United States v. Swan
| Decision Date | 12 December 2012 |
| Docket Number | No. 1:12-cr-00027-JAW,1:12-cr-00027-JAW |
| Parties | UNITED STATES OF AMERICA, Plaintiff, v. CAROLE SWAN AND MARSHALL SWAN, Defendants |
| Court | U.S. District Court — District of Maine |
Now before the Court is Defendant Carole Swan's Motion to Sever (ECF No. 50) and Defendant Marshall Swan's Motion for Relief from Prejudicial Joinder (ECF No. 53). For reasons that follow, the motions are granted in part by the severance of the extortion charges against Carole Swan.
The indictment charges Carole Swan with four categories of criminal conduct and her husband, Marshall Swan, with two, as outlined below.
In counts 1 through 3, the indictment charges "Hobbs Act Extortion." According to the allegations, Carole Swan, in her former capacity as a selectperson for the Town of Chelsea, violated 18 U.S.C. § 1951 by extorting money from Frank Monroe Construction on three separate dates. Marshall Swan is not subject to these charges.
In counts 4 through 8, the indictment charges both Carole Swan and Marshall Swan with false statements made on joint tax returns filed for calendar years 2006 through 2010, in violation of 26 U.S.C. § 7206(1). The false statements allegedly consisted of under-reporting income on Schedule C—Reported Gross Receipts or Sales.
In counts 9 through 12, the indictment charges Carole Swan with false statements to obtain federal worker's compensation benefits, in violation of 18 U.S.C. § 1920. These charges are based on statements made in each of the years 2008 through 2011 on U.S. Department of Labor Form 1032, allegedly in relation to Carole Swan's work history and work capacity. According to the charge, the misrepresentations involved Carole Swan's failure to disclose the true extent of her work for the Town of Chelsea, for Marshall Swan Construction, and for a harness racing business, and her failure to disclose extortion income related to counts 1 through 3. Marshall Swan is not subject to these charges.
In counts 13 through 17, the indictment charges Carole Swan with federal program fraud in violation of 18 U.S.C. § 666(a)(1)(A). In counts 18 through 22, the indictment charges Marshall Swan with aiding and abetting the alleged federal program fraud. Carole Swan and Marshall Swan are co-owners of Marshal Swan Construction. According to the indictment, Carole Swan used her position as an agent of the Town of Chelsea to mislead town officials and bidders interested in a road repair project (the "Windsor Road Culvert Project") funded by the Federal Emergency Management Agency. The indictment states that Carole Swan intentionallyoverstated the cost of the required culvert that alleges that this ensured that Marshall Swan Construction would have the lowest bid on the project and would receive the contract.
In a recommended decision related to a motion to dismiss filed by Carole Swan, I recommended that the Court dismiss the federal program fraud counts, but give leave to the Government to secure a superseding indictment charging the federal program fraud in one count. The instant order assumes that the federal program fraud will remain in this case as a solitary count. It is for this reason that I refer to the federal program fraud as a singular charge rather than as multiple charges.
Carole Swan has filed a motion requesting that the Court sever the tax fraud charges and the worker's compensation fraud charges from the extortion (Hobbs Act) charges and the federal program fraud charge. (Carole Swan's Motion to Sever, ECF No. 50.) She appears to concede that the extortion charges and the program fraud charge are properly joined because they are both "municipal contract charges." (Id. at 2.) However, she also suggests that she may wish to testify to only the extortion charges, depending on the resolution of her motion to suppress statements connected with the investigation of those charges. (Id. at 12.) I have separately issued a recommended decision on the motion to suppress, recommending that the Court deny that motion.
In general, Carole Swan's severance position is that there is a separate type of transaction underlying each group of charges and that there should, therefore, be three separate prosecutions. (Id. at 6.) That Carole Swan suggests three prosecutions rather than four further suggests a concession that the extortion and program fraud are properly joined for trial. Carole Swan's additional arguments are related in the discussion, below.
