Court Opinion

ID: 9481725
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:29:21.88756+00
Date Added: 2024-06-11T17:48:31.776152
License: Public Domain

HUNTER, Senior District Judge,
dissenting.
I respectfully dissent.
The majority today affirms six convictions for conduct which is not a crime. The verdict director, which purported to define the alleged offense, omitted an essential element of the crime: specific intent to defraud. Neither the district court nor government counsel understood that intent to defraud was a distinct element of the charged offenses. Williams’ counsel’s misunderstanding was undoubtedly the reason that the issue was not properly preserved for appellate review. The jury’s understandable confusion was evidenced not only by its two notes to the court requesting clarification concerning the requisite intent, but also by its unequivocal finding that Williams was “not guilty as charged of criminal intent.” The majority nonetheless concludes that this jury of twelve laypersons was able to recognize what the necessary elements of the crime were.
BACKGROUND
During a hearing on the various pretrial motions, the district court stated, “I think this intent to defraud business really means an intent to convert the proceeds to one’s own use. I think that’s good enough.” Transcript of February 26-27 *1540(hereinafter “Feb. Tr.”) at 44. The court later addressed the subject again: “I think all that’s required for the intent is to have the desire to sell the thing off and not have the proceeds go to the government.... It’s a matter of law. The only intent required [of Williams] is that [he] entertain that kind of intent that’s required for conversion in common law.” Id. at 59. “[T]he crime is essentially breach of contract, in a sense. I mean it’s selling something without permission from the government when you’re under a contractual obligation to them.” Transcript of April 10 (hereinafter “April Tr.”) at 172.
During a discussion of the second note from the jury, the court stated:
It seems to me that [instruction] number eleven is about as plain as it could be. Here’s the crime. The element of intent to defraud doesn’t actually appear in the instruction as an element. It says that the crime of doing X with intent to defraud consists of two things, converting to one’s own use the property of another and doing it knowingly.
That’s the definition of the crime. I’m not sure we even needed these intent instructions [Instructions 12 and 13], because intent is not an element of the crime.
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[I]f these two things are proved, that is an intent to defraud. That’s what I’m saying, that this is the definition. In other words, we’ve already defined intent to defraud.
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I think under this statute there doesn’t have to be any intent to deceive. You know, I think that the cases are clear that all you’ve got to do is have the intent required to commit the tort of conversion, whether you’re deceiving them or not, sticking money that belongs to somebody else in your pocket.
Id. at 229-30, 232 (emphasis added). Government counsel labored under the same misunderstanding:
It seems to me that also perhaps, Your Honor, they may be hung up thinking that intent to defraud is an element of the defense [sic] rather than—
Maybe could the [note to the jury] include that intent to defraud is not an element of the offense?
That’s why government counsel suggested putting “intent to deceive or intent to defraud is not an element of the offense.”
Id. at 230, 232.
As the majority correctly notes, not even defendant’s counsel clearly understood the problem with Instruction 11 as evidenced by the fact that he raised no objection to its omission of the “intent to defraud” element. Williams’ counsel had some vague awareness of a problem: in closing argument he argued that in order to find Williams guilty, the jury would have to find that he intended to defraud the FmHA. Also, in response to the jury’s first note Williams’ counsel stated to the court, “Your Honor, I would suggest that you say that that is a part of the consideration, that they have to find intent to defraud.” Id. at 225. Government counsel then remarked, “Well, that’s not exactly true.” Id. It is against this background of the parties’ and the court’s misunderstanding of the law and the jury’s confusion about its charge that we should consider the effect of the erroneous verdict directing instruction.
DISCUSSION
The statute and the caselaw in this Circuit are clear that one of the essential elements of the offense created by 18 U.S.C. § 658 is the specific intent to defraud. United States v. Porter, 842 F.2d 1021, 1026 (8th Cir.1988).1 The district *1541court in this case instructed the jury that there are only two elements to the crime and deliberately omitted the “intent to defraud” element. The majority acknowledges that the verdict director, which omitted the essential element of intent to defraud, was erroneous but nevertheless concludes that the error was harmless.
The majority cites Carella v. California, 491 U.S. 263, 109 S.Ct. 2419, 105 L.Ed.2d 218 (1989), in support of its conclusion that any error in the instruction is harmless. Part of what the majority fails to discuss, however, is that in Carella the Supreme Court unanimously held that the instructions in that case, which erected mandatory conclusive presumptions of certain elements of the crimes, “violated the Fourteenth Amendment” because they “directly foreclosed independent jury consideration of whether the facts proved established certain elements of the offenses with which Carella was charged.” Id. at 266, 109 S.Ct. at 2420. The Court further held that the error might be harmless but if, and only if, “no rational jury could find the predicate acts but fail to find the fact presumed.” Id. at 266-67, 109 S.Ct. at 2421.
In the present case, the district court undoubtedly believed that a knowing misappropriation of mortgaged property constitutes intent to defraud as a matter of law; as noted above, the district court believed that “if these two things [converting to one’s own use the property of another and doing it knowingly] are proved, that is an intent to defraud.” April Tr. at 230. By instructing the jury that the verdict director defined intent to defraud, the court, in effect, established a mandatory presumption of that intent based upon proof of a knowing misappropriation of mortgaged property.2 With the aid of this irrebuttable presumption, the government’s case is reduced to proving a knowing misappropriation of property mortgaged to the government. That conduct alone is no crime. It becomes a violation, of section 658 only when the defendant engages in that conduct with the specific intent to defraud. Just as the jury instructions in Carella “directly foreclosed independent jury consideration of whether the facts proved established certain elements of the offenses,” Instruction 11 and the district court’s responses to the jury’s notes “directly foreclosed independent jury consideration” of whether Williams acted with intent to defraud. Id. at 266, 109 S.Ct. at 2420. Thus, under Carella, the district court’s instruction in this case indisputably violated Williams’ constitutional right to have the jury determine whether he acted with intent to defraud.
