LITIGATING INTENT-MOTIONS & TRIAL TACTICS

Transcription

1 NACDL s 2007 Spring Meeting & Seminar Protecting Freedom: Strategies for Preserving Your Client s Liberty Hilton Cincinnati Netherland Plaza, Cincinnati, OH April 25-28, 2007 LITIGATING INTENT-MOTIONS & TRIAL TACTICS ERIC DELINSKY EDWARD GARLAND 1800 M ST. NW 3151 MAPLE DR. WASHINGTON, DC ATLANTA, GA (202) (404) FAX: (202) FAX: (404)

2 WHAT IS YOUR DEFENSE? TEST YOUR IGNORANCE OF THE LAW By EDWARD T.M. GARLAND AND DONALD F. SAMUEL GARLAND, SAMUEL & LOEB, P.C MAPLE DRIVE, N.E. ATLANTA, GEORGIA (404) ; Fax: (404) WHAT IS YOUR DEFENSE? Prepared for NACDL 2007 Spring Meeting & Seminar April 25-28, 2007 Cincinnati, Ohio

3 TEST YOUR IGNORANCE OF THE LAW Edward T. M. Garland and Donald F. Samuel Garland, Samuel & Loeb, P.C. Perhaps the first lesson taught in law school is the simple maxim, Ignorance of the law is no defense. Once lawyers begin defending people accused of committing crimes particularly white collar crimes or other non-violent offenses this adage is quickly discovered to be far from clear. In evaluating the methods by which a defense can be constructed on the basis of lack of intent, or mens rea, the first task is to determine what is it, exactly, that the government must prove the defendant knew or intended. Consider the following: I. Prior to 1996, 31 U.S.C made it a federal crime to willfully violate 5322 which proscribes structuring a financial transaction at a bank (that is, breaking up a single transaction involving more than $10,000 in currency into two or more transactions, each less than $10,000) in order to evade a currency report being filed. The Eleventh Circuit considered the mens rea element of this statute and decided that the government was required to prove (choose one or more):

4 1. The defendant was aware of a bank's duty to file a report when more than $10,000 was deposited or withdrawn in one day. 2. The defendant intended that his conduct would cause the bank to fail to file the report. 3. The defendant was aware that it was a crime to structure a financial transaction. 1 The Supreme Court later considered the same statute and decided that the government was required to prove (choose one or more): 1. The defendant was aware of a bank's duty to file a report when more than $10,000 was deposited or withdrawn in one day. 2. The defendant knew that his conduct would cause the bank to fail to file the report. 3. The defendant was aware that it was a crime to structure a financial transaction. 2 II. 1 "1" and "2". United States v. Brown, 954 F.2d 1563 (11 th Cir. 1992). 2 "1", "2" and "3". Ratzlaf v. United States, 510 U.S. 135 (1994).

5 18 U.S.C. 922(a)(1)(A) and 924(a)(1)(D) make it a crime to willfully violate the provision in the Firearms Owners' Protection Act that requires one engaged in selling firearms to have a license. The Eleventh Circuit considered this statute in 1996 and decided that the government must prove that the defendant (choose one or more): 1. Knew that he was dealing in firearms. 2. Knew that he was required to have a license in order to deal in firearms. 3. Knew that he did not have the requisite license. 4. Nonetheless voluntarily, intentionally engaged in the business of dealing in firearms, knowing that such conduct violated the licensing requirement. 3 The Supreme Court considered the same statute in 1998 and decided that the government was required to prove (choose one or more): 1. Knew that he was dealing in firearms. 2. Knew that what he was doing was unlawful in some respect. 3. Knew that he was required to have a firearms license in order to sell guns legally; 3 "1", "2" "3" and "4" United States v. Sanchez-Corcino, 85 F.3d 549 (11 th Cir. 1996).

