U.S. v. Czubinski

106 F.3d 1069 (1st Cir. 1997)

  Up Chapter 09 Title Page Title Page Email Listserve Email Listserve

[NOTE: This case has been edited for classroom use by the omission of text, citations, and footnotes. See this alternate source for the full opinion.]

Chief Judge Torruella

Defendant-appellant Richard Czubinski ("Czubinski") appeals his jury conviction on nine counts of wire fraud, 18 U.S.C. §§ 1343, 1346, and four counts of computer fraud, 18 U.S.C. § 1030(a)(4). The wire fraud and computer fraud prosecution that led to the conviction survived serious challenges put forward by Czubinski in various pre-trial motions. Given the broad scope of the federal fraud statutes, motions charging insufficient pleadings or selective prosecution generally deserve careful consideration. We need not scrutinize the lower court's rejection of the defendant's arguments in favor of dismissing the indictment, however, because we reverse the conviction on the clearer ground that the trial evidence mustered by the government was insufficient to support a guilty verdict, and hold that the defendant's motion for judgment of acquittal should have been granted on all counts. Unauthorized browsing of taxpayer files, although certainly inappropriate conduct, cannot, without more, sustain this federal felony conviction.


I. Pertinent Facts

On an appeal from a jury conviction, we review the relevant facts in the light most favorable to the government. The evidence in this case, so presented, is inadequate to support convictions on either the wire fraud or computer fraud charges.

For all periods relevant to the acts giving rise to his conviction, the defendant Czubinski was employed as a Contact Representative in the Boston office of the Taxpayer Services Division of the Internal Revenue Service ("IRS"). To perform his official duties, which mainly involved answering questions from taxpayers regarding their returns, Czubinski routinely accessed information from one of the IRS's computer systems known as the Integrated Data Retrieval System ("IDRS"). Using a valid password given to Contact Representatives, certain search codes, and taxpayer social security numbers, Czubinski was able to retrieve, to his terminal screen in Boston, income tax return information regarding virtually any taxpayer -- information that is permanently stored in the IDRS "master file" located in Martinsburg, West Virginia. In the period of Czubinski's employ, IRS rules plainly stated that employees with passwords and access codes were not permitted to access files on IDRS outside of the course of their official duties.

In 1992, Czubinski carried out numerous unauthorized searches of IDRS files. . . .

Nothing in the record indicates that Czubinski did anything more than knowingly disregard IRS rules by observing the confidential information he accessed. No evidence suggests, nor does the government contend, that Czubinski disclosed the confidential information he accessed to any third parties. The government's only evidence demonstrating any intent to use the confidential information for nefarious ends was the trial testimony of William A. Murray, an acquaintance of Czubinski who briefly participated in Czubinski's local Invisible Knights of the Ku Klux Klan ("KKK") chapter and worked with him on the David Duke campaign. . . .

The record shows that Czubinski did not perform any unauthorized searches after 1992. He continued to be employed as a Contact Representative until June 1995, when a grand jury returned an indictment against him on ten counts of federal wire fraud under 18 U.S.C. §§ 1343, 1346, and four counts of federal interest computer fraud under 18 U.S.C. § 1030(a)(4).

The portion of the indictment alleging wire fraud states that Czubinski defrauded the IRS of confidential property and defrauded the IRS and the public of his honest services by using his valid password to acquire confidential taxpayer information as part of a scheme to: 1) build "dossiers" on associates in the KKK; 2) seek information regarding an assistant district attorney who was then prosecuting Czubinski's father on an unrelated criminal charge; and 3) perform opposition research by inspecting the records of a political opponent in the race for a Boston City Councilor seat. The wire fraud indictment, therefore, articulated particular personal ends to which the unauthorized access to confidential information through interstate wires was allegedly a means.

The portion of the indictment setting forth the computer fraud charges stated that Czubinski obtained something of value, beyond the mere unauthorized use of a federal interest computer, by performing certain searches -- searches representing a subset of those making up the mail fraud counts.

II. Proceedings Below

After indictment and arraignment in June 1995, Czubinski filed a motion to dismiss the indictment . . . . Specifically, the district court rejected Czubinski's argument that counts 1 through 10 of the indictment must be dismissed because "browsing" does not deprive the IRS of any property and because section 1346, the intangible right to honest services amendment to the mail and wire fraud statutes, was unconstitutionally vague as applied to him. . . .

. . . [T]he jury returned a verdict finding Czubinski guilty on all thirteen remaining counts. . . .

We reverse on the ground that the district court erred in denying Czubinski's motion for acquittal . . . .


. . . The denial of a motion for judgment of acquittal presents a question of law, and our review is de novo. We determine anew whether "the evidence is sufficient to sustain a conviction." Fed. R. Crim. P. 29(a).

