Petition for Writ of Certiorari — Elkins v. United States

a ) Sapreine Court, U.S.

59 1 2 0 6 FILED

ao JAN 28 1990

a = ~ JOSEPH F. SPANIOL, JR.

CLERK

IN THE .

ee ata

—_— =

Supreme Court of the United States

OctToBeR TERM, 1989

&

>

EDWARD J. ELKINS,

Petitioner,

v.

UNITED STATES OF AMERICA,

Respondent.

— *

-

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

»

~~

P. Bruce Kirwan

(Counsel of Record)

MEALS, KIRWAN, GOGER,

WINTER & PARKS, P.C.

800 Candler Building

Atlanta, Georgia 30303

(404) 688-1000

(Counsel for Petitioner)

December 28, 1989

Tower Printing Company, 2 Peachtree St., Atlanta, Georgia 30383 (404) 659-4080

i

QUESTIONS PRESENTED

1. Whether McNally v. United States, 483 U.S. 350, 107

S.Ct. 2875 (1987) requires reversal of Petitioner's conviction

for violation of Title 18, United States Code, Section 371

where one of four underlying purposes of the conspiracy

was the substantive offense of wire fraud to deprive the

United States of the right to implement its foreign policy

and the jury returned a general verdict without designating

which of the underlying purposes of the conspiracy was the

basis for the guilty verdict?

2. Does an Allen charge given after eight days of jury

deliberation and when the trial court knew the numerical

division of a deadlock jury create a denial of due process

and thus deny Petitioner a fair trial?

3. Whether Petitioner’s sentence violates the Eighth

Amendment's prohibition against disproportionate sen-

tences and also if the trial court improperly determined the

amount of fine to be imposed for a violation of the export

control laws?

ii

LIST OF PARTIES

The parties to the proceeding below were Petitioner,

Edward J. Elkins, and Respondent, the United States of

America.

iii

TABLE OF CONTENTS

Page

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ss stcanincanosnneomnennsonanineosiapagniniamnnniaieston 1

Eh 60 ica dl ecadlcinaaieaascenecosnosaeligenduesieomsaeseeinsaneh 2

CONSTITUTIONAL PROVISIONS AND STAT-

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UN RT PO panne sscscns cxsccsssorsncesscscasnnncsnsonscocune 4

REASONS FOR GRANTING THE WRIT..........cccsesseseeeseeeeees 7

I. The Eleventh Circuit has Failed to Follow

the Holding of McNally v. United States and

Therefore Petitioner’s Conviction for Con-

spiracy to Deprive the United States of the

Right to Implement its Foreign Policy was

Based on an Impermissible Ground and the

General Jury Verdict Returned on This

II acinestsicsieccatsnaxnansinscreeniinitanalpbsoncainnaeniicnnaie 7

II. The Eleventh Circuit’s Application of the

“Allen Charge” Denied Appellant Due Pro-

cess and a Fair Trial. This Court Should Re-

consider the Propriety of the Allen Charge................ -

iv

ITI. The Eleventh Circuit has Failed to Correct

Petitioner’s Sentence Which Violates the

Eighth Amendment's Prohibition Against

Disproportionate Sentences and Also the

Eleventh Circuit Improperly Determined

the Maximum Amount of Fine to be Im-

posed Under the Export Control Laws................

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APPENDIX (Opinion and Judgment of the Court of

Appeals, and Opinion and Judgment of

Oe LON A OTL OE TION

Vv

TABLE OF AUTHORITIES

CASES:

Andrews v. United States,

309 F.2d 127, 130 (5th Cir. 1962), cert. denied,

SF er Ne Coser sice tana stienenniteiicteiinsensibinaaictamaons

Carpenter v. United States,

WO GAD. SUG, BaP Me. OATS) ieniscssescsicesinsisrssccin

Chiarella v. United States,

445 US. 234, 238 rn. 21 (1980)............csrecccsssereeseees

Lowenfield v. Phelps,

US. , 108 S.Ct. 546, 558-559

(Marshall, Brennan and Stevens dissenting) ...

McNally v. United States,

843 U.S. 350, 107 S.Ct. 2875 (1978) ..........sceeceeeees

Potter v. United States,

GPE FE 1275S (BU Cie. TIGR) a osvicessisescesssvrnsrsnsse

Stromberg v. California,

BOS ES. FFD, SOTHO, IFS) osvvasnssensnsenaaserosinevnsen

United States v. Anguilo,

GS Fee ar COREG, TOFD onincccnssccaeesestnermntanssnonnens

United States v. Bailey,

480 F.2d 518, 519 (5th Cir. 1973) (en banc) .......

United States v. Bonam,

772 F.2d 1449, 1450 (9th Cir. 1985).......... eee

United States v. Burke,

700 F.2d 70, 80 (2d Cir.), cert. denied, 464 U.S.

DO Cie seninsisiciniccesiepaieiniticnsdscjenatieadoncanepataaabnas

Page

vi

United States v. Fioravanti,

412 F.2d 407, 414-420 (3rd Cir.), cert. denied,

I A Ce CI thi nhcsintniisencccrrmnennnnen

United States v. Holmes,

822 F.2d 481, 494-496 (Sth Cir. 1987)............0.

United States v. Kelly,

783 F.2d 575, 576-577 (Sth Cir. 1986), cert.

denied, 479 U.S. 889 (1986) ........ccccecceeeseseseseeeees

United States v. McKinney,

822 F.2d 946 (10th Cir. 1987)... ceeseeeeee

United States v. Rey,

811 F.2d 1453, 1458 n. 12 and 13 (11th Cir.

United States v. Sawyers,

GZS FOG USSS CO CUE.. TS FD a vscnsvnenssscrsinsscsaneves

United States v. Scott,

547 F.2d 334 (6th Cir. 1977).............sccseseseee ee

United States v. Silvern,

484 F.2d 879 (7th Cir. 1973) (en banc) .............

United States v. Thomas,

449 F.2d 1177 (D.C. Cir. 1971) (en banc) .........

Yates v. United States,

SPE LAs. Py DER CEIOF Pesesiccsssnsrrnnrsensnsrnsainsonnenins

CONSTITUTIONAL PROVISIONS:

U.S. Const. amend. V2 ooccccccccccccccecececsccceeeeeeeeeesceeeeceeenenens

scdibiontiiasie 2

vii

STATUTES:

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Se She a eviacvwtviidsninnisttiincnsniiensniintsticicbobemaiadian 3,7

Se es er etiniiesannnniesiin asiiistasteteeseahiieesensiaaliasasialiaen a?

a sn i I iaiintisnicinchicsslaninasaniniantaiiuinisaaipibatdaamaaal 2

ein: I toeticiinsiinisnpianilaimnntianiapnansbimantatiaaandteigpiidaaiiiiaian 3

ase Sek SG siasistinnsiisincinniteidsinlniconaasninalineieanaeaaoemena 12

Ps Ih A ase eiknciin scsi ennvinnnnchitnlenncalypetaieainlnioatias 4,12

Sh HE che ersinsicsidniicthonpuitelaleetbacpmbsiaddeteabaniesasiel 3,12

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eI Coie I ones osnsesaccssncscnmnessnsnsnarrannnssniicnannanne 4,7,13

REGULATIONS:

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Be ee Oe Oe i cdi ichewnaccin es cisco 8

No.

IN THE

Supreme Court of the United States

Octoser TERM, 1989

a

w

EDWARD J. ELKINS,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

~’

-

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

~

PETITION FOR WRIT OF CERTIORARI

a

>

Petitioner Edward J. Elkins respectfully prays that a writ

of certiorari issue to review the judgment and opinion of the

United States Court of Appeals for the Eleventh Circuit, en-

tered in the above-entitled proceeding on September 29, 1989.

OPINIONS BELOW

The opinion of the Court of Appeals for the Eleventh Circuit

is reported at F2d and is reprinted in the Appen-

dix hereto, 1a-28a, infra.

The judgment and commitment of the United States Dis-

trict Court for the Northern District of Georgia are reprinted

in the Appendix hereto, 29a-31a, infra.

JURISDICTION

The judgment of the Eleventh Circuit Court of Appeals

was entered on September 29, 1989, affirming Petitioner's

conviction dated August 28, 1989. The jurisdiction of this

Court is invoked under 28 U.S.C. Section 1254(1).

CONSTITUTIONAL PROVISIONS AND

STATUTES INVOLVED

U.S. Const. amend. V: No person... shall... be de-

prived of ... liberty or property, without due process of law

U.S. Const. amend. VIIl:...nor excessive tines

imposed, nor cruel and unusual punishment inflicted

18 U.S.C. § 371: Conspiracy

If two or more persons conspire either to commit any

offense against the United States, or to defraud the United

States or any agency thereof in any manner or for any pur-

pose and one or more of such persons do any act to effect

the object of the conspiracy, each shall be fined not more

than $10,000 or imprisoned not more than five years, or

both.

