U.S. v. DeFries, Nos. 96-3015

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtPER CURIAM
Citation129 F.3d 1293,327 U.S. App. D.C. 181
Docket NumberNos. 96-3015,96-3016
Decision Date02 December 1997
Parties156 L.R.R.M. (BNA) 2999, 327 U.S.App.D.C. 181 UNITED STATES of America, Appellee, v. Clayton Eugene DEFRIES, a/k/a Gene, et al., Appellants. District of Columbia Circuit

Page 1293

129 F.3d 1293
156 L.R.R.M. (BNA) 2999, 327 U.S.App.D.C. 181
UNITED STATES of America, Appellee,
v.
Clayton Eugene DEFRIES, a/k/a Gene, et al., Appellants.
Nos. 96-3015, 96-3016.
United States Court of Appeals,
District of Columbia Circuit.
Argued Sept. 12, 1997.
Decided Dec. 2, 1997.

Page 1296

Appeals from the United States District Court for the District of Columbia (No. 93cr00117-01) (No. 93cr00117-02).

Stuart A. Levey, Washington, DC, appointed by the court, and Lisa B. Wright, Assistant Federal Public Defender, argued the cause for appellants. With them on the briefs were A.J. Kramer, Federal Public Defender, R. Stan Mortenson, Scott L. Nelson, Daniel J. Cloherty, Gerard F. Treanor, Jr., and Judith L. Wheat, appointed by the court.

Frank J. Marine, Deputy Chief, U.S. Department of Justice, Washington, DC, argued the cause for appellee. With him on the briefs was Sotiris A. Planzos, Trial Attorney.

Before: SILBERMAN, ROGERS and TATEL, Circuit Judges.

Opinion for the court filed PER CURIAM.

PER CURIAM:

Two former elected officials of a maritime union challenge their convictions for Racketeer Influence and Corrupt Organizations Act ("RICO") violations, RICO conspiracy,

Page 1297

embezzlement, and mail fraud. We reverse their convictions.

I. Background

District No. 1-Pacific Coast District, Marine Engineers' Beneficial Association ("PCD/MEBA," or the "pre-merger union") was a national union made up of mostly licensed marine engineers who manned American merchant vessels. Under the union's by-laws, an elected District Executive Committee governed the union's operations. In 1984, PCD/MEBA elected appellant Clayton Eugene DeFries president and appellant Clyde E. Dodson executive vice president and branch agent for the Port of San Francisco. The membership also elected twenty-one individuals as delegates to the convention of the National MEBA, an umbrella organization of various unions, which in 1986 elected DeFries National MEBA President and Dodson National MEBA secretary-treasurer. In the union's 1987 election, the membership reelected DeFries and Dodson to their Committee positions.

Just prior to the 1987 election, DeFries negotiated, on behalf of the Committee, an agreement to merge PCD/MEBA with the National Maritime Union ("NMU"), a much larger, predominantly blue-collar union made up of unlicensed seamen. In March 1988, PCD/MEBA approved the merger agreement in a membership referendum, as did NMU. As specified in the merger agreement, a six-person committee consisting of three former NMU officials and three former PCD/MEBA officers, including DeFries and Dodson, governed the new union, MEBA/NMU (the "post-merger union").

At the time the merger became effective, appellants and other former officers of the pre-merger union received severance payments totaling almost $2 million, even though they immediately assumed roughly equivalent positions in the newly merged union's leadership. The pre-merger union's bylaws authorized the Committee to establish compensation levels for all union officers and employees, "unless otherwise directed by a majority vote of the membership." Pursuant to that authority, the Committee adopted a formal, written severance plan, later amending it to make its triggering date the merger of the two unions. With regard to both the adoption and amendment of the severance plan, the Committee sought the advice of the firm's outside counsel, Angelo Arcadipane, a member of the law firm of Dickstein, Shapiro & Morin, who advised appellants that the severance plan was legal and that the Committee had authority to adopt it.

At trial, government witnesses testified that between the time of the severance plan's adoption in 1986 and the distribution of the payments in 1988, DeFries, Dodson, and other Committee members took steps to conceal from the union membership the adoption, terms, and triggering event of the plan. These witnesses testified that Committee members failed to mention the plan in the minutes of the meeting at which they adopted it, directing the union's controller not to reveal any details of the plan. According to these witnesses, the Committee also failed to disclose the plan's existence to the union's independent auditor until more than a year after its adoption. When the union membership eventually learned of the severance payments, a group filed suit to recover the money.

