US v. Ashley
| Citation | 905 F. Supp. 1146 |
| Decision Date | 13 November 1995 |
| Docket Number | No. 94-CR-1235 (DRH).,94-CR-1235 (DRH). |
| Parties | UNITED STATES of America, v. Kenneth ASHLEY and Frank LaGrua, Defendants. |
| Court | U.S. District Court — Eastern District of New York |
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Zachary W. Carter, United States Attorney, Eastern District of New York by Mark O. Wasserman, Asst. U.S. Atty., Garden City, New York, for U.S.
Fischetti & Russo by Ronald G. Russo, New York City, for defendant Kenneth Ashley.
Paul A. Batista, New York City, for defendant Frank LaGrua.
Presently before the Court are motions by Defendant Kenneth Ashley ("Ashley") and Defendant Frank LaGrua ("LaGrua") (collectively, "Defendants") to dismiss or sever various counts of a Superseding Indictment that was filed in April 1995 ("the Indictment"). Defendants also have moved for discovery of specified documents. For the reasons indicated below, the Court grants Ashley's motion to dismiss Counts (6) and Seven (7), and his motion to sever Counts (8) and (9). Defendants' discovery motions are denied.
The Federal Home Loan Mortgage Corporation ("Freddie Mac") "was a corporation ... created by Congress to develop a secondary mortgage market for conventional residential loans." (Indictment ¶ 1.) "As such, Freddie Mac purchased conventional mortgage loans from approved mortgage sellers." (Id.) Ashley was the President of Liberty Mortgage Banking Limited ("Liberty"), a corporation licensed by the State of New York as a mortgage bank, and LaGrua was its Sales Manager. (Id. ¶¶ 2, 7-8.) The Indictment alleges that Liberty was an approved Freddie Mac mortgage seller from 1987 until mid-October, 1990.1
The Indictment alleges, inter alia, that Defendants devised a scheme to defraud Freddie Mac (hereinafter the "Freddie Mac Scheme"). In connection with the alleged Freddie Mac Scheme, Defendants are charged with conspiracy to commit wire fraud, and with the substantive crime of wire fraud. The Indictment also alleges that Ashley devised a scheme to defraud National Westminster Bank, N.A. ("NatWest"), a federally-insured financial institution (hereinafter the "NatWest Scheme"), and that he and unnamed others devised a scheme to defraud First Penn Bank ("First Penn"), also a federally-insured financial institution (hereinafter the "First Penn Scheme"). Ashley is charged with wire fraud in connection with the alleged NatWest Scheme and with conspiracy and bank fraud in connection with the alleged First Penn Scheme. Further, the Indictment charges Defendants with conspiring to commit perjury and suborning perjury in connection with depositions in the Liberty Civil Case. Finally, LaGrua is charged with perjury in connection with his deposition testimony in the Liberty Civil Case.
LaGrua has moved to dismiss each count of the Indictment that names him as a defendant. In the alternative, he has moved for severance of his trial from Ashley's and asks that the Government be directed to provide pre-trial disclosure of specified documents. Further, LaGrua moves for an Order compelling the Government to provide immediate notice of "other act" evidence.
Ashley has moved to have his trial on the perjury charges and the charges relating to the alleged Freddie Mac Scheme severed from his trial on the remaining charges against him. Further, Ashley has moved to dismiss Counts Six (6) and Seven (7) of the Indictment, which relate to the alleged NatWest Scheme. Ashley has also moved for an Order directing the Government to produce certain specified documents. Finally, Ashley requests "leave to join in all motions of his co-defendant as they may apply to Ashley."
As a preliminary matter, the Court notes that the Government does not oppose Ashley's request to join in the motions of LaGrua to the extent that those motions inure to Ashley's benefit; the Court hereby grants that request by Ashley. As to the remaining motions by Defendants, the Court first considers their motions to dismiss, secondly their severance motions, and finally, Defendants' discovery motions.
