United States v. Gimbel

• Decision Date: 11 October 1985
• Docket Number: No. 85-CR-101.,85-CR-101.
• Citation: 632 F. Supp. 748
• Parties: UNITED STATES of America, Plaintiff, v. Stanley P. GIMBEL, Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

632 F. Supp. 748

UNITED STATES of America, Plaintiff, v. Stanley P. GIMBEL, Defendant.

No. 85-CR-101.

United States District Court, E.D. Wisconsin.

October 11, 1985.

COPYRIGHT MATERIAL OMITTED

G. Roger Markley, Sp. Asst. U.S. Atty., Chicago, Ill., for plaintiff.

William M. Coffey, Coffey, Coffey & Geraghty, Milwaukee, Wis., for defendant.

DECISION AND ORDER

CURRAN, District Judge.

On July 16, 1985, a federal grand jury returned a six-count Indictment against the defendant Stanley P. Gimbel. The Indictment charges Gimbel with one count of perpetrating a scheme to conceal material facts from the Internal Revenue Service (IRS). See 18 U.S.C. §§ 1001 and 2. Counts II through VI charge that Gimbel committed wire and mail fraud in furtherance of his scheme. See 18 U.S.C. §§ 1341 and 1343.

After the defendant was arraigned on August 1, 1985, he filed a number of motions challenging the form and substance of the Indictment and requesting discovery. Certain of these motions and the positions the parties have taken on the issues raised are discussed in the Recommendation and Orders issued by the magistrate on September 9 and 11, 1985, which the court incorporates herein by reference. The court's position on these decisions will be discussed following a determination of the motions to dismiss.

I. MOTIONS TO DISMISS

The magistrate did not make a recommendation on seven defense motions which raise substantive grounds for dismissing counts of the Indictment. A resolution of these motions depends to an extent on an interpretation of the court's Decision and Order dismissing a a previous indictment returned against Gimbel. See United States v. Gimbel, 632 F.Supp. 713 (E.D. Wis.1984) (Decision and Order dismissing indictment without prejudice). See also United States v. Gimbel, No. 84-CR-10 (E.D.Wis. March 12, 1985) (Decision and Order denying government's motion for reconsideration of Decision and Order dismissing indictment) hereinafter these two decisions will jointly be referred to as Gimbel I.

The defendant moves the court for an order dismissing Count I of the present Indictment on the grounds that:

1. 18 U.S.C. §§ 1001 and 2 are unconstitutional as applied;

2. it fails to allege an offense;

3. it is analytically indistinguishable from Count I of the indictment previously dismissed by the court;

4. it is duplicitous; and

5. it is impermissibly vague in violation of Federal Rules of Criminal Procedure 7(c)(1) and 12(b)(2).

Gimbel also asks the court to dismiss Counts II through VI on the grounds that:

1. 18 U.S.C. §§ 1341 and 1343 are unconstitutional as applied; and

2. they fail to allege an offense.

The parties were afforded an opportunity for additional briefing on certain of these motions. This briefing is now completed and the motions are ready for decision.

In ruling on these motions to dismiss, the court must assume that the facts as alleged in the Indictment are true and it may not consider the defendant's contrary assertions of fact. See Boyce Motor Lines, Inc. v. United States, 342 U.S. 337, 343 n. 16, 72 S.Ct. 329, 332 n. 16, 96 L.Ed. 367 (1952). In general, "an indictment is sufficient if it contains the elements of the offense charged and adequately informs the defendant of the specific charges against him, enabling him to prepare a defense for trial and permitting him to plead an acquittal or conviction in order to bar any future prosecution for the same offense." United States v. Brack, 747 F.2d 1142, 1146 (7th Cir.1984), cert. denied, ___ U.S. ___, 105 S.Ct. 1193, 84 L.Ed.2d 339 (1985).

The Indictment now before the court contains six counts. Count I charges that:

From on or about an exact date unknown in 1978 to on or about January 1984 at Milwaukee, in the Eastern District of Wisconsin and elsewhere,

STANLEY P. GIMBEL,

defendant herein, did knowingly, willfully and intentionally conceal and cover-up, and cause to do so, by trick, scheme and device, material facts within the jurisdiction of an agency or department of the United States, that is, the United States Department of the Treasury, Internal Revenue Service.

