CHARLES J. BAZARIAN, PETITIONER V. UNITED STATES OF AMERICA

   No. 88-2134

   In the Supreme Court of the United States

   October Term, 1989

   On Petition for a Writ of Certiorari to the United States Court of
Appeals for the Eleventh Circuit

   Brief for the United States in Opposition

            TABLE OF CONTENTS
   Opinion below
   Jurisdiction
   Statement
   Argument
   Conclusion

                             OPINION BELOW

   The opinion of the court of appeals (Pet. App. 1a-22a) is reported
at 871 F.2d 957.

                             JURISDICTION

   The judgment of the court of appeals (Pet. App. 23a-24a) was
entered on April 27, 1989.  The petition for a writ of certiorari was
filed on June 26, 1989.  The jurisdiction of this Court is invoked
under 28 U.S.C 1254(1).

                          QUESTIONS PRESENTED

   1. Whether the district court's delivery of a supplemental jury
instruction outside of petitioner's presence was harmless error.

   2. Whether the court should have required the jury to return a
special verdict.

   3. Whether the evidence was sufficient to support petitioner's
conviction.

                               STATEMENT

   Following a jury trial in the United States District Court for the
Middle District of Florida, petitioner was convicted of bank fraud, in
violation of 18 U.S.C. 1344 (Supp. V 1987);  misapplication of bank
funds, in violation of 18 U.S.C. 656;  and conspiracy to defraud a
federally insured bank, in violation of 18 U.S.C. 371.  He was
sentenced to concurrent terms of two years' imprisonment on each
count, and he was fined $100,000 on the conspiracy count.  The court
of appeals affirmed.

   1. The evidence at trial showed that Michael Rapp devised a scheme
to defraud Florida Center Bank (FCB) in Orlando of millions of dollars
through a loan and a stock purchase.  Rapp's involvement in the
transactions could not be revealed to federal regulators because he
had a felony conviction for securities fraud.  He therefore hired two
men, Clyde Pitchford and Hugh Wiley, to purchase the bank's stock on
his behalf.  To finance the purchase, Rapp applied for a $30 million
interest-free loan from FCB.  The nominal borrower was Pace-Com, a
fledgling corporation with virtually no assets, a poor credit history,
and a straw president, co-defendant Michael Smith.  /1/ John Bodziak,
yet another of Rapp's co-conspirators, was the Chairman of the Board
at FCB.  He obtained the board's approval for the Pace-Com loan and
for the stock purchase.  The loan was to be secured by 10-year
certificates of deposit purchased from the bank.  FCB agreed to prepay
the interest on the certificates.  Gov't C.A. Br. 3-4, 22.

   Petitioner agreed to assist Rapp in purchasing the certificates of
deposit needed to set Rapp's scheme in motion.  Two days before the
Pace-Com loan closing date, Rapp, Smith, and Pitchford met with
petitioner in his house in Oklahoma.  Petitioner introduced Rapp to
co-conspirator Mario Renda, a money broker, and Ed Mittlestet, the
President of an Oklahoma savings and loan.  /2/ Rapp explained that he
wanted to borrow $20 million for one day, and he promised to pay
petitioner $300,000 for arranging the loan.  After petitioner and
Renda asked many questions about the details of Rapp's plan, Rapp
assured petitioner that the money would never leave his hands.
According to Rapp's plan, petitioner agreed to provide cashiers checks
that would not be cashed by FCB until the proceeds of the Pace-Com
loan had been wired from the Florida bank to petitioner's account at
Mittlestet's savings and loan in Oklahoma.  Gov't C.A. Br. 19.

   At petitioner's direction, Mittlestet prepared two $5 million
cashiers checks drawn on petitioner's account, which at the time
contained only $23,000.  Petitioner ordered Mittlestet not to release
the checks to Rapp and his associates in Florida until FCB wired $10.3
million into petitioner's account.  Mittlestet and Renda then flew to
Florida with the checks.  At the loan closing, Renda gave the checks
to Bodziak.  Bodziak used one of the checks to purchase a $5 million
certificate of deposit on Pace-Com's behalf.  FCB prepaid the interest
on the certificate and deposited it in Pace-Com's account.  Pursuant
to Rapp's agreement with petitioner, however, Bodziak did not cash the
$5 million check that he used to purchase the certificate.  Gov't C.A.
Br. 20-26.

