United States Court of Appeals,
First Circuit.
UNITED STATES, Appellee,
v.
Richard W. CZUBINSKI, Defendant--Appellant.
No. 96-1317.
Heard Oct. 7, 1996.
Decided Feb. 21, 1997.
Defendant was convicted of wire fraud and
computer fraud by the United States District Court for the District of
Massachusetts, Nathaniel M. Gorton, J., and Robert B. Collings, United States
Magistrate Judge. Defendant
appealed. The Court of Appeals, Torruella, Chief Judge, held that: (1) interstate transmission element of
wire fraud could be inferred from circumstantial evidence that defendant's
searches of master taxpayer files caused information to be sent to his computer
terminal in different state; (2) defendant's unauthorized browsing of confidential
taxpayer information did not defraud Internal Revenue Service (IRS) of its
property within meaning of wire fraud statute; (3) defendant's unauthorized
browsing of confidential taxpayer information
did not deprive taxpayers of their intangible, nonproperty right to honest
government services; and (4) defendant could not be convicted of computer fraud
in connection with his browsing of confidential taxpayer files.
Reversed.
West Headnotes
[1] Criminal Law 
1144.13(3)
110k1144.13(3) Most
Cited Cases
On appeal
from jury conviction, Court of Appeals reviews the relevant facts in light most
favorable to government.
[2] Criminal Law 753.2(3.1)
110k753.2(3.1) Most
Cited Cases
Motion for
judgment of acquittal is the proper vehicle for a defendant to make a
sufficiency of evidence challenge. Fed.Rules
Cr.Proc.Rule 29, 18 U.S.C.A.
[3] Criminal Law 1139
Denial of
motion for judgment of acquittal presents question of law, and review of Court
of Appeals is de novo. Fed.Rules
Cr.Proc.Rule 29, 18 U.S.C.A.
[4] Criminal Law 1144.13(3)
110k1144.13(3) Most
Cited Cases
[4] Criminal
Law 1159.2(7)
110k1159.2(7) Most
Cited Cases
In
determining evidentiary sufficiency of guilty verdict, the relevant question is
whether, after viewing the evidence in the light most favorable to prosecution,
any rational trier of fact could have found essential elements of the crime
beyond a reasonable doubt. Fed.Rules
Cr.Proc.Rule 29, 18 U.S.C.A.
[5] Criminal Law 1159.2(8)
110k1159.2(8) Most
Cited Cases
Court of
Appeals' scope of review in determining evidentiary sufficiency of guilty verdict is over totality of evidence,
both direct and circumstantial: Court takes a hard look at record and rejects
those evidentiary interpretations and illations that are unreasonable,
insupportable, or overly speculative. Fed.Rules
Cr.Proc.Rule 29, 18 U.S.C.A.
[6] Telecommunications 1014(1)
(Formerly 372k363)
[6]
Telecommunications 1018(4)
(Formerly 372k363)
To support
conviction for wire fraud, government must prove beyond a reasonable doubt:
defendant's knowing and willing participation in scheme or artifice to defraud
with specific intent to defraud; and use of interstate wire communications in
furtherance of scheme. 18
U.S.C.A. § 1343.
[7] Telecommunications 1018(4)
(Formerly 372k363)
Interstate transmission element of offense
of wire fraud could be inferred from circumstantial evidence that defendant's
searches of master taxpayer files caused information to be sent to his computer
terminal in different state. 18
U.S.C.A. § 1343.
[8] Telecommunications 1018(4)
(Formerly 372k363)
Defendant's
unauthorized browsing of confidential taxpayer information did not defraud
Internal Revenue Service (IRS) of its property within meaning of wire fraud
statute, as government failed to show beyond a reasonable doubt that defendant
intended to carry out a scheme to deprive IRS of its property interest in
confidential information. 18
U.S.C.A. § 1343.
[9] Telecommunications 1014(7)
(Formerly 372k362)
For
purposes of wire fraud prosecution, confidential information may constitute intangible "property," and its
unauthorized dissemination or other use may deprive owner of its property
rights. 18
U.S.C.A. § 1343.
[10] Telecommunications 1014(8)
(Formerly 372k362)
"Scheme
to defraud" within the meaning of wire fraud statute is shown, where
deprivation of property rights is effected through dishonest or deceitful means
by unauthorized use or dissemination of confidential information. 18
U.S.C.A. § 1343.
[11] Telecommunications 1014(7)
(Formerly 372k362)
To
"deprive" a person of their intangible property interest in
confidential information under wire fraud statute, either some articulable harm
must befall holder of information as result of defendant's activities, or some
gainful use must be intended by person accessing the information, whether or not
this use is profitable in the economic sense.
18
U.S.C.A. § 1343.
[12] Postal Service 35(7)
[12]
Telecommunications 1014(5)
(Formerly 372k362)
To be
convicted of mail or wire fraud, defendant need not successfully carry
out an
intended scheme to defraud. 18
U.S.C.A. § § 1343, 1346.
