Thursday, May 2, 2019

Fifth Circuit on Willful Blindness / Deliberate Ignorance as Circumstantial Evidence of Intent Element (5/2/19)

In United States v. Ricard, ___ F.3d ___, 2019 U.S. App. LEXIS 12598 (5th Cir. 2019), here, "Ricard was convicted by a jury of one count of conspiracy to pay and receive kickbacks for referring Medicare patients to a particular health care provider, three counts of receiving such kickbacks for such referrals, three counts of identity theft, and one count of making false statements to a federal agent."  Although this is a nontax case, the case has some good discussion on issues that arise in criminal tax cases, particularly regarding the willful blindness jury instructions.

The Court explained the crime involved:
Willfulness in the Medicare kickback statute "means that the act was committed voluntarily and purposely with the specific intent to do something the law forbids; that is to say, with bad purpose either to disobey or disregard the law." United States v. Davis, 132 F.3d 1092, 1094 (5th Cir. 1998) (quoting United States v. Garcia, 762 F.2d 1222, 1224 (5th Cir. 1985)). Under this definition of willfulness, "knowledge that the conduct is unlawful is all that is required." n8 Bryan v. United States, 524 U.S. 184, 196, 118 S. Ct. 1939, 141 L. Ed. 2d 197 (1998).
   n8 In contrast, a heightened willfulness standard applies in certain tax and currency structuring cases. Those statutes "carve out an exception to the traditional rule that ignorance of the law is no excuse and require that the defendant have knowledge of the law." Bryan, 524 U.S. at 195 (internal quotation marks and footnotes omitted).
At this point, I am not sure what the Court means by "In contrast."  The Court says the crime is a "specific intent" crime requiring that the defendant know the law and intend to violate it.  I am not sure that, as articulated, it is distinguishable from the tax and currency structuring cases.  I don't think this need detain us, other than those digging into the issue might want to dig deeper on that.

The willful blindness / deliberate ignorance instruction the trial court gave was from the Fifth Circuit's Pattern Jury Instructions § 1.37A (2015).:
You may find that a defendant had knowledge of a fact if you find that the defendant deliberately closed his eyes to what would otherwise have been obvious to him. While knowledge on the part of the defendant cannot be established merely by demonstrating that the defendant was negligent, careless, or foolish, knowledge can be inferred if the defendant deliberately blinded himself to the existence of a fact.
The trial court also gave an "inferring mental state" charge as follows (this time from the Sixth Circuit pattern jury instruction § 2.08 (2013 ed.):
But a defendant's state of mind can be proved indirectly from the surrounding circumstances. This includes things like what the defendant said, what the defendant did, how the defendant acted, and any other facts or circumstances in evidence that show what was in the defendant's mind. 
You may also consider the natural and probable results of any acts that the defendant knowingly did or did not do, and whether it is reasonable to conclude that the defendant intended those results. This, of course, is all for you to decide.
At trial:
Ricard objected to the deliberate ignorance instruction, arguing that it was "covered by" the instruction concerning "inferring [the] required mental state" and that only one or the other charge should be given. The district court overruled the objection, saying that "while they both deal with the mental element" the deliberate ignorance instruction "is a different charge."
On appeal, Ricard made a different argument -- that the elements required for the deliberate ignorance instruction were absent, so that Court reviewed for plain error, noting that, in any event, "even if a deliberate ignorance charge is error, it is harmless where substantial evidence of actual knowledge exists." (Internal quotation marks omitted.)

