Is That What I Meant? Litigating Intent in White Collar Crime

What do Kenneth Lay, Martha Stewart, Jeffrey Skilling, and Conrad Black have in common? They all intended to do smarmy things. How do we know? The juries told us so. And it was easy for those juries to come to that conclusion. As litigators in white collar crime, we all live in fear of the “you don’t have to know the law to show intent” instruction. And let’s not forget about the “he wasn’t paying attention” instruction, the “willful blindness” instruction, and “‘knowledge’ includes deliberate avoidance of knowledge” – the much feared “ostrich instruction.

Intentionality clearly plays a crucial role in white collar criminal prosecutions. In fact, it is usually a key element of the charged white collar offenses – be it conspiracy, mail fraud, wire fraud, securities fraud, bank fraud, falsifying books and records, insider trading, money laundering, or racketeering. Recent white collar criminal prosecution history is replete with examples of executives who were convicted based upon juries finding them guilty of intending to commit the offenses with which they were charged: Lay and Skilling of Enron, Ebbers of WorldCom, Black of Hollinger International, Rigas of Adelphia, Shelton of Cendant, Olis of Dynergy, Bayly of Merrill Lynch, Early of Ogilvy & Mather, Brown of Rite Aid, and the list goes on. With rare exceptions, they get us every time.

Bringing jurors to the conclusion that our defendants intended to cheat, intended to lie, and intended to make off with grandpa’s pension has been all too easy for the prosecution. Why? Because prosecutors get the jury instructions they want, and they mention the elements of those instructions over and over in their presentations.

Admittedly, as criminal defense attorneys in white collar cases, if we find ourselves in front of a jury, we have already lost most of the battle. But in those circumstances where we cannot avoid a decision by those 12 folks tried and true, how do we snatch victory from the jaws of defeat? We need to understand how juries attribute intent, break it down into elements, and distinguish our defendants from those elements every chance we get.

All of us will agree that white collar crimes take months, even years, to commit. They are processes of accretion and not single events, such as arson or murder. They are fundamentally crimes of intent, because the defendants in these cases often acknowledge their involvement in the transactions. This is why we must “element-ize” intent and distinguish our client from those elements at every opportunity.

In regard to the complicated fact patterns we see in this type of litigation, we must remember that when a large amount of new, disparate, and potentially confusing information confronts our jurors, they make this social world easier to understand by the process of attributing intent. Researching this phenomenon, social psychologists have developed what they call “attribution theory,” which focuses on the various causes that people assign to behavior. In study after study, these psychologists tell us that people explain intentional actions differently from how they explain other events. We need to know what these psychologists have found about how our juries attribute intent, and we need to use it in voir dire, opening, cross, direct, and closing arguments.

For the most part, jurors just don’t understand droning, complicated instructions. Experiments testing the effectiveness of jury instructions for educating jurors about law consistently reveal that mock jurors’ comprehension of intent instructions is quite poor. Indeed, research tells us that in these trials, juries repeatedly ask for further advice about the meaning of intent. Good litigators know this and break down concepts such as intent, relating it to common experience or what psychologists call “folk concepts.”

Research validates what we know as litigators. When jurors already have and consistently use a concept such as intention in their daily lives, being forced to learn a slightly different concept for this phenomenon (e.g., the legal definition of intent) makes their common sense “folk concept” interfere with the legal concept. Researcher Vicki Smith of Northwestern University demonstrated in four separate experiments that jurors are strongly inclined to use these “folk concepts” of crime categories for decision making. We must keep this in mind when formulating our case presentations, for it is through these folk concepts that people anticipate and judge one another.

The bedrock of the folk concept that leads to the attribution of intent is that jurors believe people think and act like they themselves do. Social psychologists have made it clear that people commonly assume, often to an unwarranted degree, that their attitudes are shared by others. Thus, jurors infer intentions in others because they are aware of them in themselves.

