Professional Documents
Culture Documents
______________________
No. 97-4342
Plaintiff-Appellee,
v.
MIJA S. ROMER,
Defendant-Appellant.
______________________
No. 97-4343
Plaintiff-Appellee,
v.
KHEM C. BATRA,
Defendant-Appellant.
______________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
______________________
______________________
JOEL I. KLEIN
Assistant Attorney General
OF COUNSEL: A. DOUGLAS MELAMED
Deputy Assistant Attorney General
ANTHONY V. NANNI
JAMES T. CLANCY JOHN J. POWERS, III
KATHLEEN M. MAHONEY MARION L. JETTON
Attorneys Attorneys
U.S. Department of Justice U.S. Department of Justice
Antitrust Division Antitrust Division
1401 H Street, N.W. 601 D Street. N.W.
Washington, D.C. 20530 Washington, D.C. 20530
(202) 514-2414
TABLE OF CONTENTS
SUMY OF ARGUMNT .
ARGUMNT
Affecting Commerce.
Obstruction of Justice.
CONCLUSION
CERTIFICATE OF SERVICE
..
TABLE OF AUTORITIES
FEDERA CAES
Berger v. United States , 295 U. S. 78 (1935)
Dominion Parking Co . v. Baltimore & Ohio R. , 450 F. Supp.
441 (E. D. Va. 1978) . . 20
Estate Construction Co. v. Miller & Smith Holding Co.
14 F. 3d 213 (4th Cir. 1994) . . 16
Fry v. United States , 421 U. S. 542 (1975) . 22
Garraghty v. Jordan , 830 F. 2d 1295 (4th Cir. 1987) . 31
Goldfarb v. Virginia State Bar , 421 U. S. 773 (1975) 13, 17, 18,
Griffin v. United States , 502 U. S. 46 (1991) . 16
Hammes v. Aamco Transmission. Inc. , 33 F. 3d 774
(7th Cir. 1994) . 21
McLain v. Real Estate Board of New Orleans. Inc.
(1980) , 444 U. S. 232
. 16, 20,
Summi t Health Ltd. v. Pinhas , 500 U. S. 322 (1991) 21, 22, 23,
Turner v. United States , 396 U. S. 398 (1970) . 16
United States v. Arthurs , 73 F. 3d 444 (1st Cir. 1996) . 27
United States v. Ashley Transfer & Storage Co. , 858 F.
221 (4th Cir. 1988), cert. denied , 490 U. S. 1035 (1989) . 16
United States v. Bailey , 112 F. 3d 758 (4th Cir.
cert. denied , 66 U. W. 3262 (U. S. Oct. 6, 1997) . 24
United States v. Browning , 723 F. 2d 1544 (11th Cir. 1984) . 42
United States v. Collins , 78 F. 3d 1021 (6th Cir.
cert. denied , 117 S. Ct. 189 (1996) . . 42
United States v. Crump , 120 F. 3d 462 (4th Cir. 1997) . 24
United States v. Dunnigan 507 U. S. 87 (1993) . 49
United States v. Floresca 38 F. 3d 706 (4th Cir. 1994) . 38
United States v. Foley , 598 F. 2d 1323 (4th Cir. 1979),
cert. denied , 444 U. S. 1043 (1980) . 17, 19,
),
513 U. 19,
United States v. Heffernan , 43 F. 3d 1144 (7th Cir. 1994) . 44
U. S . S . G.
3 C1 . 1 46-49
. -
3D1. 1 . 15
3D1. 2 12,
3D1. 4 . 45
3E1.
STATE STA'lES
Va. Code 59. 1-9. seq
MISCELLAOUS
ABA Antitrust Section, Samle Ju Instructions in Criminal
Antitrust Cases (1984) .
IN THE UNITED STATES COURT OF APPEALS
No. 97-4342
MIJA S. ROMER,
Defendant- Appellant.
