Opposition Brief — Neder v. United States

~ | FILED -

SEP 1 4 1998

No. 97-1985

Jn the Supreme Court of th

OCTOBER TERM, 1997

a

ww * ww — 7 7 a>) mal!

ELLIS E. NEDER, JR., PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES

SETH P. WAXMAN

Solicitor General

Counsel of Record

JAMES K. ROBINSON

Assistant Attorney General

LOUIS M. FISCHER

Attorney -

Department of Justice

Washington, D.C . 20530-0001

(202) 514-2217

QUESTIONS PRESENTED

1. Whether materiality is an element of mail fraud

(18 U.S.C. 1341), wire fraud (18 U.S.C. 1343), and bank

fraud (18 U.S.C. 1344).

2. Whether the trial court’s failure to instruct the

jury on the materiality element of the tax charges in

this case was harmless error because materiality was

not in dispute at trial.

TABLE OF CONTENTS

Page

Opinion below 1

Jurisdiction 1

Statement 1

Discussion 6

Conclusion 14

TABLE OF AUTHORITIES

Cases:

Bilzerian v. United States, 127 F.3d 237 (2d Cir.

1997), petition for cert. pending, No. 97-1892 ............ 12, 13

BMW of N. Am., Inc. v. Gore, 517 U.S. 559

(1996) 7

California v. Roy, 519 U.S. 2 (1996) ll

Durland v. United States, 161 U.S. 306 (1896) .......... 7

Gideon v. Wainwright, 372 U.S. 335 (1968) ................ 10-11

Hart v. Stagner, 935 F.2d 1007 (9th Cir. 1991) .......... 12

Johnson v. United States, 117 8. Ct. 1544 (1997) ...... 11

McKaskle v. Wiggins, 465 U.S. 168 (1984) ................. 10

Rogers v. United States, 118 S. Ct. 673 (1998) ........... 12

Rose v. Clark, 478 U.S. 570 (1986) 10

Sullivan v. Louisiana, 508 U.S. 275 (1998) ................ 10, 11

Tumey v. Ohio, 273 U.S. 510 (1927) ll

United States v. Cochran, 109 F.3d 660 (10th

Cir. 1997) ; s

United States v. Coffman, 94 F.3d 330 (7th Cir.

1996), cert. denied, 117 S. Ct. 1425 (1997) .................. 7

United States v. DeF ries, 129 F.3d 1293 (D.C.

Cir. 1997) 13

United States v. DeSantis, 134 F.3d 760 (6th

Cir. 1998) 8-9

United States v. DiRico, 78 F.3d 732 (ist Cir.

1996) 12,13

(IID)

Cases—Continued: Page

United States v. Fern, 117 F.3d 1298 (11th Cir.

1997) 12

United States v. Gaudin, 515 U.S. 506 (1995) ......... 8,9

United States v. Holland, 880 F.2d 1091 (9th

Cir. 1989) 12

United States v. Johnson, 71 F.3d 139 (4th Cir.

1995) 13

United States v. Klausner, 80 F.3d 55 (2d Cir.

1996) 9

United States v. Moser, 123 F.3d 813 (5th Cir.),

cert. denied, 118 S. Ct. 613 (1997) 9

United States v. Nash, 115 F.3d 1431 (9th Cir.

1997), cert. denied, 118 S. Ct. 1054 (1998)... 9

United States v. Pribble, 127 F.3d 583 (7th Cir.

1997), cert. denied, 118 S. Ct. 1056 (1998) .......-...-00-- 9

United-States v. Raether, 82 F.3d 192 (8th Cir.

