United States of America, Appellee, v. George T. Kattar, Defendant, Appellant
UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
840 F.2d 118; 1988 U.S. App. LEXIS 2161
February 22, 1988
[**1] Appeal from the United States District Court for the District of
Massachusetts, Hon. John J. McNaught, U.S. District Judge.
COUNSEL: Michael Avery with whom Ellen K. Wade and Avery & Friedman were on
brief for Appellant.
Gary C. Crossen, Assistant United States Attorney, with whom Frank L. McNamara,
Jr., Acting United States Attorney, was on brief for Appellee.
JUDGES: Coffin and Breyer, Circuit Judges, and Caffrey, * Senior District Judge.
* Of the District of Massachusetts, sitting by designation.
OPINION: [*119] COFFIN, Circuit Judge.
Appellant George Kattar was indicted in 1986 on three counts of wire fraud, one
count of stolen or fraudulently taken monies, and one count of extortion under
the Hobbs Act (18 U.S.C. § 1951). The trial court granted a motion for judgment
of acquittal on one of the fraud counts at the close of the government's case.
Following a thirteen-day trial, the appellant was acquitted of all remaining
counts except the extortion charge, on which he was convicted. He appeals from
that judgment of conviction.
Because of the complicated nature of appellant's argument on appeal, it is
necessary to marshal the facts of the case in some detail. [**2]
In June 1982, someone attempted to pass a counterfeit $ 2,000,000 check drawn on
the account of L. Ron Hubbard, the founder and, until his recent death, the head
of the Church of Scientology. This attempt failed. The check was part of a
scheme concocted by a former attorney named Larry Reservitz, who had access to
genuine checks and inside information at Hubbard's bank, the Bank of New
England. The government soon discovered that the check scheme was Reservitz's
brainchild. The government subsequently enlisted Reservitz for assistance in
investigations of the Church. The government evidently suspected that the Church
was attempting to obtain false incriminating testimony regarding the check
scheme in order to discredit certain individuals. Reservitz, himself not a
member of the Church, was sent undercover to acquire information concerning the
Church's own investigation of the Hubbard counterfeit check scheme.
At some point in 1984, an attorney named Michael Flynn, considered by the Church
to be an enemy of Scientology, alerted a probate court to the check scheme, as
evidence of serious mismanagement of Hubbard's funds by the Church. The Church
responded to Flynn's charges by stepping [**3] up its own investigation of the
Geoffrey Shervell was put in charge of the Church's investigation. Shervell, who
testified as a government witness in this case, oversaw the investigation in his
capacity as Director of Scientology's Investigation Section. The Church ran
advertisements in several major newspapers, including the Boston Globe, offering
a $ 100,000 reward "for information leading to the arrest and conviction of the
person or persons responsible for the forgery and attempted passing of [the]
check." Shervell employed private investigators to look into the check scheme.
Some evidence was adduced at trial that these investigators, particularly Eugene
Ingram, suborned false statements from various persons in order [*120] to
implicate Flynn himself in the check forgery. The statements against Flynn were
given substantial play in the Church's newspaper, Freedom. The Church also
publicized these allegations in a number of press conferences.
Shervell was removed from the check scam investigation for several months due to
his "ineffectiveness" in procuring information, but was reinstated by the Church
in August 1984. At this point Reservitz, the actual mastermind of [**4] the
check scheme, became a cooperating witness and operative of the government.
Reservitz testified that he approached Church investigators to see if they would
attempt to procure false testimony from him. In effect, he was to be bait for
possible illegalities by the Church. Church investigator Ingram did in fact try
to get Reservitz to implicate Flynn. Reservitz, while wearing a body recorder
provided by the FBI, negotiated with the Church investigators about how much he
was to be paid for his incriminating statements.
At about the same time, Shervell had contacted Harvey Brower and appellant
George Kattar for further leads in the check investigation. Brower persuaded
Shervell that Kattar had information which might be helpful. Brower also said
that Kattar had other information about Flynn that might interest the Church.
Eventually, in September, Brower reported to Shervell that Kattar would provide
information relating to the check scheme in exchange for the $ 100,000 reward
payment. The negotiations went back and forth for a while, and there is much
dispute over the exact understanding each party had as to the terms of any
agreement they might enter into. Shervell seemed reluctant [**5] to part with
the $ 100,000 without more assurance from Kattar about the content of his
information, while Kattar insisted on a guarantee of payment before he would
provide any statement. Shervell did testify that Kattar at one point told the
Church investigators something to the effect of "I know what you want, I have
the information you have advertised for. I know you want Flynn and I can get
that information for you."
After several meetings with Brower, Kattar's intermediary, Shervell was told
that Kattar would provide the information pursuant to an initial payment of $
33,000, which was to represent a good faith demonstration of the Church's
willingness to part with the reward money. The $ 33,000 was to be placed in an
escrow account, to be withdrawn by Kattar after the conditions of the agreement
had been met. Shervell did not respond immediately to this plan. Brower then
contacted Shervell to convey that Kattar was angry with the delay. Brower told
Shervell that if the $ 33,000 was not provided within two days, Kattar would go
to Flynn and tell him that the Church had tried to bribe him into giving false
information about Flynn. At this point, the Church authorized the $ 33,000
[**6] payment to Brower to be placed in escrow. According to Shervell, he gave
the money to Brower, on the understanding that it would be shown to Kattar, and
then returned to Shervell pending Kattar's revelation of the information.
However, Brower apparently never returned the money to Shervell.
