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United States v. Black

October 29, 2010


Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 05 CR 727-Amy J. St. Eve, Judge.

The opinion of the court was delivered by: Posner, Circuit Judge.


Before POSNER, KANNE, and SYKES, Circuit Judges.

This case is before us for the second time, the Supreme Court having vacated the judgment, which we had affirmed, and remanded the case to us for reconsideration. Black v. United States, 130 S.Ct. 2963 (2010).

The defendants-senior executives of Hollinger International-had been convicted by a jury of three counts of mail and wire fraud, in violation of 18 U.S.C. §§ 1341 and 1342, and defendant Black had also been convicted of obstruction of justice, in violation of 18 U.S.C. § 1512(c). The judge had sentenced Black to a total of 78 months in prison, Atkinson and Boultbee to 24 and 27 months, and Kipnis to probation with six months of home detention.

The three fraud counts (which we'll treat as two, be-cause two of the three relate to transactions with the same company, APC) were submitted to the jury under two theories: that of a scheme of fraudulent appropriation of money to which Hollinger was legally entitled (we'll call this "pecuniary fraud"), and that of a scheme to deprive Hollinger of the latter's "intangible right of honest services," 18 U.S.C. § 1346, amending sections 1341 and 1342. The first theory required that the defendants have obtained a pecuniary benefit at the expense of Hollinger; the second did not; and because the jury returned a general verdict on the fraud counts, we cannot be absolutely certain that it found the defendants guilty of pecuniary fraud as well as, or instead of, honest-services fraud.

After we affirmed, the Supreme Court held that the latter form of fraud requires proof that the defendant(s) received a bribe or kickback, as otherwise section 1346 would be unconstitutionally vague. United States v. Skilling, 130 S.Ct. 2896, 2931 (2010); see United States v. Cantrell, 617 F.3d 919, 921 (7th Cir. 2010); United States v. Urciuoli, 613 F.3d 11, 17-18 (1st Cir. 2010). That was not proved here and so the defendants could not lawfully be convicted of honest-services fraud. But if it is not open to reasonable doubt that a reasonable jury would have convicted them of pecuniary fraud, the convictions on the fraud counts will stand. Hedgpeth v. Pulido, 129 S.Ct. 530, 531-32 (2008) (per curiam); see Neder v. United States, 527 U.S. 1, 15-16 (1999); United States v. L.E. Myers Co., 562 F.3d 845, 855 (7th Cir. 2009); United States v. Cappas, 29 F.3d 1187, 1192 (7th Cir. 1994); United States v. Jackson, 196 F.3d 383, 386 (2d Cir. 1999). "An instructional error arising in the context of multiple theories of guilt no more vitiates all the jury's findings than does omission or misstatement of an element of the offense when only one theory is submitted." Hedgpeth v. Pulido, supra, 129 S.Ct. at 532 (emphasis in original).

The case would still have to be remanded to the district court for resentencing unless it was reasonably certain that the judge would have imposed the same sentences even if the charge of honest-services fraud had not been submitted to the jury. Suppose no reasonable jury would have failed to find pecuniary fraud. Nevertheless that same jury, having been instructed on honest-services fraud, might have found the defendants guilty of honest-services fraud as well. The judge would then have been incorrectly sentencing the defendant for two crimes rather than one. She might think honest-services fraud the more serious crime, or at least that it made the defendants' conduct more reprehensible and so merited heavier overall sentences.

We begin with defendant Black's argument that the submission of that charge to the jury contaminated his conviction of obstruction of justice, and that therefore he is entitled to a retrial on the obstruction count as well as on the fraud counts. He was charged with having concealed or attempted to conceal documents "with the intent to impair the [documents'] integrity or availability for use in an official proceeding," in violation of 18 U.S.C. § 1512(c)(1). There was compelling evidence that he knew that the acts that later formed the basis of the fraud charges against him and his co-defendants were being investigated by a grand jury and by the SEC. In the midst of these investigations Black with the help of his secretary and his chauffeur removed 13 boxes of documents from his office, put them in his car, was driven home, and helped carry them from the car into his house.

He later returned the boxes; and copies of the documents were available to the government before the boxes were removed; but it was material to the investigation whether Black had had copies in his office. For that would mean that he had received them and might know they were material to the government's investigation. Furthermore, the boxes may have contained documents, of which there were no copies, that he'd removed before returning the boxes. That is speculation; but the possibility of such tampering helps to explain why the obstruction statute does not require proof of obstruction, as distinct from intent to obstruct, in order to convict. The usual consequence of an obstruction of justice is not that a guilty person is acquitted but that the government expends additional resources to prevent the effort at obstruction from succeeding, as in our case of United States v. Wells, 154 F.3d 412, 414-15 (7th Cir. 1998), where the defendant's lie about the proceeds of his robbery sent the police on a wild goose chase. Similarly, concern that a suspect may be concealing material documents incites additional investigative efforts by the government. See United States v. Tankersley, 296 F.3d 620, 623-24 (7th Cir. 2002).