97- 4343
UNITED STATES OF AMRICA,
Plaintiff -Appellee,
KHEM C. BATRA,
Defendant - Appellant.
was entered in both cases on April 18, 1997. JA 16, 35. Notices
of appeal were filed on April 18, 1997 (Romer), and April 28,
of partnerships?
pay the lender who holds a deed of trust on the property, and
also to pay any other liens on the property and, if there are
78, 82- 83, 96. The lender initiates foreclosure, appointing the
and disburses the funds received from the buyer to lenders, lien
holders, and former owners. JA 92. The parties stipulated that
bidding that if Gulley would let Rosen have it, they " could work
it out later. JA 124-25. After the auction, five or six
Gulley that the highest bidder would get the property, and the
other bidders would get a prorated" share of the high- bid amount.
before every auction but the agreement carried " forward; there was
sent Gulley regarding the Burke property, setting out who bid on
it at the second auction and the pay-offs those bidders received;
Gulley also identified the $1, 560 pay-off check that Gulley
that check back, so that she could tear it up; Romer also told
Gulley that if he could not return the check, he should say that
it was for something other than the pay-off, such as for
Highway, at which a man he did not know offered to pay Gulley and
others $5000 each not to bid. Gulley collected $5000 from the
man, and Romer and conspirator Ken Arnold told Gulley that he
should split it with the other conspirators, like other bids; but
Gulley disagreed and kept the entire amount. JA 153 - 55; see also
JA 409-10, 414-37 (Romer claims share saying " this is ongoing
partnership") .
Alexander Giap was a member of the conspiracy (JA 198) who
public auction, they would not bid against each other, in order
JA 659. Not every member was present at every auction that Giap
attended; conspiracy members would let the others know they were
"interested" by various signal.s, such as whispering, bumping
elbows, or putting in a bid. JA 198 - 99, 643, 657, 664, 666.
Giap joined the conspiracy at the same auction that Gulley did.
JA 193-96.
Giap met Batra because Giap I s wife worked in Batra' s travel
02, 624- 25, 630. Giap participated with Romer and Batra in
held for five properties were played for the jury, and revealed
Batra and Romer participating in the coffee auctions. JA 216- 48,
concurred in this plan, pursuant to which it was agreed that " you
payoffs in cash. JA 327, 331- 36; see also JA 666 (Giap testifies
to " cash rule" The tapes also recorded Romer and Batra
explaining how the conspiracy worked to new members, Jessica Park
and Cindy Shams. Romer told Park to write just the premium on
the slip of paper, and that she would have to make payoffs in
cash. JA 366- 70. Romer added " we don' t want any check writing
between us. If we get caught by IRS, we'll be dead. JA 373.
In addition, the conspirators were recorded discussing whether
article, Romer asked whether Giap and others had read the article
and then said that she wanted "to remind everybody" not to
mention their agreement to others because " we can go to jail for
it. " JA 452-57. Despite their concern over the Post article,
however, the conspirators continued to bid non- competitively and
house and others on April 12, 1995 (JA 693, 1048), Romer called
Giap and said the group needed to meet to get their stories
straight. " JA 472. Giap recorded his conversation with Batra
the following day. JA 473- 493. Batra told Giap that he had gone
through his files and thrown out a folder cover on which he had
written the payoffs he made on the first property he bought.
475, 478, 489- 90. Batra also talked to Giap about what Batra'
story" would be and noted that " (t) he Government doesn' t know
anything about coffee table. JA 480, 484 - 85 .
Giap, Romer, Batra, and Gulley met about five days later.
493-528. Romer was very upset when Giap told her that he had
anything on me" (JA 506), and she worried aloud that there was no
innocent explanation for the payoffs (JA 507 , 527). Romer
characterized the agreement: "it' s mutual agreement. Tha t
sort mutually agreed not to bid the price up. JA 508, 512.
Romer agreed with Batra and Giap that, although they never sat
down before the auction and decided who would bid, they did have
JA 529 - 31 . 5
Both appellants testified at trial. Romer admitted that
JA 819. Romer also stated that, if she bid at all, she stopped
you joined the group, you were not supposed to bid against the
pay- offs on 6 properties. 263- 69, 957, 974- 78, 1021- 22,
auction and told her that the price that everyone wrote down at
the second auction was the price that they would have been
willing to pay at the public auction. JA 1041-42;
see also
The jury convicted both Romer and Batra on the Sherman Act
count (count 1). After a bench trial, the court convicted Romer
35, 1437-39.
In sentencing Romer, the court concluded that her volume of
offense level (10), but added one point for submitting non
competitive bids. JA 1403- 11, 1455;
G. ~ 2R1. 1(b).
was level 14 (JA 1461- 62). Noting that the case was " aggravated"
theory . The foreclosure auctions that were the obj ect of the
Clause to enact the Shermn Act. Indeed, LQpez makes clear that
it does not apply to statutes like the Shermn Act that directly
regulate commerce and that explicitly require a case- by-case
instructed the jury to apply the law to the facts of this case.