1996) 12, 13

United States v. Rodriguez, 140 F.3d 163 (2d

Cir. 1998) 8

United States v. Slaughter, 128 F.3d 623 (8th

Cir. 1997) 8

United States v. Wells, 519 U.S. 482 (1997) ........... 5,7,8

Vasquez v. Hillery, 474 U.S. 254 (1986) 10

Waldemar v. United States, 106 F.3d 729 (7th

Cir. 1996) 13

Waller v. Georgia, 467 U.S. 39 (1984) 10

Yates v. Evatt, 500 U.S. 391 (1991) 6

Statutes:

Racketeer Influenced and Corrupt Organizations

Act, 18 U.S.C. 1961 et seq. 9

18 U.S.C. 1962(c) 1

18 U.S.C. 1962(d) 2

Statutes—Continued:

18 U.S.C. 371

Page

2

18 U.S.C. 1014

18 U.S.C, 1341

18 U.S.C. 1343

18 U.S.C. 1344

26 U.S.C. 7206

26 U.S.C. 720601)

Miscellaneous:

2,5

2, 5, 6, 7,8, 9, 10

2, 5, 6, 7,8, 10

2, 6, 7, 8, 9, 10

11,12

2, 6, 9, 10, 12

1 J. Story, Commentaries on Equity Jurispru-

dence (13th ed. 1886)

Restatement (Second) of Torts (1977)

In the Supreme Court of the United States

OCTOBER TERM, 1997

No. 97-1985

ELLIS E. NEDER, JR., PETITIONER

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES

OPINION BELOW

The opinion of the court of appeals (Pet. App. la-13a)

is reported at 136 F.3d 1459.

JURISDICTION

The judgment of the court of appeals was entered on

March 19, 1998. The petition for a writ of certiorari was

filed on June 9, 1998. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATEMENT

After a jury trial in the United States District Court

for the Middle District of Florida, petitioner was con-

victed on one count of conducting the affairs of an

enterprise through a pattern of racketeering activity

(18 U.S.C. 1962(c)); one count of conspiring to commit

(1)

2

that offense (18 U.S.C. 1962(d)); one count of conspiring

to defraud a financial institution (18 U.S.C. 371); 12

counts of bank fraud (18 U.S.C. 1344); nine counts of

mail fraud (18 U.S.C. 1341); nine counts of wire fraud

(18 U.S.C. 1343); 37 counts of making false statements

to a financial institution (18 U.S.C. 1014); and two

counts of filing false income tax returns (26 U.S.C.

7206(1)). He was sentenced to 147 months’ imprison-

ment, to be followed by five years’ supervised release,

and was ordered to pay approximately $25 million in

restitution. Pet. App. 14a-20a. The court of appeals

affirmed. Jd. at la-13a.

1. Between August 1984 and November 1986, peti-

tioner purchased land using shell corporations. Peti-

tioner then resold the land at much higher prices to

limited partnerships that he controlled. Petitioner used

bank loans to finance the resales. Because the loans

typically amounted to 70% of the inflated price, the loan

proceeds substantially exceeded the original cost of the

land to petitioner’s shell corporations. Petitioner made

numerous false statements in order to conceal from

lenders that he controlled the shell corporations that

had first bought the land and that he had engaged in a

scheme to inflate the apparent value of the land. The

lenders would not have made the loans in question had

petitioner not made false statements to conceal his

scheme. Gov’t C.A. Br. 3-7.

After each transaction, petitioner deposited to his

personal account a check reflecting the amount by

which the loan proceeds exceeded the original purchase

price of the land. In that way, petitioner obtained more

than $7 million. Petitioner made only $75,000 in pay-

ments before defaulting on all of the loans, which

totaled approximately $17 million. Gov’t C.A. Br. 7-8.

3

Petitioner also obtained a $4,150,000 construction

loan to build condominiums on a project known as

Cedar Creek. The bank loan officer told petitioner that,

in order to qualify for the loan, he would have to make

advance sales of 20 units. Petitioner initially was able

to sell only 13 units, so he secured an additional seven

buyers by making their down payments in amounts

ranging from $4,000 to $8,900. Petitioner thereby ob-

tained the construction loan, but he subsequently de-

faulted without repaying any of the principal. Peti-

tioner also arranged to have the down payments trans-

ferred back to him from the escrow account into which

they had been placed. The lender would not have made

the loan had it been aware that petitioner rather than

the buyers had made the down payments on seven of

the sales. Gov’t C.A. Br. 9-11.