   Using the $5 million certificate of deposit as collateral, Pace-Com
drew $5 million on its loan.  The loan proceeds and the prepaid
interest on the certificate totaled $6,781,484.81.  The bank deposited
that sum in Pace-Com's account.  Pace-Com then repeated the
transaction, withdrawing $5 million from the account to purchase
another certificate of deposit, drawing another $5 million on its
loan, and depositing both the loan proceeds and the prepaid interest
in its account, which already contained the $1.78 million profit from
the first transaction.  Thus, at the end of the second transaction,
Pace-Com had $8,581,618.31 in its account.  The transaction was
repeated again bringing the total in Pace-Com's account to
$10,341,751.81.  Although the circular transaction could have been
repeated three more times until Pace-Com had drawn the full $30
million, the parties stopped after three draws and moved on to the
stock purchase.  Gov't C.A. Br. 22-24.

   Pitchford and Wiley used the second $5 million cashiers check
provided by petitioner to execute the stock purchase.  Thereafter, FCB
wired $10.3 million from Pace-Com's account to petitioner's account in
Oklahoma.  After the money was received in Oklahoma, Bodziak cashed
the two $5 million cashiers checks, leaving the $300,000 fee in
petitioner's account.  Petitioner paid Renda $100,000.  In short,
petitioner netted $200,000 for letting Rapp use two pieces of paper --
unfunded $5 million cashiers checks -- to execute his scheme to
defraud Florida Center Bank of millions of dollars.  Gov't C.A. Br.
25-26.

   Shortly after Rapp's scheme was completed, FCB failed, and the
Federal Deposit Insurance Corporation assumed its liabilities.  Gov't
C.A. Br. 27.

   2. After five days of deliberations, the jury sent the court a note
stating that it had reached a verdict as to two defendants, but that
it could not reach a unanimous verdict as to petitioner and Renda.
/3/ The jury then asked, "What should we do from here?" Without
consulting either the government or defense counsel, the court
assembled the jury and delivered a modified Allen charge.  /4/ None of
the parties were present.  Thereafter, petitioner was given a copy of
the supplemental instruction and he requested a mistrial.  While the
jury was still deliberating, the court ruled that it would have given
the instruction even if it had first consulted counsel, and that it
would not have granted, nor would it now grant, a mistrial.  The court
refused petitioner's request to remind the jury yet a third time of
its duty to agree unanimously on the object of the conspiracy.  Gov't
C.A. Br. 68-72.

   3. The court of appeals affirmed.  The court rejected petitioner's
claim that the evidence was insufficient to show that he had knowlege
of the fraudulent objective of the conspiracy -- "to defraud FCB and
misapply its funds by covertly pledging as security for the Pace-Com
loan certificates of deposit purchased with proceeds of the loan,
thereby leaving FCB in an essentially unsecured position with respect
to the loan." Pet. App. 13a.  Pitchford had testified that Rapp's
scheme of borrowing money against certificates of deposit was fully
explained to petitioner, and that Rapp also assured petitioner that
his cashiers checks, which would be used to purchase the certificates
of deposit, would not be cashed until the loan proceeds were wired
into petitioner's account.  Petitioner therefore knew that his
cashiers checks would be used to defraud FCB into providing
essentially an unsecured, multi-million dollar loan to Pace-Com. Pet.
App. 14a.  The court further held that petitioner did not have to know
about the stock purchase in order to be convicted on the conspiracy
count.  Ibid.

   The court of appeals agreed with petitioner that the district court
erred when it delivered an Allen charge without first consulting
counsel and without permitting petitioner or his counsel an
opportunity to be present when the supplemental instruction was given.
 The court also assumed without deciding that the error was of
constitutional dimension.  Pet. App. 16a-17a & n.15.  Nevertheless,
the court found that the error was harmless.  Id. at 17a-20a.  The
court observed that petitioner did not dispute that the instruction
was responsive to the jury's note and that it correctly stated the
law.  The court rejected petitioner's argument that he was prejudiced
because he was not afforded an opportunity to persuade the district
court to declare a mistrial instead of sending the jury back for
further deliberations.  The court of appeals noted that the district
court had considered and rejected petitioner's plea for a mistrial
after delivering the Allen charge but before the jury reached a
verdict.  The court of appeals also held that petitioner was not
prejudiced by the district court's failure to remind the jury once
again of its duty to agree unanimously on which object of the
conspiracy petitioner conspired to commit.  Pet. App. 19a.  And
finally, the court refused to entertain petitioner's untimely argument
that the Allen charge may have misled the jury into believing that if
it failed to reach a verdict as to any one defendant, a mistrial would
be declared as to all defendants.  Pet. App. 20a.

