U.S. v. Triumph Capital Group, Inc.

• Decision Date: 18 April 2002
• Docket Number: No. CR. 3:00CR217(AHN).,CR. 3:00CR217(AHN).
• Parties: UNITED STATES of America v. TRIUMPH CAPITAL GROUP, INC. et al.
• Court: U.S. District Court — District of Connecticut

260 F.Supp.2d 444

UNITED STATES of America v. TRIUMPH CAPITAL GROUP, INC. et al.

No. CR. 3:00CR217(AHN).

United States District Court, D. Connecticut.

April 18, 2002.

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Nora R. Dannehy, Thomas V. Daily, David A. Ring, U.S. Attorney's Office, Hartford, CT, John H. Durham, Michael E. Runowicz, William J. Nardini, U.S. Attorney's Office, New Haven, CT, Mark G. Califano, U.S. Attorney's Office, Bridgeport, CT, Linda B. Bridgman, U.S. Securities & Exchange Comm., Boston, MA, David J. Stander, U.S. Department of Justice Criminal Div., Washington, DC, for U.S.

Eathan A. Levin-Epstein, Robert A. Richardson, Garrison levin-Epstein Chimes & Richardson, New Haven, CT, Tracy A. Miner, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C, Richard M. Egbert, Law Office of Richard M. Egbert, Boston, MA, William F. Dow, III, Jacobs, Grudberg, Belt & Dow, P.C, New Haven, CT, Tracey A. Miner, Keith P. Carroll, R. Robert Popeo, Cristina D. Hernandez-Malaby, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C, Boston, MA, Donald J. McCarthy, Jr., McCarthy, Schuman & Coombes, Hartford, CT, Richard M. Asche, Russell M. Gioiella, Jack T. Litman, Todd B. Terry, Litman, Asche & Gioiella, New York City, John M. McKenna, Goodman, Rosenthal & McKenna, West Hartford, CT, George C. McMahon, North Quincy, MA, Jeremiah F. Donovan, Terry Donovan, Old Saybrook, CT, for Defendants.

RULING ON MOTIONS TO DISMISS

NEVAS, District Judge.

Pending before the court are motions of defendants Triumph Capital Group, Inc. ["Triumph"], Frederick W. McCarthy ["McCarthy"], Charles B. Spadoni ["Spadoni"], Lisa A. Thiesfield ["Thiesfield"] and Ben F. Andrews ["Andrews"] to dismiss numerous counts of the superseding indictment ("indictment") in this public corruption case. Specifically, all five of the defendants move to dismiss counts one and two, which charge them with conducting and conspiring to conduct the affairs of an enterprise through a pattern of racketeering activity including bribery, bribe receiving, obstruction of justice and witness tampering in violation of RICO, 18 U.S.C. §§ 1962(c) and (d). Triumph, McCarthy, Spadoni and Thiesfield also move to dismiss counts sixteen and seventeen, which charge them with mail fraud/theft of honest services in violation of 18 U.S.C. §§ 1341 and 1346. Additionally, Spadoni moves to dismiss the wire fraud/theft of honest services charges alleged against him in counts twenty through twentythree.¹

Because the defendants' motions are merely thinly-veiled challenges to the sufficiency of the government's evidence as opposed to the sufficiency of the government's allegations, the motions [docs. ## 290, 293 and 295] are DENIED.

STANDARD

A criminal indictment is governed by Rule 7(c), F.R.Crim. P. This rule only requires an indictment to contain a "plain, concise and definite written statement of the essential facts constituting the offense charged." Id To be legally sufficient, an indictment must adequately charge the elements of an offense, fairly inform the defendant of the charges he must meet, and contain enough detail to permit the defendant to plead double jeopardy in a future prosecution based on the same set of events. See, e.g., United States v. Walsh, 194 F.3d 37, 44 (2d Cir. 1999). Indictments are legally sufficient if they do little more than track the statutory language of the offense charged, state the approximate time and place of the alleged crime, and contain some amount of factual particularity to ensure that the prosecution will not fill in the elements of its case with facts other than those considered by the grand jury. See id. The only time an indictment must descend to particulars is when the definition of an offense includes generic terms. See United States v. Pirro, 212 F.3d 86, 93 (2d Cir.2000).

Indictments do not have to set forth evidence or details of how a crime was committed. See, e.g., United States v. Carrier, 672 F.2d 300, 303-04 (2d Cir. 1982). The validity of an indictment is tested by its allegations, not by whether the government can prove its case. See Costello v. United States, 350 U.S. 359, 363, 76 S.Ct. 406, 100 L.Ed. 397 (1956). Thus, a technically sufficient indictment "is not subject to dismissal on the basis of factual questions, the resolution of which must await trial." See, e.g., United States v. Alfonso, 143 F.3d 772, 776-77 (2d Cir. 1998) (holding that district court erred in dismissing the indictment based on sufficiency of evidence); United States v. Paccione, 738 F.Supp. 691, 696 (S.D.N.Y.1990). "It is axiomatic that, in a criminal defendant may not challenge a facially valid indictment prior to trial for insufficient evidence. Instead, a defendant must await a Rule 29 proceeding or the jury's verdict before he may argue evidentiary sufficiency." United States v. Gambino, 809 F.Supp. 1061, 1079 (S.D.N.Y.1992), affd 17 F.3d 572 (2d Cir.1994).