6 4. Knew that he was violating the firearms licensing law when he sold guns without a license. 4 III. 26 U.S.C makes it a crime to willfully attempt in any manner to evade any tax. In 1991, the Supreme Court considered the case of an educated, professionally-employed man who claimed that he had no duty to report the fact that he received money from his employer in exchange for work he performed (that is, the wages he earned as a commercial airline pilot), because he did not believe that this came within the definition of "income" in the Tax Code. The Court decided that the government must prove: 1. The defendant was aware that he received the money 2. The defendant was aware of the specific provision in the tax code that required this money to be reported as income. 3. The defendant voluntarily and intentionally violated a known legal duty. 4 "1" and "2" Bryan v. United States, 524 U.S. 184 (1998).

7 4. The defendant did not have a misunderstanding of the law, even an objectively unreasonable misunderstanding (that is, the government must prove that the defendant actually believed in his own mind that the money he received from his employer was income that was taxable). 5 IV. The Food Stamp Act, 7 U.S.C. 2024(b), provides that "whoever knowingly uses coupons... in any manner not authorized by [the statute] is subject to a fine and imprisonment." Construing this provision, the Supreme Court held: The government is required to prove the defendant (choose one or more): 1. Knowingly used food stamp coupons in the manner alleged in the indictment. 2. Knew that his use was illegal, that is, was not authorized by the statute or the regulations which govern the Food Stamp program. 6 5 "1", "2", "3" and "4". Cheek v. United States, 498 U.S. 192 (1991). The language in "2" is actually taken from Bryan's discussion of Cheek and not from Cheek itself. 6 "1" and "2". Liparota v. United States, 471 U.S. 419 (1985).

8 V. The Sherman Antitrust Act, 15 U.S.C. 1, provides that every conspiracy in restraint of trade is declared to be illegal. Every person who shall make any contract or engage in any combination of conspiracy hereby declared to be illegal shall be deemed guilty of a felony. In a price-fixing case, the government must prove that the defendant: 1. Agreed with a competitor to fix prices. 2. Knew the probable consequences of this agreement (re: prices) 3. Engaged in this conduct with an awareness of its wrongfulness 4. Knew that the antitrust laws made it a crime to have such an agreement. 7 VI. At the time the statute was being considered by the Supreme Court in 1984, 18 U.S.C made it a federal offense to knowingly and willfully 7 "1" and "2". United States v. United States Gypsum Co., 438 U.S. 422 (1978).

9 make a false statement or fraudulent representation in any matter within the jurisdiction of any department or agency of the United States. True or False: The Government must prove that the defendant had knowledge that a federal agency was the recipient of his false statement. 8 VII. The Arms Export Control Act, 22 U.S.C. 2778(c), requires individuals to have a license before exporting certain listed munitions. Willful violations of the act are subject to criminal penalties. The government must prove the following (choose one or more); 1. The defendant knew he was exporting items subject to the Act. 2. The defendant was aware that he did not have the proper license. 8 False. United States v. Yermian, 468 U.S. 63 (1984). The test-taker may complain that this question blends into the issue of Mistake of Fact as opposed to Mistake of Law, but this case seems to be where these twin issues are joined at the hip. The difference between mistake of law and mistake of fact is often blurred. Whether one knows, or has reason to believe, that his false statement is being heard by a federal agency tests his knowledge of the federal bureaucracy, which could be characterized as a legal question, or a factual question. Even in the pre-ratzlaf decisions that did not require proof that the defendant knew of the illegality of his conduct, the government was obligated to prove that the defendant knew that the bank had a reporting requirement that would be avoided by structuring. Thus, the government was required to prove that the defendant knew that law, although not the law that made it a crime to avoid that law.

10 3. The defendant had knowledge in general that his conduct was unlawful. 4. The defendant was voluntarily and knowingly violating a known legal duty to obtain a license before exporting the items he exported. 9 VIII. The Taft-Hartley Act and ERISA make it a federal crime for an employer to willfully violate the provision that prohibits making payments to a representative of a union, 29 U.S.C. 186(d) and 29 U.S.C The government must prove that the defendant (choose one or more): 1. Was aware that he was an employer. 2. That the recipient was a union representative. 3. Engaged in the conduct with evil or bad purpose. 4. Knew that he was engaged in unlawful conduct. 5. Knew that it is unlawful for an employer to make a payment to a union representative. 10 IX "1", "2", "3" "4". United States v. Adames, 878 F.2d 1374 (11 th Cir. 1989). "1" and "2". United States v. Phillips, 19 F.3d 1565 (11 th Cir. 1994).

