Saturday, September 17, 2011

The Object of a Klein Conspiracy and Specificity (9/17/11)

In United States v. Mubayyid, 658 F.3d 35 (1st Cir. 2011), here, the First Circuit addressed the issue of the nature of the Klein conspiracy when the object alleged indictment went beyond the usual general allegation of impairing and impeding the lawful functions by specifically alleged how the object was achieved.
The Court introduces the case as follows:
This complex appeal arises out of the joint criminal prosecution of Emadeddin Muntasser, Muhamed Mubayyid, and Samir Al-Monla for conspiring to defraud the United States by obstructing the functions of the Internal Revenue Service ("IRS"), for corruptly endeavoring to obstruct the due administration of the Internal Revenue laws,  for filing false tax returns, for making false statements to agents of the Federal Bureau of Investigation ("FBI"), and for scheming to conceal material facts from a federal agency. The charges stem from each defendant's involvement with Care International, Inc. ("Care"), a charitable organization incorporated by Muntasser in 1993 with a stated purpose of providing worldwide humanitarian aid.

The defendants' twenty-four day jury trial focused on the circumstances motivating Muntasser's formation of Care in 1993; the defendants' failure to disclose some of Care's activities, such as the publication of certain newsletters from 1993 to 1997; and Care's support for, and promotion of, Islamic jihad and fighters known as "mujahideen." n1 The government's central theory at trial was that Muntasser had established Care in order to fraudulently obtain a tax exemption, so that contributions being used to finance mujahideen overseas could be deducted from individual tax returns as charitable donations.
n1 At trial, witnesses for the government testified that "jihad" means "holy struggle," and specifically refers to the duty to fight against the enemies of Islam, while "mujahideen" refers to Islamic [*3] "holy warriors." In its own materials, Care defined "mujahideen" as "[t]hose who are going out for Jihad, fighting in the path of Allah."
The indictment alleged the object of the conspiracy as follows (emphasis supplied):
impeding, impairing, interfering, obstructing and defeating through deceit, craft, trickery, and dishonest means the lawful functions of the [IRS] in the ascertainment, assessment, and determination of whether [Care] qualified and should be designated as a 501(c)(3) organization in 1993 and should continue to be accorded status as [a] 501(c)(3) organization thereafter.
The jury convicted.  On motion for acquittal, the trial court acquitted, reasoning:
Again, the government charged a single agreement, an agreement to obtain and maintain tax-exempt status for Care. There was no evidence that there was a conspiracy to obtain that status, and no evidence that there was a conspiracy of any kind in or about 1993. Even if Mubayyid or Al-Monla, or both, agreed with Muntasser in 1995 or later to maintain the charitable status of Care or to commit another offense, that is not the agreement charged in the indictment. To sustain a conviction there must be sufficient evidence of the conspiracy charged in the indictment -- that conspiracy and not some other conspiracy.
The Government appealed to reinstate the jury verdict of guilty. 
Nevertheless, the government urges us to reinstate the jury's verdict, casting the issue as one of evidentiary variance, rather than insufficiency. A variance occurs when the facts proved at trial differ materially from those alleged in the indictment without altering the crime charged. United States v. Tormos-Vega, 959 F.2d 1103, 1115 (1st Cir. 1992). Traditionally, a claim of variance is raised on appeal by a defendant seeking to overturn a judgment of conviction. In those situations, we have said that a variance is not a ground for acquittal, provided that the facts actually proven at trial are sufficient to convict the defendant of the charged crime and the variance did not prejudice the defendant. See United States v. Glenn, 828 F.2d 855, 858 (1st Cir. 1987) (Breyer, J.). The government claims that it succeeded in proving a narrower conspiracy prohibited by the same statutory provision charged, 18 U.S.C. § 371, and comprised wholly of acts clearly set forth in the indictment, amounting to no more than a non-prejudicial variance.
The object usually charged as the object of the Klein conspiracy is just some some variation of impairing and impeding the lawful functions of the IRS without specificity at to how that occurred. The specificity in the indictment usually comes, not in the stated object, but in the manner and means and in the overt acts of the conspiracy. For example, in the behemoth KPMG indictment (United States v. Stein), the statutory and object allegation was simply that the defendants conspired to defraud the United States and the pertinent object was simply to impair or impede the IRS without any specificity as to how that object was to be achieved. 

The Court of Appeals agreed with the Government that the doctrine of variance was the proper lens through which to review the indictment. The Court held that, even if the specificity in the indictment, were properly viewed as an object of the conspiracy rather than a manner and means, variance analysis could apply. But, the Court held (footnotes omitted),
Here, the titular crime was not altered. The defendants were indicted under 18 U.S.C. § 371, which criminalizes conspiracies with an object "to defraud the United States, or any agency thereof in any manner or for any purpose." Cf. Mueffelman, 470 F.3d at 38 (finding no constructive amendment where "Mueffelman was charged with mail fraud and convicted of mail fraud"). Pursuant to that provision, the government was required to prove three elements: "an agreement, the unlawful objective of the agreement, and an overt act in furtherance of the agreement." United States v. Barker Steel. Co., 985 F.2d 1123, 1127-28 (1st Cir. 1993) (quoting United States v. HurleyDennis v. United States, 384 U.S. 855, 861 (1966)). These elements were fully satisfied by so much of the indictment as charged the defendants with conspiring "to defraud the United States for the purpose of impeding, impairing, interfering, obstructing and defeating through deceit, craft, trickery, and dishonest means the lawful functions of the [IRS]." That language is also consonant with the narrower conspiracy proven.