For these reasons, when the court considers a motion to dismiss an indictment, it must not conflate or confuse permissible claims based on sufficiency of the government's allegations with impermissible claims based on sufficiency of the government's evidence. See, e.g., United States v. Elson, 968 F.Supp. 900, 905 (S.D.N.Y.1997). "[I]t would run counter to the whole history of the grand jury institution to permit an indictment to be challenged 'on the grounds that there was inadequate or incompetent evidence before the grand jury.'" United States v. Williams, 504 U.S. 36, 55, 112 S.Ct. 1735, 118 L.Ed.2d 352 (1992) (quoting Costello v. United States, 350 U.S. 359, 76 S.Ct. 406, 100 L.Ed. 397 (1956)). Thus, "[b]ased on the role assumed by a faithful grand jury in the accusatory process, an indictment, if valid on its face, is enough to call for trial of the charges on the merits." United States v. Labate, No. S100CR632, 2001 WL 533714, at *10 (S.D.N.Y. May 18, 2001) (quoting Costello v. United States, 350 U.S. at 363, 76 S.Ct. 406).

DISCUSSION

I. Motion to Dismiss Count One—RICO

Count one of the indictment charges the defendants with a violation of RICO, 18 U.S.C. § 1962(c). All five defendants move to dismiss this count on the grounds that (1) it does not allege a sufficient pattern of racketeering; (2) it does not allege a connection or on-going association among the members of the alleged enterprise; (3) it does not sufficiently allege that the defendants participated in the operation or management of the enterprise; (4) the predicate acts of state law bribery are insufficient racketeering acts; and (5) the Connecticut bribery statute alleged as a predicate act is unconstitutionally vague.

To be sufficient, an indictment charging a violation of this section of RICO must allege the following elements: (1) that the defendant was employed by or associated with an enterprise; (2) that the defendant knowingly conducted or participated directly or indirectly in the conduct of the affairs of the enterprise through a pattern of racketeering activity; (3) that the defendant knowingly committed or aided and abetted the commission of at least two acts of racketeering; and (4) that the activities of the enterprise affected interstate or foreign commerce. See United States v. Long, 917 F.2d 691, 696 (2d Cir. 1990); see also United States v. Torres, 191 F.3d 799, 805 (7th Cir.1999), cert, denied, 528 U.S. 1180, 120 S.Ct. 1218, 145 L.Ed.2d 1118 (2000); United States v. Starrett, 55 F.3d 1525, 1541 (11th Cir. 1995).

The indictment in this case alleges these statutory elements. It charges that from in or about March, 1997, to in or about October, 2000, the defendants knowingly and unlawfully conducted and participated directly or indirectly in the affairs of an enterprise through a pattern of racketeering activity. The members of the alleged association-in-fact enterprise are Triumph, McCarthy, Spadoni, Thiesfield, Andrews and two other individuals who are not charged as defendants, Paul J. Silvester ("Silvester"), the former Connecticut State Treasurer, and Christopher J. Stack ("Stack"). According to the indictment, Triumph is an investment firm with its principal place of business in Boston, Massachusetts. McCarthy is Triumph's Chairman and principal shareholder. Spadoni is Triumph's General Counsel. Thiesfield was an employee of the Connecticut State Treasurer's Office from September, 1997, to May, 1998, when she became campaign manager for the Silvester for State Treasurer Campaign. Andrews was employed as managing director of a company that provided investment services to the Connecticut State Treasurer's Office and was the Republican candidate for Connecticut Secretary of State in 1998. Silvester was, from January, 1995, to October, 1996, the Chief of Staff at the Connecticut State Treasurer's Office. In October, 1996, he became the Deputy Treasurer, and when the elected State Treasurer resigned on July 22, 1997, Silvester was appointed State Treasurer. As State Treasurer, Silvester had sole authority for managing and investing hundreds of millions of dollars of assets of the Connecticut Retirement Plans and Trust Fund ("CRPTF"). In 1998, Silvester ran as the Republican candidate for Connecticut State Treasurer. He was defeated in the November, 1998 election and left office on January 6, 1999. Christopher A. Stack ("Stack") was a close associate of Silvester. Each of the defendants is alleged to be employed by and associated with the alleged enterprise.

The indictment charges each defendant with at least two acts of racketeering consisting of either bribery, aiding and abetting bribe receiving, obstruction of justice or witness tampering. Further, the indictment alleges that the enterprise was engaged in, and its activities affected, interstate commerce.

In addition to alleging the statutory elements of RICO, the indictment also descends to particulars. Specifically, it alleges that the purpose of the racketeering activity conducted through the enterprise was to enrich the...