[13] Telecommunications 1014(4)
(Formerly 372k362)
All that
government was required to prove in wire fraud prosecution of Internal Revenue
Service (IRS) employee based on unauthorized browsing of computerized taxpayer
files was the intent to follow through with deprivation of IRS's property and
the use or foreseeable use of interstate wire transmissions pursuant to accomplishment of the scheme to
defraud. 18
U.S.C.A. § § 1343, 1346.
[14] Telecommunications 1014(8)
(Formerly 372k362)
Mere
browsing of confidential taxpayer records of people about whom one might have a
particular interest, although reprehensible, is not enough to sustain wire
fraud conviction on deprivation of intangible property theory. 18
U.S.C.A. § 1343.
[15] Telecommunications 1014(7)
(Formerly 372k362)
Defendant's
unauthorized browsing of confidential taxpayer information did not deprive
taxpayers of their intangible, nonproperty right to honest government services,
for purposes of wire fraud prosecution, as defendant did not receive or intend
to receive any tangible benefit, during span of defendant's employment at
Internal Revenue Service (IRS) he received no indication from his employer that performance of unauthorized
searches in taxpayer computer files would be punishable by anything more than
dismissal, and government did not prove that defendant deprived or intended to
deprive the public or IRS of their right to his honest services. 18
U.S.C.A. § § 1343, 1346.
[16] Fraud 68
Defendant
could not be convicted of computer fraud in connection with his browsing of
confidential taxpayer files, even though he exceeded authorized access to a
federal interest computer, as he did not obtain "anything of value." 18
U.S.C.A. § 1030(a)(4).
[17] Statutes 188
[17] Statutes
216
In the
game of statutory interpretation, statutory language is the ultimate trump
card, and the remarks of sponsors of legislation are authoritative only to the extent that they are
compatible with the plain language.
*1071 Susan
B. Hanmer, with whom Oliver
C. Mitchell, Jr., Louis
J. Scerra, Jr., Boston, MA, and Goldstein &
Manello, P.C., were on brief, for defendant-appellant.
S.
Theodore Merritt, Assistant United States
Attorney, with whom Donald
K. Stern, United States Attorney, Boston, MA, and
Amy B. Lederer, Assistant United States Attorney, Washington, DC, were on
brief, for appellee.
Before TORRUELLA, Chief Judge, BOWNES, Senior Circuit Judge, and
STAHL, Circuit Judge.
TORRUELLA, Chief Judge.
Defendant-appellant Richard Czubinski
("Czubinski") appeals his jury conviction on nine counts of wire
fraud, 18
U.S.C. § § 1343, 1346, and four counts of computer fraud, 18
U.S.C. § 1030(a)(4). The wire fraud
and computer fraud prosecution that led to the conviction survived serious
challenges put forward by Czubinski in various pre-trial motions. Given the broad scope of the federal fraud
statutes, motions charging insufficient pleadings or selective prosecution
generally deserve careful consideration.
We need not scrutinize the lower
court's rejection of the defendant's arguments in favor of dismissing the
indictment, however, because we reverse the conviction on the clearer ground
that the trial evidence mustered by the government was insufficient to support
a guilty verdict, and hold that the defendant's motion for judgment of
acquittal should have been granted on all counts. Unauthorized browsing of taxpayer files,
although certainly inappropriate conduct, cannot, without more, sustain this
federal felony conviction.
BACKGROUND
I. Pertinent Facts
[1] On an appeal from a jury conviction, we review the
relevant facts in the light most favorable to the government. United
States v. Tierney,
760 F.2d 382, 384 (1st Cir.1985). The evidence in this case, so presented, is
inadequate to support convictions on either the wire fraud or computer fraud
charges.
For all periods relevant to the acts giving
rise to his conviction, the defendant Czubinski was employed as a Contact
Representative in the Boston office of the Taxpayer Services Division of the
Internal Revenue Service ("IRS").
To perform his official duties, which mainly involved answering
questions from taxpayers regarding their returns, Czubinski routinely accessed
information from one of the IRS's computer systems known as the Integrated Data
Retrieval System ("IDRS").
Using a valid password given to Contact Representatives,
certain search codes, and taxpayer social security numbers, Czubinski was able
to retrieve, to his terminal screen in Boston, income tax return information
regarding virtually any taxpayer--information that is permanently stored in the
IDRS "master file" located in Martinsburg, West Virginia. In the period of Czubinski's employ, IRS
rules plainly stated that employees with passwords and access codes were not
permitted to access files on IDRS outside of the course of their official
duties. [FN1]
FN1. In 1987
Czubinski signed an acknowledgment of receipt of the IRS Rules of Conduct,
which contained the following rule:
Employees must make every effort to assure security and
prevent unauthorized disclosure of protected information data in the use of
Government owned or leased computers.
