Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-03016/USCOURTS-caDC-96-03016-0/pdf.json

Parties Involved:
Clyde E. Dodson
Appellant
United States of America
Appellee

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 12, 1997 Decided December 2, 1997 

No. 96-3015

UNITED STATES OF AMERICA,

APPELLEE

v.

CLAYTON EUGENE DEFRIES, A/K/A GENE,

APPELLANT

Consolidated with

No. 96-3016

Appeals from the United States District Court 

for the District of Columbia 

(No. 93cr00117-01) 

(No. 93cr00117-02)

Stuart A. Levey, appointed by the court, and Lisa B. 

Wright, Assistant Federal Public Defender, argued the cause 

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for appellants. With them on the briefs were A.J. Kramer,

Federal Public Defender, R. Stan Mortenson, Scott L. Nelson, Gerard F. Treanor, Jr., and Judith L. Wheat, appointed 

by the court.

Frank J. Marine, Deputy Chief, U.S. Department of Justice, argued the cause for appellee. With him on the briefs 

was Sotiris A. Planzos, Trial Attorney.

Before: SILBERMAN, ROGERS and TATEL, Circuit Judges.

Opinion for the court filed PER CURIAM.

PER CURIAM: Two former elected officials of a maritime 

union challenge their convictions for Racketeer Influence and 

Corrupt Organizations Act ("RICO") violations, RICO conspiracy, embezzlement, and mail fraud. We reverse their 

convictions.

I. Background

District No. 1-Pacific Coast District, Marine Engineers' 

Beneficial Association ("PCD/MEBA," or the "pre-merger 

union") was a national union made up of mostly licensed 

marine engineers who manned American merchant vessels. 

Under the union's by-laws, an elected District Executive 

Committee governed the union's operations. In 1984, 

PCD/MEBA elected appellant Clayton Eugene DeFries president and appellant Clyde E. Dodson executive vice president 

and branch agent for the Port of San Francisco. The membership also elected twenty-one individuals as delegates to the 

convention of the National MEBA, an umbrella organization 

of various unions, which in 1986 elected DeFries National 

MEBA President and Dodson National MEBA secretarytreasurer. In the union's 1987 election, the membership 

reelected DeFries and Dodson to their Committee positions.

Just prior to the 1987 election, DeFries negotiated, on 

behalf of the Committee, an agreement to merge PCD/MEBA 

with the National Maritime Union ("NMU"), a much larger, 

predominantly blue-collar union made up of unlicensed seamen. In March 1988, PCD/MEBA approved the merger 

agreement in a membership referendum, as did NMU. As 

specified in the merger agreement, a six-person committee 

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consisting of three former NMU officials and three former 

PCD/MEBA officers, including DeFries and Dodson, governed the new union, MEBA/NMU (the "post-merger union").

At the time the merger became effective, appellants and 

other former officers of the pre-merger union received severance payments totaling almost $2 million, even though they 

immediately assumed roughly equivalent positions in the newly merged union's leadership. The pre-merger union's bylaws authorized the Committee to establish compensation 

levels for all union officers and employees, "unless otherwise 

directed by a majority vote of the membership." Pursuant to 

that authority, the Committee adopted a formal, written 

severance plan, later amending it to make its triggering date 

the merger of the two unions. With regard to both the 

adoption and amendment of the severance plan, the Committee sought the advice of the firm's outside counsel, Angelo 

Arcadipane, a member of the law firm of Dickstein, Shapiro & 

Morin, who advised appellants that the severance plan was 

legal and that the Committee had authority to adopt it.

At trial, government witnesses testified that between the 

time of the severance plan's adoption in 1986 and the distribution of the payments in 1988, DeFries, Dodson, and other 

Committee members took steps to conceal from the union 

membership the adoption, terms, and triggering event of the 

plan. These witnesses testified that Committee members 

failed to mention the plan in the minutes of the meeting at 

which they adopted it, directing the union's controller not to 

reveal any details of the plan. According to these witnesses, 

the Committee also failed to disclose the plan's existence to 

the union's independent auditor until more than a year after 

its adoption. When the union membership eventually learned 

of the severance payments, a group filed suit to recover the 

money.

As part of the merger, the post-merger union was divided 

into two divisionsthe Licensed Division, which consisted of 

the former PCD/MEBA members, and the Unlicensed Division, which was made up of former NMU members. The 

Licensed Division held an election in 1989 to select its deleUSCA Case #96-3016 Document #312706 Filed: 12/02/1997 Page 3 of 39
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gates to the National MEBA Convention; those elected included DeFries and Dodson. The Licensed Division held 

another election in 1990, this time electing officers as well as 

delegates to the National MEBA Convention. This was the 

first time that appellants and their supporters faced substantial opposition. In a hotly contested election, the challengers 

defeated the incumbents, including Dodson (DeFries was not 

up for reelection).

According to the evidence at trial, in the 1988, 1989, and 

1990 elections appellants and other union leaders solicited and 

collected unmarked and unsealed ballots, voting them in favor 

of appellants' interests. The evidence also showed that some 

tampering of collected ballots occurred, including opening 

sealed ballots and replacing those ballots voted against appellants' interests with new ballots voted in their favor.

A federal grand jury returned a ten-count indictment 

against DeFries, Dodson, and fourteen other former union 

officials. The indictment charged appellants with one count 

of racketeering in violation of RICO, 18 U.S.C. § 1962(c) 

(1994); one count of conspiracy to violate RICO, 18 U.S.C. 

§ 1962(d) (1994); one count of embezzlement with respect to 

the severance payments, 29 U.S.C. § 501(c) (1994); and three 

counts of mail fraud, 18 U.S.C. § 1341 (1994), with regard to 

the 1988 merger referendum, the 1989 national delegate 

election, and 1990 union officers' election. The RICO count 

included two charges of mail fraud with regard to the 1984 

and 1987 elections as two of the alleged racketeering acts; it 

also incorporated the other mail fraud counts and the embezzlement count as racketeering acts. A seventh racketeering 

act incorporated one count of extortion but did not apply to 

appellants. The RICO conspiracy count incorporated all 

seven racketeering acts of the RICO count.

The district court severed the case against appellants and 

five others from that of the other nine defendants, and also 

dismissed the 1988 merger referendum mail fraud count as 

failing to allege a scheme to defraud "property" under 

McNally v. United States, 483 U.S. 350 (1987). After the 

government took an interlocutory appeal challenging the disUSCA Case #96-3016 Document #312706 Filed: 12/02/1997 Page 4 of 39
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missal, this court reversed the district court and reinstated 

the count, issuing our opinion on January 13, 1995, and 

ultimately our mandate on March 1.

In the meantime, on February 1, the deputy clerk swore 

the ninety-one individuals on the jury venire for this case, 

who then completed an extensive juror questionnaire. Two 

days later, just prior to the prospective jurors' return to the 

courtroom for formal, in-person questioning by counsel, appellants moved to stay jury selection on the grounds that selfselection tainted the jury panel summoned in this case in 

violation of the Jury Selection and Service Act, 28 U.S.C. 

§ 1866(a) (1994), and that white jurors were systematically 

underrepresented on the panel in violation of the Sixth 

Amendment's fair-cross-section requirement, U.S. Const. 

amend. VI. Refusing to stay jury selection, the district court 

allowed discovery of the juror summonses and juror qualification forms for all jurors summoned for service for the period 

of February 1-15, including any requests for deferral. Ruling that appellants failed to show that the Jury Office's 

granting of hardship deferrals was either motivated by discrimination or arbitrary and capricious, the district court 

denied the jury selection motions.

At the end of the government's case-in-chief and again at 

the close of all evidence, appellants moved for judgment of 

acquittal on the embezzlement count, arguing that lack of 

authorization is an essential element of 29 U.S.C. § 501(c) and 

that the government failed to present any evidence showing 

that the severance payments were unauthorized. Faced with 

a circuit split over whether lack of authorization is an element 

of a section 501(c) violation, the district court denied the 

motion on both occasions, electing to treat authorization as 

one factor for the jury to consider when evaluating whether 

appellants had the requisite fraudulent intent to commit the 

crime.

After the district court denied the motions for judgment of 

acquittal, appellants requested an advice-of-counsel instruction on the embezzlement count. Specifically, they asked the 

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lants, in creating the severance plan and taking the severance 

payments, had relied in good faith on the advice of the union's 

outside counsel, then they must be acquitted under section 

501(c) because they would not have had the requisite fraudulent intent to embezzle the union's funds. Ruling that appellants had not presented sufficient evidence that they had 

relied on their attorney's advice, the district court refused to 

give the requested instruction.

Appellants also objected to the district court's instructions 

on the RICO and RICO conspiracy counts, as well as on the 

mail fraud counts. Although appellants presented evidence 

disputing whether a single enterprise of the pre-merger and 

post-merger unions constituted a single RICO enterprise, as 

the indictment alleged, the district court instructed the jury 

to "regard the two unions as a single enterprise." In addition, the district court instructed the jury that it could convict 

appellants of mail fraud based on their participation in a 

scheme to defraud union members of their right to secret 

ballots and fair elections, which appellants now contend is not 

within the reach of the mail fraud statute.

