U.S. v. West Indies Transport, Inc.

Citation127 F.3d 299
Decision Date15 October 1997
Docket Number96-7064 and 96-7065,No. 96-7064,WIT,W,No. 96-7063,No. 96-7065,Nos. 96-7063,96-7063,96-7064,96-7065,s. 96-7063
Parties, 28 Envtl. L. Rep. 20,202 UNITED STATES of America v. WEST INDIES TRANSPORT, INC., Appellant atEquipment Co., Inc., Appellant atJames Oelsner, Appellant at
CourtUnited States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Treston E. Moore (Argued), Charlotte Amalie, St. Thomas, U.S. Virgin Islands, for Appellants.

Katherine W. Hazard (Argued), United States Department of Justice, Washington, DC, David L. Atkinson, Office of United States Attorney, Christiansted, St. Croix, U.S. Virgin Islands, for Appellee.

Before SCIRICA, NYGAARD and McKEE, Circuit Judges.

OPINION OF THE COURT

SCIRICA, Circuit Judge.

Defendants West Indies Transport, Inc., WIT Equipment Co., and W. James Oelsner appeal their convictions and sentences for visa fraud, environmental crimes, conspiracy, and racketeering. The district court had jurisdiction under 48 U.S.C. § 1612 1 and 18 U.S.C. §§ 3231 and 3241. 2 We have jurisdiction under 28 U.S.C. § 1291. 3 We will affirm. 4

I. Facts and Procedural History

West Indies Transport, Inc. and WIT Equipment Co. (collectively "West Indies Transport") operated several businesses in Krum Bay, St. Thomas, including a dry dock, ship repair facility, and barge towing company. West Indies Transport's chief operating officer was W. James Oelsner. In 1987, West Indies Transport obtained permits to use five barges as fixed docks for its other vessels. In 1989, Hurricane Hugo seriously damaged some of these barges, shifting them from their permitted positions. West Indies Transport did not attempt to repair, reposition, or salvage these barges after the storm. Instead, it used these barges as docks, repair facilities, and housing for employees in their new unauthorized locations. In the process, West Indies Transport attached the barges permanently to shore, constructed walkways and ramps between the barges for use by vehicles and employees, and wired them for electricity.

To staff its facilities, West Indies Transport hired an overseas agent to recruit Filipino workers. The Filipino workers were instructed to apply for D-1 visas intended for non-immigrant foreign maritime crewmen, not the H-2 visas required by law. The "West Indies Transport crewmen" never put to sea. Instead, West Indies Transport housed them in a converted shipping container on a barge and used them as dock workers. The Filipino workers were paid approximately $400 per month for a 56-hour work week. By using underpaid illegal foreign employees, West Indies Transport was able to reduce significantly its expenses for wages and wage taxes.

In the course of its repair operations, West Indies Transport discharged several different pollutants into the navigable waters of the United States. Witconcrete II, a ferro-concrete barge, was heavily damaged in Hurricane Hugo. The stern was partially severed from the remainder of the barge, attached only by metal reinforcing bars, known as rebar. West Indies Transport did not attempt to repair, break up, or salvage the damaged stern. Instead, it cut the rebar by which the stern was attached and dumped the stern into the bay. Later, when West Indies Transport decided to move the barge, it cut additional protruding pieces of rebar from the structure and dumped them in the water. West Indies Transport also sand-blasted the hull of a vessel moored in its facility, causing paint chips and sand to fall into Krum Bay near the main water intake for the St. Thomas desalinization plant. The toilet system on the Witrollon, the barge on which illegal Filipino workers were housed, discharged raw sewage directly into the bay. West Indies Transport also collected steel scrap from its repair operations and dumped it twelve miles out at sea under cover of darkness. West Indies Transport never obtained a permit for any of these pollution discharges.

Defendants were charged in a twenty-one count indictment for visa fraud, environmental crimes, conspiracy, and racketeering. Five counts were dismissed on motion of the government. A jury found defendants guilty on the remaining sixteen counts. Defendants moved for post-verdict judgment of acquittal, which the district court denied. This appeal followed.

II. Visa Fraud
A.

Defendants were convicted of aiding and abetting visa fraud in violation of 18 U.S.C. § 2 and 18 U.S.C. § 1546. 5 At trial, the district court instructed the jury that defendants' representations to U.S. immigration and State Department officials verifying that Filipino workers hired by West Indies Transport would be working as crewmen aboard foreign flagged vessels were material as a matter of law. These instructions were consistent with our decision in United States v. Greber, 760 F.2d 68 (3d Cir.), cert. denied, 474 U.S. 988, 106 S.Ct. 396, 88 L.Ed.2d 348 (1985), which held that when a defendant is tried for perjury the issue of materiality is decided by the court.