In addition, employees may not use any Service computer system for other
than official purposes.
See
Government's Exhibit 1. In addition,
Czubinski received separate rules regarding use of the IDRS, one of which
states:
Access only those accounts required to accomplish your
official duties.
See
Government's Exhibit 3.
In 1992, Czubinski carried out numerous
unauthorized searches of IDRS files. He
knowingly disregarded IRS rules by looking at confidential information obtained by performing computer searches that
were outside of the scope of his duties as a Contact Representative, including,
but not limited to, the searches listed in the indictment. [FN2] Audit *1072 trails performed by
internal IRS auditors establish that Czubinski frequently made unauthorized
accesses on IDRS in 1992. For example,
Czubinski accessed information regarding:
the tax returns of two individuals involved in the David Duke
presidential campaign; the joint tax return of an assistant district attorney
(who had been prosecuting Czubinski's father on an unrelated felony offense)
and his wife; the tax return of Boston City Counselor Jim Kelly's Campaign
Committee (Kelly had defeated Czubinski in the previous election for the
Counselor seat for District 2); the tax
return of one of his brothers' instructors;
the joint tax return of a Boston Housing Authority police officer, who
was involved in a community organization with one of Czubinski's brothers, and
the officer's wife; and the tax return
of a woman Czubinski had dated a few times. Czubinski also accessed the files
of various other social acquaintances by performing unauthorized searches.
FN2. The indictment
charged ten counts of wire fraud for accessing the return information of ten
different entities; the four computer
fraud counts (counts eleven through fourteen) identified unauthorized searches
that also underlay four of the ten wire fraud counts (counts one, two, eight and nine).
Nothing in the record indicates that Czubinski
did anything more than knowingly disregard IRS rules by observing the
confidential information he accessed.
No evidence suggests, nor does the government contend, that Czubinski
disclosed the confidential information he accessed to any third parties. The government's only evidence demonstrating
any intent to use the confidential information for nefarious ends was the trial
testimony of William A. Murray, an acquaintance of Czubinski who briefly
participated in Czubinski's local Invisible Knights of the Ku Klux Klan
("KKK") chapter and worked with him on the David Duke campaign. Murray testified that Czubinski had once
stated at a social gathering in "early 1992" that "he intended
to use some of that information to build dossiers on people" involved in
"the white supremacist movement."
Trial Transcript, Vol. 2 at 170, 188.
There is, however, no evidence that Czubinski created dossiers, took
steps toward making dossiers (such as by printing out or recording the
information he browsed), or shared any of the information he accessed in the
years following the single comment to Murray.
No other witness testified to having any knowledge of Czubinski's
alleged intent to create "dossiers" on KKK members.
The record shows that Czubinski did not
perform any unauthorized searches after 1992.
He continued to be employed as a Contact Representative until June 1995, when a grand jury returned an
indictment against him on ten counts of federal wire fraud under 18
U.S.C. § § 1343, 1346, and four counts of federal interest computer fraud under 18
U.S.C. § 1030(a)(4).
The portion of the indictment alleging wire
fraud states that Czubinski defrauded the IRS of confidential property and
defrauded the IRS and the public of his honest services by using his valid
password to acquire confidential taxpayer information as part of a scheme to: 1) build "dossiers" on associates
in the KKK; 2) seek information
regarding an assistant district attorney who was then prosecuting Czubinski's
father on an unrelated criminal charge;
and 3) perform opposition research by inspecting the records of a political
opponent in the race for a Boston City Councilor seat. The wire fraud indictment, therefore,
articulated particular personal ends to which the unauthorized access to
confidential information through interstate wires was allegedly a means.
The portion of the indictment setting forth
the computer fraud charges stated that Czubinski obtained something of value,
beyond the mere unauthorized use of a federal interest computer, by performing
certain searches--searches representing a subset of those making up the mail
fraud counts.
II. Proceedings Below
After indictment and arraignment in June 1995,
Czubinski filed a motion to dismiss the indictment, a motion to strike
surplusage from the indictment, and a motion
for discovery from the government relating to a claim of selective
prosecution. In separate orders, a
magistrate judge and the district court rejected all of these motions. Specifically, the district court rejected
Czubinski's argument that counts 1 through 10 of the indictment must be
dismissed because "browsing" *1073 does not deprive the IRS of
any property and because section
1346, the intangible right to honest services
amendment to the mail and wire fraud statutes, was unconstitutionally vague as
applied to him. In December 1995,
Czubinski filed motions in limine which essentially sought to prevent
references to certain white supremacist activities, such as his membership in a
KKK chapter, during trial. This motion
was also denied, although the trial court gave a limiting instruction regarding
the relevance of Czubinski's KKK membership to a finding of wire fraud and
computer fraud.
