U.S. v. Hsia

Decision Date18 May 1999
Docket Number98-3125,Nos. 98-3114,s. 98-3114
Citation176 F.3d 517
PartiesUNITED STATES of America, Appellant/Cross-Appellee, v. Maria HSIA, Appellee/Cross-Appellant.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeals from the United States District Court for the District of Columbia (No. 98cr00057-01).

Elizabeth D. Collery, Attorney, U.S. Department of Justice, argued the cause for appellant/cross-appellee. With her on the briefs was Eric L. Yaffe, Trial Attorney.

Nancy Luque and Rangeley Wallace argued the cause and filed the briefs for appellee/cross-appellant.

Reid H. Weingarten, William T. Hassler and Brian M. Heberlig were on the brief for amicus curiae Yah Lin Trie.

Before: WILLIAMS, ROGERS and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge STEPHEN F. WILLIAMS.

Concurring opinion filed by Circuit Judge ROGERS.

STEPHEN F. WILLIAMS, Circuit Judge:

A six-count indictment charged Maria Hsia with various offenses deriving from a scheme to solicit illegal political contributions and disguise them as lawful ones. Hsia filed numerous motions to dismiss. The district court denied the motions as to Count One--conspiracy to defraud the Federal Election Commission ("FEC") and the Immigration and Naturalization Service ("INS")--but dismissed Counts Two through Six--causing false statements to be made to FEC. 24 F.Supp.2d 33, 38-47, 52-63 (D.D.C.1998); 24 F.Supp.2d 63, 64-65 (D.D.C.1998). The United States appeals this dismissal; we reverse. Hsia cross-appeals the refusal to dismiss Count One; we dismiss the appeal for lack of appellate jurisdiction.

* * *

The International Buddhist Progress Society ("IBPS"), one of Hsia's alleged co-conspirators and operator of the Hsi Lai Temple in Hacienda Heights, California, is a tax-exempt religious organization incorporated in California. The Federal Election Campaign Act ("FECA") forbids such a corporation from making contributions in federal election campaigns, 2 U.S.C. § 441b(a); the tax code bars participation in political campaigns whether they are federal or not, 26 U.S.C. § 501(b)(3).

Hsia herself is an immigration consultant in the Los Angeles area. The indictment alleges a series of actions taken by her and her co-conspirators to funnel money from IBPS through straw contributors into various campaigns. Hsia would either find and solicit individuals to serve as nominal contributors, see Indictment pp 32, 35, 38, 40(hh), 40(ii), or ask IBPS to do so, see id. pp 17, 19, 23, 26, 28, 33, 35, 40(h), 40(k), 40(n), 40(q), 40(t), 40(z), 40(cc), 40(gg). (She sometimes employed herself as such a contributor. See id. pp 15, 30, 38, 40(jj).) When IBPS complied with such a request--often employing people associated with the Temple as nominal contributors, see id. p 13(b)--Hsia sometimes forwarded the checks to the campaign. See id. pp 23, 33, 38, 40(kk). All nominal contributors, whether solicited by Hsia or by IBPS, were reimbursed in full by IBPS from its corporate funds. See id. pp 17, 19, 23, 24, 26, 28, 30, 32, 33, 35, 39, 40(g), 40(i), 40(l), 40(o), 40(r), 40(u), 40(x), 40(aa), 40(dd), 40(ll). The individuals thus simply served as conduits for IBPS's money.

Hsia also allegedly used conduits to funnel money from two of her immigration clients--Hsieh San Yeh and Zhe Xu 1--to the Clinton/Gore '96 Primary Committee, Inc. ("Clinton/Gore '96"). In these instances she instructed others to solicit the straw donors but conveyed the checks to the committee herself. See Indictment pp 47-49; Bill of Particulars at 14-16.

Count One charges that the actions involving IBPS constituted a conspiracy to defraud the United States, specifically the FEC and INS, in violation of 18 U.S.C. § 371. See Indictment p 10. Counts Two through Six charge that Hsia, by means of her conduit contribution schemes, willfully caused certain recipients of such contributions--Clinton/Gore '96, the Democratic National Committee, and The Friends of Patrick J. Kennedy '96--to make false statements to the FEC in violation of 18 U.S.C. §§ 2 and 1001: these recipients filed reports listing the conduit contributions as being from their nominal sources, although the true source was either IBPS, Mr. Yeh, or Ms. Xu. See Indictment pp 43, 46, 49, 52, 55; Bill of Particulars at 14-16.

* * *

Counts Two through Six are based on 18 U.S.C. §§ 2(b), 1001(a):

Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.