Petitioner used a similar scheme to obtain a

$5,400,000 loan for development of condominiums at

another project referred to as the Southern Grove pro-

ject. The bank loan officer required that petitioner

have 25 reservation agreements signed by prospective

buyers, and that the prospective buyers each pay a

$500 deposit to establish their genuine interest in the

project. Petitioner solicited people to sign reservation

agreements, offering to pay the $500 deposit fee in

return for their signatures. Between July and October

1985, petitioner obtained 19 signed reservation agree-

ments. Petitioner signed each of those agreements as

the seller, but he also made each of the deposit pay-

ments for the supposed buyers and forged the signa-

tures of two of the supposed buyers. In October 1985,

petitioner obtained the construction loan. The lender

would not have made the loan had it been aware that

petitioner had paid the deposits for the supposed

buyers. Gov’t C.A. Br. 11-13.

4

After he obtained the loan for the first phase of the

Southern Grove project, petitioner sought an additional

loan for the next phase. The loan officer told petitioner

that the bank would not issue a construction loan for a

given building unless petitioner made advance sales of

70% of the units in the building. The loan officer also

said that the buyers had to make nonrefundable depos-

its of 10% of the purchase price, and that the buyers

had to qualify for a mortgage loan from the bank.

Petitioner subsequently obtained ten signed reserva-

tion agreements, but he himself provided the funds that

the buyers used to make the required deposits of

approximately $8,000. In making its loan decision, the

lender relied on the misrepresentations in the reserva-

tion agreements that the buyers were the source of the

deposits. Gov't C.A. Br. 13-14.

Petitioner attempted to obtain a $4,700,000 loan

relating to a project called The View. As part of that

attempt, petitioner directed a lawyer to execute a false

deed and promissory note. Although the lender ap-

proved the loan application, and petitioner and the

lender signed a commitment letter, the transaction fell

through when petitioner’s lawyer refused to sign an

opinion letter representing that petitioner’s financial

status had not changed for the worse. Gov't C.A. Br.

15-17.

In November 1986, petitioner obtained a $6 million

land acquisition loan for a project known as the Reddie

Point project. He fell behind in his payments, but in

July 1987 he negotiated a consolidated $14 million loan

to cover land acquisition and construction costs. Under

the terms of the revised loan, petitioner could submit

draw requests for work actually performed on the

project. Instead, he submitted false draw requests and

obtained approximately $3 million, which he used to

J

|

5

make interest payments on his other loans. Gov’t C.A.

Br. 18-20.

Finally, petitioner failed to report on his personal

income tax return more than $1 million in income for

1985 and more than $4 million in income for 1986. Those

amounts represented the profits from petitioner’s land

acquisition scheme, which petitioner had deposited into

his personal account and used for his own purposes.

Gov't C.A. Br. 20-22.

2. At trial, the district court instructed the jury on

the bank fraud, false statement, and tax offenses that

the question of materiality was not for the jury to

decide. Pet. App. 28a, 30a, 31a, 34a. On the wire and

mail fraud offenses, the district court did not include

materiality as an element. /d. at 3la-34a. Petitioner

objected to the district court’s refusal to require that

the jury make findings of materiality on all of the

offenses at issue. Jd. at 3a; Gov’t Supp. C.A. Br. 1. The

district court subsequently made a finding, outside of

the presence of the jury, that the evidence established

materiality beyond a reasonable doubt on all counts at

issue. Pet. App. 3a; Gov’t Supp. C.A. Br. 1-2.

3. On appeal, petitioner contended that the district

court had committed reversible error in refusing to

submit the question of materiality to the jury. The

court of appeals rejected that contention. Pet. App. 3a-

13a.

