UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

U NITED S TATES OF A MERICA , Plaintiff-Appellee,

v. No. 00-4328 J ORGE M ORA , Defendant-Appellant. Appeal from the United States District Court

for the Middle District of North Carolina, at Durham. Frank W. Bullock, Jr., District Judge. (CR-99-223)

Argued: February 26, 2001

Decided: July 31, 2001 Before WIDENER, MOTZ, and KING, Circuit Judges.

Vacated and remanded by unpublished opinion. Judge Widener wrote

the opinion, in which Judge Motz and Judge King joined. COUNSEL ARGUED: Jeffrey S. Lisson, Winston-Salem, North Carolina, for

Appellant. Harry L. Hobgood, Assistant United States Attorney,

Greensboro, North Carolina, for Appellee. ON BRIEF: Walter C. Holton, Jr., United States Attorney, Greensboro, North Carolina, for

Appellee.

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). OPINION WIDENER, Circuit Judge:

Jorge Mora (Mora) appeals a jury conviction under 18 U.S.C. 1028(a)(3) (2000) for the possession of five or more false United

States identification documents. Because the jury was not adequately

instructed on the elements of wire fraud, we vacate Mora's conviction

and remand for a new trial. I. Mora was president of AmBienTemps, Inc. (AmBien), which is a

temporary employment agency in High Point, North Carolina that

supplies asbestos-removal workers in five or six states. Most of

AmBien's applicants are foreign and thus must have a valid resident

alien work authorization card (green card) or a social security number

so that they may work in the United States.

Mora interviewed and hired applicants, and he signed Immigration

and Naturalization Service (INS) Eligibility Verification Forms 1

(form I-9) for the employees. As part of AmBien's business routine,

Congress enacted the Immigration and Control Act of 1986 (IRCA)

to reduce employment of unauthorized workers. See H.R. No. 101-723(i)

at 46 (1986), reprinted in 1986 U.S.C.C.A.N. 5649, 5649, 5650. It estab-

lished an employer verification system. The I-9 form is a mechanism to

ensure that workers are authorized to work. See 8 U.S.C. 1324a(b)(1)(A); 8 C.F.R. § 274a.2(b)(ii). The employee tenders to the

employer certain identification documents, which are then listed on the

form. See 8 U.S.C. 1324a(b), 1324b(b)(1)(C). An employer must

accept all documents that appear genuine on their face. See 8 U.S.C. 1324a(b). If an employer complies with the § 1324a(b) employee veri-

fication requirements, the employer has a good faith defense to civil or

criminal liability for employing unauthorized workers. See 8 U.S.C. 1324a(a)(3).

photocopies were made of green cards, social security cards, and state

asbestos licences, and these copies were placed in the employees'

files. Copies of these files were then forwarded, usually by fax or

packets hand-delivered by the workers, to the asbestos contractors

who used AmBien's workers. The original cards were returned to the

workers.

On October 8 and October 16, 1997, INS Agent Charles Goodman

conducted an inspection of AmBien, and Mora gave him 100 I-9

forms from hires within the last three months. The majority were

signed by Mora, and approximately 77 had invalid green card num-

bers. Goodman told Mora to fire the workers who did not provide ver-

ification documents and gave him a booklet 2 regarding how to detect

counterfeit cards. Mora fired, or did not employ, 23 employees who

had provided invalid work authorization numbers. INS then closed its

investigation finding AmBien in "adjusted compliance."

The government relates that asbestos-removal workers are gener-

ally required to be licenced by States. The Division of Public Health

of the North Carolina Department of Health and Human Services

requires asbestos-removal workers in North Carolina to be licenced.

Workers must complete a basic course in asbestos removal by an

accredited school, which is valid for one year. They then must take

a refresher course from an accredited school. Each year the Depart-

ment accredits 1900 workers, 90% of whom are foreign. AmBien

operated Wellington House, an asbestos-removal training school

licenced by North Carolina in both the basic and refresher courses.

North Carolina revoked the training licence for the basic course in

3 and 1995; it was allowed to teach the refresher course.

In December 1998, EPA agent Ivan Viken interviewed various

state asbestos-removal licensing officials, INS agents, AmBien

employees, and contractors who do business with AmBien. EPA

agents then executed a search warrant at AmBien offices on March

, 1999.

The pamphlet was entitled, "What Color is Your Green Card?". On

October 16, 1997, Agent Goodmen instructed Mora regarding how to

spot false cards by looking at the type face, whether the photo is raised,

and where the letters line up. In Mora's office, Viken located five counterfeit green cards and

four invalid social security cards relied upon in the indictment in an

envelope in a credenza located about 4 or 5 feet behind Mora's desk.

