US v. Finn

• Decision Date: 12 October 1995
• Docket Number: Crim. No. 5-95-12(01) to 5-95-12(03).
• Parties: UNITED STATES of America, Plaintiff, v. Harold "Skip" FINN, Defendant. UNITED STATES of America, Plaintiff, v. Alfred "Tig" PEMBERTON, Defendant. UNITED STATES of America, Plaintiff, v. Daniel BROWN, Defendant.
• Court: U.S. District Court — District of Minnesota

919 F. Supp. 1305

UNITED STATES of America, Plaintiff, v. Harold "Skip" FINN, Defendant.

UNITED STATES of America, Plaintiff, v. Alfred "Tig" PEMBERTON, Defendant.

UNITED STATES of America, Plaintiff, v. Daniel BROWN, Defendant.

Crim. Nos. 5-95-12(01) to 5-95-12(03).

United States District Court, D. Minnesota, Fifth Division.

October 12, 1995.

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Douglas A. Kelley, Kelley Law Office, Minneapolis, MN, for Harold "Skip" Finn.

Bruce Henry Hanley, Hanley & Dejoras, Minneapolis, MN, for Alfred "Tig" Pemberton.

Kevin J. Short, Short Law Office, Minneapolis, MN, for Daniel Brown.

Paul Anthony Murphy, Michael W. Ward, U.S. Atty. Office, Minneapolis, MN, for U.S.

ORDER AND REPORT AND RECOMMENDATION

ERICKSON, United States Magistrate Judge.

I. Introduction

This matter came before the undersigned United States Magistrate Judge pursuant to a general assignment, made in accordance with the provisions of Title 28 U.S.C. § 636(b)(1)(A) and (B), upon the following pretrial Motions of the Defendants:¹

1. The Motion of the Defendants Harold "Skip" Finn ("Finn") and Daniel Brown ("Brown") that the government agents retain their rough notes;²

2. The Motion of Finn and Brown to compel the production of Sentencing Guidelines information;

3. The Motion of Finn and Brown for the disclosure of Jencks Act materials;³

4. The Motion of Finn and Brown for the disclosure of Rule 404(b) evidence;⁴

5. The Motion of Finn and Brown for discovery and inspection, and the Motion of the Defendant Alfred "Tig" Pemberton ("Pemberton") and Brown for the disclosure of government witnesses;⁵

6. The Motion of Finn and Brown for the disclosure of evidence favorable to the respective Defendant;⁶

7. The Motion of Finn for the disclosure of post-conspiracy statements of co-Defendants;

8. The Defendants' Motion for a Bill of Particulars;

9. The Motion of Finn and Brown to compel the immediate disclosure of expert witness summaries;⁷

10. The Motion of Finn and Brown for the disclosure of Grand Jury instructions, minutes and transcript, or for an in camera review of the same;

11. The Defendants' Motion to dismiss and/or strike all references to actions to defraud the State of Minnesota of sales tax;

12. The Motion of the Defendants Pemberton and Brown for severance and for separate trials;

13. The Motion of Pemberton to bifurcate the forfeiture proceedings;⁸

14. The Motion of Pemberton for leave to issue Rule 17(c) subpoenas without a particularized showing to the Court 15. The Motion of Brown to affirm or deny the Government's use of electronic surveillance;⁹

16. The Defendants' Motion for the suppression of physical evidence and statements;

17. The Defendants' Motion to dismiss the indictment for want of subject matter jurisdiction;

18. The Motion of Finn and Pemberton to dismiss Counts 2 through 9 and 26;

19. The Motion of Finn and Pemberton to dismiss Counts 10, 11, 13 and 14;

20. The Motion of Finn and Pemberton to dismiss Count 12;

21. The Motion of Finn to dismiss Counts 15 through 19; and the Motion of Pemberton to dismiss Count 19; and

22. The Motion of Finn and Brown to dismiss Counts 21 and 22, and the Motion of Pemberton to dismiss Counts 20 through 22.¹⁰

A Hearing on the Motions was conducted on August 30, 1995, at which time Finn appeared by Douglas A. Kelley and Steven E. Wolter, Esqs.; Pemberton appeared by Bruce H. Hanley, Esq.; Brown appeared by Kevin J. Short, Esq.; and the Government appeared by Paul A. Murphy and Michael W. Ward, Assistant United States Attorneys.

As to the Motions which remained for resolution at the close of the Hearing in this matter, we either deny the Motions or we recommend that they be denied.

II. Findings of Fact

By a 26-Count Indictment that was filed on June 7, 1995, the Defendants are charged with participating in a conspiracy to steal and misapply money, including Federal funds, belonging to the Leech Lake Band of the Minnesota Chippewa Indians ("Leech Lake Band"), in violation of Title 18 U.S.C. § 371.¹¹ The Defendants are further accused of using the mails, and Finn and Pemberton are each accused of having engaged in money laundering, in furtherance of that conspiracy. Moreover, all of the Defendants are accused of impeding an investigation that was then being conducted by the United States Department of the Interior.

