Petition for Writ of Certiorari — Strube v. United States

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Suoreme Ceurt, U.S.

{

| FILED

4PR 20 1990

JOSEPH F. SPANIOL, JR,

CLERK

—_

‘

89-1643

No. 89-

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1989

GORDON STRUBE,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

THOMAS E. HOLLIDAY *LARRY L. SIMMS

GIBSON, DUNN & CRUTCHER GIBSON, DUNN & CRUTCHER

2029 Century Park East 1050 Connecticut Avenue, N.W.

Los Angeles, California 90067 Washington, D.C. 20036

(202) 955-8558

Of Counsel:

JAMES C. DUDA RICHARD MARMARO.

KIMBERLY S. MCGOVERN JAMES C. CHALFANT

GIBSON, DUNN & CRUTCHER McCAMBRIDGE, DEIXLER,

1050 Connecticut Avenue, N.W. MARMARO & GOLDBERG

Washington, D.C. 20036 2029 Century Park East

Los Angeles, California 90067

(213) 277-2650

Attorneys for Petitioner

*Counsel of Record

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

QUESTIONS PRESENTED

1. Whether, contrary to the decisions of several Courts

of Appeals, the court below correctly held that the Gov-

ernment need not comply with the literal terms of plea

agreements which it enters even where the defendant, upon

the Government’s breach, moves to withdraw his plea prior

to sentencing.

2. Whether the Government may, consistently with San-

tobello v. New York, 404 U.S. 257 (1971), purport to cure

its breach of a plea agreement after the defendant, prior

to sentencing, has sought to avail himself of his presump-

tive constitutional right to withdraw his plea and put the

Government to its proof at trial.

3. Whether, as all federal courts having considered the

issue other than the court below have concluded, a

defendant charged with being an accessory after the fact

under 18 U.S.C. §3 may not be convicted unless, to sup-

port that charge, he committed overt acts subsequently to

the completion of the underlying offense.

4. Whether this Court should permit a conviction to

stand when all counsel and the federal courts below failed

to recognize that the facts alleged in the information and

upon which the conviction was obtained do not, as a matter

of law, support conviction for the offense charged.

TABLE OF CONTENTS

OPINIONS AND ORDERS BELOW ...................0000008

FUMMIUCEIRINN venecssidassanicianantacimmidbiodebaaeibiedakersauinvaes

CONSTITUTIONAL PROVISION, STATUTE AND

DOA GUT VURIVEEED coccspeiunsancsisioniaitesistieionbibisieiees

A. Statement of Facts Relevant to the With-

drawal Questions and the Decision of Those

Questions by the Courts Below ..........0.0.....

B. Statement of Facts Relevant to the Acces-

sory After the Fact Questions .................0..

REASONS FOR GRANTING THE WRIT ..................

A. The er Whether the Government Must

Comply with the Literal Terms of a Plea

Agreement Is an Important and Recurring

Question Upon Which the Courts of Appeals

RRO TAVIENE conceals

B. The Court of Appeals’ Acceptance of the Gov-

ernment’s Attempts to Cure Its Breach of the

Plea Agreement Deprived Petitioner of Due

Process under Santobello v. New York ........

C. The Court of Appeals’ Judgment Obliterates

the Distinction Between the Accessory After

the Fact Statute and the Aider and Abettor

Statute and Conflicts With Other Federal

Court DOGO. vonisesscccstatuesnuiateidenner

D. This Court Should Grant the Writ, Vacate

the Judgment of the Court of ores and

Remand for Reconsideration in Light of the

Fact that the Record Discloses_ that

Petitioner Pieaded Guilty to Counts of a

Criminal Information That Did Not Charge

— Punishable under the United States

DEE cavcsvncosectanandeomsadiansiadasitnaiaaeenen ss.

bo bo

Cw po

iil

TABLE OF AUTHORITIES

Cases: Page

Carter v. United States, 350 U.S. 928 (1956) ....... 27

Correale v. United States, 479 F.2d 944 (ist Cir.

a lac chs ished aainunipininewusteraunceveve 17

Government of Virgin Islands v. Aquino, 378 F.2d

EE MIP MOD ac cccncsesssansionencssenveentoeevestienses 23,24

In re Arnett, 804 F.2d 1200 (11th Cir. 1986) ....... 17

Mariscal v. United States, 449 U.S. 405 (1981) .... 26

McKoy v. North Carolina, 110 S. Ct. 1227

i lls ull ana ccncdsaennrsabeedecmseneeneeronsseers 19

Prussian v. United States, 282 U.S. 675 (1931) .... 26

Roberts v. United States, 416 F.2d 1216 (5th Cir.

Tea si alaneningnnaniuinennanonene 25

Santobello v. New York, 404 U.S. 257 (1971)....... passim

United States v. Avery, 450 F.2d 214 (5th Cir.

SNS Se Sa a nee mn ee 16

United States v. Balano, 618 F.2d 624 (10th Cir.

ER iiicidnnibascebucrtucarenbiéanssouenbrsetniiieenseroors 22

United States v. Barlow, 470 F.2d 1245 (D.C. Cir.

FO ee aa 21,22

United States v. Benchimol, 738 F.2d 1001 (9th Cir.

1984), rev’d mem., 471 U.S. 453 (1985) ........ 8,15,16

aaaae _ v. Bornstein, 623 F.2d 1327 (9th Cir.

SI alsin alicainee dinielailethabasmianeebonsienneeenstven

a cca csursiecensesucns 16,17

United States v. Crusco, 536 F.2d 21 (3d Cir.

IIT ca aiaiinicdienskeabankscounnnnunesieenmenmniiainebernssts 14,15

United States v. Ferraro, 414 F.2d 802 (5th Cir.

RT Tos occ csceaeounggusionnesunncenadnebnereeiantion 24

BETTIE. sc cnieninsbiwessnensicesinthonaessecsontevenindisiansteeswoeseds 15,16

Table of Authorities Continued

Page

United States v. Jarboe, 374 F. Supp. 310 (W.D.

Mo. 1974), affd, 513 F.2d 33 (8th Cir.

SET sj csiicinbdlakabaisnaiblanaeadanentuccaibiaasinmahaedaduabeens 24

United States v. McCoy, 721 F.2d 473 (4th Cir.

UIT Sundin tisbacdacienra aaa Reilanacadabeneinadimamtaniasiideataenic 24

United States v. Moscahlaidis, 268 F.2d 1357 (3d

aL I acieaiicitiucslciabanacedaidieusiphienanainiteldceitbemioienssiaades 15

United States v. Nava-Maldonado, 566 F. Supp.

Ee TE: TIED enidscanisecceupeccnncvesinssecérdtiocee 23

United States v. Willis, 559 F.2d 443 (5th Cir.

SED ss vcdisovcocscianuhastktapiluacsanetne ana Mbenervckan 24

United States v. York, 578 F.2d 1036 (5th Cir.

ITED shnsendaisebtisssonisdectaadinledaedelmncmiidtlaitenaalonaiantietds 24

Watkins v. United States, 429 U.S. 1034 (1977) ... 26

Constitutional Provisions, Statutes and Rules:

PE MII ci insesacisncospneunsncnnsamuieindeneuricmisities 2

IAT EINTE Sic sete wusnpnabcasbeubdedanicasntgpiiausdndanasabnaideiad passim

ie” ERNIE APO <1 scoeasiaiiinGiiowoaibasioneinaseudasapnuuamenaensanitbdin passim

ee ac TIE crecittls turn cG idagan puasiassoadaddamenesatderudasmins 3,9,10

Es MTT cies as hashes besccpnntendckacuadoenonammanehieatnis 26

ee EE vnc s cc csenticciphiincicibdniiamesonedsconadiledans 21

Be ie Te iste is sicolcahicaninitcisransetbsanonanennnndsddaidddamabiane 3,9,10

Be EE ii alistiedss onccdinbsinimnsausonnbeundaembdabonntins 2

Be ne I eiscdscisiidudacninnsncionssesnbeasbuncensadiunes 2

Bie | a S| nee saciniheaccalaiiaifultiniiedie, 2

I i see aa aiabanane 27

Supreme Court Rule 24.1.(a) .....................:ceeeeeeeees 27

Ss Sch Asiniecciiesasteepmnnieanmineenaiiies 10,12

SU: ee ME I passim

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1989

No. 89-

GORDON STRUBE,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Ninth Circuit

Petitioner, Gordon Strube, respectfully petitions for the

issuance of a writ of certiorari to review the judgment of

the court below under which he was not permitted to

withdraw his guilty plea prior to sentencing notwithstand-

ing a breach by the Government of the plea agreement.

Petitioner also seeks review of the judgment below which,

contrary to the positions taken by other federal courts,

applied the federal “aiding and abetting” statute, 18

U.S.C. § 2, and the federal] ‘‘accessory after the fact”’ stat-

ute, 18 U.S.C. § 3, in such a way as to render them fun-

gible by affirming his conviction for violating §3 on the

basis of facts that would only have sustained a violation

of § 2 for which petitioner was never charged and to which

he did not plead guilty.

OPINIONS AND ORDERS BELOW

The initial, unpublished memorandum opinion of the

Ninth Circuit, filed on October 11, 1989, affirming the

District Court’s judgment of conviction is reproduced in

App. A, la-lla. The unpublished January 23, 1990 order

of the court below issued in response to petitioner’s re-

hearing petition, which amended the October 11, 1989

opinion, denied rehearing and rejected the en banc sug-

gestion, is reproduced in App. B, 12a-13a. The October

11, 1989 opinion as modified by the January 23, 1990 order

is reproduced in App. C, 14a-24a. The District Court issued

no opinion with respect to its denial of petitioner’s Rule

32(d) motion to withdraw his guilty piea; that court’s oral

explanation for its decision rendered at the August 15,

1988 hearing on that motion is reproduced in App. D, 25a-

28a. The District Court’s judgment and probation/commit-

ment order issued August 16, 1988 is reproduced in App.

E, 29a-3la.

JURISDICTION

The District Court’s jurisdiction over this case arose

under 18 U.S.C. § 3231. The Ninth Circuit’s jurisdiction

over the appeal arose under 28 U.S.C. § 1291. This petition

is being filed within ninety days of the January 23, 1990

order denying petitioner’s rehearing petition. This Court

has jurisdiction over this case pursuant to 28

U.S.C. § 1254(1).

CONSTITUTIONAL PROVISION, STATUTE

AND RULE INVOLVED

1. The Due Process Clause of the Fifth Amendment

provides, in pertinent part:

No person shall ... be deprived of ... liberty,

or property, without due process of law .

2. Rule 32(d) of the Federal Rules of Crimina) Procedure

provides, in pertinent part:

If a motion for withdrawal of a plea of guilty

. is made before sentence is imposed ... the

court may permit withdrawal of the plea upon a

showing by the defendant of any fair and just

reason.

3. The federal ‘accessory after the fact” statute, 18

U.S.C. § 3, provides:

Whoever, knowing that an offense against the

United States has been committed, receives, re-

lieves, comforts or assists the offender in order

to hinder or prevent his apprehension, trial or

punishment is an accessory after the fact.

STATEMENT OF THE CASE

A. Statement of Facts Relevant to the Withdrawal

Questions and the Decision of Those Questions by

the Courts Below

Petitioner is the founder, acting president, and chief

executive of Consolidated Aeronautics Corporation (CAC),

an entity which sold aircraft parts to the Government dur-

ing 1985 and 1986. In 1987, the United States Attorney’s

Office in Los Angeles began an investigation of CAC and

four of its employees for violations of 18 U.S.C. § 287 (false

claims), and 18 U.S.C. § 1001 (false statements). Petitioner

was not an object of that investigation. Nonetheless, in

early March 1988 he decided ‘‘to see whether I could vol-

untarily come forward and plead guilty to some offense

in order to prevent the indictment of as many of my

colleagues as possible.”” App. C, 15a.

On March 11, 1988, petitioner, CAC and a CAC em-

ployee entered a verbal plea agreement with the Govern-

ment. On March 25, 1989, the Government filed an

information, reproduced in App. F, 32a-38a, charging the

three defendants with various violations of federal law.

Petitioner was named in Counts Two, Three and Five of

that information which, in essentially the same language,

charged that he had, with knowledge that the charged

underlying offenses had been committed by the other

defendants, ‘‘received, relieved, comforted and assisted [the

other defendants] in order to hinder and prevent their

apprehension, trial and punishment” in violation of 18

U.S.C. §3. |

On April 11, 1988, petitioner (and the other defendants)

and the Government entered a written plea agreement,

reproduced in App. G, 39a-45a, in which petitioner agreed

to plead guilty to those same three counts of violating 18

U.S.C. § 3. The plea agreement stated that petitioner could

be sentenced to a maximum of 2.5 years of imprisonment

on each count and fines totalling $625,000. In the plea

agreement, the Government stated that, “[a]s to

[petitioner], the government will not recommend at the

time of sentencing a total period of incarceration of more

than one year.” App. G, 40a. Petitioner, CAC and its

employee entered their guilty pleas at a hearing before

the District Court on May 9, 1988. At that hearing, the

court pointed out—after explaining to the defendants the

substantial constitutional rights each was waiving by plead-

ing guilty—“‘that the Government has agreed not to make

certain recommendations at the time of sentencing ....”’

App. H, 58a.

Despite the Government’s commitment in the plea

agreement not to recommend a total sentence of more

than one year for petitioner, the Government’s sentencing

memorandum filed in the District Court on July 20, 1988,

reneged on that commitment. In that memorandum, the

pertinent parts of which are reproduced in App. I, 70a-

73a, the Government stated in the ‘‘Introduction’”’ section

that it was recommending for petitioner “‘[a] jail sentence

of one year and a fine of $625,000.” In that part of the

memorandum titled ‘‘Recommendations,”’ however, the

Government took a different position:

It is submitted that CAC’s long ingrained prac-

tice of selling defective parts was known to and

orchestrated by STRUBE. But for his age and

health, a long prison sentence would be called

for. Nevertheless, some prison is warranted to

Geter STRUBE and other corporate executives

who attempt to hide behind their employees. The

government submits that STRUBE should be sen-

tenced to a prison term of at least one year. The

government has been advised that the Terminal

Island prison in this district has adequate facil-

ities to deal with STRUBE’s health problems.

App. I, 73a (emphasis added).

Based upon his view that only one reasonable inference

could be drawn from the words ‘“‘at least one year’’—that

the Government was recommending a minimum sentence

of one year and necessarily was encouraging the District

Court to impose a greater sentence—in violation of the

Government’s promise in the plea agreement—petitioner

moved in the District Court on August 8, 1988 to withdraw

his guilty plea pursuant to Fed. R. Crim. P. 32(d). Under

that rule, a defendant is to be permitted to withdraw a

guilty plea if he shows a ‘“‘fair and just reason’”’ for doing

SO.

In opposing petitioner’s motion to withdraw his plea,

the Government acknowledged that it was not permitted

to recommend more than a cne-year jail term under the

plea agreement. Furthermore, the Government did not

suggest that the only reasonable interpretation to be given

to its own language—“‘at least one year’’--was precisely

as petitioner contended and as any other reasonable person

should have interpreted that language. Rather, the Gov-

ernment, conceding that those words were “‘ill-chosen,”

attempted to belittle the dispute as ‘‘one of semantics”

and pointed out that it had offered to delete that ill-chosen

language from its sentencing memorandum. The Govern-

ment asserted that its inclusion of that language ‘‘should

not be seen for something it was not.”” As the Government

stated, it “did not intend to breach the agreement or ask

for a higher sentence” by using the words ‘‘at least one

year’’ in its sentencing memorandum. The Government also

asserted that it would be prejudiced if petitioner were

permitted to withdraw his plea.

Apparently agreeing with the Government that the Gov-

ernment’s post hoc statement of its subjective intent in

using the language ‘“‘at least one year’ was decisive of

petitioner’s right to withdraw his plea at that point, the

District Court, expressly taking into account the Govern-

ment’s “‘intentions’”’ as articulated after the sentencing

memorandum was filed and after petitioner had moved to

withdraw his guilty plea, stated at the hearing on the

withdrawal motion that

in a certain sense [petitioner’s argument] is a

semantic argument because if [the Government]

said [the petitioner] should be sentenced to a

prison term of one year it amounts, I think, to

the same thing if you say “at least one year.”

I think [the language ‘“‘at least one year’’] ac-

knowledges that while [the Government] can’t

recommend more, [the Government] is going to

recommend one year. That is what I believe and

that is the way I interpreted it ....

App. D, 28a.

With respect to the remedy of withdrawal sought by

petitioner, the District Court expressed the view that ‘‘at

best [petitioner is] entitled to sentencing before a different

judge without ...the word[s] ‘at least’, in the [sentencing]

memorandum before the judge.’’ He went on to state his

view that Santobello v. New York, 404 U.S. 257 (1971),

“doesn’t say—none of those cases say that, the Ninth Cir-

cuit doesn’t say that you are entitled to withdraw the

plea.”” App. D, 27a. The District Court did not discuss the

Government’s prejudice argument. After denying

petitioner’s Rule 32(d) motion, the court proceeded at that

same hearing to sentence petitioner to imprisonment for

two years, the execution of which was stayed on the con-

dition that petitioner serve six months in a community

treatment center. The court also imposed a fine cf

$300,000, ordered petitioner to perform 1,000 hours of

community service and placed petitioner on probation for

five years. App. E., 30a.

In the Court of Appeals, the Government once again

did not defend its use of the language ‘‘at least one year.”’

Nor did the Government expressly take the position that

petitioner’s interpretation of that language was the only

reasonable interpretation that language would bear. In-

stead, the Government observed:

By the use of such a term, the district court

found that government did not intend to breach

the agreement or ask for a higher sentence. The

use of the words ‘‘at least’’ simply were not

viewed by the district court as seeking a sentence

greater than one year....

Br. of the United States, at 19. In short, the Government

took the position that it had not intended to breach the

agreement and that the District Court had concluded as

much.

