Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-94-01320/USCOURTS-ca10-94-01320-0/pdf.json

Parties Involved:
United States of America
Appellee
John A. Voss
Appellant

Document Text:

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UNITED 

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STATES COURT OF APPEALS y 0 2 l q 

TENTH CIRCUIT P.ttp~ '996 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

JOHN A. VOSS, 

Defendant-Appellant. 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

MITCHELL S. BEALS, 

Defendant-Appellant. 

UNITED STATES OF AMERICA, 

Plaintiff-Appellee, 

v. 

BRENT L. BEALS, 

Defendant-Appellant. 

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No. 94-1320 

No. 94-1321 

No. 94-1322 

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Appellate Case: 94-1320 Document: 01019276545 Date Filed: 05/02/1996 Page: 1 
APPEALS FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLORADO 

(D.C. Nos. 93-CR-163-1, 93-CR-163-2, and 93-CR-163-3) 

William A. Cohan, Encinitas, California for the DefendantAppellant John A. Voss and Defendant-Appellant Brent L. 

Beals. 

Warren R. Williamson, Assistant Federal Public Defender 

(Michael G. Katz, Federal Public Defender, with him on the 

briefs), Denver, Colorado for Defendant-Appellant Mitchell 

Beals. 

James C. Murphy, Assistant U.S. Attorney (Henry L. Solano, 

U.S. Attorney with him on the briefs), Denver, Colorado for 

Plaintiff-Appellee United States of America. 

Before TACHA, BRORBY, and HENRY, Circuit Judges. 

HENRY, Circuit Judge. 

The defendants John A. Voss, Mitchell S. Beals, and 

Brent L. Beals appeal their jury convictions and sentences 

for criminal contempt under 18 U.S.C. § 401(3). They argue 

that the evidence presented at trial was insufficient to 

support their convictions, that the district court applied 

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the wrong provision of the United States Sentencing 

Guidelines when calculating their sentences, and that the 

court improperly increased their offense levels for 

substantial interference with the administration of justice. 

Additionally, John Voss and Brent Beals argue that the 

district court erred by refusing to submit a number of their 

proposed instructions to the jury. We have jurisdiction 

pursuant to 28 U.S.C. § 1291, and we affirm the district 

_court's judgment in all respects. 

I. BACKGROUND 

The defendants are members of a group called the 

National Commodity and Barter Association {NCBA) . The 

defendants describe the NCBA as "a political/educational 

association espousing dissident views regarding the federal 

reserve and the income tax systems and advocat[ing] the 

return to currency backed by gold and/or silver." Br. of 

Aplts. John Voss and Brent Beals at 4. Between 1985 and 

1990, the NCBA operated the National Commodities Exchange 

{NCE), which was a private banking operation that provided 

financial services to NCBA members. 

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John Voss testified at trial that he has been the 

director of the NCBA since 1986. Mitchell Beals testified 

that he had headed the NCE from late 1985 to mid-1988, and 

that his brother, Brent Beals, had operated the NCE from 

mid-1988 until the NCE closed in 1990. Mitchell Beals also 

testified that he created the Mutual Assistance Plan (MAP) 

in 1984. The MAP is a legal defense fund supported wholly 

from NCBA member contributions. Mitchell Beals testified at 

trial that he had invited Brent Beals to take over the 

operations of the NCE in 1988 so that he could "turn [his] 

focus back" to running the MAP program. Rec. val. XII at 

1407. 

In July of 1990, a federal grand jury that had been 

investigating the NCBA and the NCE issued two subpoenas 

requiring production of the business and.financial records 

of the organizations: the first was addressed to "Custodian 

of Records" for the NCBA; ~ Aplee. Addendum doc. 1; the 

second was addressed to "Custodian of Records" for the NCE; 

~~doc. 2. Both subpoenas specifically included 

"[d]ocuments relating to the Mutual Assistance Program." 

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~doc. 1 attach., doc. 2 attach. The subpoenas were 

served upon an attorney for the two organizations. 

The NCBA and the NCE thereafter filed a petition to 

quash the subpoenas. The district court held a hearing on 

the petition, and the district court's minutes reflect that 

John Voss and Mitchell Beals appeared on behalf of the 

petitioners. 1 The district court denied the petition and 

entered an order stating that the "petitioners are DIRECTED 

to comply with [the] subpoenas . . . forthwith. " Apl t. 

Brent Beals's Addendum at 4. The organizations then moved 

the court to stay compliance with the subpoenas pending the 

resolution of their appeal. The district court denied the 

motion to stay and entered a second order, this time 

directing the organizations to comply with the subpoenas by 

December 10, 1990. ~~at 6-7. Both organizations 

refused to comply. 

In April of 1991, the district court held the 

Although Mitchell Beals concedes that he attended the hearing, he argues 

that he did not appear on behalf of the petitioners. However, the district 

court minutes read as follows: "Introduction of counsel and parties: Paul 

Carter, John Voss, John Pleasant and Mitchell Beals for petitioner/plaintiff." 