                                ARGUMEN

   1. We do not dispute that the district court violated Rule 43 of
the Federal Rules of Criminal Procedure when it delivered the modified
Allen charge outside of petitioner's presence.  /5/ That error,
however, was clearly harmless, as the court of appeals held.
Petitioner does not point to any prejudice that he suffered as a
result of the modified Allen charge, nor can he.  He does not contest
the form or the content of the Allen charge given by the district
court, which was balanced and not unduly coercive.  See Lowenfield v.
Phelps, 108 S. Ct. 546, 649-552 (1988) (approving the giving of a
modified Allen charge).  And he had no right to a mistrial when the
jury announced that it could not reach a verdict.  This was the first
time during five days of deliberation that the jury stated that it was
unable to agree as to any defendant.  /6/ Certainly, the decision to
send the jury back for further deliberations was not an abuse of
discretion.  See Lowenfield v. Phelps, supra.  Unable to show
prejudice, petitioner argues instead (1) that the harmless error rule
does not apply to the error at issue here, and (2) that in any case
prejudice is not a prerequisite to reversal.  Neither of these
arguments has merit.

   It is well settled that harmless error analysis applies where a
trial judge communicates with the jury ex parte, in violation of Fed.
R. Crim. P. 43.  See, e.g., Rushen v. Spain, 464 U.S. 114, 119-120
(1983);  Rogers v. United States, 422 U.S. 35, 38-40 (1975);  United
States v. Watchmaker, 761 F.2d 1459, 1465-1466 (11th Cir. 1985), cert.
denied, 474 U.S. 1100 (1986) (failure to contact defense counsel
before instructing the jury to resume deliberations and to try to
reach a verdict was harmless error);  United States v. Breedlove, 576
F.2d 57, 59-60 (5th Cir. 1978) (failure to consult counsel is harmless
"when the Judge's answer to the jury's inquiry was distinctly
responsive to the question, it clearly stated the law, and no
prejudice is shown").

   Petitioner argues (Pet. 14) that in Rushen v. Spain, supra, this
Court warned that giving additional instructions to a jury in the
absence of the defendant and his counsel can never be harmless error.
Petitioner relies not on any holding of the Court, but on the Court's
parenthetical description of a prior case, Rogers v. United States,
supra.  The Court in Rushen characterized the holding of Rogers as
follows:  "although violations of Federal Rule of Criminal Procedure
43 may be harmless error, additional instructions from judge to jury,
without notification to defendant or his counsel, is not." Rushen v.
Spain, 464 U.S. at 119 n.4.  The language from Rushen does not support
petitioner's point.  It simply notes that the conduct in Rogers was
held not to be harmless error;  it does not suggest that Rogers should
be read to hold that giving an ex parte instruction to a jury can
never be harmless error, no matter how clearly correct or how
innocuous the instruction may have been.  Nor does Rogers itself stand
for any such broad principle of per se reversal.  In Rogers, the Court
acknowledged that ex parte communications may be harmless, but it held
that in the circumstances of that case, where the supplemental
instruction was misleading, reversible error had occurred.  422 U.S.
at 40.  Nothing in Rogers precludes application of the harmless error
rule where, as here, a correct supplemental instruction is given.

   This Court has repeatedly held that convictions are not set aside
for error, whether constitutional or otherwise, /7/ in the absence of
prejudice.  United States v. Hasting, 461 U.S. 499, 508-509 (1983);
Rose v. Clark, 478 U.S. 570, 579-582 (1986).  Nor does petitioner's
claim gain added force from his effort to characterize the error in
this case as a violation of the Sixth Amendment right to counsel.
Nonprejudicial restrictions on the right to counsel are usually
harmless.  See, e.g., Satterwhite v. Texas, 108 S.Ct. 1792, 1797-1798
(1988);  Strickland v. Washington, 466 U.S. 668, 691-696 (1984);
United States v. Morrison, 449 U.S. 361, 364-365 (1981);  Moore v.
Illinois, 434 U.S. 220, 232 (1977);  Milton v. Wainwright, 407 U.S.
371, 372-373 (1972);  Snyder v. Massachusetts, 291 U.S. 97, 114-118
(1934).  Only a complete deprivation of counsel or a Sixth Amendment
violation that pervades the entire proceeding is reversible error per
se.  See, e.g., Holloway v. Arkansas, 435 U.S. 475 (1978);  Gideon v.
Wainwright, 372 U.S. 335 (1963).  In this case, there was no pervasive
deprivation of counsel.  Rather, counsel's absence when the modified
Allen charge was given was but a "short interlude in a complex trial."
United States v. Gagnon, 470 U.S. 522, 527 (1985).  Consequently, the
absence of concrete prejudice is fatal to petitioner's claim.  /8/

