Sunday, November 28, 2021

Court Grants Judgment of Acquittal for Failure to Prove Materiality of Defendant's Fraudulently Filing Document in Cosby Civil Suit

 In United States v. Joseph R. Johnson, No. 20-1449, 2021 WL 5492600 (Nov. 23, 2021), Judge Matey writes for a panel that also includes Judges Smith and Fisher to grant plain error relief for failure to prove materiality.  This statutory construction direct appeal could have broader applications in other contexts involving materiality. Thanks to Claudia Van Wyk, Assistant Federal Defender, Eastern District of Pennsylvania, for this summary! 

The attorney for one of the plaintiffs who sued Bill Cosby filed a praecipe with the district court to file an attachment that had been omitted from a previous motion.  Joseph Johnson, a Bill Cosby supporter, was convicted of making materially false, fraudulent and fictitious statements and representations, 18 USC sec. 1001, for subsequently hand-filing a document which purported to be the same praecipe, but which attached various documents and emails critical of the plaintiff in the lawsuit.  His deception was discovered and the FBI located and charged him.  Judge Matey summarizes the Circuit panel’s holding:

 Joseph Johnson developed an unusual fascination with the allegations of sexual assault against entertainer Bill Cosby. Hoping to cast doubt on the accusers, Johnson posed as an attorney and filed a fabricated document on the civil docket of one of the lawsuits against Cosby. His trick was quickly discovered, and the Government brought criminal charges against Johnson for making a false statement and identity theft, leading to a conviction after a jury trial. Johnson now appeals, arguing that the Government failed to prove that his statements were material.

 We agree. Johnson's behavior wasted public time and resources and distracted court officials from their work. But only Congress enjoys the authority to turn conduct into a federal crime. And while the Government presented plenty showing that Johnson's statements were false, it offered no evidence and elicited no testimony from the only individual it proposed as the government decisionmaker—the judge in the underlying litigation—to explain how the filing could influence a judicial decision. Because that evidence was necessary for the Government to establish liability under 18 U.S.C. § 1001, we will reverse Johnson's convictions and remand for entry of a judgment of acquittal.

 Judge Matey employs the following reasoning: 

  1. Johnson did not preserve the sufficiency challenge he brings in the Circuit because his general Rule 29 motion during trial and his post-trial motion for acquittal focused on the lack of evidence that he “caused” the false statement to be filed and did not mention materiality.
  2. Johnson is entitled to plain error review under the 4-part framework of US v. Olano.  Because insufficient evidence requires reversal when upholding the conviction would result in a fundamental miscarriage of justice, that standard is satisfied.
  3. The government did not prove materiality, which requires that the false statement have “a natural tendency to influence or be capable of influencing the decision of the decision making body to which it was addressed.”  While the agency need not necessarily actually rely on the false statement, it has to be of a type capable of influencing a reasonable decisionmaker.  Here, the judge who dismissed Johnson’s false praecipe testified that he generally relies on the docket in all his rulings.  The document was not even relevant to the proceedings here and the judge’s only act in relation to the document was to strike it from the docket.  That is not materiality, Matey rules.  The judge’s testimony about his general reliance on his docket established only relevance, not materiality.  Those are two different things.  And the fact that the praecipe was stricken is evidence it was false but not that it was material.  Matey rejects a new theory of relevance offered by the Government—that the statement was material because it caused the  clerk to file the document in the first place.  This theory was not considered by the jury and was unsupported by the record.
  4. The government’s failure to prove an essential element of an offense is generally a miscarriage of justice, and it is a miscarriage here. 

 The panel remands for the entry of a judgment of acquittal.

Court Affirms in Hard-Fought Appeal of Conviction in School Fraud Case

 In United States v. Shulick, Nos. 18-3305 & 19-1011 (Nov. 15, 2021), the Court affirmed Shulick’s convictions and sentences for conspiracy to embezzle, embezzling, wire fraud, bank fraud, false statements, and filing false tax returns, in connection with a for-profit business that provided alternative education to at-risk students in the School District of Philadelphia. He was sentenced to a total of 60 months’ imprisonment and three years’ supervised release, plus two $20,000 fines and restitution of $759,735 to the School District and $5,000 to PNC Bank.

Shulick alleged a speedy trial violation because the district court continued the case following the government’s late production of discovery for the stated reason of “case complexity,” when the actual reason was the government’s lack of diligent preparation. The Court distinguished Shulick’s claim from the case he relied on, United States v. Crane, 776 F.2d 600, 606 (6th Cir. 1985), in which the district court admitted to an inappropriate motive. Here, the case was indisputably complex, as evidenced by Shulick’s own requests for continuances to “wade through discovery materials,” which numbered in the millions of pages and derived from a multi-year investigation. The Court rejected Shulick’s request for a categorical rule that government discovery violations require dismissal, leaving any remedy to the district court’s discretion. And it found that Shulick failed to demonstrate here a “lack of diligent preparation,” where the government made a “one-time administrative mishap” which it “promptly admitted.” In evaluating Shulick’s request for Sixth Amendment relief, the Court found no prejudice, where trial was conducted within 18 months and Shulick did not demonstrate a lost witness had helpful testimony, nor why his attorneys failed to preserve it. The Court noted that the speedy trial guarantee does not apply to pre-indictment delay (here, Shulick alleged two years of preindictment delay).

The Court also reviewed several evidentiary rulings, relating to “agency” under 18 U.S.C. §666. Those litigating such cases will wish to review this aspect of the opinion more closely. For the rest, the opinion highlights both the importance of objecting in the trial court and the difficulty of the abuse of discretion standard on appeal. The Court also upheld the exclusion of expert testimony, because of the insufficiency of Federal Rule of Criminal Procedure 16(b)(1)(C) disclosure, holding that a “written summary” of expert testimony is more than a curriculum vitae and a short description of possible testimony. The Court held that describing an expert as a “summary” witness does not relieve counsel of the obligation to disclose opinions, bases, and reasons.

Finally, as to the convictions, the Court addressed instructional issues. Shulick raised two instructional concerns. First, he argued it is error to instruct that an intentional misapplication within the meaning of § 666(a)(1)(A) can be found even if the misuse of funds still benefited the victim. The Court disagreed, based on a careful reading of the statute’s terms, in which the disjunctive “or” suggests that an intentional misapplication of funds is a separate way of satisfying the statute, apart from the earlier prohibition on conversion which is subject to the limiting phrase about benefit to the victim. If not, the Court held, any error was harmless, because Shulick actually embezzled contract funds and used them for his own benefit. Second, Shulick argued it was error to refuse him a safe harbor instruction under § 666(c), which excludes from criminal liability salary, wages, fees, compensation, or expenses “paid or reimbursed, in the usual course of business.” The Court held that such an instruction was not supported by the evidence.

As to the sentence, the Court held that the loss amount was properly calculated under United States v. Nagle, 803 F.3d 167, 180 (3d Cir. 2015), and that Shulick failed to show he was entitled to specific offsets under United States v. Jimenez, 513 F.3d 62, 86 (3d Cir. 2008). For the same reasons, his restitution challenges failed. The Court held that it was not an abuse of discretion for the district court to supplement the sentencing record with a defense expert’s binder of materials. The Court accepted the district court’s view that the binder was material, having been relied on by the defense expert and referenced on cross-examination.

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