Quick Primer on Conspiracy Charges:

Donald Blankenship, former CEO of the now defunct Massey Coal, was charged, in part, with allegedly violating 18 U.S.C. § 371, also known as the “general conspiracy statute.” In this case, the U.S. Attorney claims that Blankenship conspired with others to willfully violate mandatory federal mine safety and health standards at the Upper Big Branch Mine where 29 miners were killed in an underground explosion on April 5, 2010.

To date, former Massey Energy Co. executive David Hughart, along with former UBB mine superintendent Gary May are in jail after pleading guilty to conspiracy charges. Hugie Elbert Stover, the head of security for the Upper Big Branch Mine, was sentenced to three years in prison for his role in giving advanced notice of MSHA inspectors coming onto mining property

The following is from the U.S. Attorneys Criminal Resource Manual on the legal definition and case law relied upon for such a charge.

The general conspiracy statute, 18 U.S.C. § 371, creates an offense “[i]f 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. (emphasis added). See Project, Tenth Annual Survey of White Collar Crime, 32 Am. Crim. L. Rev. 137, 379-406 (1995)(generally discussing § 371).

The operative language is the so-called “defraud clause,” that prohibits conspiracies to defraud the United States.

Although this language is very broad, cases rely heavily on the definition of “defraud” provided by the Supreme Court in two early cases, Hass v. Henkel, 216 U.S. 462 (1910), and Hammerschmidt v. United States, 265 U.S. 182 (1924). In Hass the Court stated:

The statute is broad enough in its terms to include any conspiracy for the purpose of impairing, obstructing or defeating the lawful function of any department of government . . . (A)ny conspiracy which is calculated to obstruct or impair its efficiency and destroy the value of its operation and reports as fair, impartial and reasonably accurate, would be to defraud the United States by depriving it of its lawful right and duty of promulgating or diffusing the information so officially acquired in the way and at the time required by law or departmental regulation.

Hass, 216 U.S. at 479-480.

In Hammerschmidt, Chief Justice Taft, defined “defraud” as follows:

To conspire to defraud the United States means primarily to cheat the Government out of property or money, but it also means to interfere with or obstruct one of its lawful governmental functions by deceit, craft or trickery, or at least by means that are dishonest. It is not necessary that the Government shall be subjected to property or pecuniary loss by the fraud, but only that its legitimate official action and purpose shall be defeated by misrepresentation, chicane or the overreaching of those charged with carrying out the governmental intention.

Hammerschmidt, 265 U.S. at 188.

The general purpose of this part of the statute is to protect governmental functions from frustration and distortion through deceptive practices. Section 371 reaches “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); see Dennis v. United States, 384 U.S. 855 (1966).

The “defraud part of section 371 criminalizes any willful impairment of a legitimate function of government, whether or not the improper acts or objective are criminal under another statute.” United States v. Tuohey, 867 F.2d 534, 537 (9th Cir. 1989).

The word “defraud” in Section 371 not only reaches financial or property loss through use of a scheme or artifice to defraud but also is designed and intended to protect the integrity of the United States and its agencies, programs and policies. United States v. Burgin, 621 F.2d 1352, 1356 (5th Cir.), cert. denied, 449 U.S. 1015 (1980); see United States v. Herron, 825 F.2d 50, 57-58 (5th Cir.); United States v. Winkle, 587 F.2d 705, 708 (5th Cir. 1979), cert. denied, 444 U.S. 827 (1979).

Thus, proof that the United States has been defrauded under this statute does not require any showing of monetary or proprietary loss. United States v. Conover, 772 F.2d 765 (11th Cir. 1985), aff’d, sub. nom. Tanner v. United States, 483 U.S. 107 (1987); United States v. Del Toro, 513 F.2d 656 (2d Cir.), cert. denied, 423 U.S. 826 (1975); United States v. Jacobs, 475 F.2d 270 (2d Cir.), cert. denied, 414 U.S. 821 (1973).

Thus, if the defendant and others have engaged in dishonest practices in connection with a program administered by an agency of the Government, it constitutes a fraud on the United States under Section 371. United States v. Gallup, 812 F.2d 1271, 1276 (10th Cir. 1987); Conover, 772 F.2d at 771. In United States v. Hopkins, 916 F.2d 207 (5th Cir. 1990), the defendants’ actions in disguising contributions were designed to evade the Federal Election Commission’s reporting requirements and constituted fraud on the agency under Section 371.

