                                                                                                                           Opinions of the United
2001 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


2-21-2001

United States v. Steele
Precedential or Non-Precedential:

Docket 99-3567




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Recommended Citation
"United States v. Steele" (2001). 2001 Decisions. Paper 28.
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Filed February 21, 2001

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-3567

UNITED STATES OF AMERICA

v.

CHARLES E. STEELE,
       Appellant

ON APPEAL FROM THE
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
D.C. Crim. No. 96-cr-67
District Judge: The Honorable Maurice B. Cohill, Jr .

Argued: January 18, 2001

Before: ROTH, BARRY, Cir cuit Judges and
SHADUR,* District Judge

(Opinion Filed: February 21, 2001)

       Thomas W. Patton, Esquire (Argued)
       Office of Federal Public Defender
       113 West 9th Street
       Erie, Pennsylvania 16501

        Attorney for Appellant



_________________________________________________________________
* The Honorable Milton I. Shadur, United States District Judge for the
Northern District of Illinois, sitting by designation.
       Bonnie R. Schlueter, Esquire
        (Argued)
       Assistant United States Attorney
       Office of United States Attorney
       633 United States Post Office
        & Courthouse
       Pittsburgh, Pennsylvania 15219

        Attorneys for Appellees

OPINION OF THE COURT

BARRY, Circuit Judge.

Charles Steele was indicted in April 1996 for mail fraud
stemming from a scheme to overbill his lawfirm's clients
and for obstruction of justice for submitting alter ed
documents in response to a March 15, 1994 grand jury
subpoena. Following an eight-day jury trial, Steele was
found guilty of mail fraud and four of five obstruction
counts. The District Court sentenced Steele to 33 months
imprisonment, three years of supervised r elease, and
restitution. Steele appealed to this Court, and we affirmed
his conviction. United States v. Steele, 135 F.3d 768 (3d
Cir. 1997), reh'g denied, (unpublished 1/7/98), cert.
denied, 118 S. Ct. 2356, reh'g denied , 119 S.Ct. 287
(1998).

On January 13, 1999, Steele filed a motion to vacate his
sentence pursuant to 28 U.S.C. S 2255. He contended that
the evidence supporting the obstruction of justice counts
was insufficient to meet the standard set forth in United
States v. Nelson, 852 F.2d 706 (3d Cir . 1988), and that his
attorney had provided ineffective assistance in not making
an argument based on Nelson at trial. The basis of Steele's
claim was that the government did not pr ove that the
March 15 subpoena had been issued as part of an actual
grand jury investigation. The District Court denied the
motion, holding that the sufficiency of the evidence had
previously been litigated. As to the inef fective assistance
claim, the Court noted that trial counsel had moved to
dismiss the obstruction charge citing, inter alia, Nelson. The

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Court stated that Steele's counsel had raised the issue in a
trial brief, in a Motion for Judgment of Acquittal, before and
at the charge conference, and on appeal.

The District Court denied Steele's request for a certificate
of appealability, but this Court granted the r equest and
certified for appeal two questions: "(1) whether appellant is
entitled to an evidentiary hearing on his section 2255
motion" in light of Nelson's mandate that a defendant "be
afforded an opportunity to question whether the United
States Attorney secured the subpoena in furtherance of a
then present contemplation that the subpoenaed evidence
would be presented to a grand jury," and"(2) if so, and if
the facts in this case ultimately show that the subpoena
was not secured in furtherance of a then pr esent
contemplation that the subpoenaed evidence would be
presented to a grand jury, whether appellant is`actually
innocent' of the four counts of obstruction of justice." App.
III at 731. It is those questions only which we answer.1
Because we conclude that the motion, files, and r ecord of
the case conclusively show that the subpoena at issue was
"secured in furtherance of a then pr esent contemplation
that the subpoenaed evidence would be presented to a
grand jury," Steele is not entitled to an evidentiary hearing
on his S 2255 motion. See United States v. Day, 969 F.2d
39, 41-42 (3d Cir. 1992). We, thus, answer the first
question in the negative and do not reach the second.

A grand jury investigation can be a pending judicial
proceeding for purposes of 18 U.S.C. S 1503, but "[n]ot
every investigation in which grand jury subpoenas ar e used
ripens into a pending grand jury investigation." Nelson, 852
F.2d at 710. As we explained in Nelson , grand jury
subpoenas often are issued by Assistant U.S. Attorneys
_________________________________________________________________

1. The government has argued, among other things, that certification
should not have been granted and that the doctrine of law of the case
prohibits reconsideration of the Nelson issue. Without pausing to decide
whether the government is right or wrong as to one or both of its
arguments, we will move immediately to the certified questions. We note
that in considering these questions, we need not consider whether Steele
raised his specific claim in haec verba at trial or on appeal and, if not,
whether he has shown the cause and prejudice r equired in the
traditional S 2255 case for failing to do so.

