United States v. Heinze, Crim. A. No. 2238.

CourtUnited States District Courts. 3th Circuit. United States District Court (Delaware)
Writing for the CourtLATCHUM
Citation361 F. Supp. 46
PartiesUNITED STATES of America, Plaintiff, v. Walter O. HEINZE et al., Defendants.
Docket NumberCrim. A. No. 2238.
Decision Date16 July 1973

361 F. Supp. 46

UNITED STATES of America, Plaintiff,
v.
Walter O. HEINZE et al., Defendants.

Crim. A. No. 2238.

United States District Court, D. Delaware.

July 16, 1973.


361 F. Supp. 47
COPYRIGHT MATERIAL OMITTED
361 F. Supp. 48
Ralph F. Keil, U. S. Atty., and Richard D. Levin, Asst. U. S. Atty., Wilmington, Del., Daniel H. Cochrane, Sp. Asst. U. S. Atty., Philadelphia, Pa., and Gerald A. Toner, Dept. of Justice, Washington, D. C., of counsel, for plaintiff

Robert K. Payson, of Potter, Anderson & Corroon, Wilmington, Del., Abraham G. Levin and Max Wild, of Rubin, Wachtel, Baum & Levin, New York City, of counsel, for defendant Walter O. Heinze.

H. Albert Young and Stuart B. Young, of Young, Conaway, Stargatt & Taylor, Wilmington, Del., and Edward Brodsky and Leonard Sharenow of Goldstein, Shames & Hyde, New York City, of counsel, for defendant Maxwell D. Feller.

S. Samuel Arsht, Walter L. Pepperman, 2nd and Robert F. Stewart, Jr., of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., and Morton J. Schlossberg, New York City, of counsel, for defendant D. Irving Obrow.

Charles F. Richards, Jr., Thomas P. Sweeney, David S. Swayze and Robert Meyer, of Richards, Layton & Finger, Wilmington, Del., for defendant Frederick W. Andrews.

361 F. Supp. 49

OPINION AND ORDER

LATCHUM, District Judge.

This case1 is before the Court on the defendants' motion to dismiss a four-count indictment returned against them on March 21, 1972 by the Grand Jury for the District of Delaware.2

The Government contends in its brief and at oral argument that Count 1 of the indictment charges the defendants Walter O. Heinze ("Heinze"), Maxwell D. Feller ("Feller"), Frederick W. Andrews ("Andrews") and D. Irving Obrow ("Obrow") with a conspiracy to defraud the United States, to violate 29 U. S.C. § 439(a), to violate 26 U.S.C. § 7206(2) and to violate 18 U.S.C. § 1001, all in violation of the conspiracy statute, 18 U.S.C. § 371. Counts 2 and 3 charge Heinze, Feller and Obrow with substantive violations of 26 U.S.C. § 7206(2). Count 4 charges Obrow with a substantive violation of 29 U.S.C. § 439(a).

The defendants' motions assert several grounds for dismissal of each count of the indictment. The Court will treat the motions on each count seriatim.

I. Count 1.

As stated above, the Government contends that Count 1 charges a four-fold conspiracy on the part of the defendants. Paragraph 1 of Count 1 charges that Heinze, Feller, Andrews and Obrow along with W. Stewart McDonald (now deceased) and Thomas A. Knowlton (not indicted) did conspire:

"To willfully defraud the United States of and concerning the exercise of its governmental function and right of ascertaining, computing, assessing, levying, and collecting income taxes due and owing to the United States of America by concealing and misrepresenting to officers, employees, and agencies of the United States of America, including the Internal Revenue Service, the true nature and purpose of monies paid by International Latex Corporation, a Delaware Corporation and its successors to Thomas A. Knowlton, a Labor Consultant, for information concerning the activities of labor organizations involved with and attempting to become involved with International Latex Corporation, its successors and subsidiaries, as prohibited by 29 U.S.C. § 186(a) during the corporate fiscal years ending August 26, 1959, up to and including August 27, 1967, in violation of 26 U.S.C. § 7206(2).
* * * * * *
"All in violation of 18 United States Code, 371."

The defendants have moved to strike Paragraph 1 on the grounds that it fails to adequately charge a conspiracy to violate 26 U.S.C. § 7206(2), and also that it amounts to mere surplusage since Paragraph 2(b) of Count 1 also charges a conspiracy to violate § 7206(2). At oral argument the Government stated that Paragraph 1 intended to charge a conspiracy generally to defraud the United States of its right to determine and collect income taxes and that it did not intend to charge a conspiracy to violate § 7206(2).