11 The regulations governing the shipment of dangerous chemicals require shippers to properly document what they are carrying. 18 U.S.C. 834(f) states that whoever "knowingly violates" any such regulation shall be fined or imprisoned. The government must prove that the defendant (choose one or more): 1. Knew that he was hauling a corrosive liquid. 2. Knew about the regulations 3. Knew about the criminal law sanctions for violating the regulations. 4. Failed to properly document the shipment knowingly and voluntarily in defiance of the regulations. 11 X. The African Elephant Conservation Act, 16 U.S.C. 4223(l) has no willfulness requirement. It simply states that any person who "knowingly violates" the provision that makes it unlawful to import raw ivory from any country other than an ivory producing country shall be guilty of a felony 4224(a), The government must prove that the defendant (choose one or more): 11 "1". United States v. Int'l Minerals and Chem. Corp., 402 U.S. 558 (1971).

12 1. Knew he was importing elephant ivory 2. Knew he was doing something illegal 3. Knew the provisions of 4223(l). 4. Knew that importing the ivory was a criminal violation of 4223(l). 12 XI. In a prosecution for knowingly possessing or transporting child pornography, the statute specifically states, (a) Any person who - (1) knowingly transports or ships in interstate or foreign commerce by any means including by computer or mails, any visual depiction of child pornography is guilty of an offense. The government is required to prove: 1. The defendant knew that he was transporting images of pornography, but not the specific age of the person depicted. 2. The defendant knew the age of the person in the picture "1", "2", "3" and "4". United States v. Grigsby, 111 F.3d 806 (11 th Cir. 1997) United States v. X-Citement Video, Inc., 513 U.S. 64 (1994); United States v. Smith, 459 F.3d 1276, 1286 (11 th Cir. 2006). X-Citement Video was guided to its conclusion by the rule that a scienter requirement should apply to each of the statutory elements that criminalize otherwise innocent conduct. Id. at 72.

13 XII. It is a federal offense to knowingly corruptly persuade another person to withhold documents from, or alter documents for use in, an official proceeding. (This was the language of the statute in 2000). 18 U.S.C. 1512(b)(2). If a person instructs another person to destroy evidence that may be, or has already been, subpoenaed to the grand jury, in order to secure a conviction, the government would be required to prove beyond a reasonable doubt that (choose one of the following): 1. The defendant was aware that the grand jury had issued a subpoena for the evidence and had thereafter encouraged the other person to destroy the evidence; 2. The defendant encouraged the other person to destroy the evidence, knowing that it was the subject of the subpoena, and did so with the specific intent to subvert or undermine the integrity of the grand jury proceeding or to impede its investigation. 3. The defendant encouraged the other person to destroy the evidence, knowing that it was the subject of the subpoena, and did so with the intent to violate the law by rendering the evidence unavailable to the grand jury and to subvert or undermine the integrity of the grand jury investigation Arthur Andersen LLP v. United States, 544 U.S. 696 (2005).

14 IGNORANCE OF THE LAW As the foregoing test reveals, regardless of the language of the statute, the courts have taken three basic approaches to the state of mind requirement: 1. The government is not required to prove that the defendant had a culpable state of mind. That is, ignorance of the law is no defense and assuming the defendant intended to do what he did, it is irrelevant that he was unaware that what he did was unlawful. Courts frequently characterize this as proof of general intent. 2. The government is required to prove that the defendant acted with bad purpose, or an evil motive, but is not required to prove that the defendant was aware of the specific law that he violated. Thus, the defendant must be shown to be aware that he was acting unlawfully, but it is not necessary to show that he was aware of the law he is charged with violating. 3. The government must prove that the defendant was aware of the specific law he violated (but not in the sense of knowing chapter and verse, or the code section by number) and that, knowing the law, he voluntarily and knowingly violated this statute with the understanding that it was a crime to do so.