With regard to the remedy issue, the Government ar-

gued to the Ninth Circuit that even if the Government

had violated the plea agreement by its use of the language

“at least one year,’’ petitioner would in any event only

be entitled to specific performance by the Government

rather than a right to withdraw his plea. Br. of United

States, at 21. Under the Government’s submission, it ap-

parently viewed its offer to withdraw the words “‘at least’’

as constituting post hoc ‘‘specific performance”’ sufficient

to override petitioner’s right to withdraw his plea and

stand trial. The Government also renewed its contention,

unaddressed by the District Court, that allowing petitioner

to withdraw his plea would result in prejudice to the Gov-

ernment.

The Court of Appeals, in a memorandum opinion issued

on October 11, 1989, concluded that the words ‘“‘at least

one year’ were in “‘substantial compliance with the terms

of the [plea] agreement’”’ and that the ‘‘recommendation’’

of the Assistant United States Attorney (“AUSA’’) “as

modified orally prior to sentencing did not violate the plea

agreement.’’ App. A, 10a-lla. In apparent recognition of

the force of petitioner’s argument in his Petition for Re-

hearing that anything less than literal performance by the

Government of its obligations under a plea agreement

would not suffice to sustain a conviction based upon a plea

bargain, e.g., United States v. Benchimol, 738 F.2d 1001,

1004 (9th Cir. 1984) (Wallace, J., dissenting) (‘‘performance

of a plea bargain requires the government to convey the

promised recommendation to the sentencing judge without

qualification’’), rev'd mem., 471 U.S. 453 (1985), the Court

of Appeals issued an order on January 23, 1990 in which

it struck the “substantial compliance’”’ language from its

initial opinion and inserted in its place as follows:

Thus, the prosecutor made clear in his statement

to the court prior to sentencing that the govern-

ment intended to rely on the terms of the plea

agreement. The district court construed the pros-

ecutor’s recommendation, as clarified by his oral

statements, as being in compliance with the terms

of the plea agreement.

App. B, 12a-13a. Noticeably missing from this statement

or the balance of the Ninth Circuit’s opinion is any as-

sertion that the language ‘“‘at least one year’’ did not mean

what petitioner said it must mean or, correspondingly, that

the Government had not in fact breached its promise by

the use of the language ‘‘at least one year” in its sent-

encing memorandum.

In rewriting its prior conclusion, the Court of Appeals

deleted the ‘‘as modified by’’ language from its October

11 opinion and stated:

“Good faith disputes of the parties as to the

terms of a plea agreement are to be resolved by

the district court in which the plea was originally

submitted.”” United States v. Bornstein, 623 F.2d

1327, 1330 (9th Cir. 1980). The district court fully

explored the intent of the parties concerning the

terms of the plea agreement before pronouncing

sentence. The district court concluded that under

the terms of the plea agreement the prosecutor

could not recommend more than one year, but

was free to argue that the sentence should not

be less than one year. The district court’s inter-

pretation of the intent of the parties was not

clearly erroneous.

App. B, 13a. Once again, the Court of Appeals failed to

contradict in any way petitioner’s assertion that as of the

filing of the Government’s sentencing memorandum, the

plain language of that memorandum constituted a breach

of the plea agreement. In essence, the Court of Appeals

deferred to the District Court’s interpretation of the ‘‘in-

tent’’ of the parties regarding the plea agreement without

itself confronting the inescapable conclusion that the Gov-

ernment’s use of the language ‘“‘at least one year’ con-

stituted a material breach of the Government’s promise

not to recommend a sentence of more than one year.

B. Statement of Facts Relevant to the Accessory After

the Fact Questions

Petitioner pled guilty to three counts of violating 18

U.S.C. §3 as an accessory after the fact to violations by

his company and an employee of his company of 18

U.S.C. § 1001 (submitting a false certification to the gov-

ernment) and 18 U.S.C. § 287 (presenting false claims for

payment). The criminal information charging those offen-

ses alleged that ‘‘on or about’’ three specific dates—April

9, 1985, April 4, 1986 and March 20, 1986—CAC and its

employee had violated 18 U.S.C. §§ 287 & 1001. App. F,

35a-38a. The information also alleged as to petitioner that

“Talt said time and place, [petitioner] received, relieved,

comforted and assisted [the other defendants] in order to

hinder and prevent [their] apprehension, trial and punish-

ment in violation of 18 U.S.C. § 3.” App. F, 35a-38a. Thus,

on its face the information charged petitioner as an ac-

cessory after the fact on the basis of his alleged commission

of acts occurring at the same time as the underlying sub-

stantive offenses for which the other defendants were

charged.

Petitioner’s plea was taken on May 9, 1988 at the same

hearing at which CAC and its employee pled guilty as

principals to the underlying substantive offenses. At that

hearing, petitioner’s counsel made clear to the court that

petitioner was pleading only to being an accessory after

the fact. See Transcript of May 9, 1988 Hearing, App. H,

53a-54a. After accepting the defendants’ pleas, the District

Court, attempting to fulfill its responsibility under Fed. R.

Crim. P. 1i(f), asked the AUSA to set forth the factual

basis for the vleas. The AUSA devoted most of his state-

ment of facts to those supporting the pleas of CAC and

its employee to the substantive offenses. At the outset,

he stated that the offenses involved in the plea were part

of a conspiracy which was “‘active during the time period

of about at least 1984 and ’85 through October 31st, 1987.”’

With respect to the facts he thought to establish a basis

for petitioner’s plea to accessory after the fact to violations

of 18 U.S.C. § 1001, the AUSA stated only that petitioner

knew what was going on at the time and did

nothing to stop this particular pattern; indeed,

[his employees were] assisted by lack of action

and lack of intent to put an end to this particular

path and, therefore, in the government’s view,

could be found guilty of 18 USC Section 3 in

conjunction with the false statement [alleged in

Count Two of the Information].

App. H, 63a (emphasis added). The AUSA relied on that

same factual assertion to support the Government’s case

against petitioner under Counts Three and Five. App. H,

64a.

Following the AUSA’s statement, petitioner’s counsel

stated to the court that petitioner learned of the misdeeds

of the other CAC employees ‘‘in early 1986 [and] failed

to bring them to the attention of the authorities ....”

On that basis, counsel advised the court of his legal con-

clusion that a factual basis existed to convict petitioner

for violating 18 U.S.C. § 3. App. H, 66a.

The District Court then asked the AUSA whether he

believed the facts as elaborated upon by petitioner’s counsel

constituted a violation of 18 U.S.C. §3. After petitioner’s

counsel made clear that the gravamen of petitioner’s of-

fenses was his failure ‘to come forward to authorities”

upon learning of the misconduct of his employee, the AUSA

‘At the May 9, 1988 hearing, respective counsel for all three

defendants also jointly submitted a written paper entitled ‘‘Defendants’

Factual] Basis for Guilty Plea to Information.’’ The statements in that

paper regarding the factual basis for petitioner’s plea were consistent

with the discussion of the facts at the May hearing. The relevant

paragraph reads as follows:

In approximately January 1986 and later, Mr. Strube

learned from other officers of CAC who had primary re-

sponsibility for the U.S. Government contracting business

that CAC had supplied ‘‘newly manufactured material” to

the government in connection with certain ‘selector set”’

contracts even though the contract specifications called for

the material to be “new, unused surplus.’’ Further, Mr.

Strube learned si that time that certifications had been

submitted to the government by CAC personne! which falsely

affirmed that the product supplied was “‘new, unused sur-

plus,” when, as Mr. Strube learned after the fact, the prod-

uct was “newly manufactured”’ material. (This applies to

the contracts referred to in counts two, three and five of

the Information.)

stated his belief that those facts supported a violation of

§ 3. App. H, 68a. The District Court accepted this proffer

as a sufficient factual basis for a violation of 18 U.S.C. § 3.

App. H, 69a.

On appeal, petitioner contended that the District Court

had failed to establish a factual basis for his guilty plea

as required by Rule 11(f) because it had ‘‘received abso-

lutely no facts whatsoever to demonstrate that [petitioner]

ever committed an affirmative act’’ to assist CAC or its

employee in concealing their violations. Reviewing this is-

sue de novo, the Court of Appeals acknowledged that, to

establish a factual basis for a violation of 18 U.S.C. § 3,

the District Court must have had a basis for concluding:

(1) that the underlying offense occurred; (2) that petitioner

had knowledge thereof; and (3) that petitioner comforted

or assisted the offender ‘in order to hinder or prevent

his apprehension, trial or punishment.” Noting that

petitioner had conceded the first two elements, the Court

of Appeals found that petitioner had committed the fol-

lowing acts which that court viewed as ‘“‘affirmative’’:

— petitioner ‘concealed from the government the

fact that his employees were continuing to file

false claims’’;

— petitioner ‘“‘permitted his employees to con-

tinue to file false claims”;

— petitioner allowed ‘‘the pattern of presenting

false claims” to continue with his knowledge;

and

— petitioner provided a “safe harbor for the

criminal action and conceal[ed] their ongoing

crimes for personal or corporate profit.”’

On the basis of its review of the record, the Court of

Appeals concluded that petitioner ‘‘comforted and assisted

his employees in continuing to file false claims after he

had knowledge of their prior illegal activity.’”” App. C, 21a.

It is beyond dispute that under the facts as found by

the Ninth Circuit, the acts of petitioner relied upon by

that court to support petitioner’s conviction for violating

§ 3 were committed during the commission of the under-

lying substantive offenses. Not so much as a single act

was found by the Court of Appeals to have been committed

which could have been committed by petitioner after the

completion of the underlying offenses. Because petitioner

pled guilty to three counts of being an accessory after the

fact, the Court of Appeals necessarily, if unwittingly, found

that assistance rendered during the commission of a crime

constitutes a violation of 18 U.S.C. §3.

REASONS FOR GRANTING THE WRIT

As demonstrated below, the questions upon which

petitioner seeks review are frequently recurring and have

divided the lower federal courts. Thus, they warrant plen-

ary review by the Court in this case. In any event, the

conviction cannot stand because the conduct charged is not,

as a matter of law, made punishable by the provision of

the United States Code for which petitioner was convicted.

A. The Question Whether the Government Must Comply

with the Literal Terms of a Plea Agreement Is an

Important and Recurring Question Upon Which the

Courts of Appeals Are Divided

In the courts below, the Government—with a cavalier

flair—characterized petitioner’s demand to withdraw his

guilty plea prior to his sentencing as a “dispute over se-

mantics.’”’ That characterization is not inapt; the Govern-

ment’s cavalier attitude towards petitioner’s claim,

however, betrays the Government’s insensitivity to the

central importance of all language used in plea agree-

ments. In Santobello v. New York, 404 U.S., at 262, this

Court stated, as a constitutional imperative, that, ‘“‘when

a plea rests in any significant degree on a promise or

agreement of the prosecutor, so that it can be said to be

part of the inducement or consideration, such promise must

be fulfilled.” Promises are, of course, made through the

use of language.

In this case, the Government itself has never directly

disputed petitioner’s contention that the language ‘“‘at least

one year’’ is susceptible to only one reasonable interpre-

tation—that the AUSA was communicating to the District

Court the message that the Government would be pleased

to see a sentence of greater than one year imposed on

petitioner. Nor did the Court of Appeals contradict

petitioner’s interpretation of that language which, read in

isolation and in the context of the paragraph of the sent-

encing memorandum in which it appeared, see p. 5 supra,

cannot reasonably be read as other than a breach of the

Government’s written promise regarding possible sen-

tences it would not recommend to the District Court.

Following the teaching of Santobello, the Courts of

Appeals for the Third, Fifth, Seventh and Eleventh Cir-

cuits have insisted that the Government abide by the literal

terms of a plea agreement. Thus, in United States v.

Crusco, 536 F.2d 21, 26 (8d Cir. 1976), the Third Circuit

ruled that the District Court had erred by failing to allow

the defendant to withdraw his plea after the Government

failed strictly to adhere to the terms of a plea agreement.’

In that case, the Government had agreed to take no po-

sition on sentencing. Jd., at 23. At the sentencing hearing,

the Government expressly stated that it was “leaving the

sentencing decision to the judge,” but then proceeded to

portray the defendant as an important figure in organized

* The court also ruled in the alternative that the defendant justifiably

misunderstood the maximum sentence to which he would be subject by

pleading guilty. Crusco, 536 F.2d, at 24-25.

crime and a danger to the community. Jd., at 25. The

Court of Appeals ruled that this characterization of the

defendant was ‘‘a transparent effort to influence the se-

verity of [the defendant’s] sentence”’ in violation of the

Government’s promise to take “‘no position’’ on sentencing.

Id., at 26. The Third Circuit concluded:

The Government, therefore, must also clearly un-

derstand the scope and depth of its commitment

and the need for precision in plea bargaining. it

may reach port in the plea bargaining process

but founder there because of careless or loose

language in its commitment. Once it makes a

promise, Santobello requires strict adherence.

Id. See also United States v. Moscahlaidis, 868 F.2d 1357,

1361-63 (8d Cir. 1989) (comments about character by Gov-

ernment violated agreement to take no position regarding

whether to impose custodial sentence).

The Fifth Circuit has similarly interpreted the require-

ments of Santobello. In United States v. Grandinetti, 564

F.2d 723 (5th Cir. 1977), the Government had agreed, inter

alia, to make certain sentencing recommendations at the

defendant’s probation revocation hearing. Id., at 725. At

that hearing, however, the Government stated that it had

‘“‘very serious problems”’ with the promised sentencing rec-

ommendation, and that it was unsure of the “‘legality’”’ and

“propriety” of the sentencing agreement. Jd. The Fifth

Circuit considered ‘‘simply whether the plea bargain agree-

ment has been breached or not—irrespective of prosecu-

torial justifications for the failure in performance.” Jd., at

727. On this basis, that court ruled that the Government

had violated the plea agreement because it not only was

“an unpersuasive advocate’’® for the agreement but had,

In United States v. Benchimol, 471 U.S. 453 (1985), this Court held

that when the Government agrees to make a sentencing recommen-

dation, it is under no obligation to do so “enthusiastically.’’ In so

“in effect, argued against it.’”’ Id.; see also United States

v. Avery, 450 F.2d 214, 216 (5th Cir. 1980) (noting that

the Government must “adhere strictly to the terms and

conditions of the plea agreement” but ruling that the Gov-

ernment did not violate agreement by providing infor-

mation on defendant to the probation officer).

A like approach also has been adopted by the Seventh

Circuit. In United States v. Bowler, 585 F.2d 851 (7th Cir.

1978), the Government had promised that its recommen-

dation ‘‘may be reduced, based upon” its assessment of

the defendant’s health, his cooperation, and the Antitrust

Division’s sentencing guidelines under which, in some cir-

cumstances, fines could be substituted for imprisonment.

Id., at 853, 854. The court found that this constituted a

promise by the Government “to undertake a good faith

analysis’ of these factors in formulating its sentencing

recommendation. The court determined that such consid-

erations by the Government must be reflected in the re-

cord of the lower court proceedings. Jd., at 855. Ruling

that the Government must be held to ‘“{s}trict fulfillment

of prosecutorial promises,”’ id., at 853, and finding no

consideration of the defendant’s health or of the Antitrust

Division’s guidelines reflected in the Government’s pres-

entation to the District Court, the Court of Appeals ruled

that the Government had breached the plea agreement.

Id. Underlying this holding was the recognition by the

holding, the Court expressly distinguished Grandinetti. Id., at 456. On

its facts, Benchimol could have presented a challenge to the Govern-

ment’s fulfillment of its obligations under the plea agreement similar

to that advanced by petitioner. In that case, the Government's sent-

encing memorandum had incorrectly stated that the Government wouid

remain silent as to the sentence, whereas the Government had agreed

to recommend probation with restitution. The defendant’s own counse!

pointed out that mistake at the sentencing hearing and corrected it.

Five years later, the defendant brought a collateral attack on his con-

viction in which he once again made no argument that at the time of

his sentencing he should have been entitled to withdraw his plea based

upon the Government’s literal breach of its plea agreement.

Seventh Circuit that “to protect the plea bargaining

defendant from overreaching by the prosecutor and to in-

sure the integrity of the plea bargaining process, the ‘most

meticulous standards of both promise and performance

must be met by prosecutors engaging in plea bargaining.’ ”’

Id., at 854, quoting-Cerreale v. United States, 479 F.2d

944, 947 (1st Cir. 1973).

The Eleventh Circuit has required similar strict com-

pliance by the Government with all promises it makes to

induce a guilty plea, even if some of those promises are

made orally and are not reflected in the written plea agree-

ment. In re Arnett, 804 F.2d 1200 (11th Cir. 1986). In

Arnett, the “forfeiture’’ provision of the written plea

agreement indicated that it was ‘‘the entire agreement”

between the parties; it stated only that the defendant

agreed to forfeit $3,000 to the Government. Jd., at 1202.

Furthermore, at the plea hearing the defendant stated that

this written agreement contained all promises made by the

Government. Jd. The Government also had orally stated

that it had ‘‘no interest”’ in the defendant’s farm. Jd. Find-

ing that this oral statement constituted a part of the in-

ducement to plead guilty and ruling that Santobello requires

“that the government adhere strictly to the terms of plea

agreements,’ the court held that the government had

breached the agreement by attempting to gain forfeiture

of the defendant’s farm. Jd., at 1204.

It is evident from these cases that the decision below

cannot be reconciled with those of the Courts of Appeals

which have insisted that the Government must be in literal

compliance with all material terms of a plea bargain agree-

ment. This Court should grant review in this case in order

to establish uniformity on this important and frequently

recurring question.

B. The Court of Appeals’ Acceptance of the Govern-

ment’s Attempts to Cure Its Breach of the Plea

Agreement Deprived Petitioner of Due Process un-

der Santobello v. New York

In its initial opinion, the Court of Appeals made quite

clear that it was sustaining petitioner’s conviction on the

basis of its conclusion that, after petitioner had brought

his Rule 32(d) motion to withdraw his plea but before

sentencing, the Government had modified the sentencing

recommendation contained in its sentencing memorandum

so that the recommendation upon which petitioner was

sentenced was, in a temporal sense, consistent with the

Government’s promise in the plea agreement. As the court

stated, ‘[w]e agree with the district court that the pros-

ecutor’s recommendation as modified orally prior to the

sentencing did not violate the plea agreement.’’ App. A,

lla. (emphasis added). This conclusion is well supported

by the Government’s own position before the courts below.