Aplt. Brent Beals's Addendum at 10. 

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organizations in civil contempt and imposed a fine of fifty 

dollars for each day of noncompliance with the court's 

order. Both the contempt citation and the fine were 

affirmed by this court on appeal, ~ National Commodity & 

Barter Ass'n y. United States, 972 F.2d 356 (lOth Cir. 

1992}, and the Supreme Court denied certiorari,~ 113 S. 

Ct. 1413 (1993}. 

In 1993, two new subpoenas were issued by a new grand 

jury. These were also addressed to the "Custodian of 

Records" for each organization, but this time they were 

personally served upon Mr. Voss. ~ Aplee. Addendum doc. 

9, doc. 10. The district court subsequently entered another 

order directing the NCBA and the NCE to comply with the 

subpoenas. The organizations still failed to comply. 

The grand jury thereafter returned indictments against 

the defendants for criminal contempt in violation of 18 

U.S.C. § 401(3}, for conspiring to defraud the United States 

government by impairing and impeding the Internal Revenue 

Service (IRS} in its duties in violation of 18 U.S.C. § 371, 

and for structuring financial transactions to evade currency 

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transaction reporting requirements in violation of 31 U.S.C. 

§§ 5322(a), 5324(3) and 18 U.S.C. § 2. After a jury trial, 

the defendants were acquitted on all but the criminal 

contempt charges. The defendants then moved for judgments 

of acquittal, arguing that the evidence was insufficient to 

support the jury's verdict on the contempt charges. These 

motions were denied. The defendants were ultimately 

sentenced to terms ranging from twelve to twenty-four 

months' imprisonment. They now appeal. 

II. DISCUSSION 

A. Sufficiency of the Evidence 

The defendants first argue that the evidence presented 

at trial was insufficient to support their contempt 

convictions. In making this argument, the defendants are 

faced with a high hurdle: in reviewing the sufficiency of 

the evidence to support a jury verdict, this court must 

review the record de novo "and ask only whether, taking the 

evidence--'both direct and circumstantial, together with the 

reasonable inferences to be drawn therefrom'--in the light 

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most favorable to the government, a reasonable jury could 

find the defendant guilty beyond a reasonable doubt." 

united States y. Urena, 27 F.3d 1487, 1489 (lOth Cir.) 

(quoting United States y. Hooks, 780 F.2d 1526, 1531 (lOth 

Cir.), cert. denied, 475 U.S. 1128 (1986)), cert. denied, 

115 S. Ct. 455 (1994). 

Federal courts are authorized by statute to punish 

contempt: "A court of the United States shall have power to 

punish by fine or imprisonment, at its discretion, such 

contempt of its authority and none other, as ... 

[d]isobedience or resistance to its lawful writ, process, 

order, rule, decree, or command." 18 U.S.C. § 401(3). The 

defendants contend that under this statute, a court's order 

must be sufficiently specific to put the defendants on 

notice that they are personally required- to comply. They 

maintain that the evidence at trial failed to show that the 

district court's order in this case was adequate to put them 

on notice that they were personally required to produce the 

subpoenaed documents on behalf of the NCBA and the NCE. 

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1. Notice to Individual Defendants 

Although this circuit has not dispositively addressed 

this issue, several other circuits have recognized a notice 

requirement under § 401(3). Almost all of those circuits 

have agreed that one may be held in contempt only if the 

court's order is sufficiently specific so as to put the 

alleged contemnor on notice. See. e.g., Hazen y. Reagen, 16 

F.3d 921, 924 (8th Cir. 1994) ("Before a party can be held 

in contempt for violating a court order, he must have actual 

knowledge of the order and the order must be 'sufficiently 

specific to be enforceable.'" (quoting Finney y. Arkansas 

Bd. of Correction, 505 F.2d 194, 213 (8th Cir. 1974))); 

Cooper y. Texaco. Inc., 961 F.2d 71, 72 n.3 (5th Cir. 1992) 

("There are three elements to contempt under 18 U.S.C. § 

401(3): (1) a reasonably specific order~ (2) violation of 

the order, and (3) the willful intent to violate the order." 

(citing United States v. Burstyn, 878 F.2d 1322, 1324 (11th 

Cir. 1989))); United States v. Powers, 629 F.2d 619, 627 

(9th Cir. 1980) ("Criminal contempt is established when 

there is a clear and definite order of the court, the 

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contemnor knows of the order, and the contemnor willfully 

disobeys the order."); In re Rubin, 378 F.2d 104, 108 (3d 

Cir. 1967) ("[T]he alleged contemnor [must have] had 

knowledge of the order which he is said to have violated[,]" 

and the order "must be specific and definite." (citing 

Wilson y. North Carolina, 169 U.S. 586, 600 (1898)); 

Terminal R.R. Ass'n v. United States, 266 U.S. 17, 29 

(1924))); ~Project B.A.S.I.C. y. Kemp, 947 F.2d 11, 16 

(1st Cir. 1991) (noting that a court order must be "clear 

and unambiguous," and that any ambiguities must be construed 

in a light favorable to those charged with contempt) . 

