United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
Honorable Thomas M. Durkin United States District Judge
Jessica Arong O'Brien and Maria Bartko are charged with
engaging in a scheme to defraud lenders and obtain money and
property from lenders through materially false pretenses and
representations. The indictment alleges in Count I that
defendants committed mail fraud in violation of 18 U.S.C.
§ 1341, and in Count II that defendants committed bank
fraud in violation of 18 U.S.C. § 1344. The indictment
also contains a forfeiture allegation.
the Court is defendant O'Brien's motion to dismiss
Counts I and II of the indictment on duplicity grounds (R.
45). O'Brien argues that in both Counts I and II, the
government has improperly joined four separate offenses into
a single scheme to avoid the statute of limitations that
would otherwise apply to bar the first three offenses.
O'Brien claims the indictment is therefore duplicitous
and prejudicial to her in a number of ways. Because this
Court finds that the indictment fairly alleges a scheme and
that potential prejudices can be effectively mitigated at
trial, it denies O'Brien's motion to dismiss (R. 45).
an indictment is not a means of testing the strength or
weakness of the government's case, or the sufficiency of
the government's evidence.” United States v.
Moore, 563 F.3d 583, 586 (7th Cir. 2009) (internal
quotation marks omitted). Rather, a motion to dismiss seeks
to correct a defect in the indictment, such as
“duplicity.” Fed. R. Crim. P. 12(b)(3)(B)(i).
is the joining of two or more offenses in a single
count.” United States v. Hughes, 310 F.3d 557,
560 (7th Cir. 2002) (quotation marks and citation omitted).
“The overall vice of duplicity is that the jury cannot
in a general verdict render its finding on each offense,
making it difficult to determine whether a conviction rests
on only one of the offenses or both.” United States
v. Buchmeier, 255 F.3d 415, 425 (7th Cir. 2001)
(quotation marks and citation omitted). In addition to jury
confusion, “a duplicitous indictment may expose a
defendant to other adverse effects including improper notice
of the charges against him, prejudice in shaping of
evidentiary rulings, in sentencing, in limiting review on
appeal, and in exposure to double jeopardy.”
Id. (quotation marks omitted).
indictment is not duplicitous, however, if it charges a
single offense carried out through different means.
United States v. Berardi, 675 F.2d 894, 897 (7th
Cir. 1982). Federal Rule of Criminal Procedure 7(c)(1)
provides that “[a] count may allege that . . . the
defendant committed [an offense] by one or more specified
means.” “The line between multiple offenses and
multiple means to the commission of a single continuing
offense is often a difficult one to draw, ” and
“[t]he decision is left, at least initially, to the
discretion of the prosecution.” United States v.
Davis, 471 F.3d 783, 791 (7th Cir. 2006) (quotation
marks omitted). “Where the indictment ‘fairly
interpreted' alleges a ‘continuing course of
conduct, during a discrete period of time, ' the
indictment is not prejudicially duplicitous.”
Id. at 790-91 (quoting Berardi, 675 F.2d at
898). More generally, the Seventh Circuit has held that
“an indictment is legally sufficient” for
purposes of Rule 7(c)(1) “if (1) it states all the
elements of the crime charged, (2) adequately informs the
defendant of the nature of the charges against him, and (3)
allows the defendant to assert the judgment as a bar to
future prosecutions of the same offense.” United
States v. Vaughn, 722 F.3d 918, 925 (7th Cir. 2013).
is not always fatal to an indictment.” United
States v. Steurer, 942 F.Supp. 1183, 1186 (N.D. Ill.
1996). Accordingly, this Court “first determine[s]
whether the counts at issue are duplicitous, ” and then
turns to the question of whether, in any event, “other
measures can cure any prejudice that might exist.”
Duplicity of Indictment
Counts I and II of the indictment in this case allege a
three-year scheme to defraud, causing lenders to issue and
refinance loans related to two investment properties that
O'Brien owned on the south side of Chicago. R. 1. The
indictment alleges that this scheme was comprised of four
transactions: (1) in 2004, O'Brien “fraudulently
obtained mortgage loan proceeds to purchase an investment
property located at 625 West 46th Street” by submitting
mortgage documents with false statements regarding her income
and liabilities; (2) in 2005, O'Brien, with Bartko as the
loan originator, “fraudulently refinanced her mortgage
loans on the 46th Street property and on a second investment
property located at 823 West 54th Street” by submitting
applications with false statements regarding
O'Brien's income and employment; (3) in 2006,
O'Brien “fraudulently obtained a commercial line of
credit” by submitting an application with false
statements about her realty company's revenue and profit
“and used those loan proceeds to maintain the 46th
Street and 54th Street properties”; and (4) in 2007,
O'Brien and Bartko “agreed that O'Brien would
sell the 46th Street and 54th Street properties to
Bartko” using “a straw buyer whom O'Brien and
Bartko knew would be fraudulently qualified for mortgage
loans.” Id. at 4-7. For each of Counts I and
II, the indictment alleges only one “execut[ion]”
of the scheme-a single fraudulent mailing during the 2007
transaction in Count I and a single fraudulent issuance of a
mortgage loan by a lender during the 2007 transaction in
Count II. Id. at 9-10.