The critical issue in this case is whether the erroneous verdict director requires reversal. As the majority notes, Williams did not object to the giving of Instruction 11.3 An error “not brought to the attention of the [district] court” is reversible only if it constitutes plain error. See Fed.R.Crim.P. 52(b). However, once the appellant shows that the district court committed constitutional error, the government bears the burden of proving the error harmless beyond a reasonable doubt. Chapman v. California, 386 U.S. 18, 87 S.Ct. 824, 17 L.Ed.2d 705 (1969).
Under Carella, an erroneous instruction which erects a mandatory conclusive pre*1542sumption of an element of a crime is harmless-error if, and only if, “no rational jury could find the predicate acts but fail to find the fact presumed.” Carella, 491 U.S. at 267, 109 S.Ct. at 2421. Four members of the Court stated that the harmless-error analysis authorized by Carella is “wholly unlike the typical form of [harmless-error] analysis.” Id. (Scalia, J., concurring in the judgment). Typical harmless-error analysis involves assessing the prejudicial impact of a particular error in light of the whole record. United States v. Hasting, 461 U.S. 499, 509, 103 S.Ct. 1974, 1980, 76 L.Ed.2d 96 (1983). Justice Scalia explained that Carella does not authorize such review of a mandatory presumption concerning an element of the charged crime.4 491 U.S. at 267, 109 S.Ct. at 2421. To consider the trial record as a whole “would be error.” Id. (emphasis added).
In the present case, proof that Williams concealed, removed, disposed of or converted to his own use or the use of another, property that was pledged as collateral to the FmHA and that Williams did that act knowingly may be some indication that he acted with intent to defraud. It is a far cry, however, from establishing beyond a reasonable doubt Williams’ intent to defraud. It simply cannot be said that no rational jury could find these predicate acts but fail to find that Williams acted with intent to defraud. Therefore, under Carel-la, the error here cannot be harmless beyond a reasonable doubt.
The majority, without any explanation, has done precisely what Justice Scalia believed would be error: it has looked to the evidence in support of its holding that the error was harmless and has concluded “that the jury was able to separate the proof on the various counts of the indictment.” The majority is unquestionably correct insofar as the evidence in the case would have supported the verdict if the jury had been properly instructed. But as this Court has stated:
The Constitution forbids conviction absent proof beyond a reasonable doubt of every fact necessary to constitute the crime. If the sixth amendment right to have a jury decide guilt and innocence means anything, it means that the facts essential to conviction must be proven beyond the jury’s reasonable doubt, not beyond ours. A jury verdict, if based on an instruction that allows [the jury] to convict without properly finding the facts supporting each element of the crime, is error. Such error is not corrected merely because an appellate court, upon review, is satisfied that the jury would have found the essential facts had it been properly instructed. The error cannot be treated as harmless.
United States v. Voss, 787 F.2d 393, 398 (8th Cir.), cert. denied, 479 U.S. 888, 107 S.Ct. 286, 93 L.Ed.2d 261 (1986) (citations omitted; emphasis added). “Findings made by a judge cannot cure deficiencies in the jury’s findings as to the guilt or innocence of a defendant resulting from the court’s failure to instruct it to find an element of the crime.” Cabana v. Bullock, 474 U.S. 376, 384-85, 106 S.Ct. 689, 696, 88 *1543L.Ed.2d 704 (1986). Thus, Justice Scalia’s explanation of the extraordinarily limited scope of the harmless-error analysis adopted in Carella is consistent with binding precedent of both this Circuit and the Supreme Court.
Similarly, the majority’s reference to other instructions and to the jury’s notes obscures the proper focus.5 Even though the phrase “intent to defraud” appears in the name of the crime and Instructions 12 and 13 discuss intent, specific intent to defraud does not appear in the verdict directing instruction as an element of the offense. The district court acknowledged that fact. April Tr. at 229. None of the instructions required the jury to find specific intent to defraud in order to convict, even though violation of section 658 is a specific intent offense. Nothing in Instructions 12 or 13 cures that fatal defect.
The majority next states that “the jury made clear that it understood that intent to defraud was an essential element of the crime by asking the court to define the term.” Whether the jury asked the court to define intent to defraud is debatable, but what the jury’s note said is a matter of record. The note stated:
All counts saying that he’s guilty from evidence that we’ve seen, but not guilty as charged of criminal intent.
Even if this note indicated that the jury had some remarkable intuition that proof of specific intent was required, the district court emphatically reassured the jury that this was not the case. The court, without qualification, told the jury that “Instruction number eleven contains the elements of the charges.”
The jury sent a second note asking, “Could one of our jurors talk to the judge concerning criminal intent?” Over Williams’ objection, the court responded, “Instruction No. 11 defines intent to defraud. I cannot speak with any juror about the matter.” Instruction 11 did not define intent to defraud, nor did it even purport to do so. The district court’s response to this note was, therefore, clearly erroneous.6
Both of the notes to the jury were answered incorrectly, and there is nothing in the record that indicates that the jury understood that specific intent to defraud was an essential element of the crime. In fact, the jury’s convictions on six counts, despite its belief that Williams was “not guilty as charged of criminal intent,” makes it obvious that the jury did not understand that it was required to find an intent to defraud. Instruction 11 and the court’s instructions in response to the jury’s notes stripped Williams of his sixth amendment right to have the jury determine whether he acted with intent to defraud.
CONCLUSION
In summary, even disregarding Carella, the error here was not harmless. The case turned on whether Williams intended to defraud the government, but the instructions did not require the jury to find that Williams possessed an intent to defraud anyone. Neither the court nor the lawyers clearly understood the intent to defraud element. The jury’s notes demonstrate that it was struggling with the issue of intent, and the district court not only failed to enlighten the jury, it erroneously instructed the jury that Instruction 11 defined intent to defraud. The jury’s own statement that Williams was “not guilty as charged of criminal intent” makes it clear that the error here was far from harmless under any meaningful interpretation of that standard. The six fraud convictions should be reversed. This would moot Williams’ double jeopardy challenge to his jury tampering convictions and permit re*1544mand for sentencing on those convictions.7