For example, in its opposition to petitioner’s motion to

withdraw his plea, the Government stated that “‘a one year

jail term is the maximum [the Government] is able to and

does ask for’ and relied on its offer ‘‘to delete those two

words [‘‘at least’’] from the Sentencing Memorandum.”’

On rehearing, the Court of Appeals appeared to retreat

from the words “as modified orally.” Where those words

had previously appeared, the court substituted language

the gist of which is that this was a problem for the District

Court to resolve and that that court’s “interpretation of

the intent of the parties was not clearly erroneous.’’ App.

C, 24a. Elsewhere in its modified opinion, however, the

Court of Appeals indicated that its affirmance was based

upon the fact that ‘(t]he district court construed the pros-

ecutor’s recommendation, as clarified by his oral state-

ments, as being in compliance with the terms of the plea

agreement.”’ App. C, 23a.

There is little doubt that the initial decision of the Court

of Appeals, on its face, constituted a flagrant violation of

Santobello v. New York. In Santobello, an inadvertent

breach of a plea agreement had resulted from a change

in personnel, with the “new’’ prosecutor making a sent-

encing recommendation that violated a plea agreement on

sentence recommendation that had been reached by the

former prosecutor and the defendant. In this Court, all

seven of the Justices participating in the decision were of

the view that whether the sentencing judge was or was

not influenced by the prosecutor’s recommendation was

irrelevant to whether a violation of due process had oc-

curred. 404 U.S., at 262.

The necessary holding of Santobdello is that the Govern-

ment cannot “‘cure’’ its violation of a plea agreement by

subsequently modifying a sentencing recommendation made

in breach of that agreement. This is so because if the

Government could qualify or modify its formal, written

recommendation, testing the constitutionality of the con-

viction would require an appellate court to determine

whether the trial court was influenced by the initial,

breaching recommendation.

Viewing the concurring opinion of Justice Douglas in

Santobello as controlling the holding of Santobello,

petitioner’s contention becomes even more sharply focused.

As the “glossator,”” see McKoy v. North Carolina, 110 S.

Ct. 1227, 1243-44 n.3 (1990) (Scalia, J., dissenting), Justice

Douglas expressed his view that as a matter of due proc-

ess, a defendant has a presumptive right to withdraw his

plea upon the failure of the Government to honor its plea

bargain. 404 U.S., at 267. Justice Marshall, joined by Jus-

tices Brennan and Stewart, agreed that ‘“‘where the

defendant presents a reason for vacating his plea and the

government has not relied on the plea to its disadvantage,

the plea may be vacated and the right to trial regained,

at least where the motion to vacate is made prior to sen-

tence and judgment.” 404 U.S., at 267-68 (Brennan, J.,

concurring in part and dissenting in part).

Under the opinions issued in Santobello, it is abundantly

clear that the Government’s failure to live up to its prom-

ise *¢-erding its sentencing recommendation gives rise to

a presumption in favor of the defendant’s ability to with-

draw his plea and reclaim his right to a trial if he moves

promptly to do so. Any other understanding of Santobello

would destroy its holding. In this case, the Court of

Appeals beat a hasty retreat, but the ‘“‘as clarified” lan-

guage chosen on rehearing cannot be reconciled with San-

tobello. It may be that the AUSA in this case adequately

“clarified” his personal, subjective intent in using the

words “‘at least.”” The Government may not, however, put

the sentencing court in the position of being exposed to

an illicit, breaching sentence recommendation. In short,

under Santobello the AUSA had to get it right the first

time.

Whether viewed through the prism of due process, an

aspect of this Court’s supervisory power over the federal

courts, see id., at 266-67 (Douglas, J., concurring), or an

aspect of the proper interpretation of Rule 32(d) of the

Federal Rules of Criminal Procedure,‘ this Court should

grant certiorari to clarify for all participants in the plea

bargaining process whether prosecutors may, with impun-

ity, send to the sentencing judge the very signal which

the pleading defendant bargained to avoid and then pre-

vent withdrawal through the judicial legerdemain that oc-

curred here.

‘Under Rule 32(d), a defendant is permitted to withdraw a guiity

plea simply by showing a ‘“‘fair and just reason’’ for his request. Under

the decision below, the Court of Appeals has construed and applied

Rule 32(d) in an unconstitutional fashion, thereby providing a separate

basis for this Court’s grant of certiorari in this case.

C. The Court of Appeals’ Judgment Obliterates the Dis-

tinction Between the Accessory After the Fact Stat-

ute and the Aider and Abettor Statute and Conflicts

With Other Federal Court Decisions’

Many federal courts have held that to be guilty of vi-

olating 18 U.S.C. § 3, a defendant must comfort or assist

the offender after the commission of the underlying crime.

If, however, a defendant rendered assistance to the prin-

cipal offender during the commission of an offense, the

defendant must be considered an aider and abettor in vi-

olation of 18 U.S.C. §2, rather than an accessory after

the fact in violation of 18 U.S.C. § 3.

The fundamental point of law at issue has been artic-

ulated many times. In United States v. Barlow, 470 F.2d

1245 (D.C. Cir. 1972), the defendant was charged and con-

victed as an aider and abettor to the crime of theft of

government property in violation of 18 U.S.C. § 641. On

* As indicated in the Statement of Facts, supra, counsel for petitioner

and the Government, as well as the Ninth Circuit, considered the ques-

tion whether petitioner’s conviction for violation of 18 U.S.C. § 3 should

stand primarily as involving whether there was a factual basis in the

record to show that petitioner had committed an “‘affirmative’’ act as

distinct from merely omitting to report violations of federal law to

appropriate authorities upon his discovery of them. In the Ninth Circuit,

petitioner and the Government disagreed over how early in the con-

spiracy alleged in Count One of the information (not involving petitioner)

petitioner became aware of the misconduct of other CAC employees.

Neither petitioner nor the Government, however, noted the fatal defect

in the criminal information. Petitioner acknowledges that Question 3

was not, in terms, sharply framed by the parties in the Court of Appeals,

in part because it arose only after the Court of Appeals determined,

contrary to petitioner’s submission, that the record supported the prop-

osition—otherwise necessary to sustain his conviction—that petitioner

committed an ‘‘affirmative’’ act. While this Court has jurisdiction over

Question 3, petitioner recognizes that plenary consideration of it in this

posture may be undesirable and therefore asks the Court in part D

below to vacate the judgment and remand the case for reconsideration

in light of the defect in the criminal information.

appeal, he argued that the evidence was insufficient to

show that he aided and abetted the larceny and that the

most the evidence showed was that he was an accessory

after the fact to the larceny. The court disagreed with

that factual contention but went on to explain the dis-

tinction at issue in this case:

The gist of being an accessory after the fact lies

essentially in obstructing justice by rendering as-

sistance to hinder or prevent the arrest of the

offender after he has committed the crime... .

The very definition of the crime also requires that

the felony not be in progress when the assistance

is rendered... .

Id., at 1252-53.

In United States v. Balano, 618 F.2d. 624 (10th Cir.

1979), the defendant appealed his conviction as an acces-

sory after the fact to interstate transportation of stolen

coins by two co-defendants. The evidence at trial showed

that after the co-defendants had stolen the coins, they had

crossed a state line and had come to the defendant’s office,

where he had provided the eo-defendants with clothes, a

suitcase, a bathroom and a razor so that one of the co-

defendants could change his appearance. The defendant

argued on appeal that the two co-defendants were still in

the escape phase of their crime when they came to his

office and thus he could only be convicted for violation of

18 U.S.C. § 2.

In considering that claim, the Tenth Circuit explained

the “‘escape phase”’ doctrine as having been ‘“‘developed to

deal with those who are entangled in the consummation

of the crime itself.... In contrast, accessories after the

fact ‘opstruct justice by rendering assistance to hinder or

prevent the arrest of the offender after he has committed

the crime.’ ”’ Id. at 631, quoting United States v. Barlow,

470 F.2d at 1253. Upon examination of the record, the

Tenth Circuit concluded that the ‘escape’ phase of the

co-defendants’ crime had come to an end by the time they

reached the defendant’s office and on that basis affirmed

the conviction. In sharp contrast, the Court of Appeals

here found that petitioner had assisted the company and

its employee during the commission of their offenses, but

nevertheless sustained petitioner’s conviction as an acces-

sory after the fact.

Other courts have applied this rule to overturn convic-

tions for being an accessory after the fact where those

convictions were based on assistance given during the com-

mission of a crime. In United States v. Nava-Maldonado,

566 F. Supp. 1436 (D. Nev. 1983), the defendant had been

arrested while transporting illegal aliens. He was ulti-

mately convicted at trial of being an accessory after the

fact to the transportation of illegal aliens. After verdict,

he moved for a judgment of acquittal. The court granted

the motion, holding that the defendant could not be con-

victed of being an accessory after the fact to transporting

illegal aliens because the substantive crime of transporting

illegal aliens was not complete at the time the acts charged

against him were committed. ‘One who is an accessory

after the fact assists an offender after the latter has al-

ready committed a crime; the assistance is for the purpose

of hindering or preventing the apprehension or punishment

of the offender. The assistance given by the accessory after

the fact is not in connection with the commission of the

crime by the offender.” /d., at 1438. In this case, ‘“‘[t]he

prerequisite that the substantive crime already have been

committed was not satisfied.’”’ Jd., at 1439. The facts as

found by the Court of Appeals establish that petitioner’s

acts upon which the plea was taken all occurred before the

completion of the underlying offenses.

The Third Circuit has also held that the offense of ac-

cessory after the fact can occur only after the substantive

crime has been committed. See Government of Virgin Is-

lands v. Aquino, 378 F.2d 540, 553 (3d. Cir. 1967). Being

an accessory after the fact “‘does not relate to assistance

ee | hh

in the commission of the crime, but rather to assistance

rendered the offender in order to hinder or prevent his

apprehension or punishment after he has already commit-

ted an offense.” Id. See also United States v. McCoy, 721

F.2d 473, 475 (4th Cir. 1983). Other cases make clear that

assistance rendered during the commission of a crime is

a violation of 18 U.S.C §2 rather than a violation of 18

U.S.C. § 3. See, e.g., United States v. York, 578 F.2d 1036

(5th Cir. 1978); United States v. Willis, 559 F.2d 443 (5th

Cir. 1977); United States v. Jarboe, 374 F. Supp. 310 (W.D.

Mo. 1974), affd, 513 F.2d 33 (8th Cir. 1975). In contrast,

the Court of Appeals affirmed petitioner’s conviction on

the basis of acts of, or assistance provided by, petitioner

while CAC employees were allegedly committing the un-

derlying substantive offenses.

The reasoning and results reached in other cases in-

volving the principle that aid rendered after the commis-

sion of an offense does not violate 18 U.S.C. § 2 are equally

called into question by the decision in the case at bar. In

one such case, the defendant had been convicted of aiding

-and abetting his girlfriend, an employee of a federally

insured savings and loan association, in her embezzlement

of $19,575. See United States v. Ferraro, 414 F.2d 802

(5th Cir. 1969). On the particular day in question, the

girlfriend carried away the money from the bank. The

defendant picked her up in his car and drove to their home,

where she told him what she had done. They then planned

an escape. There was no evidence to indicate, however,

that the defendant had known or planned with his girl-

friend to steal the money. On appeal, the court squarely

held that the evidence was insufficient to find the

defendant guilty of aiding and abetting; at most, he could

have been convicted as an accessory after the fact, because

the underlying offense was complete when the girlfriend

walked out of the bank with the money in her possession.

Id., at 804.

In a similar case, Roberts v. United States, 416 F.2d

1216 (5th Cir. 1969), the defendant was convicted of aiding

and abetting the substantive offense of passing a coun-

terfeit $20 bill at a particular drug store. The defendant

and her friend had gone into the drug store and the friend,

who had paid with a counterfeit bill, was arrested im-

mediately. At that point, the defendant took the rest of

the counterfeit bills from her friend, left the drug store

and burned them. On the basis of this evidence, she was

convicted as an aider and abettor. On appeal, the Fifth

Circuit held that a person cannot aid or abet a crime which

has already been committed. In that case, the passing of

the counterfeit bill had been completed at the time the

defendant destroyed the other counterfeit money. While

the defendant could have been charged and possibly con-

victed as an accessory after the fact, she could not be

convicted as an aider and abettor. Jd., at 1221. The Court

of Appeals in this case reached the opposite result by

upholding petitioner’s conviction as an accessory after the

fact on the basis of a factual record that could arguably

support only a conviction for aiding and abetting. Under

this decision, 18 U.S.C. §§ 2 and 3 are rendered essentially

fungible; so long as the evidence supports a conviction

under either statute, the fact that the Government charged

under the wrong statute becomes legally irrelevant and a

defendant may be convicted of an offense which he did

not in fact commit.

By its determination that assistance rendered during the

commission of an underlying substantive offense violates

18 U.S.C. §3, the Court of Appeals has reached a result

that conflicts with other federal court decisions holding

that an accessory after the fact must render his assistance

after the commission of the underlying crime.

D. This Court Should Grant the Writ, Vacate the Judg-

ment of the Court of Appeals and Remand for Re-

consideration in Light of the Fact that the Record

Discloses that Petitioner Pleaded Guilty to Counts

of a Criminal Information That Did Not Charge Of-

feuses Punishable Under the United States Code

Upon its independent examination of the record in a

federal] criminal case in which the Solicitor General ac-

knowledges that reversible error exists, this Court not in-

frequently has granted a certiorari petition filed by the

defendant, vacated the judgment of the Court of Appeals

and remanded the case for reconsideration in light of the

Government’s present position. See, e.g., Mariscal v. United

States, 449 U.S. 405 (1981). Petitioner respectfully re-

quests that the Court follow that practice in this case and

has separately asked the Solicitor General to join in this

request.®

In Watkins v. United States, 429 U.S. 1034 (1977), this

Court, in reviewing the certiorari petition, noticed sua

sponte that the conviction for violation of 18 U.S.C. § 473

(selling forged government obligations) might be precluded

by a prior decision of this Court, Prussian v. United States,

282 U.S. 675 (1931). In Prussian, the Court had held that

an endorsement on a government obligation was not itself

an obligation of the United States, and the petitioner in

Watkins had been convicted upon the theory that he had

sold genuine United States Savings Bonds which bore

forged endorsements. Id., at 678.

In responding to this Court’s request that the parties

address this question, Solicitor General Bork took the po-

sition on the merits that the conviction could not stand.

* By letter of April 20, 1990 to the Solicitor General, ten copies of

which have been lodged with the Clerk upon the filing of this petition,

petitioner has expressly requested that the Solicitor General acknow]-

edge to this Court that petitioner’s conviction cannot stand on the basis

of the record and applicable law.

In doing so, he acknowledged that the petitioner had not

raised this argument in the Court of Appeals or in his

certiorari petition. The Solicitor General nevertheless rec-

ommended that the petition be granted and that the judg-

ment be reversed and the indictment dismissed. As he put

it, ‘there seems little point in requiring petitioner to make

these arguments in a proceeding under 28 U.S.C. 2255,

and we therefore believe that the error should be noticed

under Rule 40(1XdX2) [now Rule 24.1.(a)] of the Rules of

this Court.’”’

In the case at bar, as in Watkins, the petitioner has

been convicted of violating a provision of Title 18 which,

on the facts as charged in the information, he could not

have violated. All three pertinent counts of the criminal

information in this case charged petitioner with violating

18 U.S.C. §3 on the basis of acts committed “‘[a]t said

time and place’’ as the underlying substantive offenses.

As discussed more fully in part C above, one cannot be

an accessory after the fact of a crime unless one has com-

mitted acts after that crime. Furthermore, and as set forth

in part B of the Statement of the Facts above, the record

in this case is consistent with the charge in the infor-

mation.

Nor does the fact that petitioner’s conviction comes by

a plea of guilty distinguish this case from Watkins. For

example, in Carter v. United States, 350 U.S. 928 (1956),

the petitioner had pied guilty to wilful attempts to evade

7 For the convenience of the Court, ten copies of the Solicitor Gen-

eral’s Supplemental Memorandum in Watkins, which is not available in

the Court’s archives because Watkins was here on the IFP docket,

have been lodged with the Clerk upon the filing of this petition. Under

Rule 24.1.(a), the Court may notice “plain error’ in cases otherwise

properly before it even if the parties have not comprehended that error

at the certiorari stage (or previously).

the payment of federal income taxes.* Over three years

later, he filed a collateral attack on that plea, claiming

that he had not intentionally violated the law and that he

had denied any intent to violate the law when his plea

was originally taken. Mem. for United States, at 4. Al-

though the Government had prevailed in the lower courts,

the Solicitor General advised this Court that, based on the

Government’s review, the record permitted no conclusion

other than that the petitioner had in fact disavowed an

essential element of the offense—wilful intent—to which

he had pleaded. Jd., at 17. In Carter, the petitioner had

been perceived by the lower courts as using his Rule 32(d)

motion to escape prosecution altogether, but in this Court

the petitioner disavowed any such intent. Jd., at 19. In

sharp contrast, petitioner in the case at bar brought his

Rule 32(d) motion prior to sentencing for the very purpose

of reclaiming his right to a trial and putting the Govern-

ment to its proof on any offenses the Government was

prepared to charge and prosecute. This Court should act

to restore that fundamental constitutional right.

CONCLUSION

The Government failed to carry out its end of the plea

bargain, but insisted below that petitioner should be held

to his obligations under that agreement. Although that

dispute presents a question worthy of this Court’s review,

petitioner submits that there is an otherwise fatal defect

in his conviction that demands reversal of the judgment

of conviction.

* The facts in Carter are as taken from the Solicitor General’s mem-

orandum filed in that case on behalf of the United States in response

to the certiorari petition. For the convenience of the Court, ten copies

of that memorandum have been lodged with the Clerk upon the filing

of this petition.