The jury found appellants guilty on all counts. After 

appellants waived their right to a trial by jury on RICO 

forfeiture and following an evidentiary hearing, the court 

ordered forfeiture of the severance payments and all salaries 

earned by appellants from 1985 to 1990. The court sentenced 

DeFries to concurrent terms of sixty-three months of imprisonment on the RICO and RICO conspiracy counts and sixty 

months of imprisonment on the embezzlement and mail fraud 

counts, with three years of supervised release. Dodson received concurrent terms of fifty-seven months of imprisonment on all six counts, with three years of supervised release. 

The court ordered appellants to pay certain fines, restitution, 

and costs of confinement. Appellants now appeal their convictions and the district court's forfeiture ruling. A third 

appellant, Claude W. Daulley, passed away the day before we 

heard oral argument. In response to the "suggestion of 

death" filed by Daulley's counsel, we have dismissed Daulley's 

appeal.

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II. Jury Venire Issues

Appellants raise both a statutory and a constitutional challenge to the racial composition of their jury venire. They 

maintain that white jurors were systematically underrepresented in the juror pool they received. According to appellants, white jurors constitute roughly a third of the population 

in the District of Columbia eligible to serve on juries, yet 

constituted only 23% of the jurors drawn for appellants' 

venire. This disparity, appellants maintain, is due in part to 

the fact that potential white jurors were more likely than 

nonwhites to obtain hardship deferrals of their jury service

at least half of the fifty-four deferrals in the jury pool used by 

the district court for the venire in appellants' trial were white. 

Appellants therefore contend that the low number of white 

people in their venire violated both the Jury Selection and 

Service Act ("Jury Selection Act"), which codifies the right to 

a jury "selected at random from a fair cross section of the 

community," 28 U.S.C. § 1861 (1994), and the Sixth Amendment, which guarantees criminal defendants the right to trial 

"by an impartial jury." We conclude that appellants have 

failed to meet their evidentiary burden to show their rights 

were violated.

Jury Selection and Service Act Claim

The government argues for the first time on appeal that 

appellants' Jury Selection Act contention is untimely. Relying on cases stating that the timeliness requirement "is to be 

strictly construed," United States v. Bearden, 659 F.2d 590, 

595 (5th Cir. Unit B 1981); accord United States v. Contreras, 108 F.3d 1255, 1266 (10th Cir. 1997); United States v. 

Paradies, 98 F.3d 1266, 1277 (11th Cir. 1996); United States 

v. Young, 822 F.2d 1234, 1239 (2d Cir. 1987), the government 

notes that "voir dire" began on February 1, 1995, but appellants did not file their motion objecting to the venire until 

February 3, 1995.

The Jury Selection Act requires that any motion to dismiss 

the indictment or stay the proceedings on the ground of a 

substantial failure to comply with the statute must be filed no 

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later than "before the voir dire examination begins." 28 

U.S.C. § 1867(a) (1994).1 Appellants filed their motion to 

stay proceedings on Friday morning, February 3, 1995, and 

promptly brought it to the attention of the district court. 

This was two days after they had first seen the members of 

the jury venire in person, on Wednesday, February 1, 1995, 

and after the members of the jury venire had responded in 

writing to a detailed written questionnaire. That questionnaire consisted of questions that the district court had approved after receiving suggested questions from appellants' 

counsel and the prosecutor. Because the questionnaire, particularly in view of appellants' participation in determining its 

content, could be viewed as the initial phase of voir dire 

examination, see, e.g., United States v. George (In re Washington Post ), 20 Media L. Rep. (BNA) 1511, 1511 (D.D.C.

1992), appellants' motion would appear to be untimely.

The difficulty with this conclusion arises from the fact that 

the Jury Selection Act and the jury selection procedures 

utilized by the district court effectively foreclosed the filing of 

appellants' motion at an earlier time. The Jury Selection Act 

required appellants both to file their motion before the voir 

dire examination began, and to support it with a sworn 

statement of facts that, if true, would demonstrate a substantial failure to comply with the statute.2

See 28 U.S.C. 

§ 1867(d); Bearden, 659 F.2d at 597; United States v. Ken-

__________

1 Section 1867(a) provides:

In criminal cases, before the voir dire examination begins, or 

within seven days after the defendant discovered or could have 

discovered, by the exercise of diligence, the grounds therefor, 

whichever is earlier, the defendant may move to dismiss the 

indictment or stay the proceedings against him on the ground 

of substantial failure to comply with the provisions of this title 

in selecting the grand or petit jury.

18 U.S.C. § 1867(a).

2 Congress intended that "[t]his threshold requirement to a 

successful challenge will make it possible for the judge to review a 

challenge motion and swiftly dispose of it if it fails, on its face, to 

state a case for which a remedy could be granted." H.R. Rep. No. 

90-1076 (1968), reprinted in 1968 U.S.C.C.A.N. 1792, 1806.

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nedy, 548 F.2d 608, 613 (5th Cir. 1977). Yet, appellants did 

not see a list of the jurors who would be in their venire until 

the members of the jury venire were brought into the courtroom on Wednesday, February 1, 1995. Even if they could 

have seen the list of venire jurors in the jury office, see 28 

U.S.C. § 1867(f), prior to that date, the list would not have 

included information on the ethnicity or gender of the jurors. 

Nor is it clear on this record that appellants could have 

obtained the information from another source prior to trial. 

The absence of such information precluded appellants from 

providing a detailed and supported motion outlining their jury 

concerns at the moment they first learned, at least by eyesight, of the ethnic and gender composition of the jury on 

February 1, 1995.

The Fifth Circuit has indicated that it might waive a 

procedural requirement of the Jury Selection Act if circumstances indicated that "counsel could not reasonably have 

been expected to comply with the procedural prerequisites to 

a statutory challenge to the jury." Kennedy, 548 F.2d at 613. 

Assuming that the government has not waived its timeliness 

objection, we need not decide whether appellants would be 

entitled to such an exception, because appellants' Jury Selection Act claim is unsupported by the evidence necessary for 

the court to conclude that there has been a "substantial" 

violation of the Jury Selection Act.328 U.S.C. § 1867(a); 

United States v. Spriggs, 102 F.3d 1245, 1251 (D.C. Cir. 1996); 

United States v. Barnette, 800 F.2d 1558, 1567 (11th Cir. 

1986).

To succeed on their Jury Selection Act contention, appellants must demonstrate a substantial violation of the two 

related goals of the statute: random selection and objective 

disqualifications. See 28 U.S.C. §§ 1861, 1866(c); Spriggs, 

102 F.2d at 1251; United States v. North, 910 F.2d 843, 909 

__________

3

In light of our disposition, we need not address the government's contention, also raised for the first time on appeal, that the 

sworn statement accompanying appellants' motion was deficient. 

See 28 U.S.C. § 1867(d).

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(D.C. Cir. 1990). Appellants maintain that the jury office in 

this district grants hardship deferments more liberally than 

the Jury Selection Act permits, see 28 U.S.C. § 1866(c)(1), 

and then recalls deferred jurors en masse, rather than distributing them evenly among the venires. As a result of the 

combination of these two practices, appellants contend, some 

venires are disproportionately white because they are composed in part of disproportionately white deferred jurors.

Although such a practice would be cause for concern, see 28 

U.S.C. § 1866(c), appellants have produced almost no evidence of its existence, let alone evidence that it was a regular 

occurrence that produced a substantial violation of the Jury 

Selection Act. They rely solely on counsel's declaration that 

"[o]n February 13, 1995, I learned that no previously deferred 

jurors have been added to any jury group in this Court since 

approximately October, 1994." Such hearsay information 

does not demonstrate that the jury office deferral practices in 

this district substantially violate the statute. See, e.g., United 

States v. Layton, 519 F. Supp. 946, 955 (N.D. Cal. 1981).

Sixth Amendment Claim

Appellants' Sixth Amendment contention fares no better. 

The Sixth Amendment guarantees a criminal defendant the 

right to a trial "by an impartial jury." The Supreme Court 

has held that an "impartial jury" is one drawn from a 

"representative cross-section of the community." Taylor v. 

Louisiana, 419 U.S. 522, 528 (1975).

In order to establish a prima facie violation of the faircross-section requirement, the defendant must show (1) 

that the group alleged to be excluded is a "distinctive" 

group in the community; (2) that the representation of 

this group in venires for which juries are selected is not 

fair and reasonable in relation to the number of such 

persons in the community; and (3) that this underrepresentation is due to systematic exclusion of the group in 

the jury-selection process.

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Duren v. Missouri, 439 U.S. 357, 364 (1979).4 Appellants 

contend that the disparity between the percentage of whites 

in their venire and the percentage of eligible white jurors in 

the District of Columbia suggests that whites are systematically excluded from juries in the district court. They point 

to the evidence that although whites comprise approximately 

one-third of the eligible jurors in the district, they comprised 

only 23% of the venire in their case. Yet appellants cannot 

show on the basis of this single instance of disparity that 

there has been a systematic exclusion of whites from the jury. 

Cf., e.g. Duren, 439 U.S. at 366 (reversing conviction on the 

basis of jury selection practices over a year); Castaneda v. 

Partida, 430 U.S. 482, 496 n.17 (1977) (same, over a decade). 

