Court Opinion

ID: 820680
Source: CourtListenerOpinion
Date Created: 2013-02-15 19:44:34.844142+00
Date Added: 2024-06-11T15:37:02.222594
License: Public Domain

United States Court of Appeals
                       For the First Circuit

No. 11-2446

                           UNITED STATES,

                             Appellee,

                                 v.

                      CHRISTOPHER D. WILLSON,

                       Defendant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Rya W. Zobel, U.S. District Judge]

                               Before

                        Lynch, Chief Judge,
                    Souter,* Associate Justice,
                     and Selya, Circuit Judge.

     James L. Sultan, with whom Kerry A. Haberlin and Rankin &
Sultan were on brief, for appellant.
     Steven H. Breslow, United States Attorney's Office, District
of Massachusetts, with whom Carmen M. Ortiz, United States
Attorney, and Randall E. Kromm, United States Attorney's Office,
District of Massachusetts, were on brief, for appellee.

                         February 15, 2013

     *
       Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
            LYNCH, Chief Judge. Christopher Willson, an engineer for

battery producer Electric Vehicles Worldwide (EVW), was convicted

of submitting false invoices and conspiring to defraud the Federal

Transit Administration (FTA) in connection with federal grants to

develop a battery for electric mass transit.                 Willson appeals,

arguing that the government's evidence was insufficient to support

his conviction and that the trial court erred in not giving his

requested    jury   instructions      on     condonation     and    reasonable

interpretation of regulations.        We affirm.

                                      I.

            The government funding at the center of this case was the

result of an earmark that a Massachusetts Congressman secured

through an appropriations bill passed in October of 1999.                  The

Congressman hoped that EVW's proposals to develop technology for

electric mass transit -- initially an all-electric bus, eventually

just a battery -- would bring environmentally friendly "green" jobs

to   Pittsfield,    a   city   in   his    district   that    was   struggling

economically. Accordingly, he earmarked FTA research funds for the

Pittsfield    Economic    Development       Authority   (PEDA),     with   the

understanding that the money ultimately would go to EVW.1                  See

Department of Transportation and Related Agencies Appropriations

Act, Pub. L. No. 106-69, 113 Stat. 986, 1001 (1999).

      1
        At trial, EVW was also referred to as ElectraStor, LLC, a
wholly-owned subsidiary of EVW.    We use EVW to refer to both
companies.

                                     -2-
           In late 1999 or early 2000, the PEDA in turn contracted

with the Pioneer Valley Transit Authority (PVTA), a local agency

with experience in federal grant administration, to manage the

earmarked funds for EVW.      The PVTA, in March 2000, entered into a

consortium agreement with EVW, under which the PVTA would receive

funds from the FTA and then pass them on to EVW.            The agreement

mandated that EVW match all grant funds "on a dollar for dollar

basis in cash, in kind, or with any other consideration which

qualifies for such match."       It also mandated that EVW "take all

actions necessary or desirable to comply with applicable laws and

regulations relating to the . . . [f]unds."             These regulations

included the FTA "Master Agreement," a document issued annually and

attached to all FTA grants, which required, inter alia, that grant

recipients strictly adhere to any funding match requirement and

that only "approved in-kind resources" be counted as matching

contributions.

           In June 2000, the PVTA formally submitted to the FTA an

application for the earmarked funds.            The application described

EVW's proposal in detail and recounted the relevant industry

experience   of   the   company's   principals,     including     its   Chief

Executive Officer Michael Armitage.          After finalizing a budget for

EVW's   work,   the   FTA   approved   the    application   and   signed   a

cooperative agreement with the PVTA governing distribution of the

funds. This agreement, numbered MA-26-7050 (the "7050 agreement"),

                                    -3-
limited the FTA's "[m]aximum . . . [p]articipation" in the project

to 50 percent of incurred costs.         The FTA and PVTA later amended

the agreement three times to increase the funding amount and extend

the project period.

           In the fall of 2000, EVW recruited Willson, at the time

an engineer at the battery producer Energizer, to serve as the

company's chief scientist. Willson joined the company in November,

and work soon began on developing a rechargeable battery for mass

transit.    As agreed, the FTA funded EVW's development efforts

through payments administered by the PVTA.           From approximately

December 2000 through March 2005, EVW submitted 27 invoices under

the 7050 agreement to the PVTA, where a grant manager and the

agency's chief financial officer reviewed them before forwarding

them to the FTA.   Each invoice was a single page; it identified the

expenses   for   which   EVW   sought    reimbursement   and   listed   the

percentage of total project expenses "drawn and pending" from the

FTA as of the invoice date.     The invoices indicated that the FTA's

total expenditures never exceeded 50 percent of the project costs,

although some invoices requested payment of more than 50 percent of

costs incurred within that specific invoice period.               The FTA

ultimately paid all of these invoices.