15 A review of the significant cases in the last twenty-five years reveals that several considerations, or predictors, steer the result: A. Does the statute contain a requirement of willfulness? If so, a higher level of mens rea is required. B. Is the conduct proscribed inherently dangerous? If so, a lower level of mens rea is required. C. Is the conduct "inherently evil"? If so, a lower level of mens rea is required. D. Is the statute "complex"? If so, a higher level of mens rea is required. These are merely guides, however, and success in predicting the result based on these considerations is relatively modest for two reasons: (1) there is no infallible gauge which measures what is "inherently evil" or "complex ; and (2) a statute may have two inconsistent indicators and balancing them is as problematic as trying to determine which is heavier, a pound of feathers or a pound of lead. THE DEBATE TURNS TO THE FIELD OF HEALTH CARE FRAUD The Eleventh Circuit's decision in United States v. Starks, 157 F.3d 833 (11 th Cir. 1998), marked one of the recent of several efforts by the

16 appellate court to delineate the state-of-mind requirement in a "white collar" criminal case. Two prior efforts by the Eleventh Circuit were overruled by the United States Supreme Court: Ratzlaf overruling Brown; 15 and Bryan, overruling Sanchez-Corcino. 16 The statute being construed in Starks was the Anti-Kickback provision of the Social Security Act. 42 U.S.C. 1320a-7b. This law makes it a crime to pay, or offer to pay, or receive, or solicit payment for, the referral of Medicare patients. 17 The defendants claimed at trial that they were entitled to have the jury instructed that in order to be convicted, the government must prove beyond a reasonable doubt that the defendants not only knew that their conduct was unlawful in some general sense, but also that they were aware that paying and receiving kickbacks in connection with a Medicare patient referral was outlawed. The difference between these two states of mind can be gleaned by considering the jury instruction actually given by the court in contrast to the instruction requested by the defense: See footnotes 1 and 2, supra. See footnotes 3 and 4, supra. Specifically, 42 U.S.C. 1320a-7b(b)(1)(A) provides: Whoever knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly, or covertly, in cash or in kind -- (A) in return for referring an individual to a person for the furnishing of any item or service for which payment may be made in whole or in part under [Medicare]... shall be guilty of a felony.

17 Court's charge: The word "willfully" as that term is used from time to time in these instructions, means the act was committed voluntarily and purposely, with the specific intent to do something the law forbids, that is with a bad purpose, either to disobey or disregard the law. 18 The Defendants' Request to Charge required the government to prove that the defendants had to have known that their referral payments were for an improper purpose and that these payments violated the Anti-Kickback statute. The Eleventh Circuit affirmed the conviction, rejecting the defendants' contention that their jury instruction reflected an accurate statement of the required state of mind. The Eleventh Circuit was not alone in this conclusion, see United States v. Davis, 132 F.3d 1092 (5 th Cir. 1998); United States v. Jain, 93 F.3d 436 (8 th Cir. 1996); United States v. Bay State Ambulance and Hosp. Rental F.3d at This language tracks verbatim the Eleventh Circuit Pattern Jury Instruction #9.1 p. 33 (11 th Cir. Pattern Instructions 1997).

18 Serv., 874 F.2d 20 (1 st Cir. 1989). Only the Ninth Circuit has concluded that the government must prove that the defendant was aware of the legal duty that he violated. Hanlester Network v. Shalala, 51 F.3d 1390 (9 th Cir. 1995)(in the context of an administrative debarment proceeding). Yet, the Eleventh Circuit was also not alone in its earlier -- and similar -- analysis in the context of CTR structuring offenses, that a criminal conviction did not require that the defendant be proven to have been aware of the anti-structuring law. United States v. Brown, 954 F.2d 1563 (11 th Cir. 1992). In fact, prior to the Supreme Court's decision in Ratzlaf every Circuit besides the First, had held that the anti-structuring law did not require proof that the defendant violated a known criminal law. STATUTORY CONSTRUCTION Is this all a matter of statutory construction? Perhaps, but the traditional rules of statutory construction -- particularly Justice Frankfurter's three cardinal rules (read the statute, read the statute, read the statute) -- are of little aid. The problem confronting the courts for generations has been perpetuated by an agonizing unwillingness (perhaps it is knowing and

