United States v. Simon

• Decision Date: 30 March 1981
• Docket Number: Crim. No. 80-381-1.
• Citation: 510 F. Supp. 232
• Parties: UNITED STATES v. Sidney D. SIMON.
• Court: U.S. District Court — Eastern District of Pennsylvania

510 F. Supp. 232

UNITED STATES v. Sidney D. SIMON.

Crim. No. 80-381-1.

United States District Court, E. D. Pennsylvania.

March 30, 1981.

Gary S. Glazer, Asst. U. S. Atty., Philadelphia, Pa., for plaintiff.

Robert E. Madden, Sprague, Goldberg & Rubenstone, Philadelphia, Pa., for defendant.

MEMORANDUM

CLIFFORD SCOTT GREEN, District Judge.

On December 10, 1980, a federal grand jury sitting in the Eastern District of Pennsylvania indicted defendant Sidney D. Simon, charging him with seventeen counts of mail fraud, 18 U.S.C. § 1341, and three counts of making false statements within the jurisdiction of a federal agency, 18 U.S.C. § 1001. According to the indictment, defendant Simon was at all relevant times the president, administrator and owner of the Garden Court Nursing Home, Inc. ("Garden Court"), a facility located in Doylestown, Pennsylvania and licensed under the Commonwealth of Pennsylvania Medicaid Plan, making it eligible to receive Medicaid.¹

The indictment alleges that from October 1, 1976 to December, 1980, Mr. Simon "devised and intended to devise a scheme and artifice to defraud and obtain money by means of false and fraudulent pretenses, representations and promises, from the United States of America, H.H.S.², the Commonwealth of Pennsylvania, and D.P.W. the Pennsylvania Department of Public Welfare, based upon representations that Garden Court had incurred expenses allowable under Medicaid for skilled nursing home services, when the defendant knew that these representations were falsely and fraudulently made for the purpose of inflating costs submitted for Medicaid reimbursement." (Count 1, ¶ 16) The scheme and artifice devised and employed by defendant Simon included, according to the indictment, causing Garden Court to pay for and report as expenses reimbursable by Medicaid such items as the marina services costs for defendant's yacht, the repair costs for a swimming pool located at his Pennsylvania residence, and various hotel and restaurant bills incurred by defendant on several continents.

Counts one through seventeen charge the defendant with mail fraud. Counts one, two and three deal with three purportedly false and fraudulent Medicaid cost reports for Garden Court mailed or caused to be mailed by Mr. Simon to the Pennsylvania Department of Public Welfare ("D.P.W.") while counts four through seventeen concern unspecified mailings from the Commonwealth of Pennsylvania to Garden Court which the defendant "for the purpose of executing the scheme and artifice to defraud and obtain money by means of false and fraudulent pretenses, representations and promises, did knowingly and wilfully cause to be delivered by mail." (Counts 4-17, ¶ 2). Counts eighteen, nineteen and twenty charge defendant Simon with violating 18 U.S.C. § 1001. Each of these counts concerns one of the three Medicaid reports described in the first three counts and purportedly submitted by the defendant to D.P.W. Regarding these reports, counts eighteen, nineteen and twenty each allege that "defendant Sidney D. Simon knowingly and wilfully did make and use and did cause to be made and used, a false writing and document, knowing said writing and document to contain false, fictitious and fraudulent statements and entries as to material matters within the jurisdiction of H.H.S., a department of the United States." (Counts 18-20, ¶ 2)

The defendant has filed four different motions to dismiss, each asserting a separate basis for dismissal of the indictment. For the reasons that follow, I will deny all of these motions.

MOTION TO DISMISS THE INDICTMENT OR ALTERNATIVELY TO GRANT DEFENDANT A PRELIMINARY HEARING

In this motion and supporting memorandum, the defendant contends that his Fifth Amendment rights to due process and equal protection have been violated because the United States Attorney enjoys unbridled discretion in determining whether to initiate a prosecution either by the procedure of grand jury indictment followed by arrest or by the procedure of arrest upon complaint followed by preliminary examination (hearing). It is Mr. Simon's contention that from a defense point of view the former procedure is inherently inferior to the latter as the preliminary hearing affords a defendant certain invaluable rights, such as the opportunity to confront and cross-examine hostile witnesses and to discover the prosecution's case. Because there are no objective standards, defendant argues, the government's determinations as to which procedure to elect are necessarily arbitrary, capricious and discriminatory. The sole legal authority cited by the defense in support of this proposition is an opinion written by the California Supreme Court, Hawkins v. Superior Court of San Francisco, 22 Cal.3d 584, 150 Cal.Rptr. 435, 586 P.2d 916 (1978). The Hawkins decision held that the dual system under California law for initiating felony prosecutions, either by grand jury indictment or by information after a preliminary hearing, violated the equal protection guarantees of the California state constitution.

