U.S. v. Miller
| Decision Date | 07 October 1998 |
| Docket Number | No. 97-CR-199.,97-CR-199. |
| Citation | 26 F.Supp.2d 415 |
| Parties | UNITED STATES of America v. Larry MILLER; Robert J. Tavano, Sr.; Lewis Tavano; Nick Miller; Victoria Glines; Tim Glines; Richard Rancati; Doron Yakir; John Fountain, a/k/a "Chick"; Rex Seitz; Fabian Hart; Gail Hart; Loran Thompson; Charles White, a/k/a "Buck"; Larry Thompson, a/k/a/ LT; Dana Leigh Thompson, a/k/a Dana Leigh Bush; Sheila Loran; David Mainville; Anthony Laughing; Robert Browning; and L. David Jacobs, Defendants. |
| Court | U.S. District Court — Northern District of New York |
Thomas J. Maroney, Office of the United, States Attorney, Syracuse, NY, for the United States; Gregory A. West, Ausa, of counsel.
Office of Richard P. Ferris, Utica, NY, for defendant Larry Miller; Richard P. Ferris, of counsel.
Bond, Shoeneck & King, Syracuse, NY, for defendant Lewis Tavano; George H. Lowe, of counsel.
Office of John P. Bartolomei & Associates, Niagara Falls, for defendant Lewis Tavano; John P. Bartolomei, of counsel.
Office of Albert J. Krieger, Miami, FL, for defendant Robert Tavano, Sr.; Albert J. Krieger, of counsel.
Office of Edward Z. Menkin, Syracuse, NY, for defendant Robert Tavano, Sr.; Edward Z. Menkin, of counsel.
Office of James F. Greenwald, Syracuse, NY, for defendant Nick Miller; James F. Greenwald, of counsel.
Office of Lisa A. Peebles, Central Square, NY for defendant Victoria Glines; Lisa A. Peebles, of counsel.
Office of John A. Piasecki, Malone, NY, for defendant John Fountain; John A. Piasecki, of counsel.
Office of Stanley L. Cohen, New York City, for defendants Fabian Hart and Gail Hart; Stanley L. Cohen, of counsel.
Office of Emil M. Rossi, Syracuse, NY, for defendant Loran Thompson; Emil M. Rossi, of counsel.
Office of Geoffrey S. Stewart, New York, NY, for defendant Charles White; Geoffrey S. Stewart, of counsel.
Zdarsky, Sawicki & Agostinelli, Buffalo, NY, for defendants Larry Thompson and Dana Leigh Thompson; K. Michael Sawicki, of counsel.
Office of Lynne F. Stewart, New York City, for defendant Sheila Loran; Lynne F. Stewart, of counsel.
Office of James McGraw, Syracuse, NY, for defendant L. David Jacobs; James McGraw, of counsel.
On July 20, 1998, this Court heard oral argument and decided from the bench numerous discovery motions made by defendants.1 The Court now addresses defendants' remaining motions, seeking variously: to strike surplusage from the indictment; dismissal of the indictment; and the return of seized property.
For the reasons that follow, defendants' motions are granted in part and denied in part.
On July 10, 1997, a grand jury indicted twenty-one defendants on various counts of a seven-count superseding indictment, alleging that defendants smuggled tobacco and liquor products from the United States to Canada across the St. Regis Mohawk Indian Reservation ("Reservation"). The smuggling scheme, according to the indictment, was designed to avoid the payment of duties and taxes levied upon the importation of tobacco and liquor products by Canada.
The Reservation, consisting of a six-by-five mile strip of land straddling the international border between the State of New York and the Canadian provinces of Ontario and Quebec, allegedly acted as the conduit for the smuggling operation due to its unique geography. The government asserts that the smuggling scheme operated by certain defendants purchasing imported Canadian-brand tobacco products from Canadian distributors. The tobacco was then shipped from Canada to locations in Western New York. Certain defendants, according to the government, then transported the tobacco to warehouses operated by other defendants on the Reservation. The government alleges that defendants crafted fictitious invoices to conceal the delivery of the tobacco to the Reservation.
Upon reaching the Reservation, the government claims that defendants surreptitiously transported the tobacco by boat or sled from the Reservation into Canada, avoiding Canadian customs. The government charges that defendants employed codes and counter-surveillance throughout the smuggling scheme to avoid detection. The government further claims that defendants made international and interstate telephone calls and facsimile transmissions to advance the smuggling operation. Ultimately, according to the government, defendants resold the tobacco products on the "black market" in Montreal, Toronto, and other Canadian cities.2
According to the government, Reports of Financial Transactions Exceeding $10,000 in the Course Of A Trade or Business (8300 forms) were neither prepared nor filed in connection with the scheme, preventing the Internal Revenue Service (IRS) from assessing or collecting taxes. The government also asserts that neither Currency Transaction Reports (CTRs) nor Reports of Currency or Monetary Instruments in Excess of $10,000 Crossing the Border (CMIRs) were prepared or filed.