19 willful unwillingness) on the part of Congress to clearly signal its intention with regard to the appropriate mens rea. 19 Terms such as "knowingly violated," "willfully violated" and "willfully engages in conduct" are used almost interchangeably. If there is a code in all this, the courts have surely not learned the cryptograph. Amusingly, the Ratzlaf majority eschewed any consideration of legislative history -- a standard tool of statutory construction -- because the statute, they observed, so clearly dictated the result that the legislative history need not be consulted. Ratzlaf at 147. The dissent agreed that the statute was unambiguously clear -- but clear in favor of the opposite result. Ratzlaf at 157. Frustration with the traditional rules of statutory construction is understandable. Consider, for example the following: 1. The term "willfully" migrates within various criminal laws, without any apparent reason, sometimes appearing immediately before the actus reus and other times appearing in connection with the term "violates": 19 One notable exception is in the area of criminal securities fraud violations, where Congress explicitly provided that imprisonment for violation of 15 U.S.C. 78ff(a) is only possible where the government proves that the defendant was aware of the specific securities rule he violated. See United States v. O'Hagan, 521 U.S. 642 (1997).

20 * 47 U.S.C. 501: Any person who willfully and knowingly does... any act declared to be unlawful. * 15 U.S.C. 1990(c): Any person who knowingly and willfully commits any act... that violates any provision. * 40 U.S.C. 1472(1)(2): Whoever willfully... shall commit an act prohibited... * 31 U.S.C. 5322: A person willfully violating [the anti-structuring provision]. * 18 U.S.C. 924(a)(1)(D): Any person who willfully violates any other provision * 26 U.S.C. 7201: Any person who willfully attempts in any manner to evade or defeat any tax. * 18 U.S.C. 1001: Whoever shall knowingly and willfully... make... any false or fraudulent statement... More often than not, the court has decided the question of the appropriate mens rea with only a passing notice of the location of the term in the statute. And the decisions clearly are not dictated by the geography of the statute.

21 2. Even if the location of the word in the statute makes a modicum of difference, given the fact that courts define the term differently the problem looks more like a Rubik s cube puzzle than an endeavor to construe a statute: "Willful" means: (a) an act done deliberately, as opposed to unwittingly 20 (b) an act done with a bad purpose (c) an act done without justifiable excuse (d) an act done without ground for believing it is lawful. 21 (e) an act done voluntarily and intentionally in violation of a known legal duty. 22 "Knowingly violates," on the other hand can mean: (a) with knowledge of the law being violated. 23 (b) with knowledge of the facts, but not the law See, e.g., Browder v. United States, 312 U.S. 335 (1941); United States v. Phillips, 19 F.3d 1565 (11 th Cir. 1994) Roby v. Newton, 121 Ga. 679 (1905). Cheek v. United States, 498 U.S. 192 (1991). United States v. Grigsby supra. United States v. Int'l Minerals and Chem. Corp., supra.

22 3. In some instances, the court has found a requirement that the defendant must be shown to be violating a known legal duty -- the most stringent of the mens rea standards -- even where there is no willfulness element in the statute at all. United States v. Grigsby 111 F.3d 806 (11 th Cir. 1997); Liparota v. United States, 471 U.S. at 426 (statute requires defendant to "knowingly" use coupons in manner that is unlawful); and United States v. United States Gypsum Co., where the Court observed: "Certainly far more than the simple omission of the appropriate phrase from the statutory definition is necessary to justify dispensing with an intent requirement. 438 U.S. 422, 438 (1978). 4. Remarkably, in some cases where there is an explicit willfulness requirement, it is entirely ignored and the court has found no mens rea requirement, other than knowledge that the act is being performed. United States v. Phillips, 19 F.3d 1565 (11 th Cir. 1994) discussed above (violation of ERISA and Taft-Hartley Act). Given these relatively disparate constructions the courts have given to uses of the same term, there must be some other method of divining