           The initial promise of EVW's battery work gave way to

technical problems in late 2002, which led to layoffs and employee

departures in 2003 and 2004. Willson's project manager departed in

                                   -4-
mid-2004, leaving Willson to prepare the invoices himself.       As

Willson later testified, he had no relevant experience and received

no training, nor did he read the FTA Master Agreement, any of the

FTA federal funding regulations, or the 7050 agreement between the

FTA and PVTA.   Rather, Willson said he simply tried to copy what

his manager had done.     At one point he proposed restating the

invoices, ostensibly so that he could better account for EVW's

expenses and the FTA's payments, but a PVTA official apparently

told him not to do so.

           EVW did not overcome its technical problems, and by early

2005, with the 7050 agreement set to expire, the company had run

out of money.   Instead of disclosing this information to federal

authorities, Willson asked the Congressman to secure continued

funding for the company's work, and in July 2005 he succeeded in

getting the FTA to enter into a new cooperative agreement with the

PVTA.   This agreement, numbered MA-26-7101 (the "7101 agreement"),

superseded the 7050 agreement.     The 7101 agreement continued to

fund EVW's battery development efforts which had started under the

7050 agreement, but it specifically did not cover expenses incurred

before it was issued (the "pre-award authority").     Moreover, the

7101 agreement retained the 50 percent funding match requirement

that limited FTA disbursements to no more than half of EVW's

development costs.

                                 -5-
            Over the remaining months of 2005, Willson submitted five

invoices to the PVTA (and ultimately the FTA) under the 7101

agreement.       As     before,   each    invoice     was     a    single    page   that

identified the expenses for which EVW sought reimbursement and

listed the percentage of total expenses drawn and pending from the

FTA through the invoice date.            The first invoice Willson submitted

under    the     7101     agreement,      however,        began      from     a     total

drawn-and-pending balance of zero, and the later invoices reflected

amounts drawn and pending under the 7101 agreement only.                             Each

invoice stated, incorrectly, that EVW was meeting its funding match

requirement.

            In fact, EVW was by then desperate for money, and its

first two invoices depleted virtually the entire balance of FTA

funds available under the 7101 agreement. Accordingly, the FTA did

not pay any of the 7101 agreement invoices beyond the first two.

(Commerce Funding, a factoring company that advanced EVW funds

against the FTA distributions, paid the next two, seemingly unaware

that no further federal funds would be distributed.) In any event,

EVW received no federal funds after 2005.

            In   the     spring   of     2006,      the   federal     Department      of

Transportation (DOT) audited EVW.              The audit team met with Willson

and CEO Michael Armitage.          In her testimony at trial, DOT auditor

Mary    Thomas   paraphrased      Willson      as    having       admitted   that    "he

basically fabricated costs to place on the invoices in order to

                                         -6-
look as though [EVW] had spent money."               In fact, the audit

uncovered numerous irregularities in addition to fabricated costs.

            The government brought criminal charges in May 2008,

indicting Armitage on various fraud and false-claims counts.              A

superseding indictment, filed in April 2009, added Willson and EVW

itself as defendants.     In March 2010, the district court granted

Willson's   motion   to   sever,   ordering   that    Armitage   be   tried

separately.    A second superseding indictment, filed on June 4,

2011, charged Willson with nine counts of wire fraud, 18 U.S.C.

§ 1343, seven counts of false claims, id. § 287, one count of false

statements to a federal official, id. § 1001(a)(2), and a related

conspiracy count, id. § 371.        The false claims counts against

Willson charged two false invoices under the 7050 agreement and

five false invoices under the 7101 agreement, and the wire fraud

counts were based on the advances EVW received on these invoices

from Commerce Funding.      The false statements count was based on

Willson's comments to the DOT auditor, while the conspiracy count

charged an agreement between Willson and Armitage to prepare the

false invoices, deceive the DOT auditor, and defraud the FTA.