As part of the merger, the post-merger union was divided into two divisions--the Licensed Division, which consisted of the former PCD/MEBA members, and the Unlicensed Division, which was made up of former NMU members. The Licensed Division held an election in 1989 to select its delegates to the National MEBA Convention; those elected included DeFries and Dodson. The Licensed Division held another election in 1990, this time electing officers as well as delegates to the National MEBA Convention. This was the first time that appellants and their supporters faced substantial opposition. In a hotly contested election, the challengers defeated the incumbents, including Dodson (DeFries was not up for reelection).

According to the evidence at trial, in the 1988, 1989, and 1990 elections appellants and other union leaders solicited and collected unmarked and unsealed ballots, voting them in favor of appellants' interests. The evidence also showed that some tampering of collected ballots occurred, including opening

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sealed ballots and replacing those ballots voted against appellants' interests with new ballots voted in their favor.

A federal grand jury returned a ten-count indictment against DeFries, Dodson, and fourteen other former union officials. The indictment charged appellants with one count of racketeering in violation of RICO, 18 U.S.C. § 1962(c) (1994); one count of conspiracy to violate RICO, 18 U.S.C. § 1962(d) (1994); one count of embezzlement with respect to the severance payments, 29 U.S.C. § 501(c) (1994); and three counts of mail fraud, 18 U.S.C. § 1341 (1994), with regard to the 1988 merger referendum, the 1989 national delegate election, and the 1990 union officers' election. The RICO count included two charges of mail fraud with regard to the 1984 and 1987 elections as two of the alleged racketeering acts; it also incorporated the other mail fraud counts and the embezzlement count as racketeering acts. A seventh racketeering act incorporated one count of extortion but did not apply to appellants. The RICO conspiracy count incorporated all seven racketeering acts of the RICO count.

The district court severed the case against appellants and five others from that of the other nine defendants, and also dismissed the 1988 merger referendum mail fraud count as failing to allege a scheme to defraud "property" under McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). After the government took an interlocutory appeal challenging the dismissal, this court reversed the district court and reinstated the count, issuing our opinion on January 13, 1995, and ultimately our mandate on March 1.

In the meantime, on February 1, the deputy clerk swore the ninety-one individuals on the jury venire for this case, who then completed an extensive juror questionnaire. Two days later, just prior to the prospective jurors' return to the courtroom for formal, in-person questioning by counsel, appellants moved to stay jury selection on the grounds that self-selection tainted the jury panel summoned in this case in violation of the Jury Selection and Service Act, 28 U.S.C. § 1866(a) (1994), and that white jurors were systematically underrepresented on the panel in violation of the Sixth Amendment's fair-cross-section requirement, U.S. Const. amend. VI. Refusing to stay jury selection, the district court allowed discovery of the juror summonses and juror qualification forms for all jurors summoned for service for the period of February 1-15, including any requests for deferral. Ruling that appellants failed to show that the Jury Office's granting of hardship deferrals was either motivated by discrimination or arbitrary and capricious, the district court denied the jury selection motions.

At the end of the government's case-in-chief and again at the close of all evidence, appellants moved for judgment of acquittal on the embezzlement count, arguing that lack of authorization is an essential element of 29 U.S.C. § 501(c) and that the government failed to present any evidence showing that the severance payments were unauthorized. Faced with a circuit split over whether lack of authorization is an element of a section 501(c) violation, the district court denied the motion on both occasions, electing to treat authorization as one factor for the jury to consider when evaluating whether appellants had the requisite fraudulent intent to commit the crime.

After the district court denied the motions for judgment of acquittal, appellants requested an advice-of-counsel instruction on the embezzlement count. Specifically, they asked the district court to instruct the jury that if it found that appellants, in creating the severance plan and taking the severance payments, had relied in good faith on the advice of the union's outside counsel, then they must be acquitted under section 501(c) because they would not have had the requisite fraudulent intent to embezzle the union's funds. Ruling that appellants had not presented sufficient evidence that they had relied on their attorney's advice, the district court refused to give the requested instruction.

Appellants also objected to the district court's instructions on the RICO and RICO conspiracy counts, as well as on the mail fraud counts. Although appellants presented evidence disputing whether a single enterprise of the pre-merger and post-merger unions

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constituted a single RICO enterprise, as the indictment alleged, the district court instructed the jury to "regard the two unions as a single...