The court properly refused two jury instructions
played to the jury. It was highly relevant, and the jury could
Romer could not have been surprised when the entire scheme was
proved at trial. Even if there was a variance, it was harmess
because Romer was informed of the charges against her and was
conspiracy. The fact that the conspiracy had the additional goal
of making it more difficult to detect bid-rigging was not a
396 U. S. 398, 420 (1970). For the reasons stated in the district
proved that the appellants' activities were "in commerce, " the
the flow of interstate commerce " need have but minimal impact
upon the commerce to ' affect' it, since by definition they are a
uni ted States v. Guthrie , 814 F. Supp. 942, 944-46 (E. D. Wash.
1993) (foreclosure auction bid-rigging scheme; jury could find
that scheme was "in commerce" for purposes of Shermn Act where
II
out of state banks initiated the foreclosure process on the
similar facts in
United States v. Foley , 598 F. 2d at 1327-
held that the activities of the real estate brokers were "
parking lot, which obviously did not physically move across state
in criminal and civil antitrust cases ignores the fact that the
commerce" test had not been met in that case. D. Br. 24 n. But
the Court did not reach the issue and merely decided that there
9.
was enough evidence on the " affecting commerce" theory to
withstand a motion to dismiss.
to and inseparable" from the interstate transactions (.a
Goldfarb , 421 U. S. at 783- 84) -- and of course it is. As an
activity in the flow of commerce, the bidding can be, and has
consequences, but rather upon the potential harm that would ensue
typically bid the amount of the outstanding loan and collect all
(9363 Peter Roy Court) Thus, the government showed both attual
),
any event,
Lopez was an " affecting commerce" case, and does not
address the "in flow" prong of the Shermn Act. United States v.
Tohnson 114 F. 3d 476, 479 n. (4th Cir. cert. denied , 66
otherwise.
In response to the jury' s question (JA 1321), the court told
m going to try to give you some analogies that may help you
Let'
s say you had a situation where three Volvo dealers here
in Virginia decided that they were going to get together and,
rather than be in competition with each other, they were going
to try to have an agreement about the various prices that they
would pay to Volvo of America for their cars and the price
that they would sell them for.
Appellants claim (D. Br. 28-29) that the Shermn Act should
not be enforced against them because states have the primary
responsibility for enforcing criminal law. LQpez of course does
not stand for such a broad proposition. In support, they assert
that Virginia makes price-fixing " unlawful. " D. Br. 28 n. But 10.
the virginia antitrust statute (Va. Code ~ 59. 1-9. et seQ ) is a
civil statute only.
~ 59. 1-9. 8, -9. 11. And appellants offer
no support for the unprecedented suggestion that Congress
intended state civil antitrust statutes to preempt criminal
Shermn Act enforcement.
---- --
in this case is the extent to which you find that there are
All right?
because cars are mobile, while real estate is not. D. Br. 30 - 31.
But the jury instruction makes clear that the government was
alleging that funds and debts were the goods in the flow of
They also complain (D. Br. 31) that the instruction diverted
the jury' s attention from "the activities of the defendants" by
instructing the jury to consider if the foreclosure process in an
Far from "direct (ingJ the verdict, " the court correctly told the
Appellants did not obj ect, before the jury retired, to the
1380 (7th Cir. 1995), cert. denied , 117 S. Ct. 87 (1996). If the
party fails to object, the matter will be reviewed only for plain
--
" (t) he only term that has been used in this case has been
the case came in. JA 1082. Instead, the court decided " I
r A' ct.
Thus, Batra received the instruction that the evidence
was well within its discretion. uni ted Stat s v. Lozano , 839
As to Batra' s claim (D. Br. 33) that the jury should have
been instructed that the government must prove that " the
rigging (JA 1205- 06), which followed closely the ABA Antitrust
19 (1984).
As to the court' s failure to include the portion of
Instruction 69 that gave examples of what partners do - - such
share research or pool resources (JA 1310A) - - these aspects of
partnership are common knowledge, and there was no need for the
likelihood of detection.
, JA 451-59. The government
introduced a copy of the Post article (JA 1363 - 63C), arguing that
is was relevant as the basis for the discussions and actions of
after October 1, 1994 (JA 448), but Romer' s counsel said that he
article was about conduct that " may or may not be similar to the
conduct involved here" and that the conduct occurred in D. C., not
in Virginia. JA 449-451.
During a conference after the jury had been instructed but
testimony as well.