In rejecting petitioner’s challenge to his false state-

ment convictions under 18 U.S.C. 1014, the court of

appeals relied on this Court’s decision in United States

v. Wells, 519 U.S. 482 (1997), which held that material-

ity is not an element of that offense. Pet. App. 3a-5a.

The court of appeals further held that, under the

analysis in Wells, materiality is not an element of mail

fraud (18 U.S.C. 1341), wire fraud (18 U.S.C. 1343), or

6

bank fraud (18 U.S.C. 1344). Pet. App. 6a-10a. Finally,

the court of appeals held that, although materiality is

an element of the offense of falsely subscribing to a tax

return in violation of 26 U.S.C. 7206(1), and the district

court erred in failing to submit the issue of materiality

to the jury on those counts, the error was harmless,

because “materiality was not in dispute regarding [peti-

tioner’s] tax fraud offense.” Pet. App. 12a. The court of

appeals observed that, under the tax statute at issue,

“any failure to report income is material,” and peti-

tioner’s “convictions were based on his failing to report

$1,372,360 in income in 1985 and $4,355,766 in income in

1986.” Ibid. Indeed, the court noted, petitioner did not

contest the materiality of these sums of unreported

income. IJbid— Accordingly, the court found that the

error “did not contribute to the verdict obtained.” Jd.

at 13a (quoting Yates v. Evatt, 500 U.S. 391, 403 (1991)).

DISCUSSION

1. Petitioner contends (Pet. 20-25) that the Courts of

appeals are in conflict on the question whether materi-

ality is an element of mail fraud under 18 U.S.C. 1341,

wire fraud under 18 U.S.C. 1343, and bank fraud under

18 U.S.C. 1344. Although the court of appeals correctly

held that materiality is not an element of those offenses,

we agree with petitioner that there is a conflict among

the courts of appeals on the .uestion and that the

conflict warrants this Court’s revi2w.

a. Sections 1341, 1343, and 134+ of Title 18 criminal-

ize various kinds of conduct involving schemes or

artifices to defraud or to obtain money or property “by

means of false or fraudulent pretenses, representa-

tions, or promises.” Section 1341 prohibits the use of

the mails as part of such a scheme; Section 1343 pro-

hibits the use of wire, radio, or television communica-

7

tions as part of such a scheme; and Section 1344 pro-

hibits such schemes involving financial institutions.

Unlike many other federal criminal statutes, Sections

1341, 1343, and 1344 do not use the word “material” in

defining the offense. “Thus, under the first criterion in

the interpretative hierarchy, a natural reading of the

full text, materiality would not be an element of” those

offenses. United States v. Wells, 519 U.S. 482, 490

(1997) (citation omitted).

There is no basis for importing into those criminal

statutes civil law notions of what is required for an

action in fraud. Although civil torts sounding in fraud

do typically “require[] a material misrepresentation or

omission,” BMW of N. Am., Inc. v. Gore, 517 U.S. 559,

579 (1996), Sections 1341, 1343, and 1344 reach more

broadly than civil tort law does. For example, a civil

action sounding in fraud will generally lie only if the

victim justifiably relies to his detriment on the defen-

dant’s deceptive statements or conduct. See Restate-

ment (Second) of Torts § 537 (1977); 1 J. Story, Com-

mentaries on Equity Jurisprudence §§ 199, 202-203

(13th ed. 1886). Sections 1341, 1343, and 1344, however,

impose no such requirement. See, e.g., United States v.

Coffman, 94 F.3d 330, 333-334 (7th Cir. 1996), cert.

denied, 117 S. Ct. 1425, 1426 (1997). See generally Dur-

land v. United States, 161 U.S. 306, 312-315 (1896)

(predecessor of mail fraud statute “is broader” than

common-law doctrine of “false pretences”; “[iJt was

with the purpose of protecting the public against all

such intentional efforts to despoil, and to prevent the

post office from being used to carry them into effect,

that this statute was passed”).

