US v. Burger

• Decision Date: 16 April 1991
• Docket Number: No. 91-40002-01-07.,91-40002-01-07.
• Citation: 773 F. Supp. 1430
• Parties: UNITED STATES of America, Plaintiff, v. Thomas A. BURGER, Sherwood E. Blount, Jr., James R. Cruce, Cathy (nee Allin) Cruce, Thomas D. Dunn, Jr., Joseph Grosz, and Kim A. Wise, Defendants.
• Court: U.S. District Court — District of Kansas

773 F. Supp. 1430

UNITED STATES of America, Plaintiff, v. Thomas A. BURGER, Sherwood E. Blount, Jr., James R. Cruce, Cathy (nee Allin) Cruce, Thomas D. Dunn, Jr., Joseph Grosz, and Kim A. Wise, Defendants.

No. 91-40002-01-07.

United States District Court, D. Kansas.

April 16, 1991.

COPYRIGHT MATERIAL OMITTED

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Lee Thompson, U.S. Atty., Wichita, Kan., Richard L. Hathaway, Asst. U.S. Atty., Topeka, Kan., for the U.S.

Dennis W. Moore, Overland Park, Kan., for Thomas A. Burger.

Gary D. McCallister, Davis, Wright, Unrein, Hummer & McCallister, Topeka, Kan., Charles M. Meadows, Jr., Paul Edward Coggins, Kimberly Colby Harris, Meadows, Ownes, Collier, Reid & Coggins, Dallas, Tex., for Sherwood E. Blount, Jr.

Mark L. Bennett, Jr., Glenda L. Cafer, Bennett, Dillon & Callahan, Topeka, Kan., for James R. Cruce.

Mark L. Bennett, Jr., Glenda L. Cafer, Bennett, Dillon & Callahan, Topeka, Kan., Thomas M. Bradshaw, Thomas H. Stahl, Daniel O. Herrington, David L. Mills, Kansas City, Mo., for Cathy Cruce.

James L. Eisenbrandt, Bryan, Cave, McPheeters & McRoberts, Leawood, Kan., for Thomas D. Dunn, Jr.

Donald R. Hoffman, Topeka, Kan., Elliot Samuels, Chicago, Ill., for Joseph Grosz.

Les E. Diehl, Gerald L. Goodell, Topeka, Kan., Frank H. McCarthy, Tulsa, Okl., Layn R. Phillips, Irell & Manella, Newport, Cal., for Kim A. Wise.

MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on numerous pretrial motions and motions in limine filed by the defendants.¹ On April 12, 1991, the court heard oral arguments on the motions. The above-named defendants have been charged in a 25-count Indictment, issued January 10, 1991. Count 1 charges defendants with a Pinkerton-type conspiracy, see Pinkerton v. United States, 328 U.S. 640, 66 S.Ct. 1180, 90 L.Ed. 1489 (1946), Counts 2-24 charge them with violations of the bank fraud statute, 18 U.S.C. § 1344, and Count 25 charges a violation of the false statement statute 18 U.S.C. § 1001. Additionally, Counts 2-25 charge defendants with aiding and abetting, in violation of 18 U.S.C. § 2.

In their current motions, defendants move to dismiss the Indictment, and also move for severance on the basis of both misjoinder and prejudicial joinder. Additionally, defendants move the court for individual voir dire, additional peremptory strikes, disclosure by the government of its witnesses and their order of testimony, and exception from sequestration. Finally, defendants make several motions requesting pretrial evidentiary determinations. The court will discuss these motions seriatim.

MOTIONS TO DISMISS THE INDICTMENT

In ruling on a motion to dismiss the Indictment, the court treats the allegations as true and construes all facts in a light most favorable to the government. United States v. Dorfman, 532 F.Supp. 1118, 1123 (N.D.Ill.1981). The court views the Indictment as a whole, with an emphasis on common sense, rather than technicalities. United States v. Mobile Materials, Inc., 871 F.2d 902, 906-07 (10th Cir.1989). A motion to dismiss an indictment will not be entertained if the dispute centers on factual questions, as such questions are within the province of the jury. United States v. Kilpatrick, 821 F.2d 1456, 1462 n. 2 (10th Cir.1987), aff'd, Bank of Nova Scotia v. United States, 487 U.S. 250, 108 S.Ct. 2369, 101 L.Ed.2d 228 (1988).

Defendants move to dismiss the Indictment on four grounds: prosecutorial misconduct,² double jeopardy, duplicity and insufficiency. Defendants have not convinced the court that the Indictment should be dismissed for any of these asserted grounds.

A. Prosecutorial Misconduct

Prosecutorial misconduct, in and of itself, is not a valid reason for dismissing an indictment, and such dismissals are rarely upheld. Kilpatrick, 821 F.2d at 1465. Indeed, an indictment may be dismissed for prosecutorial misconduct only if such misconduct is flagrant enough to significantly infringe on the grand jury's exercise of independent judgment so that the grand jury cannot make an informed and unbiased determination of probable cause. Id; United States v. Larrazolo, 869 F.2d 1354, 1359 (9th Cir.1989). As the Supreme Court expressed in Bank of Nova Scotia v. United States, 487 U.S. 250, 108 S.Ct. 2369, 101 L.Ed.2d 228 (1988), prosecutorial misconduct will merit dismissal of an indictment only when it substantially influenced the grand jury's decision to indict or raises grave doubt that the decision to indict was substantially influenced. Id. at 256, 108 S.Ct. at 2374.

