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United States v. Hoskins

United States District Court, D. Connecticut

August 23, 2019

UNITED STATES OF AMERICA
v.
LAWRENCE HOSKINS

          RULING ON DEFENDANT'S MOTION FOR WITHDRAWAL INSTRUCTION

          JANET BOND ARTERTON, U.S.D.J.

         Mr. Hoskins moves "for a pretrial ruling regarding the Court's jury instruction on the elements of the withdrawal defense . . . [and] a ruling that the withdrawal defense is applicable to aiding-and-abetting liability, and a ruling precluding the government from offering evidence regarding Mr. Hoskins's receipt of a pension following his August 2004 resignation from Alstom to defeat his withdrawal defense." (Mot. for Withdrawal Instr. [Doc. # 448] at 1.) The government opposes, arguing that Defendant's motion "reflects a mistaken view of the law and the facts." (Govt. Opp. to Withdrawal Instruction [Doc. # 478] at 2.)

         I. Background

         Defendant argues that the "operative facts underpinning [his] withdrawal defense are largely undisputed." (Mem. Supp. Mot. for Withdrawal Instruction [Doc. # 448-1] at 1.) "Mr. Hoskins worked for Alstom for less than three years, from October 2001 to August 2004, when he resigned from his position at the company and severed all ties to Alstom, the alleged conspiracy and his alleged coconspirators. The original indictment against Mr. Hoskins was returned on July 30, 2013, almost nine years later." (Id.) "[T]he most recent overt act in furtherance of the conspiracy in which Mr. Hoskins is alleged to have engaged occurred on March 30, 2004, five months before his resignation" from Alstom, and "[e]ach of the substantive counts in the indictment relates to specific wire transfers of which Mr. Hoskins had no knowledge or personal involvement, and that substantially post-date Mr. Hoskins's employment with Alstom." (Id. at 1-2.) "The wire transfers alleged in the FCPA counts occurred between November 2005 and October 2009 . . . and the wire transfers alleged in the money laundering counts occurred between December 2005 and March 2007." (Id. at 2.)

         The Government alleges that between 2002 and 2004, "acting on behalf of Alstom Power US," Mr. Hoskins "helped negotiate contracts with two consultants to funnel bribes to Indonesian officials so that Alstom Power U.S. would win a contract to build the Tarahan power station." (Govt. Opp. to Withdrawal Instruction at 1.) The terms of the contracts which Defendant helped negotiate allegedly "made clear that once Alstom won the Tarahan project in July 2004, Alstom's obligation to funnel bribes through consultants was triggered and would occur over several years." (Id.) The Government explains that when Defendant "left Alstom in August 2004, his role-and that of most, if not all, of his co-conspirators-was principally fulfilled" already and the subsequent "bribe payments that were set in motion were triggered automatically by Lime-based milestones." (Id.)

         Mr. Hoskins explains that because it is "clear that [his] personal involvement in the conduct at issue ceased long before the inception of the limitations period," he will "argue that the charges against him are time-barred, making his withdrawal defense a central issue at trial" which will "turn on whether [his] resignation from Alstom and severing of ties with his alleged co-conspirators operated as an effective withdrawal from the alleged conspiracy." (Mem. Supp. Mot. for Withdrawal Instruction at 2.) He concludes that his withdrawal "was effective on August 31, 2004, and absolves [him] from culpability for any subsequent acts of his alleged coconspirators, and triggers the five-year statute-of-limitations period, which thus expired on August 31, 2009 (four years before Mr. Hoskins was first indicted)." (Id.)

         II. Discussion

         Defendant raises three issues: first, the proper content of the jury instruction regarding withdrawal; second, whether a withdrawal jury instruction should be given as to the counts for which aiding and abetting is the alleged basis of liability; and third, whether his receipt of a pension from Alstom after his resignation impacts his claimed withdrawal such that evidence of those pension payments is admissible. (Id. at 2-3.) Mr. Hoskins asks the Court for a pretrial ruling on these issues because they will "affect the parties' presentation of evidence and trial strategy." (Id. at 4.)

         The Government disputes the content of Defendant's proposed instruction, argues that no withdrawal instruction should be given regarding aiding and abetting, and argues that evidence of the Alstom pension is admissible. (Gov't Opp. at 1-2.)

         A. Withdrawal Instruction

         Mr. Hoskins argues that under United States v. Berger, 224 F.3d 107, 119 (2d Cir. 2000), the jury should be instructed[1] that withdrawal from a criminal conspiracy can occur when a defendant: 1) "resign[s] from a criminal enterprise"; 2) does noL "Lake any subsequent acts to promote the conspiracy"; and 3) does not "receive any additional benefits from the company." (Def.'s Mem. at 4.) In support of his proposed instruction, Defendant argues that "resignation from a business" constitutes "withdrawal as a matter of law when that resignation 'foreclosed [the defendant's] continuing role ... [in the scheme] and relinquished any claim to subsequent profits.'" (Id. at 5 (quoting United States v. Nerlinger, 862 F.2d 967, 974 (2d Cir. 1988)).) Mr. Hoskins also requests that the Court instruct the jury "as to the five-year statute of limitations period for the charged crimes, the date upon which the original indictment was returned and the date of the inception of the limitations period, and the elements that the defendant must prove by a preponderance of the evidence to establish withdrawal from a conspiracy." (Id. at 7.)

