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United States v. Widergren

filed: August 30, 1993.


Appeal from the United States District Court for the Northern District of California. D.C. No. CR-91-20027-JW. James Ware, District Judge, Presiding

Before: Wallace, Chief Judge, D.w. Nelson and O'scannlain, Circuit Judges.


Widergren appeals from his convictions following a jury trial for mail fraud, 18 U.S.C. § 1341, securities fraud, 15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5 (1991), and criminal contempt, 18 U.S.C. § 401(3). Both Widergren and the government appeal from the sentence imposed by the district court under the United States Sentencing Guidelines (Guidelines). The district court had jurisdiction pursuant to 18 U.S.C. § 3231. We have jurisdiction over this timely appeal pursuant to 28 U.S.C. § 1291. We affirm Widergren's conviction, vacate his sentence, and remand for resentencing.

Widergren requested a jury instruction based on his purported good faith reliance on the advice of counsel. The district court gave a general good faith instruction but did not include Widergren's specific proposed instruction. Widergren contends that the district court erred by not providing the jury with his proposed instruction.

Widergren has not pointed out sufficient evidence in the record to show that he relied in good faith on the advice of counsel. Even if he had, however, "a defendant is not entitled to any particular form of an instruction so long as the instructions given fairly and adequately cover his theories of defense." United States v. Faust, 850 F.2d 575, 583 (9th Cir. 1988). The general good faith instruction given by the district court "fairly and adequately" covered Widergren's defense positions. The district court informed the jury that good faith was a complete defense to the crimes with which Widergren was charged and that "[a] person who acts . . . on a belief or an opinion honestly held is not punishable for mail or securities fraud merely because the belief or opinion turns out to be inaccurate, incorrect, or wrong. An honest mistake in judgment or an error in management does not rise to the level of intent to defraud." This instruction was adequate to insure that the jury would not find Widergren guilty if it believed, as Widergren argued, he had relied in good faith on the advice of his counsel in not disclosing information regarding his past and the future prospects of StarSignal. United States v. Walters, 913 F.2d 388, 391 (7th Cir. 1990), relied on by Widergren, is inapposite. In that case, there is no indication that the district court gave any good faith instruction.

Widergren contends that there was insufficient evidence to conclude that he acted with the intent to defraud. There is sufficient evidence to support a conviction if, "'after reviewing 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.'" United States v. Bishop, 959 F.2d 820, 829 (9th Cir. 1992), quoting Jackson v. Virginia, 443 U.S. 307, 319, 61 L. Ed. 2d 560, 99 S. Ct. 2781 (1979).

Based on the testimony and documents presented at trial, together with the inferences drawn from that evidence, we conclude that a rational jury could find that Widergren knowingly and intentionally engaged in a scheme to defraud. The evidence indicates that Widergren orchestrated an ongoing attempt to inflate the value of StarSignal. Information pertaining to his consent decree, the bankruptcy of Widcom, and such financial setbacks as the so-called "Antebi incident" were excluded for corporate documents circulated to investors. Projects such as the "Spanish Accord" and a public offering were misleadingly presented as near completion. Representations regarding a "backlog of ninety-eight firm orders for the color fax" and the existence of a "special products divisions" were simply not true. In all, the corporate documents discussed in the indictment reveal a pervasive pattern of misrepresentation and omission. Contrary to Widergren's assertions, moreover, the evidence that the shortcomings in these documents were the result of bad legal advice is virtually nonexistent. We therefore hold that the evidence presented at trial supports Widergren's convictions for mail fraud, securities fraud, and criminal contempt.

Widergren contends that the district court erred in admitting the testimony of a government witness regarding Spanish corporate law. "Whether to admit expert testimony in a criminal trial is a decision left to the discretion of the trial Judge, and we will not overturn that decision in the absence of an abuse of such discretion." United States v. Barker, 942 F.2d 585, 589 (9th Cir. 1991) (Barker).

Although the government did not offer Popec as an expert, the district court seems to have considered him an expert on Spanish corporate law. The court permitted Popec to testify as to "the general processes and procedures as he's come to know them with respect to this qualification to do business in Spain."

Popec is a business consultant who specializes in helping American companies do business in Spain. He has 35 years of experience working with the Spanish government and has completed over 100 agreements between American concerns and the Spanish government. Popec easily "qualified as an expert by knowledge, skill, experience, training, or education." Fed. R. Evid. 702. As the district court pointed out, Popec's testimony may well have assisted the jury in understanding the evidence or determining a fact in issue. See Barker, 942 F.2d at 589. We therefore hold that the district court did not abuse its discretion in admitting Popec's testimony.

Widergren also contends that the district court erred in failing to declare a mistrial when a government witness testified that Widergren engaged in a transaction prohibited by California civil law. The decision of the district court to deny a motion for a mistrial is reviewed for abuse of discretion. United States v. Davis, 932 F.2d 752, 761 (9th Cir. 1991).

Perisho, a former accountant for StarSignal, testified that StarSignal's handling of the "Antebi incident" violated California law. Widergren objected and moved for a mistrial. The district court sustained the objection insofar as Perisho stated a legal Conclusion and instructed the jury "to disregard the witness's characterizations of the transaction as violating some provision of law." Widergren contends that the instruction given by the district court did not overcome the prejudice caused by Perisho's comments.

In general, "a cautionary instruction from the Judge is sufficient to cure any prejudice to the defendant." United States v. Escalante, 637 F.2d 1197, 1202-03 (9th Cir.), cert. denied, 449 U.S. 856, 66 L. Ed. 2d 71, 101 S. Ct. 154 (1980). Declaring a mistrial "is appropriate only where there has been so much prejudice that an instruction is unlikely to cure it." Id. at 1203. Here, the district court sustained Widergren's objection, struck the challenged testimony, and gave a cautionary instruction. Widergren does not offer any reason why the "strong presumption that the jury followed the court's instruction," United States v. Vincent, 758 F.2d 379, 382 (9th Cir.) (internal quotation omitted), cert. denied, 474 U.S. 838, 88 L. Ed. 2d 95, 106 S. Ct. 116 (1985), should not apply in this case.

We turn now to the sentencing issues raised by Widergren. We review de novo the district court's legal interpretations of the Guidelines. United States v. Foppe, 993 F.2d 1444, 1452 (9th Cir. 1993). Its ...

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