23 precisely what the term "willfully means. In fact, two early Supreme Court cases held that to understand the term, the Court must consider the "context" in which the term is used. Spies v. United States, 317 U.S. 492 (1943) and Screws v. United States, 325 U.S. 91 (1945). But this advice merely poses the problem and provides no guidance in how to solve it. The courts have drawn two sets of distinctions (distinctions apparently not expressly drawn by Congress). First, the Court will distinguish between crimes that are malum in se and those that are malum prohibitum. If malum in se, then the willfulness requirement is dispensed with completely -- at least insofar as it suggests any need to prove the defendant's awareness of the law. Every person is presumed to know the law that proscribes rape, or murder, or dealing in drugs. Malum prohibitum offenses, however, almost by definition, are not necessarily known to the general public, such as licensing and registration laws, for example, or reporting laws. Ratlzaf devoted considerable ink to the notion that arranging one's financial dealings in a manner which avoids potential liability, potential taxes, or the obligation to file a report, is as American as apple pie. Ratzlaf at Thus, businessmen, even sole proprietors, will incorporate their businesses to limit liability. And gift-givers may structure their gift-giving by graciously giving

24 a gift of $10,000 to a relative on December 31 and another $10,000 on January 1 for the sole purpose of avoiding the gift tax return which is required for gifts during a calendar year exceeding $10,000. Sometimes the dichotomy is drawn between crimes that are inherently dangerous (possession of hand grenades, or transporting corrosive chemicals, for example 25 ) and those that are not. Brown 954 F.2d at 1567 (referring to sale of narcotics and possession of unregistered handgun statutes as inherently dangerous, and citing relevant Supreme Court cases). Alternatively, rather than focusing on danger, the court determines whether the law is addressed at conduct that is "obviously evil, or inherently bad," Ratzlaf, fn. 6, p. 155, and the willfulness requirement is given added meaning in these cases, as well. In the Supreme Court, Ratzlaf's CTR law and Liparota's food stamp law have satisfied the standard of conduct that is not obviously evil, or inherently bad. 26 So has a municipal law requiring 25 United States v. Freed, 401 U.S. 601 (1971)(hand grenades); United States v. Int'l Minerals and Chem. Corp., supra (chemicals). 26 In United States v. Jain, supra, the Eighth Circuit concluded that the Anti-kickback statute also qualified under this standard, but then held that the mid-level mens rea test was adequate. Thus, the defendant need not be shown to have known that kickbacks were illegal, but the government did have to prove that the defendant did not act in good faith and acted knowingly wrongfully. 93 F.3d at 440. In other decisions, once it was decided that the offense involved conduct that was not obviously evil or dangerous, this pole was sufficient to vault over the highest bar of the mens rea test: proof that the defendant was voluntarily violating a known specific legal duty.

25 felons to register with the City of Los Angeles when they move to that city. 27 In these instances, the courts have concluded that the government must prove that the defendant was aware of the known legal duty that he was charged with violating. Oddly, in the Eleventh Circuit, the court has found that shipping guns overseas also qualifies for the heightened mens rea requirement, suggesting that this is neither dangerous, nor inherently evil. 28 In another Eleventh Circuit decision, moreover, the court held that a conviction under the Trading With The Enemy Act required proof of the highest standard of mens rea, proof that the defendant voluntarily and knowingly violated a known legal standard. 29 If the conduct involved in a violation of the Trading With the Enemy Act is not "inherently evil," it is hard to imagine what is! COMPLEX VERSUS SIMPLE LAWS But the courts have done more than simply divide offenses into malum prohibitum and malum in se. Another distinction is drawn between statutes that are part of a complex set of laws -- the tax laws, of course, and 27 Lambert v. California, 355 U.S. 225 (1957)(defendant must be shown to have known of the registration requirement) United States v. Adames, 878 F.2d 1374 (11 th Cir. 1989). United States v. Frade, 709 F.2d 1387 (11 th Cir. 1983).

