Shrimp company owner’s false claims for federal CDSOA subsidy leads to a criminal conviction

Michael Anderson owned and operated a shrimping business called Shrimpy’s in Savannah Georgia.  From 2005 through 2007, Anderson submitted CBP (Customs & Border Protection) Forms 7401 in which he falsely claimed large business expenses as part of a scheme to acquire federal government subsidies under the Continued Dumping and Subsidy Act of 2000 (CDSOA).   This federal program is designed to compensate U.S. domestic producers for losses that foreign producers caused by dumping underpriced goods into the American market.  Enacted by Congress and administered by Customs, the program allowed the federal government to levy duties on specific foreign goods and distribute the funds to affected domestic producers of products, such shrimpers, who could claim subsidies by identifying their business expenses on the Form 7401 and mailing it to the Customs office in Indiana.  Customs would then use the claimed expenses to calculate each qualifying domestic producer’s pro rata share of the funds and distribute the funds accordingly.

Mr. Anderson’s claims for 2005 through 2007 stated he had expenses exceeding $24 million in raw material expenses.  He submitted 47 invoices from a company called R&R Seafood, which happened to be identical invoices except they bore different dates ranging from February 2005 to September 2006 and listed different rates for shrimp.  The invoices showed he purchased 4.7 million pounds of shrimp for more than $29 million in two years.  Based on his CDSOA claims, Anderson received a total of $864,292.40 in federal subsidies.

It turns out that R&R Seafood was incapable of supplying the quantities of shrimp specified in the invoices.  As a small business, R&R Seafood did not have any of the equipment necessary for handling large quantities of shrimp.  On a good day during shrimping season, the business would catch and sell 100 to 200 pounds of shrimp out of R&R.  They never sold nor did it possess 100,000 pounds of shrimp at one time.

Anderson was charged with federal crimes of mail fraud, making false statements and money laundering for falsely claiming business expenses over $24 million and using the money to buy real estate and stocks.  He went to trial and was convicted.  After the defense rested its case, the district court asked Anderson to confirm he understood his right to testify and to indicate if he wished to do so.  After the judge spoke to him, he consulted with his attorney.  He then opted to take the stand.

In his appeal Anderson argued that the trial court erred by inquiring whether Anderson wanted to testify because it was a violation of his right to remain silent and it impermissibly interfered with the attorney client privilege under the Sixth Amendment.

The appellate court disagreed and found that the district court’s brief, straightforward, and neutral inquiry as to what the Defendant wanted to do was not a violation of the defendant’s right to testify, nor did it affect his right to effective assistance of counsel.  The trial court only asked the defendant whether he was aware of his right and what he wanted to do.  Nothing in the inquiry undermined the Defendant’s right to testify or improperly intruded in the attorney client relationship.

Anderson also argued that the district court violated Federal Rule of Criminal Procedure 30 by amending the mail-fraud jury instruction after defense counsel’s closing argument.  The appellate court found no error because the trial court amended an incorrect instruction so that it was a correct statement of the law regarding the jurisdictional element of the offense.  While the trial court could have given a better curative instruction to the jury about changing the instruction, but it did not among to a reversal of the conviction.