Petition — Matthews v. United States

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Man 9 1979

IN THE SUPREME COURT OF THE

|_GHABL RODAK, JR., CLERK

‘

a

UNITED STATES

Term,

No. 98-1352

RUSSELL W. MATTHEWS,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RICHARD B. MAZER

San Franciscan Penthouse

1231 Market Street

San Francisco, CA 94103

Telephone: (415) 552-6500

Attorney for Petitioner

RUSSELL W. MATTHEWS

IN THE SUPREME COURT OF THE

UNITED STATES

Term,

NO.

RUSSELL W. MATTHEWS,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RICHARD B. MAZER

San Franciscan Penthouse

1231 Market Street

San Francisco, CA 94103

Telephone: (415) 552-6500

Attorney for Petitioner

RUSSELL W. MATTHEWS

* eihe O ty ey nolan 6 Ont Oe tee 6 BL me

'

TABLE OF CONTENTS

TABLE OF AUTHORITIES

OPINION BELOW

JURISDICTION

QUESTIONS PRESENTED FOR REVIEW

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

STATEMENT OF THE CASE

STATEMENT OF THE FACTS

REASONS FOR GRANTING THE WRIT

IN LIGHT OF THE UNDISPUTED

EVIDENCE THAT PETITIONER WAS

NOT PRESENT WHEN RASSMUSSEN

OBTAINED THE MONEY AND THAT

RASSMUSSEN NEVER INFORMED HIM

FROM WHOM HE OBTAINED THE MON-

EY, THERE WAS NO EVIDENCE IN-

TRODUCED THAT PETITIONER'S

PAGE

17

ANSWER WAS ANYTHING OTHER THAN

THE LITERAL TRUTH 17

CONCLUSION 37

-i-

TABLE OF AUTHORITIES

CASES

Bronston vs. United States,

403 U.S. 354, 93 &.Ct. 595, 34

L.Ed.2d 568 (1973)

Gebhard v. United States, 422

F.2d 281, 290 (9th Cir. 1970)

Glasser v. United States, 315

U.S. 60 (1942)

United States v. Bronston, 453

F.2q 555, 559 (2d cir.1973)

United States v. Cash, 522

F.2d 1025 (9th Cir. 1975)

United States v. Cook, 489

F.2d 286, 287 (9th Cir. 1973)

United States v. Kehoe, 562

F.2d 65 (lst Cir. 1977)

United States v. Slawik, 548

F.2d 75, 84 (3rd Cir. 1977)

United States v. Tonelli, 577

F.2d 194 (3rd Cir. 1978)

aiie

PAGE

Ze 8, ai,

23, 31, 37

18

22, 23, 36

30

8, 21, 24

423. 32

21

21, 29

IN THE

SUPREME COURT OF THE UNITED STATES

Term,

NO.

RUSSELL W. MATTHEWS,

Petitioner,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Petitioner, RUSSELL W. MATTHEWS, re-

spectfully prays that a Writ of Certiorari

issue to review the judgment and opinion of

the United States Court of Appeals for the

Ninth Circuit, entered on December 21, 1978.

OPINION BELOW

The Court of Appeals entered its opin-

ion on December 21, 1978. Said opinion

appears herein as Appendix "A". Petitoner's

ale

STATEMENT OF THE CASE

timely Petition for Rehearing and Suggestion

In a three-count indictment filed on

of Appropriateness for Rehearing En Banc

August 25, 1977, Petitioner was charged

was denied by order of court on February l,

with having willfully and knowingly made

1979. A copy of said order appears herein

false declarations to a grand jury and

as Appendix "B".

having made a false, fictitious and frau-

JURISDICTION dulent statement to agents of the Internal

Jurisdiction of this Court is invoked | Revenue Service. More particularly, the

under Title 28, United States Code, Sec- indictment alleged that the grand jury was

tion 1254(1). conducting an investigation into possible

violations of 18 U.S.C. §1962,2’ and that

QUESTIONS PRESENTED FOR REVIEW

it. was material to the aforesaid investiga-

1. Is the Court of Appeals decision

tion for the grand jury to ascertain whether

in the instant case in conflict with the

Or not a Mr. Donald Rassmussen had met with

principles ennunciated by this Court in

a Mr. Matthew Madonna in September of 1973

93 S.Ct. 595, 34 L.Ed.2a 568 (1973)? V/ This statute prohibits the use or invest-

ment of income derived, directly or indirectly,

; from a pattern of racketeering activity in

CONSTITUTIONAL AND STATUTORY the acquisition of any enterprise which is

PROVISIONS INVOLVED ee engaged in interstate commerce.

Bronston vs. United States, 409 U.S. 352,

The constitutional and statutory pro- ie

visions involved in the determination of

the instant case are ‘set forth herein as

Appendix "C".

and from whom Petitioner

had obtained $260,000 in United States cur-

rency.

Count one of the indictment alleged

a violation of 18 U.S.C. §1623 based upon

the following questions and Petitioner's

answers which occurred during his appearance

before the grand jury on or about July 18,

1974:

a

In September '73, did Mr. Madonna

come to San Francisco?

Yes.

Did you meet with him?

Yes.

Do you know where he stayed?

Yes.

Did he stay at the Stanford Court

Hotel?

Stanford Court Hotel.

Did you have a number of conversa-

tions with him at that time?

Yes.

Was Mr. Rassmussen there?

No. Other members of my company

age

and Donald Rassmussen

2/

were there.? (C.T. 5)=

Count Two alleged a second violation

of 18 U.S.C. §1623 which occurred during

Petitioner's grand jury appearance of July 18,

1974, with respect to the following ques-

tions and answers:

"Q. Do you know where Mr. Rasmussen

got that money?

A.; No.* (C.T. 5-6)

Counts One and Two did not, however, speci-

fy in what way Petitioner's statements were

false.

