UNITED STATES OF AMERICA v. DALE VERNON THRUSH (2024)

OPINION AND ORDER ADDRESSING PARTIES' SUPPLEMENTAL BRIEFS, MODIFYING JURY INSTRUCTIONS, AND EXCLUDING EVIDENCE OF 402'S PAYMENTS AND USE OF MONEY FOR NON-PPP-APPROVED EXPENSES AT TRIAL

Defendant Dale Vernon Thrush is charged with wire fraud, in violation of 18 U.S.C. § 1343, for making material misrepresentations on Paycheck Protection Program (PPP) loan and loan-forgiveness applications associated with his business, 402 N. Mission St. LLC (“402”). The Government alleges that Defendant knowingly devised a scheme to defraud the Government of money by misrepresenting his eligibility for the loans, as well as his subsequent use of the loan proceeds. Defendant's jury trial is scheduled to begin on July 16, 2024. ECF No. 168.

In May 2024, this Court sent draft jury instructions to the Parties. In June 2024, this Court overruled Defendant's three objections to the draft jury instructions and issued a second draft to the Parties. ECF Nos. 172; 172-1. This Court also noted—after reviewing both Parties' expert witness disclosures—that “the Parties are attempting to advance two very different—and incompatible—interpretations of the CARES Act and relevant PPP loan regulations.” ECF No. 172 at PageID.2884. The Government, on the one hand, asserts that Defendant—and all PPP borrowers—were required to spend the specific loan proceeds only on PPP-approved expenses. See ECF Nos. 170 at PageID.2853 (“Money is not fungible under the PPP loan program[.]”); 173 at PageID.2911–12 (arguing that “the SBA intended individual borrows to spend [the specific] loan funds on enumerated expenses”). Defendant, on the other hand, argued that PPP loan proceeds were fungible and could be deposited into—and moved between—any of 402's bank accounts because “there was no clear guidance from the SBA on how to deposit the PPP loan funds,” ECF No. 171 at PageID.2878, “so long as any funds from [a borrower's business] were in fact used to pay for PPP-approved expenses, [the borrower] complied with PPP-loan-use requirements,” ECF No. 172 at PageID.2887 (emphasis in original). Recognizing that the “dispute must be reconciled in advance of trial so this Court can accurately instruct the jury about what the law is[,]” id. at PageID.2884 (emphasis in original), the Parties were directed to submit supplemental briefs “that identifie[d] the relevant legal authority regulating the management of PPP-loan funds, including the fungibility of the funds and the separation or isolation of funds from other business funds.” Id. at PageID.2888.

Neither Party filed objections to this Court's second draft jury instructions. But this Court will nevertheless modify the jury instruction based on the Parties' Supplemental Briefs, ECF Nos. 173; 179, to ensure instructions at trial accurately reflect the law regarding the use of PPP loan proceeds.

The Government responded to this Court's supplemental-briefing directive, surprisingly, that it “does not understand that there is a disagreement [between the parties] regarding the application of the relevant law governing PPP loans.” ECF No. 173 at PageID.2906. To that end, the Government noted that, at trial, it would not argue that the law requires PPP loan proceeds to be deposited into a borrower's bank account separate and apart from their other cash funds, but will argue instead that “PPP loan regulations and specific PPP loan agreement terms signed by Defendant” required the PPP loan proceeds Defendant received to be spent “only on the expenses enumerated in his specific PPP loan agreement.” Id. at PageID.2906–07.

Despite denying the existence of any disagreement, the Government seemingly doubles down on its theory that the use of the specific, particular loan proceeds deposited into 402's bank account is the only relevant inquiry. The core of the Government's argument is that, under PPP Loan Rules, Defendant could not have used other cash funds for PPP-approved expenses and still be in compliance with PPP Loan Rules. See generally ECF No. 173. Indeed, the Government asserts that “PPP Loan Regulations [r]equire the Defendant to” spend the specific loan proceeds on PPP-approved expenses. ECF No. 173 at PageID.2911 (emphasis added). But the Government cites no rule, regulation, statute, or legal precedent in support of its contention. See generally ECF No. 173. And—importantly—although the Government emphasizes the use of the word “proceeds” in the PPP Loan Application and PPP Loan-Forgiveness Application, suggesting it means the specific dollars received from the loan, the term is undefined in all relevant PPP applications, regulations, and applicable statutes.

