Thursday, December 16, 2010
Federal Rule of Evidence 704(b) provides that
No expert witness testifying with respect to the mental state or condition of a defendant in a criminal case may state an opinion or inference as to whether the defendant did or did not have the mental state or condition constituting an element of the crime charged or of a defense thereto. Such ultimate issues are matters for the trier of fact alone.
As I have noted before, however, courts almost always find that violations of Rule 704(b) constitute harmless error, which is exactly what the Sixth Circuit found in its recent opinion in United States v. Warshak, 2010 WL 5071766 (6th Cir. 2010).
Berkeley Premium Nutraceuticals, Inc., was an incredibly profitable company that served as the distributor of Enzyte, an herbal supplement purported to enhance male sexual performance. In [an] appeal, defendants Steven Warshak..., Harriet Warshak..., and TCI Media, Inc...., challenge[d] their convictions stemming from a massive scheme to defraud Berkeley's customers.
You may remember the commercials for Enzyte. As the Sixth Circuit's opinion noted,
The popularity of Enzyte appears to have been due in large part to Berkeley's aggressive advertising campaigns. The vast majority of the advertising-approximately 98%-was conducted through television spots. Around 2004, network television was saturated with Enzyte advertisements featuring a character called "Smilin' Bob," whose trademark exaggerated smile was presumably the result of Enzyte's efficacy. The "Smilin' Bob" commercials were rife with innuendo and implied that users of Enzyte would become the envy of the neighborhood.
But there were many problems with the way that Berkeley Premium Nutraceuticals marketed and distributed Enzyte, with one of them being that the customer satisfaction rate touted by the company "was totally spurious." (You can read the court's opinion for all of the other problems)
After their convictions, one of the grounds for the defendants' appeal was that the district court improperly received certain testimony from Special Agent Jerry Simpson. Specifically,
At trial, Agent Simpson made three statements that the defendants contend[ed] violated [Rule 704(b)]. First, Simpson stated that "the business dealings of TCI Media were commingled with the personal dealings of Mr. Warshak[,] and...it was done with an intent to conceal the true nature and disposition of the funds that came in and out of the TCI Media account." Second, on cross-examination, Simpson testified that certain cash transactions "were designed to conceal money laundering." Finally, during redirect, Simpson stated that the defendants had made "transfers among...various business and personal accounts that were multi-layered transactions that, in [his] opinion, were designed to conceal the true source and application of the funds.” This testimony was allowed to stand over the defense's rather ardent objections that Simpson had violated Rule 704(b).
According to the Sixth Circuit,
Notwithstanding the district court's reluctance to exclude them, Simpson's statements clearly ran afoul of Rule 704(b). In suggesting that certain transactions were undertaken with "an intent to conceal," Simpson spoke directly to the core issue of the requisite mens rea. That is impermissible. Furthermore, Simpson's remarks with respect to the "design" of the transactions also implicate the issue of intent. To say that a transaction is designed to achieve a certain effect is tantamount to declaring that the individual who conducted the transaction intended to achieve that outcome....True, a witness may permissibly testify that the effect of a transaction is to conceal,...but that is not what Simpson did when he stated that the intent of the transactions was to mask the source or nature of the funds at issue. Thus, it appears that the district court abused its discretion in admitting certain portions of Simpson's testimony.
Nonetheless, the court found that this error was harmless because, inter alia,
The jurors were faced with evidence of an expansive and convoluted tangle of financial transactions, evidence that would, standing alone, be more than sufficient basis to support the conclusion that Warshak's intent in making the charged transactions was to conceal the source of the funds.