Court Opinion

ID: 9481639
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:26:59.360295+00
Date Added: 2024-06-11T17:48:28.929446
License: Public Domain

WELLFORD, Senior Circuit Judge, concurring:
I fully agree with the principles enunciated by the majority in this case. I write separately, however, to indicate that under no circumstances should we apply the “exculpatory no” exception to a case in which the person seeking the benefit of this doctrine was not under investigation when the relevant statement was made.
I agree that the “exculpatory no” doctrine’s links to Fifth Amendment concerns are weak. Even if I were to accept this rationale for the doctrine, the Fifth Amendment normally applies only when the individual claiming the right is the subject of the interrogation. Cf. Miranda v. Arizona, 384 U.S. 436, 477, 86 S.Ct. 1602, 1629, 16 L.Ed.2d 694 (1966) (“Our decision is not intended to hamper the traditional function of police officers in investigating crime.... General on-the-scene questioning as to facts surrounding a crime or other general questioning of citizens in the fact-finding process is not affected by our holding.”) (citation omitted); see also Rhode Island v. Innis, 446 U.S. 291, 100 S.Ct. 1682, 64 L.Ed.2d 297 (1980). The “exculpatory no” doctrine, even if it were legitimately grounded on Fifth Amendment concerns, should have no application in a case such as this since the defendant here was not a suspect at the time he was questioned. United States v. Myers, 878 F.2d 1142, 1144 (9th Cir.1988).
In this case the jury had clear evidence that Steele himself helped draft or make, through a scheme with Duerr, a false statement and representation about a sale of property, and then furnished this intentionally false information to IRS agent Hall for the purposes of concealing tax consequences to himself and others. We do not decide the issue in this case as to whether Steele may have been liable for furnishing the known false documentation, which he *1323himself helped draft, to IRS for the sole purpose of protecting others to avoid substantial tax liability. This case involves his attempt to conceal his own fraud and to protect another as well.
In my view, under the circumstances of this case, Steele at least indirectly represented to agent Hall that the documents he furnished accurately described the land transaction. There is no evidence, contrary to mere speculation and surmise, that Hall had any basis himself to know, or even to suspect, that the information furnished was false and fraudulent. There was no evidence that Hall “suspected” Steele at the time to be a deceiver, a fraud participant, and a tax evader. The dissent contends that the “important question should be whether he [Steele] thought he was a suspect,” but no authority is cited for this proposition. I conclude this is not determinative; rather, the important question is whether Steele by his actions intended to deceive the investigating agent.
Steele’s offense under the statute was to falsify and conceal a material fact in an IRS investigation of another person, and to make a knowing false statement or representation in the documentation of a sale. This activity comes within the proscribed language of § 1001 and encompasses the use of the false writing.
The dissent virtually acknowledges that its proposed adoption of the “exculpatory no” doctrine would “eliminate situations” through judicial redrafting of § 1001 based on its assumption that Congress did not, despite its use of the broad language, intend to criminalize this type of fraudulent conduct. As stated by Judge Kennedy, “[i]t is not our role to re-write a statute simply because we are discomforted” by congressional language.
BAILEY BROWN, Senior Circuit Judge.
We respectfully dissent.
I
The overall thrust of the majority opinion is twofold: first, that applying the “plain meaning” of 18 U.S.C. § 1001, the evidence supports a conviction of the defendant, Steele, of a violation of that provision; and second, that without deciding whether some formulation of the “exculpatory no” doctrine could be acceptable, the formulation of the doctrine relied upon by defendant and applied in the Ninth and Fourth Circuits 1 is not acceptable and cannot be applied in this case.
On the contrary, it appears to us that, giving effect to section 1001 by its terms, the evidence does not support a conviction of defendant and that, in any event, the “exculpatory no” doctrine as applied in the Ninth Circuit and Fourth Circuit, should be adopted by this court and applied in this case.
II
We agree with the majority opinion’s statement of the rules of statutory interpretation and application. “Plain meaning” controls unless this will create a result clearly contrary to the intent of those who drafted the statute. We also agree with the majority opinion’s summary of the legislative history and agree that, section 1001 being a criminal statute, it must be “construed strictly.” United States v. Bramblett, 348 U.S. 503, 509, 75 S.Ct. 504, 508, 99 L.Ed. 594 (1955). We further agree with the majority opinion that, under the holding in United States v. Rodgers, 466 U.S. 475, 104 S.Ct. 1942, 80 L.Ed.2d 492 (1984), the Internal Revenue Service is a “department or agency of the United States” within the meaning of section 1001, and defendant has not contended otherwise.
III
A.
The majority opinion, nevertheless, recognizes that the meaning of section 1001, *1324on its face, is not so plain. It states that the provision has:
[TJhree operative clauses: the first clause prohibits a misstatement of “material” fact; the second clause prohibits a false “statement” or “representation”; and the third clause prohibits false writings containing a false “statement” or “entry.” A literal application of this statute requires a finding of materiality in the first clause, and a finding of a “statement” in the second and third clauses with no requirement of materiality. In keeping with prior caselaw, we choose to read the requirement of materiality into all of the clauses so as ‘ “to exclude trivial falsehoods from the purview of the statute.” ’ (Citations omitted.)