On the other hand, Defendant—in his supplemental briefing—acknowledged the Parties' disagreement about the law governing PPP loan funds. ECF No. 179 at PageID.2995. Defendant argues that the “SBA was not clear on its guidance for the PPP” and that there is no legal authority supporting the Government's contention that “proceeds” meant “the exact same loan dollars” received from the PPP Loan. Importantly, Defendant points out, the loan-forgiveness applications instructed borrowers that the “requested loan forgiveness amount” was the amount of money spent on cash compensation, employee benefits, and owner compensation, plus any amount spent on eligible nonpayroll costs. See ECF No. 124-3 at PageID.2208. The loan forgiveness application did not require the specific dollars received from the loan to be spent on PPP-approved expenses. It required only the total amount of money spent on PPP-approved expenses.

As this Court noted in its June 4, 2024 Opinion and Order, “if no relevant legal authority is identified” in support of the Government's contention that borrowers could not comingle their PPP loan funds with other cash funds of their business, logic compels the opposite conclusion: “that the transfer of funds between [402's bank] accounts was permissible.” ECF No. 172 at PageID.2888, n. 4. As explained in the same Opinion and Order, this conclusion “seemingly forecloses the Government's position that loan proceeds were not fungible and that the funds could not be comingled with other funds of the borrower.” Id. Importantly, the Parties' supplemental briefs do not contain any legal authority supporting the Government's contention. ECF Nos. 173; 179. And this Court has been unable to identify any supporting authority elsewhere. Thus, this Court concludes that PPP-loan funds were fungible and could be comingled with a borrower's other funds to pay PPP-approved expenses. Accordingly, the jury instructions will be modified to reflect that legal conclusion, and the jury will be provided with the following instruction:

There was no PPP Rule or other law prohibiting the comingling of PPP loan proceeds with other borrower funds. To that end, PPP loan proceeds were fungible, meaning they were interchangeable with other funds of the borrower.

See Exhibit 1 at 11.

In accordance with the instructions that will be given to the jury, evidence of 402's payments for PPP-approved expenses during the covered periods up to $231,060.00 will be admissible at trial. Conversely, any evidence of payments or expenditures for non PPP-approved expenses will be excluded at trial, because such evidence is irrelevant. See FED. R. EVID. 401 (“Evidence is relevant if (a) it has any tendency to make a fact more or less probable than it would be without the evidence; and (b) the fact is of consequence in determining the action.”); FED. R. EVID. 402 (“Irrelevant evidence is not admissible.”). What the Government must prove to the jury under the relevant PPP law here is that the Defendant did not pay $231,060.00 in PPP-approved expenses during the covered periods like he claimed he did in his PPP loan-forgiveness applications. Accordingly, any evidence of payments for non PPP-approved expenses would have a tendency to confuse the jury and would substantially outweigh any marginal probative value. See FED. R. EVID. 403. So, such evidence must be excluded at trial.

Accordingly, it is ORDERED that the Second Draft Jury Instructions, ECF No. 172-1, are MODIFIED to accurately reflect the law regarding the use of PPP loan funds. The modified jury instructions are attached as Exhibit 1 to this Order.

Further, it is ORDERED that any evidence of 402's payments for non PPP-approved expenses will be EXCLUDED at trial.

