No. 98-1481
In the Supreme Court of the United States
NORMAN P. KOSTER, PETITIONER
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
SETH P. WAXMAN
Solicitor General
Counsel of Record
JAMES K. ROBINSON
Assistant Attorney General
THOMAS M. GANNON
Attorney
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
QUESTION PRESENTED
Whether the district court correctly instructed the jury on the mental state
necessary to establish that petitioner committed mail fraud and false-statement
offenses.
In the Supreme Court of the United States
No. 98-1481
NORMAN P. KOSTER, PETITIONER
v.
UNITED STATES OF AMERICA
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
BRIEF FOR THE UNITED STATES IN OPPOSITION
OPINION BELOW
The opinion of the court of appeals (Pet. App. 1-10) is reported at 163
F.3d 1008.
JURISDICTION
The judgment of the court of appeals was entered on December 16, 1998. The
petition for a writ of certiorari was filed on March 15, 1999. The jurisdiction
of this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
Following a jury trial in the United States District Court for the Northern
District of Illinois, petitioner was convicted on nine counts of making
false statements to the Commodity Credit Corporation (15 U.S.C. 714m(a));
on ten counts of mail fraud (18 U.S.C. 1341); on six counts of money laundering
(18 U.S.C. 1956(a)(1)(B)(i)); and on four counts of causing the interstate
transportation of a security obtained by fraud (18 U.S.C. 2314). The district
court sentenced him to a term of 78 months' imprisonment, to be followed
by a three-year period of supervised release. In addition, petitioner agreed
to forfeit $705,795. Gov't C.A. Br. 2-3. The court of appeals affirmed.
Pet. App. 1-10.
1. Between 1990 and 1995, petitioner devised a scheme to defraud the Commodity
Credit Corporation (CCC), a government corporation that finances federal
farm programs. In that scheme, petitioner helped two individuals and a landlord
file forms falsely declaring their eligibility for certain disbursements
from the CCC; the money was then funneled back to petitioner. Petitioner
used straw men for those transactions because he was so deeply in debt to
the CCC that any payment he personally could have earned would have been
withheld to reduce that debt. See Pet. App. 2-6.
2. Petitioner's defense at trial was that he had made no misrepresentations
to the government. He further contended that all of his actions were taken
in good faith to preserve his farming operation. At the close of the evidence,
he asked the district court to read the jury two "good faith"
instructions: one for the false-statement charges and one for the mail fraud
charges.
Pet. App. 6.1 The district court refused the request because, among other
reasons, the mens rea elements of the mail fraud and false-statement charges
encompassed any good faith defense. Id. at 6, 9; Gov't C.A. Br. 19. Then,
with respect to the mail fraud offense, the court instructed the jury that
it could find petitioner guilty only if it found:
First, that [petitioner] knowingly devised a scheme to defraud as described
in the indictment;
Second, that for the purpose of carrying out the scheme or attempting to
do so, [petitioner] used the United States mails or caused the United States
mails to be used in the manner charged in the particular count;
Third, that [petitioner] did so knowingly and with the intent to defraud.
* * * * *
As used in this case, a scheme means some plan or course of action intended
to deceive the Commodity Credit Corporation (CCC) and to deprive it of something
of value by means of false pretenses, representations, or promises.
* * * * *
As used in this case, the phrase "intent to defraud" means that
the acts charged were done knowingly with the intent to deceive the Commodity
Credit Corporation in order to cause the loss of money or a financial gain
to the defendant.
Pet. App. 7-8 (emphasis added by court of appeals). And, on the false-statement
charges, the court instructed:
To establish the offense of making a false statement . . ., the government
must prove the following propositions:
First, [petitioner] made a false statement;
Second, the statement was material;
Third, the statement was made knowingly; and
Fourth, the statement was made for the purpose of influencing the Commodity
Credit Corporation or for obtaining money disbursed by the Commodity Credit
Corporation.
* * * * *
A statement is false if untrue when made and then known to be untrue by
the person making it or causing it to be made.
Id. at 8-9 (emphasis added by court of appeals).
3. The court of appeals affirmed. Pet. App. 1-10. The court first noted
that a defendant is entitled to an instruction on his theory of the case
if: (1) the tendered instruction is a correct statement of the law; (2)
the theory of defense is supported by the evidence; (3) the theory of defense
is not part of the charge; and (4) the failure to give the instruction would
deprive the defendant of a fair trial. Id. at 6 (citing United States v.
Wilson, 134 F.3d 855, 864 (7th Cir.), cert. denied, 119 S. Ct. 216 (1998)).
The court then found (id. at 7) that consideration of the third and fourth
of these elements led to the conclusion that the district court had properly
declined to give petitioner's good faith instructions.
In particular, the court agreed with the district court's conclusion that
the mens rea elements of the mail fraud and false-statement charges encompassed
any good faith defense. Pet. App. 7, 9. The court observed (id. at 9) that
the district court's mail fraud instructions required the jury to find that
petitioner had "knowingly devised a scheme" to defraud and had
acted with an "intent to defraud." It further observed that the
false-statement instructions required the jury to find that petitioner had
"knowingly" made a false statement. The court thus explained (ibid.)
that the jury could not have found both that the prosecution had satisfied
the mens rea elements set forth in the instructions and that petitioner
had nonetheless acted in good faith. Thus, the court concluded (ibid.),
petitioner's "good faith" defense was logically incorporated within
the district court's charge, and the denial of the proposed instructions
did not deprive him of a fair trial.
