U.S. v. Thibadeau

• Decision Date: 27 January 1982
• Docket Number: D,No. 306,306
• Parties: UNITED STATES of America, Appellee, v. William THIBADEAU, Appellant. ocket 81-1263.
• Court: U.S. Court of Appeals — Second Circuit

Page 75

671 F.2d 75

UNITED STATES of America, Appellee, v. William THIBADEAU, Appellant.

No. 306, Docket 81-1263.

United States Court of Appeals Second Circuit.

Argued Oct. 29, 1981.

Decided Jan. 27, 1982.

Hubert J. Santos, Hartford, Conn. (Clifford, Buckley & Santos, P. C., Hartford, Conn.), for appellant.

Richard N. Palmer, Asst. U. S. Atty., Dist. of Connecticut, Hartford, Conn., Richard Blumenthal, U. S. Atty., Dist. of Connecticut, New Haven, Conn., for appellee.

Before FEINBERG, Chief Judge, and FRIENDLY and PIERCE, Circuit Judges. ^*

FEINBERG, Chief Judge:

Defendant William Thibadeau appeals from a judgment of conviction in the United States District Court for the District of Connecticut, Jose A. Cabranes, J., following his plea of guilty to two counts of submitting false statements for the purpose of influencing the actions of a bank whose deposits were federally insured, in violation of 18 U.S.C. §§ 2 and 1014. With the consent of the government and the approval of the district court, Thibadeau reserved for review on appeal and now raises before us various claims rejected by the district court in denying his motions to dismiss the indictment. Appellant argues that he was denied his right to an impartial grand jury because of prosecutorial misconduct, that the indictment fails to allege an essential element of the crime charged, that the indictment is duplicitous, and that the documents containing the false statements do not fall within the scope of 18 U.S.C. § 1014 and, if they do, that the statute as applied is unconstitutionally vague. For reasons stated below, we agree with the district court's denial of the motions to dismiss, and we affirm the judgment of conviction.

I. Facts

Since appellant pleaded guilty before trial, the district court record is skimpy. We rely here primarily on the statement of facts in the government's brief, which appellant apparently does not dispute.

Appellant William Thibadeau, together with co-defendant Norman Harris, owned Eastern Wrecker Sales, Inc. (EWS), a retail seller of tow trucks and similar vehicles. EWS and its subsidiary, Cambridge Manufacturing Corp. (CMCO), submitted retail installment agreements from its customers to The Guaranty Bank and Trust Company of Hartford (the Bank), which provided financing. By late 1977 EWS had refinanced with the Bank almost.$2.5 million in installment loans. Shortly thereafter, the Bank invited Thibadeau to join its Board of Directors. By the middle of 1978, the Bank had purchased approximately $8 million in EWS and CMCO retail installment agreements.

At the time the Bank approved a loan to an EWS customer, it paid EWS the sale price of the vehicle stated in the contract. For providing the Bank with a loan customer, EWS also received an agreed upon portion of the interest due on the loan; this amount was credited to EWS's "dealer reserve account," which the Bank required dealers to maintain at a level of three percent of its sales contracts to protect the Bank against defaulting customers. Ordinarily a dealer had only limited access to this account and withdrawals required the approval of a bank officer, but Thibadeau and Harris, with the aid of James Pitcher, an assistant vice-president at the Bank, were able to obtain substantial use of these funds. Thibadeau was able to withdraw as much as $40,000 twice a week from the account, and in less than one year withdrew more than a million dollars.

To perpetuate their scheme, Thibadeau and Harris generated a large number of contracts, many with persons who could not obtain credit from other sources and who signed blank contract forms. Some of these customers were deceived as to the length of the contracts and as to the interest rates being charged, believing them to be around 10 or 11 percent; the completed contracts EWS submitted to the Bank reflected interest rates as high as 26 percent. In many cases, the contracts were only cash loans; EWS had not, as it represented to the Bank, sold a vehicle or received a downpayment. The magnitude of this scheme is reflected by the number of separate contracts stated in the 98-count indictment, which covers 51 pages. The alleged loss to the Bank, and its successor, was approximately.$4.5 million.