Count Three alleged violation of 18

U.S.C. §1001 in that during October of 1973,

the Internal Revenue Service was conducting

an investigation into possible violations

of federal laws relating to the failure to

file and/or the filing of fraudulent tax

returns and that it was material to the

aforesaid investigation for the Internal

Revenue Service to determine the scurce of

2/ Abbreviation key: "C.T."= Clerk's Trans-

cript on Appeal; "R.T."= Reporter's Trans-

cript on Appeal.

=S=

the $260,000 which had been in the possession

of Petitioner and one Donald Rassmussen. On

or about October 5, 1973, Petitioner allegedly

willfully and knowingly made a false, fictitious

and fraudulent statement as follows:

"Q. Where did you get the currency

you deposited on the 2lst of

September?

A. From Don Rassmussen.

Q. Where did he obtain it?

A. I den't know.” (C.T. 6-7)

The indictment alleged that the above state-

ment was false, fictitious and fraudulent

as Petitioner well knew the currency had

been obtained by Donald Rassmussen from a

Mr. Matthew Madonna.

Petitioner responded to the summons

which he was sent, and on or about October 14,

1977, was arraigned and entered a plea of

not guilty to each count of the indictment

before a United States Magistrate (C.T. 8-9).

On or about November 25, 1977, Petitioner

moved for a dismissal or Count One of the

indictment on the grounds that the questions

=§-

which formed the basis for the offense

alleged therein were vague, ambiguous, and

compound (C.T. 43-45). The government did

not oppose Petitioner's motion to dismiss

Count One of the indictment (C.T. 65-66).

On December 15, 1977, Count One of the in-

dictment was dismissed by the trial court

(C.T. 94). Prior to trial, Petitioner

moved, under the authority of Gebhard v.

United States, 422 F.2d 281, 290 (9th Cir.

1970), that the prosecution be required to

elect to try Petitioner on ainat Count Two

or Three in that the questions and answers

which formed the basis for those counts

were identical (C.T. 137). The trial court

denied Petitioner's motion, but stated that

it would be favorably inclined to grant such

a motion in the event that Petitioner was

convicted on Counts Two and Three by the

jury. Petitioner was tried before a jury on

January 3 and 4, 1978, and was found guilty

on Counts Two and Three of the indictment

Ja

denied Petitioner's motion for a judgment

(C.T. 152). On or about January 9, 1978, ;

of acquittal, but granted the motion for an

Petitoner moved for a judgment of acquittal

election of counts. The government then

on both counts on the grounds that the evi- ;

elected to dismiss Count Three of the in-

dence was insufficient to support Petitioner's :

dictment, and the trial court ordered Count

conviction in that the undisputed evidence

Three dismissed (C.T. 190). On February 23,

at trial showed that Donald Rasmussen had ;

1978, judgment and sentence was imposed on

obtained the $260,000 at a time when Peti- Saha oe

Count Two of the indictment, and Petitioner

tioner was not physically present and that

was sentenced to the custody of the Attorney

neither Rassmussen nor anyone else ever in- ,

General for a period of three years pur-

formed Petitioner of the identity of the ib

suant to 18 U.S.C. §4082(a). Petitioner

person who physically delivered the money < ; ate

was ordered to be confined in a jail-type

to Rassmussen. Thus, Petitioner's answers : :

institution for a period of six months and

were literally true and under the authority ;

it was further ordered that the execution

of Bronston vs. United States, 409 U.S. 352, i

of the remainder of the sentence be suspended

93 S. Ct. 593, 34 L.Ed. 2d 568 (1972) and .

and Petitioner be placed on probation for

United States vs. Cook, 489 F.2d 286 (9th

a period of 2-1/2 years, said probation to

Cir. 1973) his convictions could not stand. ‘ ae ‘

commence upon completion of Petitioner's

Petitioner also renewed his motion to re-

term of confinement (C.T. 175). On or

quire the government to elect between Counts ee :

about February 28, 1978, Petitioner filed

Two and Three of the indictment (C.T. 169- Ae

his Notice of Appeal (C.T. 183). Petitioner

70). On February 23, 1978, the trial court

moved for bail pending appeal, and on or

«Qu

=Qa

about March 7, 1978, the trial court

granted Petitioner's motion and ordered

that he be permitted to remain at liberty

upon his own recognizance during the pen-

dency of the instant appeal.

On December 21, 1978 the Court of

Appeals entered its opinion affirming Pe-

titioner's conviction and on February l,

1979, Petitioner's petition for rehearing

and suggestion of appropriateness of re-

hearing en banc was denied.

STATEMENT OF THE FACTS

During 1973, Grady Hicks, Vernon Norris,

Wayne Thornton, and Robert Debnam formed

a management team which sought to produce

an aseptic canning process based enon the

patents held by a Dr. William Martin (R.T.

27). The management group, howevex, did

not have a source of financing, and during

July or August of 1973, upon the advice of

Robert Debnam, Petitioner became the fifth

-10-

member of the management group, because

he apparently had a potential source of fi-

nancing for the enterprise (R.T. 28). During

the latter part of August, 1973, the five

members of the management group met at Pe-

titioner's residence in Clear Lake, Cali-

fornia, where they were introduced to

Matthew Madonna, the individual who was

Petitioner's potential source of financing

Sor the enterprise?’ (R.T. 29). The manage-

ment group explained the aseptic canning

process to Mr. Madonna and orfered him

51% of the corporation stock in return for

an investment of some $300,000 - $500,000

3/ Petitioner was acquainted with Matthew

Madonna in that during the early part of

1973, petitioner had been employed by

Mr. Madonna to supervise the renovation of

Mr. Madonna's home in the New York City

area.

oli}

(R.T. 30). Mr. Madonna indicated that he

would consider the proposal, discuss it

with his counsel, and would inform the manage-

ment group of his decision at a later time

(R.T. 31). Subsequently, Mr. Madonna

contacted the management group and stated

that he was interested in the proposal and

a meeting was scheduled for September 8,

1973 to discuss the matter in further de-

tail. At the September 8, 1973 meeting,

which Mr. Madonna attended along with an

attorney and an accountant, Mr. Madonna

agreed to invest $250.000 in the enterprise

in return for a 2/3 stock interest in the

corporation (R.T. 31). At that meeting,

Mr. Madonna also indicated that although he

could not guarantee that he could provide

additional funds for the corporation, he

asked for the right of first refusal. Mr.