Underrepresentation of a cognizable group in a single venire, 

without evidence of a greater pattern, is insufficient to establish the "systematic exclusion of the group" required by 

Duren, 439 U.S. at 364. See, e.g., United States v. RuizCastro, 92 F.3d 1519, 1527 (10th Cir. 1996); United States v. 

Hardwell, 80 F.3d 1471, 1486 (10th Cir. 1996); Ford v. 

Seabold, 841 F.2d 677, 685 (6th Cir. 1988); Timmel v. Phillips, 799 F.2d 1083, 1086-87 (5th Cir. 1986); United States v. 

Jones, 687 F.2d 1265, 1269-70 (8th Cir. 1982). From a small 

sample size based on one venire it is difficult to determine 

whether the disparity is random or systemic.

Accordingly, because appellants have not produced evidence that would demonstrate either a substantial violation of 

the Jury Selection Act or a substantial underrepresentation 

as would violate their Sixth Amendment right, their jury 

venire contentions fail.5

__________

4 Appellants were not required, however, to show a purposeful 

exclusion of whites from the jury to succeed on their Sixth Amendment claim. Spriggs, 102 F.3d at 1254. To the extent that the 

district court suggested otherwise when it concluded that the jury 

office made "no deliberate policy choice" to exclude whites because 

they were white, it erred.

5 The import of appellants' evidence is troubling, however, in 

view of the random selection requirement of the Jury Selection Act, 

28 U.S.C. § 1861, and the fact that the statistical disparities, if 

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III. Mail Fraud Issues

Jurisdiction over the 1988 Merger Referendum Mail Fraud 

Count

The federal mail fraud statute makes it unlawful to use the 

U.S. mails in furtherance of "any scheme or artifice to 

defraud, or for obtaining money or property by means of false 

or fraudulent pretenses, representations, or promises." 18 

U.S.C. § 1341. One count of the indictment charged appellants under section 1341 for using the mails to advance a 

scheme (1) to defraud the union of its propertythat is, the 

ballots for the 1988 merger referendumand (2) to defraud 

union members of their right to secret ballots and to participate in a fair and honest election regarding the merger 

referendum. Ruling that this count failed to allege a fraudulent scheme to obtain "property," the district court dismissed 

it, relying on McNally v. United States, which overturned a 

mail fraud conviction that rested on the theory that the 

defendants deprived a state's citizens and government of the 

right to have the state's affairs conducted honestly. 483 U.S. 

at 361. In McNally, the Court held that when enacting the 

mail fraud statute, Congress intended to prevent the use of 

the mails in furtherance of schemes to defraud others of 

money or "property" as traditionally defined, not of the 

"intangible" right to an honest and impartial government. 

483 U.S. at 356-59.

The government filed an interlocutory appeal, challenging 

the district court's dismissal of the mail fraud count. On 

January 13, 1995, we reversed the district court and reinstated the count, ruling that the referendum ballots and the 

information they contained did in fact constitute "property" 

protected under section 1341. United States v. DeFries, 43 

F.3d 707, 711 (D.C. Cir. 1995). Pursuant to D.C. Circuit Rule 

41, we withheld issuance of our mandate until seven days 

__________

random recall of deferred jurors, could support an inference that a 

jury venire was not composed of a fair cross-section of the community. See Taylor, 419 U.S. at 528.

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after disposition of any timely petition for rehearing. D.C.

CIR. R. 41.

Three weeks later, on February 7, the government moved 

for expedited issuance of our mandate, pointing out that the 

district court was almost ready to swear a jury. The next 

day, appellants filed an opposition to the government's motion 

to expedite as well as a petition for rehearing and a suggestion for rehearing en banc. Rather than issuing our mandate 

on February 10, we ordered the government to respond to 

appellants' pending rehearing petitions. On February 10, the 

government filed its reply to appellants' opposition to expedited issuance of the mandate, and on February 14, asked the 

district court to consider delaying empaneling the jury until 

this court issued its mandate. The district judge and counsel 

for the government discussed the implications of the fact that 

this court had not issued its mandate, expressing uncertainty 

as to the district court's ability to proceed to trial on that 

count prior to the mandate's issuance. When asked by the 

court, counsel for appellants said he thought the district court 

lacked jurisdiction absent the mandate, explaining that "the 

mandate is key here. And ... the court of appeals understands that." Appellants' counsel also explained why he 

thought this court delayed issuing the mandate: "[W]hat the 

court of appeals, I think, is looking at is the prospect that if it 

sends the mandate back and the case goes forward and then 

you're in the midst of trial and they have to recall the 

mandate, then you have got real problems." The district 

court took no action on the government's request, but on 

February 21, once jury selection was completed, the district 

court again raised the question of our mandate. After confirming that the mandate had not issued, counsel for the 

government, citing United States v. Salerno, 868 F.2d 524 (2d 

Cir. 1989), argued that the court could proceed. The next 

day, the district court empaneled and swore the jury. On 

February 24, the government filed its reply to appellants' 

rehearing petition. On March 1, after the trial had been 

underway for a week, we issued our mandate. Over a month 

later, on April 7, we denied appellants' petition for rehearing. 

Appellants now argue that because we had not issued our 

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mandate until after trial began, the district court lacked 

jurisdiction to proceed on the mail fraud count. Reviewing 

this jurisdictional claim de novo, see Board of Trustees v. 

Madison Hotel, Inc., 97 F.3d 1479, 1483 (D.C. Cir. 1996), we 

agree.

The relationship between district court jurisdiction and the 

issuance of the appeals court mandate is clear and wellknown: The filing of a notice of appeal, including an interlocutory appeal, "confers jurisdiction on the court of appeals and 

divests the district court of control over those aspects of the 

case involved in the appeal." Griggs v. Provident Consumer 

Discount Co., 459 U.S. 56, 58 (1982) (per curiam). The 

district court does not regain jurisdiction over those issues 

until the court of appeals issues its mandate. Johnson v. 

Bechtel Assocs. Prof'l Corp., 801 F.2d 412, 415 (D.C. Cir. 

1986) (per curiam). Courts have carved out a few narrow 

exceptions to this rule, such as where the defendant frivolously appeals, see United States v. LaMere, 951 F.2d 1106, 1109 

(9th Cir. 1991) (per curiam), or takes an interlocutory appeal 

from a non-appealable order, see United States v. Green, 882 

F.2d 999, 1001 (5th Cir. 1989).

Asking us to create an additional exception, the government argues that because we had issued our opinion by the 

time trial began, proceeding to trial prior to the issuance of 

the mandate neither caused confusion nor wasted judicial 

resources and thus did not contravene the purposes of the 

general rule on jurisdiction. As it did in the district court, 

the government relies primarily on Salerno, where the Second Circuit issued an order rejecting the defendants' interlocutory double jeopardy appeal, stating that a formal opinion 

would follow but also acknowledging that the trial was to 

begin that very same day. When defendants later challenged 

the district court's jurisdiction to try the case prior to the 

mandate's issuance, the Second Circuit held that the district 

court did indeed have jurisdiction when the case went to trial 

because the likelihood that the district court's ruling on 

double jeopardy would be affirmed "hardened into a certitude 

when [the appeals] court issued its order." Salerno, 868 F.2d 

at 540.

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Involving "admittedly unusual" facts, id., Salerno has no 

applicability to the case before us today. By clearly acknowledging the trial was to start on the very same day that it 

issued its order, the Second Circuit led the district court into 

believing it had jurisdiction to proceed with the trial. We 

gave no such message to the district court. To the contrary, 

when the government moved for expedited issuance of the 

mandate so that the district court could proceed to trial as 

scheduled, instead of immediately responding, we directed the 

government to reply to appellants' pending rehearing motions. The fact that one judge voted to rehear the case in 

banc demonstrates that this court was seriously considering 

the rehearing motions. Moreover, it is clear from the February 14 colloquy that both the government and the district 

judge clearly understood that this court had not completed its 

consideration of the issues raised in the interlocutory appeal, 

and that there was at least a serious question about the 

district court's jurisdiction. Unlike in Salerno, nothing had 

"hardened into a certitude" at the time the district court, 

choosing to disregard the fact that our mandate had not 

issued, proceeded to swear the jury and begin the trial. The 

district court thus lacked jurisdiction over the merger referendum mail fraud count when it proceeded to trial on February 22. We therefore reverse appellants' section 1341 convictions involving the 1988 merger referendum.

In reaching this conclusion, we fully understand that appellants' trial took several months, consuming thousands of 

hours of court and lawyer time. The mandate rule, however, 

is clear, well-established, and grounded in solid considerations 

of efficient judicial administration. Because "jurisdiction is 

the power to act," it is essential that well-defined, predictable 

rules identify which court has that power at any given time. 

Kusay v. United States, 62 F.3d 192, 194 (7th Cir. 1995). The 

mandate rule prevents the waste of judicial resources that 

might result if a district court, prior to the issuance of the 

appeals court's mandate, proceeds with a case, ruling on 

motions and hearing evidence, after which the appeals court 

reverses its original decision on rehearing. That we ultimately sustained the district court's jurisdiction in this case is of 

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no moment; district court jurisdiction cannot turn on retrospective examination of appeals court action. Where, as here, 

our mandate had not issued, the district court lacked jurisdiction to proceed with trial whether we later sustained its 

jurisdiction or not. Fully aware that our mandate had not 

issued, the district court chose to proceed with trial. If the 

government wishes, the district court must now rehear the 

case.

