US v. Keller, 89 CR 793.

• Decision Date: 25 January 1990
• Docket Number: No. 89 CR 793.,89 CR 793.
• Parties: UNITED STATES of America, Plaintiff, v. Leonard KELLER, et al., Defendants.
• Court: U.S. District Court — Northern District of Illinois

730 F. Supp. 151

UNITED STATES of America, Plaintiff, v. Leonard KELLER, et al., Defendants.

No. 89 CR 793.

United States District Court, N.D. Illinois, E.D.

January 25, 1990.

COPYRIGHT MATERIAL OMITTED

Harvey Silets, William G. Sullivan, Chicago, Ill., for Leonard Keller.

George Murtaugh, Chicago, Ill., for David Weisbaum.

Howard Weintraub, Atlanta, Ga., Louis B. Garippo, Louis B. Garippo, Ltd., Chicago, Ill., for Carl Franco.

Steven Ludwick, Atlanta, Ga., Terence P. Gillespie, Genson, Steinback & Gillespie, Chicago, Ill., for Mark Brotman.

Nan Nolan, Chicago, Ill., for Philip Singer.

Bernard Panetta, Caballero, Panetta & Ortega, El Paso, Tex., Nan Nolan, Kahn, Robinson, Curley & Clayton, Chicago, Ill., for Minerva Franco and Edward Franco.

Michael Monico, Monico, Pavich & Spevack, Chicago, Ill., for Steven Waitzman.

Joseph V. Roddy, Chicago, Ill., for Timothy Urwin.

Patrick A. Tuite, Cynthia Giacchetti, Tuite, Mejia & Giachetti, Chicago, Ill., for Mark Sonshine.

Thomas D. Decker, Thomas D. Decker & Assoc., Chicago, Ill., for Robert Peterson and Herman Diehl.

John Newman, Caryn Jacobs, Joan Safford, Asst. U.S. Attys., for U.S.

MEMORANDUM OPINION AND ORDER

HART, District Judge.

Before the court are a number of pretrial motions of the defendants.¹ They are discussed below.

Motions to Dismiss or Strike The Indictment

Defendants have moved to dismiss or strike various portions of the indictment. A sufficient indictment should state all the elements of the offense, inform the defendant of the charges so he or she may prepare a defense, and enable the defendant to plead the judgment as a bar to a later prosecution. United States v. Gironda, 758 F.2d 1201, 1209 (7th Cir.), cert. denied, 474 U.S. 1004, 106 S.Ct. 523, 88 L.Ed.2d 456 (1985).

Defendants argue Count One, which claims a RICO conspiracy in violation of 18 U.S.C. § 1962(d), "is impermissibly vague and duplicitous in that it fails to allege how the defendants were engaged in a single conspiracy." It is alleged that an enterprise (referred to as the "Keller Currency Exchanges") existed and that it consisted of 67 currency exchanges located in 13 states. Each exchange is owned in part by defendant Keller and three other defendants have partial interests in some of the exchanges. The defendants are owners, managers, and/or employees of various Keller Currency Exchanges. The alleged predicate acts are violations of certain laws governing currency transactions, see 31 U.S.C. §§ 5322(a), 5322(b), 5324, and violations of the Travel Act, 18 U.S.C. § 1952, which defines the currency violations as unlawful activity under the Travel Act. See also 18 U.S.C. §§ 1961(1)(B) & (E). The alleged currency law violations consisted of failing to file required currency transaction reports ("CTR") for cash transactions with an individual exceeding $10,000 in a single day. See 31 U.S.C. § 5313; 31 C.F.R. §§ 103.22(a)(1), 103.26(a)(1). These transactions were with two undercover agents using the aliases Dick Jones and Terrance Jordan.² Cash transactions exceeding $10,000 were allegedly divided into several smaller transactions and money orders were sold that were not consecutive in number and with different dates. Thirty currency transactions of over $10,000 each resulted in the issuance of 1214 money orders, each under $10,000 and totalling about two million dollars. The money orders were issued from 40 of the Keller Currency Exchanges. Cash taken to one currency exchange sometimes resulted in the issuance of money orders from one or more other exchanges. No defendant is alleged to be directly involved in more than one transaction except Weisbaum who is alleged to be involved in two and Keller who is alleged to be involved in most of the 30. It is further alleged that Keller agreed to make all the exchanges available to the agents and that he charged fees in excess of the normal charge in exchange for not filing CTR's. It is also alleged that defendants "agreed to conduct the enterprise through a pattern of racketeering" which consisted of the above described structuring of transactions and failure to file the CTR's. Furthermore, it is alleged that defendants Keller, Carl Franco, Brotman, Singer, Urwin, and Sonshine provided false and misleading information to government agents regarding the currency transactions with Jones and Jordan in order to cover up acts committed pursuant to the conspiracy.