THIRD DRAFT JURY INSTRUCTIONS

Table of Contents

I. GENERAL INSTRUCTIONS 1.01 INTRODUCTION 1.02 JURORS' DUTIES 1.03 PRESUMPTION OF INNOCENCE, BURDEN OF PROOF, REASONABLE DOUBT 8.05 PENALTY 4 II. EVALUATION OF THE EVIDENCE 1.04 EVIDENCE 1.05 CONSIDERATION OF EVIDENCE 1.06 DIRECT AND CIRCUMSTANTIAL EVIDENCE 1.07 CREDIBILITY OF WITNESSES 1.08 NUMBER OF WITNESSES 7.02 DEFENDANT'S ELECTION NOT TO TESTIFY OR PRESENT EVIDENCE 7.03 OPINION TESTIMONY 7.03A WITNESS TESTIFYING TO BOTH FACTS AND OPINIONS [IF NECESSARY] 0.00 PRESENTATION OF WITNESSES/EXHIBITS 1.09 LAWYER'S OBJECTIONS 2.01 CONCLUSION TO EVALUATION OF EVIDENCE III. BACKGROUND OF THE CARES ACT AND PPP LOANS THE CARES ACT AND THE PAYCHECK PROTECTION PROGRAM IV. SUBSTANTIVE INSTRUCTIONS 10.02(1) WIRE FRAUD (18 U.S.C. § 1343) 2.08 INFERRING REQUIRED MENTAL STATE 7.21 FRAUD – GOOD FAITH DEFENSE 10.02(2) WIRE FRAUD (18 U.S.C. § 1343) 7.21 STIPULATIONS [IF NECESSARY] 0.00 CLOSING ARGUMENTS V. DELIBERATIONS AND CONCLUDING INSTRUCTIONS 8.01 DELIBERATIONS AND VERDICT 8.02 RESEARCH, INVESTIGATION, AND OUTSIDE COMMUNICATIONS 0.00 EXHIBITS 8.10 JUROR NOTES 8.03 UNANIMOUS VERDICT REQUIRED 8.04 DUTY TO DELIBERATE 8.06 VERDICT FORM 8.08 VERDICT LIMITED TO CHARGE AGAINST THIS DEFENDANT 8.09 COURT HAS NO OPINION

I. GENERAL INSTRUCTIONS

1.01 Introduction

(1) Members of the jury, now it is time for me to instruct you about the law that you must follow in deciding this case.

(2) I will start by explaining your duties and the general rules that apply in every criminal case.

(3) Then I will explain the elements, or parts, of the crimes that the defendant is accused of committing.

(4) Then I will explain some rules that you must follow in evaluating particular testimony and evidence.

(5) And last, I will explain the rules that you must follow during your deliberations in the jury room, and the possible verdicts that you may return.

(6) Please listen carefully to everything I say.

(7) I have given each of you a copy of these instructions for your use while deliberating. They are available to each of you. If you have questions about the law or your duties as jurors, then you should consult the instructions given to you.

1.02 Jurors' Duties

(1) You have two main duties as jurors. The first one is to decide what the facts are from the evidence that you saw and heard here in court. Deciding what the facts are is your job, not mine, and nothing that I have said or done during the course of this trial was meant to influence your decision about the facts in any way.

(2) Your second duty is to take the law that I give you, to apply it to the facts, and to decide if the government has proved the defendant guilty beyond a reasonable doubt. It is my job to instruct you about the law, and you are bound by the oath that you took at the beginning of the trial to follow the instructions that I give you, even if you personally disagree with them. This includes the instructions that I gave you before and during the trial, and these instructions I am now providing. All the instructions are important, and you should consider them as a whole, together.

(3) The lawyers might talk about the law during their arguments. But if what they said is different from what I say, then you must follow what I say. What I say about the law controls.

(4) Perform these duties fairly. Do not let any bias, sympathy, or prejudice that you might feel toward one side or the other influence your decision in any way.

1.03 Presumption of Innocence, Burden of Proof, Reasonable Doubt

(1) As you know, the defendant has pled not guilty to the crime charged in the indictment. The indictment is not any evidence at all of guilt. It is just the formal way that the government tells the defendant what crimes he is accused of committing. It does not even raise any suspicion of guilt.

(2) Instead, the defendant starts the trial with a clean slate, with no evidence at all against him, and the law presumes that he is innocent. The presumption of innocence stays with him, unless the government presents evidence here in court that overcomes the presumption and convinces you beyond a reasonable doubt that he is guilty.

(3) This means that the defendant has no obligation to present any evidence at all, or to prove to you in any way that he is innocent. The government must prove that he is guilty, and this burden stays on the government from start to finish. You must find the defendant not guilty unless the government convinces you beyond a reasonable doubt that he is guilty.

(4) The government must prove every element of the crime charged beyond a reasonable doubt. Proof beyond a reasonable doubt does not mean proof beyond all possible doubt. Possible doubts or doubts based purely on speculation are not reasonable doubts. A reasonable doubt is a doubt based on reason and common sense. It may arise from the evidence, the lack of evidence, or the nature of the evidence.