At a meeting the next day, Kattar provided Shervell information that merely
reiterated what the Church already knew about the check fraud. Shervell told
Brower that he was dissatisfied with this worthless information, and asked for
the $ 33,000 back. Brower called Shervell back to inform him that Kattar was
furious with the suggestion that the money be returned. Shervell testified that
Brower conveyed a threat by Kattar that if the demand for repayment were
pressed, then Kattar would tell Flynn that the money had been paid to Kattar as
a contract on Flynn's life.
At this point, Shervell contacted the FBI. Arrangements were made for Special
Agent George DiMatteo to go undercover as a Church associate of Shervell's.
DiMatteo accompanied Shervell to a meeting with Kattar on October 2, 1984.Both
Shervell and DiMatteo testified that Kattar was incensed at that meeting.
DiMatteo testified about Kattar's [**7] actions at the meeting as follows:
[*121] He said he was in charge of the rackets in that area, that he had
unchallengeable power, that he had worked with several people in that area,
that when he made money everyone had to make money. He said that he held our
fate, not in these words, but in his hands. He told us that if we were not
more receptive to his way of doing business that he, quote, "would throw our
names in the hat."
DiMatteo testified that Kattar used a threatening tone of voice and threatening
gestures at this meeting. Kattar acknowledged receiving the $ 33,000, and
demanded that the additional $ 67,000 be paid at their next meeting, claiming
that he would there provide information that would be useful to the Church.
According to DiMatteo, Kattar directed Shervell and DiMatteo "not to go to the
Feds," because his power "was unchallengeable in that area" as well.
On the next day, Kattar had a meeting with Larry Reservitz to discuss
information that Kattar could give to the Church. Kattar and Reservitz had
previously discussed the check fraud when that scheme was in its incipiency, so
Kattar knew that Michael Flynn was not part of it. Kattar also knew that
Reservitz was a source [**8] for details about the scheme. On October 3d,
Kattar did not know that Reservitz was working for the government and equipped
with a hidden body recorder. Kattar and Reservitz discussed the fact that the
Church would not release the $ 67,000 unless Kattar provided the name of someone
at the Bank who might have been involved in the check scheme. They agreed that
this name would have to be that of someone who was not in fact part of the
scheme, so as to protect Reservitz. On the tape of this meeting, Kattar is
overheard describing to Reservitz his meeting the day before with the Church
I says you gotta fuckin' deal with me -- you're not gonna back out. Your whole
fuckin' church is coming down. I wasn't bullshitting.
. . . .
I said I'll break your fuckin' head you motherfucker. You gonna deal with me
-- you fuckin' better. n1
Later that same day, Reservitz met again with Kattar. On this occasion they
discussed at length the fabricated information Kattar was to give to the Church.
Kattar reiterated that he had warned Shervell that "I'll break your fuckin'
head." Shervell also testified that these various threats had been made.
n1 These quotations are adapted from the transcripts provided to the jury. Those
transcripts were not themselves in evidence, though the underlying tapes were.
The next day, October 4, 1984, Shervell and DiMatteo again met with Kattar.
DiMatteo wore a body recorder to this meeting. Kattar provided the phony
information he had concocted with Reservitz, including that Flynn had helped
plan the check scheme in order to create bad publicity for the Church in his
campaign against it. Kattar explained that this information would " bury" Flynn.
Although Kattar did not directly threaten DiMatteo and Shervell at this meeting,
he made it quite clear that he had substantial muscle at his service. For
instance, he suggested that his strongarms had used their powers of persuasion
to get the information, and that he commanded much power and respect in "our
business" and "our family." He made numerous remarks as to how he would use
physical force in retribution if his sources and others had deceived or crossed
him in any way. Kattar agreed to give the Church a week to verify the
information, after which he expected to receive the remaining $ 67,000. It is
unclear from the tapes whether the "deal" that was struck between Kattar and the
Church was that Kattar would provide the true information about the check
scheme, or whether Kattar was merely to provide [**10] information which would
"stick" against Flynn.
Later that day, Kattar and Reservitz spoke on the telephone, and Kattar bragged
that "I belong in Hollywood."
A secretary for the Church in Los Angeles testified that she received a phone
call on October 18, 1984, from a person identifying himself as George Kattar.
The caller allegedly left a message that "if we [*122] don't hear from Geoff
[Shervell], they are all going to the other side." The government argued that
this comment was a threat that Kattar would go to Flynn if he didn't receive the
At this point, the FBI told the Church to desist in its investigation. The
Church evidently did not forward the $ 67,000 to Kattar, and there is no
evidence in the record that the Church ever used Kattar's information in any
The government charged Kattar and Brower with attempting to defraud the Church
by giving it false information in exchange for a reward fee, 18 U.S.C. §§ 1343,
2315, and with extortion under the Hobbs Act, 18 U.S.C. § 1951. Both defendants
were acquitted on all fraud charges. Brower also was found not guilty of
extortion. Kattar, however, was found guilty on the extortion count. Kattar now
challenges his conviction on [**11] a number of grounds, including improper
instructions to the jury, the government's use of false and deceptive testimony,
and the exclusion of out-of-court statements helpful to his defense.
In order to understand appellant's contentions in this appeal, it is necessary
to set forth briefly his theory of defense to the extortion charge at trial. The
Hobbs Act, 18 U.S.C. § 1951, defines extortion as "the obtaining of property
from another, with his consent, induced by wrongful use of actual or threatened
force, violence, or fear, or under color of official right." Certain threats of
economic harm, and almost all threats of physical harm, are actionable under the
statute. Attempted extortion is also proscribed by section 1951, so that it is
not material for our purposes here whether or not fear was actually induced, or
whether the property was in fact obtained by the defendant.