On December 15, 1995, the district court
denied Czubinski's motion for judgment of acquittal on all counts except for
count 3, [FN3] and on that
day the jury returned a verdict finding Czubinski guilty on all thirteen
remaining counts. On appeal, Czubinski
challenges the denial of his motion to dismiss the indictment, including the
rejection of a selective prosecution claim, the finding that he had not made
out a prima facie case of selective prosecution, the admission at trial of
allegedly inflammatory evidence of Czubinski's white supremacist activities,
the denial of his motion for acquittal, the jury instructions, and the
sentencing determination.
FN3. On count 3, the district court ruled that there was
insufficient proof showing that the search alleged in count 3 was not requested
by the taxpayer whose files were browsed.
We reverse on the ground that the district
court erred in denying Czubinski's motion for acquittal, and therefore bypass
Czubinski's other claims.
STANDARD OF REVIEW
[2][3] A motion for judgment of acquittal under Federal
Rule of Criminal Procedure 29 is the proper
vehicle for a defendant to make a sufficiency challenge. See 2 C. Wright, Federal Practice and
Procedure: Crim.2d § 467 (1982). The denial of a motion for judgment of
acquittal presents a question of law, and our review is de novo. See United
States v. Staula,
80 F.3d 596, 604 (1st Cir.1996). We determine anew whether "the evidence
is sufficient to sustain a conviction."
Fed.R.Crim.P.
29(a).
[4][5] In determining the evidentiary sufficiency of a guilty
verdict, "the relevant question is
whether, after viewing the evidence in the light most favorable to the
prosecution, any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt." Jackson
v. Virginia,
443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); see also United
States v. Valle,
72 F.3d 210, 216 (1st Cir.1995). The scope of review
is over the totality of the evidence, both direct and circumstantial: we
"take a hard look at the record" and "reject those evidentiary
interpretations and illations that are unreasonable, insupportable, or overly
speculative." United
States v. Spinney,
65 F.3d 231, 234 (1st Cir.1995).
DISCUSSION
I. The Wire Fraud Counts
[6][7] We turn first to Czubinski's conviction on the nine wire
fraud counts. [FN4] To support a conviction for wire fraud, the
government must prove two elements beyond a reasonable doubt: (1) the defendant's knowing and willing
participation in a scheme or artifice to defraud with the specific intent to defraud,
and (2) the use of interstate wire communications in furtherance of the
scheme. United
States v. Sawyer,
85 F.3d 713, 723 (1st Cir.1996) (citing United
States v. Cassiere,
4 F.3d 1006, 1011 (1st Cir.1993)). Although defendant's motion for judgment of
acquittal places emphasis on shortcomings in proof with regard to the second
element, by arguing that the wire transmissions at issue were not proved to be
interstate, we find the *1074 first element dispositive and hold that
the government failed to prove beyond a reasonable doubt that the defendant
willfully participated in a scheme to defraud within the meaning of the wire
fraud statute. [FN5] That is, assuming the counts accurately
describe unauthorized searches of taxpayer returns through interstate wire
transmissions, there is insufficient record evidence
to permit a rational jury to conclude that the wire transmissions were part of
a criminal scheme to defraud under sections
1343 and 1346.
FN4. The federal wire
fraud statute, 18
U.S.C. § 1343, provides in pertinent part:
Whoever, having devised or intending to devise any scheme
or artifice to defraud, or for obtaining money or property by means of false or
fraudulent pretenses, representations, or promises, transmits or causes to be
transmitted by means of wire ... communication in interstate or foreign
commerce, any writings, signs, signals, pictures, or sounds for the purpose of
executing such scheme or artifice, shall be fined under this title or
imprisoned not more than five years, or both.
FN5. We do not find
that it was irrational for a trier of fact to conclude beyond a reasonable
doubt that Czubinski's searches caused information from the IDRS master file in
Martinsburg, West Virginia, to be sent to his terminal in Boston. The interstate element could reasonably be
inferred from circumstantial evidence. See,
e.g., Testimony of Edward Makaskill, Trial Transcript, Vol. 3 at 82
(explaining that certain command codes used by Czubinski generally access
information from out-of-state computer).
The
government pursued two theories of wire fraud in this prosecution: first, that Czubinski defrauded the IRS of
its property, under section
1343, by acquiring confidential information for
certain intended personal uses; second, that he defrauded the IRS and the
public of their intangible right to his honest services, under sections
1343 and 1346. [FN6] We consider the evidence with regard to each
theory, in turn.
FN6. The district
court's jury instructions on the wire fraud counts repeat both of the scheme to
defraud theories:
In this case, the government has charged Mr. Czubinski with
devising a scheme or artifice, that is, a plan, to do two things:
(1) to defraud the IRS, the United States Government, and
the citizens and taxpayers of the United States by depriving them of their
intangible right to his honest services as an IRS employee; and
(2) to defraud the IRS and to obtain its property, that is,
confidential taxpayer information, by false pretenses, representations and
promises.
Trial Transcript, Vol. 4 at 76-77.
