Unpublished Disposition, 940 F.2d 1536 (9th Cir. 1991)

MEMORANDUM^** 

Appellant Lamb, prior to sentencing, moved to withdraw his plea of guilty to two counts of wire fraud in violation 18 U.S.C. § 1343. The district court denied the motion, and Lamb was sentenced. Appellant contends on appeal that the district court violated the requirements of Fed. R. Crim. P. 11 in accepting the plea and, further, that the district court abused its discretion by refusing to allow Lamb to withdraw the guilty plea.

A court may permit a defendant to withdraw his plea of guilty, if a motion is made at any time before sentence is imposed, upon a showing by the defendant of "any fair and just reason." Fed. R. Crim. P. 32(d); United States v. Rios-Ortiz, 830 F.2d 1067, 1068 (9th Cir. 1987). A district court's denial of such a motion is reviewed for abuse of discretion. United States v. Navarro-Flores, 628 F.2d 1178, 1183 (9th Cir. 1980) (per curiam).

Lamb is a citizen and resident of the United Kingdom. At the time of the indictment, Lamb was a commodities trader and owned a company, Vanlessen, Richardson & Co., through which he held a seat on the London International Futures Exchange. In 1985, Lamb was indicted for conspiracy, mail fraud, and wire fraud, in violation of 18 U.S.C. §§ 371, 1341, and 1343. In 1985, Lamb pled not guilty to all counts in the indictment. For various reasons, the case lay dormant until July 1989 when Lamb changed his plea to guilty on two counts of the indictment. The court dismissed the remaining counts. Lamb claims that he pled guilty because waiting for a trial had already ruined his marriage and was destroying his business. In February 1990, Lamb moved to withdraw his guilty plea.

Throughout these proceedings, Lamb maintained he was innocent, claiming that his actions were not illegal under English law. Lamb asserts that he only pled guilty because of "excruciating circumstances," not because he was guilty. At one point, Lamb told the court that pleading guilty was what "he had to do." While the court told Lamb that he did not have to plead guilty, it did not attempt to ascertain why Lamb felt compelled to plead guilty.

The factual basis for the charges are as follows. An FBI agent posed as an investment advisor, purportedly seeking tax deductions for client taxpayers. The agent first contacted an American broker who put him in touch with Lamb's company. Lamb's company agreed to execute a "commodity account authorization" for the agent. The agent was to send $35,000 to Lamb. Lamb would then send a letter to the agent stating that the taxpayer had lost $35,000 in trading and that the $35,000 was needed to cover the debt. Eventually, Lamb would return the $35,000 to the taxpayer, minus a commission. In addition, Lamb would provided trading confirmations to the taxpayer. The taxpayer would then be able to use these confirmations to claim a fictitious loss on his income tax return.

The United States Supreme Court has held that, in accepting a guilty plea, a court must examine "the relation between the law and the acts the defendant admits having committed," a task designed to "expose [ ] the defendant's state of mind on the record through personal interrogation...." McCarthy v. United States, 394 U.S. 459, 467 (1969). At the initial plea hearing, Lamb asserted that he had no idea that the funds were being used for fictitious tax losses but thought that they were being used to cover a trading account debit. Lamb admitted that the trades were not at risk. However, Lamb did deny that the trades were "fictitious" under commodity practices in Great Britain. The court eventually asked Lamb if he was aware that wire fraud and mail fraud were violations in the United States. Lamb replied "I am now." This casts doubts upon whether Lamb specifically intended to defraud the IRS at the time of the transaction, which is an essential element of the crime. See Schreiber Distribution Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1400 (9th Cir. 1986).

Because of the ambiguous responses of Lamb and the general murkiness of the Rule 11 hearing, especially when Lamb later maintained that he did not fully understand the intent that was required, we conclude that it was an abuse of discretion for the district court not to have permitted Lamb to change his plea to not guilty. This conclusion is fortified by the fact that Lamb indicated "excruciating circumstances" that forced him to plead guilty, which were never really inquired into by the district court. Because of the difference in the type of commodity transactions in the two countries and because it is unclear that Lamb had the specific intent to defraud the United States Internal Revenue Service, we conclude it would be a miscarriage of justice to prevent Lamb from contesting this criminal charge.

We therefore reverse and remand with the direction that Lamb be permitted to withdraw his plea of guilty to the two charges of the indictment.

REVERSED and REMANDED.