United States v. Gary Ranum

ESCHBACH, Circuit Judge,

dissenting.

The majority acknowledges that the single issue we must decide is whether 20 U.S.C. § 1097 (a) requires that the Government prove that the defendant had “intent to deceive the Government.” The majority also acknowledges that it is irrelevant whether the majority believes Ranum’s asserted defense that he did not intend to deceive the Government. Yet the majority spends a preponderance of its opinion explaining that “[bjased upon the evidence-both direct and circumstantial — we believe it is a reasonable inference that Ranum did intend to defraud the Government....” 1 Thou doth protest too much. The fact that the majority, who has never met Ranum, does not believe Ra-num lends no support to the majority’s holding today. The Constitution requires the Government to prove each element of an offense to the trier of fact, not to the Seventh Circuit Court of Appeals.

Ranum contends now, as he contended at his plea hearing, that he used an incorrect social security number on a loan application because the educational institution to which he applied knew him by a different number. Ranum contends that he used the incorrect number with the intent to avoid administrative inconvenience, not because he had intent to deceive the Government or anyone else. Ranum attempted to explain to the magistrate judge his reason for using an incorrect social security number, but the magistrate denied him an opportunity to do so. 2 If “intent to deceive” is an element of the offense, then we must reverse the district court’s denial of Ranum’s motion to withdraw his guilty plea. Because § 1097(a) requires that the Government prove that the defendant had “intent to deceive,” I respectfully dissent from the majority opinion affirming the judgment of the district court.

Three reasons compel my conclusion. First, the plain language of the statute requires such proof. Second, four of our sister circuits have found that a similarly worded statute requires such proof. Third, the mens rea element of the statute is at most ambiguous and the legislative history provides no *1032 insight into the express or implied intent of Congress. Any ambiguity in the criminal statute, therefore, must be resolved in defendant’s favor.

This court must begin its inquiry with the language of the statute itself. Bailey v. United States, - U.S. -, -, 116 S.Ct. 501, 506 , 133 L.Ed.2d 472 (1995). 3 By its own language, § 1097(a) applies to “[a]ny person who knowingly and willfully embezzles, misapplies, steals, obtains by fraud, false statement or forgery ... any funds_” 20 U.S.C. § 1097 (a) (emphasis added). Tracking the language of the statute, Ranum argues that “willfully” modifies the phrase “obtains by.” The statutory text has a causal element and the term “willfully” modifies this causal element. Thus, it is not enough for the Government to prove that Ranum willfully made a false statement. The Government must also prove that the defendant made the false statement for the purpose of misleading the Government. As the majority notes, “specific intent would be required twice, with regard to both the making of the statement and the obtaining of the loan.” Ante at 1030.

Ranum’s interpretation of the statute is consonant with the plain language of the statute. The Government’s position before the district court evidences the “plainness” of Ranum’s reading of the statute. At the hearing before the district court, the Government conceded that “intent to deceive” is an element of the offense, but argued that Ranum’s guilty plea had been knowing and voluntary. The district court, nevertheless, rejected both Ranum’s and the Government’s reading of the statute. The majority gives lip service to the “plain” reading of the statute but posits that the statute reaches anyone “who makes false statements in connection with student loan applications.” Ante at 1030.

I would agree with the majority if the statute said “any person who knowingly and willfully ... makes a false statement_” But it does not. 4 The statute says “[a]ny person who knowingly and willfully ... obtains by ... false statement.” 20 U.S.C. § 1097 (a). Again, this language has a causal element that the majority ignores. The defendant must make a false statement for the purpose of misleading the reviewer of the loan. The grammatical structure of the statute also mandates such a reading because the phrase “willfully” modifies the phrase “obtains by.” See United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 , 109 S.Ct. 1026, 1030 , 103 L.Ed.2d 290 (1989). Therefore, “intent to deceive” is an element of the offense.

The majority cites to the Seventh Circuit model jury instructions for a similarly worded statute, 18 U.S.C. § 1001 , which state that “[a]n act is done willfully if done voluntarily and intentionally, and with the intent to do something the law forbids.” Federal Criminal Jury Instructions of the Seventh Circuit, Vol. Ill, at 56 (1986). This begs the question of “what is it that § 1097(a) forbids?” Section 1097(a) forbids “obtaining by” false statement. Therefore, the model jury instructions for 20 U.S.C. § 1097 (a) would provide that an act is done willfully if done voluntarily and intentionally, and with the intent to deceive. See Federal Judicial Center, Pattern Jury Instructions 102 (1987) (stating that, pursuant to 18 U.S.C. § 1001 , the Government must prove beyond a reasonable doubt: that defendant made a false statement to a federal entity; that he knew the statement was false; and “that he made the false statement ... for the purpose of misleading the [federal entity].”).