ARGUMENT
1. Petitioner renews his claim (Pet. 7-20) that he was entitled to a "good
faith" instruction at trial. That claim lacks merit. In mail fraud
prosecutions under 18 U.S.C. 1341, the government must establish, among
other things, that the defendant knowingly participated in a scheme to defraud
and that he had a specific intent to defraud. See, e.g., United States v.
Ruiz, 105 F.3d 1492, 1501 (1st Cir. 1997); see also Pereira v. United States,
347 U.S. 1, 8 (1954). In false-statement prosecutions under 15 U.S.C. 714m(a),
the government must prove that the defendant made a statement that was false,
that he knew the statement was false, and that he made the statement for
the purpose of influencing action by the CCC or obtaining something of value
under a statute applicable to the CCC. See, e.g., United States v. Gigot,
147 F.3d 1193, 1196 n.2 (10th Cir. 1998); United States v. Huntsman, 959
F.2d 1429, 1437 (8th Cir.), cert. denied, 506 U.S. 870 (1992). Here, the
district court fully instructed the jury on the mens rea elements of petitioner's
offenses, and petitioner makes no argument to the contrary.
The instructions that petitioner sought would not have presented "good
faith" as a separate affirmative defense to the charges against him.
In particular, although petitioner now appears to suggest otherwise (Pet.
7; but cf. Pet. 11), those instructions would not have told the jury that,
under some definition, "good faith" could somehow entitle him
to an acquittal once the elements of the relevant offense had been established.
Instead, the requested instructions would have told the jury that "good
faith on the part of the defendant is simply inconsistent with the intent
to defraud alleged in [the mail fraud] charge[s]" and "simply
inconsistent with a finding of knowingly and willfully making false statements
as alleged in the [false-statement] charge[s]."2 Gov't C.A. Br. A1,
A2 (quoting Def.'s Proposed Instr. Nos. 3, 4); see note 1, supra. Put another
way, petitioner asked the district court to repeat, in other phraseology,
what it had already told the jury when instructing it on the mens rea elements
of these offenses: that it could find petitioner guilty only if it found
that those elements were satisfied.
For that reason alone, the district court's refusal to give the proposed
instructions was not in error. In instructing the jury on the elements of
the offenses (see pp. 4-5, supra), the court adequately conveyed to the
jury that it was required to acquit petitioner if it accepted the "good
faith" theory reflected in the instructions he had proposed. See United
States v. Storm, 36 F.3d 1289, 1294 (5th Cir. 1994), cert. denied, 514 U.S.
1084 (1995); see generally Cupp v. Naughten, 414 U.S. 141, 147 (1973) (jury
instructions must be viewed as a whole). "There is nothing so important
about the words 'good faith' that their underlying meaning cannot otherwise
be conveyed. Thus, where the court properly instructs the jury on the element
of intent to defraud-essentially the opposite of good faith-a separate instruction
on good faith is not required." United States v. Dockray, 943 F.2d
152, 155 (1st Cir. 1991) (internal quotation marks and citation omitted).3
2. Petitioner contends (Pet. 11-13) that the Eighth and Tenth Circuits require
a separate instruction on good faith in these circumstances and that there
is thus a conflict that requires this Court's review. While there is minor
disagreement among the circuits, this Court has repeatedly declined requests
to resolve it, and it should do so here as well.
The clear majority of circuits have now held that it is not reversible error
for a district court to refuse to give a separate instruction on good faith
if the other instructions, taken as a whole, adequately convey to the jury
the essence of the defendant's good faith defense-for example, by explaining
to the jury that the government must prove that the defendant acted with
the mens rea applicable to the particular offenses with which he is charged.
See Dockray, 943 F.2d at 155 (First Circuit); United States v. Gross, 961
F.2d 1097, 1103 (3d Cir.), cert. denied, 506 U.S. 965 (1992); United States
v. Mancuso, 42 F.3d 836, 847 (4th Cir. 1994); United States v. Walker, 26
F.3d 108, 110 (11th Cir. 1994); United States v. Gambler, 662 F.2d 834,
837 (D.C. Cir. 1981). Moreover, the trend in the circuits is clearly away
from requiring a separate instruction on good faith. The Fifth Circuit has
largely abandoned its previous decision requiring such an instruction. See
Storm, 36 F.3d at 1294-1295. And the Eighth Circuit, while formally adhering
to its position that "a defendant is entitled to a good faith instruction
where one has been requested and finds support in the evidence," recently
denied post-conviction relief to a defendant whose counsel had failed to
request such an instruction. See Willis v. United States, 87 F.3d 1004,
1008 (8th Cir. 1996). The court reasoned that the instructions actually
given, which "stated that a specific intent to defraud was required,"
were "adequate to convey to the jury that if it found that [the defendant]
acted in good faith it could not find him guilty of bank fraud." Ibid.