18 U.S.C. § 1343: Fraud by wire

Whoever, having devised or intending to devise any

scheme or artifice to defraud, or for obtaining money or

property by means of false or fraudulent pretenses, repre-

sentations or promises, transmits or causes to be transmitted

by means of wire... for the purpose of executing such

scheme or artifice, shall be fined not more than a $1,000 or

imprisoned not more than five years, or both.

3

18 U.S.C. § 3623: Alternative fines

(a) An individual convicted of an offense may be fined

not more than the greatest of . . . (3) in the case of a felony,

$250,000... .

22 U.S.C. § 2778(b)(2)

... no defense articles ... designated by the President

under subsection (a)(1) of this section may be

exported ... without a license for such export... .

22 U.S.C. § 2778(c)

... any person who willfully, in a registration or license

application or required report, makes any untrue statement

of a material fact or omits to state a material fact required to

be stated therein . . . shall upon conviction be fined for each

violation not more than $1,000,000 or imprisoned not more

than ten years, or both.

50 U.S.C. § 1702: Presidential authorities

... the President may, under such regulations as he

may prescribe ... prevent or prohibit . . . exportation of any

property....

50 US.C. § 1705(b)

Whoever willfully violates any license, order or regula-

tion issued under this chapter shall, upon conviction, be

fined not more than $50,000, or, if a natural person, may be

imprisoned for not more than ten years, or both; or any

officer, director, or agent of any corporation who knowingly

participates in such violation may be punished by a like fine,

imprisonment, or both.

50 App. U.S.C. § 2410

... whoever knowingly .. . conspires to violate. . . any

provisions of this Act... shall be fined not more than five

times the value of the export involved or $50,000 whichever

is greater, or imprisonment not more than five years, or

both.

STATEMENT OF THE CASE

The issues presented here arose from the investigation

and prosecution of Petitioner for his role in selling two

Lockheed L-100-30 aircraft to Libya. The alleged violations

occurred on or before December of 1983 and up to June 28,

1985. The indictment returned in the United States District

Court for the Northern District of Georgia charged Peti-

tioner, six other individuals and four corporations with con-

spiracy to engage in a prohibited foreign exchange (count 1),

two substantive acts of engaging or attempting to engage in

impermissible exportation activity (counts 2 and 3), false

statements (count 4), and wire fraud (counts 4-7), in viola-

tion of 18 U.S.C. [Section] 371, 50 U.S.C. 1705, 50 App. U.S.C

2410(a), 18 U.S.C. 1001 and 18 U.S.C. 1343. Petitioner was

tried on counts 1 through 3 jointly with co-defendants

David Baskett, Thomas Burnham and Franklin Corcoran.

Upon motion of the government, the case against Baskett

was dismissed in mid-trial. The jury acquitted Burnham and

Corcoran on all counts. Petitioner was acquitted on count 3,

but convicted on counts 1 and 2. Appellant was sentenced to

consecutive terms of imprisonment for five years on count 1

and ten years on count 2. In addition, he was fined

$6,600,000. The mandatory $50 per count special assessment

was also imposed. (R9-19 & 20).

5

Petitioner owned and operated Armoflex in Santa

Maria, California, which manufactured armor-related prod-

ucts (R26-173). In the summer of 1984, Petitioner was con-

tacted by a concern that wanted to acquire a C-130 aircraft

for oil field work in Libya (R11-37-48). Since a friendly coun-

try was required to purchase these planes, Bolivia was sug-

gested but Bolivia renounced their sponsorship and the deal

ended (R11-53-58). Lockheed suggested L-100-30 civilian

transport planes (R11-62) as an equivalent aircraft and the

Libyan national wanted information about aerial refueling

kit (R11-64). Option II was conceived (R11-68) to develop

kits (R11-72) with Aero Union of California (R11-73).

Mr. Badir, the Libyan national, invited Lockheed to

check his legitimacy and to confirm that he was not hiding

his Libyan nationality (R11-77). Lockheed sent a representa-

tive who met with Mr. Badir in West Germany (R11-78).

Lockheed appeared satisfied that the sale to Comtrust, a

West German subsidiary of the national oil company, was

not a sham despite the Libyan nationality of its principals

(R11-79) and contracts for the sale of the planes were drafted

in March of 1985 (R11-81).

Lockheed made the decision to sell the aircraft to

Armoflex (AFI) and not Comtrust (R11-82). It was agreed

that the aircraft would fly from Marietta, Georgia to France

and then to Benin (R11-102). The required documents were

provided (R11-111) and a meeting was arranged in March of

1985. Before Mr. Badir would sign the contract, he insisted

that he would retain 2.5 million to ensure AFI would con-

tinue with Option II after the airplanes were exported (R11-

118-119). On March 28, 1985 a meeting was held at the

Commerce Department to complete and file the application

6

for export license for the aircraft. At that meeting, Lockheed

convinced the Commerce Department that AFI would file

for the license claiming that it was a domestic sale in which

AFI obtain control at the time of the export (R20-126). Lock-

heed’s licensing administrator told the representatives of the

Commerce Department that the Libyan nationals were ex-

patriots and anti-Ghadafi and good Libyans with no ties to

Tripoli (R22-10). Lockheed’s representative provided the

Commerce Department with a Comtrust Dunn & Bradstreet

report which convinced the Commerce Department to ex-

pedite the license process without a thorough pre-license

investigation (R22-65-66).

Petitioner never knew that the Lockheed representative

had a separate meeting with the Commerce representatives

or that the license application was expedited to enable

Lockheed to obtain the purchase price on an expedited basis

(R22-72). A license was issued and the planes were flown to

France and then Benin. After the planes were flown to

Benin, the parties again met in Europe to contract for two

additional L-100s (R11-123). On January 27, 1985 Petitioner

returned to Atlanta where he was met by Lockheed’s repre-

sentatives who surreptitiously recorded a conversation. The

recording was made at the direction of custom agents to

ascertain whether Petitioner knew that the planes had been

diverted to Libya (R11-108). After an hour-long meeting

orchestrated by the customs agents, Lockheed’s representa-

tive believed and reported to the agents that Petitioner was

clean and had no knowledge of the diversion (R17-20).

7

REASONS FOR GRANTING WRIT

I. THE ELEVENTH CIRCUIT HAS FAILED TO

FOLLOW THE HOLDING OF MCNALLY V. UNITED

STATES AND THEREFORE PETITIONER’S

CONVICTION FOR CONSPIRACY TO DEPRIVE THE

UNITED STATES OF THE RIGHT TO IMPLEMENT

ITS FOREIGN POLICY WAS BASED ON AN

IMPERMISSIBLE GROUND AND THE GENERAL

JURY VERDICT RETURNED ON THIS COUNT IS

IMPROPER

Petitioner’s conviction under count one must be re-

versed. This case is controlled by this Court’s decision in

McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875 (1978).

In McNally, this Court held that 18 U.S.C.A. Section 1341, the

mail fraud statute, applies only to schemes to defraud others

of property rights. Accordingly, McNally rejects the view

that the mail fraud statute proscribes schemes to defraud

individuals or entities of intangible rights and held that the

statute is “limited in scope to the protection of property

rights”. The McNally analysis applies equally to wire fraud.

See Carpenter v. United States, 108 S.Ct. 316, 320 n. 6 (1987).

It must be remembered that count one of the

indictment charged Petitioner with participating in a

conspiracy having four alleged unlawful objectives. The first

objective was an alleged agreement to export to Libya

commercial aircraft and their additional spare parts without

first obtaining the required export license, in violation of 50

U.S.C. App. Section 2410(a) and regulations issued

thereunder. The second object alleged a conspiracy to export

to Libya items subject to control under United States’

munitions list in violation of 22 U.S.C. Section 2778(b)(2) and

a

(c) and 22 C.F.R. Section 121 et seq. The third object of the

conspiracy alleged an agreement to violate 18 U.S.C. Section

1001. The fourth alleged unlawful object charged a wire

fraud scheme and artifice to defraud the United States and

its executive agencies of the right to implement its foreign

policy and to conduct its export laws free from stealth, false

statements and fraud, in violation of 18 U.S.C. Section 1343.

The conspiracy count did not elaborate on the nature and

the scope of the alleged scheme to defraud.

The three substantive wire fraud counts to define the

scheme alleged in the conspiracy were dismissed by the Dis-

trict Court following a defense motion (R25-57-69, 153, 155-

156). The jury was instructed that it could find Pétitioner

guilty of this conspiracy as long as it unanimously agreed

that Petitioner conspired to commit any one of the four sup-

posed unlawful objectives (R29-24, 160). On June 5, 1987 the

| jury returned a general verdict of guilty on count one. Under

McNally, the fourth object of the conspiracy incorrectly

charged Appellant with conduct that was not criminal. No

one knows if the jury considered this an object of the con-

spiracy.

The Eleventh Circuit opinion affirming Petitioner’s

conviction on count one which affirms the general verdict

violates the well established principle that convictions

premised on general jury verdicts must be reversed in in-

stances where the verdict makes it impossible to determine

whether the defendant was convicted under an erroneous or

a valid application of the law that had been submitted to the

jury as an alternative basis of the defendant's guilt. E.g.,

Chiarella v. United States, 445 U.S. 234, 238 n. 21 (1980); Yates

v. United States, 354 U.S. 298, 312 (1957); Stromberg v. Cali-

9

fornia, 283 U.S. 359, 367-368 (1931). For all of the above rea-

sons, the infirmity of Petitioner's conviction on count one is

clear and Petitioner respectfully submits this Court must re-

verse his conviction on count one.