We agree that, under the statute, only “material” statements or representations or writings could be a basis for a violation of section 1001 and further agree that the documents mailed to IRS Agent Hall were “material” to his investigation.
The majority opinion then concludes that the elements of a section 1001 offense are as follows:
Accordingly, five elements comprise the section 1001 offense: (1) the defendant made a statement; (2) the statement is false or fraudulent; (3) the statement is material; (4) the defendant made the statement knowingly and willfully; and (5) the statement pertained to an activity within the jurisdiction of a federal agency. (Citations omitted.)
B.
At this point, it should be recognized that the majority opinion never specifies the conduct of the defendant that was, applying its definition of elements of the crime, a substantive violation of section 1001. We assume that it is not intended to hold that the mere act of having the documents prepared by counsel and executed by the parties was a violation of section 1001, although the documents were prepared at Duerr’s request to cover up Duerr’s income and therefore arguably “pertained to an activity within the jurisdiction of a federal agency.” We also assume that the majority opinion does not consider the criminal conduct to be defendant’s act of sending the documents to Agent Hall knowing them to be incorrect and expressly or impliedly representing to Hall that the documents were correct. We assume this because the majority opinion does not rely on any such expression or implication from the defendant to Hall and because, in fact, the defendant did not express or imply that they were correct. Defendant only agreed to send to Hall the documents that he had in his file and so stated in the letter to Hall that accompanied the documents.2 We therefore assume that it is the intent of the majority opinion to hold that the act of sending the documents to Agent Hall, at Hall’s request, knowing them to be false, was, ipso facto, the criminal act.
The only language in the statute that could possibly criminalize the act of sending the false documents to Agent Hall, knowing them to be false, at Hall’s request, is that part which states: “Whoever, in any matter within the jurisdiction of any department or agency of the United States ... uses any false writing or document knowing the same to contain any false ... statement_” (Emphasis added.) The operative word is “uses.” If it cannot fairly be said that defendant “used” the documents when he mailed them to Hall, his act was not criminal. Defendant did not “use” the documents. It was Agent Hall, who desired to see the documents, who contacted defendant by telephone and caused them to be sent to him. It is true that defendant avoided an interview with Hall, but the fact remains that defendant merely complied with Hall’s request to supply copies of the documents in defendant’s file.
It appears to us that it is an unreasonable interpretation of section 1001, in the *1325light of the legislative history,3 to hold that the supplying of a document, at the request of a government agency, that is known to be false is, ipso facto, a crime under section 1001. Under the majority opinion, the defendant would have violated section 1001 even if, for example, he had had no interest in the land sale to Duerr and had had no part in the preparation of the documents but, as Duerr’s accountant, had had possession of the documents, knew that they were false, and had mailed them to Agent Hall at Hall’s request.
It was Agent Hall who initiated the contact, not defendant, and defendant did not represent to Agent Hall that the documents accurately described the land transaction. Moreover, it was Agent Hall’s desire to use the documents, not defendant’s, that was the reason for their delivery to Hall. The majority opinion cites no case in which section 1001 was applied in the same or similar situation to this one, and the legislative history set out in the majority opinion does not support such an application of section 1001.4
The majority opinion appears to recognize, without relying on the doctrine of “exculpatory no,” that conduct that would be covered by the “plain meaning” of the statute is not criminalized. The opinion states: “They [i.e. the statements in the documents sent to the IRS] were not spontaneous, emotional disclaimers uttered by a suspect to which an experienced investigator would give little credence and on which one would be unlikely to rely.” We agree with the implication that such conduct is not criminalized by section 1001 because, in the light of the legislative history and the concerns Congress intended to meet, it is highly unlikely that Congress intended to criminalize such conduct. We also believe, however, that the same result would follow for the same reason if a disclaimer were neither spontaneous nor emotional.
The majority opinion agrees with the statement in United States v. Medina de Perez, 799 F.2d 540, 543-44 (9th Cir.1986) (quoting United States v. Bedore, 455 F.2d 1109, 1110 (9th Cir.1972), that “if read literally, [this statute] could make ‘virtually any false statement, sworn or unsworn, written or oral, made to a Government employee ... a felony.’ ” The answer to this obvious problem in applying the statute is, according to the majority opinion, not that we narrow its application in accordance with legislative history, but rather that we rely on the prosecutors to wisely exercise their discretion and not bring some cases that are covered by the “plain meaning” of the statute. This appears to us to be an ineffective and inappropriate substitute, in this context, for the application of the accepted principle of a strict interpretation of this criminal statute in the light of its legislative history.
IV
It is the position of the government that defendant was not a “suspect” when he was contacted by Agent Hall and, at Hall’s request, supplied him with copies of the documents. In support of its position, the government in its original brief cited pages 41-45 of the transcript and in its brief for the en banc court cited government’s exhibit 14 and pages 41-45 of the transcript. Exhibit 14 is the superseding criminal information filed against Duerr after Duerr agreed to cooperate; transcript pages 41-45 are part of the testimony of Duerr as a *1326government witness. Neither this criminal information nor this testimony affords any support for the contention that defendant was not a suspect.