            On June 6, 2011, Willson went to trial on the eighteen-

count superseding indictment.      The "core" of the government's case

was that the invoices in question had falsely represented that EVW

was satisfying the 50 percent funding match requirement.               With

respect to the 7101 invoices in particular, the government argued

                                   -7-
that the     funding   match requirement     had    reset under        the 7101

agreement, that Willson knew the requirement had reset and that EVW

could not meet it, and that Willson falsely represented that the

FTA was not paying over 50 percent of EVW's costs.          He did all this

in order to pay himself and Armitage and to support a newly

established side venture, HSM Systems ("HSM"), that they co-

founded.     In addition, the government argued that these invoices

were false because they each contained inflated, mislabeled, and

falsified costs.

           The    government     presented     testimony        from    several

witnesses,    including    the   Congressman       and   Mary    Thomas,     and

introduced     extensive   documentary     evidence      concerning        EVW's

financial activities. The government also introduced the testimony

of Julie Cashman, a Senior Auditor for the Defense Contract Audit

Agency, who conducted a forensic review of EVW's invoices to

determine whether "the 50 percent matching [requirement] was met,"

"the expenses claimed were eligible," and "the company had actually

spent the money that it had claimed [it spent]."

           Cashman made two findings of particular importance.                On

the basis of the company's bank statements, Cashman testified that

EVW had received approximately $780,000 in the 2005 calendar year,

of which $724,000 (or 93%) came from FTA grant payments.               Yet each

of the 7101 invoices claimed that during this period the FTA's

share of EVW's expenses was no more that 50 percent. Additionally,

                                   -8-
EVW had claimed approximately $1.6 million in eligible expenses

under the 7101 agreement, but had spent less than half that amount

($778,000).        Second, in attempting to reconcile the 7101 invoices

with EVW's "source documents" -- that is, the bills, records, and

other data evidencing the company's actual expenses -- Cashman

found a bounty of individual errors and inconsistences on each

invoice.

                The defense countered that Willson was a scientist, not

an accountant. The individual irregularities in Willson's invoices

were       a   product   of   his   unfamiliarity   with   proper   accounting

practices, innocent mistakes, or both. Willson also testified that

he understood the 50 percent funding match requirement to apply to

the battery project as a whole (that is, to the 7050 and 7101

agreements collectively), and defense counsel maintained that the

FTA had not covered more than 50 percent of EVW's costs since the

project's inception.          Willson also said that he relied on PVTA and

FTA officials to review his invoices and catch any mistakes, and

that he assumed when these agencies covered the invoices that his

accounting practices were acceptable.

                On June 21, 2011, the jury convicted Willson on the

remaining conspiracy count,2 six counts of wire fraud, and four

       2
        After the defense rested, Willson moved for a judgment of
acquittal. On June 17, 2011, the district court granted the motion
as to the count of obstructing a federal auditor and the portion of
the conspiracy count charging a conspiracy to obstruct the auditor.

                                        -9-
counts   of    false    claims       based      upon    the   government's     charges

concerning     the    four    7101     invoices        that   Commerce   Funding      had

reimbursed.     The jury acquitted Willson on the remaining counts of

wire fraud and false claims, which related to the two 7050 invoices

and the fifth and final 7101 invoice.

              The district court denied Willson's post-verdict motions

for judgment of acquittal and a new trial, and Willson filed a

timely notice of appeal.

                                           II.

              Willson first argues that the district court erred in

denying his post-verdict motion for judgment of acquittal, Fed. R.

Crim. P. 29, because the government's evidence was insufficient to

prove beyond a reasonable doubt that he intentionally submitted

false or fraudulent claims or conspired to defraud the FTA.                            We

review a preserved challenge to the sufficiency of evidence de novo

"to determine 'whether any rational factfinder could have found

that the evidence presented at trial, together with all reasonable

inferences, viewed in the light most favorable to the government,

established     each    element      of    the    particular      offense     beyond   a

reasonable doubt.'"          United States v. Poulin, 631 F.3d 17, 22 (1st

Cir. 2011) (quoting United States v. Medina-Martinez, 396 F.3d 1,

5 (1st Cir. 2005)); see United States v. Pires, 642 F.3d 1, 7 (1st

Cir. 2011).      "We need not be convinced that a guilty verdict was

the   only    one    available    on      the    evidence,     but   merely    that    'a

                                           -10-
plausible rendition of the record' supports [it]."   United States

v. Vázquez-Botet, 532 F.3d 37, 60 (1st Cir. 2008) (quoting United

States v. Ortiz, 966 F.2d 707, 711 (1st Cir. 1992)); see Poulin,

631 F.3d at 22 ("The court's only inquiry is whether the guilty

verdict 'is supported by a plausible rendition of the record.'"