Jury Instructions Regarding the 1989 and 1990 Election 

Mail Fraud Counts

Appellants challenge their other two mail fraud convictionsstemming from the 1989 national delegate election and 

the 1990 union officers' electionarguing that the district 

court's instructions enabled the jury to convict on the basis of 

activity not criminalized by the statute. Whether the district 

court properly instructed the jury on the standard for convicting appellants of mail fraud presents a question of law 

that we review de novo. See United States v. White, 116 F.3d 

903, 924 (D.C. Cir. 1997) (per curiam). We "must determine 

whether, taken as a whole, [the instructions] accurately state 

the governing law and provide the jury with sufficient understanding of the issues and applicable standards." United 

States v. Washington, 106 F.3d 983, 1002 (D.C. Cir.) (per 

curiam), cert. denied, No. 97-5423 (November 17, 1997).

Like the 1988 merger referendum mail fraud count, the 

1989 and 1990 mail fraud counts alleged a scheme to defraud 

the union of its ballots and to defraud union members of their 

right to secret ballots and fair elections. These counts also 

alleged that DeFries and Dodson schemed to defraud union 

members of their right to honest services of their union 

officers, agents, and representatives. This third theory was 

available for the 1989 and 1990 mail fraud counts, but not the 

1988 merger referendum count, because in 1988 Congress 

responded to the McNally decision by amending the mail 

fraud statute to protect against schemes to deprive individuals of the intangible right of honest services as well as of 

money and property. 18 U.S.C. § 1346 (1994). Over appelUSCA Case #96-3016 Document #312706 Filed: 12/02/1997 Page 16 of 39
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lants' objection that in our earlier DeFries opinion we had 

declined to hold that section 1341 protected the right to fair 

elections, see 43 F.3d at 709, 711, the district court instructed 

the jury on all three theories.

Appellants' challenge raises important questions about the 

mail fraud statute's reach. They argue that because the 

district court failed to instruct the jury that it had to find that 

the union's ballots were stolen or tampered with or that the 

union officers provided dishonest services, the jury could have 

convicted them solely because they engaged in proxy-voting, 

which they claim does not violate the statute. In considering 

this argument, we must first decide whether the mail fraud 

statute protects against schemes to defraud individuals of 

their right to secret ballots and fair elections. If we answer 

that question in the negative, then we must also decide 

whether proxy-voting constitutes a deprivation of union officials' "honest services."

As to the first question, the Supreme Court held in McNally that section 1341 does not protect the intangible right of 

the citizenry to good government, clearly stating that the 

statute protects individuals against schemes to deprive them 

of their money or property only. McNally, 483 U.S. at 356. 

Elaborating on this holding five months later, the Court 

explained that the right to honest governmental services is 

"an interest too ethereal in itself" to merit the statute's 

protection. Carpenter v. United States, 484 U.S. 19, 25 (1987) 

(extending McNally to the wire fraud statute, 18 U.S.C. 

§ 1343). Prior to the honest services amendment to the mail 

fraud statute, three of our sister circuits held that under 

McNally, union members' right to fair elections is a similarly 

"ethereal" interest that does not constitute "property" under 

section 1341. See United States v. Townsley, 843 F.2d 1070, 

1080 (8th Cir.), aff'd in part and vacated in part en banc on 

other grounds, 856 F.2d 1189 (8th Cir. 1988); Ingber v. 

Enzor, 841 F.2d 450, 451 (2d Cir. 1988); United States v. 

Gordon, 836 F.2d 1312, 1314 (11th Cir. 1988) (per curiam). 

We agree. We think it particularly instructive that, in explaining the types of schemes that could not properly support 

a conviction under section 1341, the McNally Court referred 

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to two election fraud cases as examples. 483 U.S. at 358 

(citing United States v. Clapps, 732 F.2d 1148, 1152 (3d Cir. 

1984), and United States v. States, 488 F.2d 761, 764 (8th Cir. 

1973)).

The honest services amendment does not extend to all 

election practices that might be thought unfair. The jury 

could legitimately have convicted DeFries and Dodson of mail 

fraud only by finding that they participated in a scheme to 

defraud the union of its ballots or the union members of their 

right to appellants' honest services as union officers. The 

record contains adequate evidence to support such a conviction. The government presented credible though contested 

evidence that DeFries and Dodson participated in a scheme 

to tamper with election ballots in which union officials opened 

sealed ballots to see if they had been voted in favor of 

appellants' interests, discarding and replacing those ballots 

that had not. The government also presented evidence that 

union officials coercively collected ballots from union members. If accepted by the jury, such activity would constitute 

a deprivation of both the ballots as well as appellants' honest 

services. Cf. United States v. Jain, 93 F.3d 436, 441 (8th Cir. 

1996) (holding that section 1346 extends to private sector 

schemes), cert. denied, 117 S. Ct. 2452 (1997).

The mail fraud instructions, however, failed to require the 

jury to find that union officials either defrauded the union of 

its ballots or provided services that were somehow dishonest. 

The district court instructed the jury that to convict, it had to 

find beyond a reasonable doubt that appellants "knowingly 

devised or knowingly participated in a scheme or artifice to 

defraud as detailed in [the mail fraud counts] of the indictment." The court described the "general nature" of the 

alleged scheme to defraud:

[Appellants] did engage in a variety of conduct in violation of the MBA constitution, by-laws and election procedures, and in violation of [29 U.S.C. §§ 411, 481], including:

 Soliciting and collecting unsealed ballots and voting them in favor of the defendants' interests;

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 Soliciting and collecting sealed ballots and unsealing them to determine how a union member had voted;

 Discarding those ballots voted against the defendants' interests and replacing them with duplicates;

 Using U.S. mails to request duplicate ballots in 

violation of union by-laws and election procedures;

 Using the improperly obtained ballots to replace 

discarded ballots;

 Using the U.S. mails to send and receive duplicate 

and original ballots, requests for duplicates, and completed duplicate ballots;

 Causing original and duplicate ballots to be mailed 

so as to appear that union members had mailed the 

ballots themselves.

The last six activities involve either some form of tampering 

with the ballots or a dishonest service, each of which could 

support a conviction: The second, third, and fifth involve 

tampering with voted ballots; the fourth and sixth involve 

obtaining and sending duplicate ballots used to replace discarded ballots without voter authority; and the seventh involves giving the fraudulent appearance that union members 

had voted and mailed the ballots themselves. In contrast, the 

first activity"[s]oliciting and collecting unsealed ballots and 

voting them in favor of the defendants' interest"does not 

necessarily do so. As appellants argue, although the solicitation, collection, and marking of ballots in favor of appellants' 

interests may violate the union's constitution, by-laws, and 

election procedures, as well as the civil provisions of the 

Labor-Management Reporting and Disclosure Act, which 

prohibit the use of proxy-voting in union elections, those 

activities do not deprive the union of its property interest in 

the ballots or amount to a dishonest service. As the Supreme 

Court put it in McNally, to "defraud" commonly means to 

" 'wrong[ ] one in his property rights by dishonest methods or 

schemes' " and typically involves " 'the deprivation of something of value by trick, deceit, chicane or overreaching.' " 483 

U.S. at 358 (quoting Hammerschmidt v. United States, 265 

U.S. 182, 188 (1924)). There is nothing inherently dishonest 

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or deceitful about soliciting, collecting, and marking unsealed 

ballots in favor of appellants' interests. The first activity 

listed in the jury instruction does not require that the ballots 

were voted in accordance with the voters' wishes, but neither 

does it require that the union officials voted them against or 

without regard to those wishes. Such activity would be 

dishonest or deceitful only if union officials failed to vote the 

collected ballots according to the voters' wishes or if they 

obtained the ballots coercively.

The government argues that soliciting, collecting, and voting unmarked ballots, even if in accordance with members' 

wishes, violate the mail fraud statute because such conduct 

breaches appellants' fiduciary duties to the union and its 

membership to protect their rights to secret ballots and fair 

elections. We have held, however, that violation of a fiduciary duty cannot, in and of itself, constitute a violation of the 

mail fraud statute, even if the other elements of a mail fraud 

conviction exist. United States v. Lemire, 720 F.2d 1327, 

1335 (D.C. Cir. 1983) (" '[N]ot every breach of a fiduciary 

duty works a criminal fraud.' ") (quoting United States v. 