The majority opinion, however, finds other support for the government’s contention that defendant was not a suspect when he was contacted by Hall and supplied the documents. The opinion states that it may be inferred that Duerr did not give information to the government until after defendant had supplied the documents to Hall. Even if this may be inferred, however, this does not rule out the possibility that the government had received some information from a source other than Duerr. For example, it appears that the defendant’s then partner, Pelphrey, who testified as a government witness in this case, had knowledge at the time of the transaction that the documents did not truthfully reflect it. Pelphrey testified that he knew at that time that the documents did not reflect the $40,000 in cash that Duerr paid on the front end, and Pelphrey put his share of the cash ($19,500) in a safety deposit box. Pelphrey also knew that the partnership return did not reflect the cash payment; nevertheless, Pelphrey’s personal return, he testified, did reflect the cash he received. Pelphrey told his wife about this at the time of the transaction. Tr. 263-302. Certainly Agent Hall never testified that neither he nor the IRS nor drug enforcement 5 had any information that implicated defendant until Duerr confessed.
The majority opinion also bases its inference that the defendant was not a suspect on the assertion that, during an argument to the trial court at the conclusion of the government’s case, the prosecutor represented to the court that defendant was not a target and “The statement was not challenged.” It is difficult, however, to see how defense counsel could have challenged a statement the truth of which only the government would know.
The majority opinion also states that, had Duerr not confessed, it was unlikely that Agent Hall or the IRS would have ever learned the true terms of this land sale. The opinion bases this inference on Hall’s testimony that he could not have learned these terms from the defendant’s personal tax return, the partnership tax return, and the documents supplied to him by defendant. However, there were other sources of this information such as, as we have stated, the defendant’s partners in this land transaction, Pelphrey and Pelphrey’s wife, and their personal income tax return on which their share of the cash was reported.
In any case, while the majority opinion does not specify whether defendant’s not being a “suspect” undercuts his contention that section 1001 does not cover his conduct or his contention that the doctrine of “exculpatory no” applies, we assume that it is the latter. As will be seen, under the forumlation of the doctrine that we would apply, his being or not being a “suspect” is not a part of the consideration.6
V
As is recognized by the majority opinion, the “exculpatory no” doctrine has been adopted by several circuits in various formulations but it is the formulation of the Ninth Circuit, and followed by the Fourth Circuit,7 that was relied upon by defendant at trial and here. The majority opinion does not hold that the facts of this case do not fit this formulation, and clearly they do fit.8
*1327The “exculpatory no” doctrine, as recognized by those circuits and as set out in the majority opinion, consists of five parts, each and all of which must be satisfied if a defendant is to be allowed to rely on the defense:
1) the false statement must be unrelated to a claim to a privilege or a claim against the government;
2) the declarant must be responding to inquiries initiated by a federal agency or department;
3) the false statement must not impair the basic functions entrusted by law to the agency;
4) the government’s inquiries must not constitute a routine exercise of administrative responsibility; and
5) a truthful answer would have incriminated the declarant.
The majority opinion refuses to approve this formulation of “exculpatory no” because, it opines, the fourth and fifth criteria are, at least in part, wrongly based on fifth amendment concerns. We believe that to support this “exculpatory no” doctrine it is unnecessary to rely on fifth amendment concerns. We believe that the doctrine can and should be invoked for the reason that (as the majority opinion recognizes) if applied literally, section 1001 would criminalize as a felony every false statement, oral or written, sworn or un-sworn, knowingly made to any federal government employee if the statement had to do with a matter within the jurisdiction of the employee’s department. We do not believe that, in view of the legislative history, it was the intent of Congress to enact legislation that would sweep that broadly. It appears to us that the “exculpatory no” doctrine as it has evolved in the Ninth Circuit and followed in the Fourth Circuit, fairly eliminates situations that Congress never intended to criminalize. Moreover, by so applying this doctrine, the courts can avoid a case by case ad hoc consideration in making a determination whether section 1001, though appearing to apply to a defendant’s conduct, actually applies.
The majority opinion also disapproves of this formulation of the “exculpatory no” doctrine because the fourth criterion permits the defense to be applied to criminal investigations but not to a “routine exercise of administrative responsibility.” In Rodgers, the majority opinion points out, the Court held that section 1001 may be applied in the context of a criminal investigation. The answer to this concern is that, while the “exculpatory no” doctrine cannot be applied to a “routine exercise of administrative responsibility” and may be applied in the context of a criminal investigation, it cannot be applied to a criminal investigation unless the other four criteria are satisfied. That is to say, the holding in Rodgers that section 1001 was properly applied in the context of that criminal investigation does not infer that the doctrine of “exculpatory no” cannot be applied in the context of a criminal investigation where the other four criteria are met.
VI
For the reasons stated herein, we respectfully dissent.

