U.S. v. Steffen, Case No. 4:10CR371 JCH.
| Decision Date | 09 November 2010 |
| Docket Number | Case No. 4:10CR371 JCH. |
| Citation | 753 F.Supp.2d 903 |
| Parties | UNITED STATES of America, Plaintiff(s),v.John R. STEFFEN, Defendant(s). |
| Court | U.S. District Court — Eastern District of Missouri |
OPINION TEXT STARTS HERE
Steven A. Muchnick, Michael W. Reap, Office of U.S. Attorney, St. Louis, MO, for Plaintiffs.Lee T. Lawless, Federal Public Defender, St. Louis, MO, Robert T. Haar, Lisa A. Pake, Haar and Woods, LLP, St. Louis, MO, for Defendants.
This matter is before the Court on Defendant's pre-trial Motion to Dismiss Indictment for Insufficiency and Failure to State an Offense (Doc. No. 29). Pursuant to 28 U.S.C. § 636(b), this matter was referred to United States Magistrate Judge Mary Ann L. Medler, who filed a Report and Recommendation on October 25, 2010. Neither party submitted objections to the Report and Recommendation.
Magistrate Judge Medler recommends that the Court grant Defendant's Motion to Dismiss Indictment for Failure to State an Offense, and dismiss the Indictment. After de novo review of the entire record in this matter, the Court adopts the Magistrate Judge's recommendation.
Accordingly,
IT IS HEREBY ORDERED that the Report and Recommendation of the United States Magistrate Judge [Doc. No. 43] is SUSTAINED, ADOPTED, AND INCORPORATED herein.
IT IS FURTHER ORDERED that Defendant's Motion to Dismiss Indictment for Failure to State an Offense [Doc. No. 29] is GRANTED, and the Indictment in this matter [Doc. No. 1] is DISMISSED.
IT IS FURTHER ORDERED that Defendant's Alternative Motion to Dismiss the Indictment for Insufficiency [Doc. No. 29] is DENIED as moot.
This matter is before the court on Defendant's Motion to Dismiss Indictment for Insufficiency and Failure to State an Offense. [Doc. 29] Defendant's Memorandum in Support is Doc. 30. The government responded. [Doc. 39] Defendant replied. [Doc. 40] Oral argument was heard on September 29, 2010.
Defendant is charged in a one-Count Indictment with Bank Fraud in violation of 18 U.S.C. §§ 1344(1) and 1344(2).1
The Indictment alleges that “[o]n or about May 7, 2007, defendant JOHN R. STEFFEN used the Brownfield Remediation Tax Credits as collateral to obtain a loan from The Business Bank of St. Louis, Clayton, Missouri to MB Lofts, LLC ...” Indictment ¶ 8. “Between on or about May 7, 2007, and on or about April 23, 2008, The Business Bank of St. Louis advanced a total of $1,115,633.00 to MB Lofts, LLC ...” Id. ¶ 10. “On or about December 17, 2007, unbeknownst to The Business Bank of St. Louis, and without its approval and authorization, defendant JOHN R. STEFFEN fraudulently sold Brownfield Remediation Tax Credits, in the amount of $827,415.02, which were part of the collateral for the loan ...” Id. ¶ 11. Steffen purportedly “used the proceeds to pay operating expenses on other projects.” Id. ¶ 12. The Indictment alleges that The Business Bank discovered the sale of its collateral and use of the proceeds on April 10, 2008. Id. ¶ 13.
Paragraph 15, the charging paragraph, states:
[T]he defendant herein, did knowingly execute and attempt to execute a scheme and artifice to defraud a financial institution, The Business Bank of St. Louis, and to obtain money, funds, credits, assets, securities and other property owned by and under the custody and control of The Business Bank of St. Louis, by means of materially false and fraudulent pretenses, representations and promises, by representing to The Business Bank of St. Louis that Missouri Brownfield Remediation Tax Credits of $1,424,818 would be used as collateral on a $1,115, 633 loan from The Business Bank of St. Louis to MB Lofts, LLC, a corporation controlled by defendant JOHN R. STEFFEN, until the loan was paid, when in fact JOHN R. STEFFEN falsely and fraudulently converted the tax credits for his own use, sold the tax credits to other persons, and used the proceeds of said sale to pay expenses on other real estate projects which caused the loan from The Business Bank of St. Louis to MB Lofts, LLC a corporation controlled by defendant JOHN R. STEFFEN, to be unsecured.
Defendant argues that the Indictment is vague and ambiguous and that defendant has no way of knowing what, if any, misrepresentations were made, to whom they were made and when they were made. He argues that the mere recitation of the statutory language in the Indictment does not fairly inform him of the charges he must meet.