The intent required for a conspiracy to defraud the government is that the defendant possessed the intent (a) to defraud, (b) to make false statements or representations to the government or its agencies in order to obtain property of the government, or that the defendant performed acts or made statements that he/she knew to be false, fraudulent or deceitful to a government agency, which disrupted the functions of the agency or of the government. It is sufficient for the government to prove that the defendant knew the statements were false or fraudulent when made. The government is not required to prove the statements ultimately resulted in any actual loss to the government of any property or funds, only that the defendant’s activities impeded or interfered with legitimate governmental functions. See United States v. Puerto, 730 F.2d 627 (11th Cir.), cert. denied, 469 U.S. 847 (1984); United States v. Tuohey, 867 F.2d 534 (9th Cir. 1989); United States v. Sprecher, 783 F. Supp. 133, 156 (S.D.N.Y. 1992)(it is sufficient that the defendant engaged in acts that interfered with or obstructed a lawful governmental function by deceit, craft, trickery or by means that were dishonest”), modified on other grounds, 988 F.2d 318 (2d Cir. 1993).

Hello Judge Berger: This is America

Civil_Penalties_Special_Report_2014

Today, U.S. District Court Judge Irene C. Berger issued a gag order in the criminal case of Don Blankenship, who has been indicted on conspiracy and SEC fraud charges by the U.S. Attorneys Office in Charleston.

Mine Safety and Health News will be doing anything it can to fight this order. You cannot suppress people’s First Amendment rights of free speech to people who aren’t parties to the proceedings. If family members want to tell the press stories about their loved ones who bodies were blown apart in the worst mine disaster in the past 40 years of mining in the U.S., so be it. If victims want to shed their tears with the media, so be it. This trial needs to be in the open. It is the only way that Americans can trust the judicial system. I respect that you are a judge, but with no context in this order, an as a member of the press, I cannot let this go unchallenged.

The First Amendment (Amendment I) to the United States Constitution prohibits the making of any law respecting an establishment of religion, impeding the free exercise of religion, abridging the freedom of speech, infringing on the freedom of the press, interfering with the right to peaceably assemble or prohibiting the petitioning for a governmental redress of grievances. It was adopted on December 15, 1791, as one of the ten amendments that constitute the Bill of Rights.

Judge Berger’s Order Posted Today:
Full docket text for document 3:
ORDER as to Donald L. Blankenship : that neither the parties, their counsel, other representatives or members of their staff, potential witnesses, including actual and alleged victims, investigators, family members of actual and alleged victims as well as of the Defendant, nor any court personnel shall make any statements of any nature, in any form, or release any documents to the media or any other entity regarding the facts or substance of this case; that any and all motions, stipulations, discovery requests, responses, supplemental requests and responses, and other relevant documents shall be filed directly with the Clerk pursuant to Rule 49.1 of the Local Rules of Criminal Procedure; that access to all documents filed on CM/ECF be restricted to the case participants and court personnel; the Clerk is to make the docket entries publicly available. Signed by Judge Irene C. Berger on 11/14/2014. (cc: Judge, USA, USP, USM, counsel, deft) (cds)

Investigation Finds $70 Million in Unpaid Fines Leaves Deadly and Crippling Legacies

A joint investigation conducted by Mine Safety and Health News and National Public Radio have found that mine operators who fail to pay their MSHA fines have an injury rate 50% higher than mines that pay their fines. While MSHN has covered operators with delinquent penalties for 20 years, this is the first time with statistical confidence that a correlation is made showing that operators who fail to pay their fines have a higher injury rate than responsible operators who pay. Read the MSHN/NPR special report here. Civil_Penalties_Special_Report_2014

Former Massey CEO Faces Conspiracy Charges

Former Chief Executive Officer of Massey Energy, Donald L. Blankenship, has been indicted under conspiracy charges that he violate mandatory federal mine safety and health standards, conspired to impede federal mine safety officials, made false statements to the United States Securities and Exchange Commission (SEC), and has been charged with securities fraud by the U.S. Attorneys Office in Charleston W.Va.

The 43-page indictment alleges that from about January 1, 2008, through about April 9, 2010, Blankenship conspired to commit and cause routine, willful violations of mandatory federal mine safety and health standards at Massey Energy’s Upper Big Branch mine, located in Raleigh County, West Virginia.

The indictment alleges that during this same period of time, Blankenship was part of a conspiracy to impede and hinder federal mine safety officials from carrying out their duties at Upper Big Branch by providing advance warning of federal mine safety inspection activities, so their underground operations could conceal and cover up safety violations that they routinely committed.

The indictment further alleges that after a major, fatal explosion occurred at Upper Big Branch on April 5, 2010, Blankenship made and caused to be made false statements and representations to the SEC concerning Massey Energy’s safety practices prior to the explosion. Additionally, the indictment alleges that, after this explosion, Blankenship made and caused to be made materially false statements and representations, as well as materially misleading omissions, in connection with the purchase and sale of Massey Energy stock.

The four counts charged carry a maximum combined penalty of 31 years’ imprisonment.

Read the indictment here, because it’s not available through the court system due to a gag order issued by the court:

Blankenship Indictment