26 the CTR laws among them (Cheek and Ratzlaf)-- and those statutes that are not complex. Starks relied on this analysis in concluding that the Antikickback statute did not require proof that the defendant was violating a known legal duty. That is, if the duty being violated is not part of a complex scheme, there is no requirement that the defendant be aware of it. If it is part of a complex scheme, the defendant must be shown to know about it. Unfortunately, neither of these methods satisfactorily explains the various decisions. And, more troubling, how does one decide that the CTR structuring laws are "complex" and the tax laws are "complex" but the firearm licensing requirements are not complex, and the health care antikickback statutes are not complex. No court has explained the definition of "complex". And no court has decided whether to consider the statute as a whole, or whether the specific provision violated should be the focus. Consider Cheek itself, for example. The defendant claimed that he believed that income did not include money he received from his employer in exchange for work he performed. Is this a matter that is complex? Or, shall we say, beyond the ken of the average citizen? And if we consider the statute as a whole, is the Social Security Act that much simpler than the Tax

27 Code? Can any statute with a numbering system that includes 1320a- 7b(b)(1)(A) possibly qualify as simple? How do we measure complexity on a case-by-case basis? Perhaps a public opinion poll (or a public test) should be conducted. If sufficient numbers of people fail the test -- i.e., the people do not know, for example, that "income" includes money received from an employer (see the Blackmun / Marshall dissent in Cheek ridiculing the airline pilot's belief that money earned from an employer is not taxable income) -- this will satisfy the complexity standard. In Ratzlaf, the majority characterized the CTR laws as sufficiently complex to satisfy the high bar established in Cheek for tax offenses. In the later Bryan opinion, Justice Stevens went so far as to characterize the CTR laws as "highly technical." Bryan at The Ratzlaf dissent, considering the same statute, labeled the CTR provisions, "among the simplest in the United States Code." Ratzlaf at 157. And what about the result in Starks? Is it that self-evident that referral fees should not be paid for patients? Is that "inherently evil?" Lawyers, after all, pay huge referral fees to one another for referral of personal injury clients. The referring lawyer knows that he must do something, at least on paper, to "earn" his referral fee, but this is mere camouflage in most

28 instances. Additionally, the anti-kickback statute only applies in the case of Medicare patients and certain other insured patients, so it is not a prohibition on the practice in general. Nevertheless, it appears that the courts apply a simple ipse dixit approach. "We declare that health care law is not complex," so it isn't. "We declare that structuring financial transaction offenses are complex," so they are. There simply isn't any way to argue this analytically, anymore than one can argue that vanilla tastes better than chocolate. Indeed, what may appear complex to one person, may be facile to another. And vice versa. Viewing Starks side-by-side with Phillips (the Taft-Hartley / ERISA case discussed above) also results in strange discord. Both cases involved laws that prohibit payments from one person to another (in Starks, from a hospital employee to a person referring Medicare patients; and in Phillips, from an employer to a union representative). Both statutes being considered by the court made it a crime to "willfully violate" the prohibition on making these payments. In Starks, the court held that the defendant must be aware of the illegality of his conduct generally, but not the specific prohibition. In Phillips, however, the court concluded that the defendant may be totally

29 oblivious to his misconduct and have no idea that his conduct was unlawful. 30 GUILTY CONSCIENCE Bryan, the firearm license case, and Starks do not declare that the defendant can be totally ignorant of the impropriety of what he is doing. Rather, in some indeterminate, amorphous way, the government must prove that the defendant was aware that he was doing wrong. Not, however, that he was violating a particular statute, or even that he was aware of the statute he was charged with violating, but that he was doing something wrong. Thus, the jury was instructed in Starks that the defendant must have been shown to have acted with the specific intent to do something the law forbids, that is with a bad purpose, either to disobey or disregard the law. But the jury was not told that the law the defendant had to know he was disobeying was the law with which he was charged (and again, the issue is not simply the title, or codification of the statute). In reviewing the sufficiency of the evidence, the Starks court concluded that the defendants must have known they were doing something 30 Phillips it should be noted, more than any other case discussed above, carefully parsed the statutes at issue (Taft-Hartley and ERISA) and makes a plausible case that the result was virtually dictated by Congress, despite the use of the "willful" language that signaled other meanings in other contexts.