Thus, as we explained in a portion of our first opinion not disturbed by the Supreme Court and therefore the law of the case, the obstruction of justice statute does not require proof of materiality unless the alleged obstruction takes the form of a lie that could not be expected to have any effect on the justice process. United States v. Buckley, 192 F.3d 708, 710 (7th Cir. 1999). Being able to deny the materiality of a document is a common reason for concealment. So it is enough for conviction that a document was concealed in order to make it unavailable in an official proceeding. See, e.g., United States v. Senffner, 280 F.3d 755, 762 (7th Cir. 2002); United States v. Philips, 583 F.3d 1261, 1263-64 (10th Cir. 2009); United States v. Carson, 560 F.3d 566, 584 (6th Cir. 2009); United States v. Lessner, 498 F.3d 185, 197-98 (3d Cir. 2007). The evidence that the boxes were removed in order to conceal documents from the government investigators was compelling, even though Black's secretary loyally testified that Black intended to remove the documents to a temporary office that she would set up for him in her home because he had to vacate his office at Hollinger within ten days. Her testimony was inconsistent with his having put the boxes in his car (not hers, which was at the scene) and taken them to his home rather than to hers. There was also evidence that in removing the boxes he tried to avoid the surveillance cameras in his office building-unsuccessfully.

In any event, the sufficiency of the evidence to convict Black of obstruction is no longer an open question; and since the jury was separately instructed on obstruction, the fact that it received an erroneous instruction on another count would ordinarily be irrelevant. United States v. Holtzer, 840 F.2d 1343, 1349 (7th Cir. 1988). But Black argues that had the jury not been told it could convict him of honest-services fraud, it might well have acquitted him of obstruction of justice. He appeals to cases in which convictions on counts on which the jury was properly instructed were reversed because a count that was later dismissed was so inflammatory that it created a "prejudicial spillover." E.g., United States v. Lazarenko, 564 F.3d 1026, 1042-44 (9th Cir. 2009); United States v. Edwards, 303 F.3d 606, 639-40 (5th Cir. 2002); United States v. Vebeliunas, 76 F.3d 1283, 1293-94 (2d Cir. 1996). These cases are in superficial tension with our decision in Holzer and also in United States v. Schwartz, 787 F.2d 257, 264 (7th Cir. 1986), but those are decisions about misjoinder, and hold that the time to sever a trial because of a prejudicial spillover from one count to another is before the trial begins. If a count is submitted to the jury under an instruction apt to poison the jury's consideration of other counts as well, the defendant may be entitled to a new trial.

But this is not such a case. The theory of honest-services fraud submitted to the jury was esoteric rather than inflammatory; the evidence of such fraud was a subset of the evidence of pecuniary fraud; and the evidence of obstruction of justice was very strong. No reasonable jury could have acquitted Black of obstruction if only it had not been instructed on honest-services fraud. It would still have been the case that Black had known he was being investigated for fraud and could not have known that years later the Supreme Court would invalidate one of the fraud charges. And if he were clairvoyant, he would have known that the other fraud charge-pecuniary fraud-would not be invalidated.

At argument Black's lawyer posed the following amusing hypothetical in an attempt to use the error in the fraud instruction to undermine his client's conviction for obstruction of justice: Suppose the Justice Department launches an investigation of a man suspected of having an affair with Minnie Mouse, and while the investigation is under way the man burns his Disney comics. Although an "official investigation" was pending (and capable of being obstructed) when he destroyed the comics, this could not be construed as an obstruction of justice, because the crime under investigation did not exist and therefore he could not have acted with the corrupt intent necessary for guilt of obstruction. Black's lawyer hoped by this hypothetical case to persuade us that the jury would have interpreted his client's intent in removing the documents differently had it known that the honest-services fraud under investigation at the time was not a crime; it would have been more willing to credit his innocent explanation for his action and conclude that he had not acted with corrupt intent. But Black was not under investigation for an obviously nonexistent crime, such as carnal knowledge of a fictional mouse; he was under investigation for conventional pecuniary fraud as well as honest-services fraud, and besides it was not obvious at the time of his removing the documents that honest-services fraud was a ...

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