Madonna stated that he would inform Peti-

tioner of when the $250,000 would be avail-

able (R.T. 33). Approximately a week to

-12-

ten days after the September 8, 1973 meet-

ing, Petitioner informed Grady Hicks that

he was going to New York to obtain the funds

from Mr. Madonna (R.T. 36). On or about

September 20, 1973, Petitioner and one

Donald R. Rassmussen flew from San Francisco

to New York City, where they registered in

the Alrae Hotel (R.T. 75). The following

day, Petitioner visited with a number of

individuals with whom he was acquainted

in the New York City area, and upon his re-

turn to the hotel, was shown an attache case

by Rassmussen containing a large sum of

money in United States currency (R.T. 76).

Petitioner testified before the grand jury

that he did not know, and that Rasmussen

never informed him, where Rassmussen had

obtained the money (R.T. 81, 91). Rassmussen

and Petitioner divided up the money, and

Petitioner carried approximately $160,000,

and Rassmussen carried the remainder, ap-

proximately $100,000, when they returned to the

-13-

San Francisco Bay Area late on September 21, 1973. On

the advice of John Dougherty, a tax preparer

and accountant, who Petitioner and Rassmussen

had previously consulted concerning the open-

ing of an offshore trust and corporation in

the New Hebrides, Petitioner and Rassmussen

deposited the money in a Wells Fargo Bank

under Rassmussen's name for a bank-to-bank

transfer to the New Hebrides (R.T. 111-116) .4/

4/ During July or August, 1973, Petitioner

sought the advice of Steven Keeler, an of-

ficer of the Bank of the Orient, who handled

Martin Technologies accounts concerning the

feasibility of transferring funds from the

United States to a foreign bank account and

then bringing the funds back into the United

States (R.T. 188-189). According to Keeler,

Petitioner stated this procedure was neces-

sary to "clean up" the funds of an unnamed

prospective investor in MTI, because the in-

vestor had not paid taxes on the money.

Therefore, the funds had to be handled in

such a way so that the investor could not be

traced as the source of the funds (R.T. 189).

Keeler informed Petitioner that there was no

way in which this could be legally done.

Later, sometime in September, 1973, Petitioner

informed Keeler that the Wells Fargo Bank

could handle the transfer of the funds in a

manner which would accomplish the objectives

in appellant's initial conversation with

Keeler (R.T. 192). In a subsequent conver-

sation, Petitioner informed Keeler that

"they had been caught with the money" and

that the money "was Mr. Madonna's money"

(R.T. 193-194).

-14-

Rassmussen, Petitioner, and Petitioner's

son then flew to the New Hebrides to await

the arrival of the money to fund the New

Hebridean trust and corporation which

Dougherty had set up (R.T. 117). The money,

however, never arrived, because agents of

the Internal Revenue Service terminated

Rassmussen's taxable year and seized the

funds before the money left the Wells Fargo

Bank (R.T. 213-214). Petitioner and Rass-

mussen returned to the United States, where

they were questioned by agents of the Inter-

nal Revenue Service. Thereafter, Petitioner

was extremely nervous and indicated to mem-

bers of the management group that he was

fearful of his own legal liability, and also

believed that Mr. Madonna was going to hoid

him personally responsible for the loss of

the money (R.T. 39-40). Petitioner further

indicated to members of the management group

that he was seeking sources to replace the

seized funds, and that in connection with

-15-

this, he had contacted an old family friend,

Dorothy Smalley, who was willing to loan

Mr. Madonna money so that Mr. Madonna could

meet his commitment to fund Martin Tecno-

logies, Inc. ("MTI")(R.T. 39-40). Subse-

quent to the seizure, Mr. Madonna, who re-

sided in the New York City area, flew to

the Bay Area to attend the regular business

meetings of MTI. On numerous occasions,

members of the management group overheard

Mr. Madonna and Petitioner discuss the

seized funds. According to the members of

the management group, Mr. Madonna repeatedly

chastized Petitioner for having "lost"

Mr. Madonna's money (R.T. 45). Mr. Madonna

also instructed Petitioner to attempt to

retrieve from Rassmussen those portions of

the funds which the Internal Revenue Service

had released to Rassmussen (R.T. 157-158).

Petitioner was overheard informing Mr.

Madonna that Rassmussen intended to keep

all of the money and according to members

=16-

of the management group, this made Mr. Madonna

furious (R.T. 159-160). After Petitioner

received a subpoena ordering him to appear

before the grand jury, members of the manage-

ment group overheard Mr. Madonna tell Pe-

titioner not to tell the grand jury anything

(R.T. 48). When Petitioner stated that he

couldn't jeopardize himself by refusing to

answer the grand jury's questions, members

of the management group overheard Petitioner

and Mr. ihednsinn discuss "a consistency of

statements if any statements were made"

(R.T. 48-49). When Petitioner returned

from his grand jury appearance in July of

1974, he informed members of the management

group that he had testified truthfully be-

fore the grand jury but that the grand jury

had not asked him "a lot of questions which

might have been material" (R.T. 61).