In arguing that the subject subpoenas and court orders 

were sufficiently specific, the government relies primarily 

on Wilson y. United States, 221 U.S. 361 (1911); Nilya y. 

United States, 352 U.S. 385 (1957); and general principles 

regarding the responsibility of officers and agents to 

respond to subpoenas directed to corporate entities. In 

Wilson, the Court noted that "[a] command to the corporation 

is in effect a command to those who are officially 

responsible for the conduct of its affairs. If they, 

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apprised of [the subpoena] , prevent compliance or fail to 

take appropriate action within their power for the 

performance of the corporate duty, they, no less than the 

corporation itself, are guilty of disobedience and may be 

punished for contempt." Wilson, 221 U.S. at 376. In a 

later case, the Court applied Wilson's reasoning to the 

officers of an unincorporated association. ~ United 

States y. Fleischman, 339 U.S. 349, 358 {1950) {"If the 

legislative committee has a right to demand the records, the 

directing officers of the association are quite as 

responsible for their production as if they were corporate 

officers."). 

In Nilva, the Court applied Wilson to affirm a criminal 

contempt conviction based on a corporate officer's disregard 

of a grand jury subpoena seeking corporate records. Each of 

the subpoenas was addressed to a corporation that was wholly 

owned by an associate of the contemnor, and each was served 

upon the secretary-treasurer of the corporation. When the 

owner of the corporation moved to quash the subpoenas, the 

district court denied the motion and "ordered the subpoenaed 

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records to be produced 'forthwith.'" .Ida_ at 388. The 

contemnor thereafter appeared before the court, stated that 

he was the Vice President of the corporation, and produced 

some, but not all, of the subpoenaed documents. The trial 

court thereafter held him in criminal contempt for failing 

to produce all of the subpoenaed documents. 

The Supreme Court affirmed the conviction. The Court 

began by stating: "it is settled that a criminal contempt 

is committed by one who, in response to a subpoena calling 

for corporation or association records, refuses to 

surrender them when they are in existence and within his 

control." .Ida.. at 392. In holding that the evidence 

presented at trial "reasonably support[ed] the conclusion 

that those records were in existence and were within · 

petitioner's control,"~ at 394, the Court noted the 

following factors: 

Petitioner was a "nominal" vicepresident of the corporation; he rendered 

it legal and administrative services of 

many kinds; he was a brother-in-law of 

its sole owner and president; he appeared 

in court as its official representative 

in answer to the subpoenas and 

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represented that he had brought with him 

all of the subpoenaed records that he and 

the office force could find. 

~at 393. 

As the government notes, a number of courts have 

applied Wilson and Nilva to conclude that officers and 

agents may be held in contempt when a corporation or 

association fails to respond to a subpoena. In many 

instances the finding of contempt depends upon whether the 

officer or agent "was somehow personally connected with 

defying the authority of the court or disobeying its lawful 

decrees." ~Ex parte Chambers, 898 S.W.2d 257, 261 (Tex. 

1995) . The required personal connection with the 

organization's defiance of the court may arise from the 

agent's general control over the organization's operations 

or from his or her participating or aiding and abetting in 

conduct circumventing the subpoena or order. See. e.g., 

united States y. Laurins, 857 F.2d 529, 535 (9th Cir. 1988) 

(Defendant's de facto control over a corporation after the 

corporation received a summons supported a finding of 

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criminal contempt), cert. denied, 492 U.S. 906 (1989); see 

also Colonial Williamsburg Found. y. Kittinger Co., 792 F. 

Supp. 1397, 1406 (E.D. Va. 1992) ("[T]he case law 

establishes that an individual who is responsible for 

insuring that a corporation complies with a court order 

cannot escape liability merely by removing himself from the 

day-to-day operations of the corporation and washing his 

hands of responsibility."), aff'd, 38 F.3d 133 (4th Cir. 

1994); Qnited States v. Greyhound Corp., 363 F. Supp. 525, 

571-73 (N.D. Ill. 1973) (holding corporate officials in 

contempt because of their personal involvement in decision 

not to comply with court order), aff'd, 508 F.2d 529 {7th 

Cir. 1974). However, an agent's inability to comply with a 

subpoena or order due to circumstances beyond his or her 

control may constitute a defense to a contempt charge. ~ 

United States v. Rylander, 714 F.2d 996, 1002-03 (9th Cir. 

1983), cert. denied, 467 U.S. 1209 (1984). 