So let’s get to it. What are the “leg-bone-connected-to-ankle-bone” nuts and bolts of how our jurors are coming to attribute intention to our clients? And how do we break this into elements and distinguish our clients from these folk concepts which lead to intent attribution?

Let us consider a worst case scenario. Assume that the court will accept the government’s proposed “ostrich” instruction and instruct the jury:
When the word “knowingly” or the phrase “the defendant knew” is used in these instructions, it means that the defendant realized what he was doing and was aware of the nature of his conduct, and did not act through ignorance, mistake or accident. Knowledge may be proved by the defendant’s conduct, and by all the facts and circumstances surrounding the case.

You may infer knowledge from a combination of suspicion and deliberate indifference to the truth. If you find that a defendant had a strong suspicion that criminal conduct was occurring, yet intentionally shut his eyes for fear of what he would learn, you may conclude that he acted knowingly, as I have used the word. You may not conclude that a defendant had knowledge if he was merely negligent in not discovering the truth.

In decades of experiments, Malle and Knobe worked to set out the folk concepts that need to be evident
in order for people to regard a behavior as intentional. Their latest model has five conditions:
“… for people to judge an agent’s behavior as intentional, the agent must have: (a) a desire for an outcome, (b) beliefs about a behavior leading to that outcome, (c) a resulting intention to perform that behavior, (d) the skill to perform the behavior, and (e) awareness of fulfilling the intention while performing the behavior.”

Here are the elements that we need to set our sights on from the onset – right from voir dire:
A: Mr. Defendant has a desire for a certain outcome. He wants to get money. He wants to avoid further discovery into questionable acts. He wants to avoid an indictment. It is pretty tough to distinguish our guy here.

B: Mr. Defendant believes that a particular discrete behavior will lead to the outcome he desires. We must be specific here. If he does X, he will get money. If he does Y, he will avoid further discovery. If he does Z, he will avoid an indictment. This is fertile territory for counterfactuals. This is where we must begin to distinguish our defendant’s ideas about the particular discrete behavior the prosecutor wants to hang on him or her. Did the defendant even know about the particular discrete behavior? Was the particular discrete behavior the prosecutor wants to hang on the defendant even in the defendant’s commonly seen behaviors? Can the prosecutor show that the defendant has acted in this particular manner – with knowledge of its outcome – in the past?

C: Mr. Defendant intends to do the particular discrete behavior. This is the element prosecutors jump to with snitches, circumstance, and innuendo. We must weld it together with element A and element B and make it clear to jurors that they must find A and B, before they can find C. If we have set this paradigm up in voir dire, opening, and cross of the prosecutor’s witnesses, it will begin to make sense to the individual jurors.

Remember, social psychologists tell us that to attribute intent, our jurors want to hear that our defendant was trying to accomplish something he wanted and had the knowledge relevant to the attempt. But that is not enough. The psychologists tell us that jurors also want to hear that our client was recognizably doing the sort of thing one would do in order to accomplish the act and that it was no accident. Okay, let’s go back to our elements.

D: Mr. Defendant had the skill to do that particular discrete behavior. Depending on the facts of your case skill may translate into ability, experience or opportunity available to the Defendant. This is the element which is at the bottom of the “hey, maybe he’s the CEO, but he’s really a dummy” defense. It doesn’t work. However, if we imbed the concept of skill in an A + B + C voir dire, opening, and cross of the prosecutor’s witnesses, it’s going to fit into our “element-ized” scheme.

Researchers have found that skill is an essential component of people’s concepts of intentional action. That is, if a discrete behavior is performed and fulfills a desire, the agent must have brought about that behavior with skill (rather than luck) for the action to count as intentional. Over and over, researchers in attribution theory have demonstrated that the process by which people determine how much praise or blame an actor deserves depends in large part on how much skill was involved in completing the discrete acts. The more we can dissociate our defendant from the requisite skill necessary for the accomplishment of the discrete behavior, the less likely there will be an attribution of intention.

