U.S. v. Stanford

• Citation: 589 F.2d 285
• Decision Date: 14 December 1978
• Docket Number: 78-1475,Nos. 77-2092,77-2166,78-1276,78-1594 and 78-1938,78-1155,77-2168,s. 77-2092
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Bobbie STANFORD, Louis Watson, Janice Davis, Estella Patterson, Doris Beverly, Dorothy Fife, Richard O'Rourke, and Dorothy Jones, Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 285

589 F.2d 285

50 A.L.R.Fed. 656

UNITED STATES of America, Plaintiff-Appellee, v. Bobbie STANFORD, Louis Watson, Janice Davis, Estella Patterson, Doris Beverly, Dorothy Fife, Richard O'Rourke, and Dorothy Jones Defendants-Appellants.

Nos. 77-2092, 77-2166, 77-2168, 78-1155, 78-1276, 78-1475,

78-1594 and 78-1938.

United States Court of Appeals Seventh Circuit.

Argued Sept. 13, 1978.

Decided Dec. 14, 1978.

Carol A. Brook, Federal Defender Program, Chicago, Ill., for defendants-appellants.

Thomas P. Sullivan, U. S. Atty., Chicago, Ill., for plaintiff-appellee.

Before PELL, Circuit Judge, NICHOLS, Associate Judge, ^* and SPRECHER, Circuit Judge.

PELL, Circuit Judge.

The defendants appeal from their convictions for mail fraud in violation of 18 U.S.C. § 1341 and making false statements in violation of 18 U.S.C. § 1001. The proof at their trials showed that the defendants received benefits from the Illinois Department of Public Aid (IDPA) after having made false statements about their income from other sources, namely, employment with one of the federal or local government agencies in this area. All of the defendants received IDPA warrants, and some defendants also received authorizations to purchase food stamps. We shall describe the facts in detail as they become pertinent to our discussion of the issues.

The defendants' allegations of error pertain to four subjects: the grand jury investigation, the legal sufficiency of the mail fraud indictments, the legal sufficiency of the false statements indictments, and prosecutorial misconduct. The defendants ask that we either suppress evidence against them or dismiss their indictments.

I. The Grand Jury Investigation

The Special November 1975 Grand Jury indicted the defendants on June 21, 1977, after a year-long investigation of alleged welfare fraud among government employees in Illinois. Because of the complexity of the welfare laws and the broad coverage of the investigation, the grand jury used computer experts, accounting technicians, and welfare eligibility experts to aid in the investigation. The defendants argue that the disclosure of grand jury evidence to these agents violates the secrecy requirements of Fed.R.Crim.P. 6(e). ¹ At a later stage of the investigation, federal agents interviewed the defendants and at these interviews presented documents obtained by grand jury subpoena. The defendants object, also on the basis of Rule 6(e), to the disclosure of these documents to them. As a remedy for these alleged violations of Rule 6(e), the defendants request that we dismiss their indictments or, in the alternative, suppress their confessions. Because the arguments of the parties are best understood with a full knowledge of the course of the grand jury investigation, we shall first summarize the facts pertaining thereto.

During the first stage of the investigation, the grand jury subpoenaed the employee lists of various federal and local governmental agencies. ² These lists were to be fed into IDPA computers for interfacing with lists of recipients of IDPA benefits. On October 26, 1976, prior to receiving the subpoenaed employee lists, the grand jury swore as agents an IDPA employee with expertise in the use of the IDPA computer and an FBI special agent. On November 19, 1976 Chief Judge Parsons issued a disclosure order under Rule 6(e) permitting disclosure to employees of IDPA. On December 3, 1976 the grand jury swore another FBI special agent and three more IDPA employees as agents of the grand jury. The grand jury received the subpoenaed employee lists on the same day and presented the lists to the IDPA employees for the interfacing process.

The second stage of the grand jury investigation commenced in January 1977 when the grand jury received under subpoena additional employment records from the various federal and local government agencies. In late January, the grand jury swore FBI accounting technicians as agents for the purpose of examining these records.

When the IDPA employees completed the computerized interfacing of employee lists and IDPA beneficiary lists, the grand jury began the third stage of its investigation. The list of individuals simultaneously employed and receiving IDPA benefits required the scrutiny of IDPA quality control experts to determine whether any of the recipients were ineligible for benefits. The grand jury therefore swore several of these experts from the IDPA as agents between February 25, 1977 and March 18, 1977. These experts eventually presented worksheets to the grand jury on those persons from the list who were ineligible to receive benefits.

Prior to the final stage of the investigation, Chief Judge Parsons entered two more disclosure orders under Rule 6(e). The first of these, entered March 19, 1977, permitted disclosure of transcripts and subpoenaed materials to federal officers and Illinois Department of Law Enforcement personnel. The second of these orders, issued May 2, 1977, permitted disclosure to IDPA employees.