The court concludes that defendants' claims of prosecutorial misconduct, namely that the government failed to present substantially exculpatory evidence, misinformed the grand jury as to the applicable law, and made inflammatory and prejudicial references to publicity and defendant Dunn's representation by counsel, are insufficient to warrant dismissal of the instant Indictment. Even assuming, arguendo, that all of defendants' claims were true, their allegations do not meet the standard set forth in Nova Scotia; the defendants simply have not made out a case that the grand jury's independence was overborne by the government and have not raised a grave doubt that the claimed misconduct substantially influenced the grand jury's determination of probable cause. Moreover, the court has reviewed the 31 grand jury transcripts offered as exhibits and is convinced that the grand jury was active, independent, thoughtful, and not submissive to the statements and suggestions of the government. See Kilpatrick, 821 F.2d at 1473.

1. Exculpatory Evidence

The Tenth Circuit requires a prosecutor to reveal known, substantially exculpatory evidence to the grand jury. See, e.g., United States v. Page, 808 F.2d 723, 728 (10th Cir.), cert. denied, 482 U.S. 918, 107 S.Ct. 3195, 96 L.Ed.2d 683 (1987). "Substantially exculpatory evidence" is evidence that clearly negates guilt and that would change a grand jury's decision to charge a defendant with a crime. Nova Scotia, 487 U.S. at 263, 108 S.Ct. at 2378; United States v. Reid, 911 F.2d 1456, 1460 (10th Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 990, 112 L.Ed.2d 1074 (1991).

Having carefully reviewed defendants' submissions of "substantially exculpatory evidence," which they claim should have been disclosed to the grand jury, the court finds that the evidence is only tangentially related to the crimes charged. For example, the "tax benefit structure" of the transaction alleged in Count 4 is irrelevant to whether the defendants, by means of this transaction, executed a scheme to defraud Peoples Heritage Savings and Loan. "Each individual component of the scheme need not be illegal in order to find a scheme to defraud. It is sufficient that the whole scheme involve fraudulent conduct." United States v. Goldblatt, 813 F.2d 619, 624 (3d Cir.1987).

Despite defendants' assertions that certain evidence completely negates any inference of intentional conduct on their part, the court concludes that the evidence discussed in defendants' motions is not so clearly negating of guilt that the government was obligated to present it to the grand jury. Rather, the court concludes that the examples proffered are simply bits and pieces of potentially exculpatory evidence, which the government is not obligated to "ferret out," and which, in the scope of the grand jury's investigation, would have had no substantial influence on the grand jury's decision to issue an indictment. In this respect, United States v. Williams, 899 F.2d 898 (10th Cir.1990), on which all defendants rely heavily, is distinguishable.

2. Evidence of Civil Regulatory Violations

Whether the government misinformed or misled the grand jury into believing civil regulatory violations created criminal culpability, as the defendants claim, such a claim is insufficient to justify dismissal of the Indictment. Giving erroneous legal instructions to a grand jury does not constitute grounds for dismissing an indictment valid on its face. United States v. Buchanan, 787 F.2d 477, 487 (10th Cir. 1986), cert. denied, ___ U.S. ___, 110 S.Ct. 1829, 108 L.Ed.2d 958 (1990).

3. References to Publicity and Representation by Counsel

Defendants' claims of prosecutorial misconduct on these two fronts are inadequate to overcome the presumption of regularity that attaches to grand jury proceedings. Kilpatrick, 821 F.2d at 1473. Defendants cite no law in support of their propositions that negative publicity or references to a target's representation by counsel warrants dismissal of an indictment. Indeed, the law is directly contrary to these propositions. The grand jury's exposure to pre-indictment publicity does not raise a presumption of prejudice or bias, and the court's research has revealed that such exposure has never prompted the harsh result of dismissal. See, e.g., United States v. Washington, 705 F.2d 489, 499 (D.C.Cir.1983); United States v. Finley, 705 F.Supp. 1297, 1307 (N.D.Ill.1988). Similarly, references to a target's representation by counsel are insufficient to warrant dismissal. United States v. Moeckly, 769 F.2d 453, 465 (8th Cir.1985), cert. denied, 475 U.S. 1015, 106 S.Ct. 1196, 89 L.Ed.2d 311 (1986).

B. Double Jeopardy

Defendants also move to dismiss the Indictment on grounds of double jeopardy, claiming that the two conspiracies pled in this case and companion case number XX-XXXXX-XX are actually one continuing conspiracy. Defendants' double jeopardy argument is premature. Jeopardy has not attached, and will not attach, until the jury is empaneled and sworn. Serfass v. United States, 420 U.S. 377, 388, 95 S.Ct. 1055, 1062, 43 L.Ed.2d 265 (1975); United States v. Bizzell, 921 F.2d 263, 266 (10th Cir.1990). Furthermore, the administrative hearings and civil proceedings, on which defendant Burger seeks to rely for his double jeopardy argument, do not constitute prosecutions. Bizzell, 921 F.2d at 265. The court will entertain this argument when, and if, it becomes ripe.

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