Il. THE ELEVENTH CIRCUIT’S APPLICATION OF THE

“ALLEN CHARGE” DENIED APPELLANT DUE PRO-

CESS AND A FAIR TRIAL AND THIS COURT

SHOULD RECONSIDER THE PROPRIETY OF THE

ALLEN CHARGE

The Allen Charge has been the object of great criticism

by lower courts and commentators on the ground that it is

potentially coercive both in its language and the circum-

stances in which it is administered. See generally, Lowenfield

v. Phelps, ___ =» U.S. ___, 108 S.Ct. 546, 558-559 (Marshall,

Brennan and Stevens dissenting); United States v. Rey, 811

F.2d 1453, 1458 n. 12 and 13 (11th Cir. 1987), cert. denied, 108

S.Ct. 103 (1987); see also, Note Deadlocked Juries and the Allen

Charge, 37 Maine Law Review 167, 171-173. Due to this criti-

cism, the lower courts have grudgingly allowed variants of ©

the charge, including a version formulated by the American

Bar Association.' The rationale behind the varying formula-

tions of the charge is to avoid those characteristics which are

highly criticized without compromising the purpose in giv-

ing the original charge.

For example, the First, Third, Fourth, Seventh, Eighth

and District of Columbia Circuits have in some cases

1 See Lowenfield v. Phelps, U.S. __, 108 S.Ct. 546, 550 (1988); ABA

Special Committee on Minimum Standards for the Administration of

Criminal Justice, Standards relating to Trial by Jury, sec. 5.4(b) (Approved

Draft, 1968). ,

10

required the less criticized and more popular form

recommended by the American Bar Association.? Other

circuits, including the Eleventh Circuit, where Petitioner’s

case took place, have approved an Allen Charge that uses

language that suggests jurors should not surrender their

honest beliefs in order to reach a verdict.’ In Petitioner’s

case, the trial court chose to use language aimost verbatim,

about which the Eleventh Circuit had previously expressed

serious reservations. 811 F.2d 1453, 1459 (11th Cir. 1987),

cert. denied, 108 S.Ct. 103 (1987). See also, Petitioner's Brief p.

30. It is becoming increasingly apparent that there is a

growing need for this Court to review not only the language

of the charge, but also the propriety of the charge.

In Petitioner’s case the jury deliberation had taken

place for eight days. Although inadvertently volunteered,

the numerical breakdown of the jury as 8-4, was neverthe-

less made known to both the judge and the jury (R3-98).

Hence, from the jury’s perspective the impetus to hastily

reach a verdict was apparent. Thus the result is that the

2 See, United States v. Anguilo, 485 F.2d 37 (1st Cir. 1973); United States v.

Fioravanti, 412 F.2d 407, 414-420 (3rd Cir.), cert. denied, 396 U.S. 837 (1969);

United States v. Sawyers, 423 F.2d 1335 (4th Cir. 1970); United States v.

Silvern, 484 F.2d 879 (7th Cir. 1973) (en banc); Potter v. United States, 691

F.2d 1275 (8th Cir. 1982); United States v. Thomas, 449 F.2d 1177 (D.C. Cir.

1971) (en banc).

3 The pattern of the Allen Charge used in this case is set out in the

Appendix of this brief; United States v. Burke, 700 F.2d 70, 80 (2d Cir.), cert.

denied, 464 U.S. 816 (1983); United States v. Kelly, 783 F.2d 575, 576-577 (Sth

Cir. 1986), cert. denied, 479 U.S. 889 (1986); United States v. Scott, 547 F.2d

334 (6th Cir 1977); United States v. Bonam, 772 F.2d 1449, 1450 (9th Cir.

1985); United States v. McKinney, 822 F.2d 946 (10th Cir. 1987); United States

v. Rey, 811 F.2d 1453 (11th Cir. 1987), cert. denied, 108 S.Ct. 103 (1987).

11

seemingly innocuous language when given at a pivotal

point in a trial earns the Allen Charge its most deserved alias

“the dynamite charge.” See United States v. Bailey, 480 .2d

518, 519 (Sth Cir. 1973) (en banc); Andrews v. United States,

309 F.2d 127, 130 (5th Cir. 1962), cert. denied, 372 U.S. 946

(1963).

The controversy surrounding this charge has caused

many courts to retreat from the use of it. Rey, supra at 1458.

At least eighteen states have rejected the use of the charge,

three federal circuits have prohibited the use of the charge,

and four other circuits have limited their use of it. Id. As

such this issue of the language and the circumstances that

dictate when, or even if ever, the charge should be used,

merits this Court’s consideration. Accordingly, Petitioner re-

spectfully urges this Court to reconsider the propriety of the

Allen Charge.

Il. THE ELEVENTH CIRCUIT HAS FAILED TO

CORRECT PETITIONER’S SENTENCE WHICH

VIOLATES THE EIGHTH AMENDMENT’S

PROHIBITION AGAINST DISPROPORTIONATE

SENTENCES AND ALSO THE ELEVENTH CIRCUIT

IMPROPERLY DETERMINED THE MAXIMUM

AMOUNT OF FINE TO BE IMPOSED UNDER THE

EXPORT CONTROL LAWS.

Petitioner contends the Eleventh Circuit erred in failing

to find that Appellant’s sentence violates the Eighth

Amendment prohibition against disproportionate sentences

and also that the Eleventh Circuit also erred in holding that

the fine imposed upon Petitioner exceeds the maximum fine

prescribed by law. Petitioner was sentenced to a fifteen year

term of imprisonment and a $6,600,000 fine (R7-52). Peti-

12

tioner contends that the lengthy term of incarceration and

the payment of such an extremely high fine violates the

Eight Amendment’s prohibition against cruel and unusual

punishment and violates the Amendment's requirement

that sentences be proportionate to the gravity of the offense.

Petitioner's brief to the Eleventh Circuit outlined the great

disparity in sentencing for defendants similarly sentenced.

In fact, the District Court observed that the sentence

imposed on Petitioner was more severe than any sentence

listed in the pre-sentence report (R7-49-51).

Petitioner submits that the Court incorrectly implied

the penalty provisions under the International Emergency

Powers Act (“IEEPA”) and the Export Administration Act

(“EAA”) in opposing the fine and the fine was improperly

enhanced. See United States v. Holmes, 822 F.2d 481, 494-496

(5th Cir. 1987). On March 30, 1984 by executive order num-

ber 12470 the President of the United States declared a na-

tional emergency in light of the expiration of EEA of 1979.

Under section two of the executive order, the President di-

rected that 50 U.S.C. Section 1702(b)(2) and 1705

Shall control over any inconsistent provisions in

the regulations with respect to... civil and crimi-

nal penalties for violations subject to this order

(executive order 12470, 49 Fed. Reg. 13, 099 (April

3, 1984).

Accordingly, if the District Court had applied IEEPA

correctly, considering all potential penalty provisions for a

violation occurring on or about May 13, 1985, the maximum

fine allowable would be $250,000. See 50 U.S.C. Section

1705(b); 18 U.S.C. Section 3623. Petitioner submits that

under the existing law in May of 1985 EAA penalties were

13

not available to the Court under 50 U.S.C. App. Section

2410(a) and 15 C.F.R. Section 2871 and, therefore, the 6.6

million dollar fine imposed by the District Court was illegal.

CONCLUSION

For the reasons set forth herein, this petition for a writ

of certiorari should be granted.

This 28th day of December, 1989.

Respectfully submitted,

P. Bruce Kirwan

(Counsel of Record)

MEALS, KIRWAN, GOGER,

WINTER & PARKS, P.C.

800 Candler Building

127 Peachtree Street

Atlanta, Georgia 30303

- (404) 688-1000

Counsel for Petitioner

APPENDIX

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 87-8708

(D.C. Docket No. CR86-267A)

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

EDWARD J. ELKINS,

Defendant-Appellant.

Appeal from the United States District Court

for the Northern District of Georgia

(September 29, 1989)

Before RONEY, Chief Judge, JOHNSON, Circuit Judge, and

MELTON*, District Judge.