18 U.S.C. § 2(b).

[W]hoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully--

...

(2) makes any materially false, fictitious, or fraudulent statement or representation ...

shall be fined under this title or imprisoned not more than 5 years, or both.

Id. § 1001(a). 2

The most orderly fashion for addressing the district court's decision is by the elements of willfulness, causation, and falseness, with respect to all of which it found deficiencies.

"Willfully"

According to the district court, the word "willfully" in § 2(b) requires the government to show that Hsia knew that her conduct was unlawful. 24 F.Supp.2d at 62 n. 32; 24 F.Supp.2d 14, 21 (D.D.C.1998) (original decision on this issue); see also United States v. Trie, 21 F.Supp.2d 7, 14-16 (D.D.C.1998). 3 Believing that the charges here required an unconventional and extreme interpretation of §§ 2(b) and 1001, the court found that Hsia could not have known that her conduct would fall within their grasp.

Although we find no material novelty in the government's reading of the statutes (see below), our decision on whether the element of willfulness is adequately alleged does not turn on this point. We believe that the government need not prove that Hsia knew her acts to be unlawful; the question whether she could in fact have had such knowledge is therefore irrelevant.

The natural reading of §§ 2(b) and 1001 is this: the government may show mens rea simply by proof (1) that the defendant knew that the statements to be made were false (the mens rea for the underlying offense--s 1001) and (2) that the defendant intentionally caused such statements to be made by another (the additional mens rea for § 2(b)). See United States v. Gabriel, 125 F.3d 89, 101 (2d Cir.1997). The district court, like the Third Circuit in United States v. Curran, 20 F.3d 560 (3d Cir.1994), relied on Ratzlaf v. United States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994), for its contrary result. But this extends Ratzlaf too far: that case did not universalize a broad reading of "willfully" and thus overturn the general rule that ignorance of the law is no excuse. Ratzlaf found a knowledge-of-criminality requirement in a statute that independently required the act at issue to be "for the purpose of evading" various reporting requirements; reading "willfully violating" there as only requiring intention would have made it surplusage. Id. at 139-41. In this case, no such problem exists. We find Ratzlaf's narrow exception inapplicable and adopt the natural reading of mens rea above. Accordingly, nothing in the indictment's allegations contradicts the government's capacity to prove the statutorily required mens rea.

"Causes"

It is not entirely clear what defects the district court found in the government's theory of causation. The initial objection--that "a check is not a statement," 24 F.Supp.2d at 62-63--appears not only incorrect (the cases indicate, at most, that a check does not assert that it will not bounce) but irrelevant. The false statements here are the political committees' reports identifying certain listed names as sources of specific contributions; the names on the checks, together with the rest of the alleged conduit contribution scheme, could have "caused" these false statements to be made whether or not the checks were themselves statements of anything. But the district court seems also to have had a more general objection--that the causal link between Hsia's conduct and the making of false statements was too "attenuated." Id. at 61-62.

Section 2(b) does not, of course, limit by its terms the particular means by which the defendant may "cause" another to commit the act, nor the degree of permissible "attenuation" between these two people's actions. Cf., e.g., United States v. West Indies Transp., Inc., 127 F.3d 299, 307 (3d Cir.1997) (defendant may be prosecuted under §§ 2(b) and 1001 even if people who actually made false statements are not criminally liable). The mens rea element of the statute provides an outer limit on the latter, for a weak or implausible causal link would make it more difficult to prove that the defendant brought the effect about "willfully."

Nor is the general scheme of the indictment novel; the application of § 2(b) to a conduit contribution scheme has been several times upheld. See Curran, 20 F.3d 560; United States v. Hopkins, 916 F.2d 207 (5th Cir.1990); Goland v. United States, 903 F.2d 1247 (9th Cir.1990); cf. United States v. Yermian, 468 U.S. 63, 68-75, 104 S.Ct. 2936, 82 L.Ed.2d 53 (1984) ( § 1001 conviction requires no proof that defendant was aware of any federal agency jurisdiction). In those cases, defendants were convicted under §§ 2(b) and 1001 for employing such a scheme to conceal their own contributions: they had found nominal donors, had these conduits make payments to a committee, and reimbursed them. Here, the money was not Hsia's; it belonged instead to her immigration clients or to her co-conspirator IBPS. But Hsia arranged--directly or indirectly--for the conduits to do their part. That she did this to channel others' money does not help her. As FEC regulations direct committees to report "any contribution made by check, money order, or other written instrument" "as a contribution by the last person signing the instrument" "[a]bsent...

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