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COURT OF APPEALS DECISION DATED AND RELEASED April 30, 1996 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-2212-CR
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
STATE OF WISCONSIN,
Plaintiff-Respondent,
v.
THOMAS J. PATERS,
Defendant-Appellant.
APPEAL from a judgment
of the circuit court for Brown County:
WILLIAM M. ATKINSON, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
MYSE, J. Thomas J. Paters appeals
a judgment of conviction for eight counts of theft by fraud contrary to §
943.20(1)(d), Stats., and one
count of racketeering contrary to § 946.82(4), Stats.[1] Paters alleges that: (1) the trial court
erred when it admitted summaries of voluminous documents without a proper
foundation; (2) the trial court erred when it admitted the summaries because
they were based in part on oral representations; (3) the admission of the
summaries denied Paters his constitutional right of confrontation; and (4) the
trial court erred in setting restitution because the State presented no
additional evidence at the restitution hearing and the State failed to prove
that each of the alleged victims sustained a loss in the ordered amounts. Because we conclude that the trial court
properly admitted the summaries, the admission of the summaries did not deny
Paters his constitutional right of confrontation and there was sufficient
evidence to support the trial court's restitution order, the judgment of
conviction is affirmed.
Paters and Patrick
LeSage owned and operated an excavation business doing environmental cleanup
called Enex, Inc., also known as Environmental Excavators. Enex submitted bills for soil cleanup to
site owners, who in turn sought reimbursement for the bills from a government
funded program known as the Petroleum Environmental Cleanup Fund Act
(PECFA). Paters allegedly billed for
non-existent work and material, marked up or falsified subcontractor bills and
intentionally contaminated soils to increase job size. Paters was charged with one count of theft
by fraud for each of eight sites as a party to a crime with LeSage. Paters was also charged with one count of
racketeering, alleging the eight theft by fraud counts as predicate acts.
At trial, the court
allowed the State to introduce four types of summaries of voluminous
documents: (1) summaries of Enex's
checking account activity; (2) summaries comparing costs billed to Enex by
three subcontractors with Enex's bills to the landowners for the three
subcontractors' work; (3) summaries comparing costs billed to Enex by twelve
subcontractors with amounts paid by Enex to the twelve subcontractors for work
performed on various projects; and (4) summaries for each job site
comparing costs billed to Enex by the subcontractors with costs ultimately
billed by Enex to the landowners and from the landowners to PECFA. A jury convicted Paters on all eight counts
of theft by fraud and the count of racketeering.
The trial court
sentenced Paters to a total of 180 months in prison for the nine counts and
imposed probation consecutive to the prison term, a condition being the payment
of restitution in the amounts to be determined. The trial court held a restitution hearing approximately 120 days
after sentencing and received no additional evidence at the hearing. The trial court instead relied upon the
evidence received during the trial in making its determination of the amount of
restitution due. The trial court
ordered restitution of $230,096.95 to be paid to PECFA and three banks that
made loans to the property owners.
Paters first contends
that the trial court erred by admitting the summaries. The admission of evidence is addressed to
the sound discretion of the trial court.
State v. Jenkins, 168 Wis.2d 175, 186, 483 N.W.2d 262, 265
(Ct. App. 1992). We will affirm the
trial court's exercise of discretion if it has a reasonable basis and was made
in accordance with accepted legal standards and the facts of record. Id. Where the trial court fails to set forth its reasoning in
exercising its discretion to admit evidence, we "independently review the
record to determine whether it provides a basis for the trial court's exercise
of discretion." State v.
Pharr, 115 Wis.2d 334, 343, 340 N.W.2d 498, 502 (1983).
Paters argues that the
trial court erred by admitting the summaries because the State failed to lay a
foundation sufficient to show that the underlying documents were admissible in
evidence. Section 910.06, Stats., which is identical to Fed. R. Evid. 1006, provides:
Summaries. 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 a reasonable
time and place. The judge may order
that they be produced in court.