18 U.S.C. § 371 reads in pertinent part:

"If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined not more than $10,000 or imprisoned not more than five years, or both."

The statute proscribes not only conspiracies to commit an offense under another Federal statute, but also "any conspiracy for the purpose of impairing, obstructing or defeating the lawful function of any department of government." Haas v. Henkel, 216 U.S. 462, 479, 30 S.Ct. 249, 254, 54 L.Ed. 569 (1910). Therefore, a defendant can be

361 F. Supp. 50
charged with a conspiracy in violation of 18 U.S.C. § 371 without charging an underlying substantive offense that is proscribed by another Federal statute. However, because of the breadth of the general conspiracy portion of § 371, any indictment returned thereunder must be carefully drawn to ensure that the offense charged is clearly stated. Dennis v. United States, 384 U.S. 855, 860, 86 S.Ct. 1840, 16 L.Ed.2d 973 (1966)

Turning to the language of Paragraph 1, a fair reading does not sufficiently disclose that the defendants are charged with a general conspiracy to defraud the United States. The specific reference "in violation of 26 U.S.C. § 7206(2)" clearly makes it appear that the defendants are charged with a conspiracy to violate 26 U.S.C. § 7206(2).

The Government's explanation at oral argument of what it considered to be the true import of the paragraph will not cure an indictment which is unclear on its face. Russell v. United States, 369 U.S. 749, 82 S.Ct. 1038, 8 L. Ed.2d 240 (1962). Until oral argument, the Court itself shared the defendants' misconception of the thrust of Paragraph 1. Clearly Paragraph 1 of Count 1 fails to adequately apprise the defendants of the nature of the accusation against them with reasonable certainty and will therefore be dismissed as violative of the basic principles of fundamental fairness embodied in the modern concept of pleading and specifically Rule 7(c), F.R.Crim.P.

Paragraph 2(a) of Count 1 charges that the four defendants did conspire to commit:

"the crime of willful failure on the part of Walter O. Heinze and D. Irving Obrow in their capacity as President and Treasurer, respectively, to file a report on behalf of the said International Latex Corporation, and its successors, with the Secretary of Labor concerning payments to Thomas A. Knowlton, a Labor Consultant, for the fiscal years ended August 28, 1959; August 27, 1960; August 26, 1961; August 25, 1962; August 31, 1963; August 29, 1964; August 28, 1965; August 27, 1966; and August 26, 1967, as required by Section 433(a) of Title 29, United States Code, in violation of Section 439(a) of Title 29, United States Code.
* * * * * *
"All in violation of 18 United States Code 371".

The defendants contend that Paragraph 2(a) standing alone is insufficient to charge a conspiracy to violate 29 U.S.C. § 439(a). This Court has held that the overt acts set forth in a conspiracy indictment may be referred to in order to clarify the charging paragraphs. United States v. Borland, 309 F.Supp. 280 (D.Del.1970). However, even when the "means and manner" paragraphs and the overt acts alleged in the indictment are taken into consideration, the charging paragraph of 2(a) still does not sufficiently apprise the defendants of the charge which they must be prepared to meet.

29 U.S.C. § 439(a) provides that "any person who willfully violates this subchapter which includes § 431 to § 440 shall be fined not more than $10,000 or imprisoned for not more than one year, or both."

29 U.S.C. § 433(a), referred to in Paragraph 2(a) of Count 1, requires employers to report certain dealings and expenditures to the Secretary of Labor. § 433(a)(1) requires reporting payments made to any labor organization or representative or employee of any labor organization with certain exceptions not here material; § 433(a)(2) requires that an employer report payments made to any of his employees to persuade any other of his employees not to organize or bargain collectively; § 433(a)(3) requires the employer to report any expenditure whose object was to interfere with the employee's right to organize and bargain collectively; § 433(a)(4) requires an employer to report any arrangement with a labor relations consultant whereby the consultant undertakes to influence employees as to organizing and bargaining collectively, or undertakes

361 F. Supp. 51
to supply the employer with information concerning the activities of employees and labor organizations in connection with a labor dispute involving such employer