In determining the evidentiary sufficiency of a guilty verdict, "the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319 (1979). The scope of review is over the totality of the evidence, both direct and circumstantial: we "take a hard look at the record" and "reject those evidentiary interpretations and illations that are unreasonable, insupportable, or overly speculative." United States v. Spinney, 65 F.3d 231, 234 (1st Cir. 1995).


I. The Wire Fraud Counts

We turn first to Czubinski's conviction on the nine wire fraud counts.n4 To support a conviction for wire fraud, the government must prove two elements beyond a reasonable doubt: (1) the defendant's knowing and willing participation in a scheme or artifice to defraud with the specific intent to defraud, and (2) the use of interstate wire communications in furtherance of the scheme. . . . [T]he government failed to prove beyond a reasonable doubt that the defendant willfully participated in a scheme to defraud within the meaning of the wire fraud statute. . . .

The government pursued two theories of wire fraud in this prosecution: first, that Czubinski defrauded the IRS of its property, under section 1343, by acquiring confidential information for certain intended personal uses; second, that he defrauded the IRS and the public of their intangible right to his honest services, under sections 1343 and 1346. We consider the evidence with regard to each theory, in turn.

A. Scheme to Defraud IRS of Property

The government correctly notes that confidential information may constitute intangible "property" and that its unauthorized dissemination or other use may deprive the owner of its property rights. Where such deprivation is effected through dishonest or deceitful means, a "scheme to defraud," within the meaning of the wire fraud statute, is shown. Thus, a necessary step toward satisfying the "scheme to defraud" element in this context is showing that the defendant intended to "deprive" another of their protected right.

The government, however, provides no case in support of its contention here that merely accessing confidential information, without doing, or clearly intending to do, more, is tantamount to a deprivation of IRS property under the wire fraud statute. . . . We do not think that Czubinski's unauthorized browsing, even if done with the intent to deceive the IRS into thinking he was performing only authorized searches, constitutes a "deprivation" within the meaning of the federal fraud statutes.

Binding precedents, and good sense, support the conclusion that to "deprive" a person of their intangible property interest in confidential information under section 1343, either some articulable harm must befall the holder of the information as a result of the defendant's activities, or some gainful use must be intended by the person accessing the information, whether or not this use is profitable in the economic sense. Here, neither the taking of the IRS' right to "exclusive use" of the confidential information, nor Czubinski's gain from access to the information, can be shown absent evidence of his "use" of the information. Accordingly, without evidence that Czubinski used or intended to use the taxpayer information (beyond mere browsing), an intent to deprive cannot be proven, and, a fortiori, a scheme to defraud is not shown.

. . . .

The resolution of the instant case is complex because it is well-established that to be convicted of mail or wire fraud, the defendant need not successfully carry out an intended scheme to defraud. The government does not contend either that Czubinski actually created dossiers or that he accomplished some other end through use of the information. It need not do so. All that the government was required to prove was the intent to follow through with a deprivation of the IRS's property and the use or foreseeable use of interstate wire transmissions pursuant to the accomplishment of the scheme to defraud. In the case at bar, the government failed to make even this showing.

. . . .

B. Honest Services Fraud (Section 1346)

In McNally v. United States, 483 U.S. 350 (1987), the Supreme Court held that the mail and wire fraud statutes do not prohibit schemes to defraud individuals of their intangible, non-property right to honest government services. Id. at 359-60. Congress responded to McNally in 1988 by enacting section 1346, the honest services amendment, which provides:

For the purposes of this chapter, the term "scheme or artifice to defraud" includes a scheme or artifice to deprive another of the intangible right of honest services.
18 U.S.C. § 1346 (effective Nov. 11, 1988). We have held, after considering the relevant legislative history, that section 1346 effectively restores to the scope of the mail and wire fraud statutes their pre-McNally applications to government officials' schemes to defraud individuals of their intangible right to honest services.

. . . .

. . .[T]his case falls outside of the core of honest services fraud precedents. Czubinski was not bribed or otherwise influenced in any public decision-making capacity. Nor did he embezzle funds. He did not receive, nor can it be found that he intended to receive, any tangible benefit. His official duty was to respond to informational requests from taxpayers regarding their returns, a relatively straightforward task that simply does not raise the specter of secretive, self-interested action, as does a discretionary, decision-making role.

. . . .

. . . The conclusive consideration is that the government simply did not prove that Czubinski deprived, or intended to deprive, the public or his employer of their right to his honest services. Although he clearly committed wrongdoing in searching confidential information, there is no suggestion that he failed to carry out his official tasks adequately, or intended to do so.

