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

"The state of a man's mind is as determinable as the state of his digestion."
Edgington v. Fitzmaurice, 29 Chancery Division 459 (1889)

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.1 And let's not forget about the "he wasn't paying attention" instruction,2 the "willful blindness" instruction,3 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.5 With rare exceptions, they get us every time.

Bringing jurors to the conclusion that our clients 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 clients 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.6 Researching this phenomenon, social psychologists have developed what they call "attribution theory," which focuses on the various causes that people assign to behavior.7 In study after study, these psychologists tell us that people explain intentional actions differently from how they explain other events.8 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.

Folk Concepts

For the most part, jurors just do not 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.9 Indeed, research tells us that in these trials, juries repeatedly ask for further advice about the meaning of intent.10 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.11 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.12 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.13

The bedrock of the folk concepts 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.14 Thus, jurors infer intentions in others because they are aware of them in themselves.15

So let's get to it. What are the "legbone- 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 that 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.16

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."17

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 client 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 client'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 client 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.18 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 that is at the bottom of the "hey, maybe he's the CEO, but he's really a dummy" defense. It does not 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 is 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.19 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 client from the requisite skill necessary for the accomplishment of the discrete behavior, the less likely there will be an attribution of intention.20

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, will not work.21

Bernard Ebbers was convicted by a jury that 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.22 For the defendants who are in the upper echelons of corporate hierarchy, juries believe "ignorance at this level can't be excused."23 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.24

Application of the Elements

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.25 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.26 When the government blundered by bringing the case in the Bible Belt, the stage was set for stereotyping and projection.27

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).28 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.29 A number of researchers have shown that stereotype activation declines over the course of exposure to the target.30 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.31

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.32 It can do the same for you.