During the final stage of the investigation, agents of the FBI, the Postal Inspection Service, and the Illinois Bureau of Investigation interviewed many individuals who were suspected of welfare fraud. All of the defendants were interviewed during this stage. During these interviews the agents confronted each of the defendants with IDPA applications and redetermination of eligibility forms, warrants from the Illinois Comptroller, and employment records. ³ All of the documents used at each interview were obtained by grand jury subpoena, ⁴ but pertained only to the defendant interviewed. The purpose of presenting these documents was to verify the signatures and to discover the state of mind of each defendant when making the application for and receiving benefits. The defendants were given Miranda warnings at the beginning of the interviews, and each of them signed a written confession.

We shall discuss first the defendants' objection to the disclosures made to them during these interviews. The grand jury did not obtain an order under Rule 6(e) permitting disclosure of the subpoenaed documents to the defendants, and the defendants argue that showing these documents to them without this judicial imprimatur violates Rule 6(e).

Underlying the defendants' argument is the assumption that Rule 6(e) shields every item of evidence considered by the grand jury, whether or not obtained by subpoena, with an impenetrable cloak of secrecy. The defendants' theory requires a court order to expose every item of evidence once it has appeared before the grand jury. ⁵ This argument does restate the general rule, See United States v. Procter &amp Gamble, 356 U.S. 677, 682, 78 S.Ct. 983, 2 L.Ed.2d 1077 (1958); In re Holovachka, 317 F.2d 834, 836-37 (7th Cir. 1963), but neither the language nor the purpose of Rule 6(e) requires the secrecy to be absolute.

The restrictions of Rule 6(e) apply only to "disclosure of matters occurring before the grand jury." Unless information reveals something about the grand jury proceedings, secrecy is unnecessary.

Thus, when testimony or data is sought for its own sake for its intrinsic value in furtherance of a lawful investigation rather than to learn what took place before the grand jury, it is not a valid defense to disclosure that the same documents had been, or were presently being, examined by a grand jury.

United States v. Interstate Dress Carriers, 280 F.2d 52, 54 (2d Cir. 1960). Unlike testimony, documents are created for purposes other than the grand jury investigation; they are therefore more likely to be useful for purposes other than revealing what occurred before the grand jury. See Illinois v. Sarbaugh, 552 F.2d 768, 772 n.2 (7th Cir.), Cert. denied, 434 U.S. 889, 98 S.Ct. 262, 54 L.Ed.2d 174 (1977). ⁶ Persons may have a legitimate interest in documents so that disclosure to them does not constitute disclosure of matters occurring before the grand jury. See United States v. Weinstein, 511 F.2d 622 (2d Cir.) Cert. denied, 422 U.S. 1042, 95 S.Ct. 2655, 45 L.Ed.2d 693 (1975); United States v. Interstate Dress Carriers, supra; In re Grand Jury Investigation of Ven-Fuel, 441 F.Supp. 1299 (M.D.Fla.1977); Capitol Indemnity Corp. v. First Minnesota Construction Co., 405 F.Supp. 929 (D.Mass.1975); In re Hearings Before Committee on Banking and Currency, 19 F.R.D. 410 (N.D.Ill.1956).

The disclosures challenged here revealed nothing about the grand jury investigation, and the disclosures were made only to persons legitimately connected with the documents. The documents revealed to the defendants were not described by the agents during the interviews as grand jury documents. ⁷ Each defendant was shown only his or her own employment file, his or her own welfare applications, and his or her own endorsement on the warrants. For these reasons, the disclosure falls outside of the scope of Rule 6(e). Because the documents shown were not otherwise sheltered from the defendants' inspection by any form of privilege, Cf. United States v. Weinstein, supra, at 627; In re Grand Jury Investigation, 210 F.Supp. 904 (S.D.N.Y.1962), the defendants' challenge to these disclosures must fail.

The defendants also urge that Rule 6(e) did not permit the disclosures without a court order to FBI agents and accounting technicians. ⁸ The version of Rule 6(e) applicable to this case permitted disclosure without a court order only to "attorneys for the government." Rule 54(c) ⁹ defines this term, and the defendants would have us limit disclosure to those persons described. We do not agree that the drafters intended to inflict so rigid a restriction on disclosure and hold that disclosure to these FBI personnel without a court order was permissible.

One of the purposes of providing government attorneys access to grand jury materials is to aid the grand jury in its investigation. See In re Perlin, 589 F.2d 260, 265 - 267 (7th Cir. 1978); In re April 1956 Grand Jury, 239 F.2d 263, 268-69 (...