Accordingly, in addition to one Count of conspiracy, Finn has been charged with three Counts of mail fraud, in violation of Title 18 U.S.C. §§ 1341, 1346 and 2; with nine Counts of embezzlement and theft from an Indian Tribal Organization ("ITO"), in violation of Title 18 U.S.C. § 1163; with four Counts of theft from a program that has received Federal funds, in violation of Title 18 U.S.C. § 666; with one Count of bribery involving a program that has obtained Federal funds, in violation of Title 18 U.S.C. §§ 666 and 2; with five Counts of money laundering, in violation of Title 18 U.S.C. § 1957; and with one Count of obstructing the due administration of justice by a Federal Grand Jury, in violation of Title 18 U.S.C. § 1503.

Along with one Count of conspiracy, Pemberton has been charged with three Counts of mail fraud, in violation of Title 18 U.S.C. §§ 1341, 1346, and 2; with one Count of embezzlement and theft from an ITO, in violation of Title 18 U.S.C. § 1163; with one Count of theft from a program that has received Federal funds, in violation of Title 18 U.S.C. § 666; with one Count of bribery involving a program that has obtained Federal funds, in violation of Title 18 U.S.C. §§ 666 and 2; with one Count of money laundering, in violation of Title 18 U.S.C. § 1957; and with one Count of knowingly and willfully making a false statement, in violation of Title 18 U.S.C. § 1001.

Brown, in addition to the conspiracy Count, has been charged with three Counts of mail fraud, in violation of Title 18 U.S.C. §§ 1341, 1346, and 2; and with one Count of knowingly and willfully making a false statement, in violation of Title 18 U.S.C. § 1001. In addition, the Indictment includes forfeiture allegations against Finn and Pemberton, pursuant to Title 18 U.S.C. § 982(a) and Title 21 U.S.C. § 853(p). The events which precipitated these charges, and which are germane to the Motions before the Court, may be briefly summarized.

Due to an increase in insurance premiums, the Leech Lake Band initiated a self-insurance program in August of 1985. On October 1, 1985, the Leech Lake Reservation Business Committee ("RBC")¹² created a self-insurance plan, the purpose of which was to establish accounts for the collection of tribal funds to be used in the payment of liability claims. Pursuant to this plan, the RBC, through the passage of a tribal resolution, established Reservation Risk Management, Inc., ("RRM — Tribal Corp.")¹³ to manage the self-insurance plan.¹⁴ Finn encouraged the creation of RRM — Tribal Corp., and Pemberton and Brown voted for the tribal resolution by which that corporation was created.

In October of 1985, RRM — Tribal Corp. issued a ten-year insurance policy to the RBC. Finn signed his name on the policy, and also signed the initials "/kb," as RRM — Tribal Corp.'s authorized representative.¹⁵ As legal counsel for the Leech Lake Band, Finn explained the insurance policies to the RBC on October 29, 1985 and, shortly thereafter, as an agent of RRM — Tribal Corp., Finn issued an insurance binder. The binder represented the insurance coverage that was protecting the RBC in the event of a loss. The Government contends, however, that the Defendants knew that they did not have sufficient means, either in RRM — Tribal Corp. or in any other corporate enterprise, to provide the liability protection that they had promised to underwrite.

On January 14, 1986, the RBC obligated itself to make payments to RRM — Tribal Corp., in exchange for insurance coverage.¹⁶ Finn, acting as its President, executed the Agreement on behalf of RRM — Tribal Corp., while Pemberton, as Secretary-Treasurer, and Hartley White ("White"), as the Committee's Chairperson, approved the Agreement on behalf of the RBC.¹⁷

On November 5, 1985, Finn, along with Pemberton and White, who was still acting as the Chairperson of the RBC, executed a "Pre-Organization Subscription Agreement of Reservation Risk Management, Inc." White, on behalf of the RBC, subscribed to the purchase of 250 shares in RRM — Tribal Corp. for $62,500, and Finn subscribed to the purchase of 750 shares in RRM — Tribal Corp. for $187,500. Finn never paid the amount agreed upon and, more importantly, RRM — Tribal Corp. never issued any shares.

On January 14, 1986, Finn and Pemberton issued stock certificate number 001, in the name of the RBC, for 250 shares, and stock certificate number 002, in the name of Harold Finn, for 750 shares. In contrast to the subscription Agreement, the shares were not issued as the stock of RRM — Tribal Corp., however, but were shares of Reservation Risk Management, Inc., which was a corporation organized under the laws of the State of Minnesota ("RRM — Minnesota Corp."). Nevertheless, RRM — Minnesota Corp. was not formed until March 18, 1986. According to the Indictment, RRM — Minnesota Corp. was created as a shell corporation in furtherance of the Defendants' conspiracy.

On that same day — January 14, 1986 — Finn, Pemberton and White executed a "Shareholder's Agreement" between the RBC and RRM — Tribal Corp. Amongst its other provisions, the Agreement "required that the RBC make payments to RRM, Inc. in exchange for the insurance coverage * * *, which coverage the defendants then knew did not exist." In addition, the Agreement provided, in part, that the "reserves in Fund C shall belong to the shareholders of RRM and cannot be distributed unless the parties (RBC and Finn)...