Federal Rule of Criminal Procedure 7(c)(1) provides, in relevant part, as follows:
The indictment ... shall be a plain, concise and definite written statement of the essential facts constituting the offense charged. It shall be signed by an attorney for the government. It need not contain a formal commencement, a formal conclusion or any other matter not necessary to such statement. Allegations made in one count may be incorporated by reference in another count. It may be alleged in a single count that the means by which the defendant committed the offense are unknown or that the defendant committed it by one or more specified means. The indictment ... shall state for each count the official or customary citation of the statute, rule, regulation or other provision of law which the defendant is alleged therein to have violated.
This rule performs three constitutional functions: (1) pursuant to the Sixth Amendment, it insures that the defendant is informed of the "nature and cause of the accusation;" (2) pursuant to the Fifth Amendment, it prevents any person from being "subject for the same offense to be twice put in jeopardy of life or limb;" and (3) pursuant to the Fifth Amendment, it prevents a defendant from being held "to answer for a capital or otherwise infamous crime unless on a presentment or indictment of a Grand Jury." United States v. Upton, 856 F.Supp. 727, 738 (E.D.N.Y.1994) (citations omitted).
"An indictment is sufficient when it charges a crime with sufficient precision to inform the defendant of the charges he must meet and with enough detail that he may plead double jeopardy in a future prosecution based on the same set of events." United States v. Stavroulakis, 952 F.2d 686, 693 (2d Cir.), cert. denied, 504 U.S. 926, 112 S.Ct. 1982, 118 L.Ed.2d 580 (1992) .
The Second Circuit has "often stated that `an indictment need do little more than to track the language of the statute charged and state the time and place (in approximate terms) of the alleged crime.'" Id. (quoting Tramunti, 513 F.2d at 1113) (further citations omitted). However, "when the definition of an offense includes generic terms, it is not sufficient that the indictment shall charge the offence in the same generic terms as in the definition; but it must state the species, — it must descend to particulars." Id. (citing Russell, 369 U.S. at 765, 82 S.Ct. at 1047) (internal quotations and further citations omitted). In other words, an indictment must "contain some amount of factual particularity to ensure that the prosecution will not fill in elements of its case with facts other than those considered by the grand jury." Upton, 856 F.Supp. at 738 (citing Russell, 369 U.S. 749, 82 S.Ct. 1038).
Count One (1) of the Indictment charges Defendants with conspiracy in connection with the alleged Freddie Mac Scheme. 18 U.S.C. § 371 ("Section 371"); 18 U.S.C. § 3551 (Sentencing Reform Act of 1984).
The conspiracy statute, Section 371, provides in pertinent part as follows:
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 ... or imprisoned ... or both.
18 U.S.C. § 371.
Section 371 prohibits two types of conspiracies: a conspiracy "to commit any offense against the United States;" and a conspiracy "to defraud the United States, or any agency thereof." See, e.g., United States v. Rosenblatt, 554 F.2d 36, 40 (2d Cir.1977). The Government has not alleged that Freddie Mac is an agency of the United States within the purview of Section 371. Thus, the issue presently before the Court as to Count One (1) is whether or not it sufficiently charges a conspiracy to commit an offense against the United States.
"It has long been established that the words `offense against the United States' encompass all offenses against the laws of the United States, not just offenses directed at the United States as target or victim." United States v. Gibson, 881 F.2d 318, 321 (6th Cir.1989) (emphasis added) (citing Radin v. United States, 189 F. 568, 571 (2d Cir.1911)) (further citations omitted); see also United States v. Brandon, 17 F.3d 409, 422 (1st Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 80, 130 L.Ed.2d 34 (1994). Wire fraud is prohibited by a law of the United States. See 18 U.S.C. § 1343 ("Section 1343"). Thus, a conspiracy to commit wire fraud is prohibited by Section 371. See, e.g., United States v. Piervinanzi, 23 F.3d 670, 674 (2d Cir.), cert. denied, ___ U.S. ___, 115 S.Ct. 259, 130 L.Ed.2d 179 (1994).
The federal wire fraud statute, Section 1343, provides as follows:
Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than five years, or both. If the violation affects a financial...
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