United States District Court, N.D. Illinois, Eastern Division
December 1, 2005.
United States of America
The opinion of the court was delivered by: ELAINE BUCKLO, District Judge
MEMORANDUM OPINION AND ORDER
Donald Copeland ("defendant") is charged with three counts of
bank fraud under 18 U.S.C. § 1344. Each of the three counts of
the superseding indictment charges defendant with an execution of
a scheme involving the fraudulent submission of a loan
application to U.S. Bank: Count I charges that on or about July
22, 1998, defendant executed the scheme by submitting or causing
to be submitted a fraudulent loan application under the business
name "VAS Enterprises"; Count II charges that on or about August
3, 1998, defendant executed the scheme by submitting or causing
to be submitted a fraudulent loan application under the business
name "Maximilian Building Associates"; Count III charges that on
or about August 5, 1998, defendant executed the scheme by
submitting or causing to be submitted a fraudulent loan
application under the business name "We Clean". Defendant now
brings four pretrial motions.
I. Motion to Strike Surplusage
As part of a general description of the alleged scheme, each
count of the indictment contains or incorporates the language: "loan applications were submitted under the names of businesses
including, but not limited to, VAS Enterprises, Maximilian
Building Associates, We Clean, AFL Enterprises, Neo Environment,
Inc., BSA Enterprises, Leo-Max Associates, VOL Consultant, Max
Rental Associates. . . ." Even though the government plans to
show evidence of the nine fraudulent applications, the government
has chosen to indict the defendant on only three executions of
the scheme. Defendant now moves to strike "allegations as to all
applications other than those charged as a criminal offense"
arguing that reference to these applications is not essential to
the indictment and is prejudicial.
"A motion to strike surplusage should be granted only if the
targeted allegations are clearly not relevant to the charge and
are inflammatory and prejudicial." United States v.
Chaverra-Cardona, 667 F. Supp. 609, 611 (N.D. Ill. 1987). In
this matter, the six additional alleged fraudulent applications
are undeniably relevant to proving the overall scheme of bank
fraud. The government's choice to only indict on three specific
counts does not prevent it from presenting additional evidence
relevant to proving the overarching scheme. United States v.
Hammen, 977 F.2d 379, 383 (7th 1982) ("[E]ach execution need
not give rise to a charge in the indictment."); See also United
States v. Kirkham, 129 Fed. Appx. 61, 69 (5th Cir. 2005)
(stating that it is permissible to list in an indictment
executions of a scheme even though they are not charged executions). Therefore, defendant's motion to strike
surplusage is denied.
II. Motion to Dismiss for Duplicity
Defendant moves to dismiss the indictment for duplicity.
Duplicity, or the joining of more than one offense in a single
count, is prohibited because a jury cannot render in a general
verdict a finding on each offense individually. United States v.
Marshall, 75 F.3d 1097, 1111 (7th Cir. 1996). Section 1344
Whoever knowingly executes, or attempts to execute, a
scheme or artifice
(1) to defraud a financial institution; or
(2) to obtain any of the moneys, funds, credits,
assets, securities, or other property owned by, or
under the custody or control of, a financial
institution, by means of false or fraudulent
pretenses, representations, or promises;
shall be fined not more than $1,000,000 or imprisoned
not more than 30 years, or both.
Each count in the indictment in this case reads in relevant
[D]efendant herein, knowingly executed and attempted
to execute the above-described scheme to defraud U.S.
Bank by knowingly submitting or causing to be
submitted a fraudulent Advantage Line Loan
Application for the business of [NAME] to U.S. Bank;
In violation of United States Code, Section 1344.
Defendant argues that the indictment charges more than one
offense in each count because the language of the indictment
generally charges the defendant under § 1344 without specifying a subsection, and blends the language of § 1344(1) and § 1344(2) in
doing so. Defendant argues that the two subsections of § 1344 are
different offenses requiring different proof.
Defendant is correct that courts have characterized each
subsection of § 1344 as a separate offense. United States v.
Doherty, 969 F.2d 425, 427 (7th Cir. 1992) ("The statute, which
reads in the disjunctive, establishes two distinct, albeit
closely related, offenses: (1) schemes to defraud financial
institutions; and (2) schemes to obtain money, etc., from
financial institutions by false pretenses, representations or
promises."); United States v. LeDonne, 21 F.3d 1418, 1426 (7th
Cir. 1994). In specifically addressing § 1344, however, it has
been held that a single count of an indictment may conjunctively
charge bank fraud under both subparagraph (1) or (2). United
States v. LeDonne, 21 F.3d 1418, 1427 (7th Cir. 1994) ("where a
statute defines two or more ways in which an offense may be
committed, all may be alleged in the conjunctive in one count in
order to adequately apprise the defendant of the government's
intention to charge him under either prong of the statute. And
proof of any one of those acts conjunctively charged may support
a conviction.") (citations omitted); See also United States v.
Crisci, 273 F.3d 235, 239 (2d Cir. 2001) ("a single count of an
indictment may charge bank fraud under both subsections (1) and
(2) and that proof of the violation of either subsection is
sufficient to support a conviction"). Although the counts do not explicitly state that the defendant
is being charged under both subsections in this case (i.e., the
indictment does not read ". . . in violation of § 1344 (1) and §
1344(2)"), the language of the indictment tracks and incorporates
the language of both § 1344(1) and § 1344(2). The language of the
indictment conjunctively charges acts, that if proved, could
support a conviction under either subsection of § 1344.