A. Scheme to Defraud IRS of Property
[8][9][10] The government correctly notes that confidential information may constitute intangible
"property" and that its unauthorized dissemination or other use may
deprive the owner of its property rights.
See Carpenter
v. United States,
484 U.S. 19, 26, 108 S.Ct. 316, 320, 98 L.Ed.2d 275 (1987) ( "Confidential business information has long been
recognized as property.... [A newspaper]
had a property right in keeping confidential and making exclusive use, prior to
publication, of the schedule and contents" of a particular column.). Where such deprivation is effected through
dishonest or deceitful means, a "scheme to defraud," within the
meaning of the wire fraud statute, is shown.
See id.
at 27, 108 S.Ct. at 321. Thus, a necessary step toward satisfying the
"scheme to defraud" element in this context is showing that the
defendant intended to "deprive" another of their protected right.
The government, however, provides no case in
support of its contention here that merely accessing confidential information,
without doing, or clearly intending to do, more, is tantamount to a deprivation
of IRS property under the wire fraud statute.
In Carpenter, for example, the confidential information regarding
the contents of a newspaper column was converted to the defendants's use to
their substantial benefit. See id.
at 27, 108 S.Ct. at 321 (defendants participated
in "ongoing scheme to share profit from trading in anticipation" of
newspaper column). We do not think that
Czubinski's unauthorized browsing, even if done with the intent to deceive the
IRS into thinking he was performing only
authorized searches, constitutes a "deprivation" within the meaning
of the federal fraud statutes.
[11] Binding precedents, and good sense, support the conclusion
that to "deprive" a person of
their intangible property interest in confidential information under section
1343, either some articulable harm must befall
the holder of the information as a result of the defendant's activities, or
some gainful use must be intended by the person accessing the information,
whether or not this use is profitable in the economic sense. [FN7] Here, *1075
neither the taking of the IRS' right to "exclusive use" of the
confidential information, nor Czubinski's gain from access to the information,
can be shown absent evidence of his "use" of the information. Accordingly, without evidence that Czubinski
used or intended to use the taxpayer information (beyond mere browsing), an
intent to deprive cannot be proven, and, a fortiori, a scheme to defraud
is not shown.
FN7. For example, had
the government established that Czubinski disclosed or intended to disclose
taxpayer information, then the deprivation or intended deprivation of property
rights would have been shown.
All of the cases cited by the government in
support of their contention that the
confidentiality breached by Czubinski's search in itself constitutes a
deprivation of property in fact support our holding today, for they all
involve, at a minimum, a finding of a further intended use of the confidential
information accessed by the defendants.
The government's best support comes from United
States v. Seidlitz,
589 F.2d 152, 160 (4th Cir.1978), in which a
former employee of a computer systems firm secretly accessed its files, but
never was shown to have sold or used the data he accessed, and was nevertheless
convicted of wire fraud. The affirming
Fourth Circuit held, however, that a jury could have reasonably found that, at
the time the defendant raided a competitor's computer system, he intended to
retrieve information that would be helpful for his own start-up, competing
computer firm. In the instant case,
Czubinski did indeed access confidential information through fraudulent
pretenses--he appeared to be performing his duties when in fact he used IRS
passwords to perform unauthorized searches.
Nevertheless, it was not proven that he intended to deprive the IRS of
their property interest through either disclosure or use of that information.
[12][13] The resolution of the instant case is complex because it
is well-established that to be convicted of mail or wire fraud, the defendant
need not successfully carry out an intended scheme to defraud. See, e.g., United
States v. Serrano,
870 F.2d 1, 6 (1st Cir.1989) (defendant need only
participate in a scheme to defraud with the intent to achieve its illicit objectives);
Seidlitz,
589 F.2d at 160 (where circumstantial evidence
suffices to prove intent to accomplish scheme to defraud, actual use of
confidential information need not be shown).
The government does not contend either that Czubinski actually created
dossiers or that he accomplished some other end through use of the
information. It need not do so. All that the government was required to
prove was the intent to follow through with a deprivation of the IRS's
property and the use or foreseeable use of interstate wire transmissions
pursuant to the accomplishment of the scheme to defraud. See, e.g., United
States v. Silvano,
812 F.2d 754, 760 (1st Cir.1987). In the case at bar, the government failed to
make even this showing.
The fatal flaw in the government's case is
that it has not shown beyond a reasonable doubt that Czubinski intended to
carry out a scheme to deprive the IRS of its property interest in confidential
information. Had there been sufficient
proof that Czubinski intended either to create dossiers for the sake of
advancing personal causes or to disseminate confidential information to third
parties, then his actions in searching files could arguably be said to be a
step in furtherance of a scheme to deprive the IRS of its property interest in
confidential information. The
government's case regarding Czubinski's intent to make any use of the
information he browsed rests on the testimony of one witness at trial who
stated that Czubinski once remarked at a social gathering that he intended to
build dossiers on potential KKK informants. [FN8] We must assume, on this appeal, that
Czubinski did indeed make such a comment.
