Source: http://federaltaxcrimes.blogspot.com/2016/05/the-defraud-conspiracy-and-its.html
Timestamp: 2019-04-20 14:16:38+00:00

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Undaunted, Fitzpatrick and Morosco also suggest that because no statute or regulation criminalizes receiving a list of sample units before any HUD inspection, the government could not prosecute them under section 371. But our cases take all the wind out of their sails, holding as they do "that lawful activity may furnish the basis for a" section-371 conspiracy conviction. See United States v. Hurley, 957 F.2d 1, 4 (1st Cir. 1992) (finding unconvincing "defendants' asserted lack of 'fair warning' that their 'legal' conduct could be the basis for a criminal prosecution," noting that "[t]he statutory prohibition against defrauding the government adequately put defendants on notice that a scheme designed to frustrate tax collection was prohibited"); accord Barker Steel Co., 985 F.2d at 1131 (emphasizing that section 371 bans both "(1) conspiracies to commit a specific offense against the United States, included elsewhere in the criminal code, and (2) conspiracies to defraud the United States," and rejecting defendants' argument "that if no other federal law or regulation proscribes alleged conduct, then [they] cannot be held criminally responsible pursuant to § 371" — "[i]f the second clause were interpreted to require commission of a specific offense, it would have the same meaning as the first clause thus rendering the second clause redundant"); United States v. Tarvers, 833 F.2d 1068, 1075 (1st Cir. 1987) (stressing that section 371 "does not require that the means used to achieve the unlawful goal of the conspiracy be unlawful"). So this aspect of Fitzpatrick's and Morosco's vagueness theory also goes nowhere.
In what is basically a Hail Mary pass, Morosco argues that two fairly recent cases signal a new willingness on the high Court's part to entertain vagueness challenges — a willingness (the argument goes) that we must emulate. The two cases are (1) Skilling v. United States, 561 U.S. 358, 130 S. Ct. 2896, 177 L. Ed. 2d 619 (2010), limiting "honest services" fraud so that it only applies to defendants involved in either bribery or kickback schemes, and (2) Johnson v. United States, 135 S. Ct. 2551, 192 L. Ed. 2d 569 (2015), declaring the Armed Career Criminal Act's residual clause — a provision dealing with crimes that "involve conduct that presents a serious potential risk of physical injury" — too vague to be enforced. His pass falls incomplete, however, and for a simple reason. Neither Skilling nor Johnson overruled the Haas/Hammerschmidt line of section-371 cases. And because overruling Supreme Court precedent is the Court's job, not ours, we must follow Haas/Hammerschmidt, etc. until the Court specifically tells us not to — something that is true even if these long-on-the-books cases are in tension with Skilling and Johnson (and we do not suggest that they are). See Hohn v. United States, 524 U.S. 236, 252-53, 118 S. Ct. 1969, 141 L. Ed. 2d 242 (1998) (declaring that Supreme Court "decisions remain binding precedent until [the Court] see[s] fit to reconsider them, regardless of whether subsequent cases have raised doubts about their continuing vitality"); Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 484, 109 S. Ct. 1917, 104 L. Ed. 2d 526 (1989) (instructing that "[i]f a precedent of this Court has direct application in a case, yet appears to rest on reasons rejected in some other line of decisions, the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions"); see also United States v. Coplan, 703 F.3d 46, 61-62 (2d Cir. 2012) (rejecting the idea that a circuit court should use Skilling to rework controlling section-371 precedent, noting that lower courts should leave any reworking to the Supreme Court); Spector Motor Serv. v. Walsh, 139 F.2d 809, 823 (2d Cir. 1943) (L. Hand, J., dissenting) (cautioning lower courts against "embrac[ing] the exhilarating opportunity of anticipating" the overruling of a Supreme Court decision), vacated sub nom. Spector Motor Serv. v. McLaughlin, 323 U.S. 101, 65 S. Ct. 152, 89 L. Ed. 101 (1944).