Applying these principles, we hold that when a subpoena 

or order unequivocally directs an organization to produce 

records, the persons who have knowledge of the court's 

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action and who "fail to take appropriate action within their 

power" to comply with the subpoena or order may be held in 

contempt. ~ Wilson, 221 U.S. at 376; ~ Fleiscbman, 339 

U.S. at 356 ("When one accepts an office of joint 

responsibility, whether on a board of directors of a 

corporation, the governing board of a municipality, or any 

other position in which compliance with lawful orders 

requires joint action by a responsible body of which he is a 

member, he necessarily assumes an individual responsibility 

to act, within the limits of his power to do so, to bring 

about compliance with the order.") . 2 

Under this standard, we conclude that the evidence in 

the instant case--viewed in a light most favorable to the 

government--was sufficient to support the defendants' jury 

convictions for criminal contempt under§ 401(3). Initially 

we note that Brent Beals and John Voss have acknowledged in 

this appeal that they had actual knowledge of the court 

2 In the instant case, although the defendants were charged with violating 

18 U.S.C. § 401(3), they were not charged with aiding and abetting the 

contempt violations pursuant to 18 U.S.C. § 2. We note that individuals who 

aid, abet, participate in, or encourage an organization's defiance of a court 

order or subpoena may also be charged and convicted under 18 U.S.C. § 2. ~ 

Laurins, 857 F.2d at 535 n.1. 

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orders. ~ Br. of ApLts. Brent Beals and John Voss at 29. 

Additionally, Mitchell Beals stipulated at trial that he had 

knowledge of the subpoenas and court orders. ~ Rec. vol. 

X at 868. Consequently, the remaining question regarding 

the defendants' challenge to the sufficiency of the evidence 

is whether they failed to take appropriate action within 

their power to comply with the subpoenas and orders. 

Upon review of the record, we find sufficient evidence 

to support the contempt convictions of all three of the 

defendants. First, with regard to John Voss, his own 

testimony established that he has been the director of the 

NCBA since 1986. ~ Rec. vol. XI at 1179-80. 

Additionally, Mr. Voss testified that production of NCBA 

records was within his duties as the NCBA's director: 

Q. Mr. Voss, if anyone is going to 

produce records on behalf of the [NCBA] , 

it would be you, wouldn't it sir? 

A. [By Mr. Voss:] As director, yes, I 

would be responsible for that, yes. 

Q: You knew at all times that the NCBA 

had been instructed to turn over those, 

had been ordered to turn over those 

records, right? 

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A: Yes. 

Q: But you refused to turn those over 

because you disagreed with [the district 

judge], and you thought he was wrong, 

isn't that true? 

A: That's true. 

~at 1226. 

As to Brent Beals, we note that Mitchell Beals 

testified at trial that Brent Beals had taken control of the 

NCE's operations by 1989. ~ Rec. vel. XII at 1444. 

Mitchell Beals also conceded that all three defendants had 

access to NCE files at any time. ~ Rec. vel. XIII at 

1480-81. Although Brent Beals refused to admit at trial 

that he had been the director of the NCE, he conceded that 

he did "all of the work" for the organization. Rec. vel. XIV 

at 1702. From the evidence of Brent Beals's control over 

theNCE's operations and his access to the requested 

records, a reasonable jury could find that he failed to take 

appropriate action within his power to comply with the 

subpoenas and orders and was therefore guilty of criminal 

contempt. 

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... 

Finally, we are not persuaded by Mitchell Beals's 

argument that because he was no longer the director of the 

NCE when the subpoenas and court orders were issued, he did 

not have reasonably specific notice that he was required to 

comply with the subpoenas. As we have noted, the subpoenas 

specifically required production of "[d]ocuments relating to 

the Mutual Assistance Program." Aplee. Addendum doc. 1 

attach.,. doc. 2 attach. Mitchell Beals specifically 

testified that he created the MAP program, Rec. vol. XII at 

1401-02, and that he ran the MAP program after he left the 

NCE in 1988, ~at 1407-08. Mitchell Beals's testimony 

also indicates that he retained involvement in the NCE even 

after Brent Beals began directing it in 1988. See. e.g., 

Rec. doc. XIII at 1490 ("We determined [in 1990] that the 

NCE needed to be shut down."). 

We therefore conclude that the testimony of the 

defendants at trial provided sufficient evidence from which 

a jury could reasonably have found that each of them failed 

to take appropriate action to comply with the subpoenas and 

court orders and thereby violated 18 U.S.C. § 401(3). In 

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light of the defendants' admitted knowledge of the subpoenas 

and orders, the subpoenas addressed to the "Custodian of 

Records" for the organizations and the court orders directed 

at the two organizations were sufficiently specific to put 

the defendants on notice that they were personally required 

to comply. 

2. Spallone and Project B.A.S.I.C. 

In challenging the jury's verdict, the defendants also 

invoke Spallone v. United States, 493 U.S. 265 (1990) and 

Project B.A.S.I.C. y. Kemp, 947 F.2d 11 (9th Cir. 1991). 

After careful review of both decisions, we conclude that 

neither of them supports the defendants' contention that 

their convictions are not supported by the evidence. 

