On Appeal from the District Court of the Virgin Islands
Division of St. Croix (D.C. Criminal Nos. 93-cr-00195-1, 93-cr-00195-2 and 93-cr-00195-3)
Before: SCIRICA, NYGAARD and McKEE, Circuit Judges
Defendants West Indies Transport, Inc., WIT Equipment Co., and W. James Oelsner appeal their convictions and sentences for visa fraud, environmental crimes, conspiracy, and racketeering. The district court had jurisdiction under 48 U.S.C. Section(s) 1612 *fn1 and 18 U.S.C. Section(s) 3231 and 3241. *fn2 We have jurisdiction under 28 U.S.C. Section(s) 1291. *fn3 We will affirm. *fn4
I. Facts and Procedural History
West Indies Transport, Inc. and WIT Equipment Co. (collectively "West Indies Transport") operated several businesses in Krum Bay, St. Thomas, including a dry dock, ship repair facility, and barge towing company. West Indies Transport's chief operating officer was W. James Oelsner. In 1987, West Indies Transport obtained permits to use five barges as fixed docks for its other vessels. In 1989, Hurricane Hugo seriously damaged some of these barges, shifting them from their permitted positions. West Indies Transport did not attempt to repair, reposition, or salvage these barges after the storm. Instead, it used these barges as docks, repair facilities, and housing for employees in their new unauthorized locations. In the process, West Indies Transport attached the barges permanently to shore, constructed walkways and ramps between the barges for use by vehicles and employees, and wired them for electricity.
To staff its facilities, West Indies Transport hired an overseas agent to recruit Filipino workers. The Filipino workers were instructed to apply for D-1 visas intended for non-immigrant foreign maritime crewmen, not the H-2 visas required by law. The "West Indies Transport crewmen" never put to sea. Instead, West Indies Transport housed them in a converted shipping container on a barge and used them as dock workers. The Filipino workers were paid approximately $400 per month for a 56-hour work week. By using underpaid illegal foreign employees, West Indies Transport was able to reduce significantly its expenses for wages and wage taxes.
In the course of its repair operations, West Indies Transport discharged several different pollutants into the navigable waters of the United States. Witconcrete II, a ferro-concrete barge, was heavily damaged in Hurricane Hugo. The stern was partially severed from the remainder of the barge, attached only by metal reinforcing bars, known as rebar. West Indies Transport did not attempt to repair, break up, or salvage the damaged stern. Instead, it cut the rebar by which the stern was attached and dumped the stern into the bay. Later, when West Indies Transport decided to move the barge, it cut additional protruding pieces of rebar from the structure and dumped them in the water. West Indies Transport also sand-blasted the hull of a vessel moored in its facility, causing paint chips and sand to fall into Krum Bay near the main water intake for the St. Thomas desalinization plant. The toilet system on the Witrollon, the barge on which illegal Filipino workers were housed, discharged raw sewage directly into the bay. West Indies Transport also collected steel scrap from its repair operations and dumped it twelve miles out at sea under cover of darkness. West Indies Transport never obtained a permit for any of these pollution discharges.
Defendants were charged in a twenty-one count indictment for visa fraud, environmental crimes, conspiracy, and racketeering. Five counts were dismissed on motion of the government. A jury found defendants guilty on the remaining sixteen counts. Defendants moved for post-verdict judgment of acquittal, which the district court denied. This appeal followed.
Defendants were convicted of aiding and abetting visa fraud in violation of 18 U.S.C. Section(s) 2 and 18 U.S.C. Section(s) 1546. *fn5 At trial, the district court instructed the jury that defendants' representations to U.S. immigration and State Department officials verifying that Filipino workers hired by West Indies Transport would be working as crewmen aboard foreign flagged vessels were material as a matter of law. These instructions were consistent with our decision in United States v. Greber, 760 F.2d 68 (3d Cir.), cert. denied, 474 U.S. 988 (1985), which held that when a defendant is tried for perjury the issue of materiality is decided by the court.