Nevertheless, the fact that during the months following this
remark--that is, during the period in which Czubinski made his unauthorized
searches--he did not create dossiers (there was no evidence that he created
dossiers either during or after the period of his unauthorized searches); given
the fact that he did not even take steps toward creating dossiers, such as
recording or printing out the information;
given the fact that no other person testifying as to Czubinski's
involvement in white supremacist organizations had any knowledge of Czubinski's
alleged intent to create dossiers or use confidential information; and given the fact that not a single piece of
evidence suggests *1076 that Czubinski ever shared taxpayer information
with others, no rational jury could have found beyond a reasonable doubt that,
when Czubinski was browsing taxpayer files, he was doing so in furtherance of a
scheme to use the information he browsed for private purposes, be they nefarious
or otherwise. In addition, there was no
evidence that Czubinski disclosed, or used to his advantage, any information
regarding political opponents or regarding the person prosecuting his father.
FN8. Testimony of
William J. Murray. See
Background, supra.
[14] Mere browsing of the records of people about whom one
might have a particular interest, although
reprehensible, is not enough to sustain a wire fraud conviction on a
"deprivation of intangible property" theory. Curiosity on the part of an IRS officer may
lead to dismissal, but curiosity alone will not sustain a finding of
participation in a felonious criminal scheme to deprive the IRS of its
property.
B. Honest Services Fraud (Section
1346)
[15] In McNally
v. United States,
483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987),
the Supreme Court held that the mail and wire fraud statutes do not prohibit
schemes to defraud individuals of their intangible, nonproperty right to honest
government services. Id.
at 359-60, 107 S.Ct. at 2881-82. [FN9] Congress responded
to McNally in 1988 by enacting section
1346, the honest services amendment, which
provides:
FN9. Before McNally,
however, the fraud statutes had been "read as a broad shield" by this
and other circuits, applying, for example, to cases of corruption on the ground
that the defendant had used the mails in furtherance of a scheme to defraud the
public of its intangible right to honest services. See, e.g., Silvano,
812 F.2d 754 (1st Cir.1987) (applying, pre-McNally,
mail fraud statute to local political corruption); see generally United
States v. Grandmaison,
77 F.3d 555, 565 (1st Cir.1996) (discussing
change wrought by McNally ).
For the purposes of this chapter, the term "scheme or
artifice to defraud" includes a scheme or artifice to deprive another of
the intangible right of honest services.
18
U.S.C. § 1346 (effective Nov. 11, 1988). We
have held, after considering the relevant legislative history, that section
1346 effectively restores to the scope of the
mail and wire fraud statutes [FN10] their pre-McNally applications to government
officials' schemes to defraud individuals of their intangible right to honest
services. See Grandmaison,
77 F.3d at 566 (collecting cases). [FN11]
FN10. Identical
standards apply in determining the "scheme to defraud" element under
the mail and wire fraud statutes. United
States v. Boots,
80 F.3d 580, 586 n. 11 (1st Cir.1996) (citing Carpenter,
484 U.S. at 25 n. 6, 108 S.Ct. at 320 n. 6).
FN11. Finding
insufficient evidence to convict, we do not reach the issue of whether the
honest services amendment raises vagueness concerns. Cf. United
States v. Waymer,
55 F.3d 564, 568-69 (11th Cir.1995) (rejecting
facial vagueness and overbreadth challenge to section
1346).
We
recently had the opportunity to discuss, at some length, the proper application
of the section
1346 honest services amendment to the wrongful
acts of public officials. See Sawyer,
85 F.3d at 722-26. The discussion and holding in Sawyer
directly guide our disposition of the instant appeal. [FN12] First, as a general matter, we noted in Sawyer
that although the right to honest services "eludes easy definition,"
honest services convictions of public officials typically involve serious
corruption, such as embezzlement of public funds, bribery of public officials,
or the failure of public decision-makers to disclose certain conflicts of
interest. Id. at 724. Second, we
cautioned that "[t]he broad scope of the mail fraud statute, however, does
not encompass every instance of official misconduct that results in the
official's personal gain." Id.
at 725. Third, and most importantly, Sawyer
holds that the government must not merely indicate wrongdoing by a public
official, but must also demonstrate that the wrongdoing at issue is intended to
prevent or call into question the proper or impartial performance of that
public servant's official duties. Id.
at 725 (citing pre-McNally precedent to demonstrate that even where public
*1077 officials violated state laws, their actions were not found to
defraud citizens of their right to honest services, because the officials did
not actually fail to perform their official duties properly). In other words, "although a public official might engage
in reprehensible misconduct related to an official position, the conviction of
that official cannot stand where the conduct does not actually deprive the
public of its right to her honest services, and it is not shown to intend that
result." Id.