Summaries of voluminous
documents may be made only upon original documents that would themselves be admissible. United States v. Johnson, 594
F.2d 1253, 1255 (9th Cir. 1979); see also Tri-Motors Sales, Inc. v. Travelers Indemnity Co.,
19 Wis.2d 99, 107-09, 119 N.W.2d 327, 331-33 (1963). While the underlying documents do not have to be admitted into
evidence, the proponent of the summaries must lay a foundation showing the
underlying documents would be admissible.
Johnson, 594 F.2d at 1255; see also Tri-Motors
Sales, Inc., 19 Wis.2d at 107-09, 119 N.W.2d at 331-33.
We first address the
nature and scope of the objection asserted by Paters before the trial
court. The State argues that Paters'
objections lacked sufficient specificity to advise the trial court of their
true basis and thus were waived. An
objection must be sufficiently specific to apprise the trial court of the basis
of the objection. State v. Peters,
166 Wis.2d 168, 174, 479 N.W.2d 198, 200 (Ct. App. 1991).
The summaries were
submitted in advance of trial and in accordance with the provisions of §
910.06, Stats., and objections to
their admissibility were heard as part of pretrial motions. During those motions Paters objected on the
grounds of authenticity and argued that custodians from each of the individual
subcontractors were required to testify.
In addition, Paters at trial objected on hearsay and confrontation
grounds. We conclude that Paters'
objections were sufficient to raise the questions of authenticity, hearsay and
confrontation to the trial court. See
Peters, 166 Wis.2d at 174, 479 N.W.2d at 200. However, Paters' objections were not
sufficient to raise the more specific and sophisticated hearsay objections that
might be advanced in regard to these exhibits.
For example, it may be argued that the back of the checks containing the
proof of payment by the bank and the various processing information are hearsay
assertions by the bank and, accordingly, inadmissible to prove that the check
was presented for payment. Such an
argument however was not within the scope of the objection asserted by Paters.
Accordingly, we address
Paters' contention that the State failed to authenticate the underlying
documents and therefore failed to meet this requirement of admissibility. The requirement of authenticity is
"satisfied by evidence sufficient to support a finding that the matter in
question is what its proponent claims."
Section 909.01, Stats. The documents in question represent Enex
checks and billing records, subcontractor billing records and bank
records. Thomas J. Fassbender, a
special agent for the Wisconsin Department of Justice, testified that Enex
checks and billing records were seized from LeSage's apartment pursuant to a
search warrant, subcontractor billing records were received from the
subcontractors during the investigation and bank records were obtained by
subpoena from a number of banks. The
checks are self-authenticating under § 909.02(9), Stats., and the bank records were admitted into evidence
without objection. Moreover, Paters
raises no issue that each of the underlying documents are not what they purport
to be, i.e., checks, statements, billing records and bank records. We conclude that the underlying documents
were sufficiently authenticated by Fassbender's testimony identifying their
source and the circumstances by which they came into his possession.
Paters next contends
that the State failed to lay a sufficient foundation showing that the
underlying records meet an exception to the hearsay rule.[2] First, we address whether the checks are
inadmissible hearsay rendering the summaries reflecting data from the checks
inadmissible. The State contends the
checks were seized pursuant to a search warrant during the search of LeSage's
apartment and were written by LeSage in payment for services rendered to Enex
by the named payee on the check. The
State contends that the checks are therefore not hearsay but rather represent
an assertion of a coconspirator during the course and in furtherance of the
conspiracy. See § 908.01(4)(b)5,
Stats.
