United States v. Strohm
2011 U.S. App. LEXIS 22529
| 10th Cir. | 2011Background
- Strohm, former CFO/Controller of ClearOne, was involved in revenue recognition practices during 2001-2003.
- ClearOne shifted from manufacturer-based to distributor-based revenue recognition, leading to end-of-quarter shipments or “stuffing the channel.”
- In June 2002, at year-end, Strohm calculated shipments to meet revenue projections and decided to raise prices on a specific Production Audio shipment.
- Production Audio Services received an oversized shipment and later returned most of it; no consultation occurred with Production Audio about price or quantity.
- SEC investigated potential securities violations; Strohm testified in the preliminary injunction hearing that she was not involved in the Production Audio sale and was unsure when she learned of it.
- Strohm was later charged in a superseding indictment and convicted by a jury of perjury based on that testimony; Flood was separately convicted on all counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Strohm's questioning/answer fundamentally ambiguous? | Strohm contends ambiguity voids perjury. | Strohm argues the question was ambiguous due to terms 'involved' and 'sale'. | Not fundamentally ambiguous; question understood by ordinary people. |
| Was Strohm's testimony literally true? | Strohm maintains answers were literally true. | Strohm argues literal-truth defense applies. | Answers were not literally true; Bronston defense inapplicable; sufficient evidence shows knowing falsity. |
| Was Strohm's testimony material to the preliminary injunction decision? | Strohm argues testimony on Production Audio was immaterial to injunction decision. | Testimony related to scheme of improper revenue recognition; could influence decision to grant injunction. | Yes; testimony was material to the court's assessment of ongoing securities violations. |
Key Cases Cited
- Bronston v. United States, 409 U.S. 352 (U.S. Supreme Court 1973) (literal truth defense; non-responsive or misleadingly phrased answers not perjury)
- Leifson v. United States, 568 F.3d 1215 (10th Cir. 2009) (materiality and evidentiary standards for perjury under § 1623)
- Hilliard v. United States, 31 F.3d 1509 (10th Cir. 1994) (ambiguity and truthful interpretation of questions in perjury)
- Farmer v. United States, 137 F.3d 1265 (10th Cir. 1998) (fundamental ambiguity framework for perjury questions)
- Larranaga v. United States, 787 F.2d 489 (10th Cir. 1986) (literal truth and ambiguity limits in perjury convictions)
- Hasan v. United States, 609 F.3d 1121 (10th Cir. 2010) (materiality element must be proven to a reasonable jury)
- Gaudin v. United States, 515 U.S. 506 (U.S. Supreme Court 1995) (materiality treated as mixed question of law and fact for jury)