U.S. v. Hubbell

Decision Date01 June 1999
Docket NumberNo. 99-3044,99-3044
Citation177 F.3d 11
PartiesUNITED STATES of America, Appellant, v. Webster L. HUBBELL, Appellee.
CourtU.S. Court of Appeals — District of Columbia Circuit

Appeal from the United States District Court for the District of Columbia (98cr00394-01).

Paul Rosenzweig, Associate Independent Counsel, argued the cause for appellant. With him on the briefs were Kenneth W. Starr, Independent Counsel, Jay Apperson, Deputy Independent Counsel, Joseph M. Ditkoff and Eric S. Dreiband, Associate Independent Counsel.

Peter J. Romatowski argued the cause for appellee. With him on the brief were John W. Nields, Jr. and Laura S. Shores.

Before: SILBERMAN, WILLIAMS, and TATEL, Circuit Judges.

Opinion for the Court filed PER CURIAM.

PER CURIAM:

The Office of Independent Counsel appeals from the district court's dismissal, for vagueness, of one count of a multi-count indictment returned against Webster L. Hubbell. We reverse.

I.

The 15-count indictment alleges that Hubbell, acting as an attorney for the Rose Law firm, assisted Madison Guaranty Savings & Loan Association in a series of real estate transactions, including the purchase of land, through Madison Guaranty's subsidiary, Madison Financial, and nominee purchaser Seth Ward, Hubbell's father-in-law. Allegedly seeking to conceal the improprieties in these transactions from the Federal Home Loan Bank Board, Hubbell assisted Madison Guaranty in creating a fictitious paper record to deceive the bank regulators about the nature of Madison's payments to Seth Ward, and then concealed his representation of Seth Ward from the Federal Deposit Insurance Corporation (FDIC). The indictment further alleges that Hubbell lied to federal investigators about these events.

Count 1 of the indictment, 1 which incorporates by reference the allegations above as set forth in the first 85 paragraphs of the indictment, charges a violation of 18 U.S.C. § 1001 (1994). At the time of Hubbell's conduct alleged here, § 1001 provided:

[W]hoever, in any matter within the jurisdiction of any department or agency of the United States knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry, shall be fined under this title or imprisoned not more than five years, or both.

Id. Specifically, Count 1 alleges that Hubbell "did knowingly and willfully falsify, conceal, and cover up by scheme material facts about and related to the true nature" of his relationships with Seth Ward, Madison Guaranty, and Madison Financial, and that he made "materially false and fraudulent statements and representations to the FDIC and the RTC" about these relationships. Hubbell moved to dismiss this count for vagueness and to require election among multiplicitous counts. He argued that, given the lack of specificity in identifying the particular facts concealed, the indictment failed to "fairly infor[m] [him] of the charge against which he must defend." Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974); FED. R.CRIM. P. 7(c)(1).

The district court granted the motion to dismiss Count 1 for vagueness (and as such did not reach the multiplicity issue). The district court's reasoning, however, focused not on the specificity of the allegations, but on whether § 1001 permits the charging of a scheme crime. The district court first noted that, in Bramblett v. United States, 231 F.2d 489 (D.C.Cir.1956), the "suggestion that § 1001 punishes a 'pattern of conduct' is dictum." United States v. Hubbell, 44 F.Supp.2d 1 (D.D.C.1999), reported at 44 F.Supp.2d 1, 1999 WL 152534, at * 2; see Bramblett, 231 F.2d at 491. Viewing the indictment as charging just such a scheme or pattern of conduct, the district court concluded that the allegations in the indictment went to the "scheme" itself and were therefore insufficiently specific as to the precise acts of concealment or falsification at issue. Although the court acknowledged that the 85 paragraphs incorporated by reference in Count 1 allege "many false statements and acts of concealment," it described the charging language of Count 1 itself as "nonspecific." Hubbell, 44 F.Supp.2d at ----, 1999 WL 152534, at * 2. The government appealed.

II.

The government contends that the district court erred by confusing two distinct questions--whether Count 1 properly charges an offense under the "conceal[s] ... by scheme" clause of § 1001, and whether Count 1 is too vague to inform the defendant of the charge against him. As to the first question, the government asserts that governing precedent, as well as principles of statutory construction, tell us that § 1001 allows prosecution of "scheme crimes." Hubbell responds that § 1001 does not define a separate offense of committing a scheme; it merely limits the type of concealments that violate the statute. Hubbell's argument, however, cannot be squared with our prior decision in Bramblett, which expressly held that the plain language of § 1001 permits the charging of scheme crimes. In that case, the defendant, a member of Congress, filed a false designation with the Disbursing Office of the House of Representatives claiming that he had hired a clerk; he then proceeded to collect the phantom-clerk's monthly paychecks. The defendant argued that the prosecution under § 1001 was time-barred because the crime was complete when the designation was filed, more than three years before the indictment was returned. We rejected that argument, however, explaining that "the indictment [did] not merely charge the making of a false statement," but instead alleged a falsification by scheme. By "falsifying a material fact, and in leaving it on file, thereby continuing the falsification in order repeatedly to partake of the fruits of the scheme," the defendant committed a continuing crime of falsification by scheme that "fairly falls within the terms of section 1001." Bramblett, 231 F.2d at 491. To the extent that the district court concluded that Count 1 did not properly charge an offense under § 1001, it was in error.

Turning to the asserted vagueness, we do not see how Count 1, having incorporated by reference the 85-paragraph introductory section detailing the allegations, can be thought insufficient to "fairly inform[ ] [the] defendant of the charge against which he must defend." Hamling, 418 U.S. at 117, 94 S.Ct. 2887. As the government points out, the indictment sets forth the acts of falsification and concealment; the nature of the scheme by which these material facts were falsified and concealed; and the material facts that Hubbell concealed from the FDIC and RTC. The district court seems to have ignored the incorporation by...

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