In Spallone, a district court ordered a city to 

disperse public housing throughout the city. The city 

delayed acting on the court's order and the court entered 

another order requiring the city to pass an ordinance. A 

resolution of intent to adopt the ordinance in issue was 

defeated by the city council by a four-to-three vote. The 

district court thereafter held the city and the city council 

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... 

members voting against the resolution in contempt. 

The Supreme Court reversed the contempt charges as to 

the individual council members. -In doing so, the Court 

noted that "[T]he city ... was a party to the action from 

the beginning . . Petitioners, the individual city 

council members, on the other hand, were not parties to the 

action .... " .Id..a... at 276. 

We believe that Spallone is distinguishable from the 

instant case. A thorough reading of the case makes it clear 

that the Court rested its opinion on separation of powers 

concerns rather than on the lack of specificity in the court 

order. Much of the opinion was devoted to an explanation of 

why policies similar to those giving legislative bodies 

immunity should be applied. The Court noted that the 

particular problem in Spallone was the imposition of 

sanctions on individual council members because of the 

conflict of interest that would result; specifically, 

imposing sanctions in that case would have put the council 

members in a position of having to balance their personal 

interests against the city's interests that they were 

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elected to protect. ~ at 279-280. Such considerations 

are not at issue in the instant case. 

Moreover, as the government persuasively argues, even 

if Spallone were applicable, the Supreme Court's reasoning 

supports a finding of contempt as to the individual 

defendants. Assessing the district court's action, Justice 

Rehnquist concluded that the court "should have proceeded 

with such contempt sanctions first against the city alone in 

order to secure compliance with the remedial order. Only if 

that approach failed to produce compliance within a 

reasonable time should the question of imposing contempt 

sanctions against petitioners even have been considered." 

~at 280. In the instant case, as noted above, the 

district court first imposed civil contempt sanctions 

against NCBA and NCE. Only after the entities failed to 

comply did the government initiate contempt proceedings 

against the individual defendants. 

The defendants' reading of Project B.A.S.I.C. is 

similarly unpersuasive. In that case, a district court held 

the United States Department of Housing and Urban 

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Development (HUD) in contempt for refusing to provide 

funding for a local housing project, as required by a local 

court order. The First Circuit reversed the contempt 

citation against HUD on the grounds that it did not have 

fair notice that it was being compelled on penalty of 

contempt to provide funding for the project. 

Project B.A.S.I.C. clearly stands for the proposition 

that "a party cannot be held in contempt unless its 

contumacity clearly and convincingly appears." Project 

B.A.S.I.C., 947 F.2d at 16. Further, "the contempt power 

ought not to be deployed against a backdrop of uncertainty," 

.id..a.. at 17, and "any ambiguities or uncertainties in such a 

court order must be read in a light favorable to the person 

charged with contempt," .id..a.. at 16. 

However, unlike the examples given in Project 

B.A.S.I.C., the subpoenas and orders at issue here neither 

" ... def[y] comprehension,'" .id..a.. at 17 (quoting International 

Longshoremen's Ass'n. Local 1291 y. Philadelphia Marine 

Trade Ass'n, 389 U.S. 64, 76 (1967)) nor were "deployed 

against a backdrop of uncertainty," .id..a.. Unlike the order in 

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Project B.A.S.I.C. (which did not clearly indicate that HUD 

was bound by its terms), the subpoenas at issue here were 

clearly directed to the custodians of the records, and, 

contrary to their assertions, the defendants clearly knew of 

the court's lawful demand for the documents. 

Finally, we note that Project B.A.S.I.C. merely holds 

that "as a necessary prelude to a finding of contempt, the 

putative contemnor should have reasonably definite advance 

notice that a court order applies to it." ~ The facts of 

the instant case demonstrate such reasonable advance notice. 

Thus, Project B.A.S.I.C., like Spallone, does not support 

the defendants' challenge to their contempt convictions. 

B. Jury Instructions 

John Voss and Brent Beals also argue that the district 

court erred by failing to submit their proffered 

instructions to the jury. In addressing the defendants' 

arguments: 

We review the district court's refusal to 

give a particular jury instruction for 

abuse of discretion. In assessing 

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whether the court properly exercised that 

discretion, a reviewing court must 

examine the instructions as a whole to 

determine if they sufficiently cover the 

issues in the case and focus on the facts 

presented by the evidence. The question 

of whether the jury was properly 

instructed is a question of law, and 

thus, our review is de novo. 

United States y. Lee,· 54 F.3d 1534, 1536 (lOth Cir.) 

(citation omitted), cert. denied, 116 S. Ct. 247 (1995). We 

"'consider all the jury heard and, from [the] standpoint of 

the jury, decide not whether the charge was faultless in 

every particular but whether the jury was misled in any way 

and whether it had understanding of the issues and its duty 

to determine these issues.'" Duflinger y. Artiles, 727 F.2d 

888, 895 (lOth Cir. 1984) (quoting Alloy Int'l Co. v. 

