U.S. v. Wittig, Case No. 03-40142-JAR.
| Citation | 568 F.Supp.2d 1284 |
| Decision Date | 01 August 2008 |
| Docket Number | Case No. 03-40142-JAR. |
| Parties | UNITED STATES of America, Plaintiff, v. David C. WITTIG and Douglas T. Lake, Defendants. |
| Court | U.S. District Court — District of Kansas |
This matter is before the Court on defendant Douglas Lake's Motion to Dismiss (Doc. 888) and Supplemental Motion to Dismiss (Doc. 913) all counts of the First Superseding Indictment ("Indictment"), and defendants' Joint Supplemental Motion to Dismiss Count 40 (Doc. 926). Co-defendant David Wittig has joined in Lake's motion and has filed a separate Motion to Strike or Otherwise Conform Count 1 (Doc. 915). The government opposes defendants' motions (Docs. 933, 949). The Court heard argument on July 21, 2008, and took the matter under advisement. After reviewing the parties' arguments and submissions, the Court is now prepared to rule. For the reasons stated below, the Court denies the motions with respect to defendants' claims based on the Double Jeopardy Clause.1
The facts and lengthy procedural history of this case are undisputed and the Court assumes the reader is familiar with the Tenth Circuit opinion that precipitates the matters before the Court, United States v. Lake.2 The Court will not restate the findings of the Tenth Circuit in detail, but will provide excerpts from the opinion as needed to frame its discussion.
The second trial against defendants resulted in guilty verdicts on all but a few counts, as well as forfeiture of defendants' interest in specific property. On January 5, 2007, the Tenth Circuit dismissed with prejudice Counts 16-39, the wire fraud and money laundering counts, and remanded the remaining counts, conspiracy, circumvention of internal controls and forfeiture to this Court for retrial.3
Defendants contend that the scope and specific findings of the Tenth Circuit's decision require all surviving allegations "be reviewed in a new light cast by that decision." Specifically, defendants argue that the government cannot so much as introduce evidence pertaining to the now dismissed charges of wire fraud and money laundering without violating the Double Jeopardy Clause of the United States Constitution. They further contend that same principle requires the Court to strike those objects and overt acts listed in Count 1, the conspiracy charge, that pertain to the substantive counts of wire fraud or money laundering. Yet defendants acknowledge that the remanded conspiracy count charges conspiracy to commit wire fraud, money laundering and circumvention of internal controls.
This case requires an examination of the related concepts of collateral estoppel and double jeopardy. The Double Jeopardy Clause protects against multiple punishments for the "same offense."4 The Clause embodies two broad principles: protection against a second prosecution for the same offense, whether after acquittal or conviction, and protection from multiple punishments for the same crime.5 Collateral estoppel prevents a party from relitigating an issue that has already been decided, and applies in criminal as well as civil cases.6
7 8
A substantive crime and a conspiracy to commit that crime are not the "same offense" for double jeopardy purposes.9 Defendants do not assert that the Double Jeopardy Clause bars outright the retrial on conspiracy. Instead, they argue that the collateral estoppel component of the Double Jeopardy Clause bars retrial on the conspiracy count because it requires relitigation of issues already resolved in the Tenth Circuit's reversal order, namely the falsity of the SEC reports and the value of defendants' personal travel.