The mail, wire, and bank fraud statutes prohibit

schemes and artifices that are intended to defraud, and

it suffices to establish a violation of those provisions

8

that the defendant intended that his deceptive conduct

or statements would deprive the victim of some right or

interest. There is no basis to impose the additional re-

quirement, connoted by the word “material,” that the

deceptive conduct or statements in fact had “a natural

tendency to influence, or [were] capable of influencing”

the victim. United States v. Gaudin, 515 U.S. 506, 509

(1995) (defining “materiality”).

b. The courts of appeals have reached conflicting

conclusions on the question whether materiality is an

element of Sections 1341, 1343, and 1344. See Pet. 21-22

& nn.10-11. Although many of the decisions petitioner

cites antedate this Court’s decision in Wells, the conflict

has persisted and shows no sign of abating. The

Eleventh Circuit in this case relied on Wells in holding

that materiality is not an element of Sections 1341,

1343, and 1344. Pet. App. 3a-10a. The Tenth Circuit

has reiterated, after Wells, its view that

[aJlthough materiality is not an independent ele-

ment of a wire fraud prosecution, there is a ma-

teriality aspect to the determination whether the

acts of an accused give rise to a scheme to defraud,

that is appropriately submitted to the jury as one

component of the larger factual question as to the

existence of fraud and a scheme to defraud.

United States v. Cochran, 109 F.3d 660, 667 n.3 (10th

Cir. 1997) (quotation marks omitted). See also United

States v. Slaughter, 128 F.3d 623, 629 (8th Cir. 1997)

(after Wells, adopting Tenth Circuit’s approach).

The Second, Sixth, and Ninth Circuits, in contrast,

have held, after Wells, that materiality is an element of

various of the offenses at issue. See United States v.

Rodriguez, 140 F.3d 163, 167 (2d Cir. 1998) (Section

1344); United States v. DeSantis, 134 F.3d 760, 764 (6th

‘ 9

Cir. 1998) (Section 1341); United States v. Nash, 115

F.3d 1431, 1436 (9th Cir. 1997) (Section 1344), cert.

denied, 118 S. Ct. 1054 (1998). The Fifth and Seventh

Circuits, finally, have treated the issue as an open one

in light of Wells. See United States v. Moser, 123 F.3d

813, 825-827 (5th Cir.) (Section 1341), cert. denied, 118

S. Ct. 613, 642, 884 (1997); United States v. Pribble, 127

F.3d 583, 588 (7th Cir. 1997) (Section 1344), cert. denied,

118 S. Ct. 1056 (1998).

The conflict merits this Court’s review. Mai! fraud,

wire fraud, and bank fraud are frequently prosecuted

offenses. Moreover, as petitioner correctly notes (Pet.

25), they are often included as predicate offenses in

both criminal and civil cases under the Racketeer Influ-

enced and Corrupt Organizations Act, 18 U.S.C. 1961 et

seg. The Court should grant the petition to resolve the

question whether those offenses include an element of

materiality.

2. Petitioner also challenges (Pet. 15-20) the court of

appeals’ decision to conduct harmless-error review of

the district court’s failure to instruct the jury on

whether petitioner’s false statements on his tax returns

were material.’ Petitioner notes (Pet. 9-14) that there

' The harmless-error question arises only if there was an error.

Section 7206(1) provides that it is an offense to subscribe to a tax

return under penalty of perjury when the taxpayer does not

believe the return “to be true and correct as to every material

matter.” The court of appeals rejected the government’s argument

that there was no error at all because false statements concerning

income on a tax return are “material” as a matter of law. Pet. App.

10-1la. Although one court of appeals has accepted the argu-

ment that the materiality of false statements of income in a

prosecution under Section 7206(1) presents a legal question for the

court, see United States v. Klausner, 80 F.3d 55, 60-61 (2d Cir.