(5) Proof beyond a reasonable doubt means proof that is so convincing that you would not hesitate to rely and act on it in making the most important decisions in your lives. If you are convinced that the government has proved the defendant guilty beyond a reasonable doubt, then say so by returning a guilty verdict. But if you are not convinced, then say so by returning a not-guilty verdict.

8.05 Penalty

(1) If you decide that the government has proved the defendant guilty, then it will be my job to decide what the appropriate punishment should be.

(2) Deciding what the punishment should be is my job, not yours. It would violate your oaths as jurors to even consider the possible punishment in deciding your verdict.

(3) Your job is to look at the evidence and to decide if the government has proved the defendant guilty beyond a reasonable doubt.

II. EVALUATION OF THE EVIDENCE

1.04 Evidence

(1) You must base your decision on only the evidence that you saw and heard here in court. Do not let rumors, suspicions, or anything else that you may have seen or heard outside of court influence your decision in any way.

(2) The evidence in this case includes only what the witnesses said while they were testifying under oath, the exhibits that I allowed into evidence, and the stipulations that the lawyers agreed to.

(3) Nothing else is evidence. The lawyers' statements and arguments are not evidence. Their questions and objections are not evidence. My legal rulings are not evidence. And my comments and questions are not evidence.

(4) During the trial, I did not let you hear the answers to some of the questions that the lawyers asked. And sometimes I ordered you to disregard things that you saw or heard, or I struck things from the record. You must completely ignore all those things. Do not even think about them. Do not speculate about what a witness might have said. Those things are not evidence, and you are bound by your oath not to let them influence your decision in any way.

(5) Make your decision based on only the evidence, as I have defined it here, and nothing else.

1.05 Consideration of Evidence

(1) You are to consider only the evidence in the case. You should use your common sense in weighing the evidence. Consider the evidence in light of your everyday experience with people and events and give it whatever weight you believe it deserves. If your experience tells you that certain evidence reasonably leads to a conclusion, then you are free to reach that conclusion.

(2) In our lives, we often look at one fact and conclude from it that another fact exists. In law we call this an “inference.” A jury may make reasonable inferences, unless otherwise instructed. Any inferences that you make must be reasonable and based on the evidence in the case.

(3) The existence of an inference does not change or shift the burden of proof from the government to the defendant.

1.06 Direct and Circumstantial Evidence

(1) Some of you might have heard the terms “direct evidence” and “circumstantial evidence.”

(2) Direct evidence is simply evidence like the testimony of an eyewitness which, if you believe it, directly proves a fact. If a witness testified that he saw it raining outside and you believed him, then that would be direct evidence that it was raining.

(3) Circumstantial evidence is simply a chain of circumstances that indirectly proves a fact. For example, if someone walked into the courtroom wearing a raincoat covered with drops of water and carrying a wet umbrella, then that would be circumstantial evidence from which you could conclude that it was raining.

(4) It is your job to decide how much weight to give the direct and circumstantial evidence. The law makes no distinction between the weight that you should give to either one and does not say that one is any better evidence than the other. You should consider all the evidence, both direct and circumstantial, and give it whatever weight you believe it deserves.

1.07 Credibility of Witnesses

(1) Another part of your job as jurors is to decide how credible or believable each witness was. That is your job, not mine. It is up to you to decide if a witness's testimony was believable, and how much weight you think it deserves. You are free to believe everything that a witness said, or only part of it, or none of it at all. But you should act reasonably and carefully in making these decisions.

(2) Let me suggest to you some things to consider in evaluating each witness's testimony.

(A) Ask yourself if the witness was able to clearly see or hear the events. Sometimes even an honest witness might not have been able to see or hear what was happening and might make a mistake.

(B) Ask yourself how good the witness's memory seemed to be. Did the witness seem able to accurately remember what happened?

(C) Ask yourself if there was anything else that may have interfered with the witness's ability to perceive or to remember the events.

(D) Ask yourself how the witness acted while testifying. Did the witness appear to be honest? Or did the witness appear to be lying?

(E) Ask yourself if the witness had any relationship to the government or the defendant, or anything to gain or lose from the case, that might influence the witness's testimony. Ask yourself if the witness had any bias, or prejudice, or reason for testifying that might cause the witness to lie or to slant the testimony in favor of one side or the other.

