United States v. Stoecker, William J. ( 2000 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 97-3870
United States of America,
Plaintiff-Appellee,
v.
William J. Stoecker,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern
Division.
No. 95 CR 118--Robert W. Gettleman, Judge.
Argued February 9, 2000--Decided June 1, 2000
Before Bauer, Easterbrook, and Ripple,
Circuit Judges.
Bauer, Circuit Judge. On March 4, 1997,
a jury found William Stoecker guilty on
numerous counts of bank fraud in
violation of 18 U.S.C. sec. 1344, making
false statements to financial
institutions in violation of 18 U.S.C.
sec. 1014, and giving or receiving bribes
in exchange for procuring loans in
violation of 18 U.S.C. sec. 215. Stoecker
was sentenced to 90 months imprisonment,
to be followed by three years of
supervised release, and $121,652,607.00
in restitution. He appeals his conviction
and sentence.
Stoecker was the sole owner of the
Grabill Corporation. Grabill held stock
for four other holding companies (Camdon
Companies, Inc., the Techna Group, Ltd.,
Windsor-Hamilton, Ltd., and Foxxford
Group, Ltd.), which in turn owned
subsidiary or operating companies. As a
result of a major bank fraud scheme,
eight banks loaned Grabill $150 million.
Stoecker’s scheme consisted of presenting
false financial statements and pledging
the same stock as collateral to more than
one bank. By December 1988, Grabill could
not meet its loan repayment obligations.
When the bankruptcy trustee sold the
companies assets and distributed the
resulting proceeds, the banks were left
with a loss of more than $82 million.
Stoecker first argues that the district
court improperly limited his cross-
examination of the government’s witness,
Richard Bock. Stoecker wanted to question
Bock about an administrative complaint
filed against him by the Illinois
Department of Registration and Education
(DRE). The DRE terminated its complaint
against Bock after he voluntarily gave up
his real estate license. Stoecker claims
that this evidence went to Bock’s
credibility as a witness. The district
court deferred its ruling until a voir
dire of the witness was held.
During voir dire, Bock testified that he
was the senior vice-president of finance
for the real estate brokerage firm
Quinlan & Tyson. While he was working
there, the DRE conducted an audit of the
firm and found a $300,000 shortfall in
the escrow accounts. As a result, the DRE
filed a complaint against Quinlan &
Tyson, Bock, and William Jennings, owner
of the firm. Jennings surrendered his
license and three months later committed
suicide. Bock maintained his innocence
but voluntarily agreed to give up his
real estate licence. The DRE then dropped
its complaint against Bock. Based on this
testimony, the district court found the
testimony regarding the DRE complaint
inadmissable.
Limitations on cross-examination are
reviewed for abuse of discretion when
there are no implications of the
defendant’s Confrontation Clause rights.
United States v. Saunders, 166 F.3d 907,
920 (7th Cir. 1999).
In Saunders, the court did not permit
cross-examination of the government
witness on a report that he had been
investigated for bias in favor of the
government by the Department of Justice
Office of Inspector General. Id. at 918.
The court, in making its determination,
stated that "specific instances of
conduct may, in the discretion of the
court, be introduced for the purpose of
attacking a witness’ credibility, the
probative value of such evidence must
still outweigh the danger of unfair
prejudice, confusion of the issues, or
misleading the jury." See Fed.R.Evid.
608(b)./1 Because the Department of
Justice did not take disciplinary action
against the agent, the court denied the
defense request.
In this case, the district court
determined that the prejudicial value of
the DRE complaint outweighed the
probative value of the evidence for
impeachment purposes. The evidence was
unrelated and far too remote to be
probative and it would have been unfairly
prejudicial. In fact, the DRE complaint
was over fifteen years old, no final
assessment of guilt was ever made, nor
was Bock ever required to pay
restitution. Further, even if there had
been a conviction, it would have been
inadmissible. The court would not have
allowed the prior conviction into
evidence pursuant to section 609(b) of
the Federal Rules of Evidence,/2 which
provides that any conviction over ten
years old is inadmissable unless its
probative value substantially outweighs
its prejudicial value. We find that the
district court did not abuse its
discretion in preventing Stoecker from
cross-examining Bock about the complaint.
Stoecker next argues that the district
court erred in admitting Bock’s 1991
statements to FBI investigators as a
prior consistent statement under federal
rule 801(d)(1)(B). Bock testified about
the fraudulent activities of Stoecker and
the Grabill Corporation. As the chief
financial officer for Grabill, Bock knew
of and assisted Stoecker in making
misrepresentations to banks for the
purpose of obtaining loans from them.
Because of a plea agreement, Stoecker
urged on cross-examination that Bock had
an incentive to testify falsely.
Following the cross-examination, the
government moved to admit the plea
agreement and prior consistent statements
of Bock. The government argued that the
1991 statements were made several years
before the plea agreement and before Bock
had any motive to lie. The court ruled
that in order to enter the prior
consistent statements, the government had
to redirect Bock. Before doing so, the
court permitted defense counsel to
conduct a voir dire examination of Bock.
Following the voir dire, the judge denied
the admissibility of the plea agreement
but did admit the prior consistent
statements.
Evidentiary rulings of the trial judge
are reviewed for an abuse of discretion.
United States v. Fulford, 980 F.2d 1110,
1114 (7th Cir. 1992). A four-part test
has been established to allow the
admission of prior consistent statements
under Federal Rules of Evidence
801(d)(1)(B) to rehabilitate a witness:
1) the declarant testifies at trial and
is subject to cross- examination; 2) the
prior statement is consistent with the
declarant’s trial testimony; 3) the
statement is offered to rebut an express
or implied charge of recent fabrication
or improper motive; and, 4) the statement
was made before the declarant had a
motive to fabricate.