George, 477 F.2d 508, 508 (7th Cir. 1973)); see also United 

States v. Cochran, 109 F.3d 660, 667 (10th Cir. 1997) ("[I]t 

would give us great pause if a right to honest services is 

violated by every breach of contract or every misstatement 

made in the course of dealing."). To constitute a deprivation 

of "honest services," the breach of fiduciary duty must have 

some element of dishonesty. See 18 U.S.C. § 1346. Our 

analysis in Lemire, a pre-McNally decision upholding wire 

fraud convictions, is particularly instructive. Involving an 

employee whose participation in an outside joint venture 

created a conflict of interest in violation of his employer's 

policy, Lemire held that breaches of fiduciary duty are criminally fraudulent only when "accompanied by a misrepresentation or non-disclosure that is intended or is contemplated to 

deprive the person to whom the duty is owed of some legally 

significant benefit." Lemire, 720 F.2d at 1335. The misrepresentation or intentional non-disclosuretwo inherently dishonest actsconverted the employee's breach of duty into a 

deprivation of his honest services as an employee. Id.; see 

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also United States v. Frost, 125 F.3d 346, 368 (6th Cir. 1997) 

(involving mail fraud convictions based on scheme to deprive 

a university of defendants' honest services as its employees 

because they failed to disclose an alleged conflict of interest). 

Even if it violates appellants' fiduciary obligations under 

federal law and union rules, proxy-voting, so long as it is not 

done coercively or against the voters' wishes, is not necessarily "dishonest."

In sum, the district court's inclusion of the phrase "[s]oliciting and collecting unsealed ballots and voting them in favor of 

the defendants' interests" as the first of seven activities 

describing the alleged scheme to defraud inaccurately stated 

the law. Since the district court failed to instruct the jury 

that it had to find that appellants engaged in all seven of the 

alleged activities, the jury could have convicted appellants 

solely on the basis of the first. Because the government's 

case emphasized that appellants were guilty of mail fraud by 

depriving union members of a fair election, and because 

appellants never disputed that they had engaged in proxyvoting but instead vigorously contested the evidence of tampering and coercion, we cannot conclude with certainty that 

"the jury charge, read as a whole, ... reveals that the jury 

could not have found the defendants guilty on an intangible 

rights theory," United States v. Perholtz, 836 F.2d 554, 559 

(D.C. Cir. 1988), or that "the guilty verdict actually rendered 

in this trial was surely unattributable to the error," Sullivan 

v. Louisiana, 508 U.S. 275, 279 (1993). Since the district 

court's erroneous instruction was not harmless beyond a 

reasonable doubt, see id., we reverse appellants' mail fraud 

convictions regarding the 1989 and 1990 elections.

IV. Embezzlement Issues

Appellants assert they were entitled to a judgment of 

acquittal on the embezzlement count because the government 

failed to prove the severance payments triggered by the 

merger of the two unions were unauthorized. Under 29 

U.S.C. § 501(c) (1994), a union official "who embezzles, steals, 

or unlawfully and willfully abstracts or converts to his own 

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use or the use of another" union funds is subject to criminal 

liability. Appellants argue that lack of authorization is an 

essential element of a § 501(c) violation.

Although we have not squarely confronted this issue, see 

United States v. Lawton, 995 F.2d 290, 294 n.4 (D.C. Cir. 

1993), we agree that a § 501(c) violation requires the unauthorized appropriation of union property. See United States 

v. Stockton, 788 F.2d 210, 217 (4th Cir. 1986). While some of 

our sister circuits weigh lack of authorization as only one of 

many factors in determining whether a defendant possessed 

"fraudulent intent" under § 501(c), see, e.g., United States v. 

Welch, 728 F.2d 1113, 1118 (8th Cir. 1984), the language of 

the statute dictates that it should be considered a distinct 

element of the offense. Applying the traditional meaning of 

legal terms, it does not make any sense to say that a union 

officer can embezzle, steal, or convert property he is authorized to take.

In this case, appellants argue that no rational jury could 

have found that the severance payments were unauthorized. 

They point to evidence establishing: (1) the union's bylaws 

empowered the District Executive Committee to set compensation for all union officers and employees; and (2) the 

severance payments were made pursuant to a formal, written 

severance plan, duly adopted (and subsequently amended) by 

the Committee in accordance with that authority. But that 

evidence is not determinative on the matter. At the time the 

officers' severance fund was created, the Committee set aside 

an astounding 44% of the union's liquid assets for this purpose. Furthermore, the severance plan was later amended to 

make the merger of PCD/MEBA and NMU a "triggering 

event" for payment. Therefore, when the two unions 

merged, DeFries, Dodson, Daulley, and two others received 

almost $2 million in "severance" pay even though each immediately assumed a similar job in the merged union. Presumably fearing the membership's reaction to their scheme, appellants employed a strategy of concealment. They did not 

disclose the severance plan's existence to the union's independent auditor until over one year after its adoption. More 

important, the membership was kept completely in the dark 

as to any of its details until after the unions were merged and 

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the payments were made. At the time of the merger referendum, members had no idea that their yes votes would transfer a sizable portion of the union's treasury to appellants' 

personal pockets. By concealing the severance plan and its 

terms, appellants prevented the union membership from exercising its authority to terminate or modify the severance 

payments pursuant to Article 7, Section 3 of the union's 

bylaws, which authorized the Committee to establish officers' 

compensation "unless otherwise directed by a majority vote of 

the membership." As appellants do not dispute that the 

union's bylaws allowed the union membership to cancel or 

alter the severance plan, and members, indeed, initiated a 

civil lawsuit to recover the payments once they were discovered, it is not reasonable to say that the severance payments 

were "authorized" even accepting appellants' construction of 

the term. To be sure, under the union's bylaws, the members 

gave their implicit assent to the Committee's determinations 

regarding officers' compensation by not reversing their decisions. But, the membership was prevented through appellants' subterfuge from exercising its ultimate authority to 

prevent this looting of the union treasury, and authorization 

secured "without disclosure of ... material information" is a 

nullity. See United States v. Butler, 954 F.2d 114, 119 (2d 

Cir. 1992).

The government further argues that even if appellants had 

secured authorization for the severance payments in a manner consistent with the union's bylaws, appellants could not 

have been authorized as a matter of law to breach their 

fiduciary duty to "hold [union] money and property solely for 

the benefit of the organization and [the union's] members...." 29 U.S.C. § 501(a) (1994). To be sure, in United 

States v. Boyle, 482 F.2d 755 (D.C. Cir. 1973), we held that a 

union officer could not use authorization as a defense when he 

converted union funds for a plainly illegal campaign contribution, but the case only stands for the basic proposition that a 

union officer cannot be "authorized" as a matter of law to 

engage in specifically proscribed criminal acts. It would 

extend Boyle considerably to hold that an action that would 

otherwise constitute a breach of fiduciary duty under § 501(a) 

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may not be authorized as a matter of law. On the other 

hand, a very general delegation in the union's bylaws may not 

be thought adequate to authorize a manifestly unreasonable 

specific act. Since we hold that appellants were not authorized, we need not decide this issue.

Without even considering the troubling evidence that appellants secured the triggering mechanism for their severance 

payments through election fraud, there is more than enough 

evidence in the record to withstand appellants' request for a 

judgment of acquittal on the embezzlement count. As a 

fallback position, appellants, however, also assert that a new 

trial on this count is required because of the district court's 

failure to properly instruct the jury regarding the separate 

authorization element of the offense. At a minimum, they 

argue the jury should have been instructed that the government was obligated to prove either the lack of authorization 

or the lack of good faith belief that the payments would 

benefit the union. While it is true that the jury charge was 

perhaps imprecise because at one point it subsumed the 

authorization question into the fraudulent intent inquiry, we 

are satisfied that the instructions nonetheless adequately 

described the elements of the embezzlement offense. See 

Stockton, 788 F.2d at 217-18.6 We detect no reversible error 

in this aspect of the district court's charge.

Shifting from the authorization element of a § 501(c) violation to the question of intent, appellants argue that the 

district court's failure to give appellants' requested advice-ofcounsel jury instruction constitutes reversible error. Appellants' defense to the embezzlement count was largely based 

on their reliance on the advice of their outside counsel, 

Angelo Arcadipane, a partner at Dickstein, Shapiro & Morin. 

According to testimony presented at trial, Arcadipane advised 

appellants that the severance payments were completely legal. Because "[g]ood faith reliance upon advice of counsel 

... establish[es] a defense" to specific intent crimes, United 

__________

6 As in Stockton, the definitions of "embezzle" and "converts" 

given in the jury instructions sufficiently incorporated the offense's 

lack of authorization element.

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States v. Hansen, 772 F.2d 940, 947 (D.C. Cir. 1985), such as 

§ 501(c), appellants assert that the jury should have been 

given an instruction that good-faith reliance on advice of 

counsel was a defense to embezzlement.

A defendant is entitled to an advice-of-counsel instruction if 

he introduces evidence showing: (1) he made full disclosure of 

all material facts to his attorney before receiving the advice at 

issue; and (2) he relied in good faith on the counsel's advice 

that his course of conduct was legal. United States v. Lindo,

18 F.3d 353, 356 (6th Cir. 1994).7 The district court is 

required to give this instruction "if there is 'any foundation in 

the evidence' sufficient to bring the issue into the case, even if 

that evidence is 'weak, insufficient, inconsistent, or of doubtful 

credibility.' " United States v. Duncan, 850 F.2d 1104, 1117 

(6th Cir. 1988) (quoting United States v. Phillips, 217 F.2d 

435, 443 (7th Cir. 1954)). It seems clear to us that the district 

court abused its discretion by refusing appellants' request for 

an advice-of-counsel instruction. Misstating the law, the district court observed, "my problem is that the evidence as it 

stands right now is equally consistent with an inference to 

the effect that the advice of counsel was used as subterfuge 

as it was that the defendants genuinely and in good faith 

relied upon it." The district court obviously believed that 

there was at least the requisite "foundation" for appellants' 

advice-of-counsel defense but was under the incorrect understanding that appellants instead were obliged to satisfy a 

preponderance of the evidence standard in order to be entitled to the instruction.