(F) Ask yourself if the witness testified inconsistently while on the stand, or if the witness said or did something, or failed to say or do something at any time, that is inconsistent with what the witness said while testifying. If you believe that the witness was inconsistent, then ask yourself if this makes the witness's testimony less believable. Sometimes it might; others, it might not. Consider whether the inconsistency was about something important, or about some unimportant detail. Ask yourself if it seemed like an innocent mistake, or if it seemed deliberate.

(G) And ask yourself how believable the witness's testimony was in light of all of the other evidence. Was the witness's testimony supported or contradicted by other evidence that you found believable? If you believe that a witness's testimony was contradicted by other evidence, then remember that people sometimes forget things, and that even two honest people who witness the same event might not describe it exactly the same way.

(3) These are only some of the things that you may consider in deciding how believable each witness was. You may also consider other things that you think shed some light on the witness's believability. Use your common sense and your everyday experience in dealing with other people. And then decide what testimony you believe, and how much weight you believe it deserves.

1.08 Number of Witnesses

(1) Another point about the witnesses. Sometimes jurors wonder if the number of witnesses who testified makes any difference.

(2) Do not make any decisions based on only the number of witnesses who testified. What is more important is how believable the witnesses were, and how much weight you think their testimony deserves. Concentrate on that, not on the numbers.

7.02A Defendant's Election Not to Testify or Present Evidence

(1) A defendant has an absolute right not to testify or to present evidence. The fact that he did not testify or present any evidence cannot be considered by you in any way. Do not even discuss it in your deliberations.

(2) Remember that it is up to the government to prove the defendant guilty beyond a reasonable doubt. It is not up to the defendant to prove that he is innocent.

7.03 Opinion Testimony

(1) You have heard the testimony of Mary Svengros and [NAME OF DEFENDANT'S EXPERT WITNESS], who testified as opinion witnesses.

(2) You do not have to accept witness's opinions. In deciding how much weight to give it, you should consider the witness's qualifications and how he reached his conclusions. Also consider the other factors discussed in these instructions for weighing the credibility of witnesses.

(3) Remember that you alone decide how much of a witness's testimony to believe, and how much weight it deserves.

7.03A Witness Testifying to Both Facts and Opinions [IF NECESSARY]

(4) You have heard the testimony of [NAMES HERE, IF NECESSARY], who testified to both facts and opinions. Each of these types of testimony should be given the proper weight.

(5) As to the testimony on facts, consider the factors discussed earlier in these instructions for weighing the credibility of witnesses.

(6) As to the testimony on opinions, you need not accept [NAMES HERE, IF NECESSARY]'s opinion. In deciding how much weight to give it, you should consider the witness's qualifications and how she reached her conclusions along with the other factors discussed in these instructions for weighing credibility.

(7) Remember that you alone decide how much of a witness's testimony to believe and how much weight it deserves.

0.00 Presentation of Witnesses/Exhibits

The law does not require any party to call as witnesses all people who might have been present at any time or place involved in the case, or who might appear to have some knowledge of the matters in issue at this trial. Nor does the law require any party to produce as exhibits all papers and things mentioned in the evidence during the course of the case.

1.09 Lawyer's Objections

(1) There is one more general subject that I want to talk to you about before I begin explaining the elements of the crimes charged.

(2) The lawyers for both sides objected to some of the things that were said or done during the course of the trial. Do not hold that against either side. The lawyers have a duty to object whenever they think that something is not permitted by the rules of evidence. Those rules are designed to make sure that both sides receive a fair trial.

(3) And do not interpret my rulings on their objections as any indication of how I think the case should be decided. My rulings were based on the rules of evidence, and not on how I feel about the case. Remember that your decision must be based only on the evidence that you saw and heard here in court.

2.01 Conclusion to Evaluation of Evidence

(1) That concludes the part of my instructions explaining your duties and the general rules that apply in every criminal case. In a moment, I will explain the elements of the crimes that the defendant is accused of committing.

(2) But before I do that, I want to emphasize that the defendant is only on trial for the particular crimes charged in the indictment. Your job is limited to deciding whether the government has proved the crimes charged.