Notes

1In Bryan v. United States, for example, the trial judge instructed the jury as follows:" A person acts willfully if he acts intentionally and purposely and with the intent to do something the law forbids, that is, with the bad purpose to disobey or to disregard the law. Now, the person need not be aware of the specific law or rule his conduct may be violating. But he must act with the intent to do something the law forbids." See J.F. Barrett & J.M. Grasso, The Changing Standard of 'Criminal Intent,' NAT. RESOURCES & ENV'T 13 (2): 436-437 (1998).
2The First Circuit holds that "reckless disregard" is sufficient to satisfy the specific intent requirement of the bank fraud statute. United States v. Ely; see Banking Briefs 1 BANKING L.J. 116, 100 (1999).
3See the Third Circuit's Model Criminal Jury Instructions available at http://www.ca3.uscourts.gov/modeljuryinstructions.htm; see also United States v. One 1973 Rolls Royce, 43 F.3d 794, 807-08 (3d Cir. 1994); United States v. Brodie, 403 F.3d 123 (3d Cir. 2005).
4The court overrules defendants' objections to government instruction No. 63 in USA v. Black, (Docket Entry) Case No. 05CR727, U.S. District Court for the Northern District of Illinois (Hon. Amy St. Eve); also see United States v. Carrillo, 435 F.3d 767, 780 (7th Cir. 2003); United States v. Leahy, 464 F.3d 773, 796 (7th Cir. 2006).
5See K.F. Brickey, In Enron's Wake: Corporate Executives on Trial, J. CRIM. L. & CRIMINOLOGY 96: 397 (2006).
6M.D.Maselli & J.Altrocchi,Attribution of Intent, PSYCHOL. BULL., 71 (6), 445-454 (1969).
7B.F. Malle, How People Explain Behavior: A New Theoretical Framework,PERS. SOC. PSYCHOL. REV. 3 (1), 23-48, p. 23 (1999); see also F. Heider, The Psychology of Interpersonal Relations (Wiley 1958); E.E. Jones & K.E.Davis, From Acts to Dispositions: The Attribution Process in Person Perception, in ADVANCES IN EXPERIMENTAL SOCIAL PSYCHOLOGY, Vol. 2, 219-266 (L. Berkowitz ed., 1965); H.H. Kelley, Attribution Theory in Social Psychology, in NEBRASKA SYMPOSIUM ON MOTIVATION, Vol. 15, 192-240 (D. Levine ed., 1967); B. Weiner, AN ATTRIBUTIONAL THEORY OF MOTIVATION AND EMOTION (Springer 1986); see D.R.Ames,E.D.Knowles, et al.,The Social Folk Theorist: Insights From Social and Cultural Psychology on the Contents and Contexts of Folk Theorizing, in INTENTIONS AND INTENTIONALITY 308, B.F. Malle, L.J. Moses & D.A. Baldwin, eds., 2001). The literature of social psychology is extremely diverse in the study of intentionality. Various scholars study attribution, trait ascription, stereotyping, impression formation, assessments of responsibility, blaming, account giving, explanations, and a variety of other kinds of social judgments.
8B.F. Malle, Folk Explanations of Intentional Action, in INTENTIONS AND INTENTIONALITY 265 (B.F. Malle, L.J. Moses & D.A. Baldwin eds., 2001).
9V.L. Smith,When Prior Knowledge and Law Collide: Helping Jurors Use the Law, LAW & HUM. BEH. 17(5): 507-536, 510 (1993).
10N.A. Lacey, Clear Concept of Intention: Elusive or Illusory? MODERN LAW REVIEW 56(5): 621-642, 628 (1993). Lacey attributes these requests for clarification "not just to bewilderment in the face of legal 'guidelines' but also to uncertainty and disagreement over 'ordinary language.'" See also B.F. Malle & S.E. Nelson, Judging Mens Rea: The Tension Between Folk Concepts and Legal Concepts of Intentionality, BEHAV. SCI. LAW 21(5): 563-580, 565 (2003).
11V.L. Smith, When Prior Knowledge and Law Collide: Helping Jurors Use the Law, LAW & HUM. BEH. 17(5), 507-536 (1993).
12Id. at 533.
13J. Bruner, Acts of Meaning (Harvard U. Press 1990).
14J. Krueger, The Projective Perception of the Social World: A Building Block of Social Comparison Processes, in HANDBOOK OF SOCIAL COMPARISON: THEORY AND RESEARCH, 323-351 (J. Suls & L. Wheeler eds., 2000); L. Ross, D. Greene & P. House, The False Consensus Effect: An Egocentric Bias and Social Perception and Attribution Processes, J. OF EXPERIMENTAL SOCIAL PSYCHOL., 13: 279-301 (1977); see also D.R. Ames, Inside the Mind Reader's Tool Kit: Projection and Stereotyping in Mental State Inference, J.OF PERS.& SOC.SCI. 87(3): 340-353, 340 (2004).
15R. Decharms, Personal Causation: The Internal Affective Determinants of Behavior (Academic Press 1968); see also M.D. Maselli & J. Altrocchi, Attribution of Intent, PSYCHOL. BULL. 71(6), 445-454, 448 (1968).