REASONS FOR GRANTING THE WRIT

IN LIGHT OF THE UNDISPUTED EVIDENCE

THAT PETITIONER WAS NOT PRESENT WHEN

-17-

-RASSMUSSEN. OBTAINED THE MONEY

AND THAT RASSMUSSEN NEVER INFORMED

HIM FROM WHOM HE OBTAINED THE MONEY,

THERE WAS NO EVIDENCE INTRODUCED

THAT PETITIONER'S ANSWER WAS ANY-

THING OTHER THAN THE LITERAL TRUTH

Count Two of the indictment in the

instant case reads as follows:

"On or about July 18, 1974, the de-

fendant, Russell W. Matthews, appear-

ing as a witness under oath before

said grand jury, did willfully and

knowingly testify falsely with re-

spect to the aforesaid matters as

follows:

Q. Do you know where Mr. Rassmussen

got that money?

A. No.”

The evidence at trial, taken in the

light most favorable to the government ,>/

as it relates to this issue, was that Pe-

titioner and Donald Rassmussen flew to

New York where they registered in the Alrae

Hotel. The following day, Petitioner re-

turned to the room where Rassmussen showed

him an attache case containing $260,000

3/

=’ Glasser v. United States, 315 U.S. 60 (1942).

-18-

in currency (R.T. 76). Petitioner did not

ask, nor did Rassmussen volunteer, the iden-

tity of the person who had given Rassmussen

the attache case (R.T. 81).

Petitioner's contention herein, as it

consistantly has been throughout the course

of the case is that in light of the above

undisputed facts, the question which formed

the basis for Count Two was reasonably sus-

ceptible to two interpretations. It could

be construed as meaning "do you know the

identity of the person who has a proprie-

tary interest in the money?": The question

could equally reasonably be construed as

meaning "do you know the identity of the

person who delivered the money to Rassmussen?".

Because the question was ambiguous in the

light of the undisputed evidence that Pe-

titioner was not present when the money

was delivered to Rassmussen and that

Rassmussen never informed Petitioner of the

identity of the person who delivered the

-19-

money to him, the government failed to

prove that Petitioner's answer was anything

other than the literal truth. This is so

because while Petitioner may have under-

stood that the government's questioner

sought answers about Matthew Madonna's

ownership interest in the money, Petitioner

may also have realized that the question

could fairly be interpreted as calling for

information about the identity of the per-

son who delivered the money to Rassmussen.

Petitioner might have chosen, therefore, to

answer unresponsively to the questioner's

intent (i.e. Mr. Madonna's ownership inter-

est in the money), yet as to the identity

of the person who delivered the money to

Rassmussen, truthfully. Under this eminently

reasonable view of the facts, the prosecu-

tion failed to prove that Petitioner's

answer was anything other than the literal

truth, regardless of whether it may have

been unresponsive to the question and deli-

-20=

berately misleading by negative implication.

It is well established that a witness may

not be convicted of perjury for an answer

which is literally true, even though the

answer is unresponsive to the question and

is misleading. Bronston v. United States,

40% U.S. 352, 93 S.Ct. 595, 34 L.Ed.2d 568

(1972); United States v. Cook, 489 F.2d

286, 287 (9th Cir. 1973); United States v.

Kehoe, 562 F.2d 65 (lst Cir. 1977); United

States v. Slawik, 548 F.2d 75, 84 (3rd Cir.

1977) .o/

In Bronston, the defendant was the sole

owner of a motion picture production com-

pany, which petitioned for an arrangement

with creditors under Ch. XI of the Bankruptcy

Act. At the hearing to determine the nature

and location of the company's assets, the

following questions were asked of Bronston

/ Appellant did not concede at trial that

his answer was intended to deceive his inter-

rogator (R.T. 256).,. He retains this posi-

tion before this Court.

«2i=

and answers given by him:

"90. Do you have any bank accounts in

Swiss Banks, Mr. Bronston?

A. No, Sir.

Q. Have you ever?

A. The company had an account there

for about six months, in Zurich."

409 U.S. at 354.

As a matter of fact, Bronston did at one

time have a personal Swiss bank account,

but no longer maintained the account as of

the time of his testimony (409 U.S. at

354-355). On the basis of his answer to

the second question, Bronston was success-~

fully prosecuted for perjury. The Court of

Appeals for the Second Circuit affirmed his

conviction upon the theory that "for the

purposes of 18 U.S.C. §1621, an answer con-

taining half of the truth which also con-

stitutes a lie by negative implication,

when the answer is intentionally given in

place of the responsive answer called for

by a proper question, is perjury." United

~32-

States v. Bronston, 453 F.2d 555, 559

(2d Cir. 1973). In reversing Bronston's

conviction, er Court held that:

"The cases support petitioner's posi-

tion that the perjury statute is not

to be loosely construed, nor the

statute invoked simply because a wily

witness succeeds in derailing the

questioner - so long as the witness

speaks the literal truth. The bur-

den is on the questioner to pin the

witness down to the specific ob-

ject of the questioner's inquiry."

Bronston v. United States, supra,

409 U.S. at 360.

The Court specifically stated that the re-

medy for evasive and misleading, yet truth-

ful answers lies not in a perjury prosecu-

tion, but in increased acuity in the exa-

miner's questions.

"It may well be that petitioner's

answers were not guileless but were

shrewdly calculated to evade. Never-

theless, we are constrained to agree

with Judge Lumbard, who dissented

from the judgment of the of the Court

of Appeals, that any special problems

arising to be remedied through the

"questioner's acuity' and not by a

federal perjury prosecution." Id.,

409 U.S. at 362.

=-23<

Bronston was held by this Circuit to

be controlling in the United States v. Cook,

supra. In Cook, the defendant was indicted

for perjury for having given false testi-

money in his answers to the following ques-

tions, asked during a grand jury investi-

gation into gambling and racketeering acti-

vities in Seattle, Washington:

"Q. Do you have any knowledge of law

enforcement officers being paid

by operators of gambling esta-

blishments?