April 20, 1990 Respectfully submitted,

THOMAS E. HOLLIDAY *LARRY L. SIMMS

GIBSON, DUNN & CRUTCHER

2029 Century Park East

Los Angeles, California 90067

Of Counsel:

JAMES C. DUDA

KIMBERLY S. MCGOVERN

GIBSON, DUNN & CRUTCHER

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

GIBSON, DUNN & CRUTCHER

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 955-8558

RICHARD MARMARO

JAMES C. CHALFANT

McCAMBRIDGE, DEIXLER,

MARMARO & GOLDBERG

2029 Century Park East

Los Angeles, California 90067

(213) 277-2650

Attorneys for Petitioner

*Counsel of Record

APPENDIX

APPENDICES

TABLE OF CONTENTS

POORER OEE HEHEHE TEETH HEHEHE HEHEHE HEHEHE HEHEHE EEE EES

eee eee eee eee ee eee ee eee eee eee ee eee eee eee ee eee ee ee eee

SOOTHER HEE EEE THEE HEHEHE HEHEHE EOE EEEES

SOOTHER EEE EEE HEHEHE HEHEHE HEHEHE EEE EEE HEE EEE EES

eee eee ee eee eee eee eee ee eee eee eee eee eee ee eee ee ee ee ee ee ee)

SOOPER REET EEE HEHEHE HHO OEE

TORRE HEHEHE EHH HEHEHE EEE HEHEHE EEE HEE EEES

eee eee eee eee ee eee eee ee eee ee eee eee eee ee ee eee ee ee ee eee ee

eee eee eee eee ee eee eee eee eee eee ee eee eee eee

FILED

APPENDIX A

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 88-5292

D.C. No. CR-88-0230-AWT-2

UNITED STATES OF AMERICA,

Plaintiff-A ppellee,

GORDON STRUBE,

Defendant-A ppellant.

OCT 11 1989

CATHY A. CATTERSON, CLERK

U.S. COURT OF APPEALS

MEMORANDUM*

Appeal from the United States District Court

for the Central District of California

A. Wallace Tashima, District Judge, Presiding

Argued and submitted October 5, 1989

San Francisco, California

Before: WALLACE, PREGERSON, ALARCON, Circuit

Judges.

* This disposition is not appropriate for publication and may not be

cited to or by the courts of this circuit except as provided by 9th Cir.

R. 36-3.

Gordon Strube appeals from the judgment entered fol-

lowing the denial of his motion to withdraw his guilty plea.

Strube seeks reversal on two grounds:

One. The district court failed to establish that there was

a factual basis for the plea of guilty.

Two. The district court abused its discretion in denying

the motion to withdraw the guilty plea because the record

shows that the government breached the plea agreement.

Gordon Strube founded Consolidated Aeronautics Cor-

poration (CAC) in 1956 and has acted as its president and

chief executive officer since its inception. CAC sold aircraft

parts to the United States Government during 1985 and

1986. In 1987, the United States Attorney’s office for the

Central District of California began a grand jury investi-

gation of CAC and four of its employees for violations of

18 U. S. C. §§3, 1001 and 287. ——

In March of 1988 Strube expressed to his attorney a

desire ‘‘to see whether I could voluntarily come forward

and plead guilty to some offense in order to prevent the

indictment of as many of my coileagues as possible.”’

On March 11, 1988, Strube and the codefendants en-

tered into a verbal plea agreement with the United States.

On March 25, 1988, the government filed a five-count in-

formation charging Strube, Ronald Guy and CAC with

conspiracy to defraud the United States, falsely certifying

“‘used, reconditioned and refurbished’”’ parts as ‘‘new, un-

used and unaltered surplus’ presenting false claims to the

government for those parts and making false statements

to the government.

A written plea agreement was executed on April 11,

1988. Strube agreed to plead guilty to counts two, three

and five of the information as an accessory after the fact.

Count two of the information charges that on or about

April 15, 1985, Strube comforted and assisted his code-

fendants in submitted false certifications to the U.S. Gov-

ernment. Count three charges that on or about April 4,

1986 Strube comforted and assisted his codefendants in

presenting false claims for payment. Count five charges

that on or about March 20, 1986, Strube comforted and

assisted his codefendants in presenting false claims for

payment. Each count alleges that Strube hindered and

prevented the apprehension, trial and punishment of the

codefendants by failing to disclose what he knew of the

activity.

In exchange for the guilty pleas, the government agreed

that ‘‘no further criminal charges will be brought against

CAC or its employees.”’ In addition, the government prom-

ised Strube that it would ‘‘not recommend at the time of

sentencing a total period of incarceration of more than

one year.”’

On May 9, 1988 Strube pled guilty to counts two, three

and five. Before accepting the plea, the district court in-

quired of both parties in order to establish that there was

a factual basis for the plea. After engaging in a dialogue

with Strube, the court accepted the plea. Strube filed a

written factual basis for his plea on the same day.

In its sentencing memorandum filed July 20, 1988, the

government recommended that Strube be sentenced to “‘at

least one year”’ in prison. Strube filed a motion to with-

draw his guilty plea on August 8, 1988. Strube argued

that the government breached the plea agreement by ask-

ing the court to sentence him to ‘‘a minimum of one year

in prison”, despite ‘‘the prosecutor’s written commitment

to request a maximum of one year in prison’’ (emphasis

in original). Strube also claimed that there was not a suf-

ficient factual basis to support his plea of guilty.

The district court denied the motion on August 15, 1988,

stating that it was not influenced by whether the rec-

ommendation was for ‘“‘at least’’ or for ‘‘not more than’’

one year. The court sentenced Strube to 2 years (the first

six months to be served in a community treatment center,

the remainder suspended), five years probation and a

$300,000 fine.

Strube timely appeals.

Strube contends that the district court erred in denying

his metion to withdraw his plea because there is insuffi-

cient factual basis to support his guilty plea as required

by Fed. R. Crim. P. 11(f). We have conducted an inde-

pendent review of the record to determine whether a fac-

tual basis for the plea existed as required by Rule 11(f).

At least a ‘‘minor investment of time and effort’ is

required to establish on the record that the defendant had

knowledge of the crime and that he understood the con-

sequences of his plea. United States v. Kamer, 781 F.2d

1380, 1385 (9th Cir. 1986), cert. denied, 479 U.S. 835

(1986). The record shows that the district court carefully

questioned Strube prior to accepting his plea. The court

asked Strube if he had read the document filed by his

attorney, entitled Defendants’ Factual Basis For Guilty

Plea To Information, before he signed it. The court also

asked Strube whether the facts set forth in the written

factual basis were accurate. Strube replied affirmatively

to both questions. In addition, the court required the pros-

ecutor to state the facts he was ready to prove if the case

went to trial.

The Defendants’ Factual Basis describes Strube’s in-

volvement in the filing of false claims in the following

language:

As President and Chairman of the Board of

the company, Mr. Strube was generally aware of

some of CAC’s contracts with the U.S. Govern-

ment during the relevant time period.

In approximately January 1986 and later, Mr.

Strube learned from other officers of CAC who

had primary responsibility for the U.S. Govern-

ment contracting business that CAC had supplied

‘newly manufactured material’ to the government

in connection with certain ‘selector set’ contracts

even though the contract specifications called for

the material to be ‘new, unused surplus’. Further,

Mr. Strube learned at that time that certification

had been submitted to the government by CAC

personnel which falsely affirmed that the product

was ‘new, unused surplus,’ when, as Mr. Strube

learned after the fact, the product was ‘newly

manufactured’ material. (This applies to the con-

tracts referred to in counts two, three and five

of the Information.)

Having learned these facts, Mr. Strube, as

President and Chairman of the Board of CAC,

should have directed the responsible officers of

CAC to notify the government contracting officer

of the relevant facts. Mr. Strube acknowledges

that his failure to do so was illegal and he sub-

mits this as a factual basis for his guilty pleas

to counts two, three and five of the Information.

The court explained to Strube that a factual] basis must

exist before his plea could be accepted. The court then

instructed Strube that the prosecutor would ‘‘recite briefly

in the nature of an offer of proof the evidence that the

Government is ready to present if this case were to go

to trial as proof of the occurrence of the offenses charged

in this Information.’’ Strube was instructed “‘to listen care-

fully to Mr. Fahey’s statement because when he is through

with his representations, I will ask each defendant whether

or not you take issue with any representations made by

Mr. Fahey.”’

After reciting facts showing that CAC employees filed

false claims regarding the parts they sold to the govern-

ment, the prosecutor stated to the court that he was ready

to prove that Strube ‘knew what was going on at the

time and did nothing to stop this particular pattern; in-

deed, assisted by lack of action and lack of intent to put

an end to this particular path and, therefore, in the Gov-

ernment’s view, could be found guilty of 18 USC Section

3 in conjunction with the false statement.”’

Strube’s attorney advised the court that he took ‘‘ex-

ception to the portion of the prosecutor’s offer of proof

that Strube knew that the information was false or par-

ticipated in filing false claims.” Strube’s attorney then

stated, however, that ‘‘we can make out a factual basis”.

The court was informed that the failure to report to the

government that he had learned that false statements had

been made by his employees “constitutes a violation of

Title 18 United States Code Section 3.’’ Thereafter, the

court announced that it was satisfied that a factual basis

existed and accepted Strube’s plea of guilty.

In this appeal, Strube contends that “the court received

absolutely no facts whatsoever to demonstrate that Strube

ever committed an affirmative act assisting Guy and Con-

solidated in concealing their violations. All parties present

labored under the mistaken assumption that mere silence

was sufficient to constitute a section 3 offense.’’

To establish a factual basis for a violation of 18 U.S.C.

§ 3 under Rule 11(f), the district court must be satisfied

(1) that the underlying offense occurred; (2) that the

defendant had knowledge thereof; and (3) that the

defendant comforted or assisted the offender ‘‘in order to

hinder or prevent his apprehension, trial or punishment.”

United States v. Scharf, 608 F.2d 323, 325-326 (9th Cir.

1979). Strube concedes that the first two requirements are

satisfied.

Strube contends that the evidence shows no more than

mere silence after Strube received knowledge of his em-

ployees past criminal behavior. Strube argues that the trial

court was not informed of any facts that showed that he

committed an affirmative act to comfort or assist his cod-

efendants to hinder or prevent their apprehension as re-

quired under the law of this circuit as set forth in United

States v. Scharf, 608 F.2d at 326. We disagree.

The record shows that Strube concealed from the gov-

ernment the fact that his employees were continuing to

file false claims. In United States v. Prescott, 581 F.2d

1343 (9th Cir. 1978), we held that a violation of section

3 is proved if the defendant permits another person to

use her dwelling to commit a crime and conceals evidence

of his continuing wrongdoing. Jd. at 1353.

In the instant matter, the prosecutor was prepared to

prove that, with knowledge that his codefendants had filed

prior false claims, Strube permitted his employees to con-

tinue to file false claims in order to defraud the govern-

ment for the benefit of CAC. In his effer of proof the

prosecutor stated that “[t]here was a false claim in the

amount of $66,000 submitted to the United States on or

before April 4, 1986, and that is the basis for Count 3.”

The prosecutor further stated with respect to count five

that “there was a false claim placed on the Government

for approximately $19,000 on March 20, 1986, and this

claim was false.’ These crimes occurred approximately

three months after Strube was informed that his employ-

ees had filed false claims. The government was also pre-

pared to establish that Strube ‘comforted and assisted”’

the offenders by proving that the pattern of presenting

false claims continued with Strube’s knowledge after he

was informed of their illegal activity. This evidence clearly

demonstrates more than mere silence. Rather, the record

shows obstruction of justice by providing a safe harbor for

the criminal action and concealing their ongoing crimes

for personal or corporate profit.

The record reflects that the court’s inquiry adequately

established that Strube had knowledge of the offenses with

which he was charged, that he comforted and assisted his

employees in continuing to file false claims after he had

knowledge of their prior illegal activity, and that he under-

stood the consequences of his plea. Accordingly, the dis-

trict court faithfully complied with the requirements of

Rule 11(f).

Ill

Strube also claims that the government breached the

plea agreement by recommending a one-year jail term as

a minimum term rather than as a maximum period of

incarceration. He argues that (1) the language in the sent-

encing memorandum of “at least one year’’ violated the

express terms of the plea agreement; and (2) that the tone

of the sentencing memorandum demonstrates the senti-

ment of the government that Strube should receive more

than one year and violates the spirit of the plea agreement.

We review the denial of a motion to withdraw a guilty

plea for abuse of discretion. United States v. Navarro-

Flores, 628 F.2d 1178, 1183 (9th Cir. 1980). Prior to sent-

encing, a defendant may withdraw his plea upon a showing

of a “fair and just’”’ reason. Fed. R. Crim. P. 32(d). The

right to withdraw a plea is not absolute, but should be

freely granted by the trial court where defendant has met

his burden to show a fair and just reason. United States

v. Read, 778 F.2d 1437, 1440 (9th Cir. 1985), cert. denied,

479 U.S. 9385 (1986). If the defendant does not make a

showing of a fair and just reason to withdraw his guilty

plea, the government need not establish that it would he

prejudiced if the motion were granted. United States v.

Rios-Ortiz, 830 F.2d 1067, 1069 (9th Cir. 1987). Strube

contends that the prosecution’s alleged breach of the plea

agreement is a “fair and just reason’ to withdraw his

guilty plea.

In determining whether a plea agreement has been

breached, contract law principles apply. Kamer, 781 F.2d

at 1387. Where a promise made by the government is a

significant inducement for a defendant’s guilty plea, the

promise must be fulfilled, Santobello v. New York, 404 U.S.

257, 262 (1971), or the judgment of conviction must be

vacated upon appeal. Jd. at 263. Such an inducement may

affect the voluntariness of the plea. Read, 778 F.2d at

1440. Therefore, the government must be held to the lit-

eral terms of the agreement. United States v. Travis, 735

F.2d 1129, 1132 (9th Cir. 1984). We must examine what

the parties reasonably understood regarding the terms of

the agreement. Any dispute over those terms must be

determined by objective standards. Read, 778 F.2d at 1441.

The district court’s finding as to the terms of the contract

will not be disturbed unless it is clearly erroneous. Jd. at

1440.

In arguing that the trial court should be reversed, Strube

relies on Santobello. In Santobello, the Supreme Court va-

cated the judgment of conviction because the government

had failed to comply with its promise to the accused not

to recommend a sentence to the court. Jd. at 262. Instead.

the prosecutor recommended that the trial judge impose

the maximum sentence. Jd. at 259. The court reasoned

that the significant role of plea bargaining in the admin-

istration of justice directs that prosecutors fulfill their

‘bargained for’? commitments. Jd. at 262.

Santobello is clearly distinguishable factually. The pros-

ecutor’s recommendation of a maximum term of impris-

onment in Santobello was a clear and unmistakable breach

of the promise to remain silent at the sentencing hearing,

constituting a breach of the express terms of the plea

agreement. Jd. at 259. In the instant matter, Strube con-

tends that the prosecutor's use of the words “at least one

year’ in the government’s sentencing memorandum vio-

lated his agreement to recommend “no more than one

year.

10a

In opposing Strube’s motion, the prosecutor stated that

the government ‘“‘did not intend to breach the agreement

of ask for a higher term by using the words ‘at least’ ”’

in the sentencing memorandum. The government’s motion

further states that the ‘‘use of the words ‘at least’ while

perhaps ill-chosen, should not be seen for something it was

not. Indeed the government has offered to delete those

two words from the Sentencing Memorandum.”’ (Govern-

ment’s Opposition to Defendant Gordon Strube’s Motion

to Withdraw Guilty Plea at 4.)

The district court interpreted the government’s recom-

mendation as being in substantial compliance with the

terms of the agreement. We agree. At the sentencing hear-

ing on August 15, 1988, the court stated its reason for

denying defendant’s motion.

One, Mr. Fahey doesn’t argue for a long prison

sentence. He uses that term, I think in this con-

text, he says, ‘But for his age and health a long

prison sentence would be called for.’ So he’s not

asking for a long prison sentence.

He does say that the government submits he

should be sentenced to a term of—you know, and

in a certain sense it is a semantic argument be-

cause if he said he should be sentenced to a prison

term of one year it amounts, I think to the same

thing if you say ‘at least one year.’ I think it

acknowledges that while he can’t recommend

more, he is going to recommend one year. That

is what I believe and that is the way I interpret

it, and I think besides that it is a very—in my

view, the remedy is, too, if there were a breach

to sentence before another judge without that

phrase present in the sentencing memorandum

and I don’t believe the reference to the long

prison sentence would otherwise be in order as

(

lla

a breach of the agreement, so for those reasons

I deny the motion to withdraw the plea of guilty.

The record shows that Strube’s “age and health’”’ were

significant factors in negotiating the plea agreement. “In

view of Mr. Strube’s health problems, it was important

for me to attempt to obtain a commitment from Mr. Fahey

to recommend probation for Mr. Strube.” (Marmaro Dec-

laration, attached to Defendant's Motion to Withdraw, at

{ 22.) However, “(t]he most that the prosecutor would of-

fer was his agreement not to recommend more than one

year in prison.” Jd.

The district court’s interpretation of the words used by

the prosecutor as a recommendation of no more than one

year is not clearly erroneous. We agree with the district

court that the prosecutor’s recommendation as modified

orally prior to sentencing did not violate the plea agree-

ment. The district court did not abuse its discretion in

denying Strube’s motion to withdraw his plea of guilty.

AFFIRMED.

12a

APPENDIX B

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 88-5292

D.C. No. CR-88-0230-AWT- 2

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

GORDON STRUBE,

Defendant-Appellant.

FILED

JAN 23 1990

CATHY A. CATTERSON, CLERK

U.S. COURT OF APPEALS

ORDER

Before. WALLACE, PREGERSON, and ALARCON, Cir-

cuit Judges.

The memorandum filed October 11, 1989 is amended as

follows:

On page 11, strike the first and second sentence of the

last paragraph. Insert instead:

Thus, the prosecutor made clear in his statement

to the court prior to sentencing that the govern-

ment intended to rely on the terms of the plea

agreement. The district court construed the pros-

ecutor’s recommendation, as clarified by his oral

13a

statements, as being in compliance with the terms

of the plea agreement.