According to the government, the evidence demonstrated at least five separate
Hobbs Act violations. The first deals with the payment of $ 33,000 that actually
was made to Kattar. According to the testimony of Shervell, Kattar threatened
through Brower that if the $ 33,000 wasn't put into escrow, he would inform
[**12] Flynn that the Church had attempted to bribe him into giving false
testimony against Flynn. That information could, in turn, be used as ammunition
in Flynn's litigation against the Church. Kattar's alleged threat thus
implicated economic and public relations concerns of the Church.
A similar "economic" threat allegedly was made concerning the remaining $
67,000, when Kattar threatened at the October 2d meeting to bring down the
Church if Shervell did not cooperate.
The final "economic" threat allegedly occurred when a man identifying himself as
Kattar informed a Church secretary over the phone that he would "go to the other
side" if the $ 67,000 payment was not forthcoming.
As to these three allegations of extortion, Kattar argues that his threats were
not "wrongful" under the meaning of the statute. According to Kattar, his
agreement with the Church was to provide information that could implicate
Michael Flynn in the check fraud, regardless of the veracity of that
information. Kattar reasons that he was entitled to the money requested under
the terms of this "contract" with the Church, and that certain forms of economic
coercion are not "wrongful" under the Hobbs Act when [**13] the defendant has
a right to the property in question. We address this argument in section III,
The government also points to two separate incidents in which Kattar allegedly
used threats of violence to attempt to obtain the $ 67,000. At the first meeting
at which Agent DiMatteo was present, on October 2d, Kattar told Shervell and
DiMatteo that he would "throw their names in the hat" if they did not go through
with the exchange. According to both Shervell and DiMatteo, Kattar used a
threatening tone of voice and demeanor in order to frighten them into parting
with the remainder of the reward money. There was some testimony that Kattar
stressed that he was in "the rackets." This characterization of Kattar's
behavior was corroborated by Kattar in the [*123] taped conversation he later
had with Reservitz.
At the next meeting, Kattar did not make any direct threats of violence, but he
did make a point to establish that he had substantial muscle at his disposal. He
brought to the Church representatives' attention two of his associates who were
standing guard over the meeting: the "big man," who "would blow your fuckin'
head off in ten seconds," and "Dino," a "fuckin' animal" who'd [**14] "sit on
his mother." This meeting was recorded on tape, and was introduced as evidence.
It is unclear whether the show of intimidation was directly related to the
demand for the $ 67,000, but the jury could certainly have inferred such a
Kattar concedes that threats of violence are unlawful under the Hobbs Act in a
non-labor context even if the defendant has a valid claim of right to the
property extorted. See United States v. Porcaro, 648 F.2d 753, 760 (1st Cir.
1981); United States v. Zappola, 677 F.2d 264 (2d Cir. 1982). He argues,
however, that his threats of violence were specious and illusionary. His defense
is that he had been warned that the Church was prone to use violence in its
transactions. Victor Piscattello, a private investigator, testified that he
earlier had told Kattar to watch his step with the Church, because the Church
had been known to employ violence. Kattar's argument to the jury was that he had
employed rough language not in order to extort the money from Church
representatives, but instead to forestall any effort by the Church to do harm to
The jury was not asked for a special verdict on whether its finding of guilty
was based [**15] on economic or physical extortion. Therefore, if either
ground is found wanting, we must vacate the verdict. This comports with the rule
that "a general verdict must be set aside if the jury was instructed that it
could rely on any of two or more independent grounds, and one of those grounds
is insufficient, because the verdict may have rested exclusively on the
insufficient ground." Zant v. Stephens, 462 U.S. 862, 881, 77 L. Ed. 2d 235, 103
S. Ct. 2733 (1983). See also Stromberg v. California, 283 U.S. 359, 367-370, 75
L. Ed. 1117, 51 S. Ct. 532 (1931); United States v. Norton, 808 F.2d 908, 911
(1st Cir. 1987). We shall address in turn the defendant's challenges to the
government's theories of extortion through economic threats and extortion
through threats of violence.
Appellant first contends that the jury was improperly instructed on the
circumstances in which a threat of economic harm may be the basis of a
conviction for extortion. He claims that the jury should have been required to
find that he had no entitlement to the funds obtained or sought before it could
find him guilty.
A violation of the Hobbs Act requires the use of wrongful means to procure the
property. A threat of economic harm -- unlike the [**16] threat of physical
harm n2 -- is not per se wrongful; a legal right to the funds or property at
issue may therefore justify the threat of pecuniary harm, depending on the sort
of harm threatened. "Fear of economic loss is not an inherently wrongful means;
however, when employed to achieve a wrongful purpose, its 'use' is wrongful."
United States v. Clemente, 640 F.2d 1069, 1077 (2d Cir. 1981). A straightforward
example of a lawful economic threat is where one party threatens litigation in
order to persuade another party to honor a contract which the first party
believes has been breached.
n2 Except in certain labor contexts, see United States v. Enmons, 410 U.S. 396,
35 L. Ed. 2d 379, 93 S. Ct. 1007 (1973), using threats of violence to induce the
payment of money is unlawful, regardless of the extortionist's possible legal
right to the funds at issue. See United States v. Porcaro, 648 F.2d 753, 759-760
(1st Cir. 1981).
In this case, the challenged jury instructions were as follows:
You have to decide whether, as the government contends, the Church of
Scientology parted with thirty-three thousand dollars of its money fearing
that if they failed to do so, a threat to [*124] give information to Michael
[**17] Flynn would be carried out or whether, as the defendants contend, the
Church wanted information incriminating Mr. Flynn regardless of its truth or
It's for you to decide whether, as the government contends, the defendants
attempted to obtain another sixty-seven thousand dollars by threat that unless
it were paid, information would be given to Mr. Flynn; and you have to keep in
mind, of course, that the government has the burden of persuading you of all
the essential elements of the crime charged beyond reasonable doubt and that
the defendants have no burden to carry.
