Free Pretrial Memorandum - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB-MEH

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Criminal Case No. 04-cr-00103-REB UNITED STATES OF AMERICA Plaintiff, v. 1. NORMAN SCHMIDT, 2. GEORGE ALAN WEED, 4. CHARLES LEWIS, and 6. MICHAEL SMITH. Defendants.

GOVERNMENT'S SUPPLEMENTAL MEMORANDUM CONCERNING REVISED PROPOSED JURY INSTRUCTIONS

The United States of America (the government), by and through Assistant United States Attorneys Matthew T. Kirsch and Wyatt Angelo, respectfully submits this memorandum in support of its revised non-stipulated jury instructions, which have been separately provided to the Court and counsel via electronic mail. This memorandum also addresses competing instructions proposed by defendant Schmidt. 1. On March 15, 2007, the government emailed all defense counsel copies of its proposed revised draft instructions. In that message, the government requested that defense counsel provide their respective positions concerning the government's revised instructions by March 23, 2007. As of the filing of this memorandum, defendant Schmidt has indicated that he objects to all of the government's proposed instructions and verdict forms, although he has not

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indicated the basis for any of his objections. The government has received no specific responses concerning its revised proposed instructions from any defense counsel. The government is therefore submitting all of its revised instructions as non-stipulated. Supporting Authority for Government's Revised Non-Stipulated Instructions Revised Instruction No. G-4 2. The government's revised instruction adds the first paragraph of the O'Malley instruction proposed by defendants Smith and Schmidt but is otherwise based on the Tenth Circuit pattern instruction. The Tenth Circuit specifically disapproved the "two inference" portion of the O'Malley instruction in United States v. Dowlin, 408 F.3d 647, 666-67 (10th Cir. 2005). Instruction nos. Schmidt 8a and 8b appear to be alternatives designed to circumvent this problem with the "two inference" instruction, but defendant Schmidt does not explain why these instructions are better than the Tenth Circuit pattern. Revised Instruction No. G-9 3. The government's revised instruction adds the "falsus in uno falsus in omnibus" paragraph of the O'Malley instruction proposed by defendant Smith to the Tenth Circuit pattern instruction previously proposed by the government. Revised Instruction Nos. G-23, G-24, & G-25 4. Revised instruction nos. G-23, G-24, and G-25 incorporate the tables from the Second Superseding Indictment (with counts and defendants not at issue during the trial redacted) into the generic description of the offenses charged.

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This incorporation is done based on the assumption that the indictment will not be provided to the jury, which will then need information concerning the particular acts which form the bases for the charged counts. 5. Defendants Smith and Weed have also objected to the portion of these instructions which provides that "a representation is `false' if it is made with reckless indifference as to its truth or falsity." The objection of defendant Weed, and possibly that of defendant Smith, is based on the faulty premise that this constitutes a "deliberate ignorance" instruction as discussed in United States v. Manriquez Arbizo, 833 F.2d 244, 248-250 (10th Cir. 1987). A deliberate ignorance, or willful blindness, instruction is an instruction which tells a jury that it may infer the element of knowledge of illegal conduct from "a conscious purpose to avoid enlightenment" or a "deliberate closing of the eyes" to knowledge of facts. Id. at 248. The line to which the defendants object in the government's instruction does not address the issue of the defendants' knowledge. Instead, it merely forms part of the definition of a false representation. The defendants have provided no authority to undercut the Tenth Circuit's inclusion of this portion of the definition of a false representation.1 Instruction Nos. G-26 & G-27 6. Like the revised instructions described above, revised instruction nos. G-26 and G-27 incorporate the tables from the Second Superseding Indictment (with counts and defendants not at issue during the trial redacted) into the generic The government does not currently expect to request a true deliberate ignorance instruction on the issue of the defendants' knowledge. 3
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description of the offenses charged. This incorporation is done based on the same assumption that the indictment will not be provided to the jury. Objections to Defendant Schmidt's Competing Instructions 7. In general, the government objects to defendant Schmidt's competing instructions to the extent that they use O'Malley pattern instructions even in those situations where there is an existing Tenth Circuit pattern instruction. The government's position with respect to some of defendant's Schmidt's individual instructions, not already addressed above, is further elaborated below. Instruction No. Schmidt 9 8. This instruction is unnecessary because its subject matter, the guilt or innocence of unindicted persons, is addressed in instruction no. G-14. Instruction Nos. Schmidt 12, 30, 35, & 36 9. These instructions constitute "unanimity" instructions for the conspiracy, wire fraud, mail fraud, and securities fraud charges, respectively. For the conspiracy charge, any unanimity issues are already addressed by Instruction no. G-21 and by the special interrogatories as to overt acts contained in the government's proposed verdict forms. 10. Defendant Schmidt's proposed unanimity instructions for the fraud charges are also unnecessary. Although the Second Superseding Indictment charges alternate means of violating the fraud statutes, i.e., engaging in a scheme to defraud and to obtain money and property by means of materially false and

