Opinion
Criminal Case No.: C3-00-76.
January 3, 2002
MEMORANDUM AND ORDER
I. Introduction
Before the Court is a motion by defendants Duane Huber, Duane Huber, d/b/a Huber Farms General Partnership, and Huber Farms, Inc. to dismiss several counts of the Second Superseding Indictment (doc. # 72). The government opposes this motion (doc. # 80). For the reasons stated below, the motion is DENIED.
II. Analysis
A. Count Eighteen
Defendants contend that Count Eighteen is duplicitous or, alternatively, that it fails to allege an essential element of the crime charged. Count Eighteen charges defendants with conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i), 1956(a)(1)(B)(i), and 1956(h). This statute provides in relevant part:
(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity
(A)(i) with the intent to promote the carrying on of specified unlawful activity; or
(B) knowing that the transaction is designed in whole or in part —
(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity . . . .
(h) Any person who conspires to commit any offense defined in this section or section 1957 shall be subject to the same penalties as those prescribed for the offense the commission of which was the object of the conspiracy.Id. (emphasis added).
Defendants allege that Count Eighteen is duplicitous or that it fails to allege an essential element of the crime charged by contending that it does not allege a specific financial transaction, but merely alleges generally that defendants conspired to engage in unlawful financial transactions from January 1998 until March 17, 2000. Courts have acknowledged that for a substantive money laundering charge, the government must allege a specific financial transaction. See, e.g., United States v. Prescott, 42 F.3d 1165 (8th Cir. 1994); United States v. Conley, 826 F. Supp. 1536 (W.D.Pa. 1993). This is so because Congress intended each separate financial transaction to constitute an offense under the money laundering statute. The legislative history is instructive in this regard; the Senate Report states:
It should be noted that each transaction involving "dirty money" is intended to be a separate offense. For example, a drug dealer who takes $1 million is cash from a drug sale and divides the money into smaller lots and deposits it in 10 different banks (or in 10 different branches of the same bank) on the same day has committed 10 distinct violations of the new statute. If he then withdraws some of the money and uses it to purchase a boat or condominium, he will have committed two more violations, one for the withdrawal and one for the purchase.Conley, 826 F. Supp. at 1544, n. 6 (quoting S. Rep. No. 433, 99th Cong.2d Sess. 12 (1986)). Thus, there is no doubt that the government must charge a specific financial transaction for each substantive money laundering count.
While acknowledging that specific acts must be charged for the substantive provisions of the money laundering statute, the government argues that no specific act need be alleged pursuant to section 1956(h), which attaches liability to anyone who conspires to commit any of the substantive offenses in the money laundering statute. The Court agrees. Courts have long recognized that conspiracy is a separate and distinct crime from the substantive offense and should not necessarily be treated the same as the underlying substantive offense. Iannelli v. United States, 420 U.S. 770, 777 (1975) (explaining the distinctions between a conspiracy and its substantive offense). The legislative history does not indicate, and the Court does not find, that Congress meant that each charge of conspiracy must allege one specific financial transaction, especially since the substantive counts of money laundering set forth specific financial transactions. Thus, the Court finds that while the government must allege a specific financial transaction for the substantive crime of money laundering, no such requirement is necessary to allege a conspiracy to commit money laundering. Defendants motion to dismiss Count Eighteen is therefore denied.
B. Counts Twelve, Fourteen, Sixteen
Counts Twelve, Fourteen, and Sixteen charge defendants with money laundering via deposit of monies into accounts in the names of defendants. Defendants allege that a money laundering charge is improper and should be dismissed on two grounds. First, defendants contend that these counts merely allege the deposit of illegally obtained funds, and thus fail as a matter of law. Second, defendants assert that these counts are duplicitous because each count alleges violations of 18 U.S.C. § 1956(a)(1)(A)(i) and 18 U.S.C. § 1956(a)(1)(B)(i).