A. No, I do not.

Q. You don't have any knowledge of

anybody currently on the force

who participated in shakedowns?

A. I do not.”

Cook's conviction was initially upheld by

a panel of this Court with Judge Ely dis-

senting. United States v. Cook, 497 F.2d

753 (9th Cir. 1972). In his dissent, Judge

Ely argued:

"I do not think it proper to indict and

prosecute an individual for perjury

when the questions forming the basis

for the charge are so vaguely and in-

-24-

articulately phrased by the inter-

rogator as to require the jury to

probe the inner workings of the ac-

cused's mind to seek to ascertain

which of several plausible meanings

he attributed to the ambiguous in-

quiries when he gave the allegedly

perjurious responses." United States

v. Cook, supra, 497 F.2d at 773.

Shortly after the opinion in Cook was

issued, the Supreme Court handed down its

decision in Bronston. This Court of Appeals for

the Ninth Circuit recalled its decision and remanded

the case to the District Court for consideration in the

light of Bronston. The District Court did

not disturb its original judgment of con-

viction, and Cook again appealed. This

time, the Court of Appeals for the Ninth

Circuit reversed and held as follows:

“After a careful analysis, we are

unable to draw a meaningful distinc-

tion between the response to the ill

phrased question before us, and the

unresponsive answer to the question

in Bronston. Fairly interpreted,

Bronston stands for the precept that

a perjury conviction cannot be based

on answers which are literally true,

even though false information is con-

veyed by implication." United States

vs. Cook, supra, 489 F.2 6, 28

(9th Cir. 193),

-25@

In the instant case, the govern-

ment devoted all its prosecutorial efforts

to attempt to prove that Petitioner know-

ingly lied in response to the question be-

cause Petitioner knew that the money was

the property of Matthew Madonna and that

Petitioner was aware of that fact when testi-

fying before the grand jury in July, 1974.

To this end, the government produced testi-

mony which sought to prove that the money

which was in question was the property of

Matthew Madonna; that Madonna wanted to hide

his ownership interest in the funds because

he (Madonna) had not paid tax on the money;

that Petitioner and Rassmussen had placed

the money into a Wells Fargo Bank account

in Rassmussen's name for transfer to a bank

in the New Hebrides where a trust and cor-

poration would be established and funded

with the money; that the trust would make

a loan to the New Hebridean corporation

which in turn would loan the money to MTI,

@26-

thus shielding Mr. Madonna's ownership in-

terest in the money; that after the money

had been seized by agents of the Internal

Revenue Service and Petitioner subpoenaed

to appear before a federal grand jury,

Madonna and Petitioner had discussed keeping

Madonna's ownership interest secret; and

therefore when asked the question which

formed the basis for Count Two of the in-

dictment, Petitioner had knowingly lied when

he answered "no" because he well knew the

money was the property of Matthew Madonna.

Petitioner does not contend that the evi-

dence is insufficient to prove these facts.

However, Petitioner's testimony that

he was not present when Rassmussen obtained

the money, and that Rassmussen never informed

him of the identitiy of the person who de-

livered the money to Rassmussen, was undis-

puted. During closing argument, the prose-

cution conceded this fact (R.T. 250). This

o27=

being so, there simply is no evidence that

Petitioner's answer to the question "(D)o

you know where Mr. Rassmussen got that

money" was anything other than the literal

truth (i.e., he did not know the identity

of the person who physically delivered the

money to Rassmussen). The money could

have been delivered by Madonna; it could also

have been delivered by a courier whose iden-

tity was unknown to Petitioner. In any

event, because the undisputed evidence

showed Petitioner was not present when

Rassmussen obtained the money, and that

Rassmussen never informed him of the iden-

tity of the person who pad inewes the money

to him, the government failed to prove Pe-

titioner's answer was a falsehood.

The problem stemmed from the fact that'

the question, in light of the evidence, was

ambiguous. Yet, the prosecutor never pressed

for an answer which was unequivocal. In

-28-

holding that an answer which is literally

true does not constitute an offense under

18 U.S.C. §1623, even if the answer is de-

liberately misleading, the Third Circuit

put its finger on the defect in the instant

case:

",..if the prosecutor never asks the

critical question and never presses for

an unequivocal answer, the defendant

may not be convicted of false swear-

ing." United States v. Slawik, supra,

548 F.2d at 84. See also United States

v. Tonelli, 577 F.2d 194 (3rd Cir.

1978).

Thus, even accepting the prosecution's

theory of the case, the prosecutor failed

to ask the critical question (i.e., he did

not ask Petitioner whether he knew that

the money was the property of Matthew

Madonna). Petitioner may have understood

quite clearly that the government's interro-

gator wanted answers about Madonna's pro-

prietary interest in the money. But Pe-

titioner may also have realized that the

question could fairly be interpreted as

-29-

asking for information about the identity

of the person who delivered the money to

Rassmussen. He might have chosen, there-

fore, to answer unresponsively, yet as to

the identity of the person who delivered

the money to Rassmussen, truthfully. Taking

this very plausible view of the facts, the

prosecution did not prove, beyond a reason-

able doubt or otherwise, that Petitioner's

answers were knowing falsehoods, an essen-

tial element of 18 U.S.C. §1623.

The Court of Appeals ruled that the

instant case was controlled by its decision

in United States v. Cash, 522 F.2d 1025

(9th Cir. 1975) not by the Bronston and Cook

rationale. In Cash a divided panel upheld

a §1623 conviction against the contention

that the question upon which the indictment

was based was subject to two interpretations.