Appellant's dispute is only with the second paragraph. He claims that it was
improper not to include in that paragraph a charge like that in the first, which
would have suggested that the jury could not find Kattar guilty of economic
extortion if "the Church wanted information incriminating Mr. Flynn regardless
of its truth or falsity." Kattar's argument assumes that this case is simply a
variation of the straightforward contractual/litigation situation described
above. He claims that his agreement with the Church was to provide information
regardless of its veracity. Because he met this obligation, he argues, [**18]
he was entitled to the money, and this "legitimate entitlement" forecloses a
conviction for economic extortion of that property. He claims that the
challenged instruction improperly allowed the jury to find him guilty even if it
believed Kattar was thus "entitled" to the $ 67,000. Appellant further argues
that the acquittals on the fraud charges provide compelling evidence that the
jury did believe that the defendant had a "legitimate entitlement" to the money.
Kattar's theory, however, fails; the facts of this case are not equivalent to a
threat of litigation in response to a breach of a legal contract. Kattar was
properly convicted for his threats to go to Flynn with damaging information
against the Church, even if his agreement with the Church was to provide the
information which he tendered regardless of its veracity.
We reject the idea that Kattar's asserted "agreement" with the Church could
constitute a "legitimate entitlement" to the reward money. Any contract that was
entered into between Kattar and the Church that Kattar would be paid $ 100,000
for false information, so that that information could be used to defame,
ridicule and discredit Michael Flynn, is an illicit [**19] and unenforceable
pact. Even if Kattar had some sort of claim to the money, such cannot be said to
have been a "legitimate entitlement." We therefore conclude that any threat of
pecuniary harm used to obtain the money would have been "wrongful, " and thus a
violation of the Hobbs Act. If the jury found that Kattar threatened to blow the
lid on the Flynn incrimination scam unless paid the $ 67,000, then conviction
was appropriate on a theory of economic extortion, even though there may have
been an agreement to exchange the money for Kattar's false statements. n3
n3 We do not mean to suggest that no economic threat is " wrongful" where there
exists a legal right to the property obtained. Though litigation certainly is a
lawful threat in response to a breach of contract, it in not obvious that every
form of economic fear is equally legitimate, even where there is a " claim of
right" to the property. However, because we reject Kattar's claim that he had a
"claim of right" to the $ 67,000, we need not reach the question of whether
Kattar's threat to go to Flynn would itself have been "wrongful" even if he did
have a legal right to the reward.
The trial judge instructed the jury, [**20] in addition to the language quoted
above, that the government had to prove that the defendant attempted to obtain
money "without right to do so." The judge defined "wrongful, " the crucial term
in the statute, as "doing something without lawful claim or right." This
instruction was more than sufficient. Kattar had no lawful claim to the $
67,000, even if he did have some agreement with the Church. n4 The defendant
[*125] was, in fact, benefited by the court's very generous instructions. The
judge did not inform the jury that Kattar's alleged "deal" was in fact unlawful;
the jury may have concluded incorrectly that it was legal. More significantly,
the judge implied, as quoted above, that there was no extortion of the $ 33,000
if, "as the defendants contend, the Church wanted information incriminating Mr.
Flynn regardless of its truth or falsity." This was an error in the defendant's
favor. He cannot now be heard to complain on the ground that the same error was
not repeated in the instruction regarding the remainder of the money that he
attempted to obtain.
n4 Implicit in Kattar's briefs is the contention that, whether or not there was
in fact a claim of right to the money, Kattar himself thought he had such a
right. Even if such a distinction were material, however, Kattar did not argue
this theory to the jury, nor ask for a particular instruction regarding it. The
judge properly instructed the jury that a necessary element of extortion is that
the defendant act willfully and purposefully, "with an intention to do something
forbidden by the law." Such an instruction, along with the court's generous
definition of "wrongful," was more than sufficient.
Appellant's next contention is that the government knowingly elicited false
testimony. Kattar claims that this false testimony materially discredited his
defense to the charges of extortion through fear of physical harm, and thus
violated his right to due process. He specifically challenges three rulings of
the district court made in response to his arguments on this issue at trial. We
first describe the background of the issue, and then turn to the district
Regardless of any possible claim of right to the property extorted, threats of
violence are always, except in certain limited labor circumstances, wrongful
under the Hobbs Act. See supra note 2. Defendant's counsel did not, and could
not, deny the threats of physical harm made by Kattar -- they were loud and
clear on the recorded conversations played for the jury. Instead, Kattar's
defense was that these threats were idle and groundless, and that he had been
forced to "talk tough" purely as a defensive, prophylactic matter. The defense
theory was that Kattar knew that the Church in the past had used violence
against its enemies, and that he was afraid that if the deal fell through, he
might be subject [**22] to its retaliatory attacks. His violent outbursts and
threats were, his counsel argued, meant not to extort the money owed him, but
instead to forestall any effort by the Church to do harm to him. A former Church
private detective testified that he had told Kattar that the Church could be
very dangerous, had been known to use violence, and allegedly once had bombed
Appellant complains that the government knowingly elicited testimony from
witness Geoffrey Shervell that falsely characterized the Church as a reformed
organization. On direct examination, Shervell acknowledged that there had been
serious illegal activities conducted on the part of the Church by some of its
highest ranking officials in the 1970s. Shervell contended, however, that this
activity was isolated and contrary to Church policy, and that there had since
been instituted a system of reform, in which he allegedly took part, designed to
clean up the operations of the Church. He claimed that the investigations
section of the Church, in which he was working during the time of the Kattar
negotiations, was a benign group that was not involved in any illegal
activities. The overall gist of Shervell's testimony [**23] was that the
Church had undergone a substantial "reformation" since the law-breaking days of
Most significantly for purposes of this appeal, Shervell claimed that the "Fair
Game Policy" of the Church had been discontinued shortly after its
implementation in 1967. That policy, according to an official policy letter from
the office of Church leader L. Ron Hubbard, instructed that " enemies" of the
Church "may be deprived of property or injured by any means by any Scientologist
without any discipline of the Scientologist. [The enemy may] be tricked, sued or
lied to or destroyed." Shervell testified that this policy was not in effect
during either the activities of the late 1970s or the time of his negotiations
with Kattar in 1984.