Hooyer-NSK Bearing Co., 635 F.2d 1222, 1226-27 (5th Cir. 

1980) (quoting Borel v. Fibreboard Paper Prods. Corp., 493 

F.2d 1076, 1100 (5th Cir. 1973), cert. denied, 419 U.S. 869 

(1974))). "We will reverse a conviction due to an erroneous 

instruction only if the error was prejudicial when viewed in 

light of the entire record." United States y. Martin, 18 

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F.3d 1515, 1519 (lOth Cir.), cert. denied, 115 S. Ct. 187 

(1994) . The defendants cite three alleged errors in the 

district court's instructions, and we discuss each in turn. 

1. Notice to the defendants 

The defendants first argue that the jury instructions 

did not adequately direct the jury to determine whether the 

court order put the defendants on notice that they were 

personally required to comply. In that regard, the 

district court submitted the following instruction to the 

jury: 

To establish the alleged offense of 

criminal contempt of court as to any 

defendant so charged, the government must 

prove each of the following elements 

beyond a reasonable doubt as to that 

defendant: 

1. That the court entered an 

order, of reasonable 

specificity, to comply with a 

grand jury subpoena; 

2. That the defendant had 

actual knowledge of the court 

order; 

3. That the defendant 

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disobeyed or disregarded the 

court order; and 

4. That the defendant acted 

willfully and knowingly in 

disobeying or disregarding the 

court order. 

A court order binds parties to a 

case and those in active concert with 

parties who have actual knowledge of that 

order. Official officers of a business 

entity, as well as officers who for 

practical purposes are responsible for 

the conduct of the entity's affairs, are 

responsible for enabling the entity to 

comply with orders directed to it. 

Rec. val. I, doc. 9 at 16. 

The defendants argue that by instructing the jury that 

a court order binds nonparties and that officers of an 

entity who "are responsible for the conduct of the entity's 

affairs, are responsible for enabling the entity to comply 

with orders directed to it," the last paragraph of this 

instruction in effect relieved the jury from determining 

whether the order was reasonably specific in this case. 

Although this portion of the district court's 

instruction did not itself delineate Nilya's requirement of 

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reasonable specificity, we are required to review the 

instructions as a whole in order to determine "not whether 

the charge was faultless in every particular, but whether 

the jury was misled in any way and whether it had 

understanding of the issues." Duflinger, 727 F.2d at 895. 

Viewed in this light, to the extent that this part of the 

instruction failed to accurately express the Nilya rule, we 

believe that the portion of the instruction requiring the 

jury to find that the order was reasonably specific "as to 

[each] defendant" compensated for any inaccuracy. Thus, the 

district court's instruction did not take this element away 

from the jury's consideration, and the court did not abuse 

its discretion by rejecting the defendants' proffered 

instruction. 

2. Mens Rea 

The defendants also argue that the district court's 

instruction as to the requisite mens rea in this case was 

inadequate. As stated above, the court's contempt 

instruction required the jury to find "[t]hat the defendant 

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acted willfully and knowingly in disobeying or disregarding 

the court order." Rec. val. I, doc. 9 at 16. Additionally, 

the instruction defined the term "willfully" as follows: 

For purposes of the . . . contempt 

offenses . . . the term "willfully" means 

that the defendant performed an act, or 

failed to act, knowingly, voluntarily, 

deliberately and intentionally, as 

contrasted with accidentally, carelessly 

or unintentionally. The purpose of the 

"willfully" language, for purposes of the 

conspiracy and contempt charges, is to 

insure that a defendant will not be 

convicted for accidental, careless, or 

unintentional acts. 

~at 17. The defendants argue that the instruction should 

have required the jury to find an intentional violation of a 

known legal duty and that the instruction given by the 

district court was in error because it only required proof 

that the defendants acted with the gener-al intent to disobey 

the court order. 

The government argues that the defendants did not raise 

this issue below and notes the rule that "[n]o party may 

assign as error the giving or the failure to give an 

instruction unless the party objects thereto before the jury 

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... 

retires to consider its verdict, stating distinctly the 

matter objected to and the grounds of the objection." Fed. 

R. Civ. P. 51; see also lOth Cir. R. 28.2(c) (stating that 

"if the appeal is based upon ... the giving or refusal to 

give a particular jury instruction," the parties must 

include in their initial briefs "a statement as to where a 

proper objection and the court's ruling thereon may be found 

in the record"). 

In their opening brief, the defendants do not indicate 

where in the record they objected to the district court's 

instructions regarding the element of intent. Similarly, in 

their reply brief, the defendants have not responded to the 

government's contention that they failed to object to the 

court's jury instruction. Although the defendants cite 

their own proffered instructions, they have not indicated a 

place in the record in which they objected to the court's 

instruction. We have also thoroughly reviewed the record in 

this case and agree that the defendants failed to object. 