FN12. In Sawyer,
we vacated and remanded for further factfinding the mail and wire fraud
conviction of a private lobbyist who was found to have violated Massachusetts'
gift and gratuity statutes in the course of his lobbying activities. See 85
F.3d at 730-31.
The conviction was vacated because the violation of the gift statute, in
itself, was held insufficient to establish a scheme to defraud the public of
its intangible right to honest services.
See id.
Applying these principles to Czubinski's acts,
it is clear that his conviction cannot stand.
First, this case falls outside of the core of honest services fraud
precedents. Czubinski was not bribed or
otherwise influenced in any public decisionmaking capacity. Nor did he embezzle funds. He did not receive, nor can it be found that
he intended to receive, any tangible benefit.
His official duty was to respond to informational requests from
taxpayers regarding their returns, a relatively straightforward task that
simply does not raise the specter of secretive, self-interested action, as does
a discretionary, decision-making role. Cf. United
States v. McNeive,
536 F.2d 1245, 1251 (8th Cir.1976) (finding no
mail fraud violation where city employee accepted gratuities in connection with
non-discretionary duty).
Second, we believe that the cautionary
language of Sawyer is particularly appropriate here, given the evidence
amassed by the defendant at trial indicating that during his span of employment
at IRS, he received no indication from his employer that this workplace
violation--the performance of unauthorized searches--would be punishable by
anything more than dismissal. [FN13] "To allow every transgression of state
governmental obligations to amount to mail fraud would effectively turn every
such violation into a federal felony;
this cannot be countenanced."
Sawyer,
85 F.3d at 728.
Here, the threat is one of transforming governmental workplace
violations into felonies. We find no evidence that Congress intended to create
what amounts to a draconian personnel regulation. We hesitate to imply such an unusual result
in the absence of the clearest legislative mandate.
FN13. See
Appendices to Czubinski's Motion to Dismiss (including February 8, 1994 IRS
memorandum to employees indicating that the probable penalty for
"unauthorized accessing" of taxpayer information ranges from
"Reprimand" to "Removal").
These general considerations, although
serious, are not conclusive: they raise
doubts as to the propriety of this conviction that can be outweighed by
sufficient evidence of a scheme to defraud.
The third principle identified in Sawyer, instructing us as to
the basic requirements of a scheme to defraud in this context, settles any
remaining doubts. The conclusive
consideration is that the government simply did not prove that Czubinski
deprived, or intended to deprive, the public or his employer of their right to
his honest services. Although he
clearly committed wrongdoing in searching confidential information, there is no
suggestion that he failed to carry out his official tasks adequately, or
intended to do so.
The government alleges that, in addition to
defrauding the public of his honest services, Czubinski has defrauded the IRS
as well. The IRS is a public entity,
rendering this contention sufficiently answered by our holding above that
Czubinski did not defraud the public of his honest services. Even if the IRS were a private employer,
however, the pre-McNally honest services convictions involving private
fraud victims indicate that there must be a breach of a fiduciary duty to an
employer that involves self-dealing of an order significantly more serious than
the misconduct at issue here. See,
e.g., United
States v. Lemire,
720 F.2d 1327, 1332-34 (D.C.Cir.1983) (employee
took bribes and did not disclose that contractor was overcharging); United
States v. Siegel,
717 F.2d 9, 14 (2d Cir.1983) (employees used corporate funds for non-corporate
purposes); United
States v. Boffa,
688 F.2d 919, 931 (3d Cir.1982) (union official
bribed into accepting lower wages for union members). Once again, the government has failed to
prove that Czubinski intended to use the IRS files he browsed for any private
purposes, and hence his actions, however reprehensible, do not rise to the
level of a scheme to defraud his employer of his honest services.
*1078 II. The Computer Fraud Counts
[16] Czubinski was convicted on all four of the computer fraud
counts on which he was indicted; these
counts arise out of unauthorized searches that also formed the basis of four of
the ten wire fraud counts in the indictment. Specifically, he was convicted of
violating 18
U.S.C. § 1030(a)(4), a provision enacted in the Computer Fraud and Abuse Act
of 1986. Section
1030(a)(4) applies to:
whoever ... knowingly and with intent to defraud, accesses
a Federal interest computer without authorization, or exceeds authorized
access, and by means of such conduct furthers the intended fraud and obtains
anything of value, unless the object of the fraud and the thing obtained
consists only of the use of the computer.
We have never before addressed section
1030(a)(4).
Czubinski unquestionably exceeded authorized access to a Federal
interest computer. [FN14] On appeal he argues that he did not obtain
"anything of value." We agree,
finding that his searches of taxpayer return information did not satisfy the
statutory requirement that he obtain "anything of value." The value of information is relative to
one's needs and objectives; here, the
government had to show that the information was valuable to Czubinski in light
of a fraudulent scheme. The government
failed, however, to prove that Czubinski intended anything more than to satisfy
idle curiosity.