Furthermore, the government contends that the smuggling scheme generated huge profits in Canadian currency, necessitating defendants to devise an illegal currency exchange/money laundering operation. Specifically, the Canadian currency is alleged to have been exchanged and/or deposited to purchase bank drafts or wire transfers, which were then used to pay for additional products, thereby promoting the smuggling operation.
The above-described allegations form the basis for the seven-count superseding indictment (the "indictment").
Counts one, four and six charge dual-object conspiracies violating 18 U.S.C. § 371. They are based upon the alleged agreement to (1) aid and abet those engaged in the outbound smuggling of tobacco and liquor products, see 18 U.S.C. § 546; and (2) conduct the underlying transactions without preparing the required forms, and recording or reporting the underlying transactions.
Counts two, three and five charge money-laundering conspiracies violating 18 U.S.C. § 1956(a)(1)(A) and (h). They are based upon the alleged money-laundering agreement and smuggling operation.
Count seven is a racketeering count charging defendants L. David Jacobs and Anthony Laughing with extortion, bribery, and the operation of an illegal gaming business. See 18 U.S.C. § 1955(a), 1961(1)(4) & (5), 1962(c); N.Y. PENAL LAW § 155.05(2)(e)(viii), 200.10, 225.30(1-3).
Lastly, the indictment alleges forfeiture of cash and property, including: (i) $557,677,994.63 in cash representing the amount laundered as charged in Count two; (ii) $79,672,469.62 in cash representing the amount laundered as charged in Count three; (iii) $50,103,128.97 in cash representing the amount laundered as charged in Count five; (iv) $185,000.00 in cash representing proceeds obtained from the racketeering activity charged in Count seven; and (v) assorted real and personal property of defendants.
Presently before the Court are motions by defendants seeking the following relief: (1) an order striking surplusage from the indictment; (2) dismissal of the indictment; and (3) the return of seized property. The Court will address defendants' motions seriatim.
Defendants move to strike various words and paragraphs in the indictment as improper and prejudicial surplusage.
"The court on motion of the defendant may strike surplusage from the indictment or information." FED. R. CRIM. P. 7(d). The purpose of Rule 7(d) is to protect the defendant against prejudicial allegations of irrelevant facts. The decision to strike, however, is within the discretion of the trial court. U.S. v. Courtney, 257 F.2d 944, 947 (2d Cir.1958), cert. denied, 358 U.S. 929, 79 S.Ct. 316, 3 L.Ed.2d 303 (1959). Motions to strike will be granted only when the challenged allegations are "not relevant to the crime charged and are inflammatory and prejudicial." United States v. Scarpa, 913 F.2d 993, 1013 (2d Cir.1990) (internal quotations omitted). "This is a rather exacting standard, and only rarely has surplusage been ordered stricken." 1 CHARLES A. WRIGHT, FEDERAL PRACTICE AND PROCEDURE: CRIMINAL 2D § 127, at 426-27 (1982).
The test is not simply whether the words in the indictment are prejudicial; rather, to warrant their removal the language must be irrelevant to the crime charged. See United States v. DePalma, 461 F.Supp. 778, 797 n. 26 (S.D.N.Y.1978). "`If evidence of the allegation is admissible and relevant to the charge, then regardless of how prejudicial the language is, it may not be stricken.'" Scarpa, 913 F.2d at 1013 (quoting DePalma, 461 F.Supp. at 797).
In the present case, defendants challenge a number of phrases. First, they move to strike paragraph two of the preamble of the indictment, which states:
During the late 1980s and early 1990s, there were numerous confrontations between members of the New York State Police and armed members of a paramilitary group known as the "Warriors Society."
According to defendants, this paragraph is both irrelevant and highly inflammatory. The government counters that it informs of the unique characteristics of the Reservation, which was essential to the smuggling scheme's creation and success.
Defendants' argument is more persuasive; there is no relevancy between the alleged commercial smuggling of cigarettes and tobacco and the "numerous confrontations" between a "paramilitary group" and law enforcement. The paragraph also is highly prejudicial; it improperly implies defendants involvement in uncharged acts of violence. See United States v. Gatto, 746 F.Supp. 432, 458 (D.N.J.1990) (), rev'd on other grounds, 924 F.2d 491 (3d Cir.1991); United States v. Hubbard, 474 F.Supp. 64, 83 (D.D.C.1979) (...
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