There was sufficient
evidence for the trial court to conclude that Paters and LeSage were part of a
conspiracy as that term is used in § 908.01(4)(b)5, Stats. See State
v. Whitaker, 167 Wis.2d 247, 262, 481 N.W.2d 649, 655 (Ct. App. 1992)
(requisite "conspiracy" is concerted action and neither party need be
charged with conspiracy). Paters and
LeSage were allegedly engaged in a conspiracy to submit fraudulent bills for
work purported to have been done pursuant to the PECFA program. The checks are written assertions of the
payments made by Enex for particular jobs that were issued in furtherance of
the conspiracy so that inflated bills could be submitted for reimbursement from
the PECFA fund. Accordingly, we
conclude the checks represent admissible nonhearsay evidence of statements of a
coconspirator during the course and in furtherance of a conspiracy under
§ 908.01(4)(b)5, Stats.
We note that an
alternative argument for admissibility can be asserted. A check, like currency, is no more than a
negotiable instrument which when presented and processed results in payment of
the amount indicated to the payee or endorser.
Is such a document an assertion of any fact made by the maker of the
check? If the checks were introduced to
prove a fact other than that the documents themselves were submitted to the
payee, they might run afoul of the hearsay provisions. See § 908.01(3), Stats.
However, it would seem that the checks are making no assertion; each
check is merely evidence of a negotiable instrument in the amount contained
within the check prepared and made payable to the designated payee. In other words, it is proof only of the
existence of the document itself. While
the fact that payment was made as indicated by the information of the
processing on the back of the check may be hearsay, no objection specifically
addressing this issue was made by Paters.
Paters next contends
that the invoices prepared by the subcontractors are inadmissible hearsay. The State argues that the invoices meet the
exception to the hearsay rule for records of regularly conducted activity under
§ 908.03(6), Stats. Section 908.03(6) provides:
Records of Regularly Conducted Activity. A
memorandum, report, record, or data compilation, in any form, of acts, events,
conditions, opinions, or diagnoses, made at or near the time by, or from
information transmitted by, a person with knowledge, all in the course of
regularly conducted activity, as shown by the testimony of the custodian or
other qualified witness, unless the sources of information or other
circumstances indicate lack of trustworthiness.
Fassbender testified
without objection that the invoices were prepared and maintained in the
ordinary course of business by the subcontractors.[3] This unobjected-to testimony is sufficient
to demonstrate several of the foundational requirements for the admission of
records of regularly conducted activity.
We conclude that
Fassbender was a qualified witness to testify regarding the invoices. The term "qualified witness" is
given a broad interpretation by case law.
See 4 Jack B. Weinstein
& Margaret A. Berger, Weinstein's Evidence § 803(6)[2] at 803-197-98
(1994). Paters did not object to
Fassbender testifying that the invoices were prepared and maintained in the
ordinary course of business. From this
testimony and the lack of objection to it, the trial court could reasonably
conclude that Fassbender determined that the invoices were prepared in the
ordinary course of each subcontractors' business. This is sufficient to make a government agent a qualified witness. See United States v. Franco,
874 F.2d 1136, 1140 (7th Cir. 1989).[4]
Section 908.03(6), Stats., also requires that the record
be made from information transmitted by a person with knowledge. The State asserts that because of the nature
of the document this requirement is less compelling. The State argues that Fassbender's testimony that the invoices
were prepared in the ordinary course of business is sufficient to satisfy the
requirement that the invoices be prepared by someone with knowledge of the
specifics reflected in the invoice. We
conclude it is at least a permitted inference that the preparation of invoices
in the ordinary course of business is done by one with knowledge. Therefore, the trial court did not
erroneously exercise its discretion in concluding that this requirement was
met.
Section 908.03(6), Stats., also requires the records be
prepared "at or near the time."
The State asserts that the "at or near the time" requirement
does not apply because the purpose for which these invoices are submitted is
not to prove the nature or extent of the work performed by the
subcontractors. While the State does
not explain how it proposes to write out one of the statutory requirements for
admissibility of records of regularly conducted activity, there is some merit
in the assertion that the timeliness requirement is addressed to the
reliability of the contents of the invoice rather than the creation of the
invoice itself. The "at or near
the time" requirement is met as long as the invoice was reasonably related
in time to the claimed work. The
testimony that the invoices were prepared in the ordinary course of business is
sufficient to satisfy this requirement.