In support of their first argument, defendants cite United States v. Jolivet, 224 F.3d 902 (8th Cir. 2000), in which the court held that a woman who obtained insurance money by fraudulent means could not be convicted of money laundering merely by depositing the money in her deposit account. The court found that if the underlying crime is completed, then there could not be an additional carrying on of the illegal activity by the deposit. Id. at 909. The court in Joliet further explained why a mere deposit of funds is insufficient:
The government must prove that the defendant, using illegally-gained proceeds, undertook a financial transaction "with the intent to promote the carrying on of specified unlawful activity." § 1956(a)(1)(A)(i). It is true that the deposit of funds in a bank account may promote an antecedent unlawful activity by making the funds available to the wrongdoer. However, the government bears the burden of proving that the money was used to further the carrying on of such illegal activity. We find no logic in the government's suggestion that Jolivet could promote the carrying on of an already completed crime. Cf. United States v. Edgmon, 952 F.2d 1206, 1214 (10th Cir. 1991) ("Congress aimed the crime of money laundering at conduct that follows in time the underlying crime rather than to afford an alternative means of punishing the prior `specified unlawful activity.'").Id. at 909. Thus, defendants are correct that a mere deposit of money is insufficient to obtain a money laundering conviction. However, the indictment specifically charges that the money was deposited to carry on an unlawful activity and to conceal illegal proceeds. If the government can prove at trial that defendants used the proceeds from any one incident to further their future schemes or to conceal illegal proceeds, then a money laundering conviction is appropriate. Id. The Court thus finds it inappropriate to dismiss this count at the pretrial stage when the indictment sufficiently alleges that defendants used the money to carry on an unlawful activity and to conceal the illegal proceeds. Moreover, the Court finds that the Jolivet case is readily distinguishable from the case at hand. In Jolivet, the defendant merely deposited proceeds from insurance fraud into her own account. Here, the defendants allegedly caused the transfer of funds from the accounts of the alleged co-conspirators to the accounts of defendants. This constitutes more than a mere deposit. Defendants motion to dismiss Counts Twelve, Fourteen, and Sixteen on this basis is therefore denied.
Defendants also allege that Counts Twelve, Fourteen, and Sixteen are duplicitous because each count alleges violations of 18 U.S.C. § 1956(a)(1)(A)(i) and 18 U.S.C. § 1956(a)(1)(B)(i). A count is duplicitous if a single count alleges two or more separate and distinct offenses. United States v. Moore, 184 F.3d 790, 793 (8th Cir. 1999). An indictment is not duplicitous, however, where it charges two different methods of completing the same general offense. United States v. Street, 66 F.3d 969, 974 (8th Cir. 1993). Here, a strong indication that Congress intended to create only one offense is that section 1956 imposes a single penalty for conduct under 1956(a)(1)(A)(i) or 1956(a)(1)(B)(i). Id. Therefore, since the statute specifies two or more ways in which one offense may be committed, all may be alleged in the conjunctive in one count of the indictment, and proof of any one of the methods will sustain a conviction. Id. (quoting Gerberding v. United States, 471 F.2d 55, 59 (8th Cir. 1973)).
The Court recognizes that each subsection requires proof of different types of acts. United States v. Nattier, 127 F.3d 655, 658 (8th Cir. 1997). However, any jury confusion in this regard may be cured by a limiting instruction requiring the jury to unanimously find the defendant guilty of at least one distinct act. Id. The Court will so instruct the jury. Thus, defendants motion to dismiss these counts on the grounds of duplicity is denied.
Defendants ask, however, that this Court direct a bill of particulars, or alternatively, that the government give the Court and defendants notice of which subsection under which it intends to proceed. The district court has broad discretion in granting or denying a bill of particulars. United States v. Stephenson, 924 F.2d 753, 762 (8th Cir.),cert. denied, 502 U.S. 813 (1991). A bill of particulars is warranted when the indictment fails to fairly apprise the defendant of charges he will face at trial. United States v. Wessels, 12 F.3d 746, 750 (8th Cir. 1993). By tracking the language of the money laundering statute, Counts Twelve, Fourteen, and Sixteen sufficiently inform defendants of the nature of the charges against them. A bill of particulars is thus unnecessary. Id.
Citing United States v. Jackson, 935 F.2d 832, 842 (7th Cir. 1991), defendants alternatively request that this Court order the government to advise the Court and defense counsel whether it is proceeding under either or both subsections. While the Jackson court mentioned such an option, the primary concern of the court was to avoid confusion for the jury. As mentioned above, this confusion will be alleviated by a limiting instruction. Defendants request is thus denied.
In a footnote, defendants further challenge the sufficiency of the indictment by claiming that Counts Thirteen, Fifteen, and Seventeen, which charge violations of 18 U.S.C. § 1957 (engaging in monetary transaction in property derived from specified unlawful activity), and Counts Twelve, Fourteen, and Sixteen, which charge violations of 18 U.S.C. § 1956 (money laundering), are improperly multiplicitous. An indictment is multiplicitous if it charges a single offense in more than one count. United States v. Webber, 255 F.3d 523, 527 (8th Cir. 2001). Courts which have addressed this issue have found that violations of § 1956 and § 1957, while likely based on the same conduct, represent two distinct offenses, each with different elements. See, e.g., United States v. Hill, 167 F.3d 1055, 1069-70 (6th Cir. 1999);United States v. Caruso, 948 F. Supp. 382, 390-91 (D.N.J. 1996); United States v. Ferrouillet, 1996 WL 684461 at *1-*2 (E.D.La. Nov. 26, 1996). The Court fully adopts the reasoning articulated in these cases, since it has found no cases that support a contrary finding. The Court thus holds that the indictment with respect to these counts was not multiplicitous.
