US v. Taylor, LR-CR-89-52.
| Decision Date | 08 September 1989 |
| Docket Number | No. LR-CR-89-52.,LR-CR-89-52. |
| Citation | 105 BR 486 |
| Parties | The UNITED STATES of America v. Felix TAYLOR. |
| Court | U.S. District Court — Eastern District of Arkansas |
Patrick Harris, Asst. U.S. Atty., Little Rock, Ark., for plaintiff.
Richard Holiman, Little Rock, Ark., for defendant.
The defendant, Mr. Felix Taylor, has been charged in a three-count indictment with making certain false statements and representations in connection with a bankruptcy proceeding. Counts I and II of the indictment charge that the defendant knowingly and willfully answered falsely to certain questions posed during a hearing before the bankruptcy court, and that these unsworn statements constitute a violation of 18 U.S.C. § 1001. Count III of the indictment alleges that the defendant knowingly filed a false pleading in a bankruptcy petition in violation of 18 U.S.C. § 152.
Now pending before the Court is the defendant's motion to dismiss Counts I and II of the indictment. The defendant contends that his simple negative responses to the bankruptcy judge's inquiry are not punishable, but rather fall under the so called "exculpatory no" exception to prosecutions under § 1001. Although this doctrine has gained wide use among the federal appellate courts, its validity has never been squarely addressed by the Eighth Circuit. Thus, while the "exculpatory no" argument raised by the defendant is not novel, it does raise issues in this Court for which there are no controlling cases within this circuit. After a thorough review of the law in this area, and for the reasons set forth below, the Court concludes that the motion to dismiss Counts I and II should be granted.
The offense alleged by the government, arose out of Mr. Taylor's involvement in a bankruptcy proceeding initiated by his estranged wife, Magalene Taylor. On or about September 28, 1988, Ms. Taylor filed a petition for bankruptcy in the Eastern District of Arkansas. In re Taylor, No. LR-B-88-1938S. At some point, the defendant intervened and became a party to the petition. At the time the petition was filed, Ms. Taylor was represented by an attorney named Mr. Marquis Jones, of the Jones & Tiller Law Firm, who was also an employer of the defendant.
On November 23, 1988 a motion signed "Magalene Harris Taylor, Pro Se" was filed seeking inter alia an extension of time in which to file monthly budget schedules, to disallow the claim of a creditor, to secure new counsel and to disqualify the bankruptcy judge on the grounds of bias. (See Defendant's Exhibit A). On January 11, 1989 a second pleading was filed entitled "RENEWAL OF DEBTOR'S MOTIONS, MOTION TO STRIKE CREDITOR'S RESPONSE, OR VOLUNTARY DISMISSAL OF DEBTOR'S CHAPTER 13 CASE". This pleading was signed: "Magalene H. Taylor". (Defendant's Exhibit B).
On January 23, 1989 a document entitled "Affidavit of Magalene Taylor" was filed. The affidavit states that the defendant became involved in her bankruptcy case through his association with her attorney's law firm, and alleges that "Felix was upset over my bankruptcy and did not want it filed." The affiant further stated that she was "not given proper assistance or timely hearing notice by Attorney Jones as a result of Felix interfering." The affidavit does not specify the nature of the alleged interference, but concludes by stating that as a result of the defendant's association with the Jones & Tiller firm, "a conflict of interest existed, and my petition was not properly handled."
Finally, on February 9, 1989, a third motion was filed under the caption: "RENEWED MOTION FOR RECONSIDERATION; MOTION TO STAY ORDER AND SUPPLEMENT THE RECORD; AND REPLY TO DEFENDANT'S RESPONSE TO MOTION FOR RECONSIDERATION". This last motion, which was also signed "Magalene H. Taylor", again alleged that she had been improperly represented by her attorney, and that a conflict had arisen due to her attorney's employment of Felix Taylor. In an accompanying affidavit, Ms. Taylor stated that several documents in the court file were not executed by her or filed with her knowledge or consent. (Defendant's Exhibit C).
In an effort to resolve the conflicts raised by these pleadings, the Bankruptcy Judge, the Hon. Mary Scott, conducted a hearing on February 16, 1989. Present at the hearing were Ms. Taylor, her attorney, Mr. Jones, and the defendant, Felix Taylor. At that hearing, both Ms. Taylor and Mr. Jones denied knowledge of the November 23rd and January 11th pleadings which purported to contain Ms. Taylor's signature. The following dialogue then took place between the Court and the defendant:
It is this last statement which serves as the basis for Count I of the indictment. Specifically, the government alleges that the defendant was in fact the person who signed and filed the November 23rd pleading, and that defendant's denial before the Bankruptcy Court constituted a violation of 18 U.S.C. § 1001.
The Court then turned its focus to the motion filed on January 11, 1989. After Magalene Taylor denied having signed or filed that pleading, Judge Scott recalled the defendant to the bench.
The government alleges in Count II of the indictment that Mr. Taylor was the author of the January 11th pleading, and that his negative response to the judge's inquiry also constituted a false statement on a matter within the jurisdiction of a department of the government in violation of 18 U.S.C. § 1001.
In support of the motion to dismiss Counts I and II, the defendant argues that his responses to the Bankruptcy Court's inquiry, even assuming they were false, fall within the so called "exculpatory no" exception to 18 U.S.C. § 1001. The "exculpatory no" doctrine provides a defense to prosecution under § 1001 for an individual who merely supplied a negative and exculpatory response to an investigator's questions. United States v. Longbehn, 850 F.2d 450, 452 n. 2 (8th Cir.1988).
In essence, the defendant argues that once he was called upon by Judge Scott to state whether he signed the pleadings, the defendant was faced with two choices: either he could answer in the affirmative and incriminate himself by admitting he filed a false pleading in a bankruptcy petition, which constitutes a separate offense under 18 U.S.C. § 152 and is the basis for Count III of the indictment; or the defendant could provide exculpatory, perhaps untruthful, responses to the judge's inquiry. Section 1001, the defendant argues, was not intended to apply to such "forced" violations.
The notion of an "exculpatory no" is a judicially-created exception to the use of § 1001. It has evolved out of concerns for a defendant's privilege against self-incrimination as well as the possible abuse of the statute due to its extremely broad language. Title 18, Section 1001 provides:
Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined not more than $10,000 or imprisoned not more than five years or both.
The predecessor statute punished false statements only when made "for the purpose and with the intent of cheating and swindling or defrauding the Government of the United States." United States v. Rodgers, 466 U.S. 475, 478, 104 S.Ct. 1942, 1945, 80 L.Ed.2d 492 (1984), quoting, Act of Oct. 23, 1918, ch. 194, 40 Stat. 1015. In 1934, at the urging of a number of newly created regulatory agencies, the statute was amended and broadened into its present form thereby eliminating the restriction of its application to only those cases where the government suffered some pecuniary or property loss. Id. See also Paternostro v. United States, 311 F.2d 298, 302 (5th Cir.1962). The Supreme Court has interpreted the amended statute as indicating "congressional intent to protect the authorized functions of governmental departments and agencies from the perversion which might result from the deceptive practices described." United States v. Gilliland, 312 U.S. 86, 93, 61 S.Ct. 518, 522, 85 L.Ed. 598 (1941).
The Court has also held that the provisions of the statute are to be liberally interpreted. Thus, for instance, it has rejected...
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