FN14. "[T]he
term 'exceeds authorized access' means to access a computer with authorization
and to use such access to obtain or alter information in the computer that the
accessor is not entitled so to obtain or alter." 18
U.S.C. § 1030(e)(6).
The plain language of section
1030(a)(4) emphasizes that more than mere
unauthorized use is required: the
"thing obtained" may not merely be the unauthorized use. It is the showing of some additional end--to
which the unauthorized access is a means--that is lacking here. The evidence did not show that Czubinski's
end was anything more than to satisfy his curiosity by viewing information
about friends, acquaintances, and political rivals. No evidence suggests that he printed out,
recorded, or used the information he browsed.
No rational jury could conclude beyond a reasonable doubt that Czubinski intended to use or disclose that
information, and merely viewing information cannot be deemed the same as
obtaining something of value for the purposes of this statute. [FN15]
FN15. The district
court, in denying a motion to dismiss the computer fraud counts in the
indictment, found that the indictment sufficiently alleged that the
confidential taxpayer information was itself a "thing of value" to
Czubinski, given his ends. The
indictment, of course, alleged specific uses for the information, such as
creating dossiers on KKK members, that were not proven at trial. In light of the trial evidence-- which, as
we have said, indicates that there was no recording, disclosure or further use
of the confidential information--we find that Czubinski did not obtain
"anything of value" through his unauthorized searches.
[17] The legislative history further supports our reading of
the term "anything of
value." "In the game of
statutory interpretation, statutory language is the ultimate trump card,"
and the remarks of sponsors of legislation are authoritative only to the extent
that they are compatible with the plain language of section
1030(a)(4).
Rhode
Island v. Narragansett Indian Tribe,
19 F.3d 685, 699 (1st Cir.1994) (citing Grove
City College v. Bell,
465 U.S. 555, 567, 104 S.Ct. 1211, 1218, 79 L.Ed.2d 516 (1984)). Here, a Senate co-sponsor's comments suggest that
Congress intended section
1030(a)(4) to punish attempts to steal valuable
data, and did not wish to punish mere unauthorized access:
The acts of fraud we are addressing in proposed section
1030(a)(4) are essentially thefts in which
someone uses a federal interest computer to wrongly obtain something of value
from another.... Proposed section
1030(a)(4) is intended to reflect the distinction
between the theft of information, a felony, and mere unauthorized access, a
misdemeanor.
132 Cong. Rec. 7128, 7129, 99th Cong., 2d.
Sess. (1986). The Senate Committee
Report further underscores the fact that this section should apply to those who
steal information through unauthorized access as part of an illegal scheme:
The Committee remains convinced that there must be a clear
distinction between *1079 computer theft, punishable as a felony [under section
1030(a)(4) ], and computer trespass, punishable
in the first instance as a misdemeanor [under a different provision]. The element in the new paragraph (a)(4),
requiring a showing of an intent to defraud, is meant to preserve that
distinction, as is the requirement that the property wrongfully obtained via
computer furthers the intended fraud.
S. Rep. No. 432, 99th Cong., 2d Sess., reprinted
in 1986 U.S.C.C.A.N. 2479, 2488.
For the same reasons we deemed the trial evidence could not support a finding that Czubinski deprived the
IRS of its property, see discussion of wire fraud under section
1343 supra, we find that Czubinski has not
obtained valuable information in furtherance of a fraudulent scheme for the
purposes of section
1030(a)(4).
CONCLUSION
We add a cautionary note. The broad language of the mail and wire
fraud statutes are both their blessing and their curse. They can address new forms of serious crime
that fail to fall within more specific legislation. See United
States v. Maze,
414 U.S. 395, 405-06, 94 S.Ct. 645, 651, 38 L.Ed.2d 603 (1974) (observing that the mail fraud statute serves "as a
first line of defense" or "stopgap device" to tackle new types
of frauds before particularized legislation is developed) (Burger, C.J.,
dissenting). On the other hand, they
might be used to prosecute kinds of behavior that, albeit offensive to the
morals or aesthetics of federal prosecutors, cannot reasonably be expected by
the instigators to form the basis of a federal felony. The case at bar falls within the latter
category. Also discomforting is the
prosecution's insistence, before trial, on the admission of inflammatory
evidence regarding the defendant's membership in white supremacist groups
purportedly as a means to prove a scheme to defraud, when, on appeal, it argues
that unauthorized access in itself is a sufficient ground for conviction on all
counts. Finally, we caution that the wire
fraud statute must not serve as a vehicle
for prosecuting only those citizens whose views run against the tide, no matter
how incorrect or uncivilized such views are.
For the reasons stated in this opinion, we
hold the district court's denial of defendant's motion for judgment of
acquittal on counts 1, 2, and 4 through 14, to be in error. The defendant's conviction is thus reversed
on all counts.
106 F.3d 1069, 65 USLW 2571, 79 A.F.T.R.2d
97-1664, 97-2 USTC P 50,622
END OF
DOCUMENT