The agents also found 285 asbestos worker licenses in Mora's desk

and credenza in various names issued by various States. Mora testi-

fied that he was unaware that many were in his office. Of a sample

of 229 social security numbers listed, 179 were invalid.

The agents then examined approximately 1251 personnel files from

employees in 1998 and 1999, located in Bill Williams' office, the

AmBien accountant. The district court allowed evidence at trial (over

an in limine objection) establishing that there were 1251 different

social security numbers in these filesÐ982 of which were found

invalid by Frank Maroney, Jr. of the Social Security Administration.

The district court similarly allowed evidence over objection that there

were 969 different green card numbers compiled into a list by Agent

VikenÐ879 of which were found invalid by Agent Goodmen. Good-

men testified that an employer could call the INS to verify a suspi-

cious green card number only if they are in a pilot program. AmBien

was not. The agents also discovered canceled payroll checks for the five

individuals with the invalid green cards mentioned in the indictment.

A former AmBien employee testified that Mora instructed her to add

to the Wellington School roster names of persons who did not attend

that training. Mora denied the allegation. The government did not

present any testimony from AmBien customers at trial.

Mora was indicted on August 30, 1999 and charged in one count

with violating 18 U.S.C. 1028(a)(3) for possessing five or more

false United States identification documents (the five green cards and

four social security cards) with the intent to use them unlawfully. The

indictment alleged that Mora possessed six false green cards and six

false social security cards. On November 17, 1999, the indictment

was redacted upon motion of the government to charge possession of

only five false green cards and four false social security cards.

Mora was convicted by a jury in November 19, 2000 and was sen-

tenced on March 28, 2000 to 15-months imprisonment and fined

$25,000 under United States Sentencing Guideline § 2L2.1. He timely

appealed on April 20, 2000. II. We exercise jurisdiction pursuant to 28 U.S.C. 1291. We review

a district court's jury instructions de novo. See United States v. Ellis ,

F.3d 908, 913 (4th Cir. 1997).

This appeal involves the interrelation between the statutory ele-

ments for two separate offenses. The indictment in this case alleges

that Mora violated 18 U.S.C. 1028(a)(3). Congress adopted the

False Identification Crime Control Act of 1982, Pub. L. No. 97-398,

Stat. 2009, of which § 1028(a)(3) is a part, to create federal

offenses relating to possession of false identification documents,

counterfeiting of identification documents, and trafficking in such

documents. See H.R. Rep. No. 802, 97th Cong., 2d Sess. 1, reprinted

in 1982 U.S.C.C.A.N. 3519, 3519. In creating the § 1028(a)(3)

offense, Congress made an element of the offense an "intent to use

unlawfully" the false identifications possessed. 18 U.S.C. 1028(a)(3). Accordingly, possession of five or more false identifica-

tions violates § 1028(a)(3) when the intended use of the documents

would also "violate[ ] a federal, state or local law, or [be] part of the

making of a misrepresentation that violates a law." H.R. Rep. No. , 97th Cong., 2d Sess. 10, reprinted in 1982 U.S.C.C.A.N. 3519,

9. Thus, for a jury to conclude that a defendant intended to use false

identifications unlawfully, the government must establish two things:

) the uses to which defendant intended to put the false identifications

and 2) that those intended uses would violate one or more federal,

state, or local laws. See United States v. Rohn , 964 F.2d 310, 313 (4th

Cir. 1992). The elements of a § 1028(a)(3) offense thus are: 1) posses-

sion of five or more false identification documents; 2) the defendant

knew the identification documents were false; 3) the documents were

or appeared to be issued by the United States; 4) and the possession

was with the intent to use them unlawfully . See § 1028(a)(3)(c)

(emphasis added). This case presents a question with respect to jury instructions for the final element.

Rohn requires the government to present to the jury a specific

offense that satisfies the "unlawfully" elementÐrather than relying on

mere notions of right and wrong. See Rohn , 964 F.2d at 312-13. Rohn

was charged with violating § 1028(a)(3). At trial, over 70 pieces of

false identification were admitted into evidence, including social

security cards, driver's licences, bank cards, birth certificates, and stu-

dent identification cards. See Rohn , 964 F.2d at 312. During delibera-

tions, the jury asked the court whether fleeing to avoid arrest was

unlawful. See Rohn , 964 F.2d at 312. In response, the district court

relying on 18 U.S.C. 1073 stated, "YesÐit is a violation of federal

law to travel or move in interstate commerce with intent to avoid

prosecution for a felony under the laws of the place from which one

flees." Rohn , 964 F.2d at 312.