JOHNSON, Circuit Judge:

This case arises on appeal from defendant's convictions

of conspiracy in violation of 18 U.S.C.A. § 371, and of engag-

ing in or aiding and abetting illegal export activity in viola-

tion of the Export Administration Act, 50 U.S.C.A. App. §

* Honorable Howell W. Melton, U.S. District judge for the Middle District

of Florida, sitting by designation

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2410, the Arms Export Control Act, 50 U.S.C.A. §§ 1702,

1705, the International Emergency Economic Powers Act, 15

C.E.R. §§ 374.1, 387, and 399, and 18 US.C.A.§ 2. We affirm

I. FACTS

This prosecution arose out of an investigation into the

1985 shipment of two Lockheed L-100-30 aircraft to Libya

At the time, Libya was (and remains) subject to strict export

controls. See 15 C.F.R. § 376.16; see also Executive Order No

12543, January 7, 1986, 51 Fed. Reg. 875 (prohibiting trade

with Libya). Export licenses were required for the export of

these two jets; because of government restrictions on trade

with Libya, no export licenses would have been given to ex-

port these planes to Libya. Defendant and several other in-

dividuals, six of whom were also indicted as a result of this

investigation, engaged in a complex set of transactions to

purchase the planes for a West German company owned

and operated by Libyans, and to route the planes through

Bourdeaux, France, to the small African nation of Benin, and

then to Libya.

The sequence of events leading to defendant's arrest is

complicated. Defendant owned Armaflex, Inc., a southern

California company which produced ceramic tiles for mili-

tary use as armor. In 1984, defendant attempted to supply

ceramic tiles to an English firm for ultimate transfer to

Libya. The Libyan dealer was named Badir, and he was

purportedly associated with a West German oil field pro-

duction company. This deal was never consummated.

In the-summer of 1984, Carl Lilly, who had worked

with defendant in the ceramic tile negotiations, approached

defendant on behalf of a customer! who wanted to purchase

one Lockheed C-130 aircraft, a military transport plane, for

oil field work in Libya. Because this plane had potential mil-

itary application, the sale had to be cleared by the State De-

partment. The State Department responded to inquiries

about the export of this aircraft to Libya by stating that the

transaction would not be approved. Baskett, a military offi-

cer who became defendant's employee, informed defendant

of this refusal. Defendant then suggested an alternative plan

that involved leasing the aircraft by Armaflex on behalf of

Badir's West German company, TOP, or its subsidiary,

Contrust, and basing it in Greece or Malta. Because this ar-

rangement involved a lease rather than a sale to a company

for use in Libya, the Departrnent of Commerce, rather than

the Department of State, would have had to approve it. The

Commerce Department rejected this alternative. At about

this time, the Air Force reclassified the KC-130? to make it

impossible for a private company to obtain one of the air-

craft unless acting on behalf of or sponsored by an accept-

able foreign government. Badir and Lilly attempted to ob-

tain sponsorship first from Morocco and subsequently from

Bolivia. The government of Bolivia did sponsor the purchase

temporarily, but disavowed that sponsorship after its agent

' The customer was Corcoran, Lilly’s father-in-law and a co-indictee, who

was purportedly representing National Oil Company. Badir, the Libyan

national involved in the prior transaction, was the ultimate recipient of

the planes.

? The KC-130 is a modified version of the C-130 with air-to-air refueling

capability. Badir indicated in November 1984 that he desired the KC-130

version.

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in the negotiations, General Rodriguez, unsuccessfully at-

tempted to overthrow the government.

At this point, defendant adopted the recommendation

of an employee, Franklin, and suggested to Lilly that the

customer, Corcoran, substitute the L-100-30 model for the

KC-130, because the L-100-30 model did not need foreign

sponsorship and because the Department of Commerce

rather than State would review the transaction. Badir re-

quested information about the L-100-30 aircraft, which de-

fendant provided. Shortly after this communication, Badir

inquired into modification kits for the L-100-30 to allow air-

to-air refueling. Lilly discussed the modification with de-

fendant. Defendant suggested a company in England, Flight

Refueling Systems, that had modification kits available.

After it became clear that the British company could not

meet Badir’s demands, defendant contacted a California

company, Aero Union, about modification kits. Defendant

did not disclose consideration or discussion of this modifi-

cation to Lockheed, and defendant ordered Baskett to re-

frain from discussing it.’

Defendant originally negotiated with Lockheed as rep-

resentative of Contrust, the West German oil exploration

subsidiary controlled by Badir. Lockheed preferred to sell

the aircraft to Armaflex, Inc., rather than to Contrust. De-

fendant created a second California corporation, AFI Inter-

national, to represent Contrust in the negotiations. In nego-

3 This refueling modification was critical, because at the time Libya did

not have air-to-air refueling capability. Badir purchased the plane

contingent upon the availability of the modification, and entered into a

Memorandum of Understanding with Elkins to that effect.

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tiations with Lockheed, defendant maintained that the air-

plane was destined for the West African country of Benin.

When Lockheed learned of Badir’s involvement, however,

Lockheed cancelled a March 1, 1985, negotiating session. De-

fendant quickly assured Lockheed that Badir represented a

legitimate West German concern, and that he was a Libyan

expatriate antagonistic to the Libyan government. The inter-

ruption in the negotiations arising from Lockheed’s enlight-

enment about Badir’s involvement was brief, and negotia-

tions between defendant and Lockheed resumed. Defendant

continued to assert that Badir had no connection with the

Libyan government. At no time did defendant notify Lock-

heed that the plane was to be modified with mid-air refuel-

ing capability.

Defendant and Lockheed reached an agreement on the

sale of two L-100-30 planes and parts. Defendant mailed the

contract to Lilly in West Germany; Lilly traveled to Tripoli

to deliver the contract to Badir and Badi, Badir’s superior.

While in Tripoli, Lilly also met with Abid Al-Jawwad, the

banker for the transaction. While Lilly was traveling, defen-

dant and Lockheed representatives executed the contract for

the sale of the two L-100-30 airplanes to AFI. Defendant’s

net profit on the deal exceeded $7 million. The contract

provided, among other things, that AFI had the sole re-

sponsibility to obtain a valid export license.

Lockheed officials accompanied defendant to the De-

partment of Commerce to obtain an export license for the

airplanes. Department of Commerce officials realized that

Contrust, the West Germany company receiving the planes,

was owned by Libyans. Defendant explained that the planes

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were destined for Benin. At no time did defendant mention

the planned refueling modification.

The Department of Commerce approved the export li-

cense on April 18, 1985. Lockheed delivered the aircraft

within a month to Benin. The planes were never seen again

in Benin. One of the airplanes was found at an airport in

Cairo, Egypt, on March 7, 1987. The plane’s radio signal and

operations manual indicated that the plane had been used

by the Libyan Arab Air Force.

Defendant was convicted on one count of conspiracy in

violation of 18 U.S.C.A. § 371, and one count of violating ex-

port restrictions in violation of 50 U.S.C.A. App. § 2410, 50

U.S.C.A. § 1705, and 18 U.S.C.A. § 2. Defendant received a

five-year sentence on count one. Defendant received a con-

secutive ten year sentence on count two and a $6,600,000

fine. A $50 per count special assessment was also imposed.

Defendant appeals.

II. DISCUSSION

A. The Effect of McNally

The jury returned a verdict of guilty on Count One of

the indictment which charged defendant with conspiracy to

commit four substantive offenses against the United States.‘

* The indictment charged defendant with conspiracy to violate:

(1) the Export Administration Act of 1979, as amended, Title

50, United States Code Appendix, Section 2410(a) . . . , (2) the

Arms Export Control Act, Title 22, United States Code, Sections

2778(b)(2) and 2778(c), and Title 22, Code of Federal

Regulations, Sections 121, et seq.; (3) Title 18, United States Code,

Section 1001 and (4) Title 18, United States Code, Section 1343.

6a

Conspiracy to commit an offense against the United States

violates 18 U.S.C.A. § 371, which provides:

If two or more persons conspire either to

commit any offense against the United States, or to

defraud the United States, or any agency thereof

in any manner or for any purpose, and one or

more of such persons do any act to effect the object

of the conspiracy, each shall be fined not more

than $10,000 or imprisoned not more than five

years, or both.

(emphasis added). This statute is written in the disjunctive.

A violation occurs if the defendant conspires to commit one

or more substantive offenses against the United States, or if

the defendant conspires to defraud the government in any

manner or for any purpose.

Defendant was charged with conspiring to commit,

among other things, the substantive offense of wire fraud

against the United States. See 18 U.S.C.A. § 1343. That

statute prohibits the use of wire transmission services in fur-

therance of any scheme or artifice to defraud. The object of

the scheme alleged was to defraud the United States of the

right to implement its foreign policy free from stealth, false

statement, and fraud.

Three weeks after defendant's conviction, the Supreme

Court decided McNally v. United States, 483 U.S. 350 (1987).

In McNally, the Supreme Court held that 18 U.S.C.A. § 1341,

the mail fraud statute,> applies only to schemes to defraud

>The McNally analysis applies equally to wire fraud. See Carpenter v.

United States, 108 S. Ct. 316, 320 n. 6 (1987) (“The mail and wire fraud

statutes share the same language in relevant part, and accordingly we

apply the same analysis to both sets of offenses here.”).

7a

others of property rights. The Court held that a scheme to

defraud citizens of their interest in fair and effective gov-

ernment does not violate section 1341. Id. at 2879. Thus, the

wire and mail fraud statutes are limited to schemes to de-

prive others of property rights, although the object of the

scheme to defraud may be intangible property rights. See

Carpenter v. United States, 108 S. Ct. 316 (1987).

