United States v. Ratliff

PER CURIAM. Malcolm Eugene Ratliff was convicted pursuant to a jury trial in the United States District Court for the Eastern District of Arkansas of five counts of an eight-count indictment. The jury convicted Ratliff of four counts of making false statements to a bank in violation of 18 U.S.C. §1014 (1976) and of one count of conspiracy to make false statements in violation of 18 U.S.C. §371 (1976). Ratliff misrepresented the collateral value and history of pre-World War II German corporate bonds in order to obtain bank loans....

Ratliff challenges the admission into evidence of the expert testimony of a German banker and bond examiner, Mintken, with regard to the value of the bonds. Ratliff claims Mintken's testimony was hearsay, in violation of the best evidence rule and of Ratliff's constitutional right to compulsory process. The District Court fully considered this issue in its post-trial memorandum. The question presented was whether the unavailability of a master list of redeemable bonds,(1)7 compiled by the German government after the war, precluded Mintken's testimony of his valuation of the bonds supplied by Ratliff. The District Court admitted Mintken's testimony, finding:

"The primary factor in this Court's decision to admit Mr. Mintken's testimony despite the absence of the master list is the unique relationship of the list, Mr. Mintken's conclusions regarding potential validity, and the value of the bonds. The issue in the case is the value of the bonds--not their value in some abstract sense, but the value they have in a normal commercial context. It is the Court's perception that the value is determined by Mr. Mintken's conclusions as to underlying validity, not by investigation of the master list or other background records....

"This perception leads the Court to conclude that the relevant inquiry concerning a bond's validity ends with a thorough investigation of Mr. Mintken's conclusion and the processes behind it, which may be accomplished by his cross-examination without production of the master list. In this case, ... the witness who testified to his conclusions was vigorously cross-examined about the background and process behind his conclusions, as well as about the reliability and accuracy of the master list and other records. His testimony regarding background was relevant to the weight and credibility assigned by the jury to his testimony regarding his conclusions, but it did not undermine the admissibility of that testimony...."

We agree with the District Court that Mintken's testimony was not a mere reiteration that Ratliff's bonds were not included on the master list as being valid and outstanding. To the extent that Mintken did testify to the bonds' status on the list, the testimony was admissible under the "catch-all" exception to the hearsay rule. See Fed. R. Evid. 803(24); United States v. Friedman, 593 F.2d 109, 118-19 (9th Cir. 1979). Mintken was subjected to extensive cross-examination, thus satisfying Ratliff's constitutional right of cross-examination.

Ratliff also contends that the District Court erred in not striking Mintken's testimony on the basis that it violated the best evidence rule. See Fed. R. Evid. 1002. Since Mintken did not attempt to "prove the content of a writing [the master list]" the rule does not apply herein. In addition, the District Court found the list to be "unavailable" and "not amenable to court processes in this country."(2)8 The best evidence rule does not apply to the list under these conditions. See Fed. R. Evid. 1004(2).

Affirmed.

1. 7. The bonds were issued and sold prior to the outbreak of World War II. These bonds were due and payable in 1950, but prior to World War II many of the bonds had been purchased by or on behalf of the issuer and held for conservation. During the war, the New York selling agent was precluded from cancelling the German obligations. The German authorities, however, repurchased a considerable amount of the bonds. These uncancelled bonds were stored, among others, in the Reichsbank until they would be redeemed by the issuing corporation. When Berlin was invaded at the end of the war, the Russians plundered the bank, resulting in the recirculation of the bonds. The German government set up an examining system to determine which bonds were valid and redeemable. Only a relative few of the bonds (29 with face value of $29,000) were valid and outstanding obligations as of the date of this trial. The bonds now are redeemable only in Germany. Proof of source, right to possession, and validity must be supplied by those seeking redemption. Mintken is the examiner for the issue of bonds involved in Ratliff's case.

2. 8. On appeal, Ratliff does not challenge this factual finding. He does claim that the court erred in not ruling on whether the list was privileged. Whether the master list was privileged or not is but one possible reason for its unavailability. Ratliff has not demonstrated that it is the only reason. The court, in fact, believed that it had no subpoena power over the documents in Germany. In the absence of such a demonstration, we cannot find the court's finding to be clearly erroneous.