On page 12, strike the first two sentences of the last

paragraph. Insert instead:

“Good faith disputes of the parties as to the

terms of a plea agreement are to be resolved by

the district court in which the plea was originally

submitted.” United States v. Bornstein, 623 F.2d

1327, 1330 (9th Cir. 1980). The district court fully

explored the intent of the parties concerning the

terms of the plea agreement before pronouncing

sentence. The district court concluded that under

the terms of the plea agreement the prosecutor

could not recommend more than one year, but

was free to argue that the sentence should not

be less than one year. The district court’s inter-

pretation of the intent of the parties was not

clearly erroneous.

With the memorandum thus amended, the panel has

voted unanimously to deny the petition for rehearing and

to reject the suggestion for rehearing en banc. The full

court has been advised of the suggestion for rehearing en

bane and no active judge has requested a vote on whether

to rehear the matter en banc. Fed. R. App. P. 35(b).

The petition for rehearing is DENIED and the sugges-

tion for rehearing en banc is REJECTED.

l4a

APPENDIX C

NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 88-5292

D.C. No. CR-88-0230-AWT-2

UNITED STATES OF AMERICA,

Plaintiff-A ppellee,

GORDON STRUBE,

Defendant-A ppellant.

FILED

OCT 11 1989**

CATHY A. CATTERSON, CLERK

U.S. COURT OF APPEALS

MEMORANDUM*

Appeal from the United States District Court

for the Central District of California

A. Wallace Tashima, District Judge, Presiding

Argued and submitted October 5, 1989

San Francisco, California

Before: WALLACE, PREGERSON, ALARCON, Circuit

Judges.

* This disposition is not appropriate for publication and may not be

cited to or by the courts of this circuit except as provided by 9th Cir

R. 36-3.

** Editor's Note: This reproduction incorporates amendments to the

court's opinion of October 11, 1989 that were ordered by the court on

January 23, 1990.

15a

Gordon Strube appeals from the judgment entered fol-

lowing the denial of his motion to withdraw his guilty plea.

Strube seeks reversal on two grounds:

One. The district court failed to establish that there was

a factual basis for the plea of guilty.

Two. The district court abused its discretion in denying

the motion to withd.aw the guilty plea because the record

shows that the government breached the plea agreement.

Gordon Strube founded Consolidated Aeronautics Cor-

poration (CAC) in 1956 and has acted as its president and

chief executive officer since its inception. CAC sold aircraft

parts to the United States Government during 1985 and

1986. In 1987, the United States Attorney’s office for the

Centra] District of California began a grand jury investi-

gation of CAC and four of its employees for violations of

18 U. S. C. §§ 3, 1001 and 287.

In March of 1988 Strube expressed to his attorney a

desire “‘to see whether I could voluntarily come forward

and plead guilty to some offense in order to prevent the

indictment of as many of my colleagues as possible.”’

On March 11, 1988, Strube and the codefendants en

tered into a verbal plea agreement with the United States.

On March 25, 1988, the government filed a five-count in-

formation charging Strube, Ronald Guy and CAC with

conspiracy to defraud the United States, falsely certifying

“used, reconditioned and refurbished”’ parts as ‘‘new, un-

used and unaltered surplus” presenting false claims to the

government for those parts and making false statements

to the government.

A written plea agreement was executed on April 11,

1988. Strube agreed to plead guilty to counts two, three

and five of the information as an accessory after the fact.

l6a

Count two of the information charges that on or about

April 15, 1985, Strube comforted and assisted his code-

fendants in submitting false certifications to the U.S. Gov-

ernment. Count three charges that on or about April 4,

1986 Strube comforted and assisted his codefendants in

presenting false claims for payment. Count five charges

that on or about March 20, 1986, Strube comforted and

assisted his codefendants in presenting false claims for

payment. Each count alleges that Strube hindered and

prevented the apprehension, trial and punishment of the

codefendants by failing to disclose what he knew of the

activity.

In exchange for the guilty pleas, the government agreed

that ‘tno further criminal charges will be brought against

CAC or its employees.” In addition, the government prom-

ised Strube that it would ‘‘not recommend at the time of

sentencing a total period of incarceration of more than

one year.”’

On May 9, 1988 Strube pled guilty to counts two, three

and five. Before accepting the plea, the district court in-

quired of both parties in order to establish that there was

a factual basis for the plea. After engaging in a dialogue

with Strube, the court accepted the plea. Strube filed a

written factual basis for his plea on the same day.

In its sentencing memorandum filed July 20, 1988, the

government recommended that Strube be sentenced to ‘‘at

least one year’’ in prison. Strube filed a motion to with-

draw his guilty plea on August 8, i988. Strube argued

that the government breached the plea agreement by ask-

ing the court to sentence him to “‘a minimum of one year

in prison’’. despite “‘the prosecutor’s written commitment

to request a maximum of one year in prison” (emphasis

in original). Strube also claimed that there was not a suf-

ficient factual basis to support his plea of guilty.

The district court denied the motion on August 15, 1988,

stating that it was not influenced by whether the rec-

l7a

ommendation was for ‘‘at least’’ or for ‘‘not more than’’

one year. The court sentenced Strube to 2 years (the first

six months to be served in a community treatment center,

the remainder suspended), five years probation and a

$300,000 fine.

Strube timely appeals.

Strube contends that the district court erred in denying

his motion to withdraw his plea because there is insuffi-

cient factual] basis to support his guilty plea as required

by Fed. R. Crim. P. 11(f). We have conducted an inde-

pendent review of the record to determine whether a fac-

tual basis for the plea existed as required by Rule 11(f).

At least a “minor investment of time and effort’’ is

required to establish on the record that the defendant had

knowledge of the crime and that he understood the con-

sequences of his plea. United States v. Kamer, 781 F.2d

1380, 1385 (9th Cir. 1986), cert. denied, 479 U.S. 835

(1986). The record shows that the district court carefully

questioned Strube prior to accepting his plea. The court

asked Strube if he had read the document filed by his

attorney, entitled Defendants’ Factual Basis For Guilty

Plea To Information, before he signed it. The court also

asked Strube whether the facts set forth in the written

factual basis were accurate. Strube replied affirmatively

to both questions. In addition, the court required the pros-

ecutor to state the facts he was ready to prove if the case

went to trial.

The Defendants’ Factual Basis describes Strube’s in-

volvement in the filing of false claims in the following

language:

As President and Chairman of the Board of

the company, Mr. Strube was generally aware of

some of CAC’s contracts with the U.S. Govern-

ment during the relevant time period.

18a

In approximately January 1986 and later, Mr.

Strube learned from other officers of CAC who

had primary responsibility for the U.S. Govern-

ment contracting business that CAC had supplied

‘newly manufactured material’ to the government

in connection with certain ‘selector set’ contracts

even though the contract specifications called for

the materia] to be ‘new, unused surplus’. Further,

Mr. Strube learned at that time that certification

had been submitted to the government by CAC

personnel which falsely affirmed that the product

was ‘new, unused surplus,’ when, as Mr. Strube

learned after the fact, the product was ‘newly

manufactured’ material. (This applies to the con-

tracts referred to in counts two, three and five

of the Information.)

Having learned these facts, Mr. Strube, as

President and Chairman of the Board of CAC,

should have directed the responsible officers of

CAC to notify the government contracting officer

of the relevant facts. Mr. Strube acknowledges

that his failure to do so was illegal and he sub-

mits this as a factual basis for his guilty pleas

to counts two, three and five of the Information.

The court explained to Strube that a factual basis must

exist before his plea could be accepted. The court then

instructed Strube that the prosecutor would “‘recite briefly

in the nature of an offer of proof the evidence that the

Government is ready to present if this case were to go

to trial as proof of the occurrence of the offenses charged

in this Information.’’ Strube was instructed ‘‘to listen care-

fully to Mr. Fahey’s statement because when he is through

with his representations, I will ask each defendant whether

or not you take issue with any representations made by

Mr. Fahey.”’

19a

After reciting facts showing that CAC employees filed

false claims regarding the parts they sold to the govern-

ment, the prosecutor stated to the court that he was ready

to prove that Strube ‘“‘knew what was going on at the

time and did nothing to stop this particular pattern; in-

deed, assisted by lack of action and lack of intent to put

an end to this particular path and, therefore, in the Gov-

ernment’s view, could be found guilty of 18 USC Section

3 in conjunction with the false statement.”

Strube’s attorney advised the court that he took ‘‘ex-

ception to the portion of the prosecutor’s offer of proof

that Strube knew that the information was false or par-

ticipated in filing false claims.’’ Strube’s attorney then

stated, however, that ‘‘we can make out a factual basis’’.

The court was informed that the failure to report to the

government that he had learned that false statements had

been made by his employees “constitutes a violation of

Title 18 United States Code Section 3.’’ Thereafter, the

court announced that it was satisfied that a factual basis

existed and accepted Strube’s plea of guilty.

In this appeal, Strube contends that ‘‘the court received

absolutely no facts whatsoever to demonstrate that Strube

ever committed an affirmative act assisting Guy and Con-

solidated in concealing their violations. All parties present

labored under the mistaken assumption that mere silence

was sufficient to constitute a section 3 offense.’’

To establish a factual] basis for a violation of 18 U.S.C.

§3 under Rule 11(f), the district court must be satisfied

(1) that the underlying offense occurred; (2) that the

defendant had knowledge thereof; and (38)that the

defendant comforted or assisted the offender ‘‘in order to

hinder or prevent his apprehension, trial or punishment.”’

United States v. Scharf, 608 F.2d 323, 325-326 (9th Cir.

1979). Strube concedes that the first two requirements are

satisfied.

20a

Strube contends that the evidence shows no more than

mere silence after Strube received knowledge of his em-

ployees past criminal behavior. Strube argues that the trial

court was not informed of any facts that showed that he

committed an affirmative act to comfort or assist his cod-

efendants to hinder or prevent their apprehension as re-

quired under the law of this circuit as set forth in United

States v. Scharf, 608 F.2d at 326. We disagree.

The record shows that Strube concealed from the gov-

ernment the fact that his employees were continuing to

file false claims. In United States v. Prescott, 581 F.2d

1343 (9th Cir. 1978), we held that a violation of section

3 is proved if the defendant permits another person to

use her dwelling to commit a crime and conceals evidence

of his continuing wrongdoing. Jd. at 1353.

In the instant matter, the prosecutor was prepared to

prove that, with knowledge that his codefendants had filed

prior false claims, Strube permitted his employees to con-

tinue to file false claims in order to defraud the govern-

ment for the benefit of CAC. In his offer of proof the

prosecutor stated that ‘“[t]here was a false claim in the

amount of $66,000 submitted to the United States on or

before April 4, 1986, and that is the basis for Count 3.”’

The prosecutor further stated with respect to count five

that ‘‘there was a false claim placed on the Government

for approximately $19,000 on March 20, 1986, and this

claim was false.’’ These crimes occurred approximately

three months after Strube was informed that his employ-

ees had filed false claims. The government was also pre-

pared to establish that Strube “comforted and assisted”’

the offenders by proving that the pattern of presenting

false claims continued with Strube’s knowledge after he

was informed of their illegal activity. This evidence clearly

demonstrates more than mere silence. Rather, the record

shows obstruction of justice by providing a safe harbor for

the criminal action and concealing their ongoing crimes

for personal or corporate profit.

2la

The record reflects that the court’s inquiry adequately

established that Strube had knowledge of the offenses with

which he was charged, that he comforted and assisted his

employees in continuing to file false claims after he had

knowledge of their prior illegal activity, and that he under-

stood the consequences of his plea. Accordingly, the dis-

trict court faithfully complied with the requirements of

Rule 11(f).

Ill

Strube also claims that the government breached the

plea agreement by recommending a one-year jail term as

a minimum term rather than as a maximum period of

incarceration. He argues that (1) the language in the sent-

encing memorandum of ‘‘at least one year’’ violated the

express terms of the plea agreement; and (2) that the tone

of the sentencing memorandum demonstrates the senti-

ment of the government that Strube should receive more

than one year and violates the spirit of the plea agreement.

We review the denial of a motion to withdraw a guilty

plea for abuse of discretion. United States v. Navarro-

Flores, 628 F.2d 1178, 1183 (9th Cir. 1980). Prior to sent-

encing, a defendant may withdraw his plea upon a showing

of a ‘‘fair and just’ reason. Fed. R. Crim. P. 32(d). The

right to withdraw a plea is not absolute, but should be

freely granted by the trial court where defendant has met

his burden to show a fair and just reason. United States

v. Read, 778 F.2d 1437, 1440 (9th Cir. 1985), cert. denied,

479 U.S. 9385 (1986). If the defendant does not make a

showing of a fair and just reason to withdraw his guilty

plea, the government need not establish that it would be

prejudiced if the motion were granted. United States v.

Rios-Ortiz, 830 F.2d 1067, 1069 (9th Cir. 1987). Strube

contends that the prosecution’s alleged breach of the plea

agreement is a “fair and just reason” to withdraw his

guilty plea.

22a

In determining whether a plea agreement has been

breached, contract law principles apply. Kamer, 781 F.2d

at 1387. Where a promise made by the government is a

significant inducement for a defendant’s guilty plea, the

promise must be fulfilled, Santobello v. New York, 404 U.S.

257, 262 (1971), or the judgment of conviction must be

vacated upon appeal. Jd. at 263. Such an inducement may

affect the voluntariness of the plea. Read, 778 F.2d at

1440. Therefore, the government must be held to the lit-

eral terms of the agreement. United States v. Travis, 735

F.2d 1129, 1132 (9th Cir. 1984). We must examine what

the parties reasonably understood regarding the terms of

the agreement. Any dispute over those terms must be

determined by objective standards. Read, 778 F.2d at 1441.

The district court’s finding as to the terms of the contract

will not be disturbed unless it is clearly erroneous. Jd. at

1440.

In arguing that the trial court should be reversed, Strube

relies on Santobello. In Santobello, the Supreme Court va-

cated the judgment of conviction because the government

had failed to comply with its promise to the accused not

to recommend a sentence to the court. Jd. at 262. Instead,

the prosecutor recommended that the trial judge impose

the maximum sentence. Jd. at 259. The court reasoned

that the significant role of plea bargaining in the admin-

istration of justice directs that prosecutors fulfill their

“bargained for’’ commitments. Jd. at 262.

Santobello is clearly distinguishable factually. The pros-

ecutor’s recommendation of a maximum term of impris-

onment in Santobello was a clear and unmistakable breach

of the promise to remain silent at the sentencing hearing,

constituting a breach of the express terms of the plea

agreement. Jd. at 259. In the instant matter, Strube con-

tends that the prosecutor’s use of the words ‘‘at least one

year’ in the government’s sentencing memorandum vio-

lated his agreement to recommend ‘“‘no more than one

year.

om"

23a

In opposing Strube’s motion, the prosecutor stated that

the government ‘“‘did not intend to breach the agreement

of ask for a higher term by using the words ‘at least’ ”’

in the sentencing memorandum. The government’s motion

further states that the ‘‘use of the words ‘at least’ while

perhaps ill-chosen, should not be seen for something it was

not. Indeed the government has offered to delete those

two words from the Sentencing Memorandum.” (Govern-

ment’s Opposition to Defendant Gordon Strube’s Motio1:

to Withdraw Guilty Plea at 4.)

Thus, the prosecutor made clear in his statement to the

court prior to sentencing that the government intended to

rely on the terms of the plea agreement. The district court

construed the prosecutor’s recommendation, as clarified by

his oral statements, as being in compliance with the terms

of the plea agreement. At the sentencing hearing on Au-

gust 15, 1988, the court stated its reason for denying

defendant’s motion.

One, Mr. Fahey doesn’t argue for a long prison

sentence. He uses that term, I think in this con-

text, he says, ‘But for his age and health a long

prison sentence would be called for.’ So he’s not

asking for a long prison sentence.

He does say that the government submits he

should be sentenced to a term of—you know, and

in a certain sense it is a semantic argument be-

cause if he said he should be sentenced to a prison

term of one year it amounts, I think to the same

thing if you say ‘at least one year.’ I think it

acknowledges that while he can’t recommend

more, he is going to recommend one year. That

is what I believe and that is the way I interpret

it, and I think besides that it is a very—in my

view, the remedy is, too, if there were a breach

to sentence before another judge without that

phrase present in the sentencing memorandum

}

24a

and I don’t believe the reference to the long

prison sentence would otherwise be in order as

a breach of the agreement, so for those reasons

I deny the motion to withdraw the plea of guilty.

The record shows that Strube’s ‘‘age and health’’ were

significant factors in negotiating the plea agreement. “In

view of Mr. Strube’s health problems, it was important

for me to attempt to obtain a commitment from Mr. Fahey

to recommend probation for Mr. Strube.’’ (Marmaro Dec-

laration, attached to Defendant’s Motion to Withdraw. at

4 22.) However, ‘‘[t]he most that the prosecutor would of-

fer was his agreement not to recommend more than one

year in prison.” Jd.

“Good faith disputes of the parties as to the terms of

a plea agreement are to be resolved by the district court

in which the plea was originally submitted.’’ United States

v. Bornstein, 623 F.2d 1327, 1330 (9th Cir. 1980). The

district court fully explored the intent of the parties con-

cerning the terms of the plea agreement before pron-

ouncing sentence. The district court concluded that under

the terms of the plea agreement the prosecutor could not

recommend more than one year, but was free to argue

that the sentence should not be less than one year. The

district court’s interpretation of the intent of the parties

was not clearly erroneous. The district court did not abuse

its discretion in denying Strube’s motion to withdraw his

plea of guilty.

AFFIRMED.

25a

APPENDIX D

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

No. CV 88-230-AWT

UNITED STATES OF AMERICA,

Plaintiff,

VS.

CONSOLIDATED AERONAUTICS, GORDON STRUBE, AND

RONALD GUY

Defendant.

