United States v. Computer Sciences Corp., Crim. No. 80-158-A.
| Court | United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia) |
| Citation | 511 F. Supp. 1125 |
| Decision Date | 05 March 1981 |
| Docket Number | Crim. No. 80-158-A. |
| Parties | UNITED STATES of America, v. COMPUTER SCIENCES CORPORATION, et al., Defendants. |
COPYRIGHT MATERIAL OMITTED
William Lynch, Senior Counsel for Litigation, Dept. of Justice, Washington, D. C., for United States.
Milton Eisenberg, Washington, D. C., Michael McGettigan, Alexandria, Va., Nathan Lewin, R. Stan Mortenson, Washington, D. C., Thomas B. Carr, Arlington, Va., Barry W. Levine, David R. Addis, Barnet D. Skolnik, Washington, D. C., Andrew P. Miller, Alexandria, Va., Thomas L. Patten, Allen B. Green, Washington, D. C., Stephen M. Colangelo, Alexandria, Va., Walter J. Bonner, Jacob A. Stein, Robert Muse, Washington, D. C., for defendants.
This criminal action against a major domestic corporation and six individual defendants is before the court on the following pretrial motions:
DATE FILED MOTION
November 25, 1980 All Defendants' Motion
to Dismiss the
Indictment on Grounds
That RICO, Mail Fraud
and Wire Fraud
Allegations as Well as
Allegations Regarding
the Contract are
Improper
November 25, 1980 Blecker's and Loux's
Motion to Dismiss the
Indictment on Grounds
of Collateral Estoppel
November 25, 1980 Blecker's and Loux's
Motion to Dismiss the
Indictment as Against
the Defendants for
Prosecutorial
Vindictiveness
November 25, 1980 All Defendants' Motion
to Dismiss the
Indictment on the
Grounds That the Grand
Jury was Not Fully
Informed
November 25, 1980 All Defendants' Motion
to Dismiss the
Indictment on the
Grounds That the Grand
Jury was Not Properly
Selected
January 28, 1981 All Defendants' Motion
to Dismiss the
Indictment on the
Grounds That
Unauthorized Persons
Invaded the Secrecy of
the Grand Jury
Proceedings
February 26, 1981 All Defendants' Motion
for Disclosure of Grand
Jury Testimony
These motions were accompanied by voluminous briefs, affidavits and supporting documents. The government responded with voluminous briefs and affidavits. The court set certain of the motions for argument on January 6th and 7th, 1981. Arguments on the remaining motions were set for January 14th and 16th, 1981. As a result of the latter hearings, the court ordered an evidentiary hearing on February 10th and 11th, 1981. This Memorandum Opinion addresses each of these motions.
The 27-page indictment in this prosecution was returned by the grand jury on October 8, 1980. It contains 57 counts against defendants Computer Sciences Corporation ("CSC") and against CSC employees John W. Luke, Norman W. Derrick, Thomas A. Marti, Peter Loux; a former CSC employee, Erwin L. Allen; and against the president of Icarus Corporation, Herbert G. Blecker.
In the first three counts, the indictment charges violation of the Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). Count 1 charges a § 1962(d) RICO conspiracy against all of the defendants. Count 2 charges a violation of § 1962(d) against all defendants; that is, conducting an enterprise through a pattern of racketeering activity. Count 3 charges a violation of § 1962(a), investing and using income derived from a pattern of racketeering activity in an enterprise, against CSC only.
Counts 4 through 27 charge various acts of mail fraud against defendants CSC, Luke, Allen, Marti and Derrick. Counts 28 through 37 charge wire fraud against defendants CSC, Luke, Allen, Marti and Derrick. Counts 38 through 43 charge mail fraud against defendants CSC, Luke, Allen, Loux and Blecker. The conduct charged in Counts 4 through 43 is incorporated in the first three counts as a part of the pattern of racketeering engaged in by the defendants.
Counts 44 through 55 charge defendants CSC, Luke, Allen, Marti and in most instances Derrick with presenting false claims to the United States Government. Counts 56 and 57 charge False Claims Act violations against defendants CSC, Luke, Allen, Loux and Blecker.
The allegations in these charges concern the acquisition of the National Teleprocessing System ("NTS") contract by CSC and billing for computer services rendered under the contract by the Infonet Division of CSC. Regarding the acquisition of the contract, it is alleged that Luke bribed a GSA contracting officer in order to obtain the NTS contract. In addition, it is charged that the defendants overbilled the government for Systems Resource Units ("SRU's") and for computer software packages.
The motions listed above challenge the indictment on a number of grounds. First, the defendants allege that Counts 1 through 43 must be dismissed because the facts alleged do not sustain a charge under RICO or under the mail and wire fraud statutes. They allege that Counts 1 through 3 must be dismissed for failure to state a claim under RICO and because each RICO count is improperly based upon a time-barred bribery allegation. In addition, they allege that the first three counts of the indictment must be dismissed because RICO cannot constitutionally be applied to the facts here alleged. Further, defendants allege that Counts 2, 3 and 4 through 43 should be dismissed for multiplicity. Defendants also allege that Counts 1 through 3 are defective as they do not apprise the defendants of the extent of property subject to forfeiture under RICO.
The defendants also allege that the indictment should be dismissed in its entirety under the recent Fourth Circuit decision in United States v. Race, et al., 632 F.2d 1114 (4th Cir., 1980), the conduct alleged in the indictment as fraudulent is authorized by a reasonable interpretation of the contract.
In addition, the defendants move to dismiss on grounds that the grand jury was not fully informed due to the technical nature of the indictment and that the grand jury was selected in violation of the United States Constitution and laws.
Defendants Loux and Blecker move to dismiss on grounds that the issue of whether there was a conspiracy against the government by them was resolved in an earlier proceeding and collateral estoppel bars the assertion here. In addition, defendants Loux and Blecker move to dismiss on grounds of prosecutorial vindictiveness.
All of the defendants move to dismiss on grounds of prosecutorial misconduct and on grounds that the secrecy of the grand jury was invaded by unauthorized persons.
A. Counts 1-3
The defendants are charged in Counts 1 through 3 with violating several of the provisions of the Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. § 1961 et seq. ("RICO"). Count 1 charges all defendants with a conspiracy to conduct the affairs of CSC's unincorporated "Infonet" Division "through a pattern of racketeering activity" in violation of 18 U.S.C. § 1962(d). Count 2 charges the defendants with actually conducting the affairs of the Infonet Division "through a pattern of racketeering activity" by bribery, mail fraud and wire fraud, in violation of § 1962(c) and § 2. That count also claims a violation of § 1963, although that section is a recitation of criminal penalties for violation of § 1962. Count 3 alleges that CSC received income from the alleged pattern of racketeering activities and invested that income in the operation of the Infonet Division, making that investment subject to forfeiture to the United States pursuant to § 1963(a).
The sections listed are ones relating to, inter alia, bribery, mail fraud and wire fraud.
A "person" is defined as "any individual or entity capable of holding a legal or beneficial interest in property." Section 1961(3). An "enterprise" is "any individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." Section 1961(4).
At least two acts of racketeering activity, one of which occurred after the effective date of this chapter and the last of which occurred within ten years (excluding any period of imprisonment) after the commission of a prior act of...
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