US v. Gleave

• Citation: 786 F. Supp. 258
• Decision Date: 28 January 1992
• Docket Number: No. CR-90-33S.,CR-90-33S.
• Parties: UNITED STATES of America v. Ted W. GLEAVE and David R. Knoll, Defendants.
• Court: United States District Courts. 2nd Circuit. United States District Court of Western District of New York

786 F. Supp. 258

UNITED STATES of America v. Ted W. GLEAVE and David R. Knoll, Defendants.

No. CR-90-33S.

United States District Court, W.D. New York.

January 28, 1992.

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Dennis C. Vacco, U.S. Atty. by Denise O'Donnell, Asst. U.S. Atty., Buffalo, N.Y., for U.S.

Thomas P. Cleary, Joel L. Daniels, Buffalo, N.Y., for Gleave.

David R. Knoll, pro se.

Robert J. Riordan, Kenmore, N.Y., for Knoll.

DECISION AND ORDER

SKRETNY, District Judge.

INTRODUCTION

On February 22, 1990, the United States of America (hereinafter "the government") filed a forty-six count Indictment against the defendants Ted W. Gleave ("Gleave") and David R. Knoll ("Knoll") (collectively referred to as "the defendants"). The indictment charges the defendants with conspiracy (18 U.S.C. § 371); concealment of assets in bankruptcy (18 U.S.C. § 152); making false statements to a department of the United States (18 U.S.C. § 1001); money laundering (18 U.S.C. § 1956); and interstate transportation of monies obtained by fraud (18 U.S.C. § 2314).

Now before this Court are several motions of Gleave and Knoll to dismiss various counts of all or portions of the indictment and to suppress evidence, all pursuant to Fed.R.Crim.P. 12(b). Specifically, the motions of defendants addressed herein are as follows:

(1) The defendants move to dismiss Counts Seven and Eight of the indictment, arguing that they are impermissibly duplicitous.

(2) Knoll also moves to dismiss Count One on duplicity grounds.

(3) Knoll moves to dismiss Counts Four, Five and Six, arguing that those counts are barred by the statute of limitations.

(4) The defendants move to dismiss Counts Nine through Thirty-Three of the indictment arguing that the Money Laundering Control Act of 1986, 18 U.S.C. § 1956, the statute on which those counts are charged, is unconstitutional. Knoll also argues that this Court must dismiss Counts Nine through Thirty-Three because, according to Knoll, the conduct which those counts charge does not violate § 1956.

(5) The defendants move to dismiss Counts Thirty-Five through Forty-Six of the indictment on the grounds that those counts are legally insufficient. Counts Thirty-Five through Forty-Six charge the defendants with violations of the National Stolen Property Act, 18 U.S.C. § 2314. Specifically, the defendants argue that the alleged stolen property was part of a bankruptcy estate in Chapter 11 where, according to the defendants, Gleave maintained title ownership of the property. Therefore, the defendants contend, Counts Thirty-five through Forty-six do not charge that the defendants' alleged conduct deprived another of an ownership interest in property.

(6) The defendants move for an Order excluding as evidence certain bank records from Barclays Bank International, Ltd. Grand Cayman, Cayman Islands. The government seeks to introduce the foreign bank records pursuant to 18 U.S.C. § 3505.

(7) Knoll moves to dismiss the entire indictment against him on the grounds of prejudicial pre-indictment delay.

(8) Daniel Nowak, a witness called by the defense at a suppression hearing in this case, seeks an Order form this Court requiring that the government pay him witness fees pursuant to 28 U.S.C. §§ 1821 and 1825.

(9) Finally, the defendants move to suppress certain physical evidence.

This Court shall address each motion in turn and, for the reasons stated below, denies the defendants' motions. This Court also denies Daniel Nowak's request for witness fees.¹

FACTS

In August 1982, Gleave individually, and his corporation, 747 Kenmore Avenue, Inc., filed Chapter 11 bankruptcy petitions which commenced the following two bankruptcy cases: In Re Ted W. Gleave, BK. No. 82-12238, and In Re 747 Kenmore Avenue, Inc., BK. No. 82-12256M. On January 12, 1984, the Bankruptcy Court ordered the two bankruptcy cases converted to liquidation proceedings under Chapter 7 of the Bankruptcy Code (hereinafter collectively referred to as "the bankruptcy proceedings").

The central thrust of the indictment is that the defendants entered into a conspiracy to conceal assets, in excess of $600,000.00, from the trustee and creditors in the bankruptcy proceedings.