   Finally, United States v. Ronder, 639 F.2d 931 (2d Cir. 1981), does
not conflict with the decision below, as petitioner suggests (Pet.
19-20).  In Ronder, the trial court twice gave unduly coercive Allen
charges without consulting counsel.  Calling the question "close," the
court of appeals reversed Ronder's conviction because the instructions
were both flawed and unresponsive to the jury's questions.  Id. at
934.  Significantly, the court applied harmless error analysis in
reaching that result.  Accordingly, Ronder is not at odds with this
case, where a correct instruction was given that appropriately
responded to the jury's announcement that it was deadlocked.

   2. Petitioner contends (Pet. 21-27) that the district court should
have required the jury to return a special verdict identifying which
object of the conspiracy he had conspired to commit.  But special
verdicts have long been disfavored in criminal trials.  United States
v. Dennis, 786 F.2d 1029, 1041 (11th Cir. 1986), cert. denied, 481
U.S. 1037 (1987);  United States v. Pforzheimer, 826 F.2d 200, 205 (2d
Cir. 1987);  United States v. Frezzo Brothers, Inc., 602 F.2d 1123,
1129 (3d Cir. 1979), cert. denied, 444 U.S. 1074 (1980);  United
States v. Spock, 416 F.2d 165, 180-183 (1st Cir. 1969).  Indeed,
petitioner cites no case reversing a conviction for the failure to use
a special verdict form.  /9/ In the absence of a conflict, further
review of this claim is not warranted.  In any event, the district
court adequately protected petitioner's right to a unanimous verdict
by twice instructing the jury that it "must unanimously agree upon
which of the various offenses the defendant conspired to commit."
Gov't C.A. Br. 73.  A special verdict would not have protected
petitioner further.  /10/

   3. Petitioner's fact-bound sufficiency claim (Pet. 27-30) was
properly rejected by both courts below.  The government's proof
unequivocally established that petitioner agreed to provide Rapp with
two unfunded $5 million cashiers checks so that Rapp could implement
his scheme to defraud FCB of millions of dollars.  Prior to joining
the conspiracy, petitioner and Renda questioned Rapp extensively about
the details of the scheme.  Gov't C.A. Br. 46-47.  Furthermore,
petitioner admonished Mittlestet not to hand over the unfunded checks
until FCB wired $10.3 million into his Oklahoma account.  Id. at 47.
Accordingly, petitioner knew that to earn his $300,000 fee, he did not
have to lend any money, but only had to appear to be lending money.
In these circumstances, petitioner plainly understood that the
Pace-Com loan was fraudulent.

                              CONCLUSION

   The petition for a writ of certiorari should be denied.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   EDWARD S.G. DENNIS, JR.

      Assistant Attorney General

   PATTY MERKAMP STEMLER

      Attorney

SEPTEMBER 1989

   /1/ In lieu of interest, the bank agreed to accept a portion of
Pace-Com's profits, if any.  Since Pace-Com was a shell corporation,
however, there was no prospect of future profits.  Also, the loan
could not be called into default for ten years, and Pace-Com was not
obligated to pay back any of the principal until that time.  In short,
the bank was certain to lose money on this high-risk, interest-free
loan. Gov't C.A. Br. 22, 24.

   /2/ Rapp, Bodziak, Smith, and Renda were tried together with
petitioner and were each convicted of conspiracy and related charges.
Wiley was acquitted on all counts.  Pitchford pleaded guilty to some
of the charges.  Mittlestet was not indicted for his role in the
scheme.

   /3/ The jury had already rendered guilty verdicts against Smith and
Rapp.  The jury indicated in its note that it had now reached a
verdict as to Bodziak (guilty as to all but one count) and Wiley (not
guilty), but that it could not agree as to petitioner and Renda.