Id. at 1114; United States v. Lewis, 954
F.2d 1386, 1391 (7th Cir. 1992). Stoecker
contends that the third and fourth
criteria have not been satisfied.
The third prong permits admission of
prior consistent statements if there has
been an express or implied charge of
recent fabrication. Between the questions
on cross-examination and voir dire, the
court correctly inferred that the
questions were designed to imply that
Bock fabricated his testimony. During
voir dire, Stoecker asked Bock several
times if he knew the implications of his
trial testimony under the plea agreement.
Specifically, that any reduction in his
sentence was up to the government. The
court correctly found that Stoecker’s
intent was to imply Bock was acting in
his own self interest.
As for the final prong, the rule
requires that the statement have been
made before the declarant had a motive to
fabricate. Here, the statements in
question were made in 1991, approximately
four years before the original indictment
and five years before the plea agreement.
Because these statements were made
several years earlier, the court
determined that Bock did not have a
motive to fabricate. The court reasoned
that to do so would imply that everyone
who makes a statement to law enforcement
officers has reason to fabricate. The
court relied on United States v. West,
670 F.2d 675 (7th Cir. 1982), to admit
the statements only through the redirect
of Bock, not through the FBI agent to
whom they were made. Because, as we said
in Fulford, reasonable minds can differ
as to when one first possessed a motive
to fabricate, the court did not abuse its
discretion in admitting the prior
consistent statements. Fulford, at 1114.
Stoecker argues that Fulford is no
longer instructive because of the Supreme
Court’s decision in United States v.
Tome, 513 U.S. 150, 154. The court in
Tome did not allow admission of the prior
consistent statements because the
statements were made after the witness
had a motive to lie. Id. But the court
specifically stated that a consistent
statement that predates the motive is a
square rebuttal to implication that the
witness had a motive to lie. Id. at 158.
That is exactly what happened here. The
judge determined that the statements Bock
made predated the plea agreement by
approximately five years. The court found
that the plea agreement could establish a
motive and did not allow that to be
admitted into evidence. Further, Stoecker
had the opportunity to re-cross-examine
Bock, unlike Tome, where witnesses other
than the declarant were questioned. We
believe that the court did not abuse its
discretion in admitting the prior
consistent statements of Bock.
Stoecker next contends that the district
court erred in admitting five stock
pledge charts into evidence. The charts
detailed which stocks Grabill pledged as
security for its loans and revealed that,
in several instances, the same stock was
pledged to more than one bank. The
government suggested that the charts were
a summary of the witness testimony
regarding dates and pledges that the jury
might forget during the course of a long
trial. The court admitted the charts
under section 1006 of the Federal Rules
of Evidence which provides:
The contents of voluminous writings,
recordings, or photographs which cannot
conveniently be examined in court may be
presented in the form of a chart,
summary, or calculation. The originals,
or duplicates, shall be made available
for examination or copying, or both, by
other parties at reasonable time and
place. The court may order that they be
produced in court.
Fed. R. Evid. 1006.
In United States v. Swanquist, 161 F.3d
1064 (7th Cir. 1998), we upheld the
admission of charts to the jury comparing
the defendant’s "disclosed" loans with
his "actual outstanding loans." Id. at
1070. The jury was then instructed that
the charts were to be used only as an aid
in evaluating the other evidence. Id. at
1073. In United States v. Robbins, 197
F.3d 829, 837 (7th Cir. 1999), we stated
"the basic purpose of the summary exhibit
was to recapitulate the numerous and
voluminous exhibits that had already been
introduced into evidence and that were
difficult to sort out." The same is true
here and the court properly instructed
the jury to analyze the underlying
evidence on which the charts were based.
Therefore the court did not abuse its
discretion in admitting the pledge
charts.
Finally, with respect to restitution,
Stoecker argues that the court did not
take into account his ability to pay res
titution nor did it inquire into the
determination of the bankruptcy court.
Once more, we review the district court’s
calculation of restitution for an abuse
of discretion. United States v. Newman,
144 F.3d 531, 542 (7th Cir. 1998).
In Newman we explained that the
Mandatory Victims Restitution Act of
1996, 18 U.S.C. sec. 3663A, discarded the
discretionary balancing system. Id. The
court no longer has discretion as to
whether or not to impose restitution on a
defendant who has an inability to pay.
Newman, at 537. The court went on to say
that the defendant’s ability to pay will
only be addressed when setting up a
payment schedule. Id. Because the MVRA
applies to any conviction imposed on or
after April 24, 1996 and Stoecker was
convicted in 1997, his arguments must
fail. The district court did not abuse
its discretion in ordering Stoecker to
pay restitution.
For the foregoing reasons the district
court is affirmed.
/1 Rule 608(b) provides: Specific instances
of conduct. Specific instances of the
conduct of a witness, for the purpose of
attacking or supporting the witness’
credibility, . . . may not be proved by
extrinsic evidence. They may, however, in
the discretion of the court, if probative
of truthfulness or untruthfulness, be
inquired into on cross-examination of a
witness (1) concerning the witness’
character for truthfulness or
untruthfulness, or (2) concerning the
character for truthfulness or
untruthfulness of another witness as to
which character the witness being
cross-examined has testified.
/2 Rule 609(b) provides: Time limit.
Evidence of a conviction under this rule
is not admissible if a period of more
than ten years has elapsed since the date
of the conviction or of the release of
the witness from the confinement imposed
for that conviction, whichever is the
later date, unless the court determines,
in the interests of justice, that the
probative value of the conviction
supported by specific facts and
circumstances substantially outweighs its
prejudicial effect.