U.S. v. Weiss
| Decision Date | 04 January 2007 |
| Docket Number | Criminal Case No. 05-CR-179-B. |
| Citation | 469 F.Supp.2d 941 |
| Parties | UNITED STATES of America, Plaintiff, v. 1. Arvin WEISS, and 2. Jesus Guevara, Defendants. |
| Court | U.S. District Court — District of Colorado |
Linda S. Kaufman, United States Attorney's Office, Denver, CO, for Plaintiff.
Richard Kent Kornfeld, Recht & Kornfeld, PC, Denver, CO, for Defendants.
This Order addresses motions by defendants Arvin Weiss and Jesus Guevara (referred to collectively herein as "defendants") in the Government's case against them for wire fraud, mail fraud and witness tampering in relation to a scheme to arrange fraudulent home mortgages. Defendants' first motion (Docket # 77) seeks to bar the Government from using evidence related to 32 properties not identified in the Grand Jury Indictment as substantive evidence of wire fraud and mail fraud. Defendants' second motion (Docket # 149) seeks dismissal of the mail fraud charges for failure to state an essential element of the offense. Based on hearings November 3, 2006 and December 22, 2006, for the reasons stated below defendants' motion to bar the Government from using evidence of the 32 properties is DENIED and defendants' motion to dismiss is DENIED, in part and GRANTED, in part.
The Grand Jury indicted defendants on April 20, 2005 on multiple counts of mail fraud, 18 U.S.C. § 1341, wire fraud, 18 U.S.C. § 1343, and jury tampering, 18 U.S.C. § 1512(b)(3). According to the Indictment, the defendants organized a scheme to obtain mortgage loans for low-income, unsophisticated Hispanic home-buyers through a housing subsidy program sponsored by the United States Department. of Housing and Urban Development ("HUD"). Defendants purchased homes, made modest improvements, and resold the homes at a profit to the purchasers. Defendants worked with the buyers to obtain HUD subsidized loans for which they were not otherwise eligible. Defendants provided the lenders with false information about the buyers, provided the buyers' down payment money in violation of HUD rules and provided false social security numbers and other identification for the purchasers.. The Indictment lists nine properties that were the subject of this scheme.
The Government intends to introduce at trial evidence of transactions related to 32 properties ("the additional properties") not mentioned in the Indictment as substantive evidence of the defendants' alleged scheme and their involvement in it. The defendants filed a motion for a bill of particulars (Docket # 77) April 20, 2006 arguing that the Indictment provided insufficient detail on their specific acts which constitute the charges alleged in the Indictment. At a hearing November 3, 2006, the defendants clarified that they have sufficient information on the nine properties listed in the Indictment, but that use of the additional properties to show their involvement in the scheme broadens the charges against them beyond those contained in the Indictment, and potentially subjects them to double jeopardy. I heard argument on this motion November 3, 2006, and requested additional briefing from both parties on the double jeopardy issue. Based on the defense counsel's statements at the hearing, and on the additional briefs, I construe this motion for a bill of particulars as a motion to bar the Government's use of evidence of the additional properties as substantive evidence. [Defendants do not contest that the Government may use these properties as "other acts" evidence under Fed.R.Evid. 404(b).]
Separately, on November 1, 2006 defendants filed a motion to dismiss the 12 counts of mail fraud as being insufficiently related to the underlying scheme. This motion was the subject of a hearing December 22, 2006. This Order addresses both motions.
The Government proposes to use transactions related to the additional properties as substantive evidence of the scheme element in the charges for mail fraud and wire fraud. The defendants argue that this impermissibly expands the scope of the Indictment, violating their fundamental constitutional protections and potentially subjecting them to double jeopardy.
It is an axiom of constitutional law that a defendant may only be tried on charges laid out in a grand jury indictment. Russell v. U.S. 369 U.S. 749, 770-771, 82 S.Ct. 1038, 8 L.Ed.2d 240 (1962). This protection is rooted in the Fifth Amendment right of grand jury indictment and the Sixth Amendment guarantee of notice to a defendant of the charges filed against him. U.S.v. Hien Van Tim, 279 F.3d 917, 921 (10th Cir.2002). See also Hunter v. New Mexico, 916 F.2d 595, 598 & n. 5 (10th Cir.1990).