On appeal, the government defends the district court's 

ruling by claiming that appellants failed to disclose several 

material facts to Arcadipane and did not rely on his advice in 

good faith. However, our review of the record indicates that 

appellants set forth more than sufficient evidence to earn an 

__________

7 The government argues that we should apply a three-part 

test. Consistent with Lindo, however, we have not applied the 

government's second prong. So long as the defendant relies on his 

counsel's advice in good faith, it is irrelevant whether or not he 

initially sought the advice in good faith.

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advice-of-counsel instruction. The government produces a 

laundry list of supposedly material facts appellants allegedly 

did not disclose to Arcadipane, focusing on the argument that 

Arcadipane was unaware of appellants' attempts to conceal 

the severance plan's existence. The evidence clearly indicates, however, that Arcadipane was generally aware of how 

the union operated and the degree to which the severance 

plans had been disclosed to the membership and auditors at 

the time he issued his final opinion that the payment of the 

severance benefits was legal. No client ever tells his or her 

lawyer every single fact that a good lawyer probes before 

giving advice. Indeed, clients do not typically even know 

which facts a lawyer might think relevant. (That is, in part, 

why they consult lawyers.) So long as the primary facts 

which a lawyer would think pertinent are disclosed, or the 

client knows the lawyer is aware of them, the predicate for an 

advice-of-counsel defense is laid. Even if we were to regard 

Arcadipane's advice as questionable, he was adequately informed about the details of appellants' conduct.

The government also argues that appellants did not rely on 

Arcadipane's advice in good faith because (1) DeFries dictated to Arcadipane the formula and terms of the severance 

plan; and (2) appellants did not adhere to Arcadipane's advice 

to limit severance payments to one month's salary per year of 

service. According to the government, the evidence establishes that DeFries manifested his intent to implement the 

severance plan before receiving Arcadipane's legal opinion. 

The government unfairly ascribes nefarious motives to common attorney-client interaction. A client often comes to his 

lawyer with a plan and asks him to find a way to implement it 

in a legal manner. Fitting a client's objective into a legally 

acceptable formula is a large part of lawyering. Similarly, 

attorneys often advise their clients to act more cautiously 

than the law requires. It is an important part of a lawyer's 

job to warn his clients about behavior that, while not illegal, 

nonetheless has the potential to embroil a client in controversy. Although in this case Arcadipane did suggest appellants 

reduce the amount of the severance payments in order to 

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vised that the final version of the plan was legal. If we were 

to conclude that a client did not "rely" on his attorney's 

advice in good faith anytime he disregarded one of his 

attorney's suggestions, the scope of the advice-of-counsel 

defense would be very narrow indeed.

We turn to the question of whether the district court's 

error is reversible. A refusal to give a jury instruction is 

reversible error only if the requested instruction "(1) is 

substantively correct; (2) was not substantially covered in the 

charge actually delivered to the jury; and (3) concerns an 

important point in the trial so that the failure to give it 

seriously impaired the defendant's ability to effectively present a given defense." United States v. Taylor, 997 F.2d 1551, 

1558 (D.C. Cir. 1993).

The government does not dispute that the requested 

advice-of-counsel instruction was substantively correct but 

maintains that the jury was adequately instructed with regard to appellants' defense. The government points out the 

jury was informed that the government was obligated to 

prove that the defendants had acted "with the knowledge that 

[they] violated the law" and the jury was further told that 

"the defendants maintain that receipt of the severance payments was done in full compliance ... with the advice of 

counsel." Although the charge allowed the defense to argue 

in summation that appellants had believed the payments were 

legal because they had been so advised by Arcadipane, the 

jury was not exposed to one critical piece of the puzzle: goodfaith reliance on advice of counsel was a valid defense that, if 

proved, required acquittal.

The government's position fails to give due consideration to 

the prosecutor's conduct in closing argument to the jury. 

After successfully preventing the defense from obtaining the 

advice-of-counsel instruction, the prosecutor explicitly told the 

jury that reliance on Arcadipane's advice "is not a defense" 

and he informed members of the jury that "[the court] will 

not read any instruction regarding reliance on Angelo Arcadipane's advice." Reading the jury instructions in their entirety and viewing them in light of the prosecutor's comments, 

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members of the jury were left with the incorrect impression 

that reliance on advice of counsel was merely an excuse 

offered by appellants and not a legitimate defense. Appellants were entitled to an instruction explaining the legal 

significance of their defense and not just a statement summarizing the "defense theory." See United States v. Newcomb, 6 F.3d 1129, 1132, 1139 (6th Cir. 1993).

Once it is accepted that the advice-of-counsel instruction 

was not substantially covered by other aspects of the charge, 

it seems obvious that this omission seriously impaired appellants' ability to present their chosen defense. Beginning with 

the opening statement, appellants' main defense to the embezzlement count was that they did not act with fraudulent 

intent because of their good faith reliance on Arcadipane's 

advice. But when the district court listed a number of factors 

for the jury to consider in assessing appellants' intent, it did 

not even mention the advice of counsel. Not only did this 

suggest to the jury that appellants' central defense was 

irrelevant to the question of intent, but when the intent 

instructions did not mention the specific defense, the jury 

may have been led to believe that appellants' main defense 

was actually inconsistent with the law. See Duncan, 850 F.2d 

at 1118. The district court's error seriously prejudiced appellants' ability to receive a fair trial on the embezzlement count.

We, therefore, reverse appellants' § 501(c) convictions.

V. RICO Jury Instruction

Appellants contend that the district court's RICO instruction took away the enterprise element of that offense from 

the jury, and consequently their RICO and RICO conspiracy 

convictions must be reversed. We agree.

The district court instructed the jury on the RICO counts, 

over appellants' objection, that:

To establish the charged substantive RICO offense with 

respect to any particular defendant, the Government 

must prove each of the following five elements, each 

beyond a reasonable doubt:

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ONE: An "Enterprise" as described in the indictment, 

existed on or about the time alleged in the indictment....

Regarding the first element, the government must 

prove beyond a reasonable doubt the existence of an 

"enterprise." As used in these instructions, the term 

"enterprise" includes any individual, partnership, corporation, association, or other legal entity, including a labor 

union. It applies even to a group of individuals associated in fact although not generally thought of as a legal 

entity.

The indictment here charges that the enterprise was a 

union, that is District No. 1-Pacific District Maritime 

Engineers' Beneficial Association, which has been referred to as District No. 1-PCD/MEBA, its committees, 

and its successor union, the District No. 1-Marine Engineers' Beneficial Association/National Maritime Union, 

which has also been referred to as "District No. 

1-MEBA/NMU."

You are instructed that, for purposes of this element of 

counts one and two, you should regard the two unions as 

a single enterprise.

(Emphasis added).

Under RICO § 1962(c),8"the existence of an enterprise is 

an essential element of a RICO claim." Montesano v. Seafirst Commercial Corp., 818 F.2d 423, 426 (5th Cir. 1987); see 

also Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985); 

Richmond v. Nationwide Cassel L.P., 52 F.3d 640, 650 (7th 

Cir. 1995); United States v. Console, 13 F.3d 641, 653 (3d Cir. 

1993). Indeed, "[t]he central role of the concept of enterprise 

__________

8 Section 1962(c) provides that:

It shall be unlawful for any person employed by or associated 

with any enterprise engaged in, or the activities of which affect, 

interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs 

through a pattern of racketeering activity or collection of 

unlawful debt.

18 U.S.C. § 1962(c).

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under RICO cannot be overstated." United States v. Neapolitan, 791 F.2d 489, 500 (7th Cir. 1986). The existence of an 

enterprise "at all times remains a separate element which 

must be proved by the Government." 9 United States v. 

Turkette, 452 U.S. 576, 583 (1981).

Because "criminal convictions [must] rest upon a jury determination that the defendant is guilty of every element of 

the crime with which he is charged, beyond a reasonable 

doubt," 10 if jury instructions remove an element of a crime 

from the jury's consideration, then those instructions are 

flawed as a matter of law. United States v. Gaudin, 515 U.S. 

506, 510, 522-23 (1995); see also Sullivan v. Louisiana, 508 

U.S. 275, 277-78 (1993); United States v. Fennell, 53 F.3d 

1296, 1301 (D.C. Cir. 1995).

The district court's RICO instruction did not obligate the 

government to prove the existence of an enterprise. Instead 

the instructions on the enterprise element concluded with the 

admonition that the jury "should regard the two unions as a 

single enterprise."

The government maintains, nevertheless, that there was no 

error in the instructions because the district court twice 

instructed the jury that in order to convict it had to find all 

elements of a RICO offense beyond a reasonable doubt, and 

that the government was required to prove the existence of 

an enterprise as described in the indictment that existed on 

or about the time alleged in the indictment. The indictment 

alleged that the enterprise consisted of "District No. 