At oral argument before us, Morosco (through his lawyer) conceded that while what he did (giving CHA the list of to-be-inspected units before the inspection) "does not appear to be innocent," he "did not see it as criminal." That tees up his mens-rea argument, which is sort of a corollary to his void-for-vagueness claim: Morosco contends that section 371's defraud clause — which, to repeat, outlaws conspiracies "to defraud the United States, or any agency thereof in any manner or for any purpose" — lacks a mens-rea requirement. And, he intimates, to cure this problem, the judge should have told jurors (but did not) that they could only convict if they found that he knew his actions constituted a crime — an instruction, he says, that would have resulted in his acquittal, because, as he knew, no HUD regulation criminalized giving housing-authority officials a list of to-be-inspected units before the inspections. Color us unconvinced.
Mens rea (for the uninitiated) is the mental state — "knowingly" or "willfully," for example — required to convict. The idea behind the mens-rea requirement "is that a defendant must be 'blameworthy in mind' before he can be found guilty" — an idea that "is 'as universal and persistent in mature systems of law as belief in freedom of the human will and a consequent ability and duty of the normal individual to choose between good and evil.'" See Elonis v. United States, 135 S. Ct. 2001, 2009, 192 L. Ed. 2d 1 (2015) (quoting Morissette v. United States, 342 U.S. 246, 250, 252, 72 S. Ct. 240, 96 L. Ed. 288 (1952)). So important is this concept that we will usually read criminal statutes as implicitly requiring proof of mens rea even when they do not have a mens-rea component explicitly written into them, id. — though in doing so we read into them "only that mens rea which is necessary to separate wrongful conduct from 'otherwise innocent conduct,'" id. at 2010 (quoting Carter v. United States, 530 U.S. 255, 269, 120 S. Ct. 2159, 147 L. Ed. 2d 203 (2000)).
But "[t]his is not to say that a defendant must know that his conduct is illegal before he may be found guilty." Id. Far from it. Instead, he "generally must 'know the facts that make his conduct fit the definition of the offense.'" Id. (quoting Staples v. United States, 511 U.S. 600, 608 n.3, 114 S. Ct. 1793, 128 L. Ed. 2d 608 (1994)). We say "generally," however, because in certain situations — like where a statute presents a danger of criminalizing apparently innocent acts — we sometimes require proof that the defendant knew his conduct infracted a specific law. See, e.g., Cheek v. United States, 498 U.S. 192, 200-01, 111 S. Ct. 604, 112 L. Ed. 2d 617 (1991).
[t]o act willfully . . . means to act voluntarily and intelligently and with the specific intent that the underlying crime, that is, interfering with the proper operation of the [HUD] program, . . . be committed. That is, when we talk about acting "willfully," we talk about acting with bad purpose either to disobey or disregard the law, and not to act simply because of ignorance, or accident, or mistake.
Defending the judge's charge, the government (to quote its brief) says that section 371 neither explicitly nor implicitly "require[s] 'willful' action" — a "knowing" mens rea suffices — so, the government asserts, the instruction here actually required prosecutors to prove "a level of mens rea" higher than what the statute demands. n6 Interesting as the government's thought may be, the only mens-rea issue relevant here is the one Morosco raises: i.e., his claim that the judge should have said more than he did, instructing them that to convict they had to find that he knew his actions were not just improper (he basically concedes that they were) but were "criminal." The problem for Morosco is that he never asked for such an instruction, meaning we review only for plain error — a hard-to-meet standard that requires a person in his shoes to show "error, plainness, prejudice to [him] and the threat of a miscarriage of justice." See United States v. Torres—Rosario, 658 F.3d 110, 116 (1st Cir. 2011); see also United States v. Frady, 456 U.S. 152, 163, 102 S. Ct. 1584, 71 L. Ed. 2d 816 (1982) (noting that plain error means an error so obvious that a judge is "derelict in countenancing it, even absent the defendant's timely assistance in detecting it"). But Morosco cites no authority — and we know of none — saying that the mens rea for a case like his is that the defendant knew his conduct constituted a crime. So the situation here is not within a country mile of plain error — i.e., an "'indisputable'" error by the judge, "given controlling precedent." See Correa-Osorio, 784 F.3d at 22 (quoting United States v. Jones, 748 F.3d 64, 70 (1st Cir. 2014), which in turn cited United States v. Marcus, 560 U.S. 258, 262, 130 S. Ct. 2159, 176 L. Ed. 2d 1012 (2010)).