McNally applies retroactively. See Griffith v. Kentucky,

479 U.S. 314, 328 (1987); see also United States v. Asher, 854

F.2d 1483, 1487 (3rd Cir. 1988), cert. denied, 109 S. Ct. 836

(1989). Under McNally, defendant could not be convicted of

the substantive offense of wire fraud where the object of the

scheme was to deprive the government of its right to control

its foreign policy. See generally United States v. Dynalectric

Co., 859 F.2d 1559, 1570 (11th Cir. 1988). Because the object

of the scheme to defraud the government alleged in the in-

dictment is not sufficient to violate section 1343, that scheme

does not constitute conspiracy to commit a substantive of-

fense against the United States in violation of the first por-

tion of section 371. See McNally, 483 U.S. at 361 (“The Gov-

ernment concedes that if petitioners’substantive mail fraud

convictions are reversed their conspiracy convictions should

also be reversed.”); see also United State v. Hilling, 863 F.2d

677 (9th Cir. 1988).

An individual may also violate section 371, however,

by conspiring to defraud the United States in any manner or

for any purpose. The scope of “defraud” in section 371 is

broader than “defraud” as used in section 1343. In McNally

itself, the Court stated that to “defraud” the government

within the meaning of section 371 “also means to interfere

with or obstruct one of its lawful governmental functions by

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deceit, craft or trickery, or at least by means that are dishon-

est.” McNally, 483 U.S. at 358 n.8 (quoting Hammerschmidt v.

United States, 265 U.S. 182, 188 (1924)). Therefore, although

the object of the scheme alleged in the indictment, to de-

fraud the government of its right to implement its foreign

policy, would not support a wire fraud conviction after Mc-

Nally, it would support a conviction under section 371 of

conspiracy to defraud the government.

“{A] general verdict must be set aside if the jury was

instructed that it could rely on any of two or more indepen-

dent grounds, and one of those grounds is insufficient, be-

cause the verdict may have rested exclusively on insufficient

ground.” Zant v. Stephens, 462 U.S. 862, 881 (1983). A con-

viction can be affirmed, however, where the legally insuffi-

cient charge includes all the elements of a separate, legally

sufficient charge also contained in the indictment. In such a

situation, the reviewing court can be confident that if the

jury found all the elements necessary to convict the defen-

dant on the legally insufficient charge, it must also have

found all the elements necessary to convict on the legally

sufficient charge. See, e.g., United States v. Kato, 878 F.2d 267,

269-70 (9th Cir. 1989); United States v. Odom, 858 F.2d 664,

666 n.1 (11th Cir. 1988); see generally United States v. Ochs, 842

F.2d 515, 520 (1st Cir. 1988). In this case, if the jury convicted

defendant on the wire fraud charge, it necessarily must have

found all the elements necessary to sustain a conviction for

conspiracy to defraud the government under section 371.

This Court cannot affirm a criminal conviction based

on a theory not contained in the indictment, see generally

Stirone v. United States, 361 U.S. 212, 215-17 (1960), or not

presented to the jury. See generally Chiarella v. United States,

9a

445 U.S. 222, 237 n.21 (1980). The scope of a conspiracy is

that charged in the indictment. United States v. Dynalectric

Co., 859 F.2d at 1564. Conspiracy to defraud is a different

substantive offense from conspiracy to commit wire fraud.

See e.g., United States v. Sjeklocha, 843 F.2d 485, 486 (11th Cir.

1988). The dispositive issue on defendant's appeal from his

conspiracy conviction, then, is whether the indictment

charged him with conspiracy to defraud the United States.

An indictment must set forth the elements of the of-

fense in a manner which fairly informs the defendant of the

charges against him and enables him to enter a plea which

will bar future prosecution for the same offense. Belt v.

United States, 868 F.2d 1208, 1211 (11th Cir. 1989) (citing

Hamling v. United States, 418 U.S. 87, 117 (1974)). See generally

Russell v. United States, 369 U.S. 749, 763 (1962). In this case,

the indictment charged defendant with conspiracy to com-

mit four substantive offenses against the United States.

Although the fraud was charged as the object of the substan-

tive offense of wire fraud rather than as the object of the

conspiracy, defendant had clear notice that violations of the

substantive offenses constituted fraud against the govern-

ment. Conspiracy to violate the substantive offenses is con-

spiracy to defraud the government. Reading the indictment

as a whole, we conclude that the indictment adequately

charged defendant with conspiring to deprive the United

States of its ability to control its foreign policy by concealing

material facts from responsible government agencies.

We also conclude that the district court adequately

charged the jury on conspiracy to defraud the United States.

The court instructed the jury fully on the elements of con-

spiracy. The court then instructed the jury as follows:

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The fourth object of the conspiracy was to devise a

scheme and artifice to defraud the United States

and its executive agencies of the right to imple-

ment its foreign policy and to conduct its affairs

free from stealth. Here again, it is alleged that it

was a part of this object of the conspiracy that in-

terstate or international wire communications

would be used.

Vol. 29, at 17-18. The district court clarified and repeated

this instruction as follows:

What must be proved beyond a reasonable doubt

is that the accused planned knowingly and will-

fully to devise or intending — to devise a scheme

to defraud the United States of America and its

executive agencies out of the right to implement

its foreign policy and to conduct its affairs free

from stealth, false statement, and fraud and that.

the use of the interstate wire or foreign wire com-

munications were to be closely related to the

scheme.

Vol. 29, at 34. Conspiracy to commit wire fraud against the

United States contains all of the elements of conspiracy to

defraud the United States. Conspiracy to commit wire fraud

contains the additional element of use of wire transmission

services in furtherance of the scheme to defraud. The district

court’s charge to the jury, as indicated by the above pas-

sages, instructed the jury fully on the elements of conspiracy

to defraud the United Siates in violation of section 371.

The jury could not have convicted defendant of con-

spiracy in this case without having found an unlawful object

of the conspiracy. The indictment adequately charged de-

fendant with conspiracy to defraud the United States, and

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the jury was adequately charged on this object of the con-

spiracy. Under similar circumstances, Kato, supra, the Ninth

Circuit affirmed a defendant’s conspiracy conviction. We

agree with the logic of the Ninth Circuit in Kato, and the

First Circuit in Ochs, and consequently we affirm defen-

dant’s conviction on the conspiracy count in this case.

B. The Allen Charge

The jury began deliberating on May 27, 1987. On June

5, 1987, the jury sent a note to the judge indicating it was

deadlocked 8-4 on Count Two, the export violations charge.

The district judge did not advise counsel that he had been

informed of the numerical breakdown of the deadlock. In

response to this note, and over defendant's objection and

motion for a mistrial, the district judge gave the jury a modi-

fied Allen charge. See Allen v. United States, i64 U.S. 492

(1896). The jury rendered a verdict of guilty that same day.

This Circuit allows the use of Allen charges. See Thag-

gard v. United States, 354 F.2d 735, 739 (Sth Cir. 1965),$ cert.

denied, 383 U.S. 958 (1966); see also United States v. Rapp, 871

F.2d 957, 967 (11th Cir. 1989); United States v. Norton, 867 F.

2d 1354, 1366 n.14 (11th Cir.), cert. denied, 109 S. Ct. 3192

(1989); United States v. Rey, 811 F.2d 1453, 1457-60 (11th Cir.),

cert. denied, 108 S. Ct. 103 (1987). This Court’s inquiry on ap-

peal of a district court’s decision to give an Allen charge is

limited to evaluating the coercive impact of the charge.

United States v. Alonso, 740 F.2d 862, 878 (11th Cir. 1984), cert.

denied, 469 U.S. 1166 (1985). The question we address is

6In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en

banc), this Court adopted as binding precedent all decisions of the former

Fifth Circuit handed down before October 1, 1981.

12a

whether under the circumstances and language of the Allen

charge the jury was unduly coerced into reaching a verdict.

See Norton, 867 F.2d at 1365-66; Alonso, 740 F.2d at 878.

The language the district court used in this case did not

deviate from language used in accepted Allen charges. Thus,

the language itself did not unduly coerce the jury into

reaching a verdict. See Rey, 811 F.2d at 1459. The circum-

stances also do not indicate coercion. Although the jury had

not reached a verdict prior to the Allen charge, the district

court had the discretion to urge the jury to spend more time

deliberating. See, e.g., United States v. Gordon, 817 F.2d 1538,

1543 (11th Cir. 1987), vacated in part on other grounds, 836 F.2d

1312 (11th Cir. 1988), cert. dismissed, 109 S. Ct. 28 (1988).

Although the jury returned a verdict the same day that the

judge gave the charge, there is no indication that this charge

was inherently coercive. See Rapp, 871 F.2d at 967; Rey, 811

F.2d at 1458.

Defendant challenges the timing of the charge, because

the district court gave the charge on a Friday afternoon. The

timing of the charge lies in the discretion of the trial court.

See Alonso, 740 F.2d at 877. The judge gave the Allen charge

after eight days of deliberation and only after the jury in-

formed him it was deadlocked. There was no abuse of dis-

cretion in the timing of the charge. Compare United States v.