Defendant's motion to dismiss the indictment for duplicity is
III. Motion to Dismiss for Multiplicity
Defendant moves to dismiss the indictment for multiplicity.
Multiplicity is the charging of a single offense in multiple
counts and may result in a defendant receiving multiple
punishments for a single offense. United States v. Muhammad,
120 F.3d 688, 702 (7th Cir. 1997). Defendant argues that the
government has only alleged one distinct scheme of bank fraud and
that each of the three counts punishes that single scheme.
Under § 1344," "each `execution' of a scheme . . . constitutes
a separate violation of § 1344." United States v. Allender,
62 F.3d 909, 912 (7th Cir. 1995). Each execution of a scheme can be
punished separately and charged in a separate count. Id.; United
States v. Hord, 6 F.3d 276, 323 (7th Cir. 1994). The question of
whether alleged acts constitute separate executions of a scheme
or are merely acts in furtherance of a single execution is a
question of how "interrelated" the alleged acts are. United States v.
Longfellow, 43 F.3d 318, 323 (7th Cir. 1994). Acts are separate
executions when they are "chronologically and substantively
independent[,] none depended on the others for its existence,
[and] each had its own functions and purpose [and] they were
interrelated only because they involved the same overall scheme."
Id. (quoting United States v. Molinaro, 11 F.3d 853, 859 (9th
Cir. 1993)). In determining the interrelatedness of executions, a
key inquiry is whether the actions in question subjected the
financial institution to a new and additional risk or whether the
actions were taken in furtherance of a previously created risk.
Id. at 325.
In the present case, the applications were all submitted on
different dates, under different business names, and contained
different false and fraudulent statements. Each alleged
fraudulent application was for a separate and distinct loan that
subjected U.S. Bank to a new and additional monetary risk
independent of any other application. The fact that U.S. Bank was
the financial institution involved in all three transactions does
not alter the fact that they were separate executions. See Id.
Furthermore, the fact that each count incorporates a general
description of the scheme as background to that count does not
make the indictment multiplicative because each count requires
the proof of a specific execution of the scheme. Accordingly,
defendant's motion to dismiss for multiplicity is denied. IV. Motion for Bill of Particulars
Fourth, defendant moves for a bill of particulars stating the
following: 1) the specific portion of each loan or application
alleged to be false; 2) specific disclosure of documents relating
to the alleged financial loss $133, 539.00 because the defendant
has received 1223 pages of undifferentiated documents; 3) for
each alleged fraudulent transaction, a specification of the date,
loan applicant, and amount of loss; 4) identification of
anonymous co-schemers Individual A and Individual B referenced in
the indictment; 5) identification of the persons constituting
"others" referenced in the indictment on whose behalf defendant
is alleged to have submitted fraudulent information; and 6) the
name address of every potential witness.
The court has discretion whether to require a bill of
particulars. United States v. Canino, 949 F.2d 928, 949 (7th
Cir. 1991). "The test for whether a bill of particulars is
necessary is whether the indictment sets forth the elements of
the offense charged and sufficiently apprises the defendant of
the charges to enable him to prepare for trial." United States
v. Kendall, 665 F.2d 126, 134 (7th Cir. 1981). The court may
consider "the complexity of the charges, the clarity of the
indictment, and the degree of discovery available to the defense
absent a bill." Canino, 949 F.2d at 949. Additionally, a bill
of particulars becomes unnecessary when the information desired
is available through some other form. Canino, 949 F.2d at 949.
In the present case, the indictment sets forth the general time
period of the alleged scheme as between August, 1997 and August,
1998. Defendant is apprised of the business names under which the
nine alleged fraudulent applications were submitted and of the
specific dates of the application of each of the three specific
executions that form the basis of the three counts. The
indictment further specifies that for each application, the false
information submitted may include amount of sales, annual income
of the signatory, the amount of personal assets of the signatory,
and the amount of saving and checking account balances.
The government also has allowed the defendant to inspect all
documentary and physical evidence to be used at trial. The
government has provided the defendant with all bank records and
summary analyses of the bank records to simplify review.
Additionally, the government has stated its intent to release to
defendant the tax returns of all loan applicants involved in this
case. According to the government, all the information that the
defendant seeks in regards to his first five requests has already
been provided in these records.
The information sought in the defendant's second, third,
fourth, and fifth requests exceeds the level of evidentiary
detail appropriate for a bill of particulars and has nevertheless
been made available through discovery. Therefore, defendant's
second, third, fourth, and fifth requests are denied. I deny defendant's
sixth request because it is not appropriate to use a bill of
particulars to obtain a list of the government's witnesses.
United States v. Johnson, 504 F.2d 622, 628 (7th Cir. 1974)
("It is well settled that a bill of particulars cannot be used to
obtain a list of the government's witnesses"). Defendant's first
request for specification of the portions of each loan
application alleged to be false is granted. Given the nature of
the charges against him the indictment does not allege that the
defendant actually prepared all of the alleged fraudulent
applications himself this information is necessary so that the
defendant can adequately prepare his defense and avoid unfair
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