1-PCD/MEBA, its committees and its successor union District No. 1-MEBA/NMU, its divisions, committees and con-

__________

9 To the extent that the government argues that whether the 

two unions constituted a single enterprise is a matter of law, it is 

mistaken. "The existence vel non of a RICO enterprise is a 

question of fact for the jury." Console, 13 F.3d at 650.

10 This proposition is rooted in both the Fifth Amendment 

guarantee that no one will be deprived of liberty without "due 

process of law," and the Sixth Amendment right to a jury trial "[i]n 

all criminal prosecutions." See U.S. Const. amends. V, VI; United 

States v. Gaudin, 515 U.S. 506, 509-10 (1995).

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ventions." The court's subsequent remarks about the "enterprise element," the government contends, must be viewed in 

conjunction with these general admonitions. But this argument misses the point. The government's attempts to construe the district court's final instruction as a conditional 

statement are contradicted by the explicit language used by 

the courtit "instructed" the jury that it "should" regard the 

enterprise as the one alleged in the indictment. This erroneous command marked the district court's final words on the 

enterprise element, irreparably infecting the instruction.11

Rather than permitting the jury to determine whether an 

enterprise existed, and, if it did, which unions it included, the 

instruction removed those questions from the jury's consideration.12 The district court did not instruct the jury that if it 

__________

11 The government's other efforts to rehabilitate the instruction 

rely on outdated or inapposite cases. United States v. Barton, 647 

F.2d 224, 231 n.7 (2d Cir. 1981), concluded that a mixed question of 

fact and law (concerning the interstate commerce element of a 

RICO charge) could be decided by a court. But following Gaudin,

"mixed questions of law and fact" must be left for the jury. 

Gaudin, 515 U.S. at 512-15; accord United States v. Parker, 73 

F.3d 48, 51 (5th Cir. 1996) (holding interstate commerce element of 

RICO is a jury question); United States v. Aramony, 88 F.3d 1369, 

1386-88 (4th Cir. 1996) (same). The government's other cases 

concern district court refusals to give requested multiple conspiracy 

instructions. Although in some conspiracy cases a district court 

may decline to give an instruction containing a defense theory of 

multiple conspiracies where the defendant has not shown that he is 

entitled to one, see, e.g., United States v. Graham, 83 F.3d 1466, 

1472 (D.C. Cir. 1996); United States v. Briscoe, 896 F.2d 1476, 1514 

(7th Cir. 1990); United States v. Orr, 825 F.2d 1537, 1542-43 (11th 

Cir. 1987); United States v. Towers, 775 F.2d 184, 189-90 (7th Cir. 

1985); United States v. McLernon, 746 F.2d 1098, 1107-08 (6th Cir. 

1984), it may not direct the jury to find that a particular RICO 

enterprise existed, as occurred in the instant case.

12 Contrary to the government's contention, this was a contested issue. Although the government maintains that appellants fail to 

point to any disputed specific facts that the jury was required to 

resolve in order to determine whether the government had proved 

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found the two unions had an ongoing organization and functioned as a continuing unit, then they constituted a single 

enterprise as charged in the indictment. Cf. United States v. 

Roth, 860 F.2d 1382, 1390 (7th Cir. 1988); United States v. 

Serino, 835 F.2d 924, 930-31 (1st Cir. 1987). As Gaudin 

makes clear, a court must give the jury the opportunity to 

evaluate whether the government has proven its case beyond 

a reasonable doubt for every element of the crime charged. 

See Gaudin, 515 U.S. at 510. The court may never direct a 

verdict for the government on an element of a criminal 

offense, "no matter how overwhelming the evidence." Sullivan, 508 U.S. at 277; see also Gaudin at 510-11. Yet that 

was the effect of the district court's instruction in the instant 

case.

Accordingly, we hold that appellants were denied their 

right to have the jury determine whether the government had 

proved beyond a reasonable doubt that the two unions constituted a single enterprise and their RICO and RICO conspiracy convictions must be reversed.13 See Gaudin, 515 U.S. at 

510-11.

__________

the charged enterprise, appellants presented evidence that 

MEBA/NMU was a fundamentally different union from PCD/

MEBA in purpose, structure, and personnel, thereby giving rise to 

a classic jury question. Cf. United States v. Perholtz, 842 F.2d 343, 

354 (D.C. Cir. 1988).

13 The district court's failure to allow the jury to decide the 

enterprise element was, per se, a reversible error. See Gaudin, 515 

U.S. at 510-11; Sullivan 508 U.S. at 280-83. The government's 

reliance on Johnson v. United States, 117 S. Ct. 1544, 1549-50 

(1997), as somehow undermining the application of Sullivan's per se 

prejudicial error rule to a Gaudin error is misplaced. The Court in 

Johnson engaged in a plain error analysis because the appellant 

had failed to make an objection to the instruction at trial. It did 

not decide whether Gaudin errors were per se prejudicial errors 

that affected a defendant's substantial rights, or rather were subject to a harmless error analysis. See Johnson, 117 S. Ct at 1550. 

Although, as appellants note, the Court has granted certiorari to 

decide whether failing to instruct the jury on an element can be 

found harmless where the defendant admitted that element at trial, 

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VI. RICO Forfeitures

Following the return of the guilty verdicts by the jury, the 

district court ordered appellants to forfeit the salaries that 

they earned between 1985 and 1990 from both the union and 

the umbrella organization of which it was a member, the 

National MEBA (the "national"). Appellants served as officers of the national as well as the union. The court also 

ordered appellants to forfeit the severance pay that they 

earned after the merger. Because we reverse appellants' 

RICO convictions, the accompanying forfeitures must also be 

reversed. See United States v. Chavez, 845 F.3d 219, 222 (9th 

Cir. 1988). To facilitate disposition of the cases on remand, 

we address several forfeiture issues raised by appellants that 

present questions of first impression in this circuit. Cf., e.g., 

United States v. Burke, 888 F.2d 862, 869 (D.C. Cir. 1989).

Causal Relationship Between Appellants' Salaries and RICO 

Violation

The criminal forfeiture provision of RICO provides:

Whoever violates any provision of section 1962 ... shall 

forfeit to the United States, ...

(1) any interest the person has acquired or maintained 

in violation of section 1962;

(2) any

(A) interest in;

__________

see Rogers v. United States, 117 S. Ct. 1841 (1997), the resolution of 

that issue has no bearing on the instant case. In Rogers, the 

Eleventh Circuit distinguished the effect of the district court's 

failure to instruct the jury on an element from a case such as this, 

where the court directed a verdict on an element. See United 

States v. Rogers, 94 F.3d 1519, 1526 n.13 (11th Cir. 1996). Moreover, appellants make a facially persuasive argument that the error 

here was not harmless. Because the government chose to allege in 

the indictment that the two unions constituted a single enterprise 

that evidenced the pattern of racketeering, the enterprise element 

is inextricably intertwined with the jury's finding of a pattern of 

racketeering activity.

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(B) security of;

(C) claim against; or

(D) property or contractual right of any kind affording a source of influence over;

any enterprise which the person has ... participated in 

the conduct of, in violation of section 1962; and

(3) any property constituting, or derived from, any 

proceeds which the person obtained, directly or indirectly, from racketeering activity or unlawful debt collection 

in violation of section 1962.

18 U.S.C. § 1963(a) (1988). The government must prove its 

forfeiture allegations by a preponderance of the evidence.14

Cf. Libretti v. United States, 116 S. Ct. 356, 362-63 (1995) 

(holding that criminal forfeiture is an aspect of sentencing).

The forfeiture provision requires that there be a causal link 

between the property forfeited and the RICO violation. 

Thus, only property "acquired or maintained" through racketeering activity or "derived from[ ] any proceeds ... obtained, directly or indirectly from racketeering activity" is 

subject to forfeiture. 18 U.S.C. § 1963(a)(1), (3). This court 

has yet to articulate a test for determining whether the 

government has established an appropriate casual relationship between the property to be forfeited and the statutory 

violation. Other circuits have assessed the nexus between 

property and racketeering by applying a but-for test first 

articulated in United States v. Horak, 833 F.2d 1235, 1242-43 

(7th Cir. 1987). The Seventh Circuit explained that "in order 

to win a forfeiture order, the government must show ... that 

[the defendant's] racketeering activities were a cause in fact 

of the acquisition or maintenance of" the property sought. 

Id. at 1243. The but-for test has been adopted by the First, 

Second, and Third Circuits. See United States v. Angiulo, 

897 F.2d 1169, 1213 (1st Cir. 1990); United States v. Ofchinick, 883 F.2d 1172, 1183 (3d Cir. 1989); United States v. 

__________

14 We note that at the request of the government, the district 

court applied the reasonable doubt standard to the forfeiture allegations. United States v. DeFries, 909 F. Supp. 13, 16 n.3 (D.D.C. 

1995).

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Porcelli, 865 F.2d 1352, 1365 (2d Cir. 1989). Because the butfor test usefully articulates the requirement of a nexus between the targeted property and the racketeering activity, we 

adopt it.

Appellants contend that the government failed to establish 

an adequate causal link between their ballot tampering and 

the electoral triumphs that afforded them the salaries they 

forfeited. In their view, the government's causal burden 

obligated it to establish that their allegedly illegal ballot 

tampering changed the outcome of the elections they won. 