These guarantees serve several purposes. First, allowing the prosecutor to expand the charges against a defendant raises the possibility of conviction on an offense not found or charged by a Grand Jury, placing "the rights of the citizen ... at the mercy or control of the court or prosecuting attorney." U.S. v. Radetsky, 535 F.2d 556, 562 (10th Cir.1976) overruled in part on other grounds by U.S. v. Daily, 921 F.2d 994, 1004 & n. 11 (10th Cir.1990). Second, limiting prosecution to the specific charges of an indictment gives the defendant notice of what charges "he must be prepared to meet." Id. Third, the indictment shows "to what extent (the defendant) may plead a former acquittal or conviction as a bar to a further prosecution for the same cause." Id.See also U.S. v. Miller, 471 U.S. 130, 135, 105 S.Ct. 1811, 85 L.Ed.2d 99 (1985) ()
Defendants challenge the Government's use of the additional properties to broaden the Indictment under theories both of "constructive amendment" and "material variance." "An indictment is constructively amended if the evidence presented at trial, together with the jury instructions, raises the possibility that the defendant was convicted of an offense other than that charged in the indictment." Hunter, 916 F.2d at 599. A variance "occurs when the charging terms are unchanged, but the evidence at trial proves facts materially different from those alleged in the indictment." Id. at 598. Variances are "fatal only when the defendant is prejudiced in his defense because he cannot anticipate from the indictment what evidence will be presented against him or is exposed to the risk of double jeopardy." Id. at 599. Under either theory the evidence of additional properties is impermissible if it allows the jury to convict on a crime not charged in the indictment, if it subjects the defendants to prejudice at trial due to inability to anticipate evidence, or if it subjects defendants to double jeopardy.
In this case, proving violation of mail fraud requires satisfying two distinct elements: "(1) the existence of a scheme or artifice to defraud or obtain money or property by false pretenses, representations or promises, and (2) use of the United States mails for the purpose of executing the scheme." Tal v. Hogan, 453 F.3d 1244, 1263 (10 th Cir.2006). The elements of wire fraud are "very similar," but require the use of "inter-state wire, radio or television communications in furtherance of the scheme to defraud." Id. Under the mail and wire fraud statutes, each individual use of the mail and the wires constitutes a separate offense. U.S. v. Gardner, 65 F.3d 82, 85 (8th Cir.1995). See also U.S. v. Kennedy, 64 F.3d 1465, 1476 (10th Cir.1995) () The Indictment alleges 12 specific counts of mail fraud and 5 specific counts of wire fraud in relation to 9 specific properties between June of 1998 and February of 2002. The Indictment does not specify the additional properties and so does not identify any specific wire or mail fraud transactions in relation to these properties.
Accordingly, defendants argue, using the additional properties violates two fundamental constitutional protections. First, the jury could convict defendants for wire and mail fraud violations not contained in the Indictment. This deprives them of "a basic protection which the guaranty of the intervention of a grand jury was designed to secure." Russell 369 U.S. at 770, 82 S.Ct. 1038. Second, the Indictment does not provide a jeopardy bar to future charges of mail or wire fraud associated with the additional properties. The Government is free to use the additional properties as the basis of a new indictment on mail and wire fraud. (Defendants do not argue that use of this evidence will prejudice them at trial.)
I find the defendants' argument regarding expansion of the Indictment unpersuasive. In a claim for mail fraud, "The Government need not allege the subordinate evidentiary facts by which it intends to prove the `in furtherance' element of the crime charged." U.S.v. Castor, 558 F.2d 379, 385 (7th Cir.1977). The Government proposes to use mail and wire transactions associated with the additional properties as substantive evidence of the existence of the scheme, the first element of mail and wire fraud, not as additional instances of defendants' use of the mails or wires, the second element of mail and wire fraud. The additional properties are not additional charges, but additional evidence of the scheme alleged in the Indictment. To the extent this distinction poses a risk of jury confusion, it can be addressed through limiting jury instructions at the appropriate time.
The defendants' argument regarding double jeopardy is a closer call. The double jeopardy bar on subsequent prosecutions for the same...
To continue reading
Request your trial