HONORABLE A. WALLACE TASHIMA, JUDGE

PRESIDING

REPORTER’S TRANSCRIPT OF PROCEEDINGS

MONDAY, AUGUST 15, 1988

LOS ANGELES, CALIFORNIA

DELIA C. ROTUNNO, CSR #2171

Official Court Reporter

312 North Spring Street, Room 438

Los Angeles, California 90012

(213) 687-4698

26a

A-P-P-E-A-R-A-N-C-E-S:

FOR THE PLAINTIFF: UNITED STATES OF AMERICA

ROBERT C. BONNER

UNITED STATES ATTORNEY

BY: WILLIAM FAHEY

Assistant United States Attorney

312 North Spring Street

Los Angeles, California 90012

x * *

FOR THE DEFENDANT: CONSOLIDATED AERONAUTICS

PETRILLO & HORDELL

ATTORNEYS AT LAW

BY: JOSEPH PETRiILLO

20000 L Street, North West

Suite 504

WASHINGTON D. C.

MR. ALAN KEIEGEL

Corporate Attorney, In-House

FOR THE DEFENDANT: GORDON STRUBE

MCCAMBRIDGE, DEIXLER & MARMARO

ATTORNEYS AT LAW |

BY: MR. RICHARD MARMARO

2029 Century Park East

Suite 2700

Los Angeles, California 90067

* * *

FOR THE DEFENDANT: RONALD GUY

DUNNELLS, DUBALL, BENNETT & PORTER

ATTORNEYS AT LAW

BY: PLATEO CACHERIS

1220 - 19th Street, North West

Washington, D. C. 20036

a 27a

VENEBLE, BAETJER & HOWARD

ATTORNEYS AT LAW

BY: GERALD F. TREANOR

2000 CORPORATE RIDGE

SUITE 500

MCLEAN, VIRGINIA 22102

x* * *

[13] THE COURT: All right. I don’t think either side

really addressed the proper remedy. Assuming there was

a breach of the agreement by the government, what is

indicated to me by not only Santobello but the Ninth Cir-

cuit case U.S. versus Travis and a more recent second

circuit case, I think those are all cases where sentencing

has been pronounced is, one, resentencing with a clean

[14] atmosphere. And I think, at best, you are entitled to

resentencing before a different judge without this material

or I say without the word ‘‘at least’, in the memorandum

before the judge. I think that is a motion you are entitled

to.

Santobello doesn’t say—none of those cases say that,

the Ninth Circuit doesn’t say that you are entitled to with-

draw the plea.

I think it does depend on whether that is true to a

certain extent on the—I will say the gravity of the breach,

the materiality of the breach by the government.

I think that is part of the consideration to determine

what the language is. I think in this case the sufficient

remedy would be to send Mr. Strube to another judge to

be sentenced by that judge. I'll call it an interpleading

memorandum, but I don’t think I am going to get to it.

I am going to deny the motion. I deny it for this reason:

One, Mr. Fahey doesn’t argue for a long prison sentence.

He uses that term, I think in this context, he says, “But

for his age and health a long prison sentence would be

called for.”’ So he’s not asking for a long prison sentence.

He does say that the government submits he [15] should

be sentenced to a prison term of at least one year. The

term of—you know, and in a certain sense it is a semanti

argument because if he said he should be sentenced to a

prison term of one year it amounts, I think, to the same

thing if you say ‘‘at least one year.”’ I think it acknow!

5 A . .

edges that while he cant recommend more, he is going

to recommend one year. That is what I believe and tha

is the way I interpreted it, and I think besides that it |

a very—in my view, the remedy is, too, if there were

breach to sentence before another judge without tha

the sentencing memorandum and I don't

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pnrase present 1n

helieve the reference to the long prison sentence would

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otherwise be In order as a breach of the agreemen Ss

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U-

APPENDIX E

United States District Court for

Central District of California

CR 88-230-AWT

DEFENDANT

JUDGMENT AND PROBATION/COMMITMENT ORDER

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‘ COUNS R rd Marr Retains

PLEA

( [ T t lr Dé if - Sat SI t ] tnat tneé re .

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FINDING & JUDGMENT

Defendant has been convicted as charged of the of

fense(s) of false statements causing an act to be don

ears. . * a + , , " * let) < 7 | . . x ]

accessory aiter tne ta T In Vil0OIaALION Ol ic | we §§100]

9} QD « rhe ANT 9. faleo ale -m11ICI TY ‘ an

2(b). 3 as charged in count 2; false claims, causing an act

| Va) ‘ oF ? " . “+? ;

ne gone. accessory. after tne factS In wolation OF 1a

U.S.C. §§287, 2(b), 3 as charged in counts 6 and o Ol the

30a

SENTENCE OR PROBATION ORDER

The court asked whether defendant had anything to say

why judgment should not be pronounced. Because no suf-

ficient cause to the contrary was shown, or appeared to

the court, the court adjudged the defendant guilty as

charged and convicted and ordered that: The defendant is

hereby committed to the custody of the Attorney General

or his authorized representative for imprisonment for a

period of two (2) years but on the condition the defendant

serve six (6) months in a community treatment center,

execution of the remainder of the sentence is suspended

as to imprisonment; defendant placed on five years pro-

bation.

SPECIAL CONDITIONS OF PROBATION

IT IS FURTHER ADJUDGED on count 2 that the

defendant, whose address is 939 N. Alpine Dr., Beverly

Hills, CA 90210, shall pay a fine in the sum of $100,000.

to the U.S. Treasury payable through the U.S. Attorney,

Room 1347, Claims & Judgments, 312 N. Spring St., L.A.,

CA 90012.

IT IS ADJUDGED on each of counts 3 and 5 that the

defendant shall pay a fine in the sum of $100,000. to the

U.S. Treasury payable through the U.S. Attorney and that

the imposition of sentence with respect to imprisonment

only is suspended and the defendant is placed on concur-

rent terms of probation for a period of five (5) years sub-

ject to General Order 225 & the following conditions: 1) the

defendant shall serve 1000 hours of community service for

the Foundation for People Inc. & 2) the total fine of

$300,000. is payable within thirty (80) days of this date.

ADDITIONAL CONDITIONS OF PROBATION

In addition to the special] conditions of probation im-

posed above, it is hereby ordered that the general con-

3la

ditions of probation set out on the reverse side of this

judgment be imposed. The Court may change the condi-

tions of probation, reduce or extend the period of pro-

bation, and at any time during the probation period or

within a maximum probation period of five years permitted

by law, may issue a warrant and revoke probation for a

violation occurring during the probation period.

IT IS ORDERED that the defendant shall pay $150. in

Special Assessments.

IT IS FURTHER ORDERED that execution of sentence

is stayed until 12 noon, 9/12/88, at which time the

defendant shall surrender to the facility designated by the

Bureau of Prisons, or if no designation made, to U.S.

Marshal this building. If a timely notice of appeal is filed,

the stay shall continue pending the appeal and the trial

bond shall remain as bond on appeal.

COMMITMENT RECOMMENDATION

IT IS RECOMMENDED that the defendant be permit-

ted to seek medical treatment of his own choice and ex-

pense & that he be permitted to leave the CTC to obtain

such services.

/s/ A. Wallace Tashima

A. WALLACE TASHIMA Date 8/16/88

U.S. District Judge

It is ordered that the Clerk deliver a certified copy of this

judgment and commitment to the U.S. Marshal! or other

qualified officer.

32a

APPENDIX F

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

No. CR 88-230

UNITED STATES OF AMERICA,

Plaintiff,

CONSOLIDATED AERONAUTICS CORPORATION,

GORDON STRUBE,

RONALD GUY,

Defendants.

INFORMATION

(18 U.S.C. §371: Conspiracy; 18 U.S.C. § 1001: False

Statements; 18 U.S.C.§ 287: False Claims; 18 U.S.C.§ 2(b):

Causing An Act To Be Done; 18 U.S.C. § 3: Accessory

After the Fact]

The United States Attorney charges:

COUNT ONE

(18 U.S.C. § 371]

A. INTRODUCTION

At all times material] to this Information:

1. Defendant CONSOLIDATED AERONAUTICS COR-

PORATION (‘‘CAC’’) was a company located in North Hol-

lywood, California and engaged in the business of selling

new, used and newly manufactured aircraft parts to the

United States government.

33a

2. Defendant GORDON STRUBE was the president of

CAC and its chief executive officer.

3. Defendant RONALD GUY was a vice-president of

sales at CAC.

B. CONSPIRACY AND OBJECTS OF THE CONSPIRACY

Beginning on a date unknown and continuing through

on or about October 31, 1987 in the Central District of

California and elsewhere, defendants CAC and GUY and

others known and unknown, did conspire, combine and

agree together and with each other to commit offenses

against the United States:

1. To defraud the United States and agencies thereof

by supplying used, reconditioned, refurbished and altered

military aircraft parts contrary to contract requirements

and specifications, in violation of 18 U.S.C. § 371;

2. To make false, fictitious and fraudulent claims upon

agencies of the United States, in violation of 18 U.S.C.

§ 287;

3. To make false, fictitious and fraudulent statements

and representations to agencies of the United States in

violation of 18 U.S.C. § 1001

C. MEANS OF THE CONSPIRACY

The foregoing objects of the conspiracy were accom-

plished in substance as follows:

1. Defendant CAC, through its officers and employees,

would enter into contracts with agencies of the United

States to sell new and unused surplus military aircraft

parts.

2. Defendant CAC, through its officers and employees,

would thereafter supply used, reconditioned, newly man-

ufactured, refurbished and altered military aircraft parts

to United States Government agencies.

34a

3. Defendant CAC, through its officers and employees,

would on occasion falsely certify to United States govern-

ment agencies that it was supplying new and unused sur-

plus military aircraft parts.

4. Defendant CAC, through its officers and employees,

would on occasion submit invoices to United States Gov-

ernment agencies which falsely stated that CAC was sup-

plying new and unused surplus military aircraft parts.

D. OVERT ACTS

1. On or about October 10, 1984, defendant RONALD

GUY prepared a false certification in connection with CAC

Contract Number 7707.

2. On or about January 29, 1985, defendant CAC sent

purchase order aumber 1128 to ‘‘Premach Corporation”’

requesting the manufacture of $51,000 of ‘‘sliders’’ in con-

nection with CAC Contract Number 7707.

3. On or about May 9, 1985, defendant CAC approved

the payment of ‘‘Production Hone and Lap”’ Invoice 9830

for $1,800 in connection with CAC Contract Number 7707.

4. On or about June 24, 1985, defendant CAC approved

the payment of ‘Production Hone and Lap”’ Invoice 9965

for $1,040 in connection with CAC Contract Number 7707.

5. On or about July 8, 1985, defendant CAC submitted

a claim upon the Defense Contract Administration Services

Region, an agency of the United States, in the form of

invoice number 9237 demanding payment in the amount

of $57,544.

6. On or about July 24, 1985, defendant CAC submitted

a claim upon the Defense Contract Administration Services

Region, an agency of the United States, in the form of

invoice number 9419 demanding payment in the amount

of $115,088.

7. On or about August 27, 1985, defendant CAC sub-

mitted a claim upon the Defense Contract Administration

35a

Services Region, an agency of the United States, in the

form of invoice number 9543 demanding payment in the

amount of $115,088.

8. On or about September 24, 1985, defendant CAC

submitted a claim upon the Defense Contract Administra-

tion Services Region, an agency of the United States, in

the form of invoice number 9642 demanding payment in

the amount of $115,088.

9. On or about October 2, 1985, defendant CAC sub-

mitted a claim upon the Defense Contract Administraticn

Services Region, an agency of the United States, in the

form of invoice number 9677 demanding payment in the

amount of $96,673.

COUNT TWO

[18 U.S.C. § 1001; § 2(b); § 3)

On or about April 9, 1985, within the Central District

of California, defendants CONSOLIDATED AERONAU-

TICS CORPORATION and RONALD GUY knowingly and

willfully made and caused to be made a false, fictitious

and fraudulent statement and representation as to material

facts within the jurisdiction of Defense Construction Sup-

ply Center, an agency of the United States, in that

defendants CONSOLIDATED AERONAUTICS CORPO-

RATION and RONALD GUY submitted and caused to be

submitted to the Defense Construction Supply Center a

certification that the selector sets for the A-7 military

aircraft parts offered for sale were new, unused and un-

altered and would not be reconditioned, refurbished or

altered, when in truth and fact, as defendants CONSOL-

IDATED AERONAUTICS CORPORATION and RONALD

GUY well knew, the aforementioned military aircraft parts

were used, reconditioned and refurbished and contained

newly manufactured ‘‘sliders.’’

At said time and place, defendant GORDON STRUBE,

knowing that the above offense had been committed, re-

36a

ceived, relieved, comforted and assisted defendants CON-

SOLIDATED AERONAUTICS CORPORATION and

RONALD GUY in order to hinder and prevent their ap-

prehension, trial and punishment.

COUNT THREE

[18 U.S.C. § 287, § 2(b), § 3]

On or about April 4, 1986, within the Central] District

of California, defendant CONSOLIDATED AERONAU-

TICS CORPORATION made and caused to be made a

false, fictitious and fraudulent claim upon the Defense Con-

tract Administration Services Region, an agency of the

United States, in that defendant CONSOLIDATED AER-

ONAUTICS CORPORATION submitted invoice number

0631 demanding payment in the amount of $66,220. Said

claim was false, fictitious and fraudulent in that defendant

CONSOLIDATED AERONAUTICS CORPORATION rep-

resented it was supplying new, unused and unaltered se-

lector sets for the A-7 military aircraft when in truth and

fact defendant CONSOLIDATED AERONAUTICS COR-

PORATION supplied used, reconditioned and refurbished

selector sets which also contained newly manufactured

“sliders.”

At said time and place, defendant GORDON STRUBE,

knowing that the above offense had been committed, re-

ceived, relieved, comforted and assisted defendant CON-

SOLIDATED AERONAUTICS CORPORATION in order

to hinder and prevent its apprehension, trial and punish-

ment.

COUNT FOUR

[18 U.S.C. § 1001; § 2(b)]

On or about April 14, 1986, within the Centra] District

of California, defendants CONSOLIDATED AERONAUL-

TICS CORPORATION and RONALD GUY knowingly and

37a

willfully made and caused to be made a false, fictitious

and fraudulent statement and representation as to material

facts within the jurisdiction of the United States Air Force,

an agency of the United States, in that defendants CON-

SOLIDATED AERONAUTICS CORPORATION and RON-

ALD GUY submitted and caused to be submitted to the

United States Air Force a quotation stating that the hook

assemblies for the F-104 military aircraft offered for sale

were new, unused and acquired from the “DPDO in Weis-

baden, West Germany,’ when in truth and fact, as

defendants consolidated AERONAUTICS CORPORATION

and RONALD GUY well knew, the aforementioned mili-

tary aircraft parts were in part, newly manufactured, re-

conditioned and refurbished.

COUNT FIVE

[18 U.S.C. § 287, § 2(b) § 3)

On or about March 20, 1986, within the Centra] District

of California, defendant CONSOLIDATED AERONAU-

TICS CORPORATION made and caused to be made a

false, fictitious and fraudulent claim upon the Defense Con-

tract Administration Services Region, an agency of the

United States, in that defendant CONSOLIDATED AER-

ONAUTICS CORPORATION submitted invoice number

0561 demanding payment in the amount of $19,600. Said

claim was false, fictitious and fraudulent in that defendant

~ CONSOLIDATED AERONAUTICS CORPORATION rep-

resented it was supplying new surplus hydraulic fittings

for the F-4 military aircraft when in truth and fact

defendant CONSOLIDATED AERONAUTICS CORPO-

RATION supplied used, reconditioned and refurbished hy-

draulic fittings.

At said time and place, defendant GORDON STRUBE,

knowing that the above offense had been committed, re-

ceived, relieved, comforted and assisted defendant CON-

SOLIDATED AERONAUTICS CORPORATION in order

38a

to hinder and prevent its apprehension, trial and punish-

ment.

/s/ Robert C. Bonner

ROBERT C. BONNER

United States Attorney

| ene

39a

APPENDIX G

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

NO. CR 88-230

UNITED STATES OF AMERICA,

Plaintiff,

CONSOLIDATED AERONAUTICS CORP., GORDON STRUBE,

RONALD GLY,

Defendants.

ROBERT C. BONNER

United States Attorney

ROBERT L. BROSIO

Assistant United States Attorney

Chief, Criminal Division

WILLIAM F. FAHEY

Assistant United States Attorney

Chief, Public Corruption & Government Fraud Section

1300 United States Courthouse

312 North Spring Street

Los Angeles, California 90012

Telephone: (213) 894-3036

Attorneys for Plaintiff

United States of America

JOINT PLEA AGREEMENT

The United States, by and through its attorney of re-

cord, and the individual defendants, by and through their

respective attorneys, hereby enter into the following Joint

Plea Agreement:

Dene

40a

DEFENDANTS’ PLEAS

1. Defendant Consolidated Aeronautics Corporation

(““CAC”’) shall waive indictment and plea guilty to the five

count Information filed March 24, 1988 in this case.

2. Defendant Gordon Strube shall waive indictment and

plead guilty to counts two, three and five of the Infor-

mation filed in this case.

3. Defendant Ronald Guy shall waive indictment and

plead guilty to counts one, two and four of the Information

filed in this case.

GOVERNMENT’S AGREEMENT

A. In return for the above stated pleas, as well as the

other conditions specified in this Joint Plea Agreement,

the government agrees that:

1. As to defendant Gordon Strube, the government will

not recommend at the time of sentencing a total pe-

riod of incarceration of more than one vear.

. As to defendant Ronald Guy, the government will

not recommend at the time of sentencing a total pe-

riod of incarceration of more than three years.

3. The government acknowledges that defendants Gor-

don Strube and Ronald Guy will recommend that sen-

tences of probation be imposed.