To be sure, the government's indictment did not stop there. It specifically alleged that the agreed-upon purpose of the defendants' fraud was to obstruct the IRS "in the ascertainment, assessment, and determination of whether Care International, Inc., qualified and should be designated as a 501(c)(3) organization in 1993 and should continue to be accorded status as [a] 501(c)(3) organization thereafter." As the district court noted, this language appears in the key charging paragraph, is identified as a component of the conspiracy's "purpose," and appears prior to and apart from the five paragraphs of the indictment setting forth the "manner and means by which the conspiracy was sought to be accomplished" and the nine paragraphs identifying the overt acts committed in furtherance of the conspiracy. The question is whether, and to what extent, this additional charging language precluded the government from proving a narrower conspiracy that embraced only the agreement of the defendants to act unlawfully to maintain Care's tax-exempt status.

We have found no indications in our case law that, as an element of the offense, the unlawful object of a § 371 conspiracy must be defined with the level of specificity to which the defendant now seeks to hold the government. To the contrary, we have previously declined to parse the conspiratorial object so finely. See United States v. Goldberg, 105 F.3d 770, 774 (1st Cir. 1997) ("[W]e see no sharp distinction under section 371 between a purpose to file [false tax] documents and a purpose to interfere [with the functions of the IRS]."); cf. Dennis, 384 U.S. at 863 (rejecting claim that defendants' specific purpose of filing false documents in violation of another statute precluded trial under general charge of conspiracy to defraud, noting that indictment under the broader charge is permissible so long as it "properly reflects the essence of the alleged offense"). We have also held, in other contexts, that where the government's charging language identified an element of the crime with greater specificity than was required by the statute, the alteration of that additional language had "no bearing on the substance of the charge." United States v. Dowdell, 595 F.3d 50, 68 (1st Cir. 2010) [*40] (finding no constructive amendment in government's clarification of drug type identified in indictment where charged crime "prohibits distribution of any controlled substance regardless of type," and thus "the government could technically have omitted reference to a particular controlled substance altogether"). This approach is consistent with the approach taken in other circuits. See, e.g., United States v. Kuenstler, 325 F.3d 1015, 1022 (8th Cir. 2003) (treating as surplusage language in the indictment that described the object of the conspiracy in detail exceeding that which was needed to make out the statutory offense); United States v. Garcia-Paz, 282 F.3d 1212, 1215-17 (9th Cir. 2002) (holding that language preceded by the phrase "to wit" in the indictment is mere surplusage that may be disregarded and need not be proven); United States v. Pumphrey, 831 F.2d 307, 309 (D.C. Cir. 1987) ("[E]xcess allegations in an indictment that do not change the basic nature of the offense charged need not be proven and should be treated as mere surplusage.").

Thus, what is striking about the language relied upon by the defendants for the unitary conspiracy theory is that it is needless in the purpose portion of the indictment. If the indictment's reference to "the ascertainment, assessment, and determination of whether [Care] qualified and should be designated as a 501(c)(3) organization in 1993 and should continue to be accorded status as [a] 501(c)(3) organization thereafter" had appeared in the section of the indictment describing the conspiracy's "manner and means," rather than its "purpose," the defendants would have no argument at all. Hence, the defendants' argument challenging the government's right to prove a narrower conspiracy elevates form over substance. All of the material in the "manner and means" portion of the indictment, along with the overt acts alleged, is the specification of the ways in which the defendants sought to accomplish the conspiracy. Given the sufficiency of the more broadly stated purpose of the conspiracy and the detailed specification of conduct in its "manner and means" portion, the language at issue could have been omitted altogether without affecting the sufficiency of the indictment. See United States v. Troy, 618 F.3d 27, 34 (1st Cir. 2010) ("[T]he statutory language may be used in the indictment to describe the offense, 'but it must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offence, coming under the general description, with which he is charged.'" (quoting Hamling v. United States, 418 U.S. 87, 117-18 (1974))).

In light of the foregoing considerations, the government has demonstrated that variance, rather than constructive amendment, is the proper lens through which to view the narrowing of the conspiracy that occurred in this case. The allegations in the indictment charging, in the words of the district court, a conspiracy with a "single, unitary object" are not indispensable or "essential" to the integrity of that document. Indeed, they were effectively surplusage. The government is not seeking to reinstate the defendants' conviction on the basis of a crime other than the one with which they were charged. Although we hold the government to its charging decisions, we must also hold defendants to so much of their criminal conduct that the government has properly charged and successfully proven.
 Needless to say, the Court then found that the variance was not prejudicial and reinstated the guilty verdict.

1 comment:

  1. Jack,

    Thank you for posting such an excellent case!

    Query: Do you think the appellate outcome would have been different had the Government defined its accusation(s) through a Bill of Particulars as compared to specifics in an Indictment? In other words: Does the "factual variance"/substance-over-form analysis apply to those instances where the prosecuting officer has circumscribed the Government's case in its Bill of Particulars?

    I would welcome your's and other readers' feedback.


Please make sure that your comment is relevant to the blog entry. For those regular commenters on the blog who otherwise do not want to identify by name, readers would find it helpful if you would choose a unique anonymous indentifier other than just Anonymous. This will help readers identify other comments from a trusted source, so to speak.