. While agreeing that the Court could order
restitution against Zomber, his counsel objected to the figures adopted by the District
Court in computing restitution. On March 27, 2006, the Court entered an amended
criminal judgment that included a sentence of restitution in the amount of $1.1 million
against Zomber. On March 31, 2006, Zomber filed a second notice of appeal, which
included the restitution order. We entered an order on April 11, 2006, consolidating
Zomber’s appeals (06-1287/06-2230).
4
On May 12, 2006, Zomber filed a motion with the Third Circuit to stay his appeals
pending the District Court’s resolution of his § 2255 motion, and we granted the motion
to stay on June 13, 2006.
5
[Under the Jencks Act,] the government is required to ‘produce any statement
... of [a] witness in the possession of the United States which relates to the
subject matter as to which the witness has testified.’ ... An examination of
cases applying the Jencks Act reveals that it applies to statements given to or
taken by government agents, or reports created by government agents, that
directly relate to the witness’s testimony at trial. ... There is no indication that
the Jencks Act encompasses collateral statements made in a letter that is totally
unrelated to the criminal investigation or the proffered content of the witness’s
eventual testimony.
Zomber v. United States, No. 03-46-2, 2007 WL 853803, at *17 (E.D. Pa. 2007). The
Court then described why the Jencks Act had not been violated in Zomber’s case:
Petitioner has not cited a single case in which the Jencks Act was found to
apply to tangential letters or other documents that were not sent to or provided
to an investigating officer, agent, or prosecutor. The Jencks Act was enacted
to deal specifically with actual statements given to government officials by
potential witnesses. For example, if Murphy had met with investigating agents
or government prosecutors and made a statement about the value of his
firearms collection, the Jencks Act would require the government to disclose
that statement to defense counsel. Similarly, if Murphy had written a letter to
... one of the F.B.I. agents investigating the conspiracy [,] in which he made
a statement concerning the value of his collection, the Jencks Act would likely
require disclosure of that letter. ... The Jencks Act does not, however, require
disclosure of a letter, unrelated to the criminal investigation or prosecution,
sent to an uninterested third party. The Court does not believe that an offer for
sale included in a letter to a third party, wholly unrelated to the government’s
investigation, constitutes a “statement” under 18 U.S.C. § 3500.
Id. at *18.
In addition to denying all of the claims in Zomber’s § 2255 motion, the District
Court declined to issue him a certificate of appealability because it held that he had failed
to make a substantial showing that any of his constitutional rights had been violated. Id.
6
at *19. Zomber appealed the denial of his motion. On October 29, 2007, we issued an
order granting his motion for a certificate of appealability and consolidated the appeal on
his § 2255 motion with his direct appeal.5
II. Discussion 6
Zomber advances a number of arguments for overturning his conviction and
sentence. One is dispositive. He argues that his conviction should be vacated because,
during the trial, the government withheld the Gates letters, which should have been
produced under the Jencks Act and which could have been used to impeach Murphy’s
testimony.
The Jencks Act requires that “[a]fter a witness called by the United States has
testified on direct examination, the court shall, on motion of the defendant, order the
United States to produce any statement ... of the witness in the possession of the United
States which relates to the subject matter as to which the witness has testified.” 18
U.S.C.A. § 3500(b). It goes on to define a “statement” to include “a written statement
made by said witness and signed or otherwise adopted or approved by him ... .” 18
5
As noted herein, infra at n.10, it would have been better if the § 2255 motion had been
denied without prejudice at the outset, but we are where we are, and our treatment of the
issues on direct appeal is unaffected by the existence of the § 2255 motion, except that the
District Court explicated its reasoning more fully in the context of ruling on that motion.
6
The District Court had jurisdiction pursuant to 18 U.S.C. § 3231. We have
jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). “We review the
district court’s denial of defendant’s motion for a mistrial based on a claim of Jencks
error under an abuse of discretion standard.” United States v. Hill, 976 F.2d 132, 139 (3d
Cir. 1992).