Between verdict and sentencing, the United States Supreme Court held that on a perjury charge under 18 U.S.C. § 1001, materiality must be submitted to the jury. United States v. Gaudin, 515 U.S. 506, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995). "The Constitution gives a criminal defendant the right to have a jury determine, beyond a reasonable doubt, his guilt of every element of the crime with which he is charged. The trial court's refusal to allow the jury to pass on the materiality of Gaudin's false statements infringed that right." Id. at 522-23, 115 S.Ct. at 2320.

The rule announced in Gaudin applies retroactively to this direct appeal. Johnson v. United States, --- U.S. ----, ----, 117 S.Ct. 1544, 1549, 137 L.Ed.2d 718 (1997) (Gaudin applies retroactively on direct review; citing Griffith v. Kentucky, 479 U.S. 314, 328, 107 S.Ct. 708, 716, 93 L.Ed.2d 649 (1987)). Defendants contend that Gaudin requires a new trial.

Defendants submitted to the district court proposed jury instructions which took the issue of materiality away from the jury, but now object to those same instructions. For this reason, the government asks us to treat the district court's instructions as non-reviewable invited error, under United States v. Console, 13 F.3d 641 (3d Cir.1993), cert. denied, 513 U.S. 812, 115 S.Ct. 64, 130 L.Ed.2d 21 (1994) and Herman v. Hess Oil Virgin Islands Corp., 524 F.2d 767 (3d Cir.1975). We decline to do so. Where a defendant submits proposed jury instructions in reliance on current law, and on direct appeal that law is declared constitutionally infirm, we will not apply the invited error doctrine. Instead, we will review for plain error under Fed.R.Crim.P. 52. See Johnson, at ---- - ----, 117 S.Ct. at 1548-49 (reviewing Gaudin error under plain error standard where defendant, relying on current law later declared unconstitutional, insisted at trial that materiality was an issue for the court, not jury, to decide). Under Rule 52, "before an appellate court can correct an error not raised at trial, there must be (1) error, (2) that is plain, and (3) that affects substantial rights. If all three conditions are met, an appellate court may then exercise its discretion to notice a forfeited error, but only if (4) the error seriously affects the fairness, integrity or public reputation of the judicial proceedings." Johnson, at ----, 117 S.Ct. at 1549 (internal quotations and brackets omitted; citing United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 1776-77, 123 L.Ed.2d 508 (1993)). As the Supreme Court explained in Johnson, "in a case such as this--where the law at the time of trial was settled and clearly contrary to the law at the time of appeal--it is enough that an error be 'plain' at the time of appellate consideration." Id. See also United States v. Retos, 25 F.3d 1220 (3d Cir.1994) (question is not whether error was plain at time of trial, but whether it is plain based on current law at time of direct appeal).

Failure to submit the issue of materiality to the jury was error. Gaudin, at 522, 115 S.Ct. at 2320; Johnson, at ----, 117 S.Ct. at 1549. That Gaudin involved perjury under 18 U.S.C. § 1001 rather than 18 U.S.C. § 1546, the relevant statute here, is not significant given the identical character of the materiality element in both perjury statutes. See Johnson v. U.S., --- U.S. ----, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997) (applying Gaudin to case involving perjury under 18 U.S.C. § 1623); United States v. DiRico, 78 F.3d 732 (1st Cir.1996) (applying Gaudin to perjury under 26 U.S.C. § 7206(1)).

A "plain" error is an error which is "clear" or "obvious." Johnson, at ----, 117 S.Ct. at 1549; Olano, 507 U.S. at 734, 113 S.Ct. at 1777-78. Failure to send the issue of materiality to the jury is, in light of Gaudin, obvious or clear and therefore "plain" error. Johnson, at ----, 117 S.Ct. at 1549.

To satisfy the "substantial rights" prong of the plain error test, defendants usually must show that the error was "prejudicial"--"It must have affected the outcome of the district court proceedings." Olano, 507 U.S. at 734, 113 S.Ct. at 1777-78; United States v. Turcks, 41 F.3d 893 (3d Cir.1994) (same), cert. denied, 514 U.S. 1074, 115 S.Ct. 1716, 131 L.Ed.2d 575 (1995). 6 Defendants bear this burden of proof. Id. Defendants here have not brought to our attention any facts suggesting that a jury might have reached a conclusion different from the district court on materiality. Defendants presented no evidence at trial that their statements were not material. More importantly, the government introduced substantial evidence proving the defendants' representations were material. Indeed, had immigration officials known the true facts behind the Filipino workers' applications for visas--defendants' intention to employ as dock workers illegally underpaid foreign workers housed permanently on derelict barges--the visas never would have been granted. For these reasons, defendants have not...

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