On appeal, we noted that although there was a law (unlawful flight)

cited to the jury in that case, we emphasized that the government

"presented no evidence at trial" regarding the felony nature of her out-

standing warrants. See Rohn , 964 F.2d at 313. In reference to this

fact, we noted that because of this lack of proof the government did

not contend that the instruction relating to this law was sufficient to

support the verdict. In an attempt to get around this lack of evidence,

the government argued that the district court was not required to cite

for the jury any particular law that the intended uses would have vio-

lated. See Rohn , 964 F.2d at 313-14. But we rejected this argument.

We held that the text of § 1028(a)(3) and its legislative history

showed Congress' intent that the government prove that the intended

use was unlawful. See Rohn , 964 F.2d at 313-14. Absent an instruc-

tion being given on an unlawful use, we held that the conviction could

not stand. See Rohn , 964 F.2d at 313. We cautioned that this showing

does not mandate proving that the defendant actually put the docu-

ment to the unlawful useÐbut rather, only that the defendant's

intended use would have violated some law. See Rohn , 964 F.2d at

n.3. We apply these principles to the conviction at hand.

In order to convict properly under § 1028(a)(3), the first three ele-

ments of § 1028 must be met as well as an intent to use the documents

named in the indictment unlawfully. At trial, 3 the government alleged

The indictment did not refer to the wire fraud statute, and Mora appar-

ently did not learn of the specific alleged intended use until trial.

that the final element of § 1028(a)(3) was met with an intent to violate

the federal wire fraud statute. The government articulated its theory

of the case during its opening remarks and closing argument: Mora

intended to use the false green and social security cards to carry out

a wire fraud scheme to defraud its customers, asbestos-removal con-

tractors, by providing them with workers using false identification,

many of whom had not been properly trained. In this regard, the court

instructed the jury on the elements of § 1028 as well as the elements

of wire fraud as follows:

Now, the Government contends that the defendant's

intended use would have violated Title 18, United States

Code, Section 1343, which makes it a Federal crime for any-

one to use interstate wire communication facilities in carry-

ing out a scheme to defraud. The offense of wire fraud is

committed when a person having devised or intending to

devise a scheme to defraud or obtain money by false or

fraudulent pretenses, transmits or causes to be transmitted

by wire in interstate commerce any writings for the purpose

of executing such scheme.

It is not necessary that the Government prove that the use

of interstate wire communications was intended to be the

sole or exclusive means of accomplishing that fraud. It is

not necessary that the Government prove that the defendant

actually used the false identification documents to complete

wire fraud. It is only necessary that the Government prove

beyond a reasonable doubt, that the defendant's intended

use would have violated a particular Federal law. In this

case, that the defendant intended to use a false identification

document listed in the indictment to further a wire fraud

scheme.

The district court judge instructed the jury in line with then-existing

wire fraud elements. See, e.g., United States v. ReBrook , 58 F.3d 961,

(4th Cir. 1995). Although this circuit long held that materiality

in the wire fraud statute was a matter of law for the court, the

Supreme Court recently held that materiality of a false statement was

a matter of fact for the jury. See United States v. Neder , 527 U.S. 1, 25 (1999) ("Accordingly, we hold that materiality of falsehood is an

element of the federal mail fraud, wire fraud, and bank fraud stat-

utes."). Therefore, the factual elements of wire fraud under 18 U.S.C. 1343 are: 1) a scheme to defraud; 2) use of an interstate wire in fur-

therance of the scheme; and 3) statements or omissions in the wire

communication that were material to the scheme. See Neder , 527 U.S. at 10. As applied in the context of a § 1028(a)(3) prosecution, the

government must prove that Mora intended to engage or engaged in

a scheme to defraud, intended to use or used interstate wire in further-

ance of the intended scheme, and that Mora intended to make or made

material misstatements in the wire communication.

Mora did not object in the district court to the failure to include the

materiality element or on any other ground regarding the jury instruc-

tions, and thus our review is for plain error. See R. Fed. Crim. P. (b); United States v. Williams , 152 F.3d 294, 300 (4th Cir. 1998).