The Court then rejected the argument reasoning (boldface supplied by JAT, cleaned up):
A deliberate ignorance instruction serves to inform the jury that it may consider evidence of the defendant's charade of ignorance as circumstantial proof of guilty knowledge. It guards against a defendant who chooses to remain ignorant so he can plead lack of positive knowledge in the event he should be caught. The danger of such an instruction, however, is that, when a defendant must have acted knowingly or willfully, the jury might convict for negligence or stupidity. Thus, a deliberate ignorance instruction should only be given when a defendant claims a lack of guilty knowledge and the proof at trial supports an inference of deliberate ignorance.  An inference of deliberate ignorance exists if there is evidence showing (1) subjective awareness of a high probability of the existence of illegal conduct, and (2) purposeful contrivance to avoid learning of the illegal conduct. 
There is no dispute that Ricard claimed a lack of guilty knowledge; her central defense at trial, and the main focus of this appeal, is that she did not know that receiving payments for patient referrals, as she did, was itself unlawful.  
Thus, we turn to the two-prong test, asking first if there was sufficient evidence showing that Ricard had a subjective awareness of a high probability that the referral payments were unlawful. The evidence showed that Ricard shifted patients, unrelated to the welfare of those patients, to and from different home health agencies, and did so in pursuit of greater personal profits; such transfers are sufficient to infer her subjective awareness of a high probability that her referral payments were legally improper.  
Next, as to the second prong, we ask whether the evidence raises the inference that the defendant purposefully contrived to avoid learning of the illegal conduct.  The government points to two items of evidence as demonstrating Ricard purposefully contrived to avoid learning of the illegality of the referral payments. First, when she went to work for Abide, Crinel, Abide's owner, refused to pay Ricard on a referral basis; yet Ricard, despite being apparently "shocked" by this decision, did not ask for an explanation of why the referral arrangement was inappropriate. Second, while employed at Abide, Ricard did not attend orientation, meetings, and trainings held for other marketers; she continued to consider her sole task to only be procuring referrals on her own terms. 
We are skeptical that either of these items of evidence raise the inference that Ricard purposefully contrived to avoid learning of the illegality of her conduct. Both acts occurred months after the charged scheme at Progressive was completed. Any error, however, was not plain. There is no clearly established law in this circuit that the conduct which raises an inference of purposeful contrivance must occur during commission of the charged offenses, rather than during a subsequent, similar scheme. Therefore, we reject Ricard's challenge to the inclusion of a deliberate ignorance jury instruction.
JAT Comments:

1.  The key item boldface is that, if the jury finds acts of deliberate ignorance, those acts are circumstantial evidence of the required specific intent element.

2.  I have written on willful blindness (called deliberate ignorance in the opinion) and believe that rather than providing an alternative basis for finding the intent/knowledge element of a crime is simply circumstantial evidence that a jury can consider in determining whether the prosecution has proved the required intent beyond a reasonable doubt.  Some of the postings are:
  • Fifth Circuit Sustains Willful Blindness / Deliberate Ignorance Jury Instruction As Harmless Error (Federal Tax Crimes Blog 4/26/19), here.
  • Willful Blindness - Is It An Inference of Knowledge or Intent or Is It a Substitute (Federal Tax Crimes Blog 2/21/19), here.
  • Willful Blindness -- Does the Concept Expand the Statutory Element of the Crime of Knowledge? (Federal Tax Crimes Blog 2/24/18), here.
  • The Willful Blindness Concept -- What Does It Do? (Federal Tax Crimes Blog 1/23/17), here.
3.  In my mind, if a specific willful blindness/deliberate instruction is given, it should state specifically that the facts indicating deliberate ignorance are circumstantial evidence of the required intent and not a substitute for the required intent.

4. In United States v. Daneshvar, 2019 U.S. App. LEXIS 12773 (6th Cir. 2019) (unpublished), here, the trial court gave the following deliberate ignorance instruction (emphasis supplied by JAT):
Now I want to explain something about proving a defendant's knowledge. No one can avoid responsibility for a crime by deliberately ignoring the obvious. If you are convinced that the defendant deliberately ignored a high probability that Mobile Doctors was engaged in a fraud, you may find that he knew that Mobile Doctors was engaged in a fraud. 
But to find this you must be convinced beyond a reasonable doubt that the defendant was aware of a high probability that Mobile Doctors was engaged in fraud and that defendant deliberately closed his eyes to what was obvious. Carelessness or negligence or foolishness on his part is not the same as knowledge and is not enough to convict. This, of course, is all for you to decide.
I believe that the instruction although using the permissive "may" and not the mandatory "must" is consistent with my point, but I do think that it is confusing because the jury could easily read may as must.  I think the instructions should be made clear.

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