7
U.S.C.A. § 3500(e)(1). Zomber argues that the Gates letters are obviously Murphy’s own
written statements and are related to the subject matter of Murphy’s trial testimony. As
such, Zomber reasons, they should have been produced by the government no later than
after Murphy’s direct testimony.
The District Court, however, held that the Gates letters are not Jencks material for
two reasons. First, the Court effectively read into the statute an additional restriction on
the definition of “statement,” namely that to be a “statement” the information at issue
must have been provided directly to someone in law enforcement. In the Court’s words,
the letters are not subject to the Jencks Act because they “were not sent to or provided to
an investigating officer, agent, or prosecutor.” Zomber, 2007 WL 853803, at *18. The
District Court’s second reason for holding that the Gates letters are not covered by the
Act is that they are “unrelated to the criminal investigation or prosecution.” Id. We
cannot agree with either of those conclusions.
As to the first, it reflects an inaccurate reading of the Jencks Act, as even the
government acknowledges. (Appellee’s Br. at 54.) Nothing in the statute distinguishes
statements made to a government agent from statements made to anyone else. It does not
matter to whom the statement is made. What matters is that the statement relates to the
witness’s testimony and is in the possession of the government. See Goldberg v. United
States, 425 U.S. 94, 103 (1976) (The Act “requires production of ‘any statement ... of the
8
witness in the possession of the United States’ without any limitation to statements made
‘to an agent of the Government.’”).
The second reason given by the District Court, that the letters do not relate to the
subject matter of Murphy’s testimony, is flawed as a matter of fact and law. It is clearly
erroneous as a factual matter because the letters solicit negotiations for the sale of the
very firearms at issue in this case, albeit as part of a larger set of Colt firearms, and they
reveal Murphy’s assessment of the value of those firearms. Since Murphy testified in
essence that the firearms were not worth the price that he paid for them, and since the
letters show that he was interested in selling the firearms for that same price, we are
persuaded that the letters are, as a matter of common parlance and within the meaning of
the Jencks Act, “related” to the testimony Murphy gave at trial.
Given, then, that the Gates letters are Murphy’s own written statements, that they
relate to Murphy’s testimony as to the value of the firearms, and that they were in the
possession of the government prior to trial, they were subject to disclosure under the
Jencks Act. The District Court’s conclusion to the contrary is an error of law and,
therefore, constitutes – in the infelicitous phrase we are required to use – an abuse of
discretion. See LaSalle Nat’l Bank v. First Conn. Holding Gr., LLC, 287 F.3d 279, 288
(3d Cir. 2002) (“An abuse of discretion occurs when the court bases its opinion on ... an
erroneous legal conclusion, or an improper application of law to fact.”).
9
Having determined that a Jencks Act violation occurred, we must review the
record to determine whether the District Court’s error in countenancing it was harmless.
Hill, 976 F.2d at 141. The test for harmless error is whether it is highly probable that the
error did not contribute to conviction. United States v. Ali, 493 F.3d 387, 392 n.3 (3d Cir.
2007). Specifically in the context of the Jencks Act, “we must analyze the prejudice
resulting from the nondisclosure of the [evidence] in terms of its potential usefulness to
the defense ... .” Hill, 976 F.2d at 141.
We conclude that the error resulting from the government’s withholding was not
harmless in this case. Murphy was the government’s main witness and testified at length
about how he was defrauded by Zomber and Ellis. Much of his testimony dealt with the
value of the firearms. Indeed, a central premise of the prosecution is that Zomber and
Ellis persuaded Murphy to pay a price vastly above the true market value of the guns.7
Since Murphy would presumably be reluctant to visit on someone else the crime he
allegedly suffered, his offer in the Gates letters to sell the same firearms “at cost,” or, in
other words, at the price he paid, could certainly be viewed as contradicting the premise
that he paid more for the firearms than they were worth.
7
Although Zomber argues that it is impossible to assign a market value to something as
subjectively desirable as an antique, there was expert testimony at trial that a rational jury
could accept as establishing that there is a market for antique guns and that the guns had a
discernable fair value in that market.