(quoting Ortiz, 966 F.2d at 711)).

          The jury convicted Willson on the counts for false claims

and wire fraud that stemmed from the first four 7101 invoices he

submitted in 2005.   The government's evidence was sufficient for a

jury to conclude that these invoices were false or fraudulent

because they (1) misrepresented that EVW was satisfying the funding

match requirement and (2) sought reimbursement for ineligible,

inflated, and fictitious expenses.

          EVW was in severe financial distress by early 2005.

Former EVW communications director Curt Pressier testified that

EVW's financial situation was "dire" and that the company stopped

matching the FTA's funding contribution in November of 2004.   And

Willson himself testified that EVW was "out of money" by the end of

2004 and that he stopped drawing a salary in October of 2005.

Willson also informed Armitage in a May 2005 email, months before

EVW was awarded the 7101 agreement, that FTA funds would constitute

nearly 100 percent of EVW's cash receipts during FY 2005.      The

government's expert confirmed that the actual figure for the FTA's

contributions, 92.85 percent, was not far from Willson's estimate.

                                -11-
           During this period, Willson submitted the four 7101

invoices, which represented that EVW had incurred over $1.2 million

in eligible expenses from January to September of 2005, and sought

reimbursement from the FTA for just under half that amount.            Each

invoice also stated that, to date, the FTA had covered no more than

50 percent of EVW's "drawn and pending" expenses.            The logical

import of these representations is that, in order to comply with

the   funding   match   requirement,   EVW   had   contributed   at   least

$600,000 in non-federal funding to the battery project over this

nine-month interval.     But EVW had almost no independent funding in

2005, let alone funding in excess of $600,000.3

           Willson argues that even if the funding match requirement

did reset under the 7101 agreement, and his invoices were therefore

inaccurate, the government failed to show that he understood the

requirement had reset and submitted the 7101 invoices nonetheless.

      3
        Willson reverts to his trial court argument that, reading
the local share requirement to apply to EVW's cumulative expenses
over the 7050 and 7101 agreements, the four 7101 invoices
accurately represented that EVW had met its obligations.      This
argument is unconvincing for a number of reasons. As an initial
matter, Willson's proposed construction of the funding match
requirement is based on a superseded version of the FTA's Master
Agreement. The only evidence countenancing that EVW contributed
over 50 percent of the battery project's cumulative costs is a
spreadsheet that Armitage gave to the DOT investigator during the
2006 audit. That spreadsheet contains almost no information on the
sources of EVW's outside capital and includes over $1.6 million in
"in-kind" contributions from Armitage himself and another
unidentified source. Moreover, there is no evidence to show that
these "in-kind" payments, assuming they were actually made, were
approved contributions under the Master Agreement.

                                  -12-
Willson's purported belief that the funding match requirement had

not reset is easily rejected.                Willson admitted that he was

directly involved in preparing the 7101 agreement application,

which stated that the "previously approved" budget amount for the

project was "$0.00" and identified EVW's "local share" as 50

percent of its future costs.            Willson also reset his "rolling

accounting"    to   zero   on   the   first    7101   invoice   he submitted,

demonstrating that he understood the 7101 and 7050 budgets to be

distinct.   Finally, Willson made several misleading statements to

federal authorities concerning EVW's financial status, supporting

the conclusion that he knowingly concealed EVW's inability to meet

the funding match requirement.

            There was also ample evidence to show that individual

claims in the 7101 invoices were false or fraudulent.                   Julie

Cashman identified discrepancies in each of the 7101 invoices.             In

some, Willson sought reimbursement for real but ineligible costs,

including EVW's debt payments to Armitage and its outstanding tax

liabilities.    But in others, Willson flatly misstated the source,

timing, or both of EVW's expenses.4             This evidence corroborates

     4
        For example, on the second invoice, Willson claimed that
EVW spent $172,772.18 in April of 2005 on "licensing fees." He
later testified that this expense was actually incurred in 2002 for
an equipment purchase. Similarly, on the third and fourth 7101
invoices, Willson claimed $80,000 in expenses for equipment that he
knew EVW had not yet (and ultimately never) purchased, and another
$24,010 for "Debt and Interest" expenses that had actually been
used to purchase Armitage a new vehicle.