(3) Also keep in mind that whether anyone else should be prosecuted or convicted for this crime is not a proper matter for you to consider. The possible guilt of others is no defense to a criminal charge. Your job is to decide if the government has proved this defendant guilty. Do not let the possible guilt of others influence your decision in any way.

III. BACKGROUND OF THE CARES ACT AND PPP LOANS

The CARES Act and the Paycheck Protection Program

(1) The Paycheck Protection Program was established by Congress in March 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act, commonly referred to as the CARES Act. The PPP, which was administered by the U.S. Small Business Administration (SBA), permitted eligible small businesses to apply for a PPP loan through a bank authorized to process PPP loan applications. PPP loans were backed by the SBA and required no collateral or guarantee. The SBA was permitted by Congress to enact rules regarding PPP loans, and the SBA Rule in effect during the relevant time period was that if a person who owned 20% or more of a small business was “presently subject to an indictment,” the small business was not eligible to receive a PPP loan. Although PPP-loan applicants were asked on the loan-application if they were subject to an indictment, the loan application did not state that a person owning 20% or more of a small business

(2) If approved, borrowers of PPP loans were authorized to use PPP loan funds for employee compensation, payroll costs, continuing group healthcare benefits, interest payments on any mortgage obligation, rent, utilities, and interest on any debt obligations incurred before the “covered period.”

(A) In this case, the defendant's “covered periods” were:

i. May 13–October 27, 2020 for the first PPP loan for

$110,000.00, disbursed to the defendant on May 13, 2020; and

ii. February 10–April 21, 2021 for the second PPP loan for $121,060.00, disbursed to the defendant on February 10, 2021.

(B) “Payroll costs” is defined as The sum of payments of any compensation with respect to employees, including salary, wages, commission, payment of cash tips, payment for vacation, parental, family, medical, or sick leave, allowance for dismissal or separation, payment required for group healthcare benefits including insurance premiums, payment of any retirement benefit, and payment of State or local tax assessed on the compensation of employees.

(3) PPP loan borrowers were eligible for forgiveness if, during the covered period corresponding with their loan, the borrower met three conditions:

(A) Employee and compensation levels were maintained;

(B) The loan proceeds were spent on payroll costs and other eligible expenses; and

(C) At least 60% of the loan proceeds were spent on payroll costs.

(4) The application for PPP loan forgiveness required authorized representatives of borrowers to certify that they complied with all requirements in the PPP Rules, including rules related to eligible uses of PPP loan proceeds, the amount of loan proceeds used for payroll costs, and the calculation of the borrower's requested loan-forgiveness amount.

(5) There was no PPP Rule or other law prohibiting the comingling of PPP loan proceeds with other borrower funds. To that end, PPP loan proceeds were fungible, meaning they were interchangeable with other funds of the borrower.

(6) The loan-forgiveness application also informed the authorized representative of the borrower that they were to retain all employment records and payroll documentation for four years and all other documentation for three years after the date of the loan-forgiveness application and that the borrower was required to permit an SBA representative to access such documents if requested. However, this civil requirement does not mean that the defendant here must provide all such documentation in this case. The burden of proof in this case, like all criminal cases, is on the government when it elects to prosecute the case under the criminal law of wire fraud.

IV. SUBSTANTIVE INSTRUCTIONS

10.02(1) Wire Fraud (18 U.S.C. § 1343)

(1) The Superseding Indictment charges the defendant with Wire Fraud. For you to find the defendant guilty of Wire Fraud, you must find that the government has proved each and every one of the following elements beyond a reasonable doubt:

(A) First, that the defendant knowingly devised a scheme to defraud in order to deprive another of money or property. The scheme alleged by the government is a scheme by the defendant to submit (1) a Paycheck Protection Program (PPP) loan application with materially false and fraudulent representations; and (2) two PPP loan-forgiveness applications with materially false and fraudulent representations about the use of the PPP loan funds and 402 N. Mission's entitlement to PPP loan forgiveness.

(B) Second, that the scheme included a material misrepresentation or concealment of a material fact.

(C) Third, that the defendant had the intent to defraud.

(D) Fourth, that the defendant used wire communications in interstate commerce in furtherance of the scheme.

2.08 Inferring Required Mental State

(1) Next, I want to explain something about proving a defendant's state of mind.