4. In consideration for defendants CAC, Strube and Guy

agreeing to plead guilty to the charges set forth in

the Information, the government agrees that no fur-

ther criminal charges will be brought against CAC

or its other officers and employees, including those

who were targets of the grand jury investigation and

against whom the government intended to seek an

a ee

4la

indictment, for their actions in connection with those

CAC contracts referred to in the memoranda of Char-

lene Izzo dated June 23, 1987, June 30, 1987, July

14, 1987 and July 31, 1987, which are attached hereto

and incorporated herein by reference, or in connec-

tion with CAC Contract No. 4901.

5. Defendant Strube submits that he has a serious health

problem. He requests, and the government does not

oppose, that an independent physician examine

defendant Strube and report his findings on the sta-

tus of defendant Strube’s health to the court and to

the probation office prior to sentencing. Defendant

Strube agrees to pay for such medical examination

and report.

B. There is no agreement as to the maximum fine, if any,

which can be imposed on CAC, Strube and Guy as to their

pleas of guilty and the parties to this Joint Plea Agree-

ment are free to make their own recommendation to the

Court in this regard.

Ill

DEFENDANTS’ AGREEMENTS

1. Defendant Consolidated Aeronautics Corporation

agrees to make restitution to the government in the

total amount of $987,891 representing the full amount

of the contract price on CAC Contract Numbers 2324,

4627, 7707, 9356 and 9376. This restitution shall be

made as directed by the court at sentencing.

2. Defendant CAC on behalf of itself and its successors

and assigns, and defendants Gordon Strube and Ron-

ald Guy agree that they shall not oppose debarment

for a period of three years in accordance with Sub-

part 9.4 of the Federal Acquisition Regulations.

3. Defendant CAC represents that none of its affiliates

has done or intends to do business with the govern-

STRUBE:

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Respectfully submitted,

ROBERT C. BONNER

United States Attorne\

ROBERT L. BROSIO

Assistant United States Attorney

Chief, Criminal] Division

s/ W. F. Fahey

WILLIAM F. FAHEY

Assistant United States

Attorney

Chief, Public Corruption and

Government Fraud

Attorneys for Plaintiff

United States of America

Date + 11/8

Date: April 11, 1988

45a

/ Richard Marmaro

Richard Marmaro

McCambridge, Deixler & Marmaro

2029 Century Park East, Suite 2700

Los Angeles, California 90067

(213) 277-2650

Attorney for Gordon Strube

Ronald Guy a

Ronald Guy, Defendant

Plato Cacheris

Dunnells, Duvall, Bennett & Porter

1220 Nineteenth Street, N.W

Washington, D.C. 2003¢

(202) 861-1400

Attorney for Ronald Guy

Gerard F. Treanor

Venable, Baetjer & Howard

2000 Corporate Ridge, Suit

McLean, Virginia 22102

(703) 749-350¢

Attorney for Ronald Gu

Date:

Date

April 11, 1988

ben

46a

APPENDIX H

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

NO. CR 88-230-AWT

UNITED STATES OF AMERICA

Plaintiff.

VS.

CONSOLIDATED AERONAUTICS CORPORATION,

GORDON STRUBE,

RONALD GUY,

Detenda nts.

HONORABLE A. WALLACE TASHIMA, JUDGE

PRESIDING

REPORTER’S TRANSCRIPT OF PROCEEDINGS

Los Angeles, California

Monday, May 9, 1988

M. LENOIR EDDY, CSR #2504

Official Reporter

417 U. S. Courthouse

312 North Spring Street

Los Angeles, California 90012

(213) 628-2530

[2] APPEARANCES

For the Plaintiff:

ROBERT C. BONNER

United States Attorney

For

47a

ROBERT L. BROSIO

Assistant United States Attorney

Chief, Criminal Division

WILLIAM F. FAHEY

Assistant United States Attorney

Chief, Public Corruption & Government Fraud Section

1300 United States Courthouse

312 North Spring Street

Los Angeles, California 90012

(213) 894-3036

the Defendant Consolidated Aeronautics Corporation:

DUNNELLS, DUVALL, BENETT & PORTER

Attorneys at Law

By: ALAN KRiEGEL

1220 Nineteenth Street, N.W., Suite 400

Washington, D.C. 20036

(202) 861-1400

-and-

PETRILLO & HORDELL

Attorneys at Law

By: JOSEPH J. PETRILLO

2000 L Street, N.W., Suite 504

Washington, D.C. 20036-4988

(202) 293-0400

For Defendant Gordon Strube:

McCAMBRIDGE, DEIXLER & MARMARO

Attorneys at Law

By: RICHARD MARMARO

2029 Century Park East, Suite 2700

Los Angeles, California 90067

(213) 277-2650 ,

[3] For Defendant Ronald Guy:

VENEBLE, BAETJER & HOWARD

Attorneys at Law

48a

By: GERARD F. TREANOR

2000 Corporate Ridge, Suite 500

McLean, Virginia 22102

(703) 749-3500

-and-

DUNNELLS, DUVALL, BENNETT & PORTER

Attorneys at Law

By: PLATO CACHERIS

1220 Nineteenth Street, N.W.

Washington, D.C. 20036

(202) 861-1400

[4] LOS ANGELES, CALIFORNIA; MONDAY, MAY 9,

1988; 3:25 P.M.

THE COURT: There is a 3 o’clock matter, and we will

take a recess before getting to the SIPC case.

THE CLERK: Yes, your Honor.

Item 17, CR 88-23000-AWT, United States of America

vs. Consolidated Aeronautics, Gordon Strube and Ronald

Guy.

MR. FAHEY: Good afternoon, your Honor, William

Fahey for the United States.

THE COURT: Good afternoon.

MR. MARMARO: Good afternoon, your Honor, Richard

Marmaro on behalf of Gordon Strube, who is present.

MR. TREANOR: Gerard Treanor on behalf of Mr. Guy.

MR. CACHERIS: Plato Cacheris on behalf of Mr. Guy,

also.

MR. KRIEGEL: Alan Kriegel on behalf of Consolidated

Aeronautics Corporation. Joseph Petrillo also on behalf of

Consolidated Aeronautics Corporation.

THE COURT: My understanding is that this will be a

change of plea and an entry of plea of guilty by the Cor-

sd i

49a

poration—a change of plea by the individuals, and an entry

of a guilty plea by the Corporation to the Information.

Am I correct?

MR. FAHEY: The Information and the two-named [5]

defendants, your Honor, yes. We filed a joint plea agree-

ment, and hopefully that has found its way to your Honor’s

file.

THE COURT: Yes, I have that. Let me see now. (Brief

Pause.)

All right. The Corporation is going to plead guilty to

five counts. Right?

MR. FAHEY: That’s correct, your Honor.

THE COURT: And then Mr. Strube will plead guilty to

Counts 2, 3, and 5? Correct?

MR. FAHEY: Yes, your Honor.

THE COURT: And Mr. Guy will plead guilty to Counts

1, 2 and 4.

MR. FAHEY: That’s right, your Honor.

THE COURT: And then apparently all defendants have

waived proceeding by Indictment.

MR. FAHEY: Yes, your Honor. The Joint Plea Agree-

ment sets forth various of the constitutional rights, in-

cluding the right to be indicted, and your Honor’s copy

should reflect signatures by both defendants as well as

their lawyers.

THE COURT: It does, yes.

Let me ask the clerk then to take the pleas. Who is

going to plead on behalf of the Corporation, an officer or

counsel?

[6] MR. PETRILLO: Your Honor, I will plead on behalf

of the Corporation, Joseph Petrillo, counsel.

50a

THE COURT: Let me ask you, I think, first of all, the

defendants appeared previously. Am I correct?

MR. FAHEY: Your Honor, they were arraigned before

a magistrate.

THE COURT: Was the plea entered then or not?

MR. MARMARO: Your Honor—

THE COURT: I have a minute order here that says

that. So all defendants pleaded not guilty on April 11th.

Is that correct?

MR. MARMARO: That’s correct, your Honor.

THE COURT: I will ask the clerk to take the change

of pleas, the pleas of guilty from all three defendants.

Swear the defendants.

THE CLERK: Yes, your Honor.

Mr. Petrillo, will you step to the podium. on behalf of

the Corporation, Consolidated Aeronautics, did you receive

a copy of the Information?

MR. PETRILLO: Yes.

THE COURT: Do you wish that read to you in open

court?

MR. PETRILLO: That is not necessary.

THE CLERK: Mr. Petrillo, on behalf of the [7] Cor-

poration, is it your intention to withdraw your plea of not

guilty previously entered as to Counts 1 through 55 and

to enter a new and different plea of guilty?

MR. PETRILLO: That’s correct.

THE CLERK: Mr. Petrillo, how do you now plead to

Counts 1 through 5 of the Information, guilty or not guilty?

MR. PETRILLO: Guilty as to all counts.

5la

THE CLERK: Thank you.

Mr. Strube, is Gordon Strube your true and correct

name?

DEFENDANT STRUBE: Yes, it is.

THE CLERK: Did you receive a copy of the Informa-

tion?

DEFENDANT STRUBE: Yes, I did.

THE CLERK: Do you wish to have it read to you now

in open court?

DEFENDANT STRUBE: It isn’t necessary.

THE CLERK: Thank you. Is it your intention, Mr.

Strube, to withdraw your plea of not guilty previously

entered as to Counts 2, 3, and 5 and now to enter a new

and different plea of guilty?

DEFENDANT STRUBE: Yes, that’s correct.

THE CLERK: Mr. Strube, how do you now plead to

Counts 2, 3, and 5 of the Information, guilty or not [8]

guilty?

DEFENDANT STRUBE: Guilty.

THE CLERK: Thank you.

Mr. Guy, please approach the podium.

Is Ronald Guy your true and correct name?

DEFENDANT GUY: Yes, it is.

THE CLERK: Did you receive a copy of the Informa-

tion?

DEFENDANT GLY: Yes, I did.

THE CLERK: Do you wish it read to you now in open

court?

DEFENDANT GUY: Not necessary.

52a

THE CLERK: Mr. Guy, is it now your intention to

withdraw your plea of not guilty previously entered as to

Counts 1, 2 and 4 of the Information and now to enter

a new and different plea of guilty?

DEFENDANT GUY: Yes, that’s correct.

THE CLERK: Mr. Guy, how do you now plead to Counts

1, 2 and 4 of the Information, guilty or not guilty?

DEFENDANT GUY: Guilty.

THE CLERK: Thank you.

Mr. Strube, Mr. Guy and Mr. Petrillo, on behalf of the

Corporation, will you please raise your right hands. The

Court will ask you a series of questions and you will be

have to under oath.

[9] (Defendants duly sworn by clerk.)

THE COURT: I am addressing al! three defendants now

jointly, and at times, if I want a response from an indi-

vidual, I will so specify.

Each of you now has entered a plea of guilty—Mr. Pe-

trillo, as attorney for the Corporation—-to certain counts

of this Information. Before I can accept your pleas of

guilty, as I am sure your counsel has explained to you, |

have to be satisfied that you are acting freely and vol-

untarily, that you understand the consequences of the

guilty plea and that you are in fact guilty; that is, that a

sufficient factual basis exists to believe that you committed

the offense to which you have just entered a plea of guilty.

Because you have been placed under oath, you have the

obligation to answer my questions truthfully. If you do

not, you wiil be subject to a charge of perjury or false

statement.

I want each of you to feel free to consult with your

attorney before you answer any questions if you believe

53a

it would be helpful to you or if it is necessary before you

can give an intelligent answer.

~ First of all, each of the individual defendants have had

an opportunity to discuss the charges made against him

with your respective attorneys. Is that correct?

[10] DEFENDANT GUY: Yes.

DEFENDANT STRUBE: Yes, I did.

THE COURT: Have you in fact fully discussed it with

your attorneys’?

DEFENDANT GLY: Yes.

DEFENDANT STRUBE: Yes, I did.

[11] Mr. Strube and Mr. Guy, each of you understands the

nature of the charges against you in this case. Is that

correct?

DEFENDANT STRUBE: I do.

DEFENDANT GUY: Yes, your Honor.

THE COURT: Mr. Strube, the charges against you in

Counts 2, 3 and 5 are all in the nature of false statement

charges, as 1 understand it.

And, Mr. Fahey, you will correct me if I am wrong,

but Count 2 charges a violat‘on of Section 1001 of Title

[12] 18, which is making a fa.se statement in a matter in

which the United States is interested.

Count 3 is making or submitting a false claim to the

Defense Contract Administration, and Count 5 is a similar

charge.

Do you understand those to be the nature of the charges

against you, Mr. Strube?

MR. MARMARO: Your Honor, if I might, actually the

charges against Mr. Strube are accessory after the fact

to those substantive offenses that your Honor just recited.

54a

THE COURT: You are speaking now about the charges

in Count 3, which is accessory after the fact to those

substantive offenses?

MR. MARMARO: Absolutely, and it is under Title 18

of the United States Code, Section 3.

THE COURT: Thank you, Mr. Marmaro.

You understand that to he the nature of the charges

against you, Mr. Strube?

DEFENDANT STRUBE: Yes, your Honor.

THE COURT: Accessory after the fact to those sub-

stantive offenses.

DEFENDANT STRUBE: Yes, your Honor.

THE COURT: Al! right. Now, Mr. Guy, the charge

against you is first, under Count 1. is the conspiracy

THE COURT: All right. Now, each defendant under-

stands under Count 1 the Corporation is subject to a max-

imum fine of $500,000.

Mr. Guy is subject to imprisonment of five years and a

fine of $250,000.

And under Count 2, the Corporation is subject—when

I say ‘“‘subject,’’ I mean to say this is the maximum [14]

possible sentence that could be imposed.

Under Count 2, the Corporation is subject to a fine of

$500,000, and Mr. Guy is subject to five years imprison-

ment and to a maximum fine of $250,000.

Mr. Strube is subject to a fine of $125,000, and two-

and-a-half years imprisonment.

Under Counts 3 and 5, the Corporation is subject to a

fine of $1 million under each count. and that under Counts

55a

3 and 5 Mr. Strube is subject to a fine of $250,000 and

two-and-a-half years imprisonment as to each count.

And that as to Count 4, the Corporation is subject to

a fine of $500,000, and Mr. Guy is subject to a fine of

$250,000, and imprisonment of five years.

Each defendant understands that these are the maxi-

mum possible sentences under these counts to which he

is subjecting himself by his plea of guilty. Each of you

understands that?

DEFENDANT STRUBE: I do. .

DEFENDANT GUY: Yes, your Honor.

THE COURT: Mr. Strube, are you satisfied that your

attorney has done everything a lawyer can do for you in

these circumstances in having arrived at this negotiated

plea agreement?

DEFENDANT STRUBE: Yes, your Honor, I am.

THE COURT: And Mr. Guy, are you likewise [15] sat-

isfied that your attorney has performed all that can be

reasonably expected of an attorney under these circum-

stances in having arrived at this plea agreement on your

behalf?

DEFENDANT GUY: Yes, your Honor.

THE COURT: I am going to inform all of you now, al!

defendants, of your constitutional rights.

First of all, under the Constitution, each defendant

charged with a felony offense has the right to require that

the Government proceed by way of Indictment.

My understanding is each defendant has and is waiving

that right and agrees to proceed by way of Information.

The right to require the Government to proceed by way

of Indictment means that the Government attorney has to

appear before a grand jury and to convince that body by

—- a i

TI gee ee a ee ee a ae

56a

a majority vote, I believe, that reasonable or probable cause

exists on the basis of the evidence presented to the grand

jury to believe that the offense charged has been com-

mitted by the defendant. And if the grand jury does not

so believe, it does not have to return an Indictment.

Each defendant understands that that is what is meant

by a right to require the Government to proceed by way

of Indictment by grand jury. Do you understand [16] that?

DEFENDANT STRUBE: Yes.

DEFENDANT GUY: I do.

MR. PETRILLO: Yes.

THE COURT: And each of you has agreed to waive

that right and to proceed by way of an Information, which

is a charge made by the U.S. Attorney. Is that correct?

DEFENDANT STRUBE: Yes, your Honor.

DEFENDANT GUY: Yes, it is, your Honor.

MR. PETRILLO: The Corporation so agrees.

THE COURT: Now, aside from that right, each defendant

has the following rights: the nght to plead not guilty as

each defendant has done originally in this case, and the

right to persist or to continue with a not guilty plea; the

right to trial and to trial by jury; the nght to the assistance

of counsel] at such a trial; the right to confront and to cross-

examine all of the witnesses against him at such a trial.

With respect to non-corporate defendants, the right not

to incriminate yourself, the right not to testify against

yourself.

And, finally, with respect to all defendants, the right

to require that the Government prove your guilt by proof

beyond a reasonable doubt. Each defendant understands

that you have these rights. Is that correct?

[17] DEFENDANT STRUBE: Yes, your Honor.

57a

DEFENDANT GUY: Yes, your Honor.

THE COURT: Each of you understands that by pleading

guilty you are waiving all of these constitutional rights.

Is that correct? Do you understand that?

DEFENDANT STRUBE: I do, correct.

THE COURT: You understand that?

DEFENDANT GUY: I do.

MR. PETRILLO: Yes, your Honor.

THE COURT: And you all understand that under a plea

of guilty you have no trial at all. Is that correct, Mr. Guy?

DEFENDANT GUY: I do.

DEFENDANT STRUBE: Yes, I do.

THE COURT: Each defendant has signed—There was

filed in this case on April 26th a document entitled Joint

Plea Agreement, where many of these matters are ex-

plained by each of you.

And it appears to bear the signatures of Mr. Petrillo

for Consolidated, Mr. Kriegel as attorney for Consolidated,

Mr. Petrillo in his capacity as an attorney; by Mr. Gordon

Strube, by Mr. Marmaro, his attorney; by Mr. Guy and

Mr, Cacheris and Mr. Treanor, as his attorneys.

Has each of you, each defendant acknowledges [18] hav-

ing reviewed this Joint Plea Agreement and having signed

it?

DEFENDANT STRUBE: I have.

DEFENDANT GUY: Yes, your Honor.

MR. PETRILLO: Yes, I have, on behalf of the Corpo-

ration.

THE COURT: The substance of the plea agreement has

been explained to you by your respective own attorneys.

Is that correct?