                                      -13-
Mary Thomas's testimony that Willson admitted during the 2006 audit

to duplicating claims from earlier invoices and to fabricating and

inflating other expenses.

            Willson offers explanations for each of these alleged

discrepancies, but the jury was not obliged to accept them.                    It is

also worth remembering that, throughout 2005, Willson and Armitage

were simultaneously managing their newly established business HSM.

At trial, Willson testified that he told the PVTA and FTA that

federal    funds    would    not    be    diverted      to    HSM.   However,      the

government proffered evidence that Willson not only charged HSM

expenses to the FTA grant, but also attempted to conceal that fact

through mislabeling and redaction.               This evidence lends additional

support    to    the   government's       argument      that    Willson    knowingly

included false or fraudulent expenses on the 7101 invoices.

            The government's evidence was also sufficient to convict

Willson of the alleged conspiracy with Armitage to defraud the FTA.

This count required proof of "an agreement, the unlawful objective

of   the   agreement,       and    an    overt    act   in    furtherance    of    the

agreement."      United States v. Mubayyid, 658 F.3d 35, 52 (1st Cir.

2011), cert. denied 132 S. Ct. 2378 (2012) (quoting United States

v. Barker Steel Co., 985 F.2d 1123, 1127-28 (1st Cir. 1993))

(internal       quotation    marks       omitted);      see    United     States    v.

Medina-Martinez, 396 F.3d 1, 5 (1st Cir. 2005).                         In a single

paragraph, Willson challenges the sufficiency of the government's

                                          -14-
evidence as to the first element--the existence of a conspiratorial

agreement.5    His challenge fails.

            A "conspiracy may be based on a tacit agreement shown

from an implicit working relationship."       United States v. Patrick,

248 F.3d 11, 20 (1st Cir. 2001); see also United States v. Gomez,

255 F.3d 31, 35 (1st Cir. 2001) ("The conspiratorial agreement need

not be explicit and the proof thereof need not be direct.").         There

is no dispute that Willson and Armitage worked closely together and

discussed     EVW's   financial   troubles,   including    the   company's

inability to meet the funding match requirement.            Additionally,

both men took steps to hide EVW's financial troubles from federal

authorities.     It is also clear that both Willson and Armitage

benefited from the conspiracy.        During 2005, when almost all of

EVW's cash receipts came from federal funds, Willson received over

$100,000 from EVW, Armitage received over $200,000, and both used

FTA funding to support their side venture HSM.       Thus, a reasonable

jury could easily find that a tacit agreement to defraud the FTA

existed between Willson and Armitage.

                                   III.

            The district court did not err by refusing to issue two

theory-of-defense      instructions   that    Willson     had    requested.

Generally, "[a] criminal defendant is entitled to an instruction on

     5
       We bypass the government's argument that Willson waived his
challenge to the conspiracy count by failing to develop that
challenge. See United States v. Zannino, 895 F.2d 1, 17 (1st Cir.
1990).

                                   -15-
the proposed theory of defense when the theory is a valid one, and

the 'evidence adduced at trial, taken in the light most flattering

to the accused, . . . plausibly support[s] the theory.'"               United

States v. Djokich, 693 F.3d 37, 47 (1st Cir. 2012) (second and

third    alterations   in   original)    (emphasis    omitted)    (citation

omitted) (quoting United States v. Ramos-Paulino, 488 F.3d 459, 461

(1st Cir. 2007)); see also United States v. Powers, 702 F.3d 1, 8

(1st Cir. 2012) ("[A] defendant is entitled to an instruction on

his theory of defense provided that the theory is a legally valid

one and there is evidence in the record to support it.").               "The

burden is on the defendant, as the proponent of the theory, to

identify evidence adduced during the trial that suffices to satisfy

this    standard."     Ramos-Paulino,    488   F.3d   at   462.   We   treat

Willson's objections as preserved and our review is de novo.

United States v. Allen, 670 F.3d 12, 15 (1st Cir. 2012).

            A court's "failure to give a requested instruction on the

defendant's theory of the case is reversible error only if the

requested instruction (1) was substantively correct; (2) was not

substantially covered elsewhere in the charge; and (3) concerned an

important point in the case so that the failure to give the

instruction seriously impaired the defendant's ability to present

his defense."   United States v. Rose, 104 F.3d 1408, 1416 (1st Cir.

