Opinion ID: 32604
Heading Depth: 2
Heading Rank: 2

Heading: Faulty Jury Charge

Text: Before the jury retired to deliberate, the district court instructed the jury on the laws that Tucker had been charged with violating. With regard to the securities fraud charge, the district court explained the elements of the crime.37 Although the 36 See CHARLES ALAN WRIGHT & VICTOR JAMES GOLD, FEDERAL PRACTICE AND PROCEDURE: EVIDENCE § 6264 at 210 (1997). 37 Specifically, the district court explained that the Government was required to prove beyond a reasonable doubt that: (1) the defendant knowingly or willfully (a) employed a device, scheme, or artifice to defraud, or; (b) obtained money or property by means of an untrue statement of a material fact or an omission to state a material fact necessary in order to make the statement not misleading, in the light of the circumstances under which they were made, or; (c) engaged in a transaction, practice, or course of business that operated or would operate as a fraud or deceit upon the purchaser; (2) that the Defendant’s acts or omission were in connection with the purchase or sale of securities; (3) that the Defendant used, or caused to be used, the United States mail or 22 jury charge did not contain the phrase “intent to defraud,” immediately following the delineation of the elements, the district court explained that Tucker acted with the requisite “intent to defraud” if he “acted knowingly and with the specific intent to deceive, ordinarily for the purpose of causing some financial loss to another or [to] bring about some financial gain” to himself. The district court also provided the jury with a definition of the term “security” mirroring the definition contained in the Securities Exchange Act of 1934.38 Then, turning to the mail fraud charge, the district court spelled out the essential elements of that crime for the jury.39 other means of transportation or communication in intestate commerce in furtherance of the scheme. 38 The district court described a security as: any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, reorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put call, straddle, option, or privilege on any security, certificate of deposit, or group or index of securities (including interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. See 15 U.S.C. § 78c(a)(10). 39 The district court explained that in order to find Tucker guilty of mail fraud, the Government was required to prove beyond a reasonable doubt: (1) that the defendant knowingly created a scheme to defraud, that is made false statements or omission of 23 Following the recitation of these elements, the district court clarified that “‘knowingly,’ as that term has been used from time to time in these instructions, means that the act was done voluntarily and intentionally and not because of mistake or accident.” Tucker raises a number of potential shortcomings related to the jury instructions. First, he complains that the district court precluded the jury from determining whether the certificates sold to the investors were securities, a required element of a charge of securities fraud in violation of § 77q(a). Next, Tucker alleges that the district court did not adequately explain the requisite criminal intent for a § 77q(a) violation. Finally, Tucker calls attention to the district court’s failure to include in the jury charge an instruction on specific unanimity of theory.
Tucker did not raise these objections to the district court’s instructions at trial. Pursuant to Federal Rule of Criminal Procedure 52(b), we “may correct forfeited errors only when the appellant shows (1) there is an error, (2) that is clear or material facts in the offer and sale of securities; (2) that the defendant acted with the specific intent to defraud; (3) that the defendant mailed something, or caused another person to mail something, through the United States Postal Service, or through a private or commercial interstate carrier, for the purpose of carrying our the scheme; and (4) that the scheme to defraud employed false material representations. 24 obvious, and (3) that affects his substantial rights.”40 Once the appellant establishes these factors, “the decision to correct the forfeited error is within the sound discretion of the court, and the court will not exercise that discretion unless the error seriously affects the fairness, integrity, or public reputation of judicial proceedings.”41