. . . .

II. The Computer Fraud Counts

Czubinski was convicted on all four of the computer fraud counts on which he was indicted; these counts arise out of unauthorized searches that also formed the basis of four of the ten wire fraud counts in the indictment. Specifically, he was convicted of violating 18 U.S.C. § 1030(a)(4), a provision enacted in the Computer Fraud and Abuse Act of 1986. Section 1030(a)(4) applies to:

whoever . . . knowingly and with intent to defraud, accesses a Federal interest computer without authorization, or exceeds authorized access, and by means of such conduct furthers the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained consists only of the use of the computer.
We have never before addressed section 1030(a)(4). Czubinski unquestionably exceeded authorized access to a Federal interest computer. On appeal he argues that he did not obtain "anything of value." We agree, finding that his searches of taxpayer return information did not satisfy the statutory requirement that he obtain "anything of value." The value of information is relative to one's needs and objectives; here, the government had to show that the information was valuable to Czubinski in light of a fraudulent scheme. The government failed, however, to prove that Czubinski intended anything more than to satisfy idle curiosity.

The plain language of section 1030(a)(4) emphasizes that more than mere unauthorized use is required: the "thing obtained" may not merely be the unauthorized use. It is the showing of some additional end -- to which the unauthorized access is a means -- that is lacking here. The evidence did not show that Czubinski's end was anything more than to satisfy his curiosity by viewing information about friends, acquaintances, and political rivals. No evidence suggests that he printed out, recorded, or used the information he browsed. No rational jury could conclude beyond a reasonable doubt that Czubinski intended to use or disclose that information, and merely viewing information cannot be deemed the same as obtaining something of value for the purposes of this statute.

The legislative history further supports our reading of the term "anything of value." . . . Here, a Senate co-sponsor's comments suggest that Congress intended section 1030(a)(4) to punish attempts to steal valuable data, and did not wish to punish mere unauthorized access:

The acts of fraud we are addressing in proposed section 1030(a)(4) are essentially thefts in which someone uses a federal interest computer to wrongly obtain something of value from another. . . . Proposed section 1030(a)(4) is intended to reflect the distinction between the theft of information, a felony, and mere unauthorized access, a misdemeanor.
132 Cong. Rec. 7128, 7129, 99th Cong., 2d. Sess. (1986). The Senate Committee Report further underscores the fact that this section should apply to those who steal information through unauthorized access as part of an illegal scheme: The Committee remains convinced that there must be a clear distinction between computer theft, punishable as a felony [under section 1030(a)(4)], and computer trespass, punishable in the first instance as a misdemeanor [under a different provision]. The element in the new paragraph (a)(4), requiring a showing of an intent to defraud, is meant to preserve that distinction, as is the requirement that the property wrongfully obtained via computer furthers the intended fraud. S. Rep. No. 132, 99th Cong., 2d Sess., reprinted in 1986 U.S.C.C.A.N. 2479. For the same reasons we deemed the trial evidence could not support a finding that Czubinski deprived the IRS of its property, see discussion of wire fraud under section 1343 supra, we find that Czubinski has not obtained valuable information in furtherance of a fraudulent scheme for the purposes of section 1030(a)(4).


We add a cautionary note. The broad language of the mail and wire fraud statutes are both their blessing and their curse. They can address new forms of serious crime that fail to fall within more specific legislation. On the other hand, they might be used to prosecute kinds of behavior that, albeit offensive to the morals or aesthetics of federal prosecutors, cannot reasonably be expected by the instigators to form the basis of a federal felony. The case at bar falls within the latter category. Also discomforting is the prosecution's insistence, before trial, on the admission of inflammatory evidence regarding the defendant's membership in white supremacist groups purportedly as a means to prove a scheme to defraud, when, on appeal, it argues that unauthorized access in itself is a sufficient ground for conviction on all counts. Finally, we caution that the wire fraud statute must not serve as a vehicle for prosecuting only those citizens whose views run against the tide, no matter how incorrect or uncivilized such views are.

For the reasons stated in this opinion, we hold the district court's denial of defendant's motion for judgment of acquittal on counts 1, 2, and 4 through 14, to be in error. The defendant's conviction is thus reversed on all counts.




4 The federal wire fraud statute, 18 U.S.C. § 1343, provides in pertinent part:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire . . . communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than five years, or both.

Top Top of Page Up Chapter 09 Title Page Title Page
  Email Listserve Email Listserve
(C) 2001-03 Tom W. Bell. All rights reserved. Fully attributed noncommercial use of this document permitted if accompanied by this paragraph.
www.tomwbell.com/NetLaw/Ch09/USvCzubinski.html - v.2003.04.02