1997).    Cases satisfying all three Rose factors are "relatively

rare."    United States v. Gonzalez, 570 F.3d 16, 21 (1st Cir. 2009)

                                  -16-
(quoting United States v. Prigmore, 243 F.3d 1, 17 (1st Cir. 2001))

(internal quotation mark omitted).

A.   The Condonation Instruction

            Willson    proposed    a      two-paragraph      "Good    Faith"

instruction, which followed from his argument that he lacked the

requisite intent to defraud the PVTA and FTA.        The first paragraph

informed the jury that good faith was "a complete defense to the

charges against [Willson]" because good faith was "inconsistent

with knowingly making false, fictitious, or fraudulent claims." It

also explained that it was "entirely the government's burden to

prove . . . beyond a reasonable doubt that [Willson] did not act in

good faith."     See, e.g., United States v. Callipari, 368 F.3d 22,

33 (1st Cir. 2004), vacated on other grounds, 543 U.S. 1098 (2005).

            The second paragraph then directed the jury to consider

any evidence of condonation on the part of PVTA or FTA officials.

Specifically, Willson had argued that he had relied on these

officials   to   review   and   correct    his   invoices,    and    that   he

reasonably inferred when the FTA paid for the invoices that he "was

doing [them] well enough and everything was right."           In that vein,

the second paragraph sought to instruct the jury as follows:

     You may consider, for instance, any and all evidence of
     the Pioneer Valley Transit Authority's and Federal
     Transportation Administration's actions or omissions, or
     deficiencies in the manner in which those agencies
     implemented and enforced their rules, to the extent that
     you find such evidence bears on the issue of whether
     Christopher Willson had the requisite state of mind. You
     may find that the Federal Transit Administration's and

                                  -17-
     Pioneer Valley Transit Authority's review and approval of
     [EVW]'s invoices, or failure to alert [EVW] to problems
     with the invoices submitted by Willson, if relied upon by
     him, negates evidence, if there is any, that Christopher
     Willson knowingly made false claims or acted with an
     intent to defraud.

          At the June 20, 2011 charge conference, the government

made only minor objections to the good faith instruction's first

paragraph, but opposed the condonation charge in its entirety.         It

argued that the record did not evince any condonation on the part

of PVTA or FTA officials, and that, even if it did, the defense was

free to argue that point without the additional language.             The

district court agreed.

          Willson argues that the good faith instruction actually

given was insufficient and that he was "entitled to a specific

instruction on the relevance of [the] PVTA and FTA's 'condonation'

of the invoices at issue."   He relies principally on our opinion in

United States v. Josleyn, 99 F.3d 1182 (1st Cir. 1996).         There, the

defendant was charged with defrauding Honda, his employer, by

accepting kickbacks from prospective Honda dealers.        Id. at 1184.

The court had instructed the jury on the defendant's "theory of the

case," which was that Honda "knew of and condoned; that is, gave

tacit approval to the activities . . . alleged in the indictment."

Id. at   1194   (emphasis added).      The   district   court   declined,

however, to issue the defendant's proposed instruction, which would

have told the jury that the government had to prove beyond a

reasonable doubt that Honda had not condoned his activities.          Id.

                                -18-
On appeal, this court found no error in the district court's

instruction, on the grounds that it had "unmistakably permitted the

jury to consider all the condonation evidence" and that "[n]o more

was required."     Id.

           Even if we assume dubitante that Willson's proposed

condonation     instruction    is    substantively     consistent   with   our

decision   in   Josleyn,     the    district   court    rightly   denied   the

instruction on another basis. Taken in the light most favorable to

Willson, the record in this case does not plausibly support the

alleged condonation.

           The dispute in Josleyn was over the language of the

district court's condonation instruction, not over the question of

whether condonation had occurred at all.               By all accounts, the

defense in Josleyn had presented sufficient evidence to show that

Honda   executives   could    have    known    that   their   representatives

accepted kickbacks and chose to look the other way.               Josleyn, 99

F.3d at 1194 (noting that the government conceded that Josleyn's

evidence "would have permitted the jury to find that . . .

executives at the highest levels of Honda implicitly condoned" his

conduct); see also United States v. Josleyn (Josleyn II), 206 F.3d

144, 160 (1st Cir. 2000) ("The jury heard evidence as to the

management's alleged condonation and testimony that American Honda

consistently paid lower salaries and then conveniently looked the

other way and allowed bribe-taking to supplement those salaries.").

