United States v. Randolph Rodman , 776 F.3d 638 ( 2015 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 13-10337
Plaintiff-Appellee,
D.C. No.
v. 2:10-cr-01047-ROS-2
RANDOLPH BENJAMIN RODMAN,
Defendant-Appellant.
UNITED STATES OF AMERICA, No. 13-10351
Plaintiff-Appellee,
D.C. No.
v. 2:10-cr-01047-ROS-6
IDAN C. GREENBERG,
Defendant-Appellant. OPINION
Appeal from the United States District Court
for the District of Arizona
Roslyn O. Silver, Senior District Judge, Presiding
Argued and Submitted
October 9, 2014—Phoenix, Arizona
Filed January 9, 2015
Before: J. Clifford Wallace, Barry G. Silverman,
and Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
2 UNITED STATES V. RODMAN
SUMMARY*
Criminal Law
The panel affirmed a conviction for conspiracy to defraud
an agency of the United States, in violation of 18 U.S.C.
§ 371, in a case in which Randolph Rodman and his co-
defendants were charged with conspiracy to transfer machine
guns unlawfully by making false entries on forms submitted
to the Bureau of Alcohol, Tobacco, Firearms, and Explosives.
The panel held that regulating the registration and transfer
of firearms using government forms is a lawful function of
the government, and that to be guilty of a conspiracy to
defraud the government in the context of this case, it is
sufficient that Rodman and his co-conspirators agreed to
submit, and did submit, machine gun registration and transfer
forms with false information to the ATF, thereby impairing
and obstructing the ATF’s lawful government function of
regulating the transfer of firearms.
The panel held that the district court did not err in
declining to give a jury instruction for entrapment by estoppel
based on Rodman’s claim that George Clark, a federal
firearms licensee, told Rodman that the manner in which
Clark manufactured and transferred machine guns was legal.
The panel held that Clark was not acting as an authorized
government official for purposes of the entrapment-by-
estoppel defense in this context in which Rodman is himself
a federal firearms licensee.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
UNITED STATES V. RODMAN 3
The panel rejected Rodman’s argument that he was
entitled to a jury instruction explaining the buyer-seller
affirmative defense, as such an instruction would have been
inapposite to the charged conspiracy to submit fraudulent
forms to the ATF.
The panel addressed other claims raised by Rodman and
his co-defendant Idan Greenberg in memorandum
dispositions filed contemporaneously with the opinion.
COUNSEL
David T. Hardy (argued), Tucson, Arizona, for Defendant-
Appellant Randolph Rodman.
Steven Robert Shanin (argued), Chicago, Illinois, for
Defendant-Appellant Idan Greenberg.
Dominic Lanza (argued), Assistant United States Attorney,
and Mark Kokonavich, Deputy Appellate Chief, United
States Attorney’s Office, Phoenix, Arizona, for Plaintiff-
Appellee.
4 UNITED STATES V. RODMAN
OPINION
M. SMITH, Circuit Judge:
Defendant-Appellant Randolph Rodman challenges his
conviction for conspiracy to defraud the government.
Rodman contends that insufficient evidence existed to convict
him, and that the district court erred in failing to give jury
instructions for entrapment by estoppel, and instructions
concerning a buyer-seller relationship between George Clark
and Rodman.
We hold that regulating the registration and transfer of
firearms is a lawful function of the government. We also
conclude that the district court did not err in declining to give
the requested jury instructions because the lack of an
authorized government official precludes entrapment by
estoppel, and there was sufficient evidence of a conspiracy to
obstruct a lawful function of the government to eliminate the
possibility of a simple buyer-seller transaction.
All other claims raised by Rodman and his co-defendant,
Idan Greenberg, are addressed in two memorandum
dispositions filed concurrently with this opinion. We affirm
Rodman’s conviction.
FACTUAL AND PROCEDURAL BACKGROUND
Rodman and five other defendants were indicted for
conspiracy to defraud an agency of the United States, in
violation of 18 U.S.C. § 371. Specifically, the defendants
were charged with conspiracy to transfer machine guns
unlawfully by making false entries on forms submitted to the
Bureau of Alcohol, Tobacco, Firearms, and Explosives
UNITED STATES V. RODMAN 5
(ATF). The National Firearms Act (NFA) provides that it is
unlawful for a private citizen to transfer or possess an
unregistered machine gun. 26 U.S.C. §§ 5812, 5822.
