Willfulness - Non Tax Contexts

I have written on the willfulness element for most federal tax crimes previously. Yesterday, I read on the White Collar Crime Prof blog here a discussion of a recent Second Circuit case, United States v. Kaiser, ___ F.3d ___ (2d Cir. 2010), discussing the willfulness requirement a securities crime. Willfulness of course means different things in different criminal statutes (see the excerpts from my Federal Tax Crimes book here). Perhaps I confuse more than I help for readers of this blog, but I will provide a few comments on Kaiser.

The fight on appeal was whether the securities crime with a willfulness element required that the Government prove that the defendant knew his conduct was illegal or just that the Government prove that the defendant knew the conduct was wrongful. A person generally knows when he tells a lie that it is wrongful (I set aside the philosophical debate as to whether a lie is always wrongful); what he or she may not know in the specific context is whether the law describes that wrongful conduct (the lie) as a crime. Bottom-line, the court held that the Government need only prove that the defendant know that the conduct -- the lie -- is wrongful. The court summarized its holding:

[W]e conclude that [the prior cases] do not require a showing that a defendant had awareness of the general unlawfulness of his conduct, but rather, that he had an awareness of the general wrongfulness of his conduct.

The opinion is more nuanced than that, so I refer you to it.

One of the interesting points in the decision is the discussion of a specific wrinkle in the securities law is Section 78ff(a) which says: "[N]o person shall be subject to imprisonment under this section for the violation of any rule or regulation if he proves that he had no knowledge of such rule or regulation." So pronounced the court, this does not mean that, in order to convict, the Government must prove knowledge of illegality; it just means that the convicted defendant cannot be imprisoned unless he knew of the illegality. The court talked about this as a "defense" to incarceration, but presumably in a criminal case, the Government must prove the key fact (knowledge of illegality) beyond a reasonable doubt.  I found this wrinkle odd, but securities law is not my area of practice.  But, as suggested by the excerpts from my book, this additional required element for imprisonment seems to be incorporated in the willfulness element for tax crimes.  (I do caution that there may be some continuing uncertainty about the level of knowledge of the illegality, such as does the defendant really have to know the specific law he is violating?)

The Second Circuit's decision also has a good, succinct discussion of Second Circuit law on the conscious avoidance instruction. (For my earlier blog comments on this instruction, see here.)