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UNITED STATES v. ABRAMS

June 21, 1982

UNITED STATES of America
v.
Martin B. ABRAMS, et al., Defendants



The opinion of the court was delivered by: STEWART

MEMORANDUM DECISION

Following our dismissal of Counts 16-18 of the original indictment for their factual insufficiency, see United States v. Abrams, 539 F. Supp. 378 at 390 (S.D.N.Y.1982), the government filed a superseding indictment containing much greater factual detail as to these counts. All five defendants subsequently filed a new set of pretrial motions directed to the superseding indictment. We address each motion in turn.

 Defendant Abrams' Motion to Dismiss Count 16

 Defendant Abrams' motion to dismiss Count 16 of the superseding indictment is denied. The count in question alleges that defendant Abrams violated 18 U.S.C. § 1510 *fn1" by "unlawfully, wilfully, knowingly and corruptly" endeavoring by means of bribery to delay and prevent one Herbert Ristau from communicating information to the Securities and Exchange Commission concerning cash sales to him of Mego merchandise. Defendant Abrams argues that this count is insufficient as a matter of law because it fails to allege the existence of a criminal investigator whose investigation was obstructed by Abrams' alleged conduct, and because it fails to allege that he had actual knowledge of any federal criminal investigator who was investigating Mego. We reject these arguments.

 To prove a violation of 18 U.S.C. § 1510, the government must prove beyond a reasonable doubt that (1) the defendant wilfully endeavored by one of the means set forth in the statute to prevent the communication of information relating to a violation of the federal criminal laws; (2) that the action was taken to prevent the communication from being made to a criminal investigator, that is, to an individual authorized to conduct or engage in investigations of or prosecution for such violations; and (3) that the defendant knew that the recipient or intended recipient of the information was a criminal investigator, as defined above. United States v. San Martin, 515 F.2d 317, 320 (5th Cir. 1975). Significantly, the government need not prove that a federal criminal investigation was actually taking place to prove a violation of section 1510. United States v. Zemek, 634 F.2d 1159, 1176-77 (9th Cir. 