Between verdict and sentencing, the United States Supreme Court held that on a perjury charge under 18 U.S.C. Section(s) 1001, materiality must be submitted to the jury. United States v. Gaudin, 515 U.S. 506 (1995). "The Constitution gives a criminal defendant the right to have a jury determine, beyond a reasonable doubt, his guilt of every element of the crime with which he is charged. The trial court's refusal to allow the jury to pass on the materiality of Gaudin's false statements infringed that right." Id. at 2320.
The rule announced in Gaudin applies retroactively to this direct appeal. Johnson v. United States, ___ U.S. ___, 117 S. Ct. 1544, 1549 (1997) (Gaudin applies retroactively on direct review; citing Griffith v. Kentucky, 479 U.S. 314, 328 (1987)). Defendants contend that Gaudin requires a new trial.
Defendants submitted to the district court proposed jury instructions which took the issue of materiality away from the jury, but now object to those same instructions. For this reason, the government asks us to treat the district court's instructions as non-reviewable invited error, under United States v. Console, 13 F.3d 641 (3d Cir. 1993), cert. denied, 513 U.S. 812 (1994) and Herman v. Hess Oil Virgin Islands Corp., 524 F.2d 767 (3d Cir. 1975). We decline to do so. Where a defendant submits proposed jury instructions in reliance on current law, and on direct appeal that law is declared constitutionally infirm, we will not apply the invited error doctrine. Instead, we will review for plain error under Fed. R. Crim. P. 52. See Johnson, 117 S. Ct. at 1548-49 (reviewing Gaudin error under plain error standard where defendant, relying on current law later declared unconstitutional, insisted at trial that materiality was an issue for the court, not jury, to decide). Under Rule 52, "before an appellate court can correct an error not raised at trial, there must be (1) error, (2) that is plain, and (3) that affects substantial rights. If all three conditions are met, an appellate court may then exercise its discretion to notice a forfeited error, but only if (4) the error seriously affects the fairness, integrity or public reputation of the judicial proceedings." Johnson, 117 S. Ct. at 1549 (internal quotations and brackets omitted; citing United States v. Olano, 507 U.S. 725, 732 (1993)). As the Supreme Court explained in Johnson, "in a case such as this -- where the law at the time of trial was settled and clearly contrary to the law at the time of appeal -- it is enough that an error be `plain' at the time of appellate consideration." Id. See also United States v. Retos, 25 F.3d 1220 (3d Cir. 1994) (question is not whether error was plain at time of trial, but whether it is plain based on current law at time of direct appeal).
Failure to submit the issue of materiality to the jury was error. Gaudin, 115 S. Ct. at 2320; Johnson, 117 S. Ct. at 1549. That Gaudin involved perjury under 18 U.S.C. Section(s) 1001 rather than 18 U.S.C. Section(s) 1546, the relevant statute here, is not significant given the identical character of the materiality element in both perjury statutes. See Johnson, 117 S. Ct. 1544 (1997) (applying Gaudin to case involving perjury under 18 U.S.C. Section(s) 1623); United States v. DiRico, 78 F.3d 732 (1st Cir. 1996) (applying Gaudin to perjury under 26 U.S.C. Section(s) 7206(1)).
A "plain" error is an error which is "clear" or "obvious." Johnson, 117 S. Ct. at 1549; Olano, 507 U.S. at 734. Failure to send the issue of materiality to the jury is, in light of Gaudin, obvious or clear and therefore "plain" error. Johnson, 117 S. Ct. at 1549.