The majority’s discussion of 18 U.S.C. § 1001 notes that the First, Fifth, Sixth and Eleventh Circuits have explicitly held that “intent to deceive” is required to convict a *1033 defendant under § 1001 for making a false statement. Ante at 1029. Section 1001 is a similarly worded statute. The wording is, however, not exactly the same as the wording of 20 U.S.C. § 1097 (a). Section 1001 states in relevant part: “Whoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully ... makes any false ... statements ... shall be fined.” 18 U.S.C. § 1001 . The statute at issue in this ease states “[a]ny person who knowingly and willfully ... obtains by ... false statement.” 20 U.S.C. § 1097 (a). A comparison of the two statutes leads to the conclusion that 20 U.S.C. § 1097 (a) more clearly requires proof of “intent to deceive.” Yet, the only courts to have addressed the issue have held that “intent to deceive” is an element of 18 U.S.C. § 1001 . See, e.g., United States v. Shah, 44 F.3d 285, 289 (5th Cir.1995) (stating that intent to deceive or mislead is an element of the offense and noting that the district court properly instructed the jury that the Government must prove “that the defendant made the false statement for the purposes of misleading the General Services Administration”). If “intent to deceive” is an element of 18 U.S.C. § 1001 , then the statutory text dictates that “intent to deceive” is an element of 20 U.S.C. § 1097 (a).

As the preceding discussion of the statutory text makes clear, “intent to deceive” is an element of 20 U.S.C. § 1097 (a). The legislative history of this statute is sparse and contains no indication of a contrary purpose. See H.R. Conf. Rep. No. 630,102d Cong., 2d Sess. 413, 513 (1992), reprinted in 1992 U.S.C.C.A.N. 334, 528, 628. Even if we were to find that the text is ambiguous, however, we resolve any doubt in favor of the defendant. Hughey v. United States, 495 U.S. 411, 422 , 110 S.Ct. 1979, 1985 , 109 L.Ed.2d 408 (1990) (lenity principles “demand resolution of ambiguities in criminal statutes in favor of the defendant”); see also Liparota v. United States, 471 U.S. 419 , 105 S.Ct. 2084 , 85 L.Ed.2d 434 (1985) (“Application of the rule of lenity ensures that criminal statutes will provide fair warning concerning conduct rendered illegal and strikes the appropriate balance between the legislature, the prosecutor, and the court in defining criminal liability”). It would be disingenuous of the Government to contend that the statute is not ambiguous at the very least, given that the Government conceded at the hearing before the district court that one element of the statute was an “intent to deceive.”

Indeed, application of the rule of lenity is particularly appropriate in this case because Ranum argues that he pleaded guilty to an offense that does not exist. He tried to explain to the magistrate judge his reason for making a false statement, but the magistrate judge denied him the opportunity to do so. All Ranum seeks is a chance to withdraw his plea of guilty to a misdemeanor charge. He may then face a trial on more serious felony charges, but he will do so with “fair warning concerning conduct rendered illegal.” Id.

For the foregoing reasons, it is clear that 20 U.S.C. § 1097 (a) requires the Government to prove that the defendant had the “intent to deceive the Government.” I respectfully dissent.

. As part of its attempt to emphasize that the majority does not believe Ranum, the majority neglects to discuss the facts as they happened at the plea hearing. The transcript of the plea hearing reveals that Ranum attempted to explain to the court why he used an incorrect social security number on the student loan application:

MR. RANUM: What occurred there is that I had taken a computer course many years before from this school at a downtown campus, the technical school. And when I started and

went there, the application process with MATC, they had a different number. I was reluctant to change that number. I eventually did not. I should have changed the number back to my correct I.D. number

I think the fact that I did do something wrong is clear and that I didn’t correct it, but I would like the Court to look into the reasons why those actions were taken.

THE COURT: And I’m going to.

Unfortunately, the court did not hold up its end of the bargain. In the magistrate judge's order denying Ranum’s motion to withdraw his guilty plea, the court acknowledges that it did not explore this point with Ranum.

. The majority reaches the language of the statute only after stating that it disbelieves Ranum’s assertion that he did not intend to deceive the government and after conducting an analysis of a similarly worded statute (a statute that four of our sister circuits have interpreted in a manner that supports Ranum’s position).

. The majority’s strained reading of the statute’s language would allow a conviction for willfully and knowingly making a false statement in the process of obtaining funds. The language of the statute requires more. The defendant must "obtain” funds before the crime is complete. United States v. Redfearn, 906 F.2d 352, 353-54 (8th Cir.1990). The majority’s "plain” reading of the statute ignores the language of the statute.