It is reasonable for the trial court to conclude that invoices that are
prepared in the ordinary course of business are made at or near the time of the
claimed work. We therefore conclude
that the State made a sufficient showing that the invoices were admissible as
records of regularly conducted activity.
See United States v. Hayes, 861 F.2d 1225, 1228 (10th Cir.
1988) (proper foundation laid for IRS computer records where IRS employees
testified that the tax records were kept in the ordinary course of business and
that it was the regular practice of the IRS to keep such records).
An alternative analysis
to demonstrate the admissibility of the invoices requires a careful examination
of the limited purpose for which the invoices were introduced. The purpose of the invoices was to show that
the subcontractors submitted bills in a specific amount for work done. The invoice is not submitted as a written
statement that the bill is accurate but is the bill itself. As such it is not offered as a declaration
that that amount was properly due or that the work was properly done, but only
that a demand for a specific amount of money is being made. Examined in this limited way it would appear
that the invoice contains no assertion which the State is attempting to prove
true. The State need show only that the
bill itself was submitted. The invoice
demonstrates only the fact of billing in a specific amount and as such is not
hearsay but admissible nonhearsay documentary evidence. See § 908.01(3), Stats.
Whichever analysis may
be employed, it is clear that invoices submitted for payment by the
subcontractors and checks written by the defendant's business in payment of those
invoices are properly admissible.
Because no more specific objections were asserted by Paters, we have
little difficulty in concluding that the trial court did not erroneously
exercise its discretion by admitting the summaries based upon the State's showing
that the underlying documents were themselves admissible in evidence.
Next, Paters contends
that the summaries are inadmissible because they were based in part on oral
information obtained from subcontractor employees to determine which companies did
work on each job. We reject this
argument. Fassbender did use interviews
to locate the documentation supporting the summaries. However, there is no evidence that the summaries were not
completely based on actual bills, invoices, checks and bank records. The summaries only show costs Fassbender was
able to locate; Fassbender did not claim that the summaries contained all the
costs Enex incurred. Therefore, we
conclude the summaries were not based on inadmissible hearsay; they were based
on the bills, invoices, checks and bank records that were admissible.
Paters next contends
that the admission of the summaries violated his right of confrontation.[5] If the evidence has sufficient guarantees of
reliability to come within a firmly rooted hearsay exception to the hearsay
rule, the confrontation clause is satisfied.
White v. Illinois, 502 U.S. 346, 356 (1992). The exemption for statements made by a
coconspirator is firmly rooted and thus sufficient to satisfy the confrontation
clause. See Bourjaily v. United
States, 483 U.S. 171, 182 (1987); State v. Webster, 156
Wis.2d 510, 517-18, 458 N.W.2d 373, 376 (Ct. App. 1990).
Further, we conclude
that the hearsay exception for records of regularly conducted activity is also
firmly rooted. The hearsay exception
for records of regularly conducted activity under § 908.03(6), Stats., is identical to Fed. R. Evid. 803.06, except
that the federal rule refers to "regularly conducted business
activity" and the exception under § 908.03(6), does not. The federal courts have concluded that Rule 803(6) is a firmly rooted
exception. United States v.
Johnson, 971 F.2d 562, 573 (10th Cir. 1992); United States v.
Jacoby, 955 F.2d 1527, 1538 (11th Cir. 1992). Although the Wisconsin courts have not dealt explicitly with this
issue, we conclude that like the federal rule dealing with regularly conducted
activity, § 908.03(6), Stats.,
is sufficiently firmly rooted to satisfy the confrontation clause. Because the evidence comes within firmly rooted
exceptions to the hearsay rule, we reject Paters' claim that he was denied his
right of confrontation.