Kattar contends that Shervell's characterization of the Church activities was
false and deceptive. He claims that the Fair Game Policy, in spirit if not in
name, was [*126] alive and well during the Church investigation of the check
fraud, and that the Church investigation was designed to destroy the " enem "
Michael Flynn. Kattar introduced substantial evidence to show that the Church
had been trying to "destroy" Flynn through the use of voluminous false [**24]
information that they had disseminated about him.
The basis for Kattar's due process claim is that the prosecution elicited
Shervell's characterizations of the Church despite the government's own
knowledge that those descriptions were distorted. Kattar suggests that, as a
result of these mischaracterizations, the jury would have been less likely to
believe his defense that he had to threaten physical harm to protect himself
from Church retributory violence. In particular, Kattar contends that the
government itself did not believe that the crimes committed by Church members in
the 1970s were mere isolated indiscretions contrary to Church policy, but
instead knew that these incidents were fully consistent with and authorized by
the official instructions and teachings of the Church hierarchy. Kattar further
contends that the government believed the Fair Game Policy to have continued in
effect not only throughout the 1970s, but also through the period of time during
which the Kattar/Flynn episodes took place.
The evidence offered by Kattar to demonstrate that the government's own beliefs
about the Church conflicted with those testified to by Kattar consists of the
In the late [**25] 1970s, the United States successfully prosecuted a number
of high-level Scientologist operatives for various crimes involving illegal
break-ins, burglaries, and wiretaps. In one of those cases, United States v.
Kember and Budlong, No. 78-401 (2&3) (D.D.C.), two Church officials were
convicted of nine counts of aiding and abetting burglary in the second degree.
In its sentencing memorandum in that case (the "Kember memo"), submitted to the
federal court in 1980, the Justice Department characterized the defendants'
"brazen and persistent burglaries and thefts" as "but one minor aspect of the
defendants' wanton assault upon the laws of this country," and noted that the
defendants' crimes were "of a breadth and scope previously unheard." The memo
described the defendants as highly placed officials of the Church, and claimed
that their operations were performed with the full authority and approval of the
Church. The memo accused the Church and its members of considering themselves
"above the law," with "carte blanche to violate the rights of others, [and]
frame critics in order to destroy them." The Church, according to the U.S.
Attorney, "launched vicious smear campaigns. [**26] . . against those . . .
perceived to be enemies of Scientology." The Church's methods for this included
the subornation of perjury. The memo also acknowledged the existence of the Fair
Game doctrine as the active animating philosophy of the Church.
This characterization, even where it does not technically contradict Shervell's
testimony, certainly does cast the Church in a radically different light from
that used by the prosecution in the instant case.
A more direct and substantial contradiction of Shervell's testimony was
contained in a brief filed by the United States in February 1986, more than one
year after the events in question here took place, in a civil case instituted by
the Church against the F.B.I., Founding Church of Scientology of Washington,
D.C. v. Webster, 802 F.2d 1448 (D.D.C. 1986). In that brief (the " Webster
brief"), the government again asserted that the illegal activities of high-level
Scientologists in the 1970s were carried out under the orders of the Church
hierarchy, and pursuant to explicit policy directives issued by the Church. More
significantly, in a footnote, the government alleged that the Church " continues
to pursue" (in 1986) the Fair Game [**27] Policy, "as the action against
Flynn, Sullivan and others referenced in the text attests." This directly
contradicts Shervell's testimony, and in fact strongly suggests that the Fair
Game Policy was in effect as to Michael Flynn during this time period.
[*127] The defense brought this brief to the government's and the court's
attention after Shervell's direct examination, and moved for dismissal. That
motion was denied. The defendants then moved for discovery of additional
evidence in the government's possession that may have been the basis for the
claims in the brief. This motion also was denied. Finally, the defendants asked
that the government's statements be introduced into evidence. The trial judge
allowed defense counsel to use the document on re-cross, but excluded it from
evidence, even in a redacted version.
Appellant argues that each of the three rulings by the court was improper. We
address each in turn.