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fraudulent pretenses, representations, and promises,2 the government's proposed jury instructions already reflect the government's election to proceed at trial solely on the basis of the scheme to defraud prong of these statutes. See United States v. Bolt, 776 F.2d 1463, 1467 (10th Cir. 1985) (noting that government may make such a pre-trial election). Under the government's proposed instructions, the jury will only be asked to decide whether the single scheme to defraud alleged in Counts 2-29 of the Second Superseding Indictment has been proven beyond a reasonable doubt. Instruction Nos. Schmidt 12, 20, 22, & 23 11. These instructions all incorrectly indicate that the Second Superseding Indictment charges a conspiracy to defraud the United States, with instruction no. Schmidt 12 further incorrectly indicating that defrauding the SEC was the specific object of the conspiracy. The Second Superseding Indictment instead charges a conspiracy to commit offenses against the United States, as reflected in the government's proposed instructions. See United States v. Hauck, 980 F.2d 611, 615 (10th Cir. 1992) (noting alternate means of committing a Section 371 conspiracy). Instruction No. Schmidt 29 12. The government objects to this instruction, as it has for defendant Smith, unless and until he adduces sufficient evidence at trial to support it. See United States

The second prong of the securities fraud charges uses slightly different language, but that difference is immaterial here. 5

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v. Janusz, 135 F.3d 1319, 1322 (10th Cir. 1998). Instruction Nos. Schmidt 8 & 31 13. These instructions are unnecessary. Both refer to willfulness, which is not an element of any of the offenses charged in the Second Superseding Indictment. Instruction No. Schmidt 28 14. The government proposes to wait until the close of the evidence to determine whether there is any support for the proposed "multiple conspiracy" instruction. In any event, instruction no. Schmidt 28 is largely repetitive of instruction no. G21. Therefore, if "multiple conspiracy" language is warranted in the instructions, it would be less confusing for the jury to simply incorporate language akin to the second and third paragraphs of instruction no. Schmidt 28 into instruction no. G21. Respectfully submitted this 26th day of March, 2007. TROY A. EID United States Attorney

s/Matthew T. Kirsch Matthew T. Kirsch Wyatt B. Angelo Assistant United States Attorneys 1225 17th Street, Suite 700 Denver, CO 80202 Phone: (303) 454-0100 Fax: (303) 454-0402 email: [email protected] [email protected]

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CERTIFICATE OF SERVICE (CM/ECF) I hereby certify on this 26th day of March, 2007, I electronically filed the foregoing GOVERNMENT'S SUPPLEMENTAL MEMORANDUM CONCERNING REVISED PROPOSED JURY INSTRUCTIONS with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses:

Peter Bornstein, Esq. [email protected] Thomas Hammond, Esq. [email protected] Declan J. O'Donnell, Esq [email protected]

Richard N. Stuckey, Esq. [email protected] Thomas Goodreid, Esq. [email protected] Ronald Gainor, Esq. [email protected]

s/Matthew T. Kirsch Matthew T. Kirsch Assistant United States Attorney 1225 17th Street, Suite 700 Denver, CO 80202 Phone: (303) 454-0100 Fax: (303) 454-0402 email: [email protected]

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