Machine guns must be registered with the National Firearms
Registration and Transfer Record, which is maintained by the
National Firearms Act Branch (NFA Branch) of the ATF. In
order to transfer a machine gun between federal firearms
licensees, an ATF Form 3, signed under penalty of perjury,
must be completed and filed with the ATF. In order to
transfer a machine gun to a member of the general public, an
ATF Form 4, signed under penalty of perjury, must be
completed and filed with the ATF. Among other data, these
forms require a description of the firearm being transferred,
including the serial number, the type of firearm, the caliber,
the model, the length of the barrel, and the overall length of
the firearm.
Private citizens, whether federal firearms licensees or
members of the general public, who are not acting under the
authority of the United States or a state, may transfer or
possess only machine guns that were registered on or before
May 16, 1986. 18 U.S.C. §§ 922(o)(2)(A)–(B). In this
opinion, we refer to machine guns registered on or before
May 16, 1986 as “pre-ban machine guns,” and to machine
guns registered after May 16, 1986 as “post-ban machine
guns.”
In order to circumvent the restrictions described, Rodman,
along with his codefendants Idan Greenberg, George Clark,
Hal Goldstein, James Arnberger, and Lorren Kalish, all of
whom were federal firearms licensees, entered into a
conspiracy to build, possess, and sell post-ban machine guns
that used serial numbers cut from pre-ban machine guns.
Clark, who was also licensed to manufacture firearms, would
6 UNITED STATES V. RODMAN
cut the serial number from an inexpensive registered pre-ban
machine gun, and discard the remaining parts of the gun.
Clark would then use new parts, often supplied by his
codefendants, to construct a new machine gun, and would
weld the serial number of the pre-ban machine gun onto the
new, post-ban machine gun. The defendants would then sell
the new, post-ban machine guns as pre-ban machine guns, in
some cases for a significant profit, without telling the buyers
of those guns the method by which the machine guns had
been made, or that the machine guns offered to the buyers
were actually post-ban machine guns.
The defendants registered and transferred these “new”
machine guns amongst themselves and others by filling out
either a Form 3 or a Form 4 using the serial number,
manufacturer, and model of the pre-ban machine guns. These
transfer forms were fraudulent. The forms listed the model
and manufacture of the pre-ban machine gun even though the
machine gun actually sold was a new gun, a different model
than the pre-ban gun, and had been manufactured by Clark.
Additionally, the forms did not mention that the serial
number on the gun being sold had been cut from a pre-ban
machine gun and affixed onto the new post-ban machine gun.
The ATF approved these transfers because none of the
defendants disclosed that they were selling post-ban machine
guns using pre-ban machine gun information, and the ATF
relied on the false representations made in the transfer forms.
Consistent with the conspiracy, Rodman purchased
Clark’s machine guns manufactured post-ban but affixed with
pre-ban serial numbers. Rodman knew the method by which
Clark manufactured the machine guns, but claimed during
trial that Clark told him this method was lawful. Clark filed
transfer papers with the ATF to transfer 13 machine guns to
UNITED STATES V. RODMAN 7
Rodman between 2000 and 2008. These new machine guns
were transferred to Rodman using the serial number and other
information, such as the model name and manufacturer, from
the pre-ban machine guns. Rodman sold and filed transfer
papers with the ATF for seven of the Clark-made machine
guns, again using pre-ban information to sell and transfer
post-ban guns.
Rodman moved for acquittal, and to dismiss the charge
for conspiracy to defraud the government under 18 U.S.C.
§ 371. The district court denied both motions. Rodman also
unsuccessfully requested a jury instruction for entrapment by
estoppel based on Clark’s alleged statements that his method
of manufacturing machine guns was lawful, and a jury
instruction regarding a buyer-seller relationship between
Rodman and Clark.
JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction pursuant to 28 U.S.C. § 1291. We
review de novo Rodman’s motion for acquittal of the
conspiracy charge, and Rodman’s motion to dismiss the
charge for conspiracy. United States v. Neill, 166 F.3d 943,
947 (9th Cir. 1999); United States v. Yoshida, 303 F.3d 1145,
1149 (9th Cir. 2002). We also review de novo a district
court’s decision declining to issue a requested jury
instruction. See United States v. Ibarra-Pino, 657 F.3d 1000,
1003 (9th Cir. 2011).
8 UNITED STATES V. RODMAN
DISCUSSION
I. Conspiracy to Defraud
The federal conspiracy statute, 18 U.S.C. § 371, makes it
a crime:
If two or more persons conspire either to
commit any offense against the United States,
or to defraud the United States, or any agency
thereof in any manner or for any purpose, and
one or more of such persons do any act to
effect the object of the conspiracy . . . .
