Professional Documents
Culture Documents
No. 08-5182
v.
ROBERT A. BERMAN,
APPELLANT
1
Section 3730(b) of the False Claims Act provides that a “private
person[,]” commonly known as a “relator,” may bring a civil action
for a violation of § 3729 “in the name of the Government.” 31 U.S.C.
§ 3730(b). Such an action is known as a “qui tam” suit. The statute
permits the government to take over the action and conduct it itself, or
to decline to do so, in which case the relator has the right to conduct
it. See id. The relator is entitled to different percentages of any
recovery from a successful False Claims Act suit, depending upon
whether the relator or the government conducts the action. See id.
§ 3730(d)(1)-(2).
4
After the case returned to the district court for trial, the
defendants asked the court to instruct the jury that intent to
compensate Berman for his services as a government employee
was an essential element of a § 209(a) violation. At the
government’s urging, the court denied the request. The court
also denied Berman’s motion for summary judgment on the
6
II
2
As we discuss in Part II.A.4, the statute further provides that
whoever “willfully engages in the conduct constituting the offense”
may be imprisoned for not more than five years. 18 U.S.C.
§ 216(a)(2) (emphasis added).
3
See Staples v. United States, 511 U.S. 600, 605 (1994)
(“[S]ilence on this point by itself does not necessarily suggest that
Congress intended to dispense with a conventional mens rea element,
which would require that the defendant know the facts that make his
conduct illegal.”); Liparota v. United States, 471 U.S. 419, 426 (1985)
(“[F]ar more than the simple omission of the appropriate phrase . . . is
necessary to justify dispensing with an intent requirement.” (quoting
United States v. U.S. Gypsum Co., 438 U.S. 422, 438 (1978)) (internal
quotation mark omitted)); see also Carter v. United States, 530 U.S.
255, 269 (2000); United States v. X-Citement Video, 513 U.S. 64, 70
(1994).
4
See Liparota, 471 U.S. at 426; U.S. Gypsum Co., 438 U.S. at
437-38; Morissette, 342 U.S. at 263; see also Staples, 511 U.S. at 605
(“‘[T]he existence of a mens rea is the rule of, rather than the
exception to, the principles of Anglo-American criminal
jurisprudence.’” (quoting U.S. Gypsum Co., 438 U.S. at 436)).
10
5
The government points to precedent noting that this line of cases
does not apply to what the Supreme Court has termed “public welfare”
or “regulatory” offenses. As we discuss below, § 209(a) is not such
an offense. See infra note 15.
11
6
Similarly, to conclude that a payment was received “as
compensation for” something, one must determine the intent of the
recipient.
12
7
Accord OLC, Application of 18 U.S.C. § 209 to Employee-
Inventors Who Receive Outside Royalty Payments (Sept. 7, 2000),
2000 WL 33952879, at *3 (concluding that § 209 does not bar
government employee-inventors from receiving outside royalties
because there is “no intentional, direct link between an employee-
inventor’s government services and the licensing of patent rights”
(emphasis added)); see also 41 Op. Att’y Gen. 217, 217, 220-21
(1955) (concluding that “whether a payment to an officer or
employee” violates the statute “is often a matter of ascertaining the
intent of both the payor and the payee” (emphasis added)).
8
Accord OGE Memorandum to Designated Agency Ethics
Officials Regarding 18 U.S.C. § 209 Guidance (July 1, 2002), 2002
WL 32100961, at *9 (reaffirming that “an intent to compensate for
14
9
See, e.g., Nat’l Ass’n of Mfrs. v. Taylor, 582 F.3d 1, 28 (D.C.
Cir. 2009) (stating that, because the Lobbying Disclosure Act requires
the government to prove the defendant acted “knowingly and
corruptly,” “good faith mistakes will [not] result in criminal liability”);
United States v. DeFries, 129 F.3d 1293, 1310 (D.C. Cir. 1997)
(holding that the district court erred in failing to instruct that good
faith reliance on counsel’s advice is a defense to the fraudulent intent
required for embezzlement under 29 U.S.C. § 501(c)); see also United
States v. McNair, 605 F.3d 1152, 1201 n.65 (11th Cir. 2010) (holding
that “a finding of specific intent to defraud necessarily excludes a
finding of good faith”); United States v. Kay, 513 F.3d 432, 454 (5th
Cir. 2007) (indicating that a requirement that the defendant acted
“corruptly” would be inconsistent with “good faith”); United States v.
Khorozian, 333 F.3d 498, 508 (3d Cir. 2003) (holding that “good faith
is a complete defense to fraud charges -- negating specific intent”).
10
See Bryan v. United States, 524 U.S. 184, 191 (1998) (“As a
general matter, when used in the criminal context, a ‘willful’ act is one
undertaken with a ‘bad purpose.’ In other words, in order to establish
a ‘willful’ violation of a statute, the Government must prove that the
defendant acted with knowledge that his conduct was unlawful.”
(internal quotation marks omitted)); Ratzlaf v. United States, 510 U.S.
