United States v. Treadwell

• Decision Date: 20 June 1984
• Docket Number: No. CR 82-45.,CR 82-45.
• Citation: 594 F. Supp. 831
• Parties: UNITED STATES of America v. Mary TREADWELL.
• Court: U.S. District Court — District of Columbia

594 F. Supp. 831

UNITED STATES of America v. Mary TREADWELL.

No. CR 82-45.

United States District Court, District of Columbia.

June 20, 1984.

William Pease, Stephen Spivack, Melanie Dorsey, Asst. U.S. Attys., Washington, D.C., for plaintiff.

John Nields and Robert Joseph, Washington, D.C., for defendant.

MEMORANDUM OPINION

JOHN GARRETT PENN, District Judge.

The defendant, together with four other persons, was charged in a thirty-count, thirty-two page indictment filed on February 22, 1982, with conspiracy (18 U.S.C. § 371), false statements (18 U.S.C. § 1001), mail fraud (18 U.S.C. § 1341), wire fraud (18 U.S.C. § 1343), and tax evasion (26 U.S.C. § 7201). The charges against the other four persons named in the indictment, Robert E. Lee, Joan M. Booth, Charles W. Rinker, Jr., and Ronald S. Williams, have been disposed of; Lee, Booth and Williams entered pleas of guilty to certain counts, and the Government dismissed the charges against Rinker.

The defendant filed a pretrial motion to dismiss Counts 18 through 22, and Count 24 of the indictment, charging her with mail fraud. The Court granted that motion after concluding that the "mailings did not further the objectives of the alleged scheme, did not conceal the alleged fraudulent representations, and did not assure the success of the alleged scheme." United States v. Treadwell, 566 F.Supp. 80, 83 (D.D.C.1983). See also United States v. Maze, 414 U.S. 395, 405, 94 S.Ct. 645, 651, 38 L.Ed.2d 603 (1974); United States v. Alston, 197 U.S.App.D.C. 276, 283, 609 F.2d 531, 538 (1979), cert. denied, 445 U.S. 918, 100 S.Ct. 1281, 63 L.Ed.2d 603 (1980). The case thereafter went to trial before a jury. The remaining mail fraud count was dismissed without objection before the case was sent to the jury. The jury found the defendant guilty of eight counts, including the count charging conspiracy and seven counts of false statements, and found the defendant not guilty of the remaining counts, which included charges of false statements, wire fraud and tax evasion.

The case is now before the Court on the defendant's post trial motions, one being a motion to dismiss the indictment or, in the alternative, to allow defendant's counsel to inspect the grand jury minutes, and the other being a motion for judgment of acquittal or, in the alternative, for a new trial. The Court heard arguments by counsel, and has carefully considered the record in this case, including the briefs filed by the parties, including the defendant's supplemental brief filed in late January 1984. After giving careful consideration to the motions, and the oppositions thereto, the Court concludes that the motions should be denied.

I

Very briefly, the indictment alleges that the defendant, as a director and/or chief executive officer of P.I. Properties, Inc., Pride International, Inc., Sticks and Stone, Inc., Youth Pride Economic Enterprises, Inc., Pride Economic Enterprises Special Police, Pride Environmental Services, Inc., T. Barry Associates, Inc., and Youth Pride, Inc., entered into a conspiracy with the other named defendants, in which the object was for the defendants to "unjustly and illegally enrich themselves and the other businesses which they directed and controlled, by using P.I. Properties to acquire Clifton Terrace and thereafter to misappropriate, misapply, divert and steal monies and assets from Clifton Terrace and the other housing projects which P.I. Properties owned or managed and to hide, conceal and coverup such misappropriation, misapplication, diversion and theft. The property owned or managed by P.I. Properties was Clifton Terrace Apartments, a three building housing complex consisting of 285 rental units located at 1308, 1312 and 1315 Clifton Street, Northwest, in the District of Columbia, which from in or about April 1974 to in or about June 1975 was owned by the Department of Housing and Urban Development (HUD) and managed by P.I. Properties or its predecessor Pride International, and from in or about July 1975 to in or about August 1978 was owned and managed by P.I. Properties. The other properties consisted of Buena Vista Apartments, a 54 unit apartment complex located at 3223 and 3229 Buena Vista Terrace Southeast, and on Shipley Terrace Southeast in Washington, D.C., which was owned by Pride Economic Enterprises and on or about November 1974 to on or about July 1977 was managed by P.I. Properties, and the Kenesaw Apartments, an 85 unit apartment complex located at 3060 16th Street, Northwest, which complex was owned by the Antioch School of Law and from May 1976 to about September 1977 was managed by P.I. Properties.