To reverse for plain error occurring at trial, a reviewing court must:

) identify an error; 2) that was plain; 3) that affects substantial rights;

and 4) that seriously affects the fairness, integrity or public reputation

of judicial proceedings. See United States v. Olano , 507 U.S. 725,

  (1993); United States v. Brewer , 1 F.3d 1430, 1434-35 (4th Cir. 3).

In this case, there was error because the district court omitted an

essential element of the offense of wire fraud from its jury instruc-

tions. To be plain, an error must be clear or obvious, at least by the

time of appeal. See Olano , 507 U.S. at 734. An error is clear or obvi-

ous "when the settled law of the Supreme Court . . . establishes that

an error has occurred. . . ." United States v. Neal , 101 F.3d 993, 998

(4th Cir. 1996). In light of Neder , we conclude that this error was

plain.

We next address whether the error affected substantial rights, i.e. ,

that it was prejudicial. See Olano , 507 U.S. at 734; United States v. Hastings , 134 F.3d 235, 240 (4th Cir. 1998) (explaining that prejudice

is shown when it "actually affected the outcome of the proceedings").

Mora contends that this error taints his conviction and thus requires

reversal because he is entitled to have a jury determine that all ele-

ments of the offense have been proven. The failure to instruct on an

element of the offense, however, does not require reversal when "the

omitted element was uncontested and supported by overwhelming

evidence, such that the jury verdict would have been the same absent

the error." Neder , 527 U.S. at 17. When no objection is preserved

below, the burden of proof is on the defendantÐnot the government

Ðbecause we undertake plain error, rather than harmless error,

review. See United States v. Strickland , 245 F.3d 368, 379-80 (4th

Cir. 2001). Under this inquiry, it is proper to consider the evidence

actually presented at trial. See United States v. Brown , 202 F.3d 691,

-703 (4th Cir. 2000).

It is important to remember there was no instruction to the jury

defining the scheme or artifice to defraud under the wire fraud statute,

U.S.C. § 1343. And there was no instruction on materiality. The

government, however, argued to the jury that the people who used the

workers hired by AmBien as asbestos removers had been defrauded

because "they were assured that they were getting workers who had

been fully trained in every aspect to remove asbestos" and "because

they anticipated that they would be getting workers who were, first

of all, qualified to work in the United States."

But not one contractor who used the AmBien workers to remove

asbestos testified in the case, so that aspect of proof of materiality, at

least, was not supported by such testimony. It is true that one of the

secretaries testified that such contractors required the green cards,

Social Security cards, drivers licenses, I-9 forms and asbestos

removal training class papers, and Mora testified that one of such con-

tractors, at least, did. Bearing in mind that the acts for which Mora

was indicted refer wholly to Social Security cards and green cards,

these acts could not possibly have been material in ascertaining

whether or not the workers were "fully trained in every respect to

removing asbestos" any more than whether or not the possession of

a drivers license is material in ascertaining whether an automobile is

negligently operated. Pursuant to the statute involved here, the term

" employer shall mean the independent contractor or contractors and

not the person or entity using the contractor labor." 8 C.F.R. § 274a.1(g). That definition may well bear on the materiality to the

various contractors for it may determine criminal or civil liability. So

the materiality of the conduct with which Mora was charged is quite

in dispute and the jury should have been instructed. Mora specifically denied the wrongdoing with which he was charged so the element of

materiality was contested. 4 Our decision in United States v. Brown ,

F.3d 691, 701 (4th Cir. 2000), requires that we find the error to

be not harmless. ("But if the element was generally contested, and

there is evidence upon which a jury could have reached a contrary

finding, the error was not harmless.")

The standard for prejudice under harmless or plain error standards

is the same. See United States v. Strickland , 245 F.3d 368, 379-80

(4th Cir. 2001). The error being not harmless and prejudicial, we are

of opinion that substantial rights of the defendant were affected, and

the fairness of the judicial proceeding was seriously affected. See

Olano , 507 U.S. at 732. Under the circumstances present in this case,

we must vacate the order of conviction and remand for a new trial.

We express no opinion on any question which was not addressed

in this opinion. We are aware that the case of Burks v. United States ,

U.S. 1, 18 (1978), requires a decision on the sufficiency of the

evidence as it overruled Bryan v. United States , 338 U.S. 552 (1950).

Because an element of the offense was missing in this case, however,

we believe that it would not be fair either to the government or to

Mora to pass on that question at this stage of the proceeding, and we

address only the failure to instruct on materiality and the scheme to

defraud at this time. VACATED AND REMANDED FOR A NEW TRIAL 4 We note also that the jury reported at one time that it was hung.