The opinion of the court was delivered by: Foreman, Chief Judge:
Before the Court is defendant's Motion to Dismiss
Indictment. It is submitted that the three count indictment
fails to charge any criminal violation. Count I charges
defendant with conspiracy to make false statements to banks
(in violation of 18 U.S.C. § 1014) and to misapply bank
funds (in violation of 18 U.S.C. § 656), all in
violation of 18 U.S.C. § 371. Counts II and III charge
defendant with violating 18 U.S.C. §§ 656 and 2 by
willfully misapplying money, funds and credits of the First
National Bank of Woodlawn and the Peoples National Bank of
The underlying scheme, as set out in the indictment, can be
described as follows: In 1977, defendant was the chairman of
Board of Directors of the Woodlawn Bank and a member of the
Board of Directors of the McLeansboro Bank; both banks were
insured by the Federal Deposit Insurance Corporation.
Defendant and his co-conspirators allegedly caused loans from
the banks to be made to Dr. Max Ahlers, who in turn gave the
loan proceeds to DEW Mortgage Company, which in turn gave the
proceeds to Southern Gardens, Inc. At all times, defendant and
his co-conspirators allegedly knew that the loan proceeds
would go to Southern Gardens, Inc. Defendant allegedly
received 23% of the stock in Southern Gardens for arranging
Defendant argues that the indictment is insufficient as a
matter of law. He makes the following points: (1) Count I
fails to allege that he had knowledge of the conspiracy's
illicit purpose; (2) elements of the conspiracy's objectives
are not set out sufficiently; (3) Count I is barred by the
statute of limitations; (4) Count I is duplicitous; and (5)
Counts II and III do not allege that the nominee borrower was
financially incapable of repaying the loans. The Court rejects
First, the Court disagrees that Count I fails to allege that
defendant had knowledge of the conspiracy's illicit purpose.
The indictment clearly states that defendant "did willfully
and knowingly combine, conspire, confederate and agree
together with Dale E. Witsman, Sr., James A. Nigg, Donald R.
Parrish . . ." to make false statements,
to misapply funds, and to defraud the United States.
Defendant's second point is similarly meritless.
Specifically, he argues that the elements of the substantive
crimes constituting the objects of the conspiracy are not
enumerated in Count I. If such a strict pleading standard was
required, defendant's argument would have merit. Rather, the
Seventh Circuit has recognized that the substantive criminal
objectives of a conspiracy need not be alleged as if charging
the substantive offense itself:
Wilful misapplication was charged as one of
several illegal objects of the conspiracy. As
part of the conspiracy charge, it need not be
alleged as precisely as would be necessary in a
United States v. Grizaffi, 471 F.2d 69, 73 (7th Cir. 1972).
Clearly, alleging all the elements is not necessary:
It is not necessary in a conspiracy indictment to
allege with precision all the elements essential
to the offense which is the object of a
conspiracy; allegations clearly identifying the
offense defendants conspired to commit are
United States v. Kahn, 381 F.2d 824, 829 (7th Cir. 1967). It
cannot be argued seriously that Count I fails to identify
clearly that defendant conspired to violate 18 U.S.C. §§
1014 and 656.
Count I is not barred by the statute of limitations.
Defendant argues that Count I fails to show any agreement or
act which occurred within five years of the filing of the
indictment, and that 18 U.S.C. § 3282 bars the charge of
conspiracy. This assertion is simply untrue. As the Government
indicates, nine of the fourteen overt acts alleged were
committed within five years of the filing of the indictment.
The statute of limitations starts to run on the date of the
last overt act alleged. United States v. Walker, 653 F.2d 1343
(9th Cir. 1981); United States v. Charnay, 537 F.2d 341, 354
(9th Cir.), cert. denied, 429 U.S. 1000, 97 S.Ct. 527, 50
L.Ed.2d 610 (1976). In Grunewald v. United States,
353 U.S. 391, 77 S.Ct. 963, 1 L.Ed.2d 931 (1957), the Supreme Court
focused on the character of alleged overt acts to determine
whether they can be part of the conspiracy for purposes of the
statute of limitations:
[T]he crucial question in determining whether the
statute of limitations has run is the scope of
the conspiratorial agreement, for it is that
which determines both the duration of the
conspiracy, and whether the act relied on as an
overt act may properly be regarded as in
furtherance of the conspiracy.
Id. at 397, 77 S.Ct. at 970. Nowhere in his motion does
defendant argue that the overt acts allegedly committed within
five years of the filing of the indictment do not constitute
acts "in furtherance of the conspiracy." Any such argument
would be fruitless. Many of those alleged acts involve the
actual money transactions underlying the alleged scheme.
Defendant's fourth point is that the phrase "money, funds,
and credits," renders the indictment impermissibly
duplicitous. Defendant relies on United States v. Smith, 152 F.
542 (D.Ky. 1907) which held that a charge of misapplying "funds
and credits" was fatally duplicitous. The Court declines to
dismiss the indictment on this ground. First, Smith is
distinguishable. That Court emphasized that the indictment
failed to set forth any description of either "funds or
credits." The same could not be said about the indictment in
this case. That which was allegedly misapplied is set forth in
detail. Second, it has been held more recently that the phrase
"money, funds, and credits" does not render an indictment
duplicitous. United States v. Cooper, 464 F.2d 648 (10th Cir.
1972), cert. denied, 409 U.S. 1107, 93 ...