Accordingly, we may only review the district court's 

instruction for plain error. ~ United States y. Barber, 

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•• 

39 F.3d 285, 287-88 (lOth Cir. 1994). Under this standard, 

we find no error in the district court's instruction 

regarding the requisite mens rea. 

3. Refusal to Instruct on Defendants' Theory of the Case 

The defendants also argue that the district court erred 

by not instructing the jury regarding the defendants' theory 

of the case. They maintain that the court's failure to do 

so exacerbated the alleged errors it made regarding the 

previously mentioned jury instructions. According to the 

defendants, their proffered instruction regarding the 

elements of contempt should have been submitted to the jury 

to "inform the jury of the defendants' version of events and 

explain their theory of why their conduct did not constitute 

criminal contempt." Br. of Aplts. Brent.Beals and John Voss 

at 30. More specifically, the defendants argue that the 

court's failure to submit the proffered instruction 

"deprived the jury of the defendants' theory that they did 

not willfully violate the subject court orders." ~at 30-

31. 

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As we have already stated, however, we believe that, 

viewed as a whole, the district court's contempt instruction 

adequately explained the relevant legal standards to the 

jury regarding the necessary specificity of the court order. 

Additionally, to the extent the defendants argue that the 

district court erred in instructing the jury regarding the 

mens rea element of the offense, the defendants waived the 

issue. 

C. Sentencing Guideline for Contempt 

The defendants argue that the district court applied 

the wrong sentencing guideline in this case. Section 2J1.1 

of the United States Sentencing Guidelines (U.S.S.G.) 

governs sentencing for contempt convictions under 18 U.S.C. 

§ 401 (3) . Section 2J1.1 merely states, ''Apply § 2XS .1." 

U.S.S.G. § 2X5.1 instructs the court to apply "the most 

analogous offense guideline" if there is no guideline 

expressly applicable to the crime at issue. An Application 

Note to § 2J1.1 reads as follows: 

Because misconduct constituting 

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contempt varies significantly . . . the 

Commission has not provided a specific 

guideline for this offense. In certain 

cases. the offense conduct will be 

sufficiently analogous to §2J1.2 

(Obstruction of Justice) for that 

guideline to apply. 

U.S.S.G. § 2Jl.l comment. (n.l) (Nov. 1987) (emphasis 

added) . In this case the district court sentenced the 

defendants pursuant to U.S.S.G. § 2Jl.2(b) (2), which 

governs cases involving the "Obstruction of Justice." 

Although we engage in de novo review of the district court's 

application and interpretation of the Guidelines, United 

States y. McAlpine, 32 F.3d 484, 487-88 (lOth Cir.), cert. 

denied, 115 S. Ct. 610 (1994), factual findings upon which 

the court based the sentencing determination are reviewed 

for clear error, ~at 488. 

The defendants argue that the district court erred by 

sentencing them under§ 2J1.2(b) (2), and that the "most 

analogous" guideline was really U.S.S.G. § 2Jl.S, entitled 

"Failure to Appear by Material Witness." The defendants 

cite United States v. Underwood, 880 F.2d 612 (1st Cir. 

32 

.. 

Appellate Case: 94-1320 Document: 01019276545 Date Filed: 05/02/1996 Page: 32 
1989), as support for their position. In Underwood, the 

defendant was held in criminal contempt for refusing to 

testify at a trial. Because the district court had 

specifically found that the defendant did not intend to 

"obstruct justice," but instead intended only "not to 

testify," .a.e..e, .id.... at 620, the First Circuit held that§ 

2J1.2 was not the most analogous guideline. Instead, the 

court held, § 2J1.5 provided the closest analogy. 

However, in Qnited States v. Remini, 967 F.2d 754 (2d 

Cir. 1992), the Second Circuit distinguished Underwood in 

the context of a case in which the district court 

specifically found that the defendant ~ attempted to 

obstruct justice by refusing to testify at a criminal trial. 

The Remini court reasoned that even though the defendants in 

both Underwood and Remini were held in contempt for refusal 

to testify, the district courts in each case had made 

sufficiently different findings to warrant application of 

the different "analogous" guidelines. ~ .id.... at 760. 

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In the instant case, the district court made the 

following finding prior to sentencing the defendants under 

§ 2J1.2: 

The Court . . . finds and concludes 

that the most closely analogous 

sentencing guideline is the guideline 

governing the obstruction of justice. It 

seems very clear to me that by refusing 

to comply with the Court's lawful orders 

even after having a civil contempt fine 

imposed, the defendants clearly were 

preventing the Grand Jury from getting 

records that most probably would have 

been of assistance to the Grand Jury in 

finding what actually occurred in this 

situation. 

Rec. vel. XVI at 34. After reviewing the record, we cannot 

conclude that this factual finding is clearly erroneous. 

The district court was well aware of the facts of this case 

and carefully considered them in light of the Guidelines 

policies. In light of the district court's factual finding, 

we believe that the district court quite properly sentenced 

the defendants under § 2J1.2, as this was the most analogous 

guideline under the circumstances of this case. 

