United States v. Stuart

Kathleen Gayle Stuart (defendant) was federally indicted for misapplying funds of a savings-and-loan institution, making false entries in the records of a savings-and-loan institution, and a related conspiracy offense. At Stuart’s trial, John Van de Water testified that Van de Water and Stuart took jobs at separate branches of Gibraltar Savings and Loan Association (Gibraltar) so that they could work together to funnel money from a large bank account. Stuart withdrew funds from the targeted bank account and issued an interbranch cashier’s check to Van de Water for $40,000. Stuart’s attorney cross-examined Van de Water about the plea agreement that Van de Water reached with the government (plaintiff): in exchange for truthful testimony at Stuart’s trial, Van de Water was able to plead guilty to one count of aiding and abetting Stuart’s misapplication of funds. Stuart also presented a Federal Bureau of Investigation (FBI) agent’s testimony to impeach Van de Water’s testimony with a prior inconsistent statement that Van de Water allegedly made. Over Stuart’s objection, the district court then permitted the government to question the FBI agent about statements Van de Water allegedly made in the same interview that were consistent with Van de Water’s trial testimony. The jury convicted Stuart of all three charges. Stuart appealed, arguing in relevant part that the district court had erred by introducing Van de Water’s prior consistent statements.