Scruggs, 583 F.2d 238, 239-41 (5th Cir. 1978) (charge given

sua sponte at 10:28 p.m. ona Friday night was not an abuse

of discretion).

Defendant argues his conviction must be reversed be-

cause the district court knew the numerical split of the jury

at the time it gave the charge. The fact that the judge was

aware of the split in the vote does not necessarily mean that

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this charge was coercive. See United States v. Norton, 867 F.2d

at 1365-66 (no reversal even if district judge knowing nu-

merical split gives Allen charge absent a showing that the

knowledge and the charge were inherently coercive) The

district court did not request that information, and, in fact,

the court expressly charged the jury not to divulge any nu-

merical breakdown should the jury request further instruc-

tions. In these circumstances, we conclude that the district

judge’s Allen charge did not unduly coerce the jury into

reaching a verdict.

C. Evidentiary Challenges

The government introduced into evidence two docu

ments used to show that the Libyan military had purchased

these aircraft. The documents were found in West Germany

in a briefcase allegedly owned by Badir. One was a letter by

Jabir, purportedly the head of the Libyan military, to Badi,

Badir’s superior, authorizing the purchase of two L-100-30

jet aircraft with air-to-air refueling capability. The other was

a progress report written by Badir to “Chief of Staff Colonel

Ahmad Mahmoud” about the purchase of the jets. Defen-

dant challenges the admission into evidence of these letters

on several grounds

1. Rule 403

Defendant argues that the district court erred under

Fed. R. Evid. 403 in admitting these documents into evi-

dence. Fed. R. Evid. 402 provides that all relevant evidence

is admissible. Rule 403 allows the district court to exclude

evidence if the danger of unfair prejudice substantially

outweighs the probative value of the evidence. Rule 403 is

an extraordinary remedy which the district court should in-

l4a

A

voke sparingly. United States v. Finestone, 816 F.2d 583, 585

(11th Cir.), cert. denied, 108 S. Ct. 338 (1987). The balance un-

der Rule 403 should be struck in favor of admissibility.

United States v. Norton, 867 F.2d at 1361. In determining

A whether the district court erred in failing to exclude relevant

evidence under Rule 403, this Court must give deference to

the discretion of the district judge. United States v. Howard,

855 F.2d 832, 837 (11th Cir. 1988). On appeal, this Court

should look at the evidence in a light most favorable to its

admission, maximizing its probative value and minimizing

its undue prejudicial impact. Finestone, 816 F.2d at 585. The

district court’s admission of evidence will be reversed only

upon a clear showing of abuse of discretion. United States v.

Russell, 703 F.2d 1243, 1249 (11th Cir. 1983).

Defendant did not object under Rule 403 to the admis-

sion of this evidence at trial, although defendant did object

that the documents were improperly authenticated. Conse-

quently, this error, if any, is reviewed for plain error. See

Fed. R. Crim. P. 52(b). “Plain error consists of error which,

when examined in the context of the entire case, is so obvi-

ous that failure to notice it would substantially affect the

fairness, integrity and public reputation of judicial proceed-

ings.” Russell, 703 F.2d at 1248. This Court will reverse de-

fendant’s conviction for plain error only if the erroneous

admission of evidence seriously affected substantial rights

of the defendant. United States v. Cortez, 757 F.2d 1204, 1207

(11th Cir.), cert. denied sub nom. Martinez-Valdez v. United

States, 474 U.S. 945 (1985).

The district court did not err in admitting these letters.

We emphasize that the level of prejudice we consider is the

level of unfair prejudice. United States v. Norton, 867 F.2d at

15a

1362. The documents were relevant to show Badir’s intent

that the planes would go to Libya. The unfair prejudice to

defendant was limited, because there was nothing in either

document connecting defendant directly to the Libyan mili-

tary. Even if defendant is correct in arguing that the district

court erred in admitting these two documents under Rule

403, he would not be entitled to relief under the plain error

standard. Defendant failed to show any significant unfair

prejudice, much less the level of unfair prejudice necessary

for a finding of plain error.

2. Rule 804(b)(5)

Defendant argues that the district court erred in admit-

ting the Jabir letter under Fed. R. Evid. 804(b)(5). Rule 804

(b\(5) provides for admission of hearsay evidence having

circumstantial guarantees of trustworthiness if “(A) The

statement is offered as evidence of material fact; (B) the

statement is more probative on the point for which it is of-

fered than any other evidence which the proponent can pro-

cure through reasonable efforts; and (C) the general pur-

poses of these rules and the interests of justice will best be

served by admission of the statement into evidence.”

We conclude that the district court correctly found that

the government satisfied the elements required for admis-

sion of the Jabir letter under Rule 804 (b)(5). The presence of

corroborating evidence that these planes were destined for

’ A preliminary requirement is that the declarant be unavailable. See Fed.

R. Evid. 804(a)(5). Defendant first argues that the government could have

obtained the presence of Badir, and that therefore the declarant was not

unavailable. This argument fails for the simple reason that Jabir and not

Badir was the declarant. There is no argument that Jabir, the head of the

Libyan military forces, was reasonably available to the government.

16a

use in Libya by the Libyan armed forces provides cir-cum-

stantial guarantees of the trustworthiness of the letter. See

United States v. Chapman, 866 F.2d 1326, 1332 (11th Cir. 1989).

The official stationery and its presence in Badir’s briefcase

also constitute circumstantial guarantees of trustworthiness.

The letter is clearly material, indicating as it does the direct

involvement of high Libyan officials in the purchase of these

planes. The letter, authored by Jabir, was more probative

than any other information reasonably available to indicate

that the Libyan military participated in the purchase of these

planes. We conclude that the district court did not err in

admitting this letter.* Even if this letter had been erro-

neously admitted, however, we would not reverse defen-

dant’s conviction, because we conclude that the admission

would have constituted harmless error. See Fed. R. Crim. P.

52(a).

3. Authentication

Defendant challenges the use of circumstantial evi-

dence to authenticate the letters under Fed. R. Evid. 901(a).

Use of circumstantial evidence alone to authenticate a doc-

ument does not constitute error. United States v. Caldwell, 776

F.2d 989, 1001-03 (11th Cir. 1985). There is no evidence of

adulteration or forgery; thus, there is no reasonable proba-

bility of misidentification. See Fed. R. Evid. 901(a)

(authentication is sufficient if it supports a finding that “the

matter in question is what its proponent claims”); United

States v. Shabazz, 724 F.2d 1536, 1539 (11th Cir. 1984). Fed. R.

* Although the government does not make this argument, this letter may

also have been admissible as a co-conspirator statement. See Fed. R. Evid.

801(a)(2)(E).

17a

Evid. 901(a) requires only some competent evidence in the

record to support authentication. United States v. Koziy, 728

F. 2d 1314, 1321 (11th Cir.), cert. denied, 469 U.S. 835 (1984).

The government introduced evidence that these documents

were indeed what the government claimed them to be. We

conclude that the district court did not err in finding that the

government had properly authenticated the documents.

4. Expert Testimony

Defendant claims that the district court erred in admit-

ted hearsay evidence on the identity of Jabir. In attempting

to prove that Jabir was the head of the Libyan military, the

government called an expert in Libyan history, George

Schuler. Schuler testified that Jabir had been announced in

the Libyan press in 1970 as commander-in-chief of the

Libyan armed forces, and that Jabir was still commander-in-

chief at the time the letter was written.

The district court has broad discretion in admitting or

excluding expert testimony. The district court’s ruling quali-

fying Schuler as an expert and admitting this evidence will

not be reversed unless manifestly erroneous. United States v.

Brown, 872 F.2d 385, 392 (11th Cir. 1989); United States v.

Sans, 731 F.2d 1521, 1530 (11th Cir. 1984), cert. denied, 469

U.S. 1111 (1985). Testimony based on hearsay is inadmissible

as a general rule, whether offered by an expert or by a lay

person. United States v. Cox, 696 F.2d 1294, 1296-97 (11th

Cir.), cert. denied, 464 U.S. 827 (1983). Fed. R. Evid. 702 al-

lows an individual to be qualified as an expert based on

knowledge, experience, and education, and an expert can

testify based on his knowledge and experience. Fed. R. Evid.

703; see United States v. Bagnell, 679 F.2d 826, 833-34 (11th

Cir. 1982), cert. denied, 460 U.S. 1047 (1983). Once qualified as

18a

an expert in Libyan affairs, Schuler could give his opinion

about who Jabir was. His testimony could include hearsay

that formed the basis of that opinion. See United States v.

Ramos, 725 F.2d 1322, 1324 (11th Cir. 1984). The weakness of

the basis for his opinion that Jabir was the head of the

Libyan military goes to weight rather than to the admissibil-

ity of Schuler’s opinion. See Jones v. Otis Elevator Co., 861

F.2d 655, 663 (11th Cir. 1988).

We need not decide whether the district court erred in

admitting Schuler’s testimony. In order to be entitled to re-

lief from the erroneous admission of evidence, defendant

must show prejudice to substantial rights. See Fed. R. Crim.