. Government counsel suggested at trial that intent to defraud does not mean intent to deceive. April Tr. at 228. Counsel cited United States v. McGuire, 744 F.2d 1197, 1200 n. 2 (6th Cir.1984), for that proposition. The McGuire court did not expressly discuss whether intent to defraud and intent to deceive are synonymous. Rather, it quoted the instruction given in that *1541case which stated that "[t]o act with 'intent to defraud’ means to act knowingly and with the specific intent to deceive_” Id. at 1201 n. 2 (emphasis added). The suggestion that there is some difference between "intent to defraud” and "intent to deceive” is unsupported by case-law.

. If there was no presumption of intent to defraud in this case, then there was not even the shadow of a finding — by judge or jury — that Williams acted with intent to defraud. In the final analysis, it really makes no difference whether the district court’s error is characterized as erecting a mandatory presumption of specific intent to defraud or simply eliminating that intent as a consideration. In either case, Instruction 11 "foreclosed independent jury consideration of whether the facts proved” established Williams’ intent to defraud. Carella v. California, 491 U.S. 263, 267, 109 S.Ct. 2419, 2421, 105 L.Ed.2d 218 (1989).

. He did, however, object to the court’s response to the jury’s second note where the court instructed the jury that Instruction 11 defined intent to defraud.

. Justice Scalia offered a compelling explanation for the extremely limited harmless-error analysis of a mandatory conclusive presumption of an element of a crime. This kind of error both conflicts with the overriding presumption of innocence and invades the fact-finding function of the jury. 491 U.S. at 268, 109 S.Ct. at 2422.
The constitutional right to a jury trial embodies "a profound judgment about the way in which law should be enforced and justice administered.” It is a structural guarantee that "reflect[s] a fundamental decision about the exercise of official power — a reluctance to
entrust plenary powers over the life and liberty to one judge or to a group of judges.” A defendant may assuredly insist upon observance of this guarantee even when the evidence against him is so overwhelming as to establish guilt beyond a reasonable doubt. In other words, “the question is not whether guilt may be spelt out of a record, but whether guilt has been found by a jury according to the procedure and standards appropriate for criminal trials.” ... These principles necessarily circumscribe the availability of harmless-error analysis when a jury has been instructed to apply a conclusive presumption.
Id. (emphasis added).

. The reference to Instructions 12 and 13 seems to be a suggestion that the instructions "as a whole” were not erroneous, though the majority concedes that Instruction 11 was indeed erroneous.

. This disposition would also moot Williams’ contention that the district court erred in excluding the testimony of four lawyers who represented Williams in civil litigation against the FmHA. This testimony purportedly would have supported Williams’ good faith defense. If the fraud case were remanded, the district court would need to reconsider this ruling in light of Cheek v. United States, — U.S. -, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991).

. As I have noted, supra n. 2 and accompanying text, this response in effect created a mandatory conclusive presumption for the jury that proof of the two elements in Instruction 11 constituted proof of intent to defraud as a matter of law.