## Facts

- A federal grand jury investigated multiple crimes and questioned Sherry Lynn Smith about the cash purchase of a Chevrolet Corvette involving her boyfriend, Craig Keltner.
- Keltner attempted to pay $12,200 in cash; after being told an IRS report was required for cash transactions over $10,000, he rearranged payment to $9,800 in cash plus a $2,400 check from Smith.
- The dealership temporarily held the $12,200, accepted Smith’s $2,400 check, and returned $2,400 in cash to Keltner; Smith deposited $2,400 cash into her bank account the same day.
- Under oath, Smith initially testified falsely that she contributed $3,000 from her own savings toward the Corvette and denied that the $2,400 deposit came from Keltner.
- After a 38-minute break during which she reviewed bank records, Smith resumed testimony in the same grand-jury appearance and admitted the prior statements were false, acknowledging the $2,400 belonged to Keltner and was given to her to deposit as part of the transaction.
- The government indicted Smith for conspiracy, structuring-related offenses, and perjury under 18 U.S.C. § 1623(a) based on the initial false testimony.
- Smith entered a conditional guilty plea to perjury after the district court denied her motion to dismiss under § 1623(d)’s recantation bar; the other counts were dismissed.

## Issues

1. Whether the recantation bar in 18 U.S.C. § 1623(d) applies when a witness corrects false grand-jury testimony during the same continuous proceeding.
2. Whether § 1623(d)’s requirements that the false declaration “has not substantially affected the proceeding” and “it has not become manifest that such falsity has been or will be exposed” are conjunctive (both required) or disjunctive (either sufficient).

## Decision

- The Eighth Circuit vacated Smith’s perjury conviction and remanded.
- The court held that the final two conditions in § 1623(d) are disjunctive, permitting the recantation bar if, at the time of admission, either:
  - the false declaration had not substantially affected the proceeding, or
  - it had not become manifest that the falsity had been or would be exposed.
- The district court erred by treating those conditions as cumulative requirements and denying Smith’s motion on that basis.

## Legal Principles

- Statutory interpretation of § 1623(d) is reviewed de novo and begins with the statutory text.
- Section 1623(d) provides a limited statutory bar to prosecution when a witness, in the same continuous proceeding, admits the falsity of prior testimony under conditions set by the statute.
- In the Eighth Circuit, § 1623(d)’s “substantial effect” condition and “manifest exposure” condition operate as alternatives rather than joint prerequisites.
- A conviction based on a conditional guilty plea must be vacated where the plea followed an erroneous legal ruling that improperly denied a preserved statutory defense.

## Conclusion

The Eighth Circuit construed § 1623(d) to allow recantation to bar a § 1623 perjury prosecution when, during the same proceeding, the witness admits falsity before either the false testimony substantially affects the proceeding or it becomes manifest the falsity will be exposed, and it vacated Smith’s conviction because the district court applied an incorrect conjunctive reading.


United States v. Smith, 35 F.3d 344 (8th Cir. 1994)