In Ashe v. Swenson,10 the Supreme Court held that the Double Jeopardy Clause encompasses the corollary doctrine of collateral estoppel.11 "When an issue of ultimate fact has once been determined by a valid and final judgment," collateral estoppel precludes the same parties from litigating that same issue in any future lawsuit.12 This principle bars only the relitigation of "ultimate issues" decided in a prior criminal proceeding.13 Thus, collateral estoppel will not apply if a rational jury could have based its verdict upon an issue not decided in the prior case.14
In Dowling v. United States,15 the Supreme Court declined to extend Ashe and collateral estoppel as far as "to exclude in all circumstances . . . relevant and probative evidence that is otherwise admissible under the Rules of Evidence simply because it relates to alleged criminal conduct for which a defendant has been acquitted."16 Thus, "if an issue determined in a prior proceeding between the same parties . . . constitutes a necessary element of a subsequent prosecution, collateral estoppel will likely operate as a complete bar to the latter prosecution; otherwise, the doctrine at most may forestall the presentation of particular evidence and arguments."17 A fact previously determined in a criminal case is not an "ultimate fact" unless it was necessarily determined by the jury against the government and, in the second prosecution, that same fact is required to be proved beyond a reasonable doubt in order to convict.18 In other words, "[t]he key to reuse [of evidence] is independent significance: does the proof bear upon an issue (or issues) materially different from those determined at the former trial?"19
Guided by these principles, the Court turns to defendants' argument that certain facts were "necessarily determined" by the Tenth Circuit and that those facts constitute "ultimate issues" as to the conspiracy charge. Defendants argue that the judicially directed acquittals on the wire fraud counts necessarily determined an ultimate issue of fact—that the SEC filings were not false as the government failed to show that the use of the corporate airplane ever exceeded $50,000 or 10% of either defendant's salary in any single year. Because the government is foreclosed from relitigating either the falsity of the SEC filings or the question of whether the value of personal travel ever exceeded the SEC reporting threshold, defendants contend that the conspiracy charge necessarily fails and must be dismissed.
Counts 16-22 of the Indictment charged substantive wire fraud while Count 1 charges conspiracy to commit wire fraud, money laundering and circumvention of internal controls. These are distinct crimes having distinct elements. The elements of substantive wire fraud are (1) a scheme to defraud, (2) an interstate wire communication, and (3) a purpose to use the wire communication to execute the scheme.20 This requires a showing that the wires were actually used to further the scheme or artifice to defraud. And, in this case, the Tenth Circuit held that because the SEC filings were required by law to be filed, the government must prove that they were false in order to meet the third element.21
By contrast, conspiracy requires proof that (1) the defendant entered into an agreement; (2) the agreement involved a violation of the law; (3) one of the members of the conspiracy committed an overt act; (4) the overt act was in furtherance of the conspiracy's object; and (5) the defendant willfully entered the conspiracy.22 The Court discusses each of the three objects of the conspiracy in turn.
Conspiracy to commit wire fraud
To be guilty of conspiracy to commit wire fraud, the defendant must have the requisite intent to commit wire fraud.23 However, there is no specific intent requirement regarding use of the wire facilities.24 Conspiracy to commit wire fraud requires only that the government prove intent to use the wires or that use of the wires in furtherance of the scheme was reasonably foreseeable to the conspirators; defendant need not intend to cause the wire facilities to be used, nor is there a requirement to show any actual wirings.25 Thus, the government's burden is to demonstrate beyond a reasonable doubt that the alleged conspirators agreed to engage in a scheme to defraud in which they contemplated that the wire facilities would likely be used.26
Courts often face difficulty in determining which facts have been previously decided by the jury.27 The Tenth Circuit's reversal of the wire fraud convictions, however, spelled out in detail the basis for acquittal—that as a matter of law, there was insufficient evidence "from which the jury could conclude beyond a reasonable doubt that any of the reports wired to the SEC were false, fraudulent, or even misleading."28 Under Parr, these reports were required by law and because the government failed to prove that they contained anything false, the court could not see how their filing advanced the allegedly fraudulent scheme or that defendants' purpose in filing them was to advance the scheme.29 The court went on the explain why each of the seven filed reports were not false or fraudulent as far as the trial evidence showed, noting that even if the jury had been correctly instructed on the Parr requirement, it could not properly have found that the reports were false or fraudulent.30 Specifically, the court held that whether the reports were false depends on what is required to be reported and that the government did not show at trial that disclosure was required.31 After analyzing...
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