Opinion ID: 218749
Heading Depth: 3
Heading Rank: 1

Heading: Refusal to Instruct on Good Faith as to the Section 1014 Charges

Text: Hill asked the court to give the pattern jury instruction on good faith as a defense to all of the charges in the indictment. The court gave that instruction as to all of the fraud charges in the indictment, except the § 1014 false credit application charges. At the government's request, the court left those charges out of the scope of the good faith instruction. This is what the court told the jury about good faith as a defense: Ladies and gentlemen, good faith is a complete defense to the bank, wire and mail fraud charges in the indictment since good faith on the part of the defendant is inconsistent with intent to defraud or willfulness, which is an essential part of such charges. The burden of proof is not on the defendant to prove good faith, of course, since the defendant has no burden to prove anything. The government must establish beyond a reasonable doubt that the defendant acted with specific intent to defraud as charged in the indictment. One who expresses an honestly held opinion or an honestly formed belief is not chargeable with fraudulent intent even though the opinion is erroneous or the belief is mistaken; and, similarly, evidence which establishes only that a person made a mistake in judgment or an error in management or was careless does not establish fraudulent intent. On the other hand, an honest belief on the part of the defendant that a particular business venture was sound and would ultimately succeed would not in and of itself constitute good faith as that term is used in these instructions if in carrying out that venture the defendant knowingly made false or fraudulent representations to others with the specific intent to deceive them. (emphasis added). Hill's complaint, as we said, is not with the content of the good faith instruction as to the bank, wire and mail fraud charges in the indictment, but with the failure to instruct the jury that good faith is also a complete defense to the § 1014 credit application fraud charges. We assume for present purposes that good faith is a defense to those charges, which would mean that the requested instruction was a correct statement of the law, the first requirement for finding an abuse of discretion based on a refusal to give a requested instruction. Jordan, 582 F.3d at 1247. That assumption without more does not, however, establish that the refusal to give the good faith instruction as to the § 1014 charges was an abuse of discretion. As we have explained, the failure to give the proffered instruction on good faith is not per se error [because] we must examine the facts of the case to determine the adequacy of the instructions as a whole and the effect of the omission on the defendant's case. Sirang, 70 F.3d at 594. To move the analysis along, we will assume that there was an evidentiary basis for the good faith instruction on the § 1014 charge insofar as Hill (and the other defendants who are pursuing this issue) are concerned. Still, in order to prevail, the defendants must establish that the subject matter of the requested instruction was not substantially covered by other instructions, and that it dealt with an issue in the trial court that was so important that failure to give it seriously impaired the defendant's ability to defend himself. Jordan, 582 F.3d at 1247-48. That is where their position falters. The good faith defense for the § 1014 crime was substantially dealt with in the instructions on the elements of the crime and on the definitions of the required state of mind. This is what the court instructed the jury about the elements of the § 1014 crime: Now, ladies and gentlemen, Title 18, United States Code Section 1014 makes it a federal crime or offense for anyone to willfully make a false statement to a federally insured financial institution. The defendant can be found guilty of that offense only if all of the following facts are proved beyond a reasonable doubt: First, that the defendant knowingly made a false statement or report to the financial institution described in the indictment; second, that the deposits of the institution were insured by the Federal Deposit Insurance Corporation; and, third, that the defendant made the false statement or report willfully and with intent to influence the action of the institution upon an application, advance, commitment or loan or any change or extension thereof. A statement or report is false when made if it is untrue and is then known to be untrue by the person making it. It is not necessary, however, to prove that the institution involved was, in fact, influenced or misled. The gist of the offense is an attempt to influence such an institution by willfully making a false statement or report concerning the matter. (emphasis added). See Eleventh Circuit Pattern Jury Instructions (Criminal) at 232-33, Offense Instruction 39 (West 2003). The definitions the court gave the jury on the key mental state terms were these: The word knowingly, as that term is used in the indictment or in these instructions, means that the act was done voluntarily and intentionally and not because of mistake or accident. The word willfully, as that term is used in the indictment or in these instructions, means that the act was committed voluntarily and purposely with the specific intent to do something the law forbids, that is, with bad purpose either to disobey or disregard the law. While you must find that the defendants acted willfully as I have just instructed you, willfulness does not require that the defendants specifically know that the conduct alleged in the indictment constitutes a criminal violation or specifically know which federal or state criminalexcuse me, which federal or state criminal prohibition such conduct may violate. (emphasis added). The closest precedent on this issue is United States v. Martinelli, 454 F.3d 1300 (11th Cir.2006), where we found no reversible error under similar circumstances. The district court in that case refused to give the defendant's proffered instruction on good faith as a defense to the charge of conspiracy to launder money. The court did, however, instruct the jury that the defendant had to know the money represented the proceeds of the specified unlawful activity of mail fraud. Id. at 1315. The instructions also properly defined the term knowingly so that the jury plainly had to rule out the possibility that [the defendant] actually harbored a good-faith belief in the legitimacy of the business before it could have found that he knew the money represented proceeds of mail fraud. Id. at 1316. In other words, based on the instructions the district judge gave, if the jury concluded that [the defendant] had a good-faith belief in the legitimacy of the business, it could not have found that he knew the funds were the proceeds of mail fraud. Id. The same reasoning applies in this case. The court instructed the jury that the defendants had to have made the false statements wilfully and with intent to influence the lenders. The instructions properly defined wilfully so that the jury plainly had to rule out the possibility that the defendants actually harbored a good faith belief in the legitimacy of the scheme before the jury could have found that they made the false statements wilfully and with the intent to influence the lenders. See Sirang, 70 F.3d at 595 (As we have said, the finding of specific intent to deceive categorically excludes a finding of good faith.) In other words, based on the instructions the district judge gave, if the jury had concluded that the defendants had a good faith belief in the legitimacy of the scheme, it could not have found that they made the false statements wilfully and with the intent to influence the lenders. The Martinelli decision and common sense compel that conclusion. It follows that the instruction on good faith as a defense to the § 1014 charge was substantially covered by other instructions, Jordan, 582 F.3d at 1247, so that there was no abuse of discretion in failing to give it, although we note, as the Martinelli opinion did, that it would have been wiser to instruct on the defense of good faith. Martinelli, 454 F.3d at 1317.