with which he is charged in this case is protected by the First Amendment. Interpreting the First Amendment as shielding Neidorf from criminal liability would open a gaping hole in criminal law; individuals could violate criminal laws with impunity simply by engaging in criminal activities which involve speech-related activity. The First Amendment does not countenance that kind of end run around criminal law.
Under Palmer v. City of Euclid, 402 U.S. 544, 29 L. Ed. 2d 98, 91 S. Ct. 1563 (1971), a criminal charge must be dismissed where a criminal statute, as applied to the defendant's conduct, "fail[s] to give 'a person of ordinary intelligence fair notice that his contemplated conduct is forbidden.'" Id. at 545 (quoting United States v. Harriss, 347 U.S. 612, 617, 98 L. Ed. 989, 74 S. Ct. 808 (1954)). Neidorf argues that Counts Five, Six, Eight, Nine, Ten and Eleven should be dismissed pursuant to Palmer because sections 1343 and 2314 are unconstitutionally vague as applied to his alleged conduct.
The court finds no merit in Neidorf's contention. Two elements must be proven to sustain a conviction under the wire fraud statute: (1) a scheme to defraud; and (2) use of wire communications in furtherance of the scheme. Lombardo v. United States, 865 F.2d 155, 157 (7th Cir.), cert. denied, 491 U.S. 905, 109 S. Ct. 3186, 105 L. Ed. 2d 695 (1989). It is not in any way unclear or ambiguous that Neidorf's alleged conduct satisfies each of these elements. According to the superseding indictment, Neidorf entered into a scheme to defraud Bell South and other corporations and individuals out of valuable, computer-stored information, and through the use of a computer he allegedly caused wire communications to be sent in furtherance of that scheme. If these allegations are true, then Neidorf schemed, and he used wire communications to further his scheme. Thus, there are no vagueness problems with respect to § 1343; that statute clearly applies to Neidorf's alleged conduct.
With respect to § 2314, Neidorf's vagueness argument is a by-product of his previous argument against the original indictment that he did not cause "goods, wares, or merchandise" to be transferred within the meaning of the statute. The court rejected that argument, finding that the confidential, computer-stored information which Neidorf allegedly transferred comes within the § 2314 definition of "goods, wares, or merchandise." Neidorf now argues that § 2314 is unconstitutionally vague as applied to him because he could not have known that the information he transferred came within the definition of "goods, wares, or merchandise."
However, as this court detailed in the earlier opinion in this case, several courts have already held that the definition of "goods, wares, or merchandise" in § 2314 encompasses proprietary business information which is stored on a tangible medium, such as paper. See United States v. Riggs, 739 F. Supp. 414, 420 (N.D.Ill. 1990) (collecting cases). The only difference between those cases and this case is that here the information was stored on computer. Moreover, it is clear that in this case Neidorf knew the information he transferred was valuable property; in fact, that is the precise reason he wanted to obtain the information and share it with other computer hackers. Therefore, the court finds that § 2314, as applied to this case, is not unconstitutionally vague. Neidorf had fair notice that his alleged conduct could constitute a violation of that statute.
II. Counts Two, Three, Four and Seven
A. Scheme to Defraud
Neidorf argues that Counts Two, Three, Four and Seven -- all of which charge wire fraud -- should be dismissed on the grounds that the superseding indictment "fails to allege a scheme to defraud of which these counts could be a part." This argument is easily rejected. As noted above, the superseding indictment expressly alleges that Neidorf and Riggs entered into a scheme to defraud individuals and corporations out of proprietary information stored on computers. This plan involved two major steps: (1) stealing the information by gaining unauthorized access to computers; and (2) disseminating the information to others. Any use of the wires in furtherance of the alleged scheme is chargeable under the wire fraud statute. To satisfy the "in furtherance" requirement, a wire communication must simply be "incident to an essential part of the scheme." Schmuck v. United States, 489 U.S. 705, 109 S. Ct. 1443, 1447, 103 L. Ed. 2d 734 (1989) (quoting Badders v. United States, 240 U.S. 391, 394, 60 L. Ed. 706, 36 S. Ct. 367 (1916)).
Each wire communication alleged in Counts Two, Three, Four and Seven clearly satisfies that requirement. Counts Three and Four charge that Neidorf and Riggs exchanged electronic mail discussing the implementation of the scheme. Counts Two and Seven involve wire transfers of separate issues of PHRACK. In one of those issues (Count Two), Neidorf announced the beginning of the "Phoenix Project;" in the other (Count Seven), he published tutorials on computer hacking. Each of these communications was certainly incident to an essential part of the scheme, since the aim of the communications was ostensibly to encourage others to illicitly obtain confidential, computer-stored information. Therefore, based on the scheme alleged in the superseding indictment, the acts in Counts Two, Three, Four, and Seven are properly chargeable under the wire fraud statute.
B. First Amendment
Relying again on the First Amendment, Neidorf raises a separate challenge to Counts Two and Seven, which he claims charge him with mere advocacy of illegal conduct. He argues that under Brandenburg v. Ohio, 395 U.S. 444, 23 L. Ed. 2d 430, 89 S. Ct. 1827 (1969), his mere advocacy of illegal activity is no basis for criminal liability because: (1) the alleged advocacy was not directed at producing imminent lawless action; and (2) the alleged advocacy was not likely to produce or incite such action.
Neidorf's argument must be rejected for the same reasons the court rejected Neidorf's previous First Amendment argument. If Neidorf participated in the scheme to defraud as alleged in the superseding indictment, then he is criminally responsible for his conduct in furtherance of the scheme, and the First Amendment does not shield him from that responsibility merely because his criminal conduct involved speech. See, e.g., Rowlee, 899 F.2d at 1278-81; Morison, 844 F.2d 1057. Cases like this one, where a wire fraud violation is based on the theft and unlawful dissemination of proprietary business information, simply do not implicate the type of First Amendment concerns which arise in cases like Brandenburg, which involved prosecution under a criminal syndicalism statute. Moreover, as the court noted in Rowlee, the Brandenburg test cannot be reasonably applied to violations of the mail fraud or wire fraud statutes, which usually "involve long-term, slowly-developing wrongs, not 'imminent lawless action.'" Rowlee, 899 F.2d at 1280. Therefore, Neidorf's request to dismiss Counts Two, Three, Four and Seven on First Amendment grounds must be denied.
For the foregoing reasons, Neidorf's motion to dismiss the superseding indictment is denied.
IT IS SO ORDERED.