facts and any government concession in response. Sufficient facts cannot be derived from the briefs. Therefore, Waitzman's motion will be denied without further consideration.
As regards Keller, IRS Special Agent Clayton and Keller testified before the court. The following findings are made. Clayton was working under the direction of assistant United States attorney Newman on a grand jury investigation. On July 8, 1989, Clayton and another agent interviewed Keller at one of the exchanges Keller owns. Keller was not in custody. Newman had instructed Clayton to not inform Keller he was a target of the investigation unless Keller asked. Clayton told Keller he was in the IRS Criminal Investigation Division and was investigating Jones, Jordan, and DePaulo. At the time, Keller did not know the three were actually undercover agents. In accordance with instructions from Newman, Clayton did not advise Keller of his Miranda or administrative rights. Keller recognized a picture of Jones and answered questions about him and the business. During this initial interview, a grand jury subpoena was served on Keller. The agents questioned Keller for about an hour, then left to telephone Newman. Newman then instructed them to return for a second interview and reveal that Keller was a target and also reveal the true identity of the undercover agents. They were also to confront Keller with information contrary to his previous statements. The agents followed these instructions and also informed Keller his conversations with Jones were taped and that he was not under arrest. This is when Keller first became aware he was under investigation. Keller continued to answer questions for about another half hour. Keller eventually stated he had no more to say and the agents left shortly thereafter.
Keller, who has a college degree and substantial business interests, testified that he knows of the right to remain silent and the right to an attorney, but that he does not know the specifics of those rights. He testified he would have contacted an attorney and remained silent if specifically advised of those rights during the July 8 interview. He testified that he allowed the second interview to continue because he felt "compelled" to answer further questions after his statements in the first interview.
Since none of the defendants were in custody, the IRS agents were not obliged to give Miranda warnings. Beckwith v. United States, 425 U.S. 341, 48 L. Ed. 2d 1, 96 S. Ct. 1612 (1976). Neither were administrative warnings required since the agents were not participating in an Internal Revenue Service investigation but rather were acting under the direction of an assistant United States attorney in connection with a grand jury investigation.
See I.R.M. P 342.132(10).
To suppress the statements given in the interviews, it must be shown that, taking into account the totality of the circumstances, the statements were involuntary in that the defendants' wills were overborne. Culombe v. Connecticut, 367 U.S. 568, 602, 6 L. Ed. 2d 1037, 81 S. Ct. 1860 (1961). Failure to reveal that the person being interviewed is the subject of the investigation is not, by itself, a ground for suppressing the statements obtained. See United States v. Serlin, 707 F.2d 953, 956-57 (7th Cir. 1983). Defendants argue that the misrepresentations that Jones, Jordan, and DePaulo were the subjects of the investigation are grounds for suppressing the statements.
Misrepresentations are relevant to the voluntariness determination, but are not necessarily determinative and must be considered along with other evidence. See Frazier v. Cupp, 394 U.S. 731, 739, 22 L. Ed. 2d 684, 89 S. Ct. 1420 (1969). The evidence before the court does not show that any of the defendants' wills were overborne because of any representations regarding the undercover agents. No statement is suppressed because involuntary.
Defendants' motion for a pretrial hearing on admissibility of co-conspirator statements is denied. The government shall submit its written Santiago proffer by February 16, 1990. Defendants shall file written objections, if any, to the government's proffer by February 22, 1990.
Defendants have moved for severance. While each defendant moves for his or her own separate trial, the principal argument is to try Keller separate from the other defendants. Initially, certain grounds for severance have been mooted by rulings on other motions. The allegations of a RICO conspiracy have been found to be sufficient and the allegations regarding drugs have been stricken from the indictment. Defendants' argument that Bruton v. United States, 391 U.S. 123, 20 L. Ed. 2d 476, 88 S. Ct. 1620 (1968), requires severance has been mooted by the government's agreement not to use statements not in furtherance of the conspiracy that inculpate other defendants. Also, prior to trial, the government's Santiago proffer must be found to be sufficient. Additionally, Count 61 is not an adequate basis for severance. It alleges the same statements that are alleged to be part of a coverup; it does not bring new evidence into the case.