1. Failure to submit “security” element to the jury Tucker contends on appeal that the district court committed plain error by removing the issue of whether the certificates were securities from the jury’s consideration. As noted above, the district court, at Tucker’s urging, determined that whether the certificates were securities was purely a legal question.42 Posttrial, the district court issued a ruling finding that the certificates at issue were, as a matter of law, securities. Tucker asserts that the district court did not instruct the jury that in order to convict him of either count charged in the indictment, it would have to find beyond a reasonable doubt that the certificates sold to the investors were in fact securities. 40 United States v. Waldron, 118 F.3d 369, 371 (5th Cir.1997) (citing United States v. Blocker, 104 F.3d 720, 735 (5th Cir.1997)); FED. R. CRIM. P. 52(b). 41 Waldron, 118 F.3d at 371 (citing Blocker, 104 F.3d at 735). 42 It is rather disingenuous for Tucker to argue now that the matter of whether the certificates were securities should have been submitted to the jury when throughout the trial he argued that it was a matter of law to be decided solely by the district court. 25 Yet a reading of the jury charge reveals that the district court did submit this element to the jury. The district court explained to the jury that the second element, which the Government was burdened with proving beyond a reasonable doubt, required a showing “that the Defendant’s acts or omissions were in connection with the purchase or sale of securities.” As already noted, the district court then provided the jury with the definition of a security. We disagree with Tucker that the district court’s definition of “security” was “cursory” and “superfluous.” Rather, the district court furnished the definition of “security” as contained in the Securities Exchange Act of 1934. Most importantly, the district court at no time informed the jury that it was not to consider whether this element of the crime had been satisfied. In refutation of the Government’s claim that the security issue was actually delivered to the jury for consideration, Tucker points to the district court’s post-trial order finding that the certificates were indeed securities. But the district court’s later determination does not change the fact that three months prior, the “security” element appeared in the jury charge, and the jury made a finding that the certificates were securities in arriving at its decision to convict on this charge. As such, the district did not act improperly since it did not preclude the jury from making that determination. 2. Failure to submit proper charge on § 77q(a) intent element 26 The Government indicted Tucker for violating § 77q(a), which prohibits the fraudulent offer or sale of securities in interstate commerce.43 In criminal prosecutions, violations of § 77q(a) are charged simultaneously with § 77x which contains the applicable mens rea.44 Accordingly, § 77x provides that only “willful” violations of § 77q(a) trigger criminal liability.45 Tucker complains that with regard to the § 77q(a) violation, the district court failed to instruct the jury that in order to convict, it needed to find that he acted with the specific intent to defraud. According to Tucker, the root of the problem is the district court’s direction that the jury could convict upon finding that Tucker acted knowingly or willfully. To be sure, the federal pattern jury charge for this crime employs the phrase “knowingly and deliberately.”46 Further, Tucker argues that since the district court did include the phrase “intent to defraud” in the elements of 43 15 U.S.C. § 77q(a). 44 Id. §§ 77q(a) & 77x. 45 Section 77x provides that: Any person who willfully violates any of the provisions of this subchapter, or the rules and regulations promulgated by the Commission under authority thereof, or any person who willfully, in a registration statement filed under this subchapter, makes any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, shall upon conviction be fined not more than $10,000 or imprisoned not more than five years, or both. 15 U.S.C. § 77x. 46 2B FED. JURY PRAC. & INSTR. § 62.03 (5th ed.). 27 mail fraud, there exists a real possibility that the jury believed the definition provided for that phrase related only to the mail fraud count. Thus, Tucker believes that the jury might have convicted him on a finding of lesser intent than that which is required by § 77x. Finally, Tucker faults the district court for failing to define the term “willfully” in the charge. All of these arguments fail. With regard to district court’s substitution of “or” for “and” in the phrase “knowingly or willfully” in the jury instructions, we find that this typographical mistake constitutes an obvious error. However, the district court’s placement of the definition of “intent to defraud” immediately following the elements of the first count effaced any confusion the jury might have encountered concerning the requisite mens rea. In addition, even assuming that the jury convicted Tucker on the “lesser” criminal intent of “knowingly,” the definition of that term provided to the jury in the mail fraud count – voluntarily and intentionally – was sufficiently like “willfully” to remove any doubt regarding the applicable mental state. Tucker’s second complaint that the district court failed to add “intent to defraud” into the elements of a § 77q(a) violation is equally unavailing. The district court’s instructions mimicked the federal pattern jury charge, which makes no mention of “intent to defraud.”47 Thus, the failure to include that phrase within the 47 2B FED. JURY PRAC. & INSTR. § 62.03. 