30 wrong, because some of the referral payments were made in cash, and when made by check, they were miscoded. And in Bryan, the court found that though the government was not required to prove that the defendant knew that he was required to have a license before he sold firearms, he was shown to have acted with knowledge that he was breaking some law, because he used strawmen to purchase the guns he ultimately re-sold, he filed off the serial numbers on the guns and he sold the guns on the street corner. This approach seems prone to tag cultural and socio-economic conduct that is prevalent (and perhaps perfectly legal) in one environment as evidence of an evil motive, because it is at odds with the culture of the jurors. Thus, selling guns on a street corner may seem "inherently" illegal to Justices on the Supreme Court, but may seem entirely routine to cowboys in Montana, or street vendors in Harlem. And in the case of the health care anti-kickback statute, the practice of paying for the referrals in cash in a parking lot may strike some as an obvious indication of guilty knowledge, but entirely ordinary to others. The gun licensing defendant may have a realization of the wrongfulness of his conduct in several respects, without, in fact, having any awareness that he had a duty to acquire a license before he sold firearms. Moreover, how does one defend such charges? Can one argue that he was

31 ignorant of the gun licensing requirement and that the reason he organized his affairs the way he did was to evade the payment of taxes? Is that a defense at all? Or is the motive to evade taxes itself sufficient mens rea (i.e., evil motive) in a prosecution for selling guns without a license. As Justice Scalia observed in his Bryan dissent, if the gun seller has guilty knowledge because he is violating the city's ordinance barring street sales, is this sufficient to sustain his conviction for "willfully violating" the gun licensing offense? Or, as the majority opinion explained in Sanchez-Corcino 85 F.3d 549, the defendant might be a convicted felon and know that even his possession of weapons is not permitted -- but he might be oblivious to the licensing requirement. Is he nevertheless guilty of "willfully violating" the gun licensing offense because he had an awareness he was doing something wrong? Again, if the clinic personnel who referred patients to the hospital in Starks demanded cash because they wanted to evade the payment of taxes, is this a sufficiently evil motive to sustain their conviction for violating the Anti-kickback statute? What if the defendant was soliciting cash in a clandestine manner not because he was aware of the anti-kickback law, but because he was hiding money from his spouse? Is that relevant evidence in defense of the

32 charges? Absent an evil motive, presumably he is not guilty of the antikickback violation. And if the court looks to the clandestine cash transaction as the evidence of an evil motive, then surely the defendant can confess that he received a kickback, but he did so without an evil motive -- his only motive was to hide cash from his spouse, and he was oblivious of the antikickback statute. Does this work? The problem in these cases is really not what the courts believe the defendant's state of mind must be in order to be guilty. Surely, no one would claim that a person who is in fact completely unaware of the antikickback statute and who, on one occasion, gives a "thank you" gratuity to a clinic employee who referred a patient, is in any way blameworthy. The real concern is whether the government is able to convict the more blameworthy defendants who mount a defense that they never read the code. Consider, for example, the concluding language in the Phillips court's analysis regarding the employer who paid money to the union representative: Section 186 codifies a basic moral tenet: an employer should not bribe a representative of his employees (or make payment that could be perceived as a bribe)... Appellants, of course, knew this. In enacting section 186, Congress simply prohibited people such as the

33 [Appellants] from committing acts that they should know are inherently wrong -- whether or not they were aware of the text of section 186 is of no moment. 19 F.3d at Given the fact that the court had just held that there was no requirement that the defendants be shown to have any mens rea apart from their knowledge that they in fact were paying money to the union representative -- i.e., no requirement that the defendant have any awareness of the illegality or wrongfulness of his conduct -- it is perplexing that the court provides this final justification for its decision: "They knew what they were doing was wrong." What if, in an unusual case, they did not know this? What if, for example, they consulted with an attorney and were advised (erroneously) that the peculiar circumstances in which they were involved (or the industry in which they were involved) exempted them from ERISA and Taft-Hartley? Whether the attorney's advice was right or wrong would have no relevance if there is no mens rea requirement. Absent a requirement that the defendant be shown to be aware of the wrongfulness of his conduct, the advice of counsel defense is non-existent. What really drives the decision in Phillips, we believe, is the court's final remark. The defendants did know they were acting illegally. What the court wanted to avoid, however, was forcing the government to have to

34 prove it, against the possible chance that the defendants could prove they were ignorant, or convince a jury that they are not blameworthy, because ignorant of the law. One thing is sure. Allegiance to the doggerel that "Ignorance of the law is no defense" is not the answer