U.S. v. Sun-Diamond Growers of California, Criminal Action No. 96-193.

• Decision Date: 13 May 1997
• Docket Number: Criminal Action No. 96-193.
• Citation: 964 F.Supp. 486
• Parties: UNITED STATES of America v. SUN-DIAMOND GROWERS OF CALIFORNIA.
• Court: U.S. District Court — District of Columbia

964 F.Supp. 486

UNITED STATES of America v. SUN-DIAMOND GROWERS OF CALIFORNIA.

Criminal Action No. 96-193.

United States District Court, District of Columbia.

May 13, 1997.

COPYRIGHT MATERIAL OMITTED

Donald C. Smaltz, Barry Coburn, Office of Independent Counsel, Alexandria, VA, for Plaintiff.

Richard A. Hibey, Eric W. Bloom, Winston & Strawn, Washington, DC, for Defendant.

MEMORANDUM OPINION AND ORDER

URBINA, District Judge.

Denying Sun-Diamond of California's Renewed Motion for Judgment of Acquittal

I. Introduction

This matter comes before the court upon Sun-Diamond Growers of California's (Sun-Diamond) renewed motion for judgment of acquittal. On June 13, 1996, a grand jury returned a nine count indictment against Sun-Diamond. Counts I and II charged Sun-Diamond with providing former Secretary of Agriculture Alphonso Michael Espy (Secretary Espy) with illegal gratuities in violation of 18 U.S.C. §§ 2 and 201(c)(1)(A). Counts III and IV alleged that Sun-Diamond committed wire fraud in violation of 18 U.S.C. §§ 2, 1343 and 1346. Counts V through IX charged Sun-Diamond with providing illegal campaign contributions to Secretary Espy's brother, Henry Espy, in violation of Federal Election Campaign Act (FECA), 2 U.S.C. §§ 431-455, as well as 18 U.S.C. § 2. Sun-Diamond moved to dismiss all counts charged in the indictment. The court denied Sun-Diamond's motion in its entirety. See U.S. v. Sun-Diamond Growers of California, 941 F.Supp. 1262 (D.D.C. 1996).¹

On September 9, 1996 the trial in this matter began. On September 16, 1996, at the close of the Government's case, Sun-Diamond moved for judgment of acquittal on all nine counts. The court denied Sun-Diamond's motion. On September 24, 1996, the jury returned a guilty verdict on counts I and III through IX. The jury acquitted Sun-Diamond of the charges alleged in count II.² Sun-Diamond now renews its motion for judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29(c). Sun-Diamond does not renew its motion with respect to count I. See Sun-Diamond's Motion for Judgment of Acquittal at 2 n. 1.

Sun-Diamond advances three arguments in support of its motion. First, Sun-Diamond argues that the Government failed to introduce sufficient evidence from which a reasonable jury could find beyond a reasonable doubt that Sun-Diamond's former Vice-President of Corporate Affairs, Mr. Richard Douglas, acted on behalf of Sun-Diamond when he violated the federal campaign laws. Second, Sun-Diamond argues that with respect to counts III and IV (the wire fraud counts), the Government failed to prove beyond a reasonable doubt that Mr. Douglas or Sun-Diamond possessed the requisite intent to defraud Mr. Lake's corporate employer. Sun-Diamond further maintains that the Government failed to prove beyond a reasonable doubt that Mr. Douglas engaged in an interstate wire communication that furthered the scheme to defraud. Lastly, Sun-Diamond asserts that the Government failed to establish that Mr. Douglas' use of the wire message was in furtherance of the scheme entered into by Mr. Douglas and Mr. Lake.

Sun-Diamond's motion must again be denied. The Government introduced sufficient evidence from which a reasonable jury could conclude that Mr. Douglas who, as the second highest ranking officer of the defendant, was responsible for representing Sun-Diamond's interests before senior government officials was indeed acting with the intent of benefitting his corporate employer when he engaged in an illegal scheme to secure unlawful campaign contributions for Secretary Espy's brother, Henry Espy. In addition, a reasonable jury could have concluded that Mr. Douglas possessed the requisite intent to defraud Mr. Lake's corporate employer and that the use of an interstate wire was used to further the fraud.

II. Discussion

A. Legal Standard

In ruling on a motion for judgment of acquittal, the trial court must determine whether,

viewing the evidence in the light most favorable to the Government, ... and recognizing that it is the jury's province to determine credibility and to weigh the evidence, a reasonable jury must necessarily entertain a reasonable doubt on the evidence presented.

United States v. Singleton, 702 F.2d 1159, 1163 (D.C.Cir.1983) (emphasis in the original). The court must ask whether "a fair-minded and reasonable trier of fact [could] accept the evidence as probative of the defendant's guilt beyond a reasonable doubt." In Re Holloway, 995 F.2d 1080, 1082 (D.C.Cir. 1993) (internal citation omitted), cert. denied, 511 U.S. 1030, 114 S.Ct. 1537, 128 L.Ed.2d 190 (1994); see also In Re Ellenbogen, 72 F.3d 153, 157 (D.C.Cir.1995). If "a fair-minded and reasonable trier of fact [could] accept the evidence as probative of [the elements of the offense] beyond a reasonable doubt." the defendant's motion should be denied. In Re Levine, 27 F.3d 594, 595 (D.C.Cir.1994). Thus, in reviewing the sufficiency of the evidence to sustain a conviction, the court must ask "whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the central elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in the original); see also United States v. Lucas, 67 F.3d 956, 959 (D.C.Cir.1995); United States v. Applewhite, 72 F.3d 140, 142 (D.C.Cir. 1995), cert. denied, ___ U.S. ___, 116 S.Ct. 1864, 134 L.Ed.2d 962 (1996). In this case, the court finds that the Government's evidence was sufficient to support the jury's verdict.