         The Government responds[2] that the withdrawal defense requires "some act to disavow or defeat the purpose" of the conspiracy and that the withdrawal instruction should incorporate that standard. (Gov't Opp. at 3 (citing Hyde & Schneider v. United States, 225 U.S. 347 (1912); Smith v. United States, 568 U.S. 106 (2013)).) Withdrawal, the Government argues, "carries no talismanic formula, so long as the defendant establishes that he engaged in 'affirmative acts inconsistent with the object of the conspiracy and communicated in a manner reasonably calculated to reach co-conspirators.'" (Id. (quoting United States v. United States Gypsum Co., 438 U.S. 422, 464-64 (1978).) The Government also argues that Mr. Hoskins' resignation from Alstom represents mere cessation of criminal activity, which is insufficient to demonstrate withdrawal from a conspiracy and therefore does not support Defendant's requested instruction. (Id. at 4.)

         The parties' dispute centers primarily on the interpretation and impact of Berger and Nerlinger. But neither of these two cases squarely confronts the question here: whether resignation from a legitimate corporation through and for which the alleged conspiracy was conducted can constitute the affirmative step required for withdrawal from a conspiracy.

         Mr. Hoskins argues that "[r]ead together, Nerlinger and Berger show that in the corporate context, resignation, with no further action to support the conspiracy and no further benefit from the conspiracy, will constitute disavowal when that resignation forecloses the defendant's continuing participation in the conspiracy." (Def.'s Reply [Doc. # 482] at 2.) The Government argues that those cases do not alter the standard requirements for proving withdrawal.

         In Berger, the Second Circuit upheld defendant David Goldstein's conviction by jury verdict, rejecting his claim that he had proved withdrawal from the conspiracy as a matter of law by offering evidence of his resignation. See Berger, 224 F.3d at 118 ("We believe that the jury was entitled to find that Goldstein's resignation from [Toldos Yakov Yosef Seminary ("TYY")] was insufficient to constitute withdrawal from the conspiracy."). Goldstein had resigned by letter from TYY, which "never existed except on paper" for purposes of the defrauding federal grant programs and avoiding tax liability. Id. at 111-12. Goldstein argued that the resignation letter effectuated his withdrawal from the conspiracy and "provide[d] conclusive evidence that his involvement in the charged criminal conduct had ended" by the dale of that letter. Id.

         The Berger court concluded that the "evidence support[ed] the jury's apparent conclusion that Goldstein's resignation did not amount to a disavowal of the conspiracy," explaining that it is "well-established that '[m]ere cessation of activity is not enough to start the running of the statute [of limitations]; there must also be affirmative action, either the making of a clean breast to authorities, or communication of the abandonment in a manner reasonably calculated to reach co-conspirators.'" Id. (quoting Borelli, 336 F.2d at 388). That court continued:

Our case law strongly suggests that resignation from a criminal enterprise, standing alone, does not constitute withdrawal as a matter of law; more is required. Specifically, the defendant must not take any subsequent acts to promote the conspiracy, see United States v. Nerlinger, 862 F.2d 967, 974 (2d Cir.1988) (resignation plus actions that "disabled [defendant] from further participation" in the conspiracy established withdrawal); United States v. Goldberg, 401 F.2d 644, 649 (2d Cir.1968) (resignation plus the absence of any subsequent activity in furtherance of the conspiracy established withdrawal), and must not receive any additional benefits from the conspiracy, see United States v. Eisen, 974 F.2d 246, 269 (2d Cir.1992) (no withdrawal where defendant resigned from corrupt law firm but continued to receive a percentage of recoveries).

Id. at 118-19. The Second Circuit went on to "agree with the Third Circuit's more explicit statement of these principles" in United States v. Antar, 53 F.3d 568, 583 (3d Cir. 1995):

(1) resignation from the enterprise does not, in and of itself, constitute withdrawal from a conspiracy as a matter of law; (2) total severing of ties with the enterprise may constitute withdrawal from the conspiracy; however (3) even if the defendant completely severs his or her ties with the enterprise, the defendant still may remain a part of the conspiracy if he or she continues to do acts in furtherance of the conspiracy and continues to receive benefits from the conspiracy's operations.

         Because Goldstein had taken acts inconsistent with a "total severing of ties with the enterprise" after his resignation, the jury was entitled to find that he had not withdrawn from the conspiracy. Berger, 224 F.3d at 119.

         Mr. Hoskins argues that Berger indicates that resignation from a business, when combined with a total severing of ties and the receipt of no future benefits from the conspiracy, is sufficient to prove withdrawal and thus requests that the jury be instructed on the elements of that method of withdrawal. (Def.'s Mem. at 4-5.) The Government points out that TYY merely functioned to aid the conspiracy and was not a legitimate business operation, unlike Alstom, an otherwise legitimate business. The Government argues that this difference is crucial because Goldstein's resignation from TYY reasonably signaled his resignation from the criminal enterprise itself, while Mr. Hoskins' ...


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