P. 52(a). Defendant, however, does not claim prejudice from

the introduction of this testimony. For example, defendant

does not argue that Jabir is not in fact the commander-in-

chief of the Libyan military. We conclude that the introduc-

tion of Schuler’s testimony does not constitute reversible er-

ror.

5. Transcript of Tape Recording

A tape recording of a conversation between defendant

and co-defendant Burnham that occurred at Atlanta’s Harts-

field Airport on June 27, 1985, was introduced into evidence

by the government. At the end of the tape, the individuals

making the recording questioned whether defendant was

actually involved in the plan to sell these planes to Libya.

This trailer portion of the tape was not introduced into evi-

dence. Instead, defendant’s counsel cross-examined

Boggess, the recording person, regarding his impression of

the level of defendant's involvement in the plan. During its

deliberation, the jury requested that the tape-recorded con-

versation be replayed. The trial judge allowed the tape to be

19a”

replayed, but refused to allow the jury to listen to the trailer

portion of the tape. Defendant argues that this decision con-

stitutes reversible error.

The district court did not err in refusing to allow the

jury to consider the trailer portion of the tape. The “trailer”

portion of the tape was a recording of a conversation be-

tween the individuals who made the tape; it was not a part

of the taped conversation between the defendant and co-de-

fendant Burnham. It was not up to the individuals who

made the tape to make any judgment as to Elkins’ involve-

ment in the conspiracy to sell the planes to Libya. That

judgement, as the trial judge properly recognized, was for

the jury. That portion of the tape had never been admitted

into evidence at trial. No exception to the general rule that

the jury cannot consider evidence not introduced into evi-

dence at trial applies in this case. Compare United States v.

Pendas-Martinez, 845 F.2d 938, 943-45 (11th Cir. 1988) with

United States v. Le Fevour, 798 F.2d. 977, 981 (7th Cir. 1986).

D. Prosecutorial Misconduct and Judicial Intervention

Defendant argues that the prosecutor committed re-

versible error by giving an inaccurate opening statement

and by allowing misleading testimony to be presented to the

jury. Defendant also argues that the district judge unfairly

interjected himself into the case. Defendant claims that the

combination of judicial and prosecutorial misconduct de-

prived him of a fair trial.

A conviction will be reversed on the basis of prosecuto-

rial misconduct if that misconduct is so pronounced and

persistent as to “permeate the entire atmosphere of the

trial.” United States v. McLain, 823 F.2d 1457, 1462 (11th Cir.

20a

— ont eet

1987). The focus is on whether the prosecutor's misconduct

deprived the defendant of a fair trial. See generally Smith v.

Phillips, 455 U.S. 209, 219 (1982). In a similar vein, objective

demeanor on the part of the trial judge is crucial to a fair

trial, although the judge may within reasonable limits re-

mark on the evidence presented and when appropriate cur-

tail further introduction of evidence. United States v. Bertram,

805 F.2d 1524, 1529 (11th Cir. 1986); see also United States v.

Cortez, 757 F.2d at 1208. The combination of prosecutorial

misconduct and improper judicial conduct can, in an ex-

treme case, deny a defendant a fair trial. See, e.g., McLain,

823 F.2d at 1462.

In his opening statement the prosecutor told the jury

that members of the Libyan Air Force had defected to Egypt

in one of the Lockheed L-100-30 airplanes. The government

intended to call Egyptian officials to prove this fact. During

trial, however, the Egyptian government refused to cooper-

ate, and the prosecutor was not able to prove at trial that

this statement was true. Defendant argues that this mis-

statement in opening argument constitutes prosecutorial

misconduct mandating reversal of his conviction.

Defendant did not object to the statement or move for a

mistrial at the close of evidence at trial. Consequently, this

error must be reviewed under a plain error standard. Fed. R.

Crim. P. 52 (b). See United States v. Walther, 867 F.2d 1334,

1341 n.3 (11th Cir. 1989); United States v. Odom, 858 F.2d at

667. The plain error rule should be used sparingly, and a

conviction should be reversed only if “a miscarriage of jus-

tice would otherwise result.” United States v. Young, 470 U.S.

1 (1985). Whether or not it may have been improper to refer

in an opening statement to evidence that was never ulti-

21a

mately introduced at trial, this error does not require rever-

sal, see, e.g., United States v. Sawyer, 799 F.2d 1494, 1507 (11th

Cir. 1986), cert. denied, 479 U.S. 1069 (1987) (not plain error to

refer to confession that was never introduced at trial), par-

ticularly because there was no indication of bad faith. See

United States v. Gray, 730 F.2d 733, 834-35 (11th Cir. 1984).

Defendant argues that the government introduced

misleading testimony by a critical witness, Lilly. Lilly testi-

fied that the government had not made any promises that he

would not be subject to prosecution. In fact, the government

never did prosecute Lilly. Defendant relies on the fact that

the time for prosecuting Lilly under the Speedy Trial Act

expired during defendant's trial to argue that the govern-

ment never intended to prosecute Lilly, that Lilly knew this,

and that therefore Lilly’s statement that there was no deal

was prejudicially misleading to the jury.

The government has the duty to disclose agreements

with prosecution witnesses and to disclose false testimony

presented by prosecution witnesses. See Brown v. Wain-

wright, 785 F.2d 1457, 1465 (11th Cir. 1986). Lilly’s statement

even by the defendant’s own argument is not misleading,

however. At a hearing held before the district court, attor-

neys for the government testified regarding their decision

not to prosecute Lilly. The attorneys testified that at the time

of his testimony, the government had not decided whether

or not to prosecute Lilly. Lilly’s testimony, that there was no

deal at the time of the trial, was true. Defendant does not ar-

gue that the government failed to disclose an actual agree-

ment with the defendant. See United States v. Lacayo, 758 F.2d

1559, 1562-63 (11th Cir.), cert. denied, 474 U.S. 1019 (1985)

(agreement granting leniency to witness must be reached

22a

prior to trial to be subject to disclosure). Therefore, there

was no fact disclosed or not disclosed that would have mis-

led the jury. Compare Giglio v. United States, 405 U.S. 150, 153

(1972) (“[D]eliberate deception of a court and jurors by the

presentation of known false evidence is incompatible with

‘rudimentary demands of justice.’ ” (quoting Mooney v.

Holohan, 294 U.S. 103, 112 (1935)). We conclude that defen-

dant has not demonstrated any prosecutorial misconduct

justifying a reversal of his conviction.

Defendant argues that the district court displayed a

lack of neutrality that denied him a fair trial. Defendant

does not identify any particularly egregious conduct by the

district judge that would mandate a reversal of his convic-

tion. Certainly the judge did not intervene to the extent of

indicating his personal feelings about guilt or innocence. See

United States v. Robinson, 687 F.2d 359, 361 (11th Cir. 1982).

The judge did have the discretion to control admission of

evidence and to comment on that evidence. See Bertram, 805

F.2d at 1529; Cortez, 757 F.2d at 1208. We conclude that de-

fendant has not demonstrated any misconduct on the part of

the trial judge that mandates reversal of his conviction.

E. Requested Jury Charge

Defendant challenges the district court’s refusal to give

a requested jury instruction. Defendant requested the judge

to instruct the jury that the defendant should be acquitted if

defendant reasonably believed that Lockheed knew of the

Libyan connections with Contrust and had informed the

Department of Commerce about those connections.

In reviewing jury instructions, this Court must evaluate

whether the entire charge, taken as a whole, adequately pre-

23a

sented the issues and the law to the jury. United States v.

Italiano, 837 F.2d 1480, 1487 (11th Cir. 1988). The trial judge

has broad discretion in formulating a jury charge, and will

not be reversed unless the charge does not correctly state the

substance of the law and the facts. United States v. Chapman,

866 F.2d at 1334; United States v. Hewes, 729 F.2d 1302, 1316

(11th Cir. 1984), cert. denied sub nom. Caldwell v. United States,

469 US. 1110 (1985). The defendant, however, is entitled to

instruction on any valid defense that has an evidentiary

foundation. See United States v. Fernandez, 837 F.2d 1031,

1035 (11th Cir.), cert. denied, 109 S. Ct. 102 (1988).

The defense defendant attempted to assert was good

faith reliance on Lockheed. Defendant acknowledged at

trial, however, that Lockheed lacked full knowledge of the

facts. Thus, even if this constituted a valid defense, defen-

dant was not entitled to his requested instruction, because

this defense lacked an evidentiary foundation. See United

States v. Parker, 839 F.2d 1473, 1482 n. 6 (11th Cir. 1988). -

F. Eighth Amendment Challenge to Sentence

1. Imprisonment

In Solem v. Helm, 463 U.S. 277 (1983), the Supreme

Court held that grossly disproportionate sentences can vio-

late the Eighth Amendment. Federal courts thus must con-

duct a proportionality review of sentences imposed. See

Marrero v. Dugger, 823 F.2d 1468, 1473 n.7 (11th Cir. 1987),

cert. denied, 108 S. Ct. 1235, 1247 (1988). This proportionality

review is extremely limited: “As the Supreme Court made

clear in Solem v. Helm, 463 U.S. 277 (1983), it is not normally

the role of an appellate court to second-guess the trial

judge’s determination of an appropriate sentence. Rather, an

24a

appellate court must determine only whether the sentence

imposed is so grossly disproportionate to the crime as to

constitute cruel and unusual punishment.” United States v.