C. Count Three
Count Three charges Duane Huber with aiding and abetting false statements to the Commodity Credit Corporation (CCC) in violation of 15 U.S.C. § 714m (substantive statute) and 18 U.S.C. § 2 (aiding and abetting statute). Section 714m(e) of the United States Code provides that All the general penal statutes relating to crimes and offenses against the United States shall apply with respect to the Corporation, its property, money, contracts and agreements, employees, and operations: Provided, That general penal statutes shall not apply to the extent that they relate to crimes and offenses punishable under subsections (a) to (d) of this section . . .
Defendants contend that since aiding and abetting is a general penal statute, then it may not be charged in conjunction with 15 U.S.C. § 714m. Defendants reading of the statute is misconstrued. Section 714m(e) provides that when a prosecutor has a choice of charging a crime under a general penal statute or under 714m, the prosecutor must choose 714m. For example, it is improper to charge conduct that falls within the purview of 714m(d) as conspiracy pursuant to the general conspiracy statute, 18 U.S.C. § 371, instead of a conspiracy pursuant to 15 U.S.C. § 714m(d). See United States v. Potishman, 230 F.2d 271, 274 n. 10 (5th Cir. 1956). As a second example, it is improper to charge receipt and retention of stolen property from the CCC under 18 U.S.C. § 371, when such an offense is cognizable under 18 U.S.C. § 714m. See United States v. Ray, 514 F.2d 418, 421 (7th Cir. 1975). Here, the government is not attempting to charge aiding and abetting in lieu of charging an offense under 714m; rather, the government charges aiding and abetting in conjunction with 714m. Moreover, while it did not address the issue of whether aiding and abetting false statements was a proper claim, at least one court has allowed such a claim. See United States v. Addington, 471 F.2d 560, 562 (10th Cir. 1973) (analyzing whether there was sufficient evidence to uphold a conviction of aiding and abetting false statements in violation of 15 U.S.C. § 714m). The Court thus finds that an indictment may properly charge aiding and abetting false statements pursuant to 15 U.S.C. § 714m and 18 U.S.C. § 2.
Defendants further contend that several other counts are preempted by the related to language of 15 U.S.C. § 714m(e). First, defendants contend that portions of Count One, which generally charges conspiracy under 18 U.S.C. § 371, is preempted by 714m(d), which provides a violation for a conspiracy to commit offenses against the CCC. The conspiracy claim in Count One, however, encompasses a conspiracy broader than just a conspiracy to commit offenses against the CCC. Defendants are seemingly requesting the Court to attempt to carve out from Count One the conduct that provides a violation of 714m(d) alone. This the Court finds to be unworkable and declines to do. Defendants request to dismiss Count One is therefore denied. For the same reasons, the Court denies defendants request to dismiss Counts Two and Four.
D. Counts Two and Four
Defendants further claim that Counts Two and Four are multiplicitous. Count Two charges generally that defendants made false statements to agencies of the United States in violation of 18 U.S.C. § 1001. Count Four charges that defendants made false statements to the Risk Management Agency/Federal Crop Insurance Corporation (RMA/FCIC) and the Farm Service Agency (FSA) in violation of 18 U.S.C. § 1014. Defendants contend that 18 U.S.C. § 1001 is a catch-all provision, providing punishment for false statements not otherwise covered by more specific statutes. Therefore, defendants conclude that they should not be charged under 18 U.S.C. § 1001 when a more narrow and specific statute allegedly covering the same misconduct exists under 18 U.S.C. § 1014. The government argues, however, that each statute requires an element that the other does not.
An indictment is multiplicitous if it charges a single offense in more than one count. Webber, 255 F.3d at 527. To determine whether charges are multiplicitous, the Eighth Circuit has employed what has become known as the Blockburger test, which is a rule of statutory construction to determine whether Congress meant to create separate offenses:
The applicable rule is that, where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one is whether each provision requires proof of an additional fact which the other does not.United States v. Blockburger, 284 U.S. 299, 304 (1932); see also United States v. Wilkinson, 124 F.3d 971, 975 (8th Cir. 1997) (applying theBlockburger test to determine whether the indictment was multiplicitous). This test is inapplicable, however, when there is a clear indication of contrary legislative intent. Albernaz v. United States, 450 U.S. 333, 340 (1981).
