Friday, April 26, 2019

Obstruction Conviction Affirmed for Presentation of False Documents to AUSA Serving as Attorney for Government for Grand Jury (4/26/19)

In United States v. Sutherland, 921 F.3d 421 (4th Cir. 2019), here, Sutherland was convicted of "three false tax returns and obstructing a grand jury proceeding."  The obstruction charge was under 18 U.S.C. § 1512(c)(2).  On the obstruction charge, the facts were that, through his lawyer, he submitted false documents to the AUSA who was the attorney for the government for the grand jury proceeding.  E.g., FRCrP 6(d)(1). Sutherland's argument was that the crime required a nexus to the grand jury investigation but the documents were not presented to the grand jury.  The Court easily handled the nexus argument under the key authority -- United States v. Aguilar, 515 U.S. 593 (1995) and Marinello v. United States, 584 U.S. 1 (2018).  Marinello was a tax obstruction case, but dealt with Title 18 obstruction concepts, particularly the nexus to a pending proceeding.

The Court offers an interesting discussion, probably digression, about some distinction between the AUSA's role as attorney assistant to the grand jury.  The Court starts with the proposition that an FBI investigation is not an official proceeding subject to obstruction.  A grand jury investigation is an official proceeding.  The Court said (cleaned up):
Sutherland contends that the government failed to prove a nexus between his conduct and an official proceeding. He was, he says, only "attempting to influence the U.S. Attorney's Office," not the grand jury. He correctly notes—and the government does not contest—that the U.S. Attorney's investigation is not by itself an official proceeding. The term "official proceeding" is defined by 18 U.S.C. § 1515(a)(1) to include, inter alia, "a Federal grand jury" or "a proceeding before a Federal Government agency which is authorized by law." FBI investigations, for example, are not official proceedings because the statutory language including "a proceeding before a Federal Government agency which is authorized by law," § 1515(a)(1)(C), implies 'some formal convocation of the agency in which parties are directed to appear, instead of any informal investigation conducted by any member of the agency. The same logic equally applies to the investigation by the U.S. Attorney's office in this case, meaning that its investigation was not an official proceeding. 
The term "official proceeding" thus implies something more formal than a mere investigation. That limiting term prevents a statutory sprawl in which the countless communications of citizens with one agency or another of the federal government lay the groundwork for a potential obstruction prosecution. See Marinello, 138 S. Ct. at 1109-10 (reading tax obstruction statute not to extend to "routine, day-to-day work carried out in the ordinary course by the IRS," id. at 1110). This back and forth between citizens and government works as a general matter to the benefit of both. Much of this activity is a wholly legitimate effort to "influence" the government. See 18 U.S.C. § 1512(c)(2). And indeed it is not far-fetched to think that an obstruction statute encroaching too aggressively on innocent citizen/agency interactions would infringe the basic right to petition guaranteed by the First Amendment of our Constitution. See U.S. Const. amend. I ("Congress shall make no law . . . abridging . . . the right of the people . . . to petition the Government for a redress of grievances."). Then, too, a statute that chills or burdens excessively the right of persons to protest or prove their innocence in the face of a government investigation would run counter to the operation of criminal justice as we have known it. 
There are thus important safeguards to prevent the abuse of § 1512(c)(2). As the Court held in Aguilar, "it is not enough that there be an intent to influence some ancillary proceeding, such as an investigation independent of the court's or grand jury's authority." Providing materially false documents with an intent only to influence the U.S. Attorney's investigation, therefore, would not amount to a violation of § 1512(c)(2). See Young, 916 F.3d at 387 ("[T]he Government has similarly failed to provide evidence demonstrating that Young . . . designed his conduct to thwart [the grand jury] investigation, rather than designing his conduct to obstruct an FBI inquiry . . . ."). To be clear, knowingly giving false documents to a prosecutor without the intent to obstruct a grand jury may violate other federal statutes. E.g., 18 U.S.C. §§ 1001(a), 1519. Just not § 1512(c)(2). 
Section 1512(c)(2) also requires proof that a particular grand jury proceeding was "reasonably foreseeable" to a defendant who has been charged with obstructing that proceeding. While the grand jury does not yet have to be convened, it is not enough for the government to argue that a defendant could have speculated that some official proceeding lies somewhere in the offing. The Young case illustrates the point. In that case, the defendant had intentionally misled FBI agents. But this court vacated defendant's conviction because "the only way the jury could have concluded he foresaw a particular grand jury investigation would be through speculation."  
As so often in law, there is a balance to be struck. Though obstruction statutes are susceptible to abuse, they also exist for good reason. Official proceedings are crucial to the conduct of government. They are entitled to go forward free of corrupting influences that not only delay them but increase the chances of false and unjust outcomes. The federal grand jury investigation in this case is but one example of such an "official proceeding." See J.A. 1066 (jury instruction that the grand jury was an "official proceeding"). The government has every right to prosecute those who would corrupt it. Compromised proceedings in turn diminish public confidence in the workings of government and lead to the sort of creeping cynicism toward it that affects so many nations. Section 1512(c)(2) and other like statutes help to protect against that eventuality here. 
Sutherland insists there was an insufficient nexus between his conduct and the grand jury. The nexus requirement that the government had to prove under § 1512(c)(2) comes from Aguilar and Marinello. Aguilar dealt with a conviction under 18 U.S.C. § 1503, another obstruction statute, for "corruptly endeavoring to influence, obstruct, and impede the grand jury investigation." 515 U.S. at 598 (internal quotation marks and alterations omitted). The Supreme Court held that there must be a "nexus" between a defendant's conduct and the proceeding he obstructed. This meant that his actions needed to have a "relationship in time, causation, or logic" to the obstructed proceeding. Id. at 599. In other words, obstruction must have been "the natural and probable effect" of the defendant's actions. Id. (internal quotation marks omitted). This nexus requirement demonstrated "restraint in assessing the reach of a federal criminal statute" in order to reinforce the principles of deference to Congress and fair notice to the accused. Id. at 600. 
