United States v. Frame

United States Court of Appeals Fifth Circuit F I L E D In the May 25, 2007 United States Court of Appeals Charles R. Fulbruge III for the Fifth Circuit Clerk _______________ m 05-20908 _______________ UNITED STATES OF AMERICA, Plaintiff-Appellee, VERSUS PAUL ARTHUR FRAME, JR., Defendant-Appellant. _________________________ Appeal from the United States District Court for the Southern District of Texas m 4:04-CR-491-ALL ______________________________ Before GARWOOD, SMITH, and DEMOSS, Paul Frame appeals his conviction. Finding Circuit Judges. no abuse of discretion, we affirm. JERRY E. SMITH, Circuit Judge:* I. Frame was the President and CEO of Seitel, Inc. (“Seitel”), a large public corporation. He was convicted by a jury of mail fraud, wire * fraud, money laundering, and making a false Pursuant to 5TH CIR. R. 47.5, the court has de- statement in violation of 18 U.S.C. § 1001. termined that this opinion should not be published and is not precedent except under the limited cir- The convictions stem from Frame’s orchestra- cumstances set forth in 5TH CIR. R. 47.5.4. tion of the payment of his personal legal bills from Seitel’s funds and deceptive statements he made (and disclosures he failed to make) “willfully”1 but did not include Frame’s re- about the scheme. Frame challenges the dis- quested instructions on good faith2 and reli trict court’s refusal to include jury instructions on good faith and reliance on the advice of counsel and its refusal to ask seven voir dire 1 The three instructions were as follows: questions about the prospective jurors’ opin- ions about the infamous Enron case. The offenses charged in this case require proof of specific intent on the part of the defen- II. dant before the defendant can be convicted. “A district court’s refusal to include a de- Specific intent, as that term implies, means fendant’s proposed jury instruction in the more than general intent to commit the act. To charge is reviewed under an abuse of discre- establish specific intent, the government must tion standard, and the trial judge is afforded prove that the defendant knowingly did an act substantial latitude in formulating his instruc- which the law forbids or knowingly failed to do an act which the law requires, purposely intend- tions.” United States v. Daniels, 247 F.3d ing to violate the law. 598, 601 (5th Cir. 2001) (quoting United States v. Rochester, 898 F.2d 971, 978 (5th The word “knowingly,” as that term has been Cir. 1990)). The court abuses its discretion used from time to time in these instructions, only if “(1) the requested instruction is sub- means that the act was done voluntarily and in- stantivelycorrect; (2) the requested instruction tentionally and not because of mistake or acci- is not substantially covered in the charge given dent. to the jury; and (3) it concerns an important point in the trial so that the failure to give it The word “willfully,” as that term has been seriously impairs the defendant’s ability to used from time to time in these instructions, effectively present a particular defense.” means that the act was committed voluntarily United States v. St. Gelais, 952 F.2d 90, 93 and purposely with the specific intent to do (5th Cir. 1992) (citing United States v. Hunt, something the law forbids; that is to say, with 794 F.2d 1095, 1097 (5th Cir. 1986)). bad purpose either to disobey or disregard the law. If the given instructions “fairly and ade- 2 Frame’s proposed good faith instruction was quately” address the issues, there is no abuse as follows: of discretion. Daniels, 247 F.3d at 601. A re- jection of a defendant’s request for an instruc- The good faith of a defendant is a complete tion on reliance on the advice of counsel is not defense to the charges in this case because good an abuse of discretion if there is insufficient faith on the part of the defendant is, simply, in- evidence that the defendant consulted with at- consistent with the criminal intent required for torneys. United States v. Tannehill, 49 F.3d conviction of the charges (sic) offenses, as de- 1049, 1057-58 (5th Cir. 1995). fined in the foregoing instructions. The court issued a specific intent instruc- A person who acts, or causes another to act, on a belief or an opinion honestly held is not tion and instructions defining “knowingly” and punishable merely because the belief or opinion turns out to be inaccurate, incorrect, or wrong. An honest mistake in judgment or an honest (continued...) 