16This was the government's instruction No. 63 - the ostrich instruction - that the court accepted and gave to the jury in USA v.Conrad Black, (Docket Entry) Case No. 05CR727; see Government's Final Jury Instructions. Similar instruction was also given to the jury in the Kenneth Lay, Jeffrey Skilling, and Bernard Ebbers cases.
17B.F. Malle & J. Knobe, The Folk Concept of Intentionality, J. EXPERIMENTAL SOC. PSYCHOL., 33: 101-121 (1997). See also B.F. Malle, How People Explain Behavior: A New Theoretical Framework, PERS. SOC. PSYCHOL. REV 3(1): 23-48 (1999).
18P.G. Ossorio & K.E. Davis, The Self, Intentionality, and Reactions to Evaluations, in SELF IN SOCIETY 358 (C.Gordon & K.Gergen eds., 1968). See also B.F. Malle, Folk Explanations of Intentional Action, in INTENTIONS AND INTENTIONALITY 267 (B.F. Malle, L.J.Moses & D.A.Baldwin eds., 2001). Malle's experiments specify two minimal conditions for attribution of intent: the agent has a desire for an outcome and the agent has a belief that the intended action leads to that outcome.
19B.F. Malle & J. Knobe, The Folk Concept of Intentionality, 33 J. EXPERIMENTAL SOC.PSYCHOL. , 101-121 (1997); B.F.Malle, Folk Explanations of Intentional Action, in INTENTIONS AND INTENTIONALITY 266 (B.F. Malle, L.J.Moses & D.A. Baldwin eds., 2001).
20J. Knobe, Intentional Action in Folk Psychology: An Experimental Investigation, 16 (2) PHIL. PSYCH., 309-324 (2007).
21Jury Can Convict on 'Avoidance,' CHI. TRIB., June 15, 2007, at section 3, page 1.
22Verdict Is Warning to Other CEOs of Risk of Pleading Ignorance,WALL ST. J.,March 16, 2005, at A1.
23How Could He Not See?, WALL ST. J., March 17, 2005, at C1. As one of the jurors - a bus driver from Manhattan - put it: "He (Ebbers) was the man who was in charge. It's just kind of hard to sit there and think he didn't know what was going on." See also Ebbers Is Convicted of Massive Fraud, WALL ST. J.,March 16, 2005 at A1.
24F. HEIDER, THE PSYCHOLOGY OF INTERPERSONAL RELATIONS (Wiley 1958); see,also Mary D. Maselli and John Altrocchi, Attribution of Intent, PSYCHOL. BULL. 71 (6), 445-454, 448 (1969).
25Makeup of Jury in Scrushy Trial Appears Favorable to Defense, WALL ST. J., January 25, 2005, at C2.
26'Scrushy Trial' on Local TV is Family Affair,WALL ST. J., February 15, 2005, at B1.
27Why Scrushy Won His Trial and Ebbers Lost,WALL ST. J., June 30, 2005, at C1.
28Daniel R. Ames, Inside the Mind Reader's Tool Kit: Projection and Stereotyping in Mental State Inference, J.PERS.SOC.PSYCHOL. 87(3): 340, 341 (2004).
29Id.
30Z. Kunda, P.G. Davies, B.D. Adams & S.J. Spencer, The Dynamic Time Course of Stereotype Activation: Activation, Dissipation, and Resurrection, J. PERS. & SOC. PSYCHOL., 82: 283-299 (2002); Z. Kunda & S.J. Spencer,When Do Stereotypes Come to Mind and When Do They Color Judgment? A Goal- Based Theoretical Framework for Stereotype Activation and Application, PSYCHOL. BULL., 129: 522-544 (2003). See also Daniel R. Ames, Inside the Mind Reader's Tool Kit: Projection and Stereotyping in Mental State Inference, J. PERS. SOC. PSYCHOL. 87(3): 340, 341 (2004).
31Z. Kunda, P.G. Davies, B.D. Adams & S.J. Spencer, The Dynamic Time Course of Stereotype Activation: Activation, Dissipation, and Resurrection, J. PERS. SOC. PSYCHOL. 82: 283-299 (2002); Z. Kunda & S.J. Spencer,When Do Stereotypes Come to Mind and When Do They Color Judgment? A Goal- Based Theoretical Framework for Stereotype Activation and Application, PSYCHOL. BULL. 129: 522-544 (2003); see also D.R. Ames, Inside the Mind Reader's Tool Kit: Projection and Stereotyping in Mental State Inference, J. PERS. SOC.PSYCHOL. 87(3): 340-353, 341 (2004). See also A.D. Galinsky & G.B. Moskowitz, Perspective Taking: Decreasing Stereotype Expression, Stereotype Accessibility, and In- Group Favoritism, J. PERS. SOC. PSYCHOL., 78: 708-724 (2000) and M.H.Davis, L.Conklin, A. Smith & C. Luce, Effect of Perspective Taking on the Cognitive Representation of Persons: A Merging of Self and Other, J. PERS. SOC. PSYCHOL. 70: 713-726 (1996). Galinsky and colleagues have found that perspective taking decreases stereotype accessibility and use,and Davis,Conklin,Smith, and Luce have argued that perspective taking can increase the overlap in representations of self and others.
32Though Richard Scrushy was acquitted on charges of fraud in connection with an accounting scandal at the company in 2005, in June 2007 he was convicted and sentenced to nearly 7 years in prison for bribing a former governor of Alabama. The latter conviction, however, was an outcome of a separate criminal case.