Because the government had not introduced

any evidence to establish that under one

=30-

interpretation the answer was false, Cash

argued that his case was controlled by

Bronston v. United States, supra, and

United States v. Cook, supra. Judges

Wallace and Voorhees approached the issue

from the standpoint of inquiring whether

the evidence established that Cash knew the

question called for the interpretation

which the government had proven was false.

922 F.2d at 1028-1029. If so, then he was

guilty of false swearing.

Judge Ely dissented on the grounds that

the majority opinion "cannot be reconciled

with the teachings of Bronston v. United

States, [citations omitted] and United States

v. Cook," [citations omitted]. 522 F.2d

at 1030-1031.2/

y/ Judge Ely wrote the dissent in the first

Cook decision. 497 F.2d at 762. In reversing

itself, the court in the second Cook opin-

ion acknowledged that it was adopting the

reasoning set forth in Judge Ely's dissent.

489 F.2d at 287.

=3l-

Petitioner adopts the reasoning of Judge The Government's evidence against

Ely's opinion and because the undersigned Matthews proved only that he knew the

cannot improve upon the language used there- identity of the person who had the

in, will simply paraphrase it to conform proprietary interest in the money which

to the facts of the instant case. Rassmussen received. I have searched

"Before a grand jury, Matthews was the record in vain for any proof what-

asked whether he knew where a certain soever that Matthews knew the identity

of the person who delivered the money

8/

to Rassmussen.— Since Matthews could

Rassmussen had gotten a sum of money.

Matthews responded that he did not.

It is beyond doubt that the question reasonably have interpreted the ques-

asked of Matthews was fairly suscep-

tible of two interpretations. The

question can be read as inquiring as

to whether Matthews knew the identity

of the person who had the proprietary

interest in the money which Rassmussen

had received, but it also could be

interpreted as asking as to whether

Matthews knew the identity of the per-

8/

tion as being an inquiry about the

identity of the person who delivered

the money to Rassmussen, and since the

Government offered no proof that

Matthew's answers, as they related to

the identity of the person who deli-

vered the money to Rassmussen, were

false, the judgment of conviction should

he reversed.

son who had delivered the money to — In the instant case the prosecutcr admit-

ted during closing argument that there was

no evidence as to the identity of the person

who delivered the money to Rassmussen (R.T. 250).

Rassmussen.

=32@ -33-

After reviewing the transcript

of the trial proceedings, however,

the court has concluded that Matthews

knew that the prosecutor was asking

about the person who had the proprie-

tary interest in the money. On this

basis, the court assumes that Matthew's

answer related to the person who had

the proprietary interest in the money

and concludes, therefore, that Matthews

committed perjury. I submit that the

court's logic is flawed.

Matthews may have understood quite

clearly that the Government's interro-

gator wanted answers about the identity

of the person who had the proprietary

interest in the money. But Matthews

may also have realized that the ques-

tions could fairly be interpreted as

asked for information about the iden-

tity of the person who delivered the

o3g<

money to Rassmussen. He might have

chosen, therefore, to answer unres-

ponsively, yet as to the identity of

the person who delivered the money to

Rassmussen, truthfully. Taking this

very plausible view of the facts, the

prosecution did not prove, beyond a

reasonable doubt or otherwise, that

Matthew's answer was a knowing false-

hood, an essential element of the

alleged crime. See 18 U.S.C. §1623

("whoever...knowingly makes any false

material declaration...shall be fined

..-Or imprisoned.")

In Bronston, the Supreme Court

expressly noted that the answer for

which Bronston was prosecuted might

not have been "guileless" and that,

in fact, the answer might have been

"shrewdly calculated to evade." 409

0.8. at 362, $3 3.Ct. 535. Yet the

~35—-

¢

Court reversed Bronston's conviction

because the Government had not proved

his answer to have been knowingly false.

Like the panel had done here, the

Second Circuit had examined the trans-

cript of Bronston's trial and affirmed

his conviction after concluding that

he fully understood that his examiner

was questioning him about his personal

bank accounts, not those of his cor-

poration. United States v. Bronston,

453 F.2d 555, 558 (2d Cir.), rev'd,

409 U.S. 352, 93 S.Ct. 595, 34 L.Ed.2d

568 (1973)."

-36-

CONCLUSION

The Court of Appeals' decision is in

conflict with this Court's decision in

Bronston v. United States, supra, and a

Writ of Certiorari should therefore issue.

DATED:

Respectfully submitted,

RICHARD B. MAZER

San Franciscan Penthouse

1231 Market Street

San Francisco, CA 94103

Telephone: (415) 552-6500

Attorney for Petitioner

RUSSELL W. MATTHEWS

(Appendices Follow)

=37=

APPENDICES

"A" =- Opinion of the United States

7a

ao

of Appeals for the Ninth Circuit,

dated December 21, 1978

Order of the United States Court

of Appeals for the Ninth Circuit,

denying Appellant's Petition for

Rehearing and Suggestion of Ap-

propriateness for Rehearing En Banc,

dated: February 1, 1979

Constitutional and Statutory

Provisions relied upon

ee ok

FILED December 21, 1978

APPENDIX "A"

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA, )

Plaintiff-Appellee, No. 78-1488

-Vs- OPINION

RUSSELL W. MATTHEWS, )

)

Defendant-Appellant.

)

On Appeal from the United States District

Court for the Northern

District of California

Before: MERRILL and SNEED, Circuit Judges,

and LINDBERG,* District Judge

MERRILL, Circuit Judge:

Matthews appeals his conviction of

willfully and knowingly answering a question

falsely before a grand jury in violation of

18 U.S.C. §1623. He argues that the ques-

tion was susceptible of two interpretations

under one of which his answer was not proved

to be false.

* “Honorable William J. Lindberg, Senior

United States District Judge of the Eastern

District of Washington, sitting by designation.