To satisfy the "substantial rights" prong of the plain error test, defendants usually must show that the error was "prejudicial" -- "It must have affected the outcome of the district court proceedings." Olano, 507 U.S. at 734; United States v. Turcks, 41 F.3d 893 (3d Cir.) (same), cert. denied, 514 U.S. 1074 (1994). *fn6 Defendants bear this burden of proof. Id. Defendants here have not brought to our attention any facts suggesting that a jury might have reached a conclusion different from the district court on materiality. Defendants presented no evidence at trial that their statements were not material. More importantly, the government introduced substantial evidence proving the defendants' representations were material. Indeed, had immigration officials known the true facts behind the Filipino workers' applications for visas -- defendants' intention to employ as dock workers illegally underpaid foreign workers housed permanently on derelict barges -- the visas never would have been granted. For these reasons, defendants have not met their burden of proving that the failure to submit the issue of materiality to the jury affected the outcome of the trial. See United States v. Kramer, 73 F.3d 1067 (11th Cir.) (Gaudin error not reversible plain error; defendant failed to show that error affected outcome of trial), cert. denied, 117 S. Ct. 516 (1996); United States v. Ross, 77 F.3d 1525 (7th Cir. 1996) (Gaudin error not reversible plain error; issue of materiality not seriously disputed at trial).
"When the first three parts of Olano are satisfied, an appellate court must then determine whether the forfeited error seriously affects the fairness, integrity, or public reputation of judicial proceedings before it may exercise its discretion to correct the error." Johnson, 117 S. Ct. at 1550 (internal quotations and brackets omitted). Whether or not their substantial rights were affected, defendants have not satisfied the fourth prong of the Olano test. In Johnson, a case involving similar facts, the Supreme Court observed that the evidence of materiality was "overwhelming," materiality was "essentially uncontroverted at trial," and the defendant had presented "no plausible argument" that her false statements were "somehow not material." Id. The Supreme Court concluded: "On this record there is no basis for concluding that the error seriously affected the fairness, integrity or public reputation of the judicial proceedings. Indeed, it would be the reversal of a conviction such as this which would have that effect. . . . No miscarriage of justice will result here if we do not notice the error, and we decline to do so." Id. (internal quotations omitted).
In the same manner, the evidence at trial that West Indies Transport's representations were material was overwhelming and uncontroverted. On appeal, defendants have not presented a plausible argument that their statements were not material. The failure to submit materiality to the jury did not seriously affect the fairness, integrity, or public reputation of the judicial proceedings. For these reasons, we will affirm the convictions on visa fraud.
Defendants contend their convictions for aiding and abetting visa fraud must be reversed because the district court did not instruct the jury that it must find "knowing subscription" or "knowing presentation" of false material. Not only did defendants fail to request such an instruction, their proposed instruction was remarkably similar to that actually delivered by the district court. *fn7 "Thus, if there was any error at all, it was `invited error' and cannot now be a basis for reversal." United States v. Console, 13 F.3d 641, 661 (3d Cir. 1993) (quoting Herman v. Hess Oil Virgin Islands Corp., 524 F.2d 767, 772 (3d Cir. 1975)), cert. denied, 513 U.S. 812 (1994).
Defendants contend as a matter of law they could not be convicted of aiding and abetting visa fraud because the government conceded that immigrant workers who presented false information to the INS at West Indies Transport's instigation lacked criminal intent. We review de novo where the question is one of statutory interpretation. United States v. Schneider, 14 F.3d 876 (3d Cir. 1994).
The aiding and abetting statute provides, inter alia, that a defendant is liable if he willfully causes an act to be done by another which would be illegal if he did it himself.18 U.S.C. Section(s) 2(b). For this reason, whether the immigrant workers lacked criminal intent is irrelevant so long as West Indies Transport intentionally caused them to submit false information. As the Court of Appeals for the Eleventh Circuit explained, "it is well established that Section(s) 2(b) was designed to impose criminal liability on one who causes an intermediary to commit a criminal act, even though the intermediary who performed the act has no criminal intent and hence is innocent of the substantive crime charged." United States v. Tobon-Builes, 706 F.2d 1092, 1099 (11th Cir.), reh'g denied, 716 F.2d 914 (1983). See also Springs v. First Nat. Bank of Cut Bank, 835 F.2d 1293 (9th Cir. 1988) ("A person who causes the commission of an offense is punishable as a principal even though the person who commits the wrongful act violates no criminal statute because of lack of criminal intent or capacity.").