                                      -19-
Indeed, this evidentiary support was essential to Josleyn's defense

that he lacked the requisite intent to defraud Honda. Without some

proof that Honda executives knew about the kickbacks, Josleyn could

not have reasonably believed that they "condoned" it.               See Josleyn

II, 206 F.3d at 154.

              In contrast, there is virtually nothing in the record

here to suggest that any PVTA or FTA employee could have known, let

alone   did    know,   that   the   7101    invoices   contained     the    false

representations alleged in the indictment.                The only support

Willson musters is his own testimony that Keith Henry, a PVTA

employee, corrected a few errors on some of the 7101 invoices

Willson submitted.        This evidence says little, however, about

whether Henry condoned the false and fraudulent representations

that the government alleges these invoices contained.               As Willson

acknowledged at trial, PVTA employees did not "get to see the

records . . . [or] look at all the files that support[ed]" EVW's

claimed expenses.      Without this information at his disposal, Henry

could not have identified that EVW's funds were insufficient to

meet the funding match requirement or that the individual expenses

Willson   claimed      were   inaccurate.       Moreover,     the   government

introduced     documentary    and   testimonial    evidence    to    show    that

Willson interfered with the ability of federal authorities to

identify these falsehoods by, inter alia, misrepresenting EVW's

finances during preparations for the 7101 agreement, concealing his

                                     -20-
relationship with HSM, and mislabeling and redacting information in

individual invoices.

B.    The Reasonable Interpretation of Regulations Instruction

           The    district   court    also   properly    rejected Willson's

proposed "reasonable interpretation" instruction. This instruction

related to Willson's argument that the funding match requirement in

fact permitted accounting over both agreements, such that EVW had

to match the total funds it received rather than its funding on an

agreement-by-agreement       basis.     Willson   also    claimed    that   the

funding match requirement fairly could be interpreted as allowing

EVW   to   meet    its   required      share   through     various    in-kind

contributions.

           Willson's requested reasonable interpretation instruction

explained:

      You may find that ambiguities exist in the regulations,
      contracts, and rules that the prosecution alleges
      governed the receipt of federal money from the Federal
      Transit Administration by [EVW].       If you find that
      ambiguities exist, then to prove that Christopher Willson
      knowingly presented false claims upon the Federal Transit
      Administration or that he intended to defraud, the
      prosecution must prove beyond a reasonable doubt that the
      claims were false under all objectively reasonable
      interpretations of the regulations, contracts, and rules.
      That is to say, Christopher Willson cannot be convicted
      of knowingly presenting false claims or be found to have
      intended to defraud the Federal Transit Administration if
      there is an objectively reasonable interpretation of the
      ambiguous regulations, contracts, or rules under which
      the claims presented were actually valid.

To support his request for the instruction, Willson cited United

States v. Prigmore, 243 F.3d 1, 17 (1st Cir. 2001), in which we

                                      -21-
held that defendants are "entitled to have their intent assessed in

the   light      of   the     interpretation    of   the   underlying    [legal]

requirements that is most congenial to their case theory and yet

also objectively reasonable."

              At the charge conference, Willson modified his request

rather dramatically.           He abandoned the suggestion that the jury

should    determine         whether   his   interpretation     was   objectively

reasonable, explaining that it was "really for the Court to make

that determination as a threshold matter." Indeed, the instruction

Willson initially requested by motion overlooked Prigmore's clear

rule that "if the evidence at trial gives rise to a genuine and

material dispute as to the reasonableness of a defendant's asserted

understanding of applicable law, the judge, and not the jury, must

resolve the dispute."            243 F.3d at 18.       And Willson's counsel

argued    that    "if   the     Court   finds   that   under    an   objectively

reasonable interpretation, for example, the 50-50 requirement, that

what he did was not improper, I think that we're entitled to this

kind of an instruction."6

              Willson argues that the trial judge erred in refusing to

give his instruction under the three-part Rose test cited above.

See 104 F.3d at 1416. Specifically, he argues that the instruction

      6
         The government opposed the reasonable interpretation
instruction, noting that in response to a mid-trial motion in
limine Willson had filed, the government had not presented evidence
on the proper interpretation of the various contracts and
regulations at issue. Again, we bypass the government's argument
that the objection was not preserved.