. United States v. Equihua-Juarez, 851 F.2d 1222 (9th Cir.1988); United States v. Cogdell, 844 F.2d 179 (4th Cir.1988); United States v. Medina de Perez, 799 F.2d 540 (9th Cir. 1986).

. The letter stated only: "Dear Mr. Hall: Enclosed you will find copies of all the documents which we have in our possession regarding Thomas R. Duerr.”

. As is recognized by the majority opinion, the last substantive amendment to this statute in 1934 was induced by the practice of filing false documents covering shipment of oil in commerce but which caused no loss to the government. It had nothing to do with documents not required to be filed and are furnished to the government at the government’s request.

. In concurring in the majority opinion, Judge Wellford and Judge Nelson agree that the defendant "used” the documents only if he impliedly represented to Agent Hall that the documents correctly stated the facts of the transaction and only if his reason for sending the documents to Hall was personal. It seems to us that there was no implication of correctness here as there would not have been had defendant submitted these partnership documents pursuant to a subpoena. Moreover, the evidence is that the documents would not have been sent by defendant to Hall but for the fact that Hall asked for them. This is a criminal statute, and it is contrary to accepted doctrine to stretch it to cover this fourth count of the indictment.

. As indicated by the majority opinion, pursuant to statutes relating to illicit drugs, Duerr was originally indicted, along with several others, for conspiracy and substantive violations.

. It appears to us that, if defendant’s being a "suspect” should be a factor in the determination whether he can rely on the doctrine of "exculpatory no,” the important question should be whether he thought he was a suspect, not whether the government considered him a suspect.

. See, supra note 1.

. At trial, the district court refused to charge the jury, as defendant requested, concerning defendant’s defense based on “exculpatory no." Instead, the court simply charged the jury that plaintiff would be guilty under § 1001 if he "made and used ... a false ... document within the jurisdiction of a department or agency....”