A conviction obtained by the knowing use of false or perjured testimony "is
fundamentally unfair, and must be set aside if there is any reasonable
likelihood that the false testimony could have affected the judgment of the
jury." United States v. Agurs, 427 U.S. 97, [**28] 103, 49 L. Ed. 2d 342,96
S. Ct. 2392 (1976). It is immaterial that the particular prosecutor in this case
may not have known about the evidence that revealed Shervell's testimony as
possibly false. The Justice Department's various offices ordinarily should be
treated as an entity, the left hand of which is presumed to know what the right
hand is doing. See Giglio v. United States, 405 U.S. 150, 154, 31 L. Ed. 2d 104,
92 S. Ct. 763 (1972). At any rate, the United States Attorney in this case was
made aware of the Webster and Kember briefs after direct examination of
Shervell, and yet continued on redirect to elicit testimony which, at least in
spirit, contradicted the government's asserted position in the District of
A more difficult issue is whether Shervell's testimony was in fact false or
perjurious. For the most part, the differences between Shervell's account of
Church policies and those of the government in its other briefs are differences
of characterization. In its actions against the Church, the government naturally
attempted to paint the Church in the most prejudicial light possible. In its
litigation against Kattar, the government not surprisingly tried to downplay the
dark side of the Church so as [**29] to make Kattar's actions seem more
This inconsistency is troubling where its source is the prosecutorial arm ofthe
federal government. It is one thing for private counsel to characterize events
in contrasting ways in two separate litigations, because the counsel there is
required under our adversary system to defend its clients in the most vigorous
fair manner possible -- counsel is expected to put the best possible gloss ona
client's case. The function of the United States Attorney's Office, however, is
not merely to prosecute crimes, but also to make certain that the truth is
honored to the fullest extent possible during the course of the criminal
prosecution and trial. If it happens that the government's original perspective
on the events in question is proven inaccurate, such revelation is in the
government's interest as well as the defendant's. The criminal trial should be
viewed not as an adversarial sporting contest, but as a quest for truth. See
Brennan, The Criminal Prosecution: Sporting Event or Quest for Truth?, 1963
Wash. U. L.Q. 279. See also Agurs, 427 U.S. at 104 (use of perjured testimony
involves "a corruption of the truth-seeking function [**30] of the trial
process"). This principle and this ideal are reflected in the constitutional
requirement that the government make available to the defendant all material
evidence favorable to the accused. See Brady v. Maryland, 373 U.S. 83, 87, 10 L.
Ed. 2d 215, 83 S. Ct. 1194 (1963).
Thus, it is disturbing to see the Justice Department change the color of its
stripes to such a significant degree, portraying an organization, individual, or
series of events variously as virtuous and honorable or as corrupt and
perfidious, depending on the strategic necessities of the separate litigations.
Having previously acknowledged the Church's illegal practices and maintenance of
the Fair Game Policy, [*128] the prosecution should not have attempted in this
case to describe the Church as a righteous organization without any designs to
unfairly discredit its enemies, in order that the defendant's actions would seem
more egregious. The government, of course, was free to argue that the Church's
activities were immaterial to the events in question, but it should not have
pretended that those activities were mere blights on an otherwise spotless
Nevertheless, the government's inconsistent positions do not rise to the level
of [**31] constitutional error in regard to Kattar's conviction. To begin
with, we are reluctant to conclude that most of Shervell's testimony was false
or perjurious, even when compared to the government's previously stated
conclusions about the Church. Shervell acknowledged the convictions in the
1970s, and admitted that the Church frequently attempted to defame Michael Flynn
on the basis of patently untrue testimony. The significant difference between
Shervell's testimony and the government's previous assertions lies in
characterization, in the degree of significance attributed to the Church's
illicit activities. Most of Shervell's testimony was, therefore, technically not
More serious were Shervell's repeated claims that the Fair Game Policy wasnot
in effect at the time of the check scheme operation. The government, in footnote
20 of the Webster brief, explicitly contradicted this assertion. Even though
Shervell presumably could not be prosecuted for perjury unless it was shown that
he himself knew that the policy was still in effect, the government is precluded
from using evidence that is known to the government to be false. See Napue v.
Illinois, 360 U.S. [**32] 264, 269, 3 L. Ed. 2d 1217, 79 S. Ct. 1173 (1959)
(government "may not knowingly use false evidence, including false testimony").
Shervell's testimony about the Fair Game Policy should not have been elicited by
the U.S. Attorney, given that the government itself contended elsewhere that the
policy remained in effect throughout the period in question. When the U.S.
Attorney was made aware of the Webster brief, he should have made an attempt to
correct Shervell's testimony in this regard during subsequent redirect
examination. Cf. id. (conviction must fall when the prosecution, " althoughnot
soliciting false evidence, allows it to go uncorrected when it appears").
This conclusion alone, however, is not sufficient to require a new trial. The
verdict must be set aside only if "there is any reasonable likelihood that the
false testimony could have affected the judgment of the jury." Agurs, 427 U.S.
at 103. We are required to apply "a strict standard of materiality" in making
this determination. Id. at 104. As Justice Blackmun noted in United States v.
Bagley, 473 U.S. 667, 87 L. Ed. 2d 481, 105 S. Ct. 3375 (1985), false testimony
should be considered material "unless failure to disclose it would be harmless
beyond a reasonable doubt." [**33] Id. at 680. n5 Even under this stringent
standard, the false testimony here is not fatal to the conviction, primarily
because it appears that the jury rejected that testimony. It is eminently clear
that the jurors' verdict on the extortion count was entirely unrelated to any
view they may have had regarding the Fair Game Policy or the Church's activities
generally. In fact, the verdict of not guilty on all the fraud counts strongly
suggests that the jury did not believe Shervell as to the clean hands and good
intentions of the Church. If the jury had convicted on those counts, the false
testimony likely would have constituted a due process violation sufficient to
necessitate a new trial on those charges. But the jury evidently believed the
defense's theory that the check scheme investigation was closely associated with
the Fair Game Policy.
n5 Although the section of Bagley from which this language is taken was joined
only by Justice O'Connor, the particular proposition quoted was not in any way
disputed by the other Justices.