Viewed most favorably to the Government, the evidence supporting counts III through IX established that Mr. Douglas and Mr. Lake engaged in an illegal scheme to make unlawful campaign contributions to Henry Espy.³ The scheme was inspired by Mr. Douglas who called Mr. Lake from California in February of 1994.⁴ Although Mr. Douglas was unable to reach Mr. Lake, he left a message on Mr. Lake's answering machine. Subsequently, Mr. Lake returned Mr. Douglas' telephone call at which point Mr. Douglas advised Mr. Lake of Secretary Espy's need to secure funds for the purpose of helping to retire Henry Espy's campaign debt. During this conversation, Mr. Douglas and Mr. Lake discussed their agreement to pursue an illegal scheme to secure $5,000 in illegal campaign contributions.

The scheme entailed Mr. Lake raising $5,000 from employees of Robinson-Lake, his corporate employer⁵ Because it is illegal for a corporation to make a campaign contribution to a candidate for office, Mr. Douglas and Mr. Lake conspired to make it appear that the individuals themselves were making the contributions. These individuals were to be reimbursed by Mr. Lake who in turn was to be reimbursed by Robinson-Lake. In order to execute this scheme, Mr. Douglas and Mr. Lake invoiced Robinson-Lake for a fictitious expense in order to advance the funds for the illegal campaign contribution and, further, to conceal the contributions.⁶ Mr. Lake falsified corporate records in order to secure the funds. Robinson-Lake was ultimately reimbursed by Sun-Diamond since Mr. Douglas and Mr. Lake made it appear as though Robinson-Lake had expended the funds on behalf of Sun-Diamond.⁷

B. Sufficiency of Evidence: Counts III through IX

The jury in this case found Sun-Diamond, through Mr. Douglas, guilty of making illegal campaign contributions to Secretary Espy's brother in violation of FECA as well as the aiding and abetting statute, 18 U.S.C. § 2. FECA prohibits a person from making a campaign contribution in the name of another person. 2 U.S.C. § 441f. It also prohibits a corporation from making a campaign contribution "in connection with any election" for Congress. 2 U.S.C. § 441b. Sun-Diamond contends that there was insufficient evidence from which the jury could find. beyond a reasonable doubt, that Mr. Douglas acted to benefit Sun-Diamond when he helped secure the illegal campaign contributions⁸ Conversely, Sun-Diamond maintains that Mr. Douglas acted against its interests.

"The law of corporate criminality is not well developed in this circuit." In Re Sealed Case. 107 F.3d 46, 51 (D.C.Cir.1997). However, it has long been established that corporations are criminally liable for the crimes of their senior officers, "particularly when the corporation benefits from the officers' offensive conduct." Genty v. Resolution Trust Corp., 937 F.2d 899, 909 (3rd Cir.1991); see also New York Central R.R. v. United States, 212 U.S. 481, 492-94, 29 S.Ct. 304, 306-07, 53 L.Ed. 613 (1909). This is so because the acts of a corporation are the acts of its employees acting within the scope of their employment. U.S. v. Bank of New England, N.A., 821 F.2d 844, 856 (1st Cir. 1987); United States v. One Parcel of Land, 965 F.2d 311, 316 (7th Cir.1992). Other circuits that have considered the issue have held that in order to find a corporate defendant criminally liable for the acts of its agents, the Government must establish, beyond a reasonable doubt, that the agent acted within the scope of his employment with the intent to benefit the corporation. See United States v. Cincotta, 689 F.2d 238, 242 (1st cir.), cert. denied, 459 U.S. 991, 103 S.Ct. 347, 74 L.Ed.2d 387 (1982); Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d 56, 63 (4th Cir.1993); United States v. Automated Medical Laboratories, Inc., 770 F.2d 399, 406 (4th cir.1985); United States v. Basic Const. Co., 711 F.2d 570, 573 (4th Cir.1983) (per curiam); United States v. Bi-Co Pavers, Inc., 741 F.2d 730, 737 (5th Cir.1984); United States v. One Parcel of Land, 965 F.2d 311, 316 (7th Cir. 1992); D & S Auto Parts, Inc. v. Schwartz, 838 F.2d 964, 967 (7th Cir.1988), cert. denied, 486 U.S. 1061, 108 S.Ct. 2833, 100 L.Ed.2d 933 (1988); United States v. Hilton Hotels Corp., 467 F.2d 1000, 1007 (9th Cir.1972), cert. denied, 409 U.S. 1125, 93 S.Ct. 938, 35 L.Ed.2d 256 (1973).⁹

Sun-Diamond's assertion that Mr. Douglas acted against...