Comparing the language of sections 1001 and 1014, the Court finds that Congress created two separate and distinct offenses. The elements to be established under section 1001(a) are that the defendant: (1) knowingly and willfully, (2) made a statement (3) that was materially false (4) to a federal agency. 18 U.S.C. § 1001(a)(2); United States v. Turner, 140 F.3d 815, 818 (8th Cir. 1997). Section 1014 requires that the defendant: (1) knowingly or willfully; (2) made false statements; (3) to any institution/agency enumerated in section 1014; (4) for the purpose of influencing that institution/agency to take an action enumerated in section 1014. 18 U.S.C. § 1015. Section 1001 requires proof that the statement is material, an element that section 1014 does not require.United States v. Wells, 519 U.S. 482 (1997). Section 1014 requires proof that the statement be made for the purpose of influencing the institution to take a particular action, an element that section 1001 does not require. From the language of these statutes it appears that each statute creates a distinct offense, and therefore Blockburger is satisfied. 284 U.S. at 304.
However, defendants may still prevail if, somewhere other than the statute itself, Congress expressed an intention not to authorize multiple punishments. Albernaz, 450 U.S. at 340. Addressing this precise issue, the Fifth Circuit found that sections 1001 and 1014 were directed at different ends and concluded that a conviction under both sections 1001 and 1014 was proper. See United States v. York, 888 F.2d 1050, 1059 (5th Cir. 1989). Defendants, however, cite United States v. Rose, 570 F.2d 1358 (9th Cir. 1978), in which the Ninth Circuit found that section 1001 is a catch-all provision, providing punishment for false statements not otherwise covered by more specific statutes. Based upon this finding, the Ninth Circuit concluded that the defendant could not be convicted under both section 1001 and 18 U.S.C. § 542 (entry of goods into the United States by a false statement) since charging under both statutes would be redundant. Id. at 1363. The Court finds the holding in York more persuasive, especially since it addresses the statutes at issue in the present case. Even assuming that section 1001 is a catch-all provision covering false statement violations not covered by specific statutes, the government nonetheless asserts that the case involves several types of false statements. It is likely that not all of these false statement violations fall within the specific purview of 1014 and are properly charged under 1001. The Court thus concludes that an indictment alleging violations of both 1001 and 1014 is proper. York, 888 F.2d at 1059.
E. Counts Two, Three, Four, Nineteen and Twenty
Defendants finally allege that Counts Two, Three, Four, Nineteen and Twenty are duplicitous. Counts Two, Three, and Four are duplicitous, defendants contend, because they do not allege a single, specific false statement. Defendants argue that Counts Nineteen and Twenty are duplicitous because they do not allege a specific mailing or wire transfer. The government contends, however, that multiple offenses which constitute a continuing course of conduct may be charged in one count, even though the individual acts which constitute the scheme individually may each constitute separate offenses. Thus, the question before this Court is whether each individual offense must be charged in a separate count. Courts addressing this issue have determined that a prosecutor may elect to charge only one count provided that the court makes a determination that such prosecution would be fair; fairness is determined by measuring the charges in the indictment against the purposes of the prohibition against duplicity. See, e.g., United States v. Bruce; 89 F.3d 886, 890 (D.C. Cir. 1996); United States v. Baytank, Inc., 934 F.2d 599, 609 (5th Cir. 1991); United States v. Alsobrook, 620 F.2d 139, 142 (6th Cir. 1980); United States v. Pavlovski, 574 F.2d 933, 936 (7th Cir. 1978); United States v. Steurer, 942 F. Supp. 1183, 1186-87 (N.D.Ill. 1996); United States v. Shorter, 608 F. Supp. 871, 879 (D.D.C. 1985), aff'd, 809 F.2d 54 (D.C. Cir. 1987), cert. denied, 484 U.S. 817 (1987). The Eighth Circuit has held that the principal danger posed by a duplicitous indictment is that the jury may convict a defendant without unanimous agreement on the defendant's guilt with respect to a particular offense. United States v. Karam, 37 F.3d 1280, 1286 (8th Cir. 1994). This danger, however, may be cured by providing a limiting instruction to the jury that it must unanimously find the defendant guilty with respect to at least one distinct act. Id. The Court will so instruct the jury. Accordingly, defendants motion to dismiss Counts Two, Three, Four, Nineteen, and Twenty of the indictment as duplicitous is denied.
III. Conclusion
Based on the foregoing, defendants motion to dismiss the Second Superseding Indictment is DENIED (doc. # 72).
IT IS SO ORDERED.