Appellants misapprehend what the but-for test requires, at 

least in this case. The government need not show the 

election results would have been different absent the alleged 

racketeering activities. As the district court noted,

[i]n any election, public or private, involving more than a 

minimal number of voters or ballots, a rule requiring the 

government to prove that an alternative outcome would 

have ensued had the election been untainted would render the victors' offices and emoluments virtually invulnerable to forfeiture.

United States v. DeFries, 909 F. Supp. 13, 17 (D.D.C. 1995). 

The district court concluded that appellants' racketeering 

activity infected the entire election, given that

[c]ynicism prevailed among the rank-and-file Union members as to the integrity of its electoral processes, making 

it likely that potential opponents declined to run for 

office; that an indeterminate number of Union members 

refused to vote at all; and that others voted for defendants only for self-preservation in the sure knowledge 

that the secrecy of their ballots would be compromised.

Id. These findings, made upon consideration of all the evidence presented at trial and at sentencing, could sustain the 

necessary causal inference. Appellants cannot contest that 

but for the elections, which the district court found to be 

tainted by appellants' racketeering activity, they would not 

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have received their salaries. Their challenge to the district 

court's application of the but-for test therefore must fail. 

Forfeiture of Pre-Tax Income

Appellants also contend that the district court erred in 

forfeiting taxes that they had already paid on their salaries 

and severance payments.15 We disagree.

The courts that have directly addressed the tax deduction 

question have rejected appellants' position. See United 

States v. Lizza Indus., Inc., 775 F.2d 492, 498 (2d Cir. 1985); 

United States v. Milicia, 769 F. Supp. 877, 889-90 (E.D. Pa. 

1991), appeal dismissed, 961 F.2d 1569 (3d Cir. 1992); United 

States v. Elliott, 727 F. Supp. 1126, 1129 (N.D. Ill. 1989). 

Essentially, they reason from Supreme Court decisions and 

the legislative history of the RICO statute that Congress 

intended, in allowing forfeiture in a criminal prosecution, to 

provide an extreme remedy for an extreme situation in which 

organized crime was corrupting otherwise lawful enterprises 

and activities with money from illegal drug distribution and 

other racketeering activities. E.g., Lizza, 775 F.2d at 498; 

see also Russello v. United States, 464 U.S. 16, 27-28 (1983); 

United States v. Turkette, 452 U.S. 576, 591 (1981). Although 

the Seventh Circuit in dicta has interpreted the Supreme 

Court to have "intimate[d]" in Russello, 464 U.S. at 22, that 

the RICO Act contemplates forfeiture of "net, not gross, 

revenuesprofits, not sales, for only the former are gains," 

United States v. Masters, 924 F.2d 1362, 1369-70 (7th Cir. 

1991), two other circuits have disagreed. See United States v. 

McHan, 101 F.3d 1027, 1042 (4th Cir. 1996) (noting, in part, 

that "[t]he proper measure of criminal responsibility generally is the harm that the defendant caused, not the net gain 

__________

15 Appellants further contend that a reversal of the forfeitures 

should not empower the district court to revisit its finding at the 

time of sentencing that appellants had no ability to pay any fine or 

restitution. The district court imposed fines and restitution contingent upon reversal of the forfeiture orders. The government notes, 

and appellants do not dispute, that the presentence report found 

that each appellant had the financial ability to pay the fines and 

restitution if the forfeitures were vacated. However, because we 

reverse all of appellants' convictions, the district court would have 

no basis for imposing fines or restitution in the instant case.

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that he realized from his condition"); United States v. Hurley, 63 F.3d 1, 21 (1st Cir. 1995); United States v. Saccoccia, 

58 F.3d 754, 785 (1st Cir. 1995). Furthermore, even were we 

persuaded by the view of the Seventh Circuit, in Masters the 

court was concerned with costs and profits, and not with the 

question whether taxes paid are properly deducted from the 

forfeiture amount. See Masters 924 F.2d at 1369-70. These 

are different questions, to be treated separately. See Lizza, 

775 F.2d at 498; Elliot, 727 F. Supp. at 1129. As the district 

court noted in Elliot, taxes are more like overhead, which the 

legislative history of RICO indicates should not be deducted.

Elliot, 727 F. Supp. at 1129; see also S. Rep. No. 98-225, at 

199 (1984), reprinted in 1984 U.S.C.C.A.N. 3182, 3382 (stating 

that "[i]t should not be necessary for the prosecutor to prove 

what the defendant's overhead expenses were").

The dissenting judge in Lizza suggested, appellants note, 

that "we lose sight of RICO's basic purpose when we require 

a RICO defendant to forfeit to the Government that portion 

of the defendant's unlawfully acquired profits which the Government already has taken by taxing the defendant's income." 

Lizza, 775 F.2d at 499 (Van Graafeiland, J., concurring in part 

and dissenting in part). However, neither the language of 

the RICO forfeiture provision nor its legislative history provide support for a deduction of taxes paid from a forfeited 

salary. RICO's criminal forfeiture provision calls for the 

forfeiture of "any interest ... acquired ... in violation of 

section 1962." Congress explicitly directed the courts to 

interpret the RICO Act liberally to "effectuate its remedial 

purposes." See Organized Crime Control Act of 1970, Pub. 

L. 91-452, § 904(a), 84 Stat. 947 (1970), quoted in Russello, 

464 U.S. at 27. The Supreme Court has concluded from the 

legislative history that the "statute was intended to provide 

new weapons of unprecedented scope for an assault upon 

organized crime and its economic roots." Russello, 464 U.S. 

at 26. Indeed, the Court concluded in Russello that Congress 

"undoubtedly" chose the word "interest" because it "did not 

wish the forfeiture provision of § 1963(a) to be limited by 

rigid and technical definitions drawn from other areas of the 

law...." Id. at 21, 25. Moreover, the legislative history of 

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the 1984 amendments to the RICO forfeiture provision indicate that the government need not prove net profits when it 

seeks to forfeit the property of an enterprise. See S. Rep. 

No. 98-225, at 199 ("[T]he term 'proceeds' has been used in 

lieu of the term 'profits' in order to alleviate the unreasonable 

burden on the government of proving net profits."). In any 

event, appellants' construction of "interest" would lead to the 

anomalous result that taxes could be deducted in those cases 

where defendants directly deposited their money in a bank 

account but not in cases where they used their "proceeds" to 

buy real property.

In addition, a deduction for taxes could create unwarranted 

complexities in the administration of the statute. The 

amount of taxes that a person pays depends upon his or her 

other income as well as on the nature of deductions taken by 

the taxpayer. See Elliot, 727 F. Supp. at 1129. Recognizing 

this difficulty, the majority in Lizza concluded that "RICO 

does not require the prosecution to prove or the trial court to 

resolve complex computations, so as to ensure that a convicted racketeer is not deprived of a single farthing more than his 

criminal acts produced." Lizza, 775 F.2d at 498.

Finally, RICO criminal forfeiture differs from other types 

of forfeiture because it is targeted at the individual wrongdoer, rather than the property sought to be forfeited. See 

United States v. $814,254.76 in U.S. Currency, 51 F.3d 207, 

210-11 (9th Cir. 1995). The forfeiture is not intended to 

rectify the unjust enrichment of the individual, but to punish 

the defendant "upon conviction of violation of any provision of 

the section ... by forfeiture of all interest in the enterprise." 

S. Rep. No. 91-617, at 80 (1969). (quoting Department of 

Justice commentary). RICO forfeitures mark the "revival of 

the concept of forfeiture as a criminal penalty." Id. As the 

majority in Lizza explained, "[f]orfeiture under RICO is a 

punitive, not a restitutive, measure." 16 Lizza, 775 F.2d at 

__________

16 Thus, to the extent that appellants contend that they "forfeited" a portion of their salaries to the United States when they paid 

their taxes, their contention is without merit. The payment of taxes 

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498. It follows that the punitive purpose of the forfeiture 

provision should not be subverted by a rule that could obscure that purpose with technical tax calculations. Indeed, 

construing the statute more narrowly could hinder the actualization of this punitive intent.17

VII. Conclusion

For the foregoing reasons, the convictions are reversed.

So ordered.

__________

is not an in personam criminal penalty. A RICO forfeiture is such 

a penalty.

17 Appellants' final forfeiture contention, that because the government did not indicate that it would seek forfeiture of the salaries 

they earned as members of the national in the indictment or in the 

response to a bill of particulars, it should have been precluded from 

doing so at the forfeiture hearing pursuant to Rule 7(c)(2), is 

meritless. The government is not required to list all forfeitable 

interests in the indictment, provided the indictment notifies defendants that the government will seek to forfeit all property acquired 

in violation of RICO. See, e.g. United States v. Sarbello, 985 F.2d 

716, 721 (3d Cir. 1993); United States v. Strissel, 920 F.3d 1162, 

1166 (4th Cir. 1990); United States v. Grammatikos, 633 F.2d 1013, 

1024-25 (2d Cir. 1980). De facto notice, moreover, which appellants 

had here, can cure defects in a forfeiture pleading. Sarbello, 985 

F.2d at 721.

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