10
In the context of addressing Zomber’s Brady arguments,8 the District Court
considered whether the government’s withholding of the Gates letters caused Zomber any
prejudice. The Court held that it did not. Its first reason for that holding was that “[t]he
value of the letters is questionable. While Murphy offers to sell his collection at cost,
nowhere does he promise that the collection is worth what he paid for it, nor does he
suggest that he has an alternative buyer who is ready and willing to pay cost for the
collection.” Zomber, 2007 WL 853803 at *17. Second, the Court said, “[g]iven the
quality of Murphy’s testimony on direct and cross-examination – as [defense counsel]
described him, he was a ‘tough witness,’ a ‘very good witness,’ a ‘very sympathetic
witness,’ and a ‘very formidable witness,’– the letters would have done very little to
impeach his extensive testimony.” Id.
We cannot agree with that analysis. It is true that Murphy did not expressly state
in the Gates letters that the collection is worth what he paid for it, but that message about
the value of the firearms is one fair inference from the letters and, given the legal standard
we must apply, one fair inference is enough. Furthermore, it seems circular to say that the
significance of impeachment evidence should be judged in light of the strength of
testimony that was not subject to the impeachment evidence. Murphy may well have
8
We recognize that our harmless error analysis also speaks indirectly to Zomber’s
Brady argument with respect to the Gates letters. However, we need not rule on that
Brady issue because the Jencks question is dispositive.
11
been a “very good witness,” but the jury should have been the one to decide whether he
remained credible after being asked about the Gates letters.
In short, while the District Court thought that “use of the letters on cross-
examination may have made a very minor impact on Murphy's well-established
credibility[,]” id., we think it no stretch to believe that a cross-examination of Murphy
with the benefit of the Gates letters may have seeded reasonable doubt in the minds of
one or more jurors about the alleged conspiracy to defraud Murphy. A juror may have
been left with a reasonable doubt about Murphy’s truthfulness in general, which could
have impacted the jury’s willingness to credit his testimony and, by extension, the
government’s theory of the case. More narrowly, a reasonable juror, viewing the Gates
letter, may have had a reasonable doubt about the actual value of the firearms. Murphy
had a sufficient history as a collector, that his own opinion about the value of the firearms
may have carried some weight with the jury. We do not suggest that these are necessary
outcomes of the Gates letters being available for use by the defense, only that they are
potential outcomes sufficient to constitute prejudice to Zomber. Thus, withholding the
evidence caused real prejudice, and we cannot say that it is highly probable the error
represented by that prejudice did not contribute to Zomber’s conviction.
12
III. Conclusion
Accordingly, we will vacate Zomber’s conviction and sentence, and remand the
case to the District Court for a new trial consistent with this opinion.9 We will also vacate
the District Court’s order denying Zomber’s § 2255 motion, and remand with instructions
to dismiss the § 2255 motion without prejudice.10
9
Because Zomber will have the opportunity for a new trial, during which he will have
access to the Gates letters and other information that he argues he should have had before
the first trial, his additional allegations of Brady violations and ineffective assistance of
counsel are moot. We find no merit in his remaining arguments on direct appeal
regarding erroneous jury instructions, insufficient evidence to support the conviction,
improper Guidelines calculations, and erroneous calculation of restitution.
10
Because Zomber’s direct appeal was pending when he filed his § 2255 motion, the
District Court should have dismissed it without prejudice. See Kapral v. United States,
166 F.3d 565, 570 (3d Cir. 1999) (stating that a collateral attack is not appropriate while a
direct appeal is pending). We acknowledge that our earlier decision to stay the direct
appeals while the District Court adjudicated the § 2255 motion was perhaps not the most
efficient course of action, and we regret that it may have misled the District Court into
believing that it should adjudicate the § 2255 motion. Regardless, the proper course of
action now is for the District Court to vacate its decision denying the § 2255 motion and
dismiss it without prejudice.
13