, JA 816, 822- 24, 1010-11.
potential hearsay and was not being admitted for the truth of its
assert this claim now, absent plain error. And of course the
of their own conduct and led them to change their methods. The
jury was entitled to examine the document discussed at length on
that the article was not to be considered for the truth of its
instructed jury is unclear. In any event, the jury was told that
***
long as the prosecutor does not imply through his questions that
Romer applied for a real estate loan from Burke and Herbert, an
FDIC- insured bank. JA 880 - 81. Romer met wi th Mr. Burke, the
bank chairmn, who asked her the amount of her income. She told
him that it was about $90, 000 the prior year. The banker asked
her that day for a copy of her income tax return. JA 1244-45.
The bank approved the loan, relying in part on Romer' s oral
income, about two weeks after the loan was approved. In fact,
Romer had not filed a 1992 tax return at that time, and when she
the false income tax return because that was the only evidence
41. But while Romer obj ected to testimony concerning the oral
the income tax return itself" (JA 1244), she never expressly-made
the variance and constructive amendment arguments she now makes
in this Court and, therefore, must establish plain error. uni ted
States v. Young , 470 U. S. 1, 15 (1985). But even assuming that
she did properly preserve the arguments she now makes, she was
for a loan 5) in the amount of $80, 000 6) from Burke and Herbert,
the scheme described in the indictment. Romer had told Mr. Burke
that her income was $90, 000, and she obtained a loan on that
would have called the loan based only on a discovery that Romer
had a negative income (JA 1251), Romer did not know this; and a
bank does not have actually to suffer a loss under 18 U.
(1st Cir. 1987) (mail fraud). Thus, both the oral statement and
bogus tax return were interrelated parts of a fraudulent scheme.
Contrary to Romer' s assertions (D. Br. 39, 40), the court did
indictment, Romer was not prejudiced and any error was harmless.
the indictment.
371. This Court will review the evidence in the light most
The indictment alleged that Romer from about March 22, 1994,
premiums took place after the March 22, 1994 agreement was made.
(McWhorter Place) .
In convicting Romer of Count 5, the court stated that on the
--
Romer now argues that there was no conspiracy because " every
he was not " trying" to cheat the IRS, but was " concerned about
the paper trail" (JA 289). But he did not say that he reported
all cash, and he appeared to recognize that the effect of the
scheme was to cheat the IRS. Indeed, Gull ey testified that after
the Royal Ridge auction, the group discussed using cash to avoid
a " paper trail" of the second auctions, and in fact used cash
United States v. Vogt , 910 F. 2d 1184, 1202 (4th Cir. 1990), cert .
denied , 498 U. S. 1083 (1991) (impeding IRS need only be " one
purpose" of Klein conspiracy) United States v. Browning , 723
taxes") . Thus, impeding the IRS was not merely a " collateral
effect" of the agreement as Romer asserts (D. Br. 43-44, quoting
increase in her offense level under ~ 2R1. 1 (b) (2) . JA 1499 -1500.
Romer, however, had participated in at least 11 auctions
competed honestly but did not. The one- level increase for bid-
rigging operated as intended, to reflect the seriousness of her
participation.
Romer' s reliance on
United States v. Heffernan , 43 F. 3d 1144
and that the court failed to state its reasons for departing.
Ibid. This argument is frivolous. The eighteen month sentence
was imposed because the court grouped the anti trust and tax
23 In a complementary bidding
scheme, the members collect the
the bank about her income when asked, but went to the trouble of
she did not try to hide anything by failing to include the lines
earlier $400, 000 in sale proceeds, but " (i) n the whole scheme of
things, it was not significant. JA 1456-57. The court
responded (JA 1457-58, 1462):
Well, I have problems with somebody who' s a CPA being that lax
determination. "
Romer now asserts that the court erred because her " oversight"
was inadvertent" and because the court did not make a specific
CONCLUSION
affirmed.
Respectfully submitted.
JOEL I. KLEIN
OF COUNSEL:
A. DOUGLA MELAD
Deputy Assistant Attorney General
ANHONY V. NANI
JAMS T. CLACY JOHN J. POWERS, III
KATHLEEN M. MAONEY
At torneys
MAION L.
At torneys
JETTON
/J.:vu"' Y; -t'
u. S. Department of Justice u. S. Department of Justice
Washington. D. C.
20530 Washington. D.
(202) 514- 2414
C.
20530
OCTOBER 1997
CERTIFICATE OF SERVICE
John M. Tran
Alexandria, VA 22314
John H. Shenefield
Donald C. Klawiter
1800 M St. N.
Washington, D. C. 20036
STATUORY ADDENDUM
both.
18 U. C. ~ 1344 provides:
or artifice -
(1) to defraud a financial institution; or