                                        -22-
he sought was substantively correct under Prigmore; that it was not

covered in the court's general good faith instruction or elsewhere

in the court's charge; and that it concerned his main theory of the

case such that not presenting it to the jury seriously impaired his

ability to mount a defense.     For its part, the government largely

ignores the Rose factors and primarily argues that Willson failed

to meet his initial burden of demonstrating that the "evidence

adduced at trial, taken in the light most flattering to" him

"plausibly support[ed] the theory" encapsulated in his requested

instructions. Ramos-Paulino, 488 F.3d at 461. The government also

maintains that the regulations Willson cites as ambiguous had been

superseded at the relevant time, and that in any event Willson's

interpretation was not objectively reasonable.

          Given the lack of evidence presented at trial as to what

(if any) interpretation of the relevant regulations Willson was

purportedly following in preparing the invoices, we find the

government's primary argument compelling.              Willson appears to

believe that the Prigmore rule entitles defendants to a jury

instruction that effectively puts a thumb on the scale in their

favor whenever their attorneys can articulate a plausible-sounding

undeveloped   argument   that   a    given   statute    or   regulation   is

ambiguous.    Not so.

          The Prigmore rule is designed to protect defendants from

being convicted for conduct that they reasonably concluded was

                                    -23-
legal or that they could not reasonably have known was illegal.

Indeed, we have been explicit that the rule is "rooted in the due

process-based 'fair warning requirement.'"          Prigmore, 243 F.3d at

17 (citing United States v. Lanier, 520 U.S. 259, 265–67 (1997));

see also United States v. Rowe, 144 F.3d 15, 21-22 (1st Cir. 1998)

(suggesting, in dicta, a rule like the one later adopted in

Prigmore, and quoting Dunn v. United States, 442 U.S. 100, 112

(1979), for the precept that "fundamental principles of due process

. . . mandate that no individual be forced to speculate, at peril

of indictment, whether his conduct is prohibited").

           Accordingly, the core holding of Prigmore is that a court

must give an instruction presenting a defendant's interpretation of

the legal requirements he is charged with violating when the

defendant presents evidence that he actually held an objectively

reasonable belief that his conduct conformed to those requirements.

This, of course, was the situation in Prigmore itself.                 The

defendants in that case were charged with conspiring to defraud and

impair the functioning of the FDA by not filing reports and

information supplements required under certain conditions. See 243

F.3d at 3, 13-15.    The defendants maintained that they reasonably

believed   those    conditions   had   not   been    met,   because   they

interpreted one key regulatory clause, "affecting the safety or

effectiveness of the device," as limited by a separate clause,

"intended . . . conditions of use."      See id. at 15 (alteration in

                                  -24-
original) (internal quotation marks omitted).                   How the defendants

interpreted these phrases was the "primary defense theme at trial,"

and they presented evidence that the interpretation they urged at

trial was consistent with the interpretation they had advanced in

previous communications with the FDA.                Id. at 13-14.           Because the

defendants' interpretation was objectively reasonable and supported

by evidence, we held that failing to so instruct the jury was

reversible error.        Id. at 24.

           Here,      in    contrast,        Willson    presented       virtually      no

evidence at trial that he actually held the interpretation that he

argues the court was obligated to present to the jury.                        By his own

admission,     he    never        actually    read     any     of     the    applicable

regulations.        In fact, perhaps the best evidence as to what he

believed when       preparing       the   invoices     --     the    contents    of   the

invoices   themselves        --    cuts   against      him.         Specifically,     the

invoices he submitted under the 7101 agreement reset the balance of

drawn and pending FTA funds to zero -- evidence that he understood

EVW was not allowed to carry over contributions it made under the

7050 agreement to meet the funding match requirement under the 7101

agreement.     In the absence of evidence that he actually held the

interpretation he advanced at trial, Willson did not raise the

prospect   that     he     faced    conviction    for       conduct     he    reasonably

concluded was legal, thus violating the due process fair warning

requirement.      Accordingly, Willson was well outside the heartland

                                          -25-
of Prigmore, and the district court properly denied both his

request     to    evaluate     the   reasonableness    of   an       alternate

interpretation and his proffered jury instruction.

            As Willson does not argue that Prigmore's logic should be

extended,    we   reach   no   conclusion   as   to   whether    a    Prigmore

instruction may be required in other circumstances as well.

            Affirmed.

                                     -26-