28 essential elements of a § 77q(a) violation cannot constitute reversible error. Finally, Tucker does not point to any case requiring the trial court to define within the jury charge “willfully,” as that term is referred to in § 77x. The Government points out that the evidence presented in the case clearly bespoke of willful, fraudulent behavior on the part of Tucker. The Government produced evidence that Tucker purposefully deceived the brokers, investors, regulators, and FFAC’s Board of Directors. The Government also offered proof that Tucker concealed financial information, falsified financial summaries, drafted the PPMs, and controlled and directed the transfer of all of the investors’ money. Tucker did not rebut this evidence with his own fact witnesses. All of these factors, taken together, indicate that although the instructions concerning the requisite intent in the first count were not “faultless,” they nonetheless provided the jury an adequate understanding of the intent element.48 Certainly, the forfeited errors alleged by Tucker do not leave us “with substantial and ineradicable doubt whether the jury has been properly guided in its deliberations.”49 3. Failure to charge jury on specific unanimity of 48 Pierce v. Ramsey Winch Co., 753 F.2d 416, 425 (5th Cir.1985) (citations omitted). 49 Id. 29 theory Tucker asserts that the district court further erred by not including a specific unanimity-of-theory instruction in the jury charge. Each count of the indictment identified thirty mailings, each one creating a separate act of securities and mail fraud.50 Thus, Tucker argues that in the absence of a specific unanimity instruction, the jurors might have convicted him despite internal disagreement about which mailing or mailings he initiated. Tucker points to two Fifth Circuit decisions which he urges are controlling. In the first, United States v. Gibson, we considered a defendant’s timely objection to “a court instruction that may have judicially sanctioned a non-unanimous verdict.”51 We found such an instruction to be reversible error. Presently, Tucker’s reliance on Gibson is unfounded since he has not alleged that the district court affirmatively instructed the jury to disregard unanimity while deliberating. In the second, United States v. Holley,52 a jury convicted the defendant of two counts of perjury. Each count alleged that the defendant had made multiple statements, any one of which established criminal liability. Before submitting the instructions 50 Sanders v. United States, 415 F.2d 621, 626 (5th Cir.1969) (reiterating that “[i]t is settled that each separate use of the mails in the execution of a scheme to defraud constitutes a separate offense”)(citations omitted)). 51 553 F.2d 453, 457 (5th Cir. 1977). 52 942 F.2d 916 (5th Cir.1991). 30 to the jury, the defendant in Holley “specifically objected to the charge because it contained no . . . requirement . . . that all of the jurors concur in the knowing falsity of at least one particular statement.”53 Finding the indictment to be duplicitous, we concluded that there was a “reasonable possibility that the jury was not unanimous with respect to at least one statement in each count” and ordered a new trial.54 Significantly, in Holley, the defendant lodged explicit objections to the charge; here, Tucker complains after having forfeited any potential errors in his charge, with his only relief residing in his ability to convince us that one or more of the errors he cites were clear and affected his substantial rights. The guiding principle here should be our pronouncement in Gibson that “absent competent evidence to the contrary, a court has no reason to assume that an inconsistent or compromise verdict is not unanimous, and therefore has no justification for inquiring into the logic behind the jury's verdict.”55 Moreover, we affirmed in Holley that a specific unanimity-of-theory charge was required under those circumstances where “there exists a genuine risk that the jury is confused or that a conviction may occur as the result of different jurors concluding that a defendant committed different 53 Id. at 929. 54 Id. 55 Gibson, 553 F.2d at 457 (citations omitted). 31 acts.”56 Other than his bare assertion that the error “was plain and substantially prejudiced [him],” Tucker does not corroborate his claim of prejudicial error with a modicum of evidence tending to show that the jury was confused or possessed any difficulty reaching a unanimous verdict.57 Thus, even if we were to conclude that the district court’s failure to include an instruction on specific unanimity of theory established clear error so as to have affected his substantial rights, Tucker cannot convince us that our failure to correct the error will “seriously affect[] the fairness, integrity, or public reputation of judicial proceedings.”58