135, 137, 142 n.10 (1994) (holding that, “[t]o establish that a
defendant ‘willfully violat[ed]’ the antistructuring law, the
Government must prove that the defendant acted with knowledge that
his conduct was unlawful,” and stating that “[s]pecific intent to
commit the crime[s] . . . might be negated by, e.g., proof that
defendant relied in good faith on advice of counsel” (internal
quotation marks omitted)); Cheek v. United States, 498 U.S. 192, 202
(1991) (holding that proof of willfulness in criminal tax cases
“requires negating a defendant’s claim of ignorance of the law or a
claim that because of a misunderstanding of the law, he had a good-
faith belief that he was not violating” the law); United States v.
Bishop, 412 U.S. 346, 361 (1973) (holding that “[t]he requirement of
an offense committed ‘willfully’ is not met . . . if a taxpayer has relied
16
12
We note that Crandon was decided under the pre-1989 version
of § 209(a). That version did not contain the current cross-reference
to § 216(b), which was enacted in 1989 and now makes a “willful”
violation of § 209(a) a felony. See 18 U.S.C. §§ 209, 216(b); Ethics
Reform Act of 1989, Pub. L. No. 101-194, tit. IV, § 407, 103 Stat.
1716, 1753. Thus, Crandon does not determine whether good faith is
a defense to a felony violation under current law.
18
that the trial judge had required the government to prove the
defendant “knew the facts that made the conduct criminal.” Id.
at 652.
13
The district court believed that this Circuit endorsed a similar
two-part approach in United States v. Muntain, in which we said: “For
there to be a violation of § 209, . . . the contribution must have been
23
Trial Tr. 98-99 (Feb. 11, 2008) (emphases added). There are
two errors in this instruction.
Second, the court was wrong to effectively cut off the key
statutory phrase at the word “services.” The statute bars
payment to an individual as compensation “for his services as an
officer or employee of the executive branch.” 18 U.S.C.
§ 209(a). There is no punctuation or other reason to suggest that
the phrase should end at “services.” This indicates that it is the
entire statutory phrase that describes the evil Congress sought to
prohibit: payment intended as compensation not just for
“services,” but for “services as an officer or employee of the
executive branch.” And as the Supreme Court held in United
States v. X-Citement Video, “the presumption in favor of a
scienter requirement should apply to each of the statutory
elements that criminalize otherwise innocent conduct.” 513
U.S. at 72 (emphasis added) (citing Morissette and Staples).14
14
Based on that presumption, X-Citement Video held that 18
U.S.C. § 2252, which makes it a crime to “knowingly transport[] . . .
any visual depiction, if . . . the producing of such visual depiction
involves the use of a minor engaging in sexually explicit conduct,”
requires proof not only that the defendant knowingly transported the
depiction, but also that he knew the depiction was of a minor.
X-Citement Video, 513 U.S. at 68, 78. Otherwise, the Court said, “we
would sweep within the ambit of the statute actors who had no idea
that they were even dealing with sexually explicit material.” Id. at 69.
For similar reasons, this court held in Nofziger that, to prove a
violation of 18 U.S.C. § 207(c), the government had to show not only
that the former government official knowingly communicated with his
former agency, but that he also knew the agency had “a direct and
25
15
The government argued in Staples that “this case fits in a line
of precedent concerning . . . ‘public welfare’ or ‘regulatory’ offenses,
in which [the Court has] understood Congress to impose a form of
strict criminal liability through statutes that do not require the
defendant to know the facts that make his conduct illegal.” 511 U.S.
at 606. The Court rejected the argument, noting that “[t]ypically, our
cases recognizing such offenses involve statutes that regulate
potentially harmful or injurious items,” id. at 607, such as certain
narcotics, dangerous devices, toxic waste materials, and hand
grenades, see id. at 607-08. Section 209 plainly does not fall into this
category.
The government further argues here that the Staples Court was
influenced by the penalty of up to ten years’ imprisonment that
potentially attached to a violation of § 5861(d). The Court did note
that, “[h]istorically, the penalty imposed under a statute has been a
significant consideration in determining whether the statute should be
construed as dispensing with mens rea.” Staples, 511 U.S. at 616.
But the statutory penalty was only the final consideration the Court
took into account, and one that merely “confirm[ed]” its reading of the
statute. Id. Moreover, in describing what it regarded as the “light
penalties” that “first defined the concept of the public welfare
offense,” the Court referred to terms of incarceration shorter than the
one year applicable to non-willful violations of § 209(a). See id.
(citing cases involving small fines or imprisonment of three or six
months).
27
16
In Carter, the Court construed 18 U.S.C. § 2113(a), which
punishes “whoever, by force and violence . . . takes . . . from the
person or presence of another any . . . thing of value belonging to, or
in the . . . possession of, any bank.” Id. at 280. Noting that the
subsection “contains no explicit mens rea requirement of any kind,”
the Court applied “the presumption in favor of scienter” to “requir[e]
proof of general intent,” although not of specific intent to steal or
purloin. Id. at 267-68 (emphasis omitted).