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161 practice notes
  • United States v. Bailey, Criminal Case No. 1:11–cr–00010–MR–DLH.
    • United States
    • United States District Courts. 4th Circuit. Western District of North Carolina
    • 25 Febrero 2013
    ...v. Horak, 833 F.2d 1235, 1242–43 (7th Cir.1987). See United States v. Farkas, 474 Fed.Appx. 349 (4th Cir.2012); United States v. DeFries, 129 F.3d 1293, 1313 (D.C.Cir.1997); United States v. Nicolo, 597 F.Supp.2d 342, 346 (W.D.N.Y.2009), aff'd,421 Fed.Appx. 57 (2d Cir.2011); Ivanchukov, 405......
  • United States v. Pinson, No. 3:12-cr-00974-DCN
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • 9 Abril 2015
    ...applied the "but for" test to determine whether the government has established the requisite nexus. See, e.g., United States v. DeFries, 129 F.3d 1293, 1313 (D.C. Cir. 1997); United States v. Angiulo, 897 F.2d 1169, 1213 (1st Cir. 1990); United States v. Ofchinick, 883 F.2d 1172, 1183 (3d C......
  • United States v. Christensen, No. 08-50531
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 25 Agosto 2015
    ...Fruchter , 411 F.3d 377, 383 (2d Cir. 2005) ; United States v. Najjar , 300 F.3d 466, 485–86 (4th Cir. 2002) ; United States v. DeFries , 129 F.3d 1293, 1312–13 (D.C. Cir. 1997). But see United States v. Cherry , 330 F.3d 658, 669 n. 18 (4th Cir. 2003). Rule 32.2's Committee Notes also supp......
  • United States v. Christensen, Nos. 08–50531
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 25 Agosto 2015
    ...v. Fruchter, 411 F.3d 377, 383 (2d Cir.2005) ; United States v. Najjar, 300 F.3d 466, 485–86 (4th Cir.2002) ; United States v. DeFries, 129 F.3d 1293, 1312–13 (D.C.Cir.1997). But see United States v. Cherry, 330 F.3d 658, 669 n. 18 (4th Cir.2003). Rule 32.2's Committee Notes also support th......
  • Request a trial to view additional results
160 cases
  • United States v. Bailey, Criminal Case No. 1:11–cr–00010–MR–DLH.
    • United States
    • United States District Courts. 4th Circuit. Western District of North Carolina
    • 25 Febrero 2013
    ...v. Horak, 833 F.2d 1235, 1242–43 (7th Cir.1987). See United States v. Farkas, 474 Fed.Appx. 349 (4th Cir.2012); United States v. DeFries, 129 F.3d 1293, 1313 (D.C.Cir.1997); United States v. Nicolo, 597 F.Supp.2d 342, 346 (W.D.N.Y.2009), aff'd,421 Fed.Appx. 57 (2d Cir.2011); Ivanchukov, 405......
  • United States v. Pinson, No. 3:12-cr-00974-DCN
    • United States
    • United States District Courts. 4th Circuit. United States District Court of South Carolina
    • 9 Abril 2015
    ...applied the "but for" test to determine whether the government has established the requisite nexus. See, e.g., United States v. DeFries, 129 F.3d 1293, 1313 (D.C. Cir. 1997); United States v. Angiulo, 897 F.2d 1169, 1213 (1st Cir. 1990); United States v. Ofchinick, 883 F.2d 1172, 1183 (3d C......
  • United States v. Christensen, No. 08-50531
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 25 Agosto 2015
    ...Fruchter , 411 F.3d 377, 383 (2d Cir. 2005) ; United States v. Najjar , 300 F.3d 466, 485–86 (4th Cir. 2002) ; United States v. DeFries , 129 F.3d 1293, 1312–13 (D.C. Cir. 1997). But see United States v. Cherry , 330 F.3d 658, 669 n. 18 (4th Cir. 2003). Rule 32.2's Committee Notes also supp......
  • United States v. Christensen, Nos. 08–50531
    • United States
    • United States Courts of Appeals. United States Court of Appeals (9th Circuit)
    • 25 Agosto 2015
    ...v. Fruchter, 411 F.3d 377, 383 (2d Cir.2005) ; United States v. Najjar, 300 F.3d 466, 485–86 (4th Cir.2002) ; United States v. DeFries, 129 F.3d 1293, 1312–13 (D.C.Cir.1997). But see United States v. Cherry, 330 F.3d 658, 669 n. 18 (4th Cir.2003). Rule 32.2's Committee Notes also support th......
  • Request a trial to view additional results
1 books & journal articles
  • EMPLOYMENT LAW VIOLATIONS
    • United States
    • American Criminal Law Review Nbr. 58-3, July 2021
    • 1 Julio 2021
    ...the expenditure” when union off‌icials failed to follow proper procedures to authorize expenditures). 365. See United States v. DeFries, 129 F.3d 1293, 1306–07 (D.C. Cir. 1997) (“[I]t does not make any sense to say that a union off‌icer can embezzle, steal, or convert property he is authori......

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