U.S. v. Rigas

CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
Citation281 F.Supp.2d 660
Decision Date11 August 2003
Docket NumberNo. 02 CR. 1236(LBS).,02 CR. 1236(LBS).
PartiesUNITED STATES, v. John J. RIGAS, Timothy J. Rigas, Michael J. Rigas, and Michael C. Mulcahey, Defendants.

Christopher J. Clark, Timothy J. Coleman, Judd C. Lawler, United States Attorneys Office-Southern District of New York, New York City, for the United States.

Peter Fleming, Jr., Curtis, Mallet-Prevost, Colt & Mosle LLP, New York City, for Defendant John Rigas.

Paul R. Grand, Morvillo, Abramowitz, Grand, Iason & Silberberg, P.C., New York City, for Timothy Rigas.

Andrew J. Levander, Swidler, Berlin, Shereff, Friedman, LLP, New York City, for Michael Rigas.

Mark J. Mahoney, Harrington & Mahoney, Buffalo, NY, for Michael Mulcahey.

MEMORANDUM AND ORDER

SAND, District Judge.

Defendants John Rigas, Timothy Rigas, Michael Rigas, and Michael Mulcahey ("Defendants") make multiple motions attacking the sufficiency of the indictment in this case ("Indictment"). Michael Rigas and John Rigas also move for an order severing their trials from that of their codefendants. For the reasons set forth below, the motions are denied.

BACKGROUND

The Indictment charges Defendants with one count of conspiracy and 22 counts of securities fraud, wire fraud, and bank fraud in connection with the control and management of the Adelphia Communications Corporation ("Adelphia").1 The Court's previous Memorandum and Order set forth in general the government's factual allegations, and familiarity with that decision is presumed. United States v. Rigas, 258 F.Supp.2d 299 (S.D.N.Y.2003).

In April 2003, Defendants brought a variety of motions challenging alleged deficiencies in the Indictment and requesting an order for severance of the trial. The motions are as follows: Defendants by joint motion seek an order (1) requiring the government to elect among alleged multiplicitous counts in the Indictment (Counts Two through Sixteen), (2) striking alleged prejudicial surplusage from the Indictment and (3) striking references to alleged breaches of the duty of honest services. Michael Rigas seeks an order (1) dismissing Count One (Conspiracy), Counts Seventeen through Twenty-One (Wire Fraud), and Counts Twenty-Two and Twenty-Three (Bank Fraud) on grounds that shall be described below;2 and (2) on behalf of himself, severing his trial from that of his codefendants. John Rigas, on behalf of himself, also seeks an order severing his trial from that of his codefendants. Finally, Michael Mulcahey, on behalf of himself, seeks an order dismissing all counts in the Indictment, except for any charges resting entirely on certain specified paragraphs in the Indictment, and striking surplusage from the Indictment.

The Court held oral argument on May 21, 2003 at which the government agreed to strike Count Ten of the original Indictment as erroneously duplicating Count Eight of the original Indictment. (Tr. of Oral Arg. of 5/21/03 ("Tr.") 27.) On May 29, 2003, the government informed the Court of its intention to ask the grand jury to return a superseding indictment in this case. The superceding Indictment was returned on July 30, 2003. It reflects the government's agreement to strike Count Ten and makes other changes, which, when relevant, are described below.

Two motions may be considered summarily. First, the Court denies Defendants' joint motion to strike prejudicial surplusage without prejudice to renewal after the government provides a final bill of particulars. (See Tr. 30-31.) Second, in agreement with the government's position (Gov't Memo. in Opp. ("Opp.Memo.") 25-26), the motion to dismiss Count One and Counts Seventeen through Twenty-One of the Indictment to the extent that they rely on a duty of honest services is denied without prejudice to renewal given the Second Circuit's current en banc consideration of the constitutionality of 18 U.S.C. § 1346. See United States v. Rybicki, 287 F.3d 257 (2d Cir.2002).

DISCUSSION
A. Motion to Dismiss Count One (Conspiracy)

Count One of the Indictment charges conspiracy to commit securities fraud, wire fraud, false statements in SEC filings, false books and records, and bank fraud. (Indictment ¶¶ 198-203.) As noted in this Court's previous opinion, Count One outlines in considerable detail a scheme to manipulate and conceal Adelphia's perilous financial condition from 1999 to 2002 ("Adelphia Scheme"). Rigas, 258 F.Supp.2d at 301-03. Pursuant to Federal Rules of Criminal Procedure 8(a) and 12(b), Michael Rigas moves to dismiss this Count as duplicitous.

"An indictment is impermissibly duplicitous where: 1) it combines two or more distinct crimes into one count in contravention of Fed.R.Crim.P. 8(a)'s requirement that there be `a separate count for each offense,' and 2) the defendant is prejudiced thereby." United States v. Sturdivant, 244 F.3d 71, 75 (2d Cir.2001). To avoid the problem of duplicity, an indictment may not charge multiple conspiracies in a single count. E.g., United States v. Murray, 618 F.2d 892, 896-97 (2d Cir. 1980).