In United States v. Catena, 500 F.2d 1319 (3d Cir.), cert. denied, 419 U.S. 1047 (1974), a physician was convicted for presenting false Medicare claims to the United States. On appeal, the physician argued that his conviction must be overturned because he did not present the claims to the United States in person. Rather, he submitted the false claims to two insurance companies, which forwarded them to the United States government. We affirmed his conviction, observing that under "Section(s) 2(b) a person may be convicted of causing a false claim to be presented to the United States even though he uses an innocent intermediary (in this case the insurance carriers) to actually pass on the claims to the United States." Id. at 1323.
The Court of Appeals for the Ninth Circuit reached the same conclusion in United States v. Causey, 835 F.2d 1289 (9th Cir. 1987). In Causey, a tax protester was convicted for aiding and abetting tax evasion by helping personsfile false tax returns. On appeal, he argued the government failed to prove that the persons actually submitting the false returns possessed criminal intent. The court rejected this argument "because it is immaterial to Causey's conviction whether or not the taxpayers were shown to have intended tofile false tax returns." Id. at 1291. "Under section 2(b) . . . the government need not prove that someone other than the defendant was guilty of the substantive crime. A person who causes the commission of an offense is punishable as a principal even though the person who completes the wrongful act violates no criminal statute because of lack of intent or capacity . . . . Whether the taxpayers had guilty knowledge in submitting the claims becomes irrelevant under section 2(b)." Id. at 1291.
West Indies Transport's arguments are indistinguishable from those rejected in Catena and Causey. When a defendant uses an innocent intermediary to present false claims or make false statements to the government, the criminal intent of the intermediary is not an element of the offense. 18 U.S.C. Section(s) 2(b). For this reason, the district court's charge was not erroneous.
III. Environmental Crimes
Defendants were convicted of violating the Clean Water Act, 33 U.S.C. Section(s) 1251 et seq., by (1) severing a 250-ton concrete and rebar block from the stern of Witconcrete II, a ferrous concrete barge, and dumping it into Krum Bay, St. Thomas; (2) severing approximately one hundred pieces of rebar and attached concrete from the stern of Witconcrete II and dropping it into Krause Lagoon; and (3) conducting sandblasting operations on a floating barge that projected sand and paint chip residue into Krum Bay. The Clean Water Act generally prohibits discharging pollutants into the navigable waters of the United States without a permit. But it only regulates "discharges" of pollutants from a "point source." See 33 U.S.C. SS 1311(a) and 1362(12). *fn8 Defendants contend as a matter of law their conduct did not constitute discharge of a pollutant from a point source. We review questions of statutory interpretation de novo. United States v. Schneider, 14 F.3d 876 (3d Cir. 1994).
Barges are "floating craft," expressly included within the definition of "point source." 33 U.S.C. 1362(14). *fn9 "Discharges" include "any addition of any pollutant to navigable waters from any point source." Defendants concede that Krum Bay and Krause Lagoon are navigable waters of the United States. Rebar, concrete, sand and paint chips fall within the Clean Water Act's broad definition of "pollutant." 33 U.S.C. Section(s) 1362(6). *fn10 Therefore, cutting off pieces of a ferro-concrete barge and dumping them in Krum Bay and Krause Lagoon, or conducting sandblasting on a floating craft and allowing the residue to fall into Krum Bay, constitutes making an addition of a pollutant to navigable waters of the United States from a point source. Defendants' conduct fell within the applicable statutory definitions.
Appellants' reliance on United States v. Plaza Health Labs., Inc., 3 F.3d 643 (2d Cir. 1993), cert. denied, 512 U.S. 1245 (1994), does not alter our conclusion. There, defendant removed containers loaded with blood vials from his office, transported them in his car, and carried them to the Hudson River, where he deposited them during low tide in a bulkhead separating his home from the river. The United States Court of Appeals for the Second Circuit refused to consider defendant a "point source." But Plaza offers no guidance here because it focused almost exclusively on the application of the Clean Water Act to human beings:
As the parties have presented the issue to us in their briefs and at oral argument, the question is `whether a ...