n6 For support, the government cites out-of-circuit cases holding that a section-371 prosecution does not require "willful" intent, see United States v. Khalife, 106 F.3d 1300, 1303 (6th Cir. 1997); United States v. Cyprian, 23 F.3d 1189, 1201-02 (7th Cir. 1994); United States v. Derezinski, 945 F.2d 1006, 1012 (8th Cir. 1991) — though the government acknowledges, at least implicitly, that the judge's "[t]o act willfully" instruction essentially tracks the one we approved in another conspiracy-to-defraud case involving section 371. See United States v. Monteiro, 871 F.2d 204, 208 (1st Cir. 1989).
We are not done with "willfully," however.
An act or failure to act is, quote, willful, unquote, if done voluntarily and intentionally, and with the specific intent to do something the law forbids, or with specific intent to fail to do something the law required to be done; that is to say, with bad purpose either to disobey or to disregard the law. The burden to prove intent, as well as all other elements of the crime, rests with the government.
To act "willfully" means to act voluntarily and intelligently and with specific intent that the underlying crime — conspiracy to impair, impede and defeat the proper operation of the physical condition assessment of federally-funded housing units of the Chelsea Housing Authority by the United States Department of Housing and Urban Development's Real Estate Assessment Center ("REAC") — be committed, that is to say with bad purpose, either to disobey or to disregard the law and not because of ignorance, accident or mistake.
Fitzpatrick thinks that the judge's actions here constituted an abuse of discretion, the standard (the parties agree) that governs our oversight of preserved claims, see United States v. Rivera-Hernández, 497 F.3d 71, 83 (1st Cir. 2007), with unpreserved claims getting plain-error review. Ultimately, though, we see no reason to reverse.
Fitzpatrick's lead argument is that the judge should have given an "expanded" definition of "willfully" since that is what the jury asked for. But he does not tell us what the judge should have said differently in defining that term — e.g., he does not argue that the judge should have given the supplemental instruction that counsel suggested. And given this situation, we can hardly say that his argument adds up to an abuse of discretion. Cf. generally Lussier v. Runyon, 50 F.3d 1103, 1111 (1st Cir. 1995) (saying that, "[i]n general, the abuse of discretion framework is not appellant-friendly"); Dopp v. Pritzker, 38 F.3d 1239, 1253 (1st Cir. 1994) (emphasizing that that most "appellants who consider themselves aggrieved by discretionary decisions of the district court . . . are destined to leave this court empty-handed").
Conceding that the judge "did not wrongly define 'willfully'" in the original charge, Fitzpatrick next blasts the judge for (supposedly) "omitt[ing] the thrust of the defense," first by not reminding the jury that conviction required "dual intent" — i.e., proof that he had "knowingly and willfully joined the conspiracy," plus had "the specific intent to commit the underlying crime"; and then by "omitting the earlier emphasis" that "'mere presence'" at the scene of a crime does not implicate the bystander in that offense (the judge had given a "mere presence" charge in his original instructions). Fitzpatrick preserved neither claim, however. And he makes no attempt to explain how he satisfies the requisites of plain error. We are under no obligation to do his work for him. See, e.g., United States v. Etienne, 772 F.3d 907, 918 n.7 (1st Cir. 2014); United States v. Calderón-Pacheco, 564 F.3d 55, 58 (1st Cir. 2009); accord Citizens Awareness Network, Inc. v. United States, 391 F.3d 338, 354 (1st Cir. 2004).
Lastly, Fitzpatrick argues that the judge should have warned the jury that the supplemental instruction was not a substitute for the original instruction. Perhaps such an instruction might be called for when a judge "amplifie[s] or explain[s]" the original instruction. See United States v. Parent, 954 F.2d 23, 27 (1st Cir. 1992) (quoting Beardshall v. Minuteman Press Int'l, Inc., 664 F.2d 23, 29 (3d Cir. 1981)). But even Fitzpatrick admits that the judge's supplemental instruction essentially mimicked the original, unobjected-to "willfully" charge. And he cites no case — or any persuasive reason — requiring that a judge must give the pined-for warning in a situation like ours.

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