The indictment further alleges that as a part of the conspiracy, in order to acquire control of the assets and monies of Clifton Terrace and to mislead HUD, the defendants formed P.I. Properties as the successor to Pride International so as to comply with HUD's requirement that the proposed negotiated sale of Clifton Terrace be to a nonprofit entity. It further alleges that the defendants negotiated and contracted with HUD by falsely and fraudulently representing that P.I. Properties, as a nonprofit entity, would manage, purchase and operate Clifton Terrace as a multifamily housing development dedicated to the use and enjoyment of low and moderate income tenants for a period of at least 20 years from the date of purchase, and that the defendants applied for, received and maintained tax exempt status for P.I. Properties by falsely and fraudulently representing to the Internal Revenue Service (IRS) that, among other things, P.I. Properties was a nonprofit corporation organized "exclusively for charitable and education purposes", that "no part of the net earnings of P.I. Properties would inure to the benefit of any private individual, employee or director" and that the activities of other profit and nonprofit businesses directed and controlled by the defendants were "unrelated to those envisioned for P.I. Properties" and that P.I. Properties was completely financially accountable to the federal government and would provide the government free access to the project, its books, and other data. It was further alleged that a further part of the conspiracy was to bring the monies, assets and personnel of Clifton Terrace, Buena Vista and Kenesaw under the management and control of P.I. Properties and to misappropriate, misapply, divert and steal monies and assets of Clifton Terrace, Buena Vista and Kenesaw and other tenants by various methods including, using Clifton Terrace operating funds to purchase and pay for goods and services for the use and benefit of the defendants personally and of other businesses which the defendants directed and controlled, by withdrawing and using income and operating funds of Clifton Terrace for the personal use and benefit of defendants and others, by entering into deceptive and self-dealing contracts and agreements between P.I. Properties and the other businesses which defendants directed and controlled, by applying for loans for the use and benefit of Clifton Terrace in the name of P.I. Properties and converting the proceeds of such loans to the use and benefit of the defendants personally and of the other businesses which defendants directed and controlled, by personally withdrawing and improperly pledging as collateral for personal and business loans, monies deposited in various escrow accounts held in trust for the tenants of Clifton Terrace, Buena Vista and Kenesaw for the payment of taxes, and by improperly loaning monies from accounts held in the name of P.I. Properties and Clifton Terrace to the defendants personally and to the other businesses which the defendants directed and controlled. The indictment further charged that the defendants used a number of methods to hide, conceal, and cover up their alleged misappropriations, misapplications, diversions and theft of monies and self-dealing relationships between P.I. Properties and the other businesses which defendants directed and controlled by various methods. Some of the methods included, (1) routinely and purposely transferring and laundering monies through and between various P.I. Properties and other businesses and personal bank accounts, (2) creating and maintaining and directing others to create and maintain false, fraudulent and misleading business and financial books, records and reports, (3) altering, destroying and secreting various business and financial books and records, (4) making, preparing and submitting and causing others to make, prepare and submit to HUD and IRS false, fraudulent and misleading statements, representations, reports and correspondence, thereby also forestalling or preventing governmental investigations or audits, and (5) refusing, delaying, limiting and denying governmental officials free access to the Clifton Terrace project, its books and other data relating to other businesses which the defendants directed and controlled.

The indictment alleged 50 overt acts which the defendants committed in furtherance of the conspiracy.

At the conclusion of the trial, the jury found the defendant guilty of count 1 charging conspiracy, and guilty of seven counts charging false statements. The defendant was found not guilty of all other charges.

II

One motion filed by the defendant seeks to have the Court dismiss the indictment or, in the alternative, to require the Government to permit the defendant's counsel to inspect the minutes of the grand jury which returned the indictment against her. This request is based on the defendant's argument that she (the defendant) learned, only after jeopardy attached, that "the Government's key witness, Zellane Laney, perjured herself before the grand jury in a manner highly material to the charges returned." The Court finds that the motion lacks merit.

The "dismissal of an indictment is only required in extreme situations, as where the prosecutor knowingly presents perjured testimony." United States v....