Norman Harris pleaded guilty to one count of violating 18 U.S.C. § 1014. James Pitcher was convicted by a jury of one count of aiding and abetting the submission of false loan documents in violation of 18 U.S.C. §§ 1014 and 2; his conviction was affirmed by this court in an unreported order. As already indicated, appellant Thibadeau pleaded guilty to two counts of the indictment, but reserved his right to this appeal. ¹

II. Discussion

In this court, Thibadeau argues first that his right to an impartial grand jury was so prejudiced by prosecutorial misconduct that the indictment should be dismissed. Appellant claims that he was improperly required to invoke his fifth amendment privilege against self incrimination before the grand jury, and that he was prejudiced because the government called other witnesses who invoked various testimonial privileges before the grand jury. Thus, Pitcher and Harris asserted their fifth amendment privileges, and Samuel Tallow, an attorney for the corporation, and Josephine Thibadeau invoked the attorney-client and husband-wife privilege respectively. Appellant relies on Sections 3.5(b) and 3.6(e) of the ABA Standards for the Prosecution Function (ABA Standards) as the basis for dismissing the indictment. The former section prohibits a prosecutor from making statements and arguments in order to influence the grand jury "in a manner which would be impermissible at trial before a petit jury;" the latter prohibits a prosecutor from calling a witness "whose activities are the subject of the inquiry if the witness states in advance that if called he or she will exercise the constitutional privilege not to testify...."

In considering these contentions of prosecutorial misconduct, we should first note that the remedy appellant seeks-dismissal of an indictment-is an extraordinary one. To dismiss an indictment because of misconduct means that even though a jury unanimously found the defendant guilty beyond a reasonable doubt-or as here, even though the defendant admitted his guilt-we should nevertheless void his conviction because the prosecution had made a misstep in obtaining a grand jury determination of probable cause. Justification for such action must be found not in any need for securing justice in the particular case, where the verdict supersedes the indictment, but rather in a desire to maintain proper prosecutorial standards generally. Hence, the sanction is reserved for "very limited and extreme circumstances," as we said in United States v. Broward, 594 F.2d 345, 351 (2d Cir.), cert. denied, 442 U.S. 941, 99 S.Ct. 2882, 61 L.Ed.2d 310 (1979).

Understandably, therefore, although much may be said in support of the ABA Standards, there are a number of decisions that have refused to dismiss indictments because of the conduct there condemned. See Appeal of Angiulo, 579 F.2d 104, 106-07 (1st Cir. 1978); United States v. Wolfson, 405 F.2d 779, 784-85 (2d Cir. 1968), cert. denied, 394 U.S. 946, 89 S.Ct. 1275, 22 L.Ed.2d 479 (1969); and United States v. Fortunato, 402 F.2d 79, 82 (2d Cir. 1968), cert. denied, 394 U.S. 933, 89 S.Ct. 1205, 22 L.Ed.2d 463 (1969). However, we need not consider this point in further detail because it is clear that the ABA Standards simply were not violated here. Appellant refused on fifth amendment grounds to answer the government's question about the location of corporate documents that he had agreed to supply to the grand jury but that had not been turned over because of an oversight by his counsel. Although appellant had agreed that he had no privilege with respect to a request for the production of corporate records, he declined to reply to the question, apparently because he misunderstood his counsel's advice. When the misunderstanding was resolved, appellant answered the question. This confusion between appellant and his counsel was fully apparent to the grand jury. The government, as the district court justifiably found, did not ask appellant questions that it had reason to believe would cause him to invoke his fifth amendment privilege.

With regard to other witnesses, the prosecutor apparently believed that Pitcher would testify before the grand jury, and the other three witnesses were called, as Thibadeau was, for the limited purpose of locating corporate records. The district court correctly found that the government did not "harass a witness or unnecessarily belabor a point in an effort to force a witness to invoke his privilege." Once a privilege was invoked, the government ceased questioning promptly.

Appellant's argument based upon Section 3.5(b) of the ABA Standards is that the prosecutor improperly asked two top bank officials whether they were aware of defendant's prior conviction for bankruptcy fraud. The one-sentence question asked of each witness was not followed up by the prosecutor in either case. Moreover, it is clear from a subsequent question of a grand juror that the jurors understood that the purpose of the question was to determine the credibility, judgment and involvement in the scheme of two potentially key government witnesses. Under the circumstances, if there was prejudice at all to appellant, it was not sufficient to warrant the extreme sanction of dismissing the indictment.

Appellant next argues that the indictment failed to allege an essential element of the crime. Appellant entered pleas of guilty to counts 15 and 21 of the indictment. Count 15 charges that four false statements were made on one document, a Bank purchase and loan agreement form. The false statements are as follows: that the vehicle purchased was new, when in fact it was not; that the vehicle was purchased from CMCO, when in fact it had not been purchased from CMCO; that...