In deciding a motion for severance, due deference must be given to the public interest in a joint trial, particularly one involving a conspiracy which may be proved against more than one defendant by the same evidence. United States v. Williams, 858 F.2d 1218, 1223 (7th Cir. 1988), cert. denied, 109 S. Ct. 796 (1989) (quoting United States v. Moschiano, 695 F.2d 236, 246 (7th Cir. 1982), cert. denied, 464 U.S. 831, 78 L. Ed. 2d 111, 104 S. Ct. 110 (1983)). "To prevail on a motion for severance, then, a defendant must establish such prejudice that a joint trial would be unfairly prejudicial. This is a heavy burden; a mere showing that a separate trial would result in a better chance of acquittal is not enough. Specifically, mutually antagonistic defenses mandate severance only when the acceptance of one party's defense precludes acquittal of the other." Id. at 1224. Defendants argue that Keller's defense, which may be that he did not understand the law regarding the filing of CTR's, may be inconsistent with defendants who will try to show Keller instructed them not to file CTR's. Those defenses, however, are not necessarily mutually inconsistent. Cf. United States v. Bruun, 809 F.2d 397, 407 (7th Cir. 1987). Keller could have instructed the other defendants not to file CTR's without having an understanding of the law. Moreover, his claimed misunderstanding of the law could be argued to be consistent with such instructions. Defendants have not made a sufficient showing of mutually antagonistic defenses to justify severance.
Defendants also argue severance is required because, whereas Keller is involved in most of the transactions alleged in the indictment, the other defendants are only involved in one or a few transactions. Defendants argue the jury would be confused by the evidence and unable to consider, as regards each individual defendant, only that evidence admissible against that defendant. "That evidence adduced against co-conspirators might have been greater than that adduced against the defendant does not of itself constitute grounds for severance." Sababu, slip op. at 40. Furthermore, the disparity is not as great as claimed since most of the evidence is admissible against each defendant on the conspiracy charge. See id. Moreover, it is presumed that the jury will follow limiting instructions and that it can and will sort out evidence where possible. United States v. Studley, No. 88-2331, slip op. at 10 (7th Cir. Dec. 14, 1989) (quoting United States v. Diaz, 876 F.2d 1344, 1357 (7th Cir. 1989)). Here, each currency count involves specific transactions represented by specific money orders. It is well within the jury's ability to sort out such evidence. The motions for severance are denied.
IT IS THEREFORE ORDERED that:
(1) Defendants' motion to dismiss and to strike portions of the indictment is granted in part and denied in part The motion is denied to the extent it seeks to dismiss any count. Paragraphs 13(A)(vii), 13(A)(viii), and 13(B) of Count One and paragraphs 3(A), 3(E), 3(G), and 3(H) of Count 61 shall be stricken from the indictment. The motion is denied without prejudice as regards striking the references to 18 U.S.C. § 1962(d) in the 31 U.S.C. § 5322(b) counts.
(2) Defendants' motion to strike is denied as moot.
(3) Defendants' joint motion to dismiss Count One of the indictment alleging a RICO conspiracy on grounds of impermissible vagueness is denied.
(4) Waitzman's motion to dismiss Count One of the indictment because the RICO enterprise element is unconstitutionally vague is denied.
(5) Certain defendants' motion to dismiss Travel Act counts and to strike other references to that act is denied.
(6) Defendants' motion to dismiss the indictment because of the government's misconduct in the institution of this prosecution is denied.
(7) Keller's and Edward Franco's motions to dismiss forfeiture and vacate restraining order are denied.
(8) Defendants' motion for disclosure of instructions to the grand jury is denied.
(9) Keller's, Waitzman's, Sonshine's, Brotman's, and Carl Franco's motions to suppress are denied.
(10) Defendants' motion for pretrial hearing on admissibility of co-conspirator's statements is denied. The government shall submit its written Santiago proffer by February 16, 1990. Defendants shall file written objections, if any, to the proffer by February 22, 1990.
(11) Keller's motion for severance, defendants' motion to sever, and Sonshine's motion for Rule 8(b) and Rule 14 severance are denied.
(12) Status hearing set for February 22, 1990 at 2:00 p.m.
William T. Hart
UNITED STATES DISTRICT JUDGE
Dated: JANUARY 25, 1990