Darby, 744 F.2d 1508, 1525 (11th Cir. 1984), cert. denied sub

nom. Yamanis v. United States, 471 U.S. 1100 (1985). In con-

ducting this proportionality review, this Court must evalu-

ate three elements: (1) the gravity of the offense and the

harshness of the penalty; (2) the sentences imposed on other

criminals in the same jurisdiction; and (3) the sentences im-

posed for commission of the same crime in other jurisdic-

tions. Solem v. Helm, 463 U.S. at 292; see also United States v.

Holmes, 838 F.2d 1175, 1178 (11th Cir.), cert. denied, 108 S. Ct.

2829 (1988).

Defendant was sentenced to five years’ imprisonment

on the conspiracy conviction, and to a consecutive term of

ten years’ imprisonment and a $6.6 million fine on the ex-

port control violation conviction. Defendant also received a

special assessment of $50 on each count. Defendant eventu-

ally makes one argument that his sentence violated the

Eighth Amendment: “Because the harshness of Appellant's

sentence far exceeds the sentences imposed in similar export

prosecutions in the Northern District of Georgia and else-

where, Appellant respectfully submits this Court should

conclude that his sentence is unconstitutionally dispropor-

tionate.” A sentence is disproportionate for Eighth Amend-

ment purposes if the punishment is grossly disproportionate

when compared with the nature of the crime. In Solem v.

Helm itself, for exampte, the Court held that a life sentence

without possibility of parole for a non-violent, minor offense

violates the Eighth Amendment.

25a

In a variety of situations, life sentences with the possi-

bility of parole have been held not to violate the Eighth

Amendment. See, e.g., Rummel v. Estelle, 445 U.S. 263, 272

(1980) (obtaining $120.75 by false pretenses); Williams v.

Johnson, 845 F.2d 906 (11th Cir. 1988) (forgery). These sen-

tences, five years for conspiracy and ten years for violating

export control laws, certainly are not grossly excessive com-

pared to the nature of the crime. Additionally, the ten-year

sentence imposed for violating export control regulations is

not grossly disproportionate to the sentences imposed in

other federal jurisdictions for violations of the same federal

laws. Defendant unlawfully sold $57 million worth of high

technology aircraft equipment to an unfriendly nation.

Although his sentence may have been longer than the sen-

tences normally imposed for this offense, that fact alone

does not mean it was grossly disproportionate within the

meaning of Solem.

2. Fine

Defendant also challenges the fine imposed on count

two. There may be circumstances where an excessive fine

constitutes cruel and unusual punishment in violation of the

Eighth Amendment. Cf. United States v. Monroe, 866 F.2d

1357, 1366-67 (11th Cir. 1989). We need not identify those

circumstances in this case. Defendant made a gross profit of

$13,049,474, a net profit of $7,336,233, and an after-tax profit

of $3,368,917 from the sale of these aircraft. Defendant's fine

of $6.6 million was less than his gross profit and less than

his net profit from the sale of these planes. Although a large

amount, we hold that a fine representing an amount less

than the net profit of an illegal transaction does not violate

26a

the Eighth Amendment absent a showing of severe, particu-

larized hardship suffered by defendant.

Defendant also argues that this fine exceeds the maxi-

mum prescribed by law. We disagree. Violation of the ex-

port control laws generally results in fines up to $250,000.

See 50 U.S.C.A. § 1705(b); 50 U.S.C. App. § 2410(b)(1)(B); 15

C.F.R. § 387.1(a)(1)(ii). Under 50 U.S.C. App. § 2410 and 15

C.F.R. § 387.1, however, the district court could have im-

posed a fine up to five times the value of the exports. De-

fendant argues that those sections do not apply, because in

extending the Export Administration Act, the President de-

clared by Executive Order No. 12470 that 50 U.S.C. §§ 1702

(b)(2) and 1705 were to control over inconsistent provisions

concerning punishment. The Executive Order stated that

section 1705 “shall control over any inconsistent provisions

in the regulations which respect to . . . civil and criminal

penalties for violations subject to this Order.” The Executive

Order, however, by its express language did not overrule

the penalty provision of section 2410, because that statute is

not a provision in the regulations. The value of the planes

and parts exceeded $57 million. Consequently, we conclude

this fine was well within the statutory maximum.

Even if section 2410 did not apply, this fine does not

exceed the maximum allowed by law. Title 18, U.S.C.A. §

3623(c)(1), repealed effective November 1, 1987, Pub. L. No.

98-473, applies to fines for crimes committed after December

31, 1984, and before November 1, 1987. See United States v.

Slovacek, 867 F.2d 842, 849 (Sth Cir.), cert. denied, 109 S. Ct.

2441 (1989); United States v. Henson, 848 F.2d 1374, 1385 (6th

Cir. 1988), cert. denied, 109 S. Ct. 784 (1989). The relevant acts

in this case were committed in the spring of 1985, and there-

27a

fore section 3623 is applicable. Section 3623 allows a fine

greater than the amount specified in the statute. See generally

United States v. Cha, 837 F.2d 392, 394 (9th Cir. 1988); United

States v. Holmes, 822 F.2d 481, 495 (5th Cir. 1987). Defendant

could have been fined twice the gross gain from the sale of

the planes, unless imposition of such a large fine would

have unduly complicated or prolonged the sentencing pro

cess. 18 U.S.C.A. § 3623(c)(1). This fine was less than the

amount defendant earned as a gross profit on the sale, and

is well within the limits of section 3623. Consequently, we

conclude that this fine does not exceed the maximum fine

allowed for this offense

Defendant argues that the district court did not con

sider the impact of this fine on his family. See 18 U.S.C.A.§

3622(a)(4), repealed, Pub. L. No. 98-473. This argument has no

merit. That information was before the district court, and

the transcript indicates that the court considered these fac

tors

Il. CONCLUSION

Defendant's convictions and sentence are AFFIRMED

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

UNITED STATES OF AMERICA :

VS. : CRIMINAL INDICTMENT

: NO. CR 86-267-A

EDWARD J. ELKINS

On this 28th day of August, 1987, came the attorney for

the government and the defendant appeared in person and

with counsel, Stephen K. Frankel, Esquire, and Howard J.

Weintraub, Esquire.

IT IS ADJUDGED that the defendant has been con-

victed upon his plea of not guilty and a verdict of guilty of

the offense of before December, 1983, until on or about June

28, 1985, conspiracy to violate the Arms Export Control Act,

Title 22, United States Code, Section 2778(b)(2) and 2778 (c);

Title 22, Code of Federal Regulations, Section 121, et seq.;

Title 18, United States Code, Section 1343, as charged in

count one of the indictment; on or about May 13, 1985, vio-

lation of Arms Export Control Act, Title 50, United States

Code, Section 2 and 3623, as charged in count two of the

indictment; and the court having asked the defendant

whether he has anything to say why judgment should not

be pronounced, and no sufficient cause to the contrary being

shown or appearing to the court,

IT IS ADJUDGED that the defendant is guilty as

charged and convicted.

29a

IT IS ADJUDGED that the defendant is hereby commit-

ted to the custody of the Attorney General or his authorized

representative for imprisonment for a period of FIVE (5)

YEARS on count one of the indictment in the above-entitled

cause; TEN (10) YEARS on count two and that the execution

of this sentence shall commence to run from the expiration

or, or the legal release from, the sentence imposed on count

one.

IT IS FURTHER ORDERED that the defendant pay a

fine in the amount of 6,6 MILLION DOLLARS. Under the

provisions of Title 18, United States Code, Section 3565(a)

(1), the court finds by a preponderance of the evidence that

the defendant presently can pay a substantial portion of the

fine, and therefore,

IT IS ORDERED that he be imprisoned until he trans-

fers to the United States of America all of his interest of

whatever kind in all the property, real and personal, listed

in the attached exhibit, together with any interest he may

own in partnerships or closely held corporations and any

patents or copyrights. It is further provided, however, that

in the case of personal property owned jointly with another,

the defendant will not be required to be imprisoned for fail-

ure to convey complete interest in said property to the ex-

tent he can demonstrate that the other person acquired an

interest from his or her own estate with assets not obtained

directly or indirectly from the defendant.

IT IS FURTHER ORDERED that the defendant pay a

SPECIAL ASSESSMENT in the amount of FIFTY AND

NO/100 DOLLARS ($50.00) each of counts one and two of

the indictment. TOTAL ASSESSMENT: ONE HUNDRED

AND NO/100 DOLLARS ($100.00)

30a

IT IS FURTHER ORDERED that the clerk deliver a cer-

tified copy of this judgment and commitment to the United

States Marshal or other qualified officer and that the copy

serve as the commitment of the defendant.

/s/ J. OWEN FOR R

J. OWEN FORRESTER

UNITED STATES DISTRICT JUDGE

31la