As petitioner observes, the Tenth Circuit has held that "[t]he 'good
faith' instruction is required to be given as a separate subject,"
even where the instructions otherwise set forth the mens rea elements of
the offense. United States v. Hopkins, 744 F.2d 716, 717-718 (1984) (en
banc). Like the Fifth Circuit, however, the Tenth Circuit may reconsider
that position. Moreover, as a practical matter, it makes little difference
whether a court specifically uses the term "good faith" in its
jury instructions. Where, as here, the instructions correctly define the
elements of the charged offenses, the absence of a separate good faith instruction
should have no effect on any verdict.4 There is thus no need for this Court
to resolve the differences in approach between the court of appeals in this
case and the Tenth Circuit in Hopkins. Indeed, since Hopkins, this Court
has denied review in cases raising the same issue that is presented here.
See Bates v. United States, 520 U.S. 1253 (1997) (No. 96-7731); Von Hoff
v. United States, 520 U.S. 1253 (1997) (No. 96-6518); Gross v. United States,
506 U.S. 965 (1992) (No. 92-205); Green v. United States, 474 U.S. 925 (1985)
(No. 84- 2032).
CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.
SETH P. WAXMAN
Solicitor General
JAMES K. ROBINSON
Assistant Attorney General
THOMAS M. GANNON
Attorney
MAY 1999
1 Petitioner's proposed instruction on the false-statement charges would
have read, in part:
The good faith of the defendant is a complete defense to the charge of making
false statements * * * because good faith on the part of the defendant is
simply inconsistent with a finding of knowingly and willfully making false
statements as alleged in the charge.
A person who acts on a belief or an opinion honestly held is not punishable
under this statute merely because the belief or opinion turns out to be
inaccurate, incorrect or wrong. An honest mistake in judgment does not rise
to the level of knowledge and willfulness required by the statute.
The law is intended to subject to criminal punishment only those people
who knowingly and willfully attempt to deceive. While the term good faith
has no precise definition it means among other things, a belief or opinion
honestly held, an absence of malice or ill will and an intention to comply
with known legal duties.
* * * * *
The burden of proving good faith does not rest with the defendant because
the defendant does not have any obligation to prove anything in the case.
It is the government's burden to prove to you beyond a reasonable doubt
that the defendant acted knowingly and willfully to make false statements.
Gov't C.A. Br. A1 (quoting Def.'s Proposed Instr. No. 3). Petitioner requested
a similar instruction with respect to the mail fraud counts. That instruction
would have read, in part:
The good faith of the defendant is a complete defense to the charge of mail
fraud * * * because good faith on the part of the defendant is simply inconsistent
with the intent to defraud alleged in that charge. * * * An honest mistake
in judgment does not rise to the level of an intent to defraud.
Gov't C.A. Br. A2 (quoting Def.'s Proposed Instr. No. 4).
2 Petitioner's proposed instructions on the false-statement charges made
reference to a supposed "willfulness" element. As the prosecution
observed at the charge conference, however, "the element of willfulness
isn't in this case." Gov't C.A. Br. A4; see 15 U.S.C. 714m(a) (imposing
criminal sanctions on "[w]hoever makes any statement knowing it to
be false, or whoever willfully overvalues any security, for the purpose
of influencing in any way the action of the [CCC]") (emphasis added).
The petition presents no claim that the district court erred by failing
to include a "willfulness" instruction or that the absence of
such an instruction could itself give rise to any right to a "good
faith" instruction.
3 See also United States v. Sarno, 73 F.3d 1470, 1487 (9th Cir. 1995) (no
separate good faith instruction required for false-statement offense under
18 U.S.C. 1014 (Supp. II 1996)), cert. denied, 518 U.S. 1020 (1996); United
States v. Mancuso, 42 F.3d 836, 847 (4th Cir. 1994) ("If the district
court gives adequate instruction on specific intent, a separate instruction
on good faith is not necessary."); United States v. Walker, 26 F.3d
108, 110 (11th Cir. 1994) (finding of specific intent to deceive precludes
finding of good faith); United States v. McElroy, 910 F.2d 1016, 1025-1026
(2d Cir. 1990) (where district court instructs on all elements of "knowledge"
crime, no reversible error in refusing to instruct on good faith defense);
United States v. Rochester, 898 F.2d 971, 979 (5th Cir. 1990) (jury "finding
of specific intent to deceive categorically excludes a finding of good faith")
(internal quotation marks omitted); United States v. Schwartz, 787 F.2d
257, 265 (7th Cir. 1986) ("'Good faith' is just the other side of knowingly
making false statements.").
4 Because the only proper "good faith" instruction in this context
would, in effect, inform the jury that it should acquit the defendant if
it finds that the relevant mens rea element has not been satisfied, a finding
that the mens rea element has been satisfied is the functional equivalent
of a finding that the defendant did not act in good faith. For that reason,
a failure to deliver such an instruction, even if it could somehow be characterized
as "error," would always be harmless error so long as the jury
was properly instructed on the mens rea element. See Sullivan v. Louisiana,
508 U.S. 275, 281 (1993).