58a

DEFENDANT STRUBE: Yes, your Honor.

DEFENDANT GUY: Yes, your Honor.

THE COURT: Is it correct that no promise has been

made to you in exchange for your plea agreement other

than any promise that may be set forth in this Joint Plea

Agreement?

Is that a correct statemen.?

DEFENDANT STRUBE: Yes, your Honor.

DEFENDANT GUY: Yes, it is.

THE COURT: Each defendant understands that under

this Joint Plea Agreement the sentence to be imposed is

to be determined by the Court. Do you understand that?

DEFENDANT STRUBE: Yes, your Honor.

DEFENDANT GUY: Yes, I do.

MR. PETRILLO: I do.

THE COURT: Although the Court does acknowledge

[19] that the Government has agreed not to make certain

recommendations at the time of sentencing, the Court also

acknowledges that the defendants have the right to make

their own recommendation at the time of sentencing. And,

still, despite that, as I understand the plea agreement,

there is no promise as to what the sentence will be.

Is that your understanding also?

DEFENDANT STRUBE: Yes, it is.

DEFENDANT GUY: Yes, your Honor.

THE COURT: There are other collateral] provisions in

this plea agreement, and I am not going to go through

them all.

But, for instance, I believe there is a representation here

of restitution. Do you agree to the terms of restitution,

as set forth in the plea agreement? Is that correct?

59a

MR. PETRILLO: Your Honor, the restitution is to be

made with the Corporation, and it understands that that

is it’s responsibility.

THE COURT: And there is also, I think, a represen-

tation here that no defendant will oppose debarment.

Is that a true statement? In other words, each of you

agrees not to oppose debarment. Is that correct?

DEFENDANT STRUBE: Yes.

THE COURT: Do you understand what debarment is?

[20] DEFENDANT STRUBE: Yes, your Honor, I do.

DEFENDANT GUY: Yes.

THE COURT: Which means that the Corporation would

not he eligible, as I understand it, to receive government

contracts during the period it is barred by that agency.

Do you understand that?

DEFENDANT STRUBE: Yes, | do.

THE COURT: Mr. Guy, do you understand that?

DEFENDANT GLY: Yes, I do.

THE COURT: Addressing myself to all defendants, have

any threats been made or any force been used to get you

to plead guilty to these charges?

DEFENDANT STRUBE: No, sir.

DEFENDANT GUY: No, sir.

MR. PETRILLO: No, your Honor.

THE COURT: The Court cannot accept a guilty plea

unless there is a sufficient factual basis for the plea. I’m

going to ask Mr. Fahey to recite briefly in the nature of

an offer of proof the evidence that the Government is

ready to present if this case were to go to trial as proof

60a

of the occurrence of the offenses charged in this Infor-

mation.

I want you to listen carefully to Mr. Fahey’s statement

because when he is through with his representations, [21]

I will ask each defendant whether or not you take issue

with any representation made by Mr. Fahey. And, if you

do so, then I will ask you to give me your version of that

particular event or that phase of the events because I want

to make sure that there is a sufficient basis for accepting

the pleas in this case.

MR. MARMARO: Your Honor, might my client be per-

mitted to sit down? He has a serious heart condition.

THE COURT: Certainly. Just sit down at counsel table,

Mr. Strube.

MR. MARMARO: Thank you, your Honor.

THE COURT: Mr. Fahey, go ahead.

MR. FAHEY: Yes, your Honor. If this matter were to

proceed to trial, the Government would establish that Con-

solidated Aeronautics Corporation is a corporation located

in North Hollywood. Its president during the relevant time

period was Gordon Strube.

One of the, non-chief executive officers, but more influ-

ential officers at the Corporation during the relevant time

period was Mr. Ronald Guy. Indeed, he was vice-president

of Consolidated Aeronautics Corporation and was respon-

sible for obtaining and negotiating many of the contracts,

including some of the contracts that we will be discussing

here today.

The grand jury was unclear, and the Government [22]

would not be able to establish a precise date that the

conspiracy began. But suffice it to say that it was active

during the time period of about at least 1984 and ’85

through October 31st, 1987.

6la

The overall conspiracy that the Government would prove

at trial would be that there was a pattern with some of

the contracts of Consolidated Aeronautics Corporation to

supply reconditioned, refurbished, remanufactured and on

occasion used parts when government contracts called for

the supply of new and unused parts.

Having supplied those new and unused parts, your

Honor, to various government agencies, primarily the Air

Force, at least as is alleged in the Information in this

case, the Government’s position is that on occasion Con-

solidated Aeronautics Corporation would supply false state-

ments to the Government; that is falsely certifying that

new and unused parts would be provided whereas, in true

and in fact, used, remanufactured, reconditioned parts in-

stead were provided.

Similarly, claims were made on the United States Gov-

ernment for payment on its contract, and in these claims

there were false statements made as well, and those state-

ments once again were that Consolidated, through its em-

ployees, was supplying new and unused parts when in fact

they were not.

[23] Your Honor, the Indictment is set out in various parts

and for the Government’s explanation to the Court is that

with respect to the overt acts charged in Count 1 of the

Indictment, that pertains to Consolidated Aeronautics cor-

poration Contract Number 7707, and that has to do with

some selector sets which go on a A-7 Navy jet.

Your Honor, I have a photograph of an A-7 jet. The

selector set controls one of the rear tail sections and is

critical for stabilization of the jet.

These particular parts, as charged in Count 1, Overt

Acts 1 through 9, were defective parts, your Honor, and

when they were tested by the government, turned out to

be defective. All of them failed at a particular test before

they were installed on a jet airplane.

62a

Had they failed, the Government would have elicited

testimony that the plane would have crashed with the at-

tendant loss of the plane as well as the pilot and co-pilot

aboard.

These particular parts were supposed to be new and

unused; whereas, instead, the Government will put on evi-

dence that with respect to the slider—and, your Honor,

again if the Court will bear with me for just a moment,

it is a bit easier to explain with a demonstrative device.

This is a selector set. Inside is a slider, a critically-

machined item. This slider was newly [24] manufactured,

the piece inside, by a subcontractor of Consolidated Aer-

onautics. Consolidated had contracts with the Air Force

to provide new and unused parts originally manufactured

by LTV in Texas and, instead, we would put on testimony

to the effect that it was a used part. The sleeve on the

outside, when received by one of the subcontractors, was

used and then a newly manufactured slider was placed

inside and wasn’t machined carefully enough so that when

it went down to the Naval air station for testing before

it went on the jet, all of those parts failed when tested

on some 200 in number.

So Count 1, Overt Acts 1 through 9 deal first with the

selector sets, Contract 7707. And the Government’s proof

in substance is that used, refurbished and remanufactured

parts were provided by the Corporation.

Oh, by the way, your Honor, with respect to Counts 1,

2, and 3, it was Ronald Guy who was the officer respon-

sible at Consolidated Aeronautics Corporation for negoti-

ating these contracts and ultimately signing these contracts

on behalf of the Corporation.

With respect to Count 2, your Honor, that pertains to

Consolidated Aeronautics Corporation Contract Number

9376, and that, too, was for selector sets for the A-7 jet.

And in this particular case, your Honor, there was a false

63a

statement made to the Government on or about April [25]

9, 1985, where the company, through Mr. Guy, falsely

certified that these were new and unused parts, and the

Government will put on evidence in fact that they were

not at all.

Mr. Strube—and I think the factual basis will be ex-

panded on by Mr. Marmaro and his client—knew what was

going on at the time and did nothing to stop this particular

pattern; indeed, assisted by lack of action and lack of

intent to put an end to this particular path and, therefore,

in the government’s view, could be found guilty of 18 USC

Section 3 in conjunction with the false statement.

With respect to Count 3 of the Indictment, that pertains

to Contract 9356. Iv is the third selector set contract, and

the Government’s proof with respect to Count 3 would be

the same.

There was a false claim in the amount of $66,000 sub-

mitted to the United States on or before April 4, 1986,

and that is the basis for Count 38.

I would indicate to the Court the total value of these

selector set contracts in Counts 1, 2 and 3 was approxi-

mately $900,000.

With respect to Count 4, which is also a count of false

statement, this pertains to a different type of contract.

These are hook assemblies for F-104 military [26] aircraft.

Consolidated represented, through its officers, and Mr.

Guy in particularly, that these parts were acquired from

the Defense Procurement Depot in Wiesbaden, West Ger-

many, and are new and unused. In fact, the Government

would put on evidence largely from the files of Consoli-

dated that show that these parts were newly manufactured

and assembled from various other sources, so that the

Government, instead of getting what they contracted for,

which was new and unused parts from the original man-

ufacturer, instead got parts that were in effect rebuilt by

64a

Consolidated Aeronautics Corporation without the attend-

ant competence level that the Government place in the

parts. There is no showing that the government was able

to obtain, after review of these particular files, that these

parts used to rebuild the hook assemblies for the F-104

did in fact meet specifications.

Finally, with respect to Count 5, that pertains to Con-

tract Number 2324. These are hydraulic fittings for an F-

104 military aircraft. In this particular case there was a

false claim placed on the Government for approximately

$19,000 on March 20, 1986, and this claim was false in

that Consolidated and its officers represented that new

surplus hydraulic fittings were being conveyed or given to

the United States military, when, in fact, these were [27]

used, reconditioned and refurbished parts.

With respect to this particular contract, your Honor,

there are internal documents at Consolidated that reflect

these were used parts that were reworked by Consolidated

and later submitted to the Government as new and unused

parts.

With respect to Counts 3 and 5, if I have not made it

clear, I believe the factual basis with respect to Mr.

Strube’s conduct would be the same as I outlined with

respect to Count 2, and again I would expect that Mr.

Marmaro and his client will be supplementing that basis.

Your Honor, that is the evidence in sum that the Gov-

ernment would be presenting if we were to go to trial.

* * *©* *& *

[29] THE COURT: Thank you.

Mr. Strube or perhaps Mr. Marmaro on behalf of Mr.

Strube, do you take issue with any of the representations

that Mr. Fahey stated he is ready to prove or, on the

other hand, do you wish to elaborate further on any mat-

ters that he mentioned or failed to mention?

65a

MR. MARMARO: Your Honor, we do take some excep-

tion, and | think part of it is taking Mr. Fahey’s [30]

invitation to supplement because this is a somewhat unique

situation, as I think Mr. Fahey will agree.

First of all, your Honor, we subscribe to Mr. Petrillo’s

general or specific comments, rather, on the contracts at

issue.

The two specific points that we take exception to, Mr.

Fahey’s factual basis on Mr. Strube’s behalf are that Mr.

Strube knew this information at the time—knew that the

information was false, and that Mr. Strube participated in

the conduct as alleged in the Information—the substantive

conduct as alleged in the Information.

Your Honor, both of those are incorrect. Mr. Strube did

not know of the conduct at the time, nor did he actively

participate in the conduct.

Your Honor, we can make out a factual basis, and if

the Court will indulge me, I would like to do that at this

time.

THE COURT: Go right ahead, Mr. Marmaro.

MR. MARMARO: Your Honor, some background is

really necessary.

During this investigation, four or five individuals in Mr.

Strube’s company were targeted, and at that time the

prosecutor advised me that he had no specific evidence

against my client, Mr. Strube. However, Mr. Strube

founded this company and has been its head since its in-

ception [31] in approximately 1956.

The reason that there was no evidence against Mr.

Strube was that Mr. Strube was essentially out of the

loop, so to speak, during the time these events occurred.

From approximately 1982, your Honor, through 1984 Mr.

Strube was primarily involved in the company’s export

business. The company has essentially two major compo-

66a

nents of its business: one is its government contracting

work and one is its exporting work.

Mr. Strube was principally involved in the export busi-

ness from 1982 to 1984, and that required extensive travel

on Mr. Strube’s part.

Your Honor, in late 1984 Mr. Strube contracted a very

serious ailment called bacterial endocarditis in one of his

trips to Southeast Asia. I mentioned that, your Honor,

because it becomes significant as to why Mr. Strube was

not involved in the subsequent activity that followed.

From late 1984 to approximately early 1985, Mr. Strube

was in the intensive care unit at Cedars-Sinai, where he

underwent major heart surgery. There followed a lengthy

period of confinement in the hospital and at home. This

took place during 1985 and 1986 at the time of the per-

cipient events of these contracts occurred, Mr. Strube

wasn’t at the office and was uninvolved in any [32] of the

contracts.

Mr. Strube is pleading guilty, your Honor, and I believe

there is a factual basis for the plea, in that sometime in

1986 Mr. Strube returned to the office on an intermittent

basis. Certainly not a regular basis, and certainly had no

involvement in the government contract work. But he did

learn of the events that Mr. Fahey has recited and which

appear in the Information.

Learning of those events in early 1986, your Honor, Mr.

Strube failed to bring them to the attention of the

authorities—either the investigating authorities or the Gov-

ernment contracting officer who had cognizance of these

contracts.

Your Honor, I believe that constitutes a violation of Title

18 United States Code Section 3.

In return for Mr. Strube stating that and coming for-

ward essentially volunteering his hat into this ring, Mr.

67a

Fahey has agreed not to indict several other officers or

employees of Consolidated. The purpose of Mr. Strube’s

plea, your Honor, is to tell the Court this happened in his

company during the time that he was head of the company

and during the time for which he wants to take respon-

sibility. And that is the factual basis, your Honor.

THE COURT: Mr. Strube, do you agree and adopt your

attorney’s remarks insofar as your knowledge of what [33]

was happening in 1986 is concerned?

DEFENDANT STRUBE: Yes, sir, I do. He has ex-

plained it very well.

THE COURT: In other words, he has set forth the

reason for your entering into this plea of guilty?

DEFENDANT STRUBE: That’s correct, yes.

THE COURT: You may sit down.

MR. FAHEY: Your Honor, may I have a moment with

counsel?

THE COURT: Well, let me ask you a question first,

Mr. Fahey, and then you can discuss this.

Assuming, Mr. Fahey, Mr. Marmaro’s factual statement

iS correct about his client learning about these matters in

1986, do you believe a factual basis exists?

MR. FAHEY: I believe with respect to two of the three

counts, your Honor, and I just wanted to have a brief

moment with Mr. Marmaro with respect to Count 2.

THE COURT: Go right ahead.

(Mr. Fahey and Mr. Marmaro conferring.)

MR. MARMARO: Your Honor, I have spoken with Mr.

Fahey, and I think this can be clarified. First, let me

mention two points, your Honor.

The first is that we intend to file a written factual basis.

your Honor, which will set forth in detail what I just re-

68a

cited to the Court, so it will be a permanent [34] part of

the record, and I have an original and copy to present to

the Court at this time, with a copy for Mr. Fahey.

THE COURT: All right, fine.

MR. MARMARO: Your Honor, in addition to that, let

me state that Count 2 charges conduct which occurred on

or before April 9th, 1985. For purposes of Mr. Strube’s

factual basis, I believe it is sufficient to state that in or

around January of 1986, prior to the time this investigation

came to light, prior to the time any charges were filed,

Mr. Strube learned of the facts which had occurred back

in April of 1985 and failed to come forward to authorities,

to either the Government contracting officer or to federal

authorities, and I believe that—

THE COURT: Just a minute. You said he learned of it

when?

MR. MARMARO: In or around January of 1986, your

Honor. And I believe his failure to come forward at that

time concerning the events of eight months previously con-

stitutes a violation of Title 18 United States Code Section

THE COURT: Do you believe on that basis there is a

factual basis for the plea to Count 2, Mr. Fahey?

MR. FAHEY: I believe so, your Honor, if adopted by

Mr. Strube, and I have not had a chance to see the more

detailed factual basis that counsel] has referred to. So [35]

that might alleviate some of my concerns, as well.

MR. MARMARO: For Mr. Fahey’s edification, the

Strube factual basis is set forth on pages 1 through to

the top of page 3.

THE COURT: Particularly the part in paragraph 6,

which is on line 24 on page 2.

MR. MARMARO: That’s correct, your Honor.

69a

THE COURT: All right. I have the original here, and

it appears to be signed by all relevant parties.

Mr. Strube, did you review this factual basis before you

signed it?

DEFENDANT STRUBE: Yes, your Honor, I did.

THE COURT: And it correctly sets forth the date ap-

proximately on which you learned of these offenses and

these events?

DEFENDANT STRUBE: Yes, sir, it does.

THE COURT: Thank you, Mr. Strube.

*-_* * * &

[40] THE COURT: All right. I am going to ask the clerk

now to file the document entitled Defendants’ Factual Ba-

sis for Guilty Plea to Information and on the basis of,

one, the proffer made by Mr. Fahey; two, as qualified by

various counsel as to parts of their proffer to which they

disagree; and, three, including the factual basis as set forth

in the pleading just filed by the defendants, I find with

respect to each defendant that there is a sufficient factual

basis for the plea in each case.

I further find that each defendant does understand [41]

the nature of the charges against him or it, and the rights

which are being waived by the plea of guilty, and that

these rights are waived knowingly with a full understand-

ing of the consequences of the guilty plea; and, for that

additional reason as well as the factual basis, | accept the

plea of guilty on behalf of each defendant.

*_*s* * &

70a

APPENDIX I

UNITED STATES DISTRICT COURT

FOR THE CENTRAL DISTRICT OF CALIFORNIA

——_—

No. CR 88-230-AWT

UNITED STATES OF AMERICA,

Plaintiff,

CONSOLIDATED AERONAUTICS CORP., GORDON STRUBE,

RONALD GUY,

Defendants.

GOVERNMENT’S SENTENCING MEMORANDUM;

DECLARATIONS; EXHIBITS

Hearing Date: July 25, 1988

Hearing Time: 1:30 p.m.

The United States, by and through its attorneys of re-

cord, hereby submits its Sentencing Memorandum in this

case.

DATED: July 20, 1988.

Respectfully submitted,

ROBERT C. BONNER

United States Attorney

ROBERT L. BROSIO

Assistant United States Attorney

Chief, Criminal Division

/s/ W. F. Fahey

WILLIAM F. FAHEY

Assistant United States Attorney

Chief, Public Corruption a

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