United States v. Richard A. Svoboda, Michael A. Robles
347 F.3d 471 · Court of Appeals for the Second Circuit · 2003
Facts
Between November 1994 and December 1997, Richard Svoboda, a credit policy officer at NationsBank in Dallas, Texas, had access to confidential information about the bank's clients, including earnings and merger plans. Svoboda obtained confidential information regarding securities and tender offers and passed it to his long-time friend, Michael A. Robles. Robles used this insider information to make trades, and he and Svoboda shared the resulting profits. Svoboda testified that Robles was fully aware he was trading on unlawfully obtained insider information, but Robles denied knowledge of the unlawful source. The trades were executed on the New York Stock Exchange (NYSE) or American Stock Exchange (AMEX).
Procedural history
Michael A. Robles appealed from a judgment of conviction entered in the United States District Court for the Southern District of New York, presided over by Judge Richard M. Berman. On October 3, 2002, after a thirteen-day jury trial, Robles was convicted of one count of conspiracy to commit securities and tender offer fraud and thirteen individual securities and tender offer fraud counts. This court affirmed the judgment of conviction.
Issue
1. Did the district court err by giving a conscious avoidance instruction regarding the conspiracy charge? 2. Was venue improper in the Southern District of New York for the charges?
Holding
1. No, the district court did not err in giving the conscious avoidance instruction, as it is applicable in the conspiracy context and had a sufficient factual predicate. 2. No, venue was proper in the Southern District of New York. The judgment of conviction is affirmed.
Rule
The conscious avoidance doctrine allows a finding of knowledge if the jury is persuaded the defendant consciously avoided learning a fact while aware of its high probability. This doctrine can be used to satisfy the knowledge component of intent to participate in a conspiracy, even a two-person conspiracy, as knowledge consciously avoided is the legal equivalent of knowledge actually possessed. A conscious avoidance instruction requires the defendant to assert a lack of specific knowledge and evidence that the defendant was aware of a high probability of the disputed fact and deliberately avoided confirming it. Criminal venue is proper in any district where an offense was begun, continued, or completed, or where an overt act in furtherance of a conspiracy was committed, or where any act constituting a '34 Act violation occurred. Venue is proper if the defendant intentionally or knowingly causes an act in furtherance to occur in the district, or if it is foreseeable that such an act would occur, and must be proven by a preponderance of the evidence.
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