28
17
Although it may be correct that POGO’s understanding of the
scope of Berman’s government work is not relevant to the jury’s
determination of what the scope of that work really was, it is not clear
that the same is true of Berman’s understanding of the scope of his
own work -- any more than it would be correct to exclude testimony
from Berman’s supervisors about their understanding of the nature of
his duties. See FED. R. EVID. 401 (“‘Relevant evidence’ means
evidence having any tendency to make the existence of any fact that
is of consequence to the determination of the action more probable or
less probable than it would be without the evidence.”); FED. R. EVID.
402 (providing that “[a]ll relevant evidence is admissible”). We do
not pass on this question, however, as neither POGO nor Berman
raises it.
18
Similarly, (1) the payee must intend to receive the payment as
compensation for his government work, and (2) the work at issue must
actually be his government work.
29
Finally, the government urges that, even “if error does exist,
it is harmless, as the district court admitted evidence of the
defendants’ subjective intent and allowed them to argue their
good faith to the jury.” Gov’t Br. 13. In fact, the record is quite
muddy as to how much (and what kind of) evidence of intent or
good faith the court permitted the defendants to introduce or
argue. But even if the court had permitted the jury to hear such
evidence in full, we could not conclude that this rendered the
error nonprejudicial. See Muldrow ex rel. Estate of Muldrow v.
Re-Direct, Inc., 493 F.3d 160, 168 (D.C. Cir. 2007) (stating that
the civil harmless error rule directs courts to disregard errors
that are not prejudicial).
The heart of the defense was that the defendants did not
intend the payment to be for Berman’s government service. As
we explained in POGO I:
III
19
See MERRIAM WEBSTER’S COLLEGIATE DICTIONARY 1031 (10th
ed. 1996) (defining “salary” as “fixed compensation paid regularly for
services”).
32
20
In addition to those challenges, Berman raises a number of
arguments that can best be characterized either as evidentiary disputes
or as challenges to the sufficiency of the evidence to support the
verdict. Because it is not possible to predict what the record will look
like after a new trial, there is no reason for us to address those
challenges now. Berman also disputes the district court’s conclusion,
with respect to a separate count of the complaint, “that the same facts
that rendered Berman liable under § 209(a) also support a finding that
he breached his fiduciary duty to the government.” United States v.
Project on Gov’t Oversight, 572 F. Supp. 2d 73, 75-76 (D.D.C. 2008).
Because that conclusion appears to have been largely premised on
Berman’s now-vacated liability under § 209(a), we leave this issue for
the court’s reconsideration upon remand.
35
IV
21
This evidence included: “[POGO’s] prior disclosure to [the
Justice Department of its plan to make the payment], POGO’s desire
to [issue] a press release concerning the payment, and the appropriate
tax filings made by POGO.” POGO VII, 543 F. Supp. 2d at 69.
36
is the greater amount, the court may impose nothing less than
that. Id.
22
We note that other courts -- albeit in dicta -- have construed
other statutory penalty provisions with nearly identical grammatical
constructions in the same way that we construe § 216(b). See United
States v. Rosen, 296 F. App’x 188, 194 (2d Cir. 2008) (stating that 18
U.S.C. § 1956(a)(2), which provides that a defendant convicted of
money laundering shall be fined “not more than $500,000 or twice the
value of the [laundered] funds . . . whichever is greater,” authorizes a
fine of “up to twice the money laundered”; and affirming a fine of
$150,000 where twice the money laundered totaled more than
$600,000); United States v. Rasco, 853 F.2d 501, 503-04 (7th Cir.
1988) (stating that 18 U.S.C. § 215(a) (1988), which provided that a
defendant found guilty of certain bribery offenses shall be fined “not
more than $5,000 or three times the value of the thing given . . . ,
whichever is greater,” “merely provides for the maximum amount of
fine which can be imposed”).
38
So ordered.
EDWARDS, Senior Circuit Judge, concurring in the
judgment and concurring in part in the opinion: I concur in the
judgment reached by the majority. I also concur in much of the
analysis supporting majority opinion. However, I cannot concur
in the majority’s disposition of the Government’s cross-appeal
challenging the District Court’s construction of 18 U.S.C.
§ 216(b). I agree that the Government loses on the merits, but
I think the issue is much closer than is suggested by the majority
opinion.
As the majority opinion properly notes, our review of
§ 216(b) is de novo, so we owe no deference to the District
Court’s construction of the disputed penalty provision. It is
unclear whether the majority means to endorse the District
Court’s analysis of the disputed statutory provision or merely
affirm on other grounds. The latter appears to be the case. In
any event, the decision that we reach is far from ironclad.
Section 216(b) provides that a party who violates § 209(a)
is subject to a civil penalty of “not more than $50,000 for each
violation or the amount of compensation which the person
received or offered for the prohibited conduct, whichever
amount is greater.” 18 U.S.C. § 216(b).
The District Court found that “not more than” modifies both
the $50,000 per violation amount and the compensation amount.
Under this interpretation, a trial judge court may impose a
penalty of
[1] not more than $50,000 for each violation
or
[2] not more than the amount of compensation,
[3] whichever amount is greater.
2