The opinion of the court was delivered by: RUBEN CASTILLO
Defendants Owen Marshall Brown, et al., move to dismiss
count one of the Government's indictment, which alleges that the defendants participated in a common scheme of bank fraud in violation of 18 U.S.C. §§ 2 and 1344. The defendants allege that count one is duplicitous in that it impermissibly alleges multiple schemes in a single count. Defendants also move for severance
pursuant to Federal Rules of Criminal Procedure 8(b) and 14 on the basis that joinder of defendants in this case is improper and/or prejudicial. For the reasons set forth below, the defendants' Motion to Dismiss and Motion for Severance are denied.
Count one of the indictment alleges that over a period of two and one-half years, the thirteen defendants executed a scheme to defraud twenty-two Chicago-area financial institutions, in violation of 18 U.S.C. §§ 2 and 1344,
by depositing or directing others to deposit into the financial institutions' accounts worthless, stolen and forged checks payable to the order of the defendants and various fictitious individuals and drawing against the accounts before the banks discovered the fraud. The government alleges that defendant Owen Marshall Brown ("Brown") and various co-schemers provided these worthless, stolen or forged checks to co-schemers and other individuals and directed them to deposit the checks at financial institutions and to give false information to the institutions and law enforcement agents if questioned about the checks. The alleged co-schemers deposited the checks into their bank accounts and withdrew a portion of the face value of the checks before the banks discovered that the checks were worthless. The co-schemers allegedly retained a portion of the withdrawn funds and gave the remainder to Brown. The government also alleges that several co-schemers aided Brown by providing him with telephones, names and addresses of potential participants, and transportation.
The government does not allege that all of the thirteen co-schemers knew of each of the others' existence, identity, and/or participation in the scheme. The indictment names twenty-one separate and unrelated instances of bank fraud. The only common participant in every act of alleged fraud is Brown. Several of the named co-schemers only allegedly participated in one or two acts of bank fraud and appear to have been largely unaware of the magnitude of the larger scheme.
In the Motion for Severance, the defendants argue that the joinder of defendants at trial is improper pursuant to Rule 8(b) and/or prejudicial pursuant to Rule 14. The defendants request separate trials for the following reasons: (1) they were involved in separate, distinct schemes unrelated to one another and thus joinder is improper under Rule 8(b); (2) the evidence that the government will seek to introduce against Brown is grossly disparate from the evidence that will be introduced against the other defendants, who each played a far smaller role in the alleged fraudulent acts, and will prejudice the other defendants in violation of Rule 14; (3) the government plans to introduce at trial evidence of some defendants' prior convictions that will prejudice the other defendants in violation of Rule 14; (4) the government plans to introduce statements made by some of the defendants that would not be admissible in separate trials and will incriminate and prejudice other defendants in violation of Rule 14; and (5) separate trials will promote judicial efficiency and economy because counsel for those defendants who played a minor role in Brown's scheme, all of whom are court-appointed public defenders, will not be obligated to appear at public expense throughout a lengthy and complicated trial at which much of the evidence will not involve their clients.
A duplicitous indictment is one that charges more than one offense in a single count. United States v. Hammen, 977 F.2d 379, 382 (7th Cir. 1992). The Seventh Circuit has articulated four concerns from which the ban against duplicitous indictments is derived:
First, courts condemn duplicitous indictments which fail to give defendants adequate notice of the nature of the charges against which they must prepare a defense. . . . Second, courts denounce duplicitous counts which threaten to subject defendants to prejudicial evidentiary rulings at trial. . . . Third, courts dismiss duplicitous indictments which produce trial records inadequate to allow defendants to plead prior convictions or acquittals as a bar to subsequent prosecution for the same offense. . . . Finally, courts overturn duplicitous indictments which present a risk that the jury may have convicted a defendant by a non-unanimous verdict.