A-1

The grand jury was investigating whether

money derived from racketeering activities

had been invested in enterprises engaged in

interstate commerce. Appellant was questioned

about $260,000 in cash that he and one Rass-

mussen had brought from New York to Cali-

fornia. Appellant testified that he had

obtained the money carried by him from Rass-

mussen. The following question and answer

form the basis for the charge of perjury:

"Q. Do you know where Mr. Rassmussen

got that money?

i 2."

In support of its charge that Appellant

knowingly and willfully lied, the government

presented evidence to the following effect:

In 1973 appellant had been employed by

one Madonna and had begun to look for an

enterprise in which Madonna could invest

between $200,000 and $300,000. Later that

year he undertook to obtain capital for a

group of promoters which was organizing a

corporation for the purpose of manufacturing

food processing machinery. In September of

that year he arranged for Madonna to come

to California and meet with the promoters.

Madonna agreed to invest $250,000 for a

two-thirds interest in the corporation. Ten

days later appellant told one of the promo-

ters he was going to New York to get the

money from Madonna. On September 18 he

flew to New York with Rassmussen. On Sep-

tember 20 Rassmussen showed appellant a

briefcase containing $260,000 in $100 bills.

The two returned to California with the money.

Prior to leaving California for New York

appellant and Rassmussen inquired of officers

A-2 |

of two different banks as to whether large

sums of money could be transferred to New

Hebrides so that the source of the funds

could not be traced when they were later

returned to the United States. When the

money was brought to California it was

deposited in bank accounts in Rassmussen's

name, and appellant and Rassmussen then flew

to New Hebrides to await its arrival. It

was, however, seized in the United States

by the Internal Revenue Service.

The government asserts that in the

light of all circumstances it must have

been clear to appellant that the question

in issue sought to ascertain the source of

the money. Other portions of appellant's

testimony before the grand jury support

the government's position.

"Q. Did [Rassmussen] say who he was

going to get [the money] from?

A. No***,

Q. You don't know whether it was a

legitimate source or illegitimate

source?

A. No**®,

Q. From whom did [Rassmussen] propose

to arrange the financing?

A. I don't know. The loan was to come

from him.

Q. Did he make any reference as to

the source?

a. We."

Appellant, on the other hand, contends

that the question that he is charged with

answering falsely can be construed as an

inquiry as to the person from whom Rassmussen

physically received the money. Appellant

contends that since the question could be

construed in this fashion, and since the

government has presented no evidence that the

question so construed was answered falsely,

he must, as matter of law, be acquitted

under Bronston v. United States, 409 U.S.

352 (1973), followed by this court in United

States v. Cook, 489 F.2d 286 (9th Cir. 1973).

We disagree.

In Bronston the answer given was per-

fectly true, but it was unresponsive to the

question asked. The testimony was: "Q. Do

you have any bank accounts in Swiss banks

Mr. Bronston? A. No, sir. Q. Have you

ever? A. The company had an account there

for about six months in Zurich." Bronston

actually had had a Swiss bank account at

one time in the past and the government con-

tended that the unresponsive answer was

false by implication. The Supreme Court

rejected this, stating:

"(T]he perjury statute is not to be

loosely construed, nor the statute

invoked simply because a wily witness

succeeds in derailing the questioner--

so long as the witness speaks the literal

truth. The burden is on the questioner

to pin the witness down to the speci-

fic object cf the questioner's inquiry."

409 U.S. at 360. |

This holding, however, is of no assis~

tance here. The answer here was not unre-

sponsive. It was a forthright "no." It

A-4

was not, as in Bronston, a statement of

fact the truth of which could be ascertained

without reference to the question that eli-

cited it.l Here the answer cannot be sepa-

rated from the question if the truth of the

answer is to be determined. If the "no" is

to have meaning it must be read to echo and

negate the language of the question itself:

"I do not know where Mr. Rassmussen got the

money." The problem presented here, which

was not presented in Bronston, is that the

question asked of appellant is asserted to

be subject to two different meanings.

If language in which a question is

couched is plausibly subject to two inter-

pretations, that language contains within

it two different questions. Appellant con-

tends, relying upon United States v. Cook,

supra, that under these circumstances, if the

answer is to be proved false it must be

proved false as to both questions. He con-

tends that since it was not proved false

under the interpretations he advances (i.e.,

Since it has not been proved that he knew

who had physically delivered the money to

Rassmussen), he has not been proved guilty

of perjury.2

* Had appellant wished to "derail the ques-

tioner," as in Bronston, he should have an-

swered the question, "I do not know who ac-

tually handed him the money."

‘ This assumes that the interpretation ad-

vanced by appeilant is a plausible one. As

we note later, this is a question upon which

we entertain great doubt.

A-5

In United States v. Cash, 522 F.2d

1025 (9th Cir. 1973), this court approached

the problem from a different angle. There

it was held that the critical inquiry is

as to the meaning attached to the question

by the accused. We stated:

"In the instant case the questions

asked of the appellant before the grand

jury raise this problem: Did appellant

understand the word 'seller' in the

questions asked of him before the grand

jury to mean ‘Jack Bishop' (the purported

seller) or did he understand the word

‘seller' in those questions to mean

the individual, unknown to him, who

was the actual seller of the Postal

Service Bonds? If appellant construed

the word 'seller' to mean Jack Bishop,

his conviction must be affirmed. ‘If

he construed the word 'seller' to mean

that individual who was the actual seller

of the bonds, then his conviction must

be reversed."

522 F.2d at 1028-29: We concluded:

"A careful reading of the record

has convinced us beyond any doubt that

appellant knew that he was being asked

about his knowledge of Jack Bishop when

he was being questioned before the

grand jury and that the word 'seller'

in the questions was understood by

him to mean Jack Bishop."

