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UNITED STATES v. EPPERSON

December 1, 1982

UNITED STATES OF AMERICA, PLAINTIFF,
v.
LLOYD M. EPPERSON, DEFENDANT.



The opinion of the court was delivered by: Foreman, Chief Judge:

ORDER

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 McLeansboro.

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 this financing.

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 these arguments.

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
  substantive count.

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
  sufficient.

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 ...


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