The phrase “to defraud . . . in any manner or for any purpose”
covers “any conspiracy for the purpose of impairing,
obstructing or defeating the lawful function of any
department of Government.” Tanner v. United States,
483 U.S. 107, 128 (1987) (internal quotation marks omitted).
We have construed the language in 18 U.S.C. § 371 to
include “obstructing the operation of any government agency
by any ‘deceit, craft or trickery, or at least by means that are
dishonest.’” United States v. Caldwell, 989 F.2d 1056, 1058
(9th Cir. 1993) (quoting Hammerschmidt v. United States,
265 U.S. 182, 188 (1924)). We have also clarified that a
conspiracy need not deprive the government of property,
involve any detrimental reliance by the government, or
involve independently illegal goals or means. Id. at 1058–59.
Instead, the elements of a conspiracy under 18 U.S.C. § 371
are “(1) [defendant] entered into an agreement (2) to obstruct
a lawful function of the government (3) by deceitful or
dishonest means and (4) at least one overt act in furtherance
of the conspiracy.” Id. at 1059.
 UNITED STATES V. RODMAN 9
Using these elements, we have held that 18 U.S.C. § 371
“applies to conspiracies to impede, impair, obstruct, or defeat
the lawful function of the Department of Treasury in the
collection of income taxes” by filing fraudulent income tax
returns. United States v. Little, 753 F.2d 1420, 1443 (9th Cir.
1984) (citing United States v. Turkish, 623 F.2d 769, 771 (2d
Cir. 1980), cert. denied, 449 U.S. 1077 (1981)).
Additionally, in United States v. Lorenzo, we affirmed a
conviction for conspiracy under 18 U.S.C. § 371 when
defendants filed fraudulent IRS 1099-MISC forms requesting
tax refunds from the IRS. 995 F.2d 1448, 1451–52 (9th Cir.
1993). Thus, the submission of fraudulent forms to a
governmental agency by two or more persons when those
fraudulent forms impede that agency’s lawful functions
constitutes a conspiracy under 18 U.S.C. § 371.
There is ample evidence here that Rodman impeded the
lawful government functions of the ATF and the NFA Branch
by submitting fraudulent forms. The NFA gives the ATF the
authority to regulate the transfer and making of firearms.
26 U.S.C. §§ 5812, 5822. These statutes provide that a
“firearm shall not be transferred unless . . . the transferor of
the firearm has filed with the Secretary a written application
. . . for the transfer and registration of the firearm to the
transferee on the application form prescribed by the
Secretary” and “the firearm is identified in the application
form in such manner as the Secretary may by regulations
prescribe.” 26 U.S.C. § 5812(a). They also provide that
“[n]o person shall make a firearm unless he has . . . filed with
the Secretary a written application . . . to make and register
the firearm on the form prescribed by the Secretary” and
“identified the firearm to be made in the application form in
such manner as the Secretary may by regulations prescribe.”
26 U.S.C. § 5822. Under both statutes, the maker and
10 UNITED STATES V. RODMAN
transferor are required to obtain the approval of the Secretary
before making or transferring the firearm. Id. §§ 5812(a),
5822. Just as we did in the context of filing IRS forms, we
conclude that regulating the registration and transfer of
firearms using government forms is a lawful function of the
government. The ATF approves or denies transfers based on
the information alleged in the forms. If the information
provided to the ATF is inaccurate or fraudulent, the ATF is
unable to approve transfers correctly pursuant to the NFA.
Therefore, to be guilty of a conspiracy to defraud the
government in the context of this case, it is sufficient that
Rodman and his co-conspirators agreed to submit, and did
submit, machine gun registration and transfer forms with
false information to the ATF, thereby impairing and
obstructing the ATF’s lawful government function of
regulating the transfer of firearms.
We also observe that because Rodman’s actions constitute
a conspiracy to impair the functioning of the ATF, it was not
necessary that there be evidence of any other form of injury
to the ATF in order for Rodman to be found guilty of a
conspiracy under 18 U.S.C. § 371. See Tanner, 483 U.S. at
128.
II. Entrapment by Estoppel
“The entrapment by estoppel defense applies when [(1)]
an authorized government official tells the defendant that
certain conduct is legal and [(2)] the defendant believes the
official.” United States v. Brebner, 951 F.2d 1017, 1024 (9th
Cir. 1991). Rodman argues that the district court erred when
it refused to give an entrapment by estoppel instruction based
on his claim that Clark, a federal firearms licensee, told
UNITED STATES V. RODMAN 11
Rodman that the manner in which Clark manufactured and
then transferred machine guns was legal.
