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Attorney Kurt Simmons, with the assistance of attorney John
Wolfgram of the Constitution Defender Association of Placerville,
filed a brief for a client in the US District Court for the Easter
District of California, as Bellucci v. U.S., which is excerpted
here. Simmons and Wolfgram describe an important case (U.S.
v. Gaudin) in which the Supreme Court ruled that questions of
materiality are mixed questions of law and fact which must go
to the jury.
UNITED STATES v. GAUDIN, 132 L Ed 2d 444 (1995)
As in this case, in Gaudin a real estate agent was convicted
for having made a series of allegedly false statements on federal
loan documents in connection with real estate transactions. The
jury was instructed that the government had to prove the alleged
false statements were material to HUD's activities and decisions,
but the issue of materiality was a matter for the court to decide,
and it determined the statements were material.
The Supreme Court reversed, holding that questions of fact,
and mixed questions of law and fact concerning materiality of
statements, must go to the jury. In so doing, it rejected government
contentions that materiality is a legal question, saying that
it is the kind of question typically resolved by juries; that
the concept of the criminal jury as mere fact-finder has no historical
support in the case law.
The facts, as relayed by Justice Scalia, are important because they indicate what is not present in Bellucci's case, namely, a pattern to defraud. Unlike Gaudin, the bank in Bellucci's case lost nothing and didn't even suffer an increased risk.
"In the 1980s, respondent engaged in a number of real estate transactions
financed by loans insured by the FHA of HUD. Respondent would purchase
rental housing, renovate it, obtain an inflated appraisal, and sell it to a
'straw buyer' (a friend or relative) for whom respondent would
arrange an FHA- insured mortgage loan. Then, as prearranged, respondent
would repurchase the property (at a small profit to the straw
buyer) and assume the mortgage loan. Twenty-nine of these ventures
went into default." 132 L Ed 2d 448.
The government charged that, during the course of this
plan, respondent made false statements by knowingly inflating
the appraised values, and he executed forms which showed that
the buyer was to pay some of the costs when, in fact, Gaudin (the
seller) was to pay all costs. The government had testimony of
several persons as to why the requested information was important.
At close of evidence, the trial court instructed the jury that
materiality must be proved, but the court also instructed that
"the statements charged in the indictment are material statements."
The Ninth Circuit reversed, then held en banc that taking
the question of materiality from the jury denied rights guaranteed
by the fifth and sixth amendments.
It should be noted that, while 18 USC 1001 requires a "materially
false statement" and section 1014 does not have an express
requirement of materiality, the latter has an express "purpose"
element not found in 1001. Thus, the argument of Gaudin is a fortiori
to this court because "the purpose" of a misstatement
is measured from the perspective of the person making it. Thus,
it is from Bellucci's perspective that the statements he made
must be found to be "material," i.e. an "immaterial
false statement for the purpose of deceiving" is a contradiction
in terms from the speaker's perspective.
The parties in Gaudin agreed as to the definition of "materiality,"
that the statement must have a natural tendency to influence or
be capable of influencing the decision of the body to whom submitted.
132 L2d 449. That is also the definition applied to Section 1014.
See U.S. v. Braverman, 522 F2d 218. Bellucci submits that the
instruction given, and the agreed materiality instruction in are
not a sufficient materiality instruction in a case wherein an
element is a specific purpose of the accused.
But the issue here is that this court made determinations
of materiality to keep the evidence from the jury. It determined,
as a matter of law, albeit it relied upon authority, that the
fact the bank suffered no loss was not material, and the fact
that Bellucci took steps, after Swift seized the bank loans, to
complete the project to repay the bank, was not material evidence.
The underlying constitutional issues are the flip-side
of those presented in Gaudin. There the court held that the defendant
has a right to be convicted of all the elements of a crime, including
materiality of the statements, by a jury. Here, the issues arise
under the confrontation right (some of the evidence would have
come from government witnesses on cross examination) and under
the right to call witnesses on one's own behalf. Both of those
sixth amendment rights are necessary for fifth amendment fair
trials and sixth amendment trial by jury; for, if a court can
exclude evidence that the jury could plausibly believe material
to the allegation, the court can deprive the jury of the evidence
necessary to acquit the accused.
In the instant case, the relevant issue was not whether
the court thought the proffered evidence was material. Rather,
the relevant issue was whether a jury could reasonably find the
facts -- that the bank suffered no loss, and that Bellucci took
affirmative action, at his own risk after Swift tied up the bank
loan, to complete the project and repay the bank -- material to
the purpose, if any, of the accused in making the statements,
if indeed he made them.