Paters' remaining claims
relate to restitution. Restitution is
committed to the sound discretion of the trial court. State v. Boffer, 158 Wis.2d 655, 658, 462 N.W.2d
906, 907-08 (Ct. App. 1990). Section
973.20, Stats., provides in
relevant part:
(1) When imposing sentence or ordering
probation for any crime, the court, in addition to any other penalty authorized
by law, shall order the defendant to make full or partial restitution under
this section to any victim of the crime ... unless the court finds substantial
reason not to do so and states the reason on the record.
....
(13)(a) The court, in determining whether
to order restitution and the amount thereof, shall consider all of the
following:
1. The amount of loss suffered by any victim as a result of the
crime.
2. The financial resources of the defendant.
3. The present and future earning ability of the defendant.
4. The needs and earning ability of the defendant's dependents.
5. Any other factors which the court
deems appropriate.
The victim has the
burden of demonstrating by the preponderance of the evidence the amount of loss
sustained as a result of the crime.
Section 973.20(14)(a), Stats. The defendant has the burden of proving by
the preponderance of the evidence, his or her financial resources, his or her
present and future earning ability and the needs and earning ability of his or
her dependents. The trial court is not bound
by the rules of evidence at the restitution hearing. State v. Stowers, 177 Wis.2d 798, 807, 503 N.W.2d
8, 11 (Ct. App. 1993).
Paters contends that the
victims failed to meet their burden of proof because the State failed to
produce any evidence at the restitution hearing. The State did not provide any additional witnesses at the
hearing, but did provide a restitution summary citing trial exhibits and trial
testimony.[6] The trial court determined that the amount
of fraud for each count was established by the evidence at trial and that the
burden of establishing the amount of loss was met. Paters did not present any testimony or evidence at the hearing
to contradict the proof submitted by the State on behalf of the victims. Paters only claimed that the amount should
be zero because he committed no fraud and stated that he did not concede to the
amounts provided by the State.
We conclude that the
trial court does not have to take additional testimony at the hearing when
there is sufficient evidence from the trial to meet the burden of establishing
the amount of loss, the State provides a summary citing to the evidence at the
trial, and the defendant does not present evidence to contradict the proof
submitted by the State. The trial court
in its discretion may consider evidence received during the trial to determine
the amount of restitution without the evidence being readmitted at the
restitution hearing; there is no reason to require the redundant introduction
of evidence. Accordingly, we conclude
that the trial court did not erroneously exercise its discretion when it did
not hear any additional testimony at the hearing.
Finally, Paters contends
that the State failed to produce evidence that each of the alleged victims
sustained a loss in the ordered amounts.
Paters suggests that the victims were the landowners, not PECFA and the
banks. However, PECFA did reimburse the
landowner fully on two of the sites and thus was the victim. Further, the banks had made bridge loans to
landowners to pay for the work as it progressed. Once paid, the bank and landowner would submit a claim to the PECFA
fund. The banks that had not been
reimbursed also were victims.
Accordingly, we conclude that the trial court did not erroneously
exercise its discretion by awarding restitution to PECFA and the banks.
Because we conclude that
the trial court properly admitted the summaries, the admission of the summaries
did not deny Paters his right of confrontation and there was sufficient
evidence to support the trial court's restitution order, the judgment is
affirmed.
By the Court.—Judgment
affirmed.
Not recommended for
publication in the official reports.
[2] Because the bank records were admitted into evidence without objection, we need not address whether the bank records meet an exception to the hearsay rule.
[3] We note that Fassbender said the invoices from the trucking companies were prepared and maintained in the ordinary course of business, and some subcontractor invoices were from non-trucking companies. However, in the absence of a more specific objection to the non-trucking subcontractor invoices and in view of the apparent general acceptance that all subcontractors were encompassed in Fassbender's response, we will treat the testimony as applicable to all subcontractors.
[4] The amount of proof necessary to demonstrate the foundation of admissibility would seem less stringent than the foundation required to admit the underlying documents themselves. The statutory scheme of advanced notice and an opportunity to pose objections is consistent with a lesser showing than is required in the admission of the documents themselves. Because this issue is not raised by either party, however, we do not address or rely on this theory.