In support of their assertion that count one is impermissibly duplicitous, the defendants cite two conspiracy cases in which the court deemed the mere presence of a central figure in a series of offenses insufficient to allege a conspiracy involving all participants. See Kotteakos v. United States, 328 U.S. 750, 754-55, 90 L. Ed. 1557, 66 S. Ct. 1239 (1946) (finding the facts alleged in the indictment insufficient to support a charge of one unified conspiracy, regardless of the presence of a single defendant at the "hub" of the wheel, because the "rim" of the wheel did not enclose the defendants who comprised the "spokes"); United States v. Bruun, 809 F.2d 397, 410 (7th Cir. 1987) (reversing a conspiracy conviction because the government had failed to prove that the defendant was aware of the essential nature and scope of the enterprise and intended to participate in it).
The government, however, has not charged the defendants with conspiracy, but rather with a common scheme of bank fraud. Under 18 U.S.C. §§ 2 and 1344, a defendant is liable for bank fraud as a principal or as an aider an abettor, not as a conspirator. "As an aider and abettor [to a scheme of fraud], [the defendant] need not agree to the scheme. He need only associate himself with the criminal venture and participate in it." United States v. Read, 658 F.2d 1225, 1240 (7th Cir. 1981) (citing United States v. Beck, 615 F.2d 441, 448-49 (7th Cir. 1980)). In this case, the scheme is unified by the presence of the defendant Brown in each alleged act of fraud. The defendants' assertion that many of the alleged co-schemers were unaware of the existence of a larger scheme, while fatal to an allegation of conspiracy, is irrelevant to an allegation of a common scheme. See United States v. Wilson, 506 F.2d 1252 (7th Cir. 1974) (upholding defendant's conviction for fraud where a co-defendant had misdirected checks to various unrelated co-schemers, including the defendant, who would negotiate the checks and split the proceeds, where the co-schemers had knowingly participated in the fraud, "whether each defendant was aware of the identity and participation of the other defendants or not"). Id. at 1257. We therefore find the conspiracy cases cited by the defendants inapplicable to the government's instant allegation of a common scheme of bank fraud.
The defendants argue that the government's pretrial proffer, submitted pursuant to United States v. Santiago, 582 F.2d 1128 (7th Cir. 1978), demonstrates the government's intent to introduce evidence at trial under Federal Rule of Evidence 801(d)(2)(E), and thus benefit from the evidentiary principles concerning conspiracy without actually alleging the existence of a conspiracy. It is well-settled, however, that the government need not charge criminal conspiracy in order to invoke the evidentiary co-conspirator exception. United States v. Cox, 923 F.2d 519, 526 (7th Cir. 1991) (citing Santiago, 582 F.2d at 1130); United States v. Coe, 718 F.2d 830, 835 (7th Cir. 1983) (citing United States v. Gil, 604 F.2d 546, 549 (7th Cir. 1979)). As a predicate to admissibility, the government must, however, demonstrate to the court by a preponderance of the evidence that "1) a conspiracy existed, 2) the defendant and the declarant were members thereof, and 3) the proffered statement(s) were made during the course of and in furtherance of the conspiracy." Cox, 923 F.2d at 526 (citing Santiago, 582 F.2d at 1134-35).
After careful review of the government's proffer with respect to co-conspirator statements, the Court preliminarily concludes that the government has met its burden of proof with regards to whether it is more likely than not that a conspiracy existed among the co-schemers. The government's written proffer carefully describes the details of each alleged fraudulent transaction, the actions of each defendant relating to the alleged fraudulent scheme, and the communications that occurred between the various defendants during the course of and in furtherance of the alleged scheme. Based upon the Santiago proffer, we find that it is more likely than not that a conspiracy existed, that the defendants participated in the conspiracy, and that they made statements "during the course of and in furtherance of" the conspiracy. We therefore rule that the co-conspirator statements are admissible conditionally pursuant to Rule 801(d)(2)(E) with respect to the following defendants: Owen Marshall Brown, Linda Cunningham, Constance Gatlin, Keith Grice, Sheila A. Hall, Mattie Roberts, Victor Roberts, Stacy Senior, Ernest Sivels, and Terry Thompson. With respect to the following defendants, however, the ...