One part of materiality is what the jury assumes in the absence of that evidence. Government must be pursuing Bellucci for some reason. Remember that, while juries have common knowledge of technical loopholes in the law, they do not have common experience with "technical felonies," and they may be justly very reluctant to convict a person so charged. The court should note, the bank was not a real complainant. The government was, for its own
reasons which may or may not be those Congress intends.
And that right of the jury to decide the mixed questions
of law and fact, such as relevance and materiality that can make
a difference in determining guilt or innocence, is exactly what
the Gaudin Court continues to insist is the essence of the right
to trial by jury in these United States of America.
The Court begins its examination of the jury issue at 132 L Ed 2d 450. At page 451, citing with approval J. Thayer, A Preliminary Treatise on Evidence at Common Law:
Indeed, our cases have recognized in other contexts that
the materiality inquiry, involving as it does 'delicate assessments
of the inferences a "reasonable [decisionmaker]" would
draw from a given set of facts and the significance of those inferences
to him ... [is peculiarly on[e] for the tryer of fact.' TSC Industries,
Inc. v Northway, Inc., 426 US 438 (1976) (securities fraud); McLanahan
v Universal Ins. Co., 1 Pet 170, 188-189 (1828) (materiality of
false statements in insurance applications)." U. S. v Gaudin,
132 L Ed 2d at 451
While it is true that the Gaudin case arose over the instruction
of materiality that was given, keeping evidence from a jury is,
in effect, giving an instruction the jury cannot ignore, even
if it wants to, because the facts are not before it. Thus, in
effect, the judge decided the materiality issue on the proffered
evidence in such a way that left the jury helpless.
It is one thing to keep evidence from the jury because
it could not reasonably influence them except through passion,
and then against non-government parties. But, when the exclusion
would work in favor of a criminal prosecution, an entirely different
interest comes into play. It is the right of the jury to acquit,
notwithstanding clear disagreement with the court as to the law.
Quoted the Supreme Court in Gaudin, in addition to all other purposes,
at 132 Led 2nd 450:
"This right [to trial by jury was designed 'to guard against
a spirit of oppression and tyranny on the part of rulers,' and
'was from very early times insisted on by our ancestors in the
parent country, as the great bulwark of their civil and political
liberties.' 2 J. Story, Commentaries on the Constitution of the
United States, 4th Ed 1873 at 540-541. See also Duncan v Louisiana,
391 US 145, 151-154 (1968) (tracing the history of trial by jury)."
The point is this: How dare a court exclude evidence that
may tell a jury that this is a case of technical violation of
law that caused no injury which, in turn, might have the jury
thinking that government has ulterior motives when, as an historical
fact relied on by our Supreme Court, the purpose of the jury is
to safeguard the people from exactly that kind of oppression.
In point of fact, what the court ruled immaterial for purposes
of trial, whether material to factual innocence or not, was material
for the historical and traditional purposes of trial by jury --
to determine whether to acquit or not, as a balance to government
oppression. At the bottom of 132 L Ed 2d 451, the Court restated
the principle, this time citing Justice Chase's defense with approval,
saying:
"Justice Chase's defense to one of the charges in his 1805
impeachment trial was that 'he well knows that it is the right
of juries in criminal cases, to give a general verdict of acquittal,
which cannot be set aside on account of its being contrary to
law, and that hence results the power of juries, to decide on
the law as well as on the facts, in all criminal cases. This power
he holds to be a sacred part of our legal privileges ....' 1 S.
Smith & T. Lloyd, Trial of Samuel Chase 34 (1805)."
At 132 L Ed 2d 452, the Court criticizes the government's
reliance on Sparf 8 Hansen v United States, 156 US 51, at 90,
saying:
"But our decision [in Sparf in no way undermined the historical and
constitutionally guaranteed right of criminal defendants to demand
that the jury decide guilt or innocence on every issue, which
includes application of the law to the facts. To the contrary,
Justice Harlan, writing for the Court, explained the many judicial
assertions of the jury's right to determine both law and fact
as expressions of 'the principle, that when the question is compounded
of law and fact, a general verdict, ex necessitate, disposes of
the case in hand, both as to law and fact."'
A fortiori, the excluded evidence was material to the factual
innocence of defendant's purpose in his statement that he was
not subject to any civil action; he was only required to answer
"No" to one of a series of questions to which the truthful
answers were "No." Why? Because the reasonable alternatives
to determine "purpose" which the jury had were to "mislead
the bank" or no purpose at all. A finding that the bank suffered
no loss and that he did not take advantage of Swift's seizure,
but completed the projects at his own expense, gives rise to an
inference that there was "no purpose" for the misrepresentation,
and thus for factual innocence.
That alternative is especially important for an accused
with a language-processing disorder.