maintains that each of the four transactions alleged in the
indictment to comprise a scheme constitutes a separate
offense, and that the indictment thus improperly
“join[s] . . . two or more offenses in a single
count.” See Hughes, 310 F.3d at 560. But the
question of whether these transactions could have
been charged as separate offenses is not dispositive of
duplicity. “[T]wo or more acts, each one of which would
constitute an offense standing alone, may be joined in a
single count without offending the rule against
duplicity.” Berardi, 675 F.2d at 898. In the
context of mail and bank fraud specifically, for which the
statutes criminalize each
“execut[ion]” of a scheme, the Seventh Circuit has
made clear that although “for each count of conviction,
there must be an execution, ” “the law does not
require the converse: each execution need not give rise to a
charge in the indictment.” United States v.
Hammen, 977 F.2d 379, 383 (7th Cir. 1992). In other
words, “an act which can be viewed as an
independent execution of a scheme” and thus charged as
a separate count does not need to be charged in a
separate count. United States v. King, 200 F.3d
1207, 1213 (9th Cir. 1999) (citing United States v.
Bruce, 89 F.3d 886, 889-90 (D.C. Cir. 1996)).
several fraudulent executions are part of the same scheme,
the government thus has discretion to (a) charge each
execution in a separate count or (b) “allege only one
execution of an ongoing scheme that was executed numerous
times.” Hammen, 977 F.2d at 383; accord
Bruce, 89 F.3d at 889-90 (denying motion to dismiss an
indictment as duplicitous where it alleged “four
separate loan applications each as one
‘part'” of an “overall scheme”
because the government “‘carefully crafted the
indictment to allege only one execution of an ongoing scheme
that was executed numerous times'”) (quoting
Hammen, 977 F.2d at 383).
government here chose the latter route. The indictment
alleges only one execution in each Count: (1) in Count I, it
alleges that a mailing on April 16, 2007 of a payoff check
relating to the straw buyer's purchase of the 46th Street
property constituted mail fraud in violation of 18 U.S.C.
§ 1341; and (2) in Count II, it alleges that the funding
of a mortgage by Citibank, N.A. on April 16, 2007 for the
straw buyer's purchase of the 46th Street property
constituted bank fraud in violation of 18 U.S.C. § 1344.
R. 1 at 9, 10. And it describes the 2004, 2005, and 2006
transactions as part of a scheme rather than as separate
executions of bank or mail fraud. See R. 1.
fact that the indictment clearly charges only one execution
in each count goes a long way toward satisfying Rule
7(c)(1)'s requirement of “adequately inform[ing]
the defendant of the nature of the charges against
h[er].” Vaughn, 722 F.3d at 925. It also
distinguishes this case from United States v.
Tanner, 471 F.2d 128 (7th Cir. 1972), on which
O'Brien relies. In Tanner, the Seventh Circuit
held that an indictment was duplicitous where the government
had “delineate[d] as a single offense all trips
[transporting explosives across state lines] that occurred
within a period of time” without “defining at
what point the act of transporting explosives is
completed” or which trip completed it. Id. at
138-39; see also United States v. Schock, 2017 WL
4780614, at *20-21 (C.D. Ill. Oct. 23, 2017) (dismissing
theft of government funds count as duplicitous where
“the Government has made it impossible for Defendant
(and the court) to determine which disbursement” of the
numerous disbursements alleged “gave rise to the
allegations” in that count).
her filings, O'Brien makes much of the likely reason the
government chose to proceed this way: the 2004, 2005, and
2006 transactions would have been outside the statute of
limitations if charged separately. But as long as they are
part of the same scheme, this choice was within the
government's discretion. See, e.g.,
Hammen, 977 F.2d at 383; United States v.
Longfellow, 43 F.3d 318, 322-25 (7th Cir. 1994)
(“only one or two executions fell within the Statute of
Limitations, ” but that “does not detract from
the entire pattern of loans[ ] being a scheme, and renders
Longfellow no less culpable for that entire scheme”);
United States v. Mermelstein, 487 F.Supp.2d 242, 254
(E.D.N.Y. 2007) (rejecting argument that
“executions” of fraud completed outside the
statute of limitations “are barred, ” because a
fraud indictment “may properly charge, in a single
count, a pattern of executions . . . as part of a single,
overarching continuing scheme”).
crucial question therefore becomes whether the 2004, 2005,
2006, and 2007 transactions are all fairly alleged to be part
of a single scheme to defraud. SeeDavis,
471 F.3d at 790-91 (“an indictment can be duplicitous
if numerous discrete instances of criminal conduct are lumped
into a single count, ” but this is not the case if the
indictment, “fairly interpreted, ” alleges a
scheme) (quotation marks omitted); United States v.
Zeidman, 540 F.2d 314, 317 (7th Cir. 2006) (the fact
that “each of the frauds . . . could constitute a
separate offense” was “not determinative”
of duplicity where each count “charges only one
mailing” and alleges a scheme). Although “[a]s
its ordinary meaning suggests, the term ‘scheme to
defraud' describes a broad range of conduct, ”
United States v. Doherty, 969 F.2d 425, 429 (7th
Cir. 1992), a scheme is generally ...