(2) Ordinarily, there is no way that a defendant's state of mind can be proved directly, because no one can read another person's mind and tell what that person is thinking.

(3) But a defendant's state of mind can be proved indirectly, from the surrounding circumstances. This includes things like what the defendant said, what the defendant did, how the defendant acted, and any other facts or circumstances in evidence that show what was in the defendant's mind.

(4) You may also consider the natural and probable results of any acts that the defendant knowingly did, and whether it is reasonable to conclude that the defendant intended those results. This, of course, is all for you to decide.

7.21 Fraud – Good Faith Defense

(1) A person who acts in good faith on a belief or an opinion honestly held is not punishable under the wire-fraud statute merely because the belief or opinion turns out to be inaccurate, incorrect, or wrong.

(2) A person who acts in good faith does not act with the intent to defraud. It is the government's burden to prove to you, beyond a reasonable doubt, that the defendant acted with an intent to defraud.

10.02(2) Wire Fraud (18 U.S.C. § 1343)

(1) Now I will give you more detailed instructions on some of the terms that we have just used.

(A) A “scheme to defraud” includes any plan or course of action by which someone intends to deprive another of money or property by means of false or fraudulent pretenses, representations, or promises.

(B) The term “false or fraudulent pretenses, representations or promises” means any false statements or assertions that concern a material aspect of the matter in question, that were either known to be untrue when made or made with reckless indifference to their truth. They include actual, direct false statements as well as half-truths and the knowing concealment of material facts.

(C) An act is “knowingly” done if done voluntarily and not because of mistake or some other innocent reason.

(D) A misrepresentation or concealment is “material” if it has a natural tendency to influence or is capable of influencing the decision of a person of ordinary prudence and comprehension.

(E) To act with “intent to defraud” means to act with an intent to deceive or cheat for the purposes of depriving another of money or property.

(F) To “cause” wire, radio or television communications to be used is to do an act with knowledge that the use of the communications will follow in the ordinary course of business or where such use can reasonably be foreseen.

(G) The term “interstate commerce” includes wire, radio or television communications which crossed a state line.

(2) It is not necessary that the government prove all of the details alleged concerning the precise nature and purpose of the scheme or that the alleged scheme actually succeeded in defrauding anyone or that that the use of the wire communication was intended as the specific or exclusive means of accomplishing the alleged fraud.

(3) If you are convinced that the government has proved all of the elements beyond a reasonable doubt, say so by returning a guilty verdict on this charge. If you have a reasonable doubt about any one of the elements, then you must find the defendant not guilty of this charge.

7.21 Stipulations [IF NECESSARY]

The government and the defendant have agreed, or stipulated, to the following facts, which you must accept as proved:

(1) List here if necessary.

0.00 Closing Arguments

(1) Shortly, we will hear the closing arguments of the attorneys. Please pay attention to the arguments but remember that the closing arguments are not evidence. They are only intended to assist you in understanding the evidence and the theory of each party. You must base your decision only on the evidence.

(2) Let me finish up by repeating something that I said to you earlier. Nothing that I have said or done during this trial was meant to influence your decision in any way. You decide for yourselves if the government has proved the defendant guilty beyond a reasonable doubt.

V. DELIBERATIONS AND CONCLUDING INSTRUCTIONS

8.01 Deliberations and Verdict

(1) That concludes the part of my instructions explaining the elements of the crime and the parties' positions. Now I will explain some things about your deliberations in the jury room, and your possible verdicts.

(2) The first thing that you should do in the jury room is to choose someone to be your foreperson. This person will help to guide your discussions, and will speak for you here in court.

(3) Once you start deliberating, do not talk to the jury officer, or to me, or to anyone else except each other about the case. If you have any questions or messages, then you must write them down on a piece of paper, sign them, and then give them to the jury officer. The officer will give them to me, and I will respond as soon as I can. I might have to talk to the lawyers about what you have asked, so it may take me some time to get back to you. Any questions or messages normally should be sent to me through your foreperson.

(4) Do not ever write down or tell anyone how you stand on your votes. For example, do not write down or tell anyone that you are split 6–6, or 8–4, or whatever your vote happens to be. That should stay secret until you are finished.