Constructed as it is on the foundation of the Hawkins opinion, defendant's argument fails of its own weaknesses. That decision both is not legally binding on this court and is factually distinguishable as it concerns a system of initiating prosecutions different from the one at issue here.³

There are other reasons why defendant cannot prevail on this theory. First, the assertion that the federal government can choose to proceed by either indictment or arrest upon complaint is simply incorrect in a case such as this one which involves felony charges. Fed.R.Crim.P. 7(a) provides:

An offense which may be punished by death shall be prosecuted by indictment. An offense which may be punished by imprisonment for a term exceeding one year or at hard labor shall be prosecuted by indictment or, if indictment is waived, it may be prosecuted by information.

Any other offense may be prosecuted by indictment or by information. An information may be filed without leave of court.

Therefore, under the language of Rule 7(a) and of the Fifth Amendment,⁴ absent a voluntary waiver, a defendant charged with a federal crime punishable by more than one year in prison must be prosecuted by indictment.

Moreover, under the federal system, even in the situation where the government has initiated proceedings against a person upon complaint, there is no absolute right to a preliminary examination. Rule 5(c) of the Federal Rules of Criminal Procedure provides that a person arrested upon complaint will not be given a preliminary examination if he is indicted before the date set for such hearing. The reason why the requirement of a preliminary examination is conditioned on whether there has been an indictment is that the purpose of such a hearing in the federal scheme is to give a person arrested upon complaint the opportunity to challenge the existence of probable cause and the right of the government to detain him or require bail. See Rules 5 and 5.1 of the Federal Rules of Criminal Procedure and 18 U.S.C. § 3060. Once a federal grand jury has indicted a defendant, probable cause is established, and the defendant no longer is entitled to a preliminary hearing. See, e. g. Rodriguez v. Ritchey, 556 F.2d 1185, 1191 (5th Cir. 1977)

In addition, federal courts have determined that there is not a constitutional right to a preliminary hearing, e. g., United States v. Farries, 459 F.2d 1057, 1062 (3d Cir. 1972), and that denial of such a hearing does not violate due process when a person has been indicted by a grand jury, e. g., Rivera v. Government of the Virgin Islands, 375 F.2d 988, 989 (3d Cir. 1967).

Even assuming that a federal prosecutor enjoyed the unfettered discretion in determining whether to initiate prosecution by indictment or by complaint followed by preliminary examination as alleged by defendant, it is doubtful that Mr. Simon could challenge successfully his indictment on the basis that such discretion violated his due process and equal protection rights as guaranteed by the United States Constitution. In United States v. Batchelder, 442 U.S. 114, 99 S.Ct. 2198, 60 L.Ed.2d 755 (1979), a case involving a challenge to a prosecutor's discretion in choosing to proceed under one criminal statute where there is another applicable statute which involves a lesser penalty, the Supreme Court declined to find a violation of due process or equal protection guarantees. The holding of Batchelder suggests that while the exercise of discretion by prosecutors certainly is subject to constitutional constraints, the concern of the due process and equal protection clauses is whether enforcement of the criminal laws has been based "upon an unjustifiable standard such as race, religion or other arbitrary classification." Id. at 2204, n.9 (quoting Oyler v. Boles, 368 U.S. 448, 456, 82 S.Ct. 501, 506, 7 L.Ed.2d 446 (1962).) In the instant case, there is no suggestion that the prosecution of Mr. Simon is the result of such an impermissible standard or classification.

Given the applicable federal rules of criminal procedure and the legal precedent discussed above, it is clear that defendant Simon is not entitled to dismissal because he did not receive a preliminary hearing nor is he entitled to such a hearing now at the post-indictment stage.

MOTION TO DISMISS BECAUSE OF INADEQUATE AND MISLEADING GRAND JURY INSTRUCTIONS

The gravamen of this motion is that the inadequate nature of the charge and instructions given by the impaneling judge and by the prosecutors to the grand jury which indicted Sidney Simon requires the dismissal of the indictment. Defendant concedes, however, that these allegations are based on conjecture as he has not seen the grand jury transcripts, does not know what charge or instructions were given or even which judge impaneled the grand jury. Instead, defendant's claim is that the charge made by the impaneling judge was what he describes as the standard...