In addition, the evidence overwhelmingly supported the jury's judgment that
Kattar's clear threats of physical harm were not made in self defense. [**34]
The tape recordings show no evidence of a man fearing for [*129] his physical
safety. They reveal a man of overwhelming confidence and swagger. At no point
does Kattar sound frightened of the Church. In a discussion with Reservitz on
October 3, 1984, the tape picks up the conversation apparently right after
Kattar has told Reservitz that he has been informed of the Church's violent
Reservitz: Good. I don't really think that will be a problem. I don't think
that's their style.
Kattar: He tells me they bomb guys. I said I'll blow the whole fuckin' Church
up. I said I want these guys to take a look at you.
Reservitz: They bomb people?
Kattar: That's what he says.
Reservitz: Oh. I don't know that much about him.
Kattar: Who gives a fuck? All my life I've lived with those kind of people.
Reservitz: Well, I met these people. The people I met didn't seem like they
could bomb themselves, never mind anybody else. I mean, that guy Geoff, the
Englishman, he didn't seem like he bothered a soul.
Kattar: He's the guy I's told "I'll break your fuckin' head." He's the one
that got smart.
These are not the words of a man who's running scared. And even if the jury had
been persuaded [**35] that Kattar feared the Church, the evidence
overwhelmingly indicated that his threats were not made as a response to that
fear, but rather as a means of collecting the money.
More significantly, any testimony of Shervell that the Fair Game Policy
still in effect would have added nothing to Kattar's defense. That defense
concerns Kattar's own state of mind. Whether or not the Church actually
continued the official policy is immaterial to what Kattar thought about the
Church. The fact that the government believed the Church to be a ruthless
organization adds nothing to the jury's understanding of what Kattar's ideas
about the Church were, except that it might have slightly supported the
credibility of the detective who testified that he told Kattar of the Church's
dangerousness. It is beyond any doubt that the false testimony had no material
effect on the jury's findings as to either Kattar's motives or his threats of
violence. Therefore, for the purposes of this conviction, even the strict
standard of materiality has not been met. The government's use of the false
testimony had no effect on the extortion verdict.
Appellant also argues that revelation of Shervell's [**36] false testimony
could have tarnished Shervell's credibility. The principle of not allowing the
knowing use of false testimony "does not cease to apply merely because the false
testimony goes only to the credibility of the witness." Napue v.
U.S. 264, 269, 3 L. Ed. 2d 1217, 79 S. Ct. 1173 (1959). But even if this
exposure would have completely impeached Shervell as a witness, the remaining
evidence was beyond a doubt sufficient to convict on the extortion count. The
tape recordings are proof positive of Kattar's threats, and the testimony of
Agent DiMatteo independently establishes the threats at the October 2d meeting.
As the government admits, the most logical way to interpret the jury's mixed
verdict is that they disbelieved Shervell (hence, acquittal on the fraud
counts), but believed DiMatteo and the tape recordings (leading to conviction on
the extortion charge). Shervell's testimony was not at all crucial to the
conviction obtained. n6 Even if the false testimony had come to light, there is
no doubt that the jury would have returned the same verdict. n7
n6 There was also sufficient evidence to support a finding of economic extortion
even if Shervell had been discredited. Kattar himself boasted to Reservitz that
he had told the Church representatives "You gotta fuckin' deal with me. You're
not gonna back out. Your whole fuckin' church is coming down." In addition,the
church secretary testified that someone identified as Kattar had in a telephone
call threatened to "go to the other side" unless Shervell followed through on
the deal. [**37]
n7 Appellant also argues that the government should have been " judicially
estopped" from changing its characterization of the Church from that which it
alleged in the previous litigations. The doctrine of judicial estoppel,
sometimes known as the doctrine of preclusion of inconsistent statements,
prevents a party from asserting a position contrary to a position taken by that
party in an earlier proceeding. See Patriot Cinemas, Inc. v. General Cinema
Corp., 834 F.2d 208, 211-15 (1st Cir. 1987); 1B Moore's Federal Practice para.
0.405 at 238-47 (2d ed. 1984). In this circuit, the doctrine is only applied
when a litigant is "'playing fast and loose with the courts.'" Patriot Cinemas,
834 F.2d at 212 (quoting Scarano v. Central R. Co., 203 F.2d 510 (3d Cir.
1953)). The government's conduct here does not meet this standard. In addition,
as far as we can tell, this obscure doctrine has never been applied against the
government in a criminal proceeding. We need not decide whether the government
could under any circumstances be so estopped, because we find that the
inconsistency in this case was not sufficiently egregious, and was notmaterial
to the appellant's conviction.
The defendants moved at trial for discovery of all documents in the possession
of the government that formed the basis of the statements at issue in the
Webster brief and in the Kember sentencing memorandum. These motions were
denied. We agree with the trial judge that the basis for the government's
assertions in those documents is provided in relevant part in the documents
themselves. The government supported its accusations against the Church by
citing numerous incidents and litigations that gave rise to their
characterizations of the Church's policies and practices. It would not have been
in the government's interest to omit any significant bases for its assertions,
since it had a stake in persuading the federal judges in those two cases of
their veracity. The Justice Department could ill afford to rest on mere
It was well within the district court's discretion to decide that any further
search through the voluminous government files on the Church of Scientology
would be a mere fishing expedition, and likely would reveal nothing more than
what was already included in the government memoranda. In any event, any further
evidence on the nature of [**39] the Church's policies would not have assisted
appellant in disproving the extortion charge. As we explained above, conviction
on that count was obtained wholly independent of the debate concerning the true
character of the Church; the entirety of the United States' files on the Church
could reveal nothing that would have affected the jury's determination of what
Kattar thought or how he acted.