2 ance on the advice of counsel.3 The court reasoned that Frame’s good faith defense was adequately covered in the instructions given, and there was insufficient evidence to support 2 (...continued) an instruction on reliance on counsel. The error in management does not give rise to the court emphasized that Frame would have the level (sic) of criminal conduct. opportunity to present both defenses to the jury during closing arguments. A defendant does not act in “good faith” if, even though he or she honestly holds a certain Frame correctly identifies cases in which opinion or belief, that defendant also “know- we found abuse of discretion where a court ingly” makes false or fraudulent pretenses, rep- omitted a good faith instruction despite the in- resentations, or promises to others. clusion of instructions defining specific intent, “knowingly,” and “willfully.” See United While the term “good faith” has no precise States v. Goss, 650 F.2d 1336, 1344 (5th Cir. definition, it encompasses, among other things, 1981); United States v. Fowler, 735 F.2d 823, a belief or opinion honestly held, absence of 828-29 (5th Cir. 1984). But, “later caselaw malice or ill will, and an intention to avoid tak- ing unfair advantage of another. has effectively by-passed [Goss and Fowler].” United States v. Hunt, 794 F.2d 1095, 1098 In determining whether or not the government (5th Cir. 1986).4 Since Hunt, we have held has proven that a defendant acted with requisite criminal intent or whether the defendant acted 3 in good faith, the jury must consider all of the (...continued) evidence received in the case bearing on the de- and made a full and accurate report of disclo- fendant’s state of mind. sure to his attorney of all important material facts which he or she had knowledge of or had The burden of proving good faith does not means of knowing, then acted strictly in accor- rest with the defendant because the defendant dance with the advice of that attorney. That ad- does not have any obligation to prove anything vice that the attorney gave following this full in this case. It is the government’s burden to report of disclosure, defendant would not be prove to you, beyond a reasonable doubt, that willfully or deliberately doing wrong in per- the defendant acted with the criminal intent re- forming some act as to those terms, as those quired to convict him of the crimes charged. terms are used in these instructions. If the evidence in the case leaves the jury with Whether the defendant acted in good faith for a reasonable doubt as to whether the defendant the purpose of truly seeking guidance as to the acted with the requisite criminal intent or in question about which he was in doubt and good faith, the jury must acquit the defendant. whether he made a full and complete reported disclosure to an attorney and whether he or she 3 The requested instruction was as follows: acted strictly in accordance with the advice re- ceived are all questions for you to determine. Defendant, before taking any action, while 4 acting in good faith for the purposes of asking In Hunt we held that Goss and Fowler were for advice of a lawyer, for his or her possible inconsistent with earlier cases such as United future conduct sought and obtained advice of an States v. Wellendorf, 574 F.2d 1289 (5th Cir. attorney whom he considered to be competent 1978), and that the conflict had to be resolved in (continued...) (continued...) 3 that the omission of a good faith jury instruc- vice of counsel were central to his attorney’s tion is not an abuse of discretion if the defen- closing arguments.6 Because the jury instruc- dant is able to present his good faith defense to tions “fairly and adequately” addressed the jury through, inter alia, witnesses, closing Frame’s defenses, the decision to deny the re- arguments, and the other jury instructions.5 Frame was able to present his good faith 6 defense to the jury. The instructions defining The following quotations are from the closing specific intent, “knowingly,” and “willingly” argument of Frame’s counsel: make plain that the jury was required to acquit Frame if, because of his good faith, he lacked SS [In order to convict] you have to believe that specific intent. As for reliance on counsel, the whatever those acts were that he committed court did not abuse its discretion in finding in- were done with a certain type of state of mind sufficient evidence to warrant the instruction. . . . . If you don’t believe that Mr. Frame had the requisite state of mind in order to commit Frame’s counsel conceded, at the jury charge that offense, then you cannot convict him. You conference, that no evidence had been ad- must find him not guilty. vanced showing that Frame had discussed this matter with his lawyers; counsel claimed only SS [O]ther people who were testifying for him that “it appears clear that he did rely” on law- told you that they believed that he acted in good yers who reviewed documents for him. faith for the benefit of his corporation. Finally, the court stated that Frame was free SS Mr. Frame told you that he thought he acted to argue both defenses during closing. Indeed, in good faith for the benefit of the corporation. Frame’s good faith and his reliance on the ad- SS [Frame] also told you that he relied on his employees, he relied on a staff of CPAs at Ernst 4 & Young that they paid a lot of money to, he (...continued) favor of the earlier cases. Hunt, 794 F.2d at 1098 relied on his attorney. (citing United States v. Gray, 751 F.2d 733, 735- 36 (5th Cir.1985)). SS I know there was no intent on Paul Frame’s part to commit a crime. And in order to convict 5 See, e.g., Hunt, 794 F.2d at 1098; United him of any of these charges, you have to believe States v. Fooladi, 746 F.2d 1027, 1030 (5th Cir. that there was a specific intent. 