8.02 Research, Investigation, and Outside Communications

(1) Remember that you must make your decision based only on the evidence that you saw and heard here in court.

(2) During your deliberations, you must not communicate with or provide any information to anyone by any means about the case. You may not use any electronic device or media or application, such as a telephone, cell phone, smart phone, iPhone, Blackberry, or computer, anything involving the Internet or any text or instant-messaging service that could access any applications or programs to communicate to anyone any information about the case. You may only discuss the case in the jury room with your fellow jurors during deliberations. A juror who violates these restrictions jeopardizes the fairness of these proceedings, and a mistrial could result, which would require the entire trial process to start over. I expect that you will inform me as soon as you become aware of another juror's violation of these instructions.

0.00 Exhibits

I will send the exhibits into the jury room when it is time for you to begin your deliberations. If you want to see any exhibits that were admitted into evidence that might not have been sent into the jury room, then use a note to make that request.

8.10 Juror Notes

(1) Remember that if you elected to take notes during the course of the trial, then your notes may be used as only memory aids. You may not give your notes greater weight than your independent recollection of the evidence. You must rely upon your own independent recollection of the evidence or lack of evidence, and you may not be unduly influenced by the notes of other jurors. Notes are not entitled to any more weight than the memory or impression of each juror.

(2) Whether you took notes or not, each of you must form and express your own opinion as to the facts of the case.

8.03 Unanimous Verdict Required

(1) Your verdict, whether guilty or not guilty, must be unanimous.

(2) To find the defendant guilty, all of you must agree that the government has overcome the presumption of innocence with evidence that proves the defendant's guilt for every element of every charged crime beyond a reasonable doubt.

(3) To find him not guilty a certain crime, all of you must agree that the government failed to convince you beyond a reasonable doubt of any element of the charged crime.

(4) Either way, guilty or not guilty, your verdict must be unanimous.

8.04 Duty to Deliberate

(1) Now that all the evidence is in and the arguments are completed, you are free to talk about the case in the jury room. In fact, it is your duty to talk to each other about the evidence, and to make every reasonable effort that you can to reach unanimous agreement. Talk with each other, carefully and respectfully listen to each other's views, and keep an open mind as you listen to what your fellow jurors have to say. Try your best to work out your differences. Do not hesitate to change your mind if you are convinced that other jurors are right and that your original position was wrong.

(2) But do not ever change your mind just because other jurors see things differently, or just to get the case over with. In the end, your vote must be exactly that—your own vote. It is important for you to reach unanimous agreement, but only if you can do so honestly and in good conscience.

(3) No one will be allowed to hear your discussions in the jury room, and no record will be made of what you say. So you should all feel free to speak your own mind.

(4) Listen carefully to what the other jurors have to say, and then decide for yourself if the government has proved the defendant guilty beyond a reasonable doubt.

8.06 Verdict Form

(1) Each of you has been furnished with a copy of the verdict form to aid you in your deliberations. But, after you reach your decision, your foreperson should complete only the official verdict form. The official verdict form will be presented to you in a brown folder by the bailiff along with the exhibits admitted during the trial. The form reads as follows: _____.

(2) If you decide that the government has proved any of the charges against the defendant beyond a reasonable doubt, then say so by having your foreperson mark the appropriate place on the official form. But if you decide that the government has not proved any of the charges against him beyond a reasonable doubt, then say so by having your foreperson mark the appropriate place on the form. Your foreperson should then sign the form, put the date on it, and then return it to me in court through a judicial officer.

8.08 Verdict Limited to Charge Against This Defendant

(1) Remember that the defendant is only on trial for the crimes charged in the indictment. Your job is limited to deciding whether the government has proved those crimes.

(2) Also remember that whether anyone else should be prosecuted or convicted for this crime is not a proper matter for you to consider. The possible guilt of others is no defense to a criminal charge. Your job is to decide if the government has proved this defendant guilty of these crimes. Do not let the possible guilt of others influence your decision in any way.

8.09 Court Has No Opinion

Let me finish up by repeating something that I said to you earlier. Nothing that I have said or done during the course of this trial was meant to influence your decision in any way. You decide for yourselves if the government has proved the defendant guilty beyond a reasonable doubt.

THOMAS L. LUDINGTON United States District Judge