Therefore, each subsection of § 433(a) refers to distinct and different types of employer activity. Even when Count 1 is read as a whole, Paragraph 2(a) thereof could conceivably be referring to activity required to be reported under either § 433(a)(1) or § 433(a) (3). Since overt acts 21 and 22 refer to payments made by Knowlton to officials of the International Brotherhood of Electrical Workers, the charging paragraph could possibly refer to payments to a representative of a labor organization required to be reported by § 433(a)(1). Since the purpose of such payments would be to induce the union not to organize the employees of International Latex Corporation, they could be regarded as an expenditure whose object was to interfere with the employees' right to organize and bargain collectively, requiring reporting under § 433(a)(3). In its brief, however, the Government contends that the Grand Jury intended to charge a violation of the reporting requirement of § 433(a)(4) because an agreement was made with Knowlton for the purpose of obtaining information concerning the activities of labor organizations. However § 433(a)(4) only requires a report on...

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11 practice notes
  • Sealed Motion, In re, No. M
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • July 21, 1989
    ...the effect of the transcript on the secrecy of the grand jury proceedings is minimal." Ferris at 92. See also United States v. Heinze, 361 F.Supp. 46 (D.Del.1973); In re Russo, 53 F.R.D. 564 (C.D.Cal.1971); United States v. American Radiator & Standard Sanitary Corp., 45 F.R.D. 477 (W.D.Pa.......
  • US v. Gleave, No. CR-90-33S.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Western District of New York
    • January 28, 1992
    ...in original). 18 U.S.C. § 3282 by its own terms may be modified "... as otherwise expressly provided by law." See U.S. v. Heinze, 361 F.Supp. 46 (D.Del.1973). In this case, 18 U.S.C. § 3282 must be read in conjunction with 18 U.S.C. § 3284 which The concealment of assets of a debtor in a ca......
  • United States v. Simpson, Criminal No. 3:09-CR-249-D(06)
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • July 15, 2011
    ...to separate proofs as to each count of 50-page prolix and redundant indictment as to each defendant); United States v. Heinze, 361 F. Supp. 46, 56 (D. Del. 1973) (holding prolix indictment to be so vague, indefinite, and unclear that it was fatally defective under Rule 7(c) because it faile......
  • U.S. v. Bazzano, No. 76-2584
    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • December 21, 1977
    ...we have found on this point approve the disclosure, prior to trial, to a witness of his grand jury testimony. United States v. Heinze, 361 F.Supp. 46, 57 (D.Del.1973); King v. Jones, 319 F.Supp. 653, 657 (N.D.Ohio 1970); United States v. American Radiator & Standard Sanitary Corp., 45 F.R.D......
  • Request a trial to view additional results
11 cases
  • United States v. Rogers, Crim. A. No. 84-CR-337.
    • United States
    • United States District Courts. 10th Circuit. United States District Court of Colorado
    • May 21, 1986
    ...allegations. Thus, they will be considered separately. 9 Additional support for this conclusion is found in United States v. Heinze, 361 F.Supp. 46 (D.Del.1973) where the district court held tax fraud counts insufficient because they "failed to inform the defendants charged of the ... ......
  • US v. Gleave, No. CR-90-33S.
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Western District of New York
    • January 28, 1992
    ...original). 18 U.S.C. § 3282 by its own terms may be modified "... as otherwise expressly provided by law." See U.S. v. Heinze, 361 F.Supp. 46 (D.Del.1973). In this case, 18 U.S.C. § 3282 must be read in conjunction with 18 U.S.C. § 3284 which The concealment of assets of a debtor ......
  • United States v. Simpson, Criminal No. 3:09-CR-249-D(06)
    • United States
    • United States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
    • July 15, 2011
    ...to separate proofs as to each count of 50-page prolix and redundant indictment as to each defendant); United States v. Heinze, 361 F. Supp. 46, 56 (D. Del. 1973) (holding prolix indictment to be so vague, indefinite, and unclear that it was fatally defective under Rule 7(c) because it faile......
  • Sealed Motion, In re, No. M
    • United States
    • United States Courts of Appeals. United States Court of Appeals (District of Columbia)
    • July 21, 1989
    ...effect of the transcript on the secrecy of the grand jury proceedings is minimal." Ferris at 92. See also United States v. Heinze, 361 F.Supp. 46 (D.Del.1973); In re Russo, 53 F.R.D. 564 (C.D.Cal.1971); United States v. American Radiator & Standard Sanitary Corp., 45 F.R.D. 477 (W.......
  • Request a trial to view additional results

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