1984); United States v. Gray, 751 F.2d 733, 736- 37 (5th Cir. 1985); United States v. St. Gelais, 952 SS [In order to convict] you have to believe that F.2d 90, 93-94 (5th Cir. 1992) (“We find that the he had a specific intent to defraud his company. court’s charge adequately conveyed the concept of good faith to the jury and that, while defense coun- SS [Frame] did what he ordinarily does not do. sel did not mention the words “good faith” in his He stepped back and he let two layers, who he closing argument, his remarks put the concept of thought were good people and who he trusted good faith and innocent motive before the jury. and who he thought had his best interest at Thus, the district court did not commit reversible heart, handle a sticky personal situation. error . . . .”); United States v. Peterson, 101 F.3d 375, 382-83 (5th Cir. 1996); United States v. Dan- SS Now, if you’re going to find him guilty of iels, 247 F.3d 598 (5th Cir. 2001); United States something, add another little line there: Paul v. Gonzales, 436 F.3d 560, 571 (5th Cir.), cert. Frame is an idiot for trusting [his lawyers] to denied, 126 S. Ct. 2363 (2006). take care of this lawsuit for him. 4 quested instructions was not an abuse of dis- that he could impartially hear and decide the cretion. case. Frame was free to probe further into the potential jurors’ feelings about his CEO capac- III. ity as long as the questions were relevant to Frame argues that his Sixth Amendment Frame’s case. right to an impartial jury was violated because the court refused his request to ask seven voir The only evidence Frame advances con- dire questions concerning the well-publicized cerning the alleged insufficiency of voir dire is Enron trial. “Voir dire examination serves the the dismissal of a juror who approached the dual purposes of enabling the court to select case manager at a recess during the examina- an impartial jury and assisting counsel in exer- tion of the first witness to say that she could cising peremptory challenges.” Mu’Min v. not be impartial. She was questioned outside Virginia, 500 U.S. 415, 431 (1991). “We the presence of the jury and told the court that grant broad discretion to the trial judge in during voir dire she had thought that she could making determinations of impartiality and will be impartial, and hence she had represented to not interfere with such decisions absent a clear the court that she harbored no bias or preju- abuse of discretion.” United States v. Hino- dice, but that she had changed her mind after josa, 958 F.2d 624, 631 (5th Cir. 1992). The hearing opening arguments. Although the mere fact that an excluded question would court suspected that the juror was being insin- have been helpful is insufficient to render its cere and merely attempting to avoid jury duty, exclusion unconstitutionalSSto meet this bur- it dismissed her from the jury. den the question’s exclusion must “render the defendant’s trial fundamentally unfair.” Mu’- Frame fails to articulate how this episode Min, 500 U.S. at 416 (citing Murphy v. Flori- evinces that voir dire rendered the trial funda- da, 421 U.S. 794, 799 (1975)). mentally unfair. During voir dire (after the court had mentioned Enron three times), the The court admonished the jury that this was juror said she had no bias toward corporate not the Enron case. It asked whether any po- executives or preconceived notions of Frame’s tential juror had a problem giving the pre- guilt. After hearing opening statements, she sumption of innocence to a corporate defen- changed her mind. Frame fails to explain why dant; none did.7 Frame’s counsel asked detailed questions concerning Enron would whether any potential juror had a preconceived have caused her change to her mind before op- notion of Frame’s guilt; none did. Several po- ening statements. tential jurors had knowledge of someone who had been charged with fraud, and each said Frame was permitted to question potential jurors about their thoughts and feelings toward corporate defendants in general and Frame in 7 Frame argues that by not allowing detailed particular. The court admonished the jury that questions concerning the potential jurors’ feelings this was not the Enron case, and the potential about Enron, the court prevented him from explor- jurors represented that they would reach a ver- ing “the venire’s feelings toward corporate Amer- dict based only on the evidence advanced dur- ica.” To the contrary, the potential jurors were ing trial. The omission of Frame’s requested asked about their feelings toward corporate defen- dants and affirmed that they were not biased questions about Enron, an unrelated case, did against them. not render his trial fundamentally unfair, and 5 thus the court acted within its discretion. AFFIRMED. 6