Defendants contend this is a classic example of trying to tie together into a single conspiracy the various "spokes" that surround a single "hub" (Keller) even though there is no "rim" forming the "spokes" into a "wheel." See Kotteakos v. United States, 328 U.S. 750, 755, 66 S.Ct. 1239, 1243, 90 L.Ed. 1557 (1946). As with most of the cases cited by the parties, Kotteakos involved the question of whether convictions were improper because, although a single conspiracy was alleged in the indictment, the proof at trial was of multiple and separate conspiracies. As regards the issue now before this court, the question is whether a single conspiracy is alleged in Count One, not whether the government's proof at trial will only show multiple conspiracies. See United States v. Antonucci, 663 F.Supp. 245, 246 (N.D. Ill.1987). The indictment in this case alleges all defendants agreed to work together, not simply that each of the other defendants agreed to perform certain activity with Keller. This allegation is further supported by allegations that most of the alleged transactions involved issuing money orders from more than one currency exchange, not just the one a particular defendant worked at. A single conspiracy is alleged in Count One. Whether the evidence at trial will prove a single conspiracy is a separate question that is not addressed.

Defendants seek to strike the allegations in paragraphs 13(A) through 13(E) of Count One regarding alleged false and misleading statements on the ground that they refer to "overt acts and statements outside the scope of and not `in furtherance' of the conspiracy." It is alleged in ¶ 5 of the indictment that defendants conspired to "disguise and conceal large currency transactions over $10,000." Denying that they engaged in transactions exceeding $10,000, denying that they knew the undercover agents, and claiming that necessary reports were filed could contribute to disguising and concealing the large currency transactions. For example, telling investigators that Jones had only made six or seven transactions and that Jones had not made any transactions in the past six months could mislead investigators into limiting their search of exchange records and thereby help to conceal the large currency transactions. Claiming that necessary CTR's had been filed could lead investigators to discontinue the investigation at that exchange. Most of ¶ 13 will not be stricken. Certain allegations, however, whether or not admissible as evidence, are not acts that could have furthered the alleged conspiratorial purpose of concealment by providing false information. Paragraphs 13(A)(vii),³ 13(A)(viii), and 13(B)⁴ of Count One shall be stricken from the indictment.

Defendants also argue the paragraphs should be stricken because of the manner in which the statements were obtained, i.e., without informing defendants Jones and Jordan were undercover agents. Defendants cite no authority in support of this proposition. Absent a showing that the statements should be suppressed because involuntary or otherwise improperly obtained, the paragraphs will not be stricken based upon how the information was obtained.

Defendants also argue the paragraphs should be stricken because the statements obtained violate the "exculpatory no" doctrine. The government argues the exculpatory no doctrine no longer has any validity. As discussed below, this court holds otherwise. However, whether the statements should be excluded under that doctrine would require consideration of details and facts not contained in the indictment. United States v. Gilpin, 678 F.Supp. 1361, 1363 (N.D.Ill.1988). The allegations of the indictment are generally insufficient to determine if defendants gave simple negative answers among other things. In any event, defendants cite no authority to support their proposition that the exculpatory no doctrine is a generally applicable evidentiary rule, not just a defense to a charge under 18 U.S.C. § 1001. Paragraph 13 does not charge a violation of § 1001 and the exculpatory no doctrine will not be extended beyond that statute. The remaining allegations of ¶ 13 will only be stricken to the extent the statements are found inadmissible at trial.

The indictment sufficiently alleges the elements of a RICO claim and defendants have sufficient information in order to prepare a defense. There is no basis for dismissing Counts One and Two on the ground the RICO enterprise and its relationship to the predicate acts are not adequately alleged. There are also adequate allegations of a pattern of racketeering activity. Furthermore, the RICO counts will not be dismissed on the ground that any portion of the RICO statute is unconstitutionally vague.

Defendants argue that most of the currency transaction counts must be dismissed because the currency transactions involved government money being used by the undercover agents. Section 5313 of Title 31 provides that the Secretary of the Treasury shall prescribe regulations as to what currency transactions must be reported. Those regulations exempt "deposits, or withdrawals, exchanges of currency or other payments and transfers by local or state governments, or the United States or any of its agencies or instrumentalities." 31 C.F.R. § 103.22(b)(2)(iii). A number of courts have held that exemption applies only to transactions by government agencies in their normal course of government business, not transactions by undercover government agents. United States v. Hernando Ospina, 798 F.2d 1570, 1579-80 (11th Cir.1986); United...