The parties do not dispute the basic law of indictments: To be legally sufficient on its face, the indictment must contain all the essential elements of the offense(s) charged, it must fairly inform the defendant of the charge(s) against which the defendant must defend, and it must allege sufficient information to allow the defendant to plead a conviction or an acquittal as a bar to a subsequent prosecution. United States Const. Amends. V and VI; Fed.R.Crim.P. 7(c); Hamling v. United States, 418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974); United States v. Hance, 501 F.3d 900, 906 (8th Cir.2007); United States v. Just, 74 F.3d 902, 903–04 (8th Cir.1996); United States v. Wessels, 12 F.3d 746, 750 (8th Cir.1993), cert. denied, 513 U.S. 831, 115 S.Ct. 105, 130 L.Ed.2d 53, (1994); United States v. Young, 618 F.2d 1281, 1286 (8th Cir.), cert. denied, 449 U.S. 844, 101 S.Ct. 126, 66 L.Ed.2d 52 (1980).
There is no doubt that an indictment plays a part in protecting a defendant against double jeopardy. However, “the defendant's attack on the present Indictment falls wide of the mark since it is the record as a whole that protects an accused from being ‘twice put in jeopardy of life or limb.’ ” United States v. Roman, 728 F.2d 846, 853 (7th Cir.), cert. denied, 466 U.S. 977, 104 S.Ct. 2360, 80 L.Ed.2d 832 (1984). It is necessary that the record as a whole, not just the indictment, shows with accuracy to what extent a defendant may plead a former acquittal or conviction if he is charged in another proceeding with a similar offense. Id. This is because a defendant claiming he has been subjected to double jeopardy bears the burden of establishing that both prosecutions are for the same offense. “The defendant must show that ‘the evidence required to support a conviction on one indictment would have been sufficient to warrant conviction on the other’ indictment.” Roman, 728 F.2d at 853 quoting United States v. West, 670 F.2d 675, 681 (7th Cir.), cert. denied, 457 U.S. 1124, 102 S.Ct. 2944, 73 L.Ed.2d 1340 (1982).
Defendant has been provided enormous amounts of discovery in this case. The Indictment, the discovery and the record will assure the defendant is protected against double jeopardy, in other words,
the true test of the sufficiency of an indictment is not whether it could have been made more definite and certain, but whether it contains the elements of the offense intended to be charged, and sufficiently apprises the defendant of what he must be prepared to meet, and, in case other proceedings are taken against him for a similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction.
United States v. Goldberg, 225 F.2d 180, 184 (8th Cir.1955); see also Costello v. United States, 350 U.S. 359, 363–64, 76 S.Ct. 406, 100 L.Ed. 397 (1956) (); United States v. Hirsch, 360 F.3d 860, 863 (8th Cir.2004) ().
In its Response to defendant's argument the government stated in its Response and affirmatively admitted several times at oral argument that defendant made no misrepresentations.2 At oral argument the government argued that representations can be made by affirmative actions or by silence. Here, the government alleges that defendant was silent. He sold the tax credits to pay other bills and simply did not tell the bank. The government's Response says “In simple terms, the Indictment alleges that Mr. Steffen sold the tax credits which were collateral to a loan at The Business Bank, a financial institution defined by Title 18, United States Code, Section 20.” It says he “used the sale proceeds from the tax credits for other purposes to pay other bills but not repay The Business Bank loan.” Gov.'s Response, Doc. 39 at 1. The government argues its Id. at 3.
Based on the government's position, both in the Indictment, the discovery and its admissions in its Response and oral argument, it appears that the issue of the sufficiency of the Indictment to inform defendant of the charges against which he must defend is moot. The issue before the court is whether the Indictment states the offense of bank fraud.
The crime of bank fraud has three essential elements:
One, the defendant knowingly [executed] [attempted to execute] [participated in] a scheme [to defraud a financial institution] [to obtain monies] [funds] [credits] [owned by] [under the custody and control of] a financial institution by means of material [falsehoods] [fraudulent pretenses] [false or fraudulent representations] [false or fraudulent promises].
Two, the defendant did so with intent to defraud; and
Three, the financial institution was [chartered by the United States Government] [insured by the United States Government].
The following definitions are part of this instruction:
The phrase “scheme to defraud” includes any plan or course of action intended to...
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United States v. Steffen
...the Government “affirmatively admitted several times at oral argument that defendant made no misrepresentations.” United States v. Steffen, 753 F.Supp.2d 903, 906 (E.D.Mo.2010) (emphasis omitted). The court then relied on United States v. Ponec, 163 F.3d 486 (8th Cir.1998), among other case......