Opinion ID: 514801
Heading Depth: 1
Heading Rank: 2

Heading: THE TANNER CASE AND Sec. 371

Text: 6 In Tanner, the Supreme Court held that in a Sec. 371 conspiracy, the target of the conspiracy must be the United States or one of its agencies or departments, either directly or through a third party. Defendants Tanner and Conover were indicted and convicted of inter alia, conspiring to defraud the United States by impairing, impeding, obstructing and defeating the lawful functions of the Rural Electrification Administration (REA), a credit agency of the United States Department of Agriculture, in violation of 18 U.S.C. Sec. 371. 4 Defendant Conover, the procurement manager for Seminole Electric Cooperative, Inc., a Florida corporation, improperly aided codefendant Tanner with respect to a contract bid on a construction project for Seminole. The construction contract was paid with loan money guaranteed by REA. Conover also made material misrepresentations to a bonding company regarding the project's state of completion. 7 On appeal to our court, United States v. Conover, 772 F.2d 765 (11th Cir.1985) the conviction was affirmed. Before the Supreme Court, the defendants argued that at most, the evidence showed that Seminole, a private corporation, was defrauded, and that absent a direct fraud on the REA a conviction for conspiracy to defraud the United States could not stand. The Government made two arguments: (1) that a conspiracy to defraud the United States may be effected by third parties; and (2) that Seminole, as the recipient of federal financial assistance and supervision could be treated as the United States under Sec. 371. The Supreme Court rejected the latter argument: 8 The conspiracies criminalized by Sec. 371 are defined not only by the nature of the injury intended by the conspiracy, and the method used to effectuate the conspiracy, but also--and most importantly--by the target of the conspiracy.... [T]he Government, in arguing that Sec. 371 covers conspiracies to defraud those acting on behalf of the United States, asks this Court to expand the reach of a criminal provision by reading new language into it. This we cannot do. Tanner, supra, 107 S.Ct. at 2752-53. 9 The Court did not, however, reverse the convictions. The Court accepted the Government's first argument, that a Sec. 371 conviction could be based upon a conspiracy to cause some third party to defraud the United States unwittingly. The case was thus remanded to our court to determine if there was sufficient evidence to show that the defendants conspired to cause Seminole to make false statements to REA. 5