Appellant argues that he should have been permitted to introduce into evidence
the government's statements regarding the Church in the Kember memo and the
Webster brief, as admissions of a party opponent under Rule 801(d)(2) of the
Federal Rules of Evidence. An admission by a party opponent is not hearsay under
that rule if the statement is either
(A) the party's own statement in either an individual or a representative
capacity or (B) a statement of which the party has manifested an adoption of
belief in its truth, or . . . (D) a statement by the party's agent or servant
concerning a matter within the scope of the agency or employment, made during
the existence of the relationship. . . .
Appellant contends that the government statements are admissible under
subsections (B) and [**40] (D).
We first must determine whether the government is a "party-opponent" for
purposes of this rule in a criminal case. We agree with Judge Bazelon that "the
Federal Rules clearly contemplate that the federal government is a
party-opponent of the defendant in criminal cases." United States v.Morgan,189
U.S. App. D.C. 155, 581 F.2d 933, 937 n.10 (D.C. Cir. 1978). We can find no
authority to the contrary or reason to think otherwise. Whether or not the
entire federal government in all its capacities should be deemed a
party-opponent in criminal cases, cf. United States v. American Tel. &Tel., 498
F. Supp. 353, 356-58 (D.D.C. 1980) (civil case), the Justice Department
certainly should be considered such. Cf. Giglio, 405 U.S. at 154.
Kattar initially argues that the briefs in question contained admissions of
"agents" of his party-opponent, and were therefore admissible under Rule
801(d)(2)(D). See 4 D. Louisell & C. Mueller, [*131] Federal Evidence §426,
at 328-29 (1980). We need not deduce the scope of Rule 801(d)(2)(D), however,
because the statements here were admissible under Rule 801(d)(2)(B) as
statements of which the party-opponent "has manifested an adoption or belief in
its [**41] truth." The Justice Department here has, as clearly as possible,
manifested its belief in the substance of the contested documents; it has
submitted them to other federal courts to show the truth of the matter contained
therein. We agree with Justice (then Judge) Stevens that the assertions made by
the government in a formal prosecution (and, by analogy, a formal civil defense)
"establish the position of the United States and not merely the views of its
agents who participate therein." United States v. Powers, 467 F.2d 1089, 1097
n.1 (7th Cir. 1972) (Stevens, J., dissenting). n8 See also United States v.
Blood, 806 F.2d 1218, 1221 (4th Cir. 1986) (statements by government attorney
during voir dire would be binding against the government if they had constituted
a clear and unambiguous admission). The inconsistency of the government's
positions about the Church should have been made known to the jury. n9 The
government cannot indicate to one federal court that certain statements are
trustworthy and accurate, and then argue to a jury in another federal court that
those same assertions are hearsay. See Morgan, 581 F.2d at 937-38 & n.11.Cf.
Powers, 467 F.2d at 1097-98 [**42] (Stevens, J., dissenting).
n8 Although disagreeing with Judge Stevens on the characterization of the
assertions in that case, the majority in Powers suggested that it might have
decided the case differently had there been proof "that the Government, as
opposed to any individual thereof, had taken an inconsistent position earlier."
467 F.2d at 1095.
n9 Indeed, because the prior assertions were made by representatives of the
specific party-opponent (the Justice Department) itself, they might be
admissible as the party's own statements under Rule 801(d)(2)(A).
We could find no indication in the record as to the reasons for the trial
judge's exclusion of the redacted briefs offered by the defendants. They were
not hearsay, for the reasons stated above, and they were certainly material to
the defense, inasmuch as they undercut the government's assertions that the
investigations by the Church at the time in question were legitimate. A
statement by the government that the Fair Game Policy was in effect at the time
of the check scheme investigation would have been highly probative of the nature
of the information sought by the Church; it likely would have completely
undercut the [**43] government's assertion that Shervell was seeking only true
and verifiable information from Kattar. It was therefore error to exclude those
n10 Of course, this sort of party-opponent admission is still subject to the
trial court's balancing of its probative value against its prejudicial effect
under Rule 403. We doubt that such a balancing would have weighed against
admissibility in this case.
Once again, however, Kattar's appeal fails at the threshold of materiality.
Exclusion of the documents would have required reversal of any fraud
convictions, but it had no material effect on the jury's verdict on the
extortion count. Regardless of whether the Fair Game Policy was in effect,
Kattar still threatened the Church officials with physical as well as economic
harm. It is not clear that admission of the Justice Department briefs would have
added anything to the jury's opinion of how violent the Church might be, the
issue upon which appellant relied for his defense. But even if such admission
had revealed that the government believed the Church to be dangerous, this would
still have little bearing on Kattar's impression of the Church, or Kattar's
reasons for making [**44] the threats. For this reason, his appeal must fail
on this ground as well.
Finally, appellant argues that it was error for the trial judge to exclude the
statements of two persons that were to be offered through the testimony of a
private detective. The detective apparently would have testified that these two
persons (both of whom were admittedly unavailable to testify) told her that they
had been paid money by a Church operative (not Shervell) [*132] to provide
false information implicating Flynn in the check fraud. For the same reasons as
those stated above in regard to the government's prior assertions, these
statements also would have been immaterial to the jury's deliberations on the
extortion charge. Even if they had been material, however, the district judge
was well within his discretion in finding insufficient "corroborating
circumstances clearly indicat[ing] the trustworthiness of the statement[s] ."
Fed. R. Evid. 804(b)(3). See United States v. Hemmer, 729 F.2d 10, 16 (1st Cir.
For the foregoing reasons, the judgment of conviction on the extortion count is