E: Mr. Defendant acted with an awareness that he was aiming to fulfill his desire while performing the behavior. This is the place for the “there was too much going on and Mr. Defendant wasn’t really paying attention” gambit. But the convictions of Conrad Black and Kenneth Lay clearly tell us that the “head in the sand” defenses, without more, won’t work. Indeed, Bernard Ebbers was convicted by a jury who refused to buy into the defense theory that Ebbers was an “accounting ignoramus” who knew nothing of the massive fraud that took place on his watch. Juries clearly believe that for the upper echelons of corporate hierarchy “ignorance at this level can’t be excused.” What’s the more? To break it down, the element of awareness must be seen as operative in the A + B + C + D scheme. Mr. Defendant has to desire a specific outcome (A) that he believes a particular discrete behavior will accomplish (B). Mr. Defendant must intend to do that discrete behavior (C), have the requisite skill to do that discrete behavior (D) and be aware of his attempt to accomplish the discrete behavior -while attempting it (E). When we tie in elements B, C and D, with the element of awareness, the “head in the sand” defense gains traction. Don’t forget that the greater the number of complex intellectual controls that are necessary for an act, the more it tends to be considered intentional.

Before we leave this article on intent, what can the psychologists tell us about Richard Scrushy? How did Scrushy avoid liability when five consecutive HealthSouth chief financial officers admitted to cooking the books and all fingered Scrushy? The “he was too busy to know what was going on directly below him” gambit worked for Scrushy. Why? Partially because Scrushy’s counsel distinguished him on elements C (intention to do the discrete behavior)and E (awareness that he was trying to fulfill his desired outcome). The other part of the successful defense involved stereotyping and projection.

Throughout the run up to his trial, Scrushy made an overt effort to build sympathy among religious conservatives and African Americans in his home state of Alabama. Over the course of the trial, Scrushy preached regularly at black churches in the Birmingham area and hosted a daily cable television show often featuring ministers as guests. When the government blundered by bringing the case in the Bible Belt, the stage was set for stereotyping and projection.

As stated earlier, an essential folk concept that leads to the attribution of intent is that jurors believe people think and act like they themselves do. People commonly assume that their attitudes are shared by others and, in this way, jurors infer intentions in others because they are aware of them in themselves. We all recognize this phenomenon. For example, when we meet a new acquaintance who shares our love for a particular comedian, we may unconsciously extend ourselves as a template and assume that the new acquaintance also shares our political views. On the other hand, when we discover that a new colleague hates our favorite movie, we tend to abandon ourselves as a template and turn instead to a stereotype that may apply to her (e.g., an introverted, intelligent librarian). This use of ourselves as a template is called projection. When these templates do not fit, we resort to seeing the differences in others in bold relief. This is called stereotyping.

According to psychologist Daniel Ames, when the behavior of a person of interest is ambiguous, perceivers shift between stereotyping and projection as mind reading strategies. Specifically, when perceivers see themselves as initially more similar to a target, they will rely more heavily on projection and less heavily on stereotyping than when they see themselves as less similar. A number of researchers have shown that stereotype activation declines over the course of exposure to the target. When we blend this avenue of research into the work of psychologists who study “perspective taking” (learning to see the world through another’s experience), we see that a sense of dissimilarity tips perceivers toward stereotyping, whereas a sense of similarity evoked by perspective taking draws perceivers away from stereotyping and toward projection.

This was Scrushy’s master stroke. Both Scrushy and his counsel repeated the mantra that he epitomized the ambitious, aggressive entrepreneur who transformed the plodding health care business. Scrushy was repeatedly described as the guy who was married at age 17 with a baby on the way, who worked as a gas station attendant before earning a degree in respiratory therapy. Pushed repeatedly as the hometown boy who made good, it was barely a decade after launching HealthSouth in 1984 that Scrushy was running the biggest provider of rehabilitative services and outpatient surgery in the country. Masterful work in perspective taking and projection, coupled with a sense of the elements of intent attribution, won the case for Richard Scrushy. It can do the same for you.

This entry was posted in Uncategorized. Bookmark the permalink.