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acting under Fed. Rule Crim. Pro. 17(a) without meaningful
judicial oversight. Subpoenas can, therefor e, be used to
facilitate a prosecutor's or other law enfor cement agency's
investigation rather than the grand jury's investigation. Id.
at 710. On the other hand, rigid rules marking the start of
a grand jury investigation "can be easily cir cumvented by
the government and offer the guilty a sanctuary among
empty technicalities." Id. (quotation omitted). Therefore, we
have "counselled a case by case inquiry into whether the
subpoenas were issued in furtherance of an actual grand
jury investigation, i.e., whether they were issued `to secure
a presently contemplated presentation of evidence before
the grand jury.' " Id. (quoting United States v. Walasek, 527
F.2d 676, 678 (3d Cir. 1975)).

By definition, the rejection of rigid rules leaves courts
with a rather vague standard by which to deter mine
whether a grand jury investigation was pending at the
relevant time. At a minimum, S 1503 r equires that a grand
jury be sitting at the time the subpoena issues, although
the mere existence of a potentially unr elated grand jury
sitting in the same district is not enough. United States v.
Davis, 183 F.3d 231, 241 (3d Cir. 1999). No formal act is
required to establish a pending investigation, however.
Walasek, 527 F.2d at 678. Indeed, this Court has rejected
suggestions "that an investigation be deemed pending only
if (1) the grand jury actually hears testimony, (2) the grand
jury plays an active role in the decision to issue the
subpoena, or (3) the grand jury is aware of the subpoena at
the time of the alleged obstruction of justice." Nelson, 852
F.2d at 710 (citations and quotations omitted). "[A]dding
such a gloss to the test laid down in Walasek would
frustrate the purpose of the obstruction of justice statute."
United States v. Simmons, 591 F.2d 206, 209 (3d Cir. 1979).

The evidence before the trial jury showed that Steele
produced documents which were received by the grand jury
and signed for by the grand jury deputy foreperson about
one month after the issuance of the March 15 subpoena.
One of the documents in evidence is the receipt signed by
the deputy foreperson, which states that the grand jury was
empaneled on March 15, 1994, the same date the
subpoena was issued. The subpoena gave Steele's lawfirm

                               4
the option to send a representative to appear personally
before the grand jury to present the r ecords. Steele's
partner, Matthew Hoffman, waived that right in an affidavit
admitted into evidence. Moreover, Julia Rhyner, Steele's
secretary, testified at trial that postal inspectors interviewed
her on February 17, 1994 and advised her that she would
be a "witness" rather than a "defendant," indicating that the
decision to prosecute Steele was contemplated before the
issuance of the grand jury subpoena.

Steele may be correct that none of these facts alone is
enough. However, the facts together show that (1) a grand
jury existed concurrently with the issuance of the subpoena
and either had begun or was prepared to begin an
investigation upon receipt of the evidence; (2) the grand
jury would have been available for Steele, Hof fman or a
representative of the firm to appear before in person had
any of them so desired; (3) the evidence was, in fact, given
to the grand jury and given in a timely fashion; and (4)
there was a then-present contemplation not merely of
presenting the subpoenaed evidence to the grand jury but
of prosecution. This is more than enough to establish that
the subpoena was issued as part of a grand jury
investigation and is at least as much as was found
sufficient in Nelson. Indeed, in Nelson, the subpoenaed
evidence was not received by the grand jury for months, yet
we held that "we cannot say that the subpoenas could not
have been issued in furtherance of a present contemplation
to present evidence to a grand jury." Nelson, 852 F.2d at
711.

One final note. To the extent Steele ar gues that Nelson
stands for the proposition that every obstruction case
requires testimony from the attor ney who issued the first
subpoena, he is incorrect. Nelson actually states that:

       A party on trial for obstruction of a grand jury
       investigation alleged to have begun upon the issuance
       of a grand jury subpoena must be affor ded an
       opportunity to question whether the United States
       Attorney or his or her representative secured the
       subpoena in furtherance of a then present
       contemplation that the subpoenaed evidence would be
       presented to a grand jury.

                                5
Id. (emphasis added). Read in context, this passage from
Nelson merely reiterates our r eluctance to establish some
technicality as proof of the existence of a pending
proceeding. We specified that a defendant must be allowed
to question "whether" the Assistant U.S. Attor ney
contemplated presentation to a grand jury, not that the
defendant must be able to actually question the Assistant
himself or herself.

Given that we find, as a matter of law, that the evidence
warrants rejection of Steele's Nelson claim, we also reject
his suggestion that the jury instructions for eclosed inquiry
into whether the government met its Nelson burden. We
find, in any event, that they did no such thing.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

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