Marshall Swan has filed a motion requesting relief from prejudicial joinder. (Marshall Swan's Motion for Relief from Prejudicial Joinder, ECF No. 53.) He notes that he is only charged in relation to the alleged program fraud and the alleged tax evasion. (Id. at 1.) He requests that the Court either give him his own trial on both charges or conduct a joint trial exclusively on the program fraud charge. (Id. at 3.) Marshall Swan's additional arguments are related in the discussion of his motion, after the discussion of Carole Swan's motion to sever.
Carole Swan challenges both the propriety of joinder under Rule 8 and the fairness of joinder under Rule 14. For reasons that follow, joinder was proper under Rule 8, but testimonial prejudice warrants a severance for the extortion charges against Carole Swan.
Rule 8 provides that an indictment "may charge a defendant in separate counts with 2 or more offenses if the offenses charged . . . are of the same or similar character, or are based on the same act or transaction, or are connected with or constitute parts of a common scheme or plan." Fed. R. Crim. P. 8(a). Rule 8 is construed generously in favor of joinder. United States v. Boulanger, 444 F.3d 76, 87 (1st Cir. 2006). Notably, Rule 8 permits the joinder of "similar" offenses and it is often noted that "similar" does not mean "identical." United States v. Melendez, 301 F.3d 27, 35 (1st Cir. 2002); United States v. Edgar, 82 F.3d 499, 503 (1st Cir. 1996). Similarity is evaluated from the perspective of the government and how it saw its case when it obtained the indictment. Edgar, 82 F.3d at 503. To determine whether counts are properly joined for trial, courts in this circuit generally consider such factors as "whether the charges are laid under the same statute, whether they involve similar victims, locations, or modesof operation, and the time frame in which the charged conduct occurred." United States v. Taylor, 54 F.3d 967, 973 (1st Cir. 1995). "[U]nder the mandate of the Speedy Trial Act, joinder serves the purposes of economy of resources." Edgar, 82 F.3d at 503.
Carole Swan requests severance because the charges do not describe a common scheme or plan, are not connected transactions, and are not of similar character. (Motion to Sever at 6-9, ECF No. 50.) She contends that joinder was improper under Rule 8 because commission or proof of one charged offense would not lead to commission or proof of another; the allegations concern conduct at widely disparate times; the tax charges do not concern income allegedly obtained in the municipal contract charges; the charges involve different statutes; the charges involve different victims; and there is an absence of a "unifying modus operandi." (Id. at 6-8.)
The Government's response is that each count alleges "a financial crime involving fraud or deceit designed to enrich [Defendants] at the expense of government agencies and others." (Response at 16, ECF No. 61.) The Government also points to Defendants' ownership and operation of Marshall Swan Construction, described as "common to all of the counts," whether in relation to Carole Swan's alleged failure to report income or work activity, or in relation to the alleged Windsor Road Project fraud, or in connection with the extortion charges because it was an alleged excuse given by Carole Swan that she was obtaining funds from Frank Monroe Construction to compensate for certain hauling work performed by Marshall Swan Construction. (Id. at 16-17.) The Government also states that Carole Swan's status as a municipal employee runs through all of the counts because it is essential to the extortion and the federal program fraud that she was an agent of the Town of Chelsea and because the tax and employees' compensation counts include Carole Swan's alleged under-reporting of work activity and extorted income. (Id. at 16-17.) The Government also says that some of the tax fraud evidencewill overlap with evidence relevant to the other charges, such as evidence of the Windsor Road Project income in 2007 and alleged extortion income in the year 2010. (Id. at 17.) It also states that evidence concerning the harness horse racing business will be relevant to both the tax charges and the employees' compensation charges. (Id.) Finally, the Government notes that the base offense levels for sentencing purposes are not far apart, ranging from 6 to 14 with a sentencing guidelines disparity of "only 21 months" at criminal history category I. (Id. at 17-18.)
To begin, as far as Rule 8 is concerned, there certainly would be no joinder problem if the case were divided into two parts rather than three. Such an approach, in my view, would consist of one trial for the extortion and federal program fraud charges and another trial for the tax fraud and employees' compensation fraud charges. Carole Swan concedes that the extortion and program fraud counts are properly joined based on the common alleged abuse of the same public office and the fact that both sets of charges involve municipal contracts. The tax fraud and compensation fraud also are properly joined with one another because the counts overlap by three years and involve common time frames, common...
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