The Aguilar nexus requirement has flown as the crow flies straight to Marinello. In that case, the Court interpreted the reach of 26 U.S.C. § 7212(a), which prohibits obstruction of "the due administration of [the Internal Revenue Code]." Marinello, 138 S. Ct. at 1105 (emphasis omitted) (quoting § 7212(a)). A jury found that Marinello had obfuscated his tax records with the intent to gain a personal advantage, but not that he knew of an ongoing proceeding related to his tax records or intended to interfere with it. The Court held that the government had not proven enough to sustain an obstruction charge. It noted that the principles outlined in Aguilar "apply . . . with similar strength" to the Internal Revenue Code obstruction statute. Id. at 1106. Without a nexus requirement, any interactions with the IRS could have been subject to § 7212(a), including "day-to-day work carried out in the ordinary course by the IRS, such as the review of tax returns." Id. at 1110. The Court refused to "transform every violation of the Tax Code into an obstruction charge," id., and thus required a "relationship in time, causation or logic" between a defendant's actions and a "particular administrative proceeding." Marinello, 138 S. Ct. at 1109 (quoting Aguilar, 515 U.S. at 599). 
The jury instructions in this case drew directly from the principles in Aguilar and Marinello. The district court first instructed the jury that it must decide whether Sutherland "knew that" the grand jury proceeding "was pending" when he distributed the false loan documents.  It instructed the jury that the defendant must have acted "corruptly with the intent to obstruct, [*13]  influence or impede the official proceeding." And, finally, the district court crafted an instruction on the nexus requirement straight from Aguilar: "The government must prove that the defendant . . . intended or knew his actions would have the natural and probable effect of interfering with the grand jury." Aguilar, 515 U.S. at 599 ("[I]f the defendant lacks knowledge that his actions are likely to affect the [official] proceeding, he lacks the requisite intent to obstruct."). The jury instructions, in other words, properly stated the nexus requirement that the jury had to apply to Sutherland's case 
The facts of Sutherland's case fit comfortably within the above Aguilar/Marinello criteria, especially when viewing, as we must, the trial evidence in the light most favorable to the government as the prevailing party. United States v. White, 810 F.3d 212, 228 (4th Cir. 2016). The official proceeding Sutherland attempted to influence was not some far-off possibility. The grand jury had in fact convened. Sutherland's actions, moreover, show a clear "relationship in time, causation or logic with the" grand jury proceedings. Marinello, 138 S. Ct. at 1109 (quoting Aguilar, 515 U.S. at 599). Indeed, Sutherland's actions are related to the grand jury in time, causation, and logic. The temporal and logical relationships are clear: Sutherland distributed the false loan documents just months after the grand jury subpoena was served upon him, and those documents attempted to explain away transactions reflected in the subpoenaed documents. 
The causal relationship between Sutherland and the grand jury rests in part on the meaningful differences between the prosecutor in his case and the FBI agent in Aguilar. In Aguilar, the government had proven that the defendant had lied to an FBI agent who had "not been subpoenaed or otherwise directed to appear before the grand jury." 515 U.S. at 601. The Court held that no rational jury could find a nexus between the defendant's false statements and the pending grand jury proceeding. At the same time, the Court acknowledged that "a jury could find [a] defendant guilty" if he lied to an individual who had already been subpoenaed to testify before the grand jury.  
In the instant case, Sutherland gave false documents to the U.S. Attorney's office. A prosecutor tasked with presenting to the grand jury is more akin to a witness who has been subpoenaed than one who has not. As with a subpoenaed witness, there is a strong likelihood that the U.S. Attorney's office would serve as a channel or conduit to the grand jury for the false evidence or testimony presented to it. "[A]ttorneys for the government," after all, may be present while the grand jury is in session. Fed. R. Crim. P. 6(d)(1). The causal relationship between the U.S. Attorney's office and the grand jury is that envisioned by the Aguilar decision. 
We thus join the Second Circuit in recognizing that the "discretionary actions of a third person," as here, can form part of the nexus to an official proceeding. United States v. Reich, 479 F.3d 179, 185 (2d Cir. 2007) (Sotomayor, J.). In Reich, for example, the criminal defendant had sent an opposing party in an earlier civil proceeding a forged court order that would have mooted that party's outstanding mandamus petition. The opposing party then withdrew the petition. Because it was "foreseeable" that forging a court order would cause the opposing party to withdraw its petition, the "evidence [was] clearly sufficient to establish a relationship in time, causation, or logic between Reich's transmission of the forged order and effects on the [official] proceeding." Id. at 186 (internal quotation marks omitted). As in Reich, where forwarding the fake or forged document had the foreseeable consequence of reaching and influencing an ongoing court proceeding, a rational jury could find that Sutherland's giving false evidence to the U.S. Attorney's office in charge of presenting evidence to the grand jury in fact had one intended and foreseeable consequence: transmission of those documents to the grand jury.
At the end of the day, Sutherland's efforts to corrupt the grand jury in this case lie at the heart of the conduct prohibited by § 1512(c)(2). He had already violated the federal income tax laws multiple times, and, in an effort to cover up his crimes, he distributed phony loan documents to prosecutors with the intent to influence an ongoing federal grand jury proceeding that was closing in on him. Because the jury was properly instructed and found Sutherland guilty based on ample and substantial evidence, we affirm Sutherland's § 1512(c)(2) conviction.

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