The material facts which the defendant is said to have concealed include the fact that Gimbel deposited more than $10,000.00 in currency into one bank account during the course of one day and the fact that he withdrew more than $10,000 in currency from the same bank account during the course of one day. As a result of these structured transactions, the bank failed to file Currency Transaction Reports (CTRs) with the IRS. The purpose of this scheme was to "conceal and cause to be concealed from the government the existence, source and transfer of currency well in excess of $100,000.00" — in common parlance, "money laundering." As part of this scheme, Gimbel, a lawyer, is alleged to have misused his law firm's trust account and artificially structured his own transactions in currency. He is also said to have counseled others to disguise their own currency transactions, to use false names when doing business at a financial institution, and to report income to the IRS in an amount different from that actually received. In addition, the Indictment specifies twelve different dates upon which Gimbel artificially structured currency transactions at a bank. The charging paragraph of Count I tracks the relevant language of the statutes allegedly violated. Compare Indictment, Count I at ¶ 2 with 18 U.S.C. §§ 1001 and 2.

Counts II, III, IV and VI charge Gimbel with using interstate wires and mails in furtherance of his scheme to defraud the IRS. Again, the charging paragraphs of these counts track the language of the statutes allegedly violated. Compare Indictment, Count II at ¶ 21; Count III at ¶ 2; Count IV at ¶ 2; and Count VI at ¶ 2 with 18 U.S.C. § 1343. Compare also Indictment, Count V at ¶ 2 with 18 U.S.C. § 1341.

Counts II through VI charge Gimbel with using the mails and wires in connection with his scheme to defraud the United States Department of the Treasury

by impeding, impairing, obstructing, inhibiting, frustrating and defeating the lawful governmental functions of the Department of the Treasury in: (A) the collections of data and reports of currency transactions at financial institutions in excess of $10,000.00 for use in criminal, tax and regulatory investigations and proceedings; and (B) the obtaining of accurate and truthful information and data to be used to determine the correct source and amount of income and in the determination and assessment of the revenue, that is, income taxes.

Indictment, Count II at ¶ 2. As part of the scheme Gimbel is alleged to have assisted, counseled and discussed with others various methods of laundering their own money by, among other things, evading their reporting requirements, improperly calculating their taxable income, and inaccurately reporting income to the IRS.

Having just outlined the facts of the Indictment, it bears repeating that a court considering the sufficiency of the charges before trial must regard the facts alleged as true and cannot weigh them against contrary assertions by the defendant. The court is also confined to considering only the facts, acts and allegations contained within the Indictment itself. Only under limited circumstances can the court take notice of any additional material. See United States v. Russell, 415 F.Supp. 9, 10-11 (W.D.Tex.1975). These principles are of some concern to this court because the parties, in their creditable efforts to zealously advocate their respective positions, have presented the court with documents, affidavits, extraneous facts and other matters which cannot properly be considered by the court at this stage. Accordingly, the court will disregard this material. Questions of fact are for the trier of fact to decide. Only if a motion to dismiss raises strictly a question of law, can it be properly considered. United States v. Caceres-Prado, 601 F.Supp. 468, 470 (D.P.R.1984).

A. Count I

The defendant first contends that Count I of the Indictment must be dismissed because 18 U.S.C. §§ 1001 and 2 are unconstitutionally vague as applied to the facts alleged. Then he argues that Count I must be dismissed for failure to state an offense. This method of presentation confuses the issues, because on one hand Gimbel is saying that the statutes are so vague that they do not give fair warning of what is prohibited, while on the other hand he is saying that these same statutes are so clear that it is obvious that they do not cover the acts alleged. Only if these statutes do cover the acts alleged could they give a person fair warning that such acts are prohibited. Thus, these issues will be discussed together.

The charge in Count I depends upon an interweaving of several criminal statutes. Section 1001 forbids concealing material facts within the jurisdiction of the federal government. See 18 U.S.C. § 1001. It is paired with section 2, which is not a substantive law but holds one liable as a principal for aiding and abetting a crime. See 18 U.S.C. § 2. In this case the material facts crucial to section 1001 are delineated in that portion of the Bank Secrecy Act found at 31 U.S.C. § 5313 and its implementing regulation, 31 C.F.R. § 103.22(a), which provides that:

(a) Each financial institution shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution, which involves a transaction in currency of more than $10,000.00. Such reports shall be made on forms prescribed by the Secretary and all information called for in the forms shall be furnished.

This regulation plainly indicates that all the information called for in the form is material. Form 4789 calls for:

Part I: the identity of the individual or organization who conducted the transaction;

Part II: the identity of the individual or organization for whom this transaction was completed (to be completed only if different from Part I);

Part III:

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