   /4/ See Allen v. United States, 164 U.S. 492 (1896).  The court
instructed the jury (Gov't C.A. Br. 69 n.25):

         I am going to read one additional instruction at this time.
      Members of the jury, I am going to ask you to continue your
      deliberations in an effort to reach an agreement upon a verdict
      and 000000  dispose of the issues that have not already been
      resolved in this case.  I have a few additional comments that I
      would like for you to consider.  This is an important case.  The
      trial has been extensive in time, effort, money and emotions,
      and strain both to the defense and the prosecution.  If you
      should fail to agree upon a verdict, the case will be left open
      and may have to be tried all over again.  Obviously another
      trial would only serve to increase the costs to both sides.
      There is no reason to believe that this case can be tried again
      by either side any better or more exhaustively than has been
      tried before you.  Any future jury must be selected in the same
      manner and from the same source as you were chosen.  There is no
      reason to believe that the case could ever be submitted to
      twelve men and women who are more conscientious, more capable,
      or more competent to decide it, or more clearer evidence could
      be produced.  If a substantial majority of your number are in
      favor of a conviction, those of you who disagree should
      reconsider whether your doubt is a reasonable one since it
      appears to make no effective impression upon the minds of the
      others.  On the other hand, if a majority or even a lesser
      number of you are in favor of acquittal, the rest of you should
      ask yourself again and most thoughtfully whether you should
      accept the weight and sufficiency of the evidence which fails to
      convince your fellow jurors beyond a reasonable doubt.  Remember
      at all times that no juror is expected to give up an honest
      belief he may have as to the weight or effect of the evidence.
      But after full deliberation and consideration of the evidence in
      the case, it is your duty to agree upon a verdict if you can do
      so.  You must also remember that if the evidence in the case
      fails to establish guilt beyond a reasonable doubt, the
      defendant should have your unanimous verdict of not guilty.  You
      may be as leisurely in your deliberations as the occasion may
      require and should take all the time which you feel is
      necessary.  I will ask you now to retire again and continue your
      deliberations with these additional comments in mind to be
      applied, of course, in conjunction with all of the other
      instructions that I have previously given you.  If you again go
      back and are not able to agree, let me know and I will declare a
      mistrial.

   /5/ Rule 43 provides that the "defendant shall be present * * * at
every stage of the trial including the impaneling of the jury and the
return of the verdict * * *."

   /6/ Contrary to petitioner's unsubstantiated assertion (see Pet.
17-19), the jury had not previously announced that it was unable to
reach a verdict as to any defendant.  See 8 R.A. Doc. Nos. 397, 398,
399, 401, 407.  Rather, on one occasion the jury asked, "if we can't
come to unanimous agreement on the various offenses listed under (the
conspiracy count), shall we give a verdict of not guilty as suggested
(in the jury instructions)." 8 R.A. Doc. No. 401.  This hypothetical
question, which the court answered in part by repeating the unanimity
instruction, does not give rise the inference that the jury was then
deadlocked.

   /7/ This case does not present the question whether constitutional
error occurred because even if the test for constitutional harmless
error is used, petitioner cannot prevail.  Nevertheless, we submit
that the error in this case did not constitute a violation of the
right either to counsel or to due process.  See United States v.
Gagnon, 470 U.S. 522, 526 (1985) (the mere occurrence of an ex parte
communication between the court and the jury does not give rise to a
constitutional violation);  Rushen v. Spain, supra, 464 U.S. at
117-118 n.2;  id. at 125-126 (Stevens, J., concurring);  Snyder v.
Massachusetts, 291 U.S. 97, 107-108 (1934) ("the presence of a
defendant is a condition of due process to the extent that a fair and
just hearing would be thwarted by his absence, and to that extent
only").  Petitioner and his counsel were given a copy of the
instruction after it was delivered and were given an opportunity to
suggest changes and to seek a mistrial before the jury returned its
verdict.  The constitutional standards were therefore satisfied.

   /8/ Nor can prejudice be assumed, as petitioner suggests, simply
because the trial judge may have committed similar error in unrelated
cases.  United States v. Payner, 447 U.S. 727 (1980) (remedies cannot
be imposed to vindicate violations suffered by others).

   /9/ Special verdicts were not at issue in United States v. Beros,
833 F.2d 455 (3d Cir. 1987), on which petititioner relies.  Nor does
that case support petitioner's claim that the unanimity instruction
given in this case was defective.  In Beros, the court held that the
instructions were unclear because they stated that the jury must be
unanimous with regard to the "method, mode, or manner" employed by the
defendants to execute their fraudulent scheme, instead of informing
the jury that it must be unanimous with regard to a particular act.
The wording that troubled the Third Circuit was not used in the
instant case.  Beros therefore does not help petitioner.

   /10/ Petitioner's additional claim (Pet. 26) that the modified
Allen charge deprived him of the possibility of a hung jury if
unanimity were not achieved is refuted by the record.  The district
court concluded its supplemental charge by reminding the jury that it
was not required to reach a verdict:  "If you again go back and are
not able to agree, let me know and I will declare a mistrial." See p.
6, note 5, supra.