1996), the other courts of appeals that have addressed the issue

have concluded that United States v. Gaudin, supra, requires

10

is a conflict among the courts of appeals on the question

whether the erroneous failure to instruct the jury on an —

element of an offense is subject to harmless-error

analysis. Although the court of appeals resolved that

question correctly by holding that such an error can be

_harmless, the conflict on that issue warrants this

Court’s review.”

“(I}f the defendant [in a criminal case] had counsel

and was tried by an impartial adjudicator, there is a

strong presumption that any other errors that may

have occurred are subject to harmless-error analysis.”

Rose v. Clark, 478 U.S. 570, 579 (1986). The Court has

identified certain fundamental constitutional errors—

so-called “structural” errors—that are never harmless.°

submission of the materiality issue to the jury. See Pet. App. lla

(collecting cases). We do not press here any argument that the

district court was correct in withholding the issue of materiality

from the jury on the Section 7206(1) counts.

2 Because it held that Sections 1341, 1343, and 1344 did not

require proof of materiality, the court of appeals did not reach the

government’s alternative argument on those counts that any error

was harmless because (1) petitioner did not dispute materiality, (2)

the proof of materiality was overwhelming; and (3) no reasonable

jury could have failed to find materiality in light of the jury’s

finding that petitioner “intended to deceive others and to obtain by

false or fraudulent pretenses, representations or promises money

or property from persons so deceived.” See Gov't Supp. C.A. Br.

9-10 (quoting from trial transcript); Gov’t Second Supp. C.A. Br.

16-34. If this Court were to conclude that materiality is an element

of any of those offenses, those harmless-error arguments would

have to be confronted.

3 See Sullivan v. Louisiana, 508 U.S. 275 (1993) (defective

reasonable-doubt instruction); Vasquez v. Hillery, 474 U.S. 254

(1986) (racial discrimination in grand jury); Waller v. Georgia, 467

U.S. 39, 49 n.9 (1984) (denial of public trial); McKaskle v. Wiggins,

465 U.S. 168, 177 n.8 (1984) (denial of self-representation); Gideon

11

The failure to submit an element to the jury for its

decision, however, is not such an error. See California

v. Roy, 519 U.S. 2, 5 (1996) (per curiam) (“The specific

error at issue here—an error in the instruction that

defined the crime—is * * * as easily characterized as

a misdescription of an element of the crime[] as it is

characterized as an error of omission. No one claims

that the error * * * is of the ‘structural’ sort that

defies analysis by ‘harmless error’ standards.”; “The

case before us is a case for application of the ‘harmless

error’ standard.”) (quotation marks and citation omit-

ted). See also Johnson v. United States, 117 S. Ct. 1544,

1550 (1997) (“It is by no means clear” that the failure to

submit the element of materiality to the jury consti-

tutes structural error.).

Petitioner properly concedes (Pet. 16-19) that a fail-

ure to instruct the jury on an element is harmless if the

jury’s verdict on another element is “functionally

equivalent” to a finding by the jury as to the omitted

element. See, e.g., Sullivan v. Louisiana, 508 U.S. 275,

281 (1993). The question raised by the court of appeals’

decision is whether the failure to instruct the jury on an

element is also harmless if the existence of the element

“was not in dispute” (Pet. App. 12a), in the sense that it

was not contested by the defendant at trial and the

proof on the element was overwhelming.‘ Contrary to

v. Wainwright, 372 U.S. 335 (1963) (total denial of counsel); Tumey

v. Ohio, 273 U.S. 510 (1927) (biased judge).

* A number of the courts of appeals, including the court below,

employ a particularized definition of “materiality” applicable to the

offense of falsely subscribing to a tax return under 26 U.S.C. 7206.

See Pet. App. 12a (“Under § 7206(1), a ‘material matter’ is any

information necessary to a determination of a taxpayer's income

tax liability”; citing cases). Under that definition, a jury’s finding

that a defendant falsely stated the amount of his income will often

12

petitioner’s claim (Pet. 15-19), this Court’s cases do not

conclusively resolve the question.’ And the courts of

appeals have given conflicting answers. The Eleventh

Circuit has held that the failure to instruct on an ele-

ment is harmless error where the evidence leaves no

doubt on the issue and the issue is “uncontroverted.”

