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Sole Shareholder's Testimony Against His Corporation May Be Used Against the Corporation
Description Promoter Don King testified in his criminal wire fraud trial, which resulted in mistrial, against his wholly-owned corporation. Appeals court held that King's contention that his statements against his corporation at the first trial could not be used at a second trial against him and his corporation because it would violate the Confrontation Clause was incorrect.
Topic Criminal Law
Key Words Confrontation Clause, Corporations
C A S E   S U M M A R Y
Facts Boxing promoter Don King's trial for criminal wire fraud resulted in a mistrial. The government then brought new criminal wire fraud charges against King and against Don King Productions (DKP), King's wholly-owned corporation. King moved for dismissal, claiming that the Confrontation Clause applied to testimony King gave at the first trial against DKP that the government now wanted to introduce as evidence. District court held that use of the testimony would violate the Confrontation Clause and dismissed the action. The government appealed.
Court of Appeals Decision Reversed. The Confrontation Clause does not apply "to protect a corporation, wholly owned by one individual, from admission of statements of the corporation's sole shareholder, made at that individual's prior trial." The "corporation is the alter ego of its sole shareholder and has no valid complaint that it lacked the opportunity to conduct its own cross-examination of the witness with respect to testimony that was subject to explanation or clarification by the shareholder-witness upon questioning by his counsel at the first trial." The law "that insulates the shareholder from the debts of his corporation does not warrant insulating the corporation under the Confrontation Clause from the evidentiary use against it of the shareholder's statements...."
Citation United States v. King, 134 F.3d 1173 (2nd Cir., 1998)

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