Michael Rigas argues that Count One runs afoul of this prohibition by encompassing at least six separate and distinct conspiracies. The Court is not persuaded. "A conspiracy involves an agreement by at least two parties to achieve a particular illegal end." United States v. LaSpina, 299 F.3d 165, 174 (2d Cir.2002). "In order to prove a single conspiracy, the government must show that each alleged member agreed to participate in what he knew to be a collective venture directed toward a common goal. The co-conspirators need not have agreed on the details of the conspiracy, so long as they agreed on the essential nature of the plan." United States v. McDermott, 245 F.3d 133, 137 (2d Cir.2001) (internal quotations omitted). As the agreement, not the commission of the substantive crime, is the essence of the conspiracy, United States v. Gore, 154 F.3d 34, 40 (2d Cir.1998), a single conspiracy may include multiple groups of people, and the pursuit of multiple illegal objects does not automatically divide a single conspiracy into multiple conspiracies. United States v. Berger, 224 F.3d 107, 115 (2d Cir.2000); United States v. Aracri, 968 F.2d 1512, 1518 (2d Cir.1992); see also United States v. Trippe, 171 F.Supp.2d 230, 238 (S.D.N.Y.2001) ("[I]t is firmly established in this Circuit that an indictment count may allege a conspiracy to commit multiple crimes."). Generally, whether a single conspiracy or multiple conspiracies existed is a question of fact for the jury. E.g., Berger, 224 F.3d at 114.

Here, on its face Count One charges the central players in Adelphia's corporate affairs with a single conspiracy to defraud Adelphia creditors and investors by concealing Adelphia's perilous financial condition and its alleged improper business relationships with the Rigas family and separate businesses controlled by the Rigas family. The Indictment describes, for example, Defendants' attempt to misrepresent the actual state of Adelphia's liabilities on its financial statements (Indictment ¶¶ 64-73) while at the same time concealing the true extent of Adelphia's growing debt burden through false press releases and false entries in Adelphia's books and records (Indictment ¶¶ 73-81), and misrepresentations to Moody's Investors Service. (Indictment ¶¶ 82-91.) The Indictment alleges a similar strategy of misrepresentations and concealment regarding Adelphia's earnings (Indictment ¶¶ 92-126) and operating results, including the number of basic cable (Indictment ¶¶ 127-38) and high-speed Internet subscribers. (Indictment ¶¶ 139-42.) Despite the effects on various persons and entities, and the uses of various media, Count One adequately connects these activities to a single scheme designed to ensure that Adelphia's declining financial health-and the Rigas family's involvement in such decline-would remain concealed. Although not all Defendants are individually implicated in every fraudulent act, the identification of various overt acts and different substantive crimes involving only some Defendants does not automatically transform a single overarching scheme into a series of separate conspiracies. See Aracri, 968 F.2d at 1518 (noting that separate criminal acts may be charged in a single count if they are part of "a single continuing scheme"); United States v. Maldonado-Rivera, 922 F.2d 934, 963 (2d Cir.1990) ("[A] single conspiracy is not transformed into multiple conspiracies merely by virtue of the fact that it may involve two or more phases or spheres of operation, so long as there is sufficient proof of mutual dependence and assistance."). Thus, the allegations in Count One avoid the risk of duplicity, and it will be the jury's task to decide the further factual question of whether a single conspiracy or multiple conspiracies exist. Michael Rigas's motion to dismiss Count One is denied.

B. Motion to Dismiss Counts Two Through Sixteen (Securities Fraud)

Counts Two through Sixteen of the Indictment charge Defendants with securities fraud in connection with the sale or purchase of several Adelphia securities. These Counts incorporate the previous allegations in ¶¶ 1-197 and 204-05 of the Indictment; repeat, in substantial part, the text of Section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission (SEC) Rule 10b-5; and list 15 classes of Adelphia securities, each of which forms a separate count. Defendants argue that Counts Two through Sixteen are multiplicitous, and they seek an order requiring the government to elect one count on which to proceed and to dismiss the remaining counts.

"An indictment is multiplicitous when it charges a single offense as an offense multiple times, in separate counts, when, in law and fact, only one crime has been committed." United States v. Chacko, 169 F.3d 140, 145 (2d Cir.1999). A multiplicitous indictment is impermissible because it charges a person with...

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    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
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    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
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    ...at 896 )." ‘A conspiracy involves an agreement by at least two parties to achieve a particular illegal end.’ " United States v. Rigas, 281 F.Supp.2d 660, 664 (S.D.N.Y. 2003) (quoting United States v. LaSpina, 299 F.3d 165, 174 (2d Cir. 2002) ). The Second Circuit has "frequently noted that ......
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    ...Cir.2004) (quoting Bell v. United States, 349 U.S. 81, 83-84, 75 S.Ct. 620, 99 L.Ed. 905 (1955)).4 Page 630 In United States v. Rigas, 281 F.Supp.2d 660 (S.D.N.Y.2003), this Court addressed an argument almost identical to that posed by Regensberg here. In Rigas, the defendants were charged ......
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    • American Criminal Law Review Vol. 43 No. 2, March 2006
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