See United States v. Fern, 117 F.3d 1298, 1307-1308

(11th Cir. 1997); Pet. App. 1la-13a; cf. Hart v. Stagner,

935 F.2d 1007, 1013 (9th Cir. 1991) (mandatory pre-

sumption as to element harmless where, inter alia,

defendant did not contest element at trial). The

be the “functional equivalent” of a finding of materiality. Cf., e.g.,

ibid. (“any failure to report income is material”) (quoting United

States v. Holland, 880 F.2d 1091, 1096 (9th Cir. 1989)). Cases

arising under Section 7206(1) therefore may raise somewhat

distinctive harmless-error issues. The court of appeals in this case,

however, rested its harmlessness holding on the absence of a

dispute at trial on materiality, not on a conclusion that the jury’s

verdict on other elements was the “functional equivalent” of a

verdict on materiality under Section 7206. Pet. App. 12a. More

generally, the courts of appeals have reached conflicting

conclusions on the harmlessness of a failure to instruct on

materiality under Section 7206. Compare Pet. App. lla-13a (error

harmless where element not disputed), with, e.g., United States v.

DiRico, 78 F.3d 732, 737-738 (1st Cir. 1996) (error harmful).

5 Last Term the Court considered but did not decide the closely

related question whether the failure to instruct on an element is

harmless if the defendant affirmatively admits the existence of the

element. See Rogers v. United States, 118 S. Ct. 673 (1998) (dis-

missing writ as improvidently granted).

6 Petitioner suggests that the Second and Eighth Circuits have

also so held. See Pet. 10 n.4 (citing Bilzerian v. United States, 127

F.3d 237, 242 (2d Cir. 1997), petition for cert. pending, No. 97-1892,

and United States v. Raether, 82 F.3d 192, 194 (8th Cir. 1996)). In

Bilzerian, however, the court found the absence of a materiality

instruction on two counts to be harmless in light of the jury’s

finding on two other counts that the same statements were

13 ”

Fourth Circuit, in contrast, has reversed a conviction on

the ground that the district court failed to instruct on

an element, even though the element—whether a credit

union was federally insured—was not disputed and the

proof of the element was overwhelming. United States

v. Johnson, 71 F.3d 139, 141-145 (1995). Other courts

have also concluded that the failure to instruct the jury

on an element is reversible error even if “the jury could

not have reasonably arrived at any other conclusion.”

Waldemar v. United States, 106 F.3d 729, 732 (7th Cir.

1996) (court does not expressly indicate whether issue

was contested); see United States v. DeF ries, 129 F.3d

1293, 1311-1312 nn.12-13 (D.C. Cir. 1997) (issue

contested); United States v. DiRico, 78 F.3d 732, 735-

736 (1st Cir. 1996) (same). See also, e.g., United States

v. Raether, 82 F.3d 192, 194-195 (8th Cir. 1996).

The conflict merits review by this Court. Whether a

failure to instruct on an element is harmless error when

the element’s existence was not in dispute—as the

record in this case abundantly showed—is a recurring

and important question. The Court should grant the

petition to resolve the conflict among the courts of ap-

peals on that question.

material. 127 F.3d at 242. In Raether, the Eighth Circuit held that

the failure to instruct on an element required reversal, and

suggested that such errors can be harmless only if the jury has

made a finding that is functionally equivalent to the omitted

element. 82 F.3d at 194-195. Petitioner concedes (Pet. 16 n.9) the

validity of that form of harmless-error analysis.

14

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted.

SETH P. WAXMAN

Solicitor General

JAMES K. ROBINSON

Assistant Attorney General

LOUIS M. FISCHER

Attorney

SEPTEMBER 1998