We have held that a licensed firearms dealer is an
authorized government official “in connection with the
gathering and dispensing of information” on whether a given
customer, usually one with a criminal history, can legally
purchase a firearm. United States v. Tallmadge, 829 F.2d
767, 774 (9th Cir. 1987). See also, e.g., United States v.
Batterjee, 361 F.3d 1210, 1217–19 (9th Cir. 2004). However,
the circumstances of the present case are quite different than
the circumstances in Tallmadge and Batterjee. Rodman is not
some customer off the street inquiring about whether he can
legally purchase a firearm. Rodman is himself a federal
firearms licensee. Therefore, Clark’s status as a federal
firearms licensee puts Clark in no better position than
Rodman to know whether Clark’s methods of manufacturing
and transferring the machine guns were legal. Moreover, in
determining that federal firearms licensees should be deemed
authorized government officials, the court in Tallmadge relied
on the fact that the relevant form placed an affirmative duty
on the seller of the firearms to determine the lawfulness of the
transaction, to be familiar with the relevant law, and to
inform the buyer of any restrictions imposed by Congress on
the purchase of firearms. See 829 F.2d at 774. Rodman has
failed to show that Congress has placed similar duties on a
federal firearms licensee when he sells a firearm to another
federal firearms licensee. Accordingly, we decline to extend
the holdings of Tallmadge and Batterjee to apply when the
firearm transaction is made between two federal firearms
licensees. Therefore, the district court did not err by failing
to give the requested entrapment by estoppel instruction as
Clark was not acting as an authorized government official in
this context.
12 UNITED STATES V. RODMAN
III. Buyer-Seller Relationship
Finally, Rodman argues that he was entitled to a jury
instruction explaining the buyer-seller defense to conspiracy.
The buyer-seller jury instruction is an affirmative defense
available in cases charging conspiracy to distribute a
controlled substance. In such cases, the buyer-seller defense
requires that the government show “‘an agreement to commit
a crime other than the crime that consists of the sale itself.’”
United States v. Lennick, 18 F.3d 814, 819 (9th Cir. 1994)
(quoting United States v. Lechuga, 994 F.2d 346, 347 (7th
Cir. 1993)). This is necessary because “otherwise, every
narcotics sale would constitute a conspiracy.” Id. In such
cases, the buyer-seller defense is used to distinguish between
a conviction for the sale of narcotics, and a conviction for a
conspiracy to distribute narcotics; it requires the government
to establish that the seller not only sold narcotics to the buyer,
but “that the buyer and seller in a narcotics transaction had an
agreement to further distribute the narcotics in question.”
United States v. Mincoff, 574 F.3d 1186, 1193–94 (9th Cir.
2009).
Rodman argues is that he is not guilty of conspiracy
because he merely had a buyer-seller relationship with Clark,
and thus was not part of a conspiracy to defraud the
government. This argument is untenable. The elements of
conspiracy to defraud the government under 18 U.S.C. § 371,
the crime of which Rodman was convicted, are
“(1) [defendant] entered into an agreement (2) to obstruct a
lawful function of the government (3) by deceitful or
dishonest means and (4) at least one overt act in furtherance
of the conspiracy.” Caldwell, 989 F.2d at 1059. In asserting
his alleged right to raise the buyer-seller defense, Rodman
refers to sales of post-ban machine guns to which Clark
UNITED STATES V. RODMAN 13
had affixed the serial numbers of pre-ban machine guns.
These sales were made in violation of 18 U.S.C.
§§ 922(o)(2)(A)–(B). However, Rodman was not convicted
of conspiracy to distribute these post-ban machine guns.
Instead, he was convicted of conspiracy to submit fraudulent
transfer forms to the ATF. Even if Rodman could prove that
the government was unable to establish that Clark and
Rodman had an agreement to further distribute the machine
guns beyond the initial sale, Rodman would still have been
found guilty of a conspiracy to defraud the government by
obstructing one of its lawful functions.
A buyer-seller jury instruction would have been
inapposite to the conspiracy of which Rodman was charged,
and the district court did not err in declining to give a buyer-
seller jury instruction.
IV. Conclusion
Rodman was properly convicted of conspiracy to defraud
the government in violation of 18 U.S.C. § 371, and the
district court did not err when it declined to give jury
instructions for entrapment by estoppel and the buyer-seller
rule. We therefore affirm Rodman’s conviction.
AFFIRMED.