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• 

D. Enhancement for Substantial Interference with 

Administration of Justice 

Finally, the defendants argue that the district court 

erred in increasing the offense level from twelve to fifteen 

under U.S.S.G. § 2J1.2(b) (2) . 3 The district court's 

decision raises factual questions that we review for clear 

error. ~McAlpine, 32 F.3d at 488; see also united States 

v. DeSalvo, 26 F.3d 1216, 1224 (2d. Cir.) (applying clearly 

erroneous standard of review to§ 2J1.2(b) (2) enhancement), 

cert. denied, 115 S. Ct. 192 (1994). 

Section 2J1.2(b) (2) provides, "If the offense resulted 

in substantial interference with the administration of 

justice, increase by 3 levels." The commentary to§ 2J1.2 

states that "[s]ubstantial interference with the 

administration of justice includes a premature or improper 

termination of a felony investigation; an indictment, 

verdict or any judicial decision based on perjury, false 

testimony, or other false evidence; or the unnecessary 

3 After increasing the defendant Brent Beals's offense level from twelve 

to fifteen, the court granted a two level reduction because of his minor role 

in the offense. ~ Rec. vol. XVII at 14. 

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• 

expenditure of substantial governmental or court resources." 

U.S.S.G. § 2J1.2 comment. (n.1) (Nov. 1989). 

In applying the three level enhancement to each of the 

defendant's sentences, the district court adopted the 

conclusion of the presentence reports that each "defendant's 

failure to produce subpoenaed records 'caused the government 

to expend substantial unnecessary time and effort in an 

attempt to determine the income of NCBA members' and 

'effectively frustrated not only a criminal investigation of 

themselves and their activities, but also investigation of 

NCBA members. '" Rec. val. XIX, ~ 18; val. XX, ~ 11; val. 

XXI, ~ 18 (quoting Government's Sentencing Statement, Rec. 

val. I, doc. 24 at 17-18). This conclusion regarding the § 

2J1.2(b) (2) enhancement was largely based on the statements 

of IRS Special Agent Michael Herrera, who testified as 

follows concerning the failure to respond to the subject 

subpoenas and court orders: 

Q: Were NCBA and NCE ordered by a 

Federal District Judge to provide records 

concerning their business activities? 

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A: [By Special Agent Herrera] Yes, they 

were. 

Q: Did they provide those records? 

A: ~. 

Q: Did the failure to provide those 

records in any way interfere with the 

ability of the IRS to do its job? 

A: Yes they do [sic] . 

Q: Can you explain how? 

A: If they don't provide records, then 

basically . the only thing you could 

do is go to the banks and request all the 

bank records . . . and analyze these 

records. It turned out that there were 

more than 15,000 documents contained in 

these bank records, and it took us 

approximately three years and 

approximately 4,000 hours to analyze 

everything and try to make sense of what 

was going on and try and identify the 

members and who made what money. Members 

still remain unidentified. 

Rec. vol. X at 926-27. 

The defendants now contend that the district court 

erred in relying on this testimony. They maintain that the 

subpoenaed records did not contain information that would 

have been useful to the government in its investigation. 

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't, 

• 

They note that the requested NCE files did not contain the 

names of members and "typically contained only receipts of 

the most recent transactions." Aplt. Mitchell Beals's Br. 

at 25. 

We are not persuaded by the defendants' argument. As 

the government observes, trial testimony indicated that the 

NCBA and the NCE maintained records of recent transactions 

and that the names of individual members could be obtained 

when needed. ~ Rec. val. VII at 430-34. In light of this 

evidence, it was not clearly erroneous for the district 

court to rely on Special Agent Herrera's testimony to 

conclude that these records would have been helpful to the 

government's investigation and that the failure to produce 

them resulted in the unnecessary expenditure of governmental 

resources. 

Moreover, we note that under the commentary to § 

2Jl.2(b) (2) "substantial interference with the 

administration of justice" includes "the unnecessary 

expenditure of court resources." ~ USSG § 

2Jl.2(b) {2) comment. {n.l) {Nov. 1989) {emphasis added). 

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• 

The record supports the conclusion that the defendants' 

initial failure to respond to the subpoenas resulted in the 

issuance of additional subpoenas, the conducting of 

additional court proceedings, and the issuance of court 

orders requiring production of the subject documents. If 

the defendants had complied with the subpoenas after the 

initial motion to quash was denied, the subsequent subpoenas 

and court orders, and many of the subsequent court 

proceedings (and the resulting expenditure of court 

resources) would not have been necessary. 

Accordingly, we conclude that the district court did 

not err in imposing a three-level increase in the 

defendants' offense levels under U.S.S.G. § 2J1.2(b) (2) .· 

III. CONCLUSION 

The judgment of the district court is accordingly 

AFFIRMED in all respects. 

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