Count One, charging conspiracy under 18 U.S.C. § 371, details the alleged agreement between Knoll and Gleave to commit various criminal acts. According to the indictment, Gleave, aided and abetted by Knoll, concealed assets from the trustee and creditors in the bankruptcy proceedings, and laundered the monies, initially through two bank accounts in the Cayman Islands and then transferring the monies to banks in Canada, and the United States. According to the indictment, the defendants used these monies, once laundered, to repurchase real estate which Gleave owned prior to the bankruptcy proceedings and to conduct other business and real estate transactions through various corporate entities.

Counts Two through Five charge the defendants with bankruptcy fraud violative of 18 U.S.C. § 152, by virtue of their alleged concealment of assets from the trustee and creditors in the bankruptcy proceedings and, in connection with these alleged acts, their submission of false financial statements submitted in the Ted W. Gleave, BK. No. 82-12238, bankruptcy proceeding.

Counts Six through Eight charge the defendants with falsely representing to the United States Probation Service and the United States Department of Justice, in violation of 18 U.S.C. § 1001, that Gleave was without substantial financial assets, although, according to the indictment, Gleave along with Knoll maintained bank accounts in the Cayman Islands.

Counts Nine through Thirty-Three charge the defendants with money laundering violative of 18 U.S.C. § 1956, by conducting financial transactions affecting interstate and foreign commerce, involving the proceeds of monies concealed in the Caymanian bank accounts from the trustee and creditors in the bankruptcy proceedings, knowing the transactions designed to conceal the nature, location, source, ownership and control of the proceeds.

Count Thirty-four, charging the criminal forfeiture statute, 18 U.S.C. § 982, seeks forfeiture of certain properties allegedly placed beyond the jurisdiction of this Court and other assets which the government charges are traceable to the money laundering transactions allegedly engineered by the defendants.

Counts Thirty-five through Forty-six charge the defendants with interstate transportation of monies taken by fraud violative of 18 U.S.C. § 2314, by virtue of the defendants' transfers of the monies concealed from the bankruptcy proceedings in interstate and foreign commerce to the Caymanian bank accounts.

All Counts also charge aiding and abetting under 18 U.S.C. § 2. The government's theory is that, at minimum, each defendant aided and abetted the other's criminal conduct.

DISCUSSION

I. The Defendants' Motions To Strike Counts Seven And Eight As Duplicitous

The defendants move to dismiss Counts Seven and Eight of the indictment on the grounds that those counts are impermissibly duplicitous under Fed. R.Crim.P. 7(c).

Counts Seven and Eight charge the defendants with making fraudulent statements in two separate documents (collectively referred to as "the documents") submitted to the Department of Justice in violation of 18 U.S.C. § 1001. Specifically, those counts charge that Gleave, "... aided, abetted, counseled, commanded, induced and procured ..." by Knoll, did "... conceal and cover up by trick, scheme and devise material facts and make false, fictitious and fraudulent statements and representations in a matter within the jurisdiction of the Department of Justice ..." in violation of 18 U.S.C. § 1001. Count Seven alleges that the offense occurred on October 30, 1986 in an "Examination of Judgment Debtor (Form W351)" ("Form W351"). Count Seven contains nine questions from the Form W351 and the allegedly false answers supplied by the defendants to each of these nine questions. Count Eight alleges that the offense occurred on June 2, 1987 in a "Financial Statement of Debtor" form. Count Eight contains seven questions from the "Financial Statement of Debtor" and the allegedly false answers supplied by the defendants to each of these seven questions.

Moving for dismissal of Counts Seven and Eight, the defendants contend that each count is not one offense but actually nine and seven separate offenses, respectively. Defendants argue that any one of the allegedly false answers would establish the offense under 18 U.S.C. § 1001 and, therefore, proving the falsity of each statement would involve evidence of dissimilar facts, a prospect which, according to the defendants mandates dismissal of Counts Seven and Eight.

Opposing the defendants' motions, the government contends that Counts Seven and Eight do not each contain several separate offenses but instead, as authorized by Fed.R.Crim.P. 7(c)(1), each count "... charges but a single offense which is alleged to have been committed by multiple means as part of a single scheme...." Along these lines, the government argues that Counts Seven and Eight "... merely set forth different means by which fraudulent statements were made to the Department of Justice...."

Duplicity is the joinder of two or more distinct offenses in a single count. It is a rule of pleading and "... would in no event be fatal to the count." United States v. Droms, 566 F.2d 361, 363, n. 1 (2d Cir. 1977); United States v. Duncan, 850 F.2d 1104, 1108, n. 4 (6th Cir.1988).

Not every count which charges multiple acts, any one of which could alone constitute a separate offense and be charged in a separate count, is duplicitous. The Advisory Committee notes accompanying Fed.R.Crim.P. 7(c) emphasize that the framers of the rule "... intended to eliminate the use of multiple counts for the purpose of alleging the commission of the offense by different means or in different ways." Therefore, two or more acts,...