Id. at 1029. We held that it was proper

under these circumstances to give the issue

to the jury. The result is to place on the

prosecution the burden of proving beyond a

reasonable doubt that the defendant under-

stood the question as did the government and

A-6

that, so understood, the defendant's answer

was false.

In Cash we took note of our earlier

decision in United States v. Cook, supra,

in which this court overturned a jury guilty

verdict and ruled as matter of law that the

government had failed to make out a case of

perjury. While a distinction was not ex-

pressly drawn, we appeared, in Cash, to

distinguish Cook on the facts. The history

of Cook casts light on the scope of its

holding. The questions there asked of Cook

were:

"Q. Do you have any knowledge of law

enforcement officers being paid

by operators of gambling estab-

lishments?

A. No I do not.

Q. You don't have any knowledge of

anybody currently on the force who

participated in shakedowns?

Aw F @ noe.”

The record established that kickbacks to

police officers had ceased two years before

Cook was questioned. Cook contended that

the questions were directed to the present

and that so understood his answers were

truthful. The government contended that

the questions referred to present or past

and that, as to the past, the answers were

false. The Cook panel originally affirmed

the conviction, with Judge Ely dissenting.

497 F.2d 753 (1972). After the decision in

Bronston came down, the court reconsidered

its decision and reversed itself. 489 F.2d

286 (1973). Reading the final opinion in

A-7

the light of Judge Ely's dissent in the

original opinion, 497 F.2d at 767, it is

clear that the court felt that a gramma-

tical analysis of the questions asked of

Cook made impossible any construction other

than that advanced by Cook - that the ques-

tions referred to the present only. There

was not, then, evidence from which the jury

could find the defendant guilty beyond a

reasonable doubt, and it was proper for

this court, as matter of law, to find that

the prosecution had failed to meet its bur-

den and that the defendant was entitled to

acquittal.

The case before us is a Cash case rather

than a Cook case. Here, as in Cash,the

government's construction of the question

was plausible and a jury issue was presented

as to the defendant's understanding of the

question. There is ample evidence from

which the jury could conclude beyond a rea-

sonable doubt that appellant understood the

question asked of him as pursuing the same

inquiry into the source that was explicitly

made the subject of other questions asked

in the course of the same interrogation.

Indeed, we do not see how the question could

rationally be given any other meaning. We

conclude that appellant was not entitled to

an acquittal as matter of law; that the

question of guilt remained one for the jury.

Affirmed.

FILED February l, 1979

APPENDIX "B"

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee, No. 78-1488

eee eee ee ee

RUSSELL W. MATTHEWS, )

Defendant-Appellant.)

)

Before: MERRILL and SNEED, Circuit Judges,

and LINDBERG, District Judge

The panel as constituted in ,the above

case has voted to deny the petition for

rehearing. Judge Sneed has voted to reject

the suggestion for rehearing en banc and

Judges Merrill and Lindberg have recommended

such rejection.

The full court has been advised of the

suggestion for an en banc hearing, and no

judge of the court has requested a vote on

the suggestion for rehearing en banc. Fed.

R.App.P. 35(b).

The petition for rehearing is denied

and the suggestion for a rehearing en banc

is rejected.

APPENDIX "C"

CONSTITUTIONAL AND STATUTORY

PROVISIONS

18 U.S.C. §1623. False declarations before

grand jury or court

(a) Whoever under oath (or in any

declaration, certificate, verification, or

statement under penalty of perjury as per-

mitted under section 1746 of title 28, United

States Code) in any proceeding before or

ancillary to any court or grand jury of the

United States knowingly makes any false ma-

terial declaration or makes or uses any other

information, including any book, paper,

document, record, recording, or other ma-

terial, knowing the same to contain any

false material declaration, shall be fined

not more than $10,000 or imprisoned not

more than five years, or both.

(b) This section is applicable whether

the conduct occurred within or without the

United States.

(c) An indictment or information for

violation of this section alleging that,

in any proceedings before or ancillary to any

court or grand jury of the United States, the

defendant under oath has knowingly made two

or more declarations, which are inconsistent

to the degree that one of them is necessarily

false, need not specify which declaration

is false if--

(1) each declaration was material

to the point in question, and

(2) each declaration was made

within the period of the statute

of limitations for the offense

charged under this section.

1

In any prosecution under this section,

the falsity of a declaration set forth in

the indictment or information shall be esta-

blished sufficient for conviction by proof

that the defendant while under oath made

irreconcilably contradictory declarations

material to the point in question in any

proceeding before or ancillary to any court

or grand jury. It shall be a defense to an

indictment or information made pursuant to

the first sentence of this subsection that

the defendant at the time he made each de-

claration believed the declaration was true.

(a) Where, in the same continuous

court or grand jury proceeding in which a

declaration is made, the person making the

declaration admits such declaration to be

CERTIFICATE OF SERVICE

I, RICHARD B. MAZER, certify

as follows:

My business address is 1231 Market

Street, San Franciscan Penthouse, San

Francisco, California.

On February 28, 1979, I served the

within Petition for Writ of Certiorari

false, such admission shall bar prosecution

under this section if, at the time the ad-

mission is made, the declaration has not sub- sealed envelope with postage thereo

stantially affected the proceeding, or it " id cucdienortes

has not become manifest that such falsity prepaid, in the United States mail at

has been or will be exposed.

by placing three true copies thereof in a

(e) Proof beyond a reasonable doubt San Francisco, California, addressed as

under this section is sufficient for con-

viction. t shall not be necessary that such follows:

proof be made by any particular number of wit-

nesses or by documentary or other type of SOLICITOR GENERAL

evidence. Department of Justice

Washington, D.C. 20530

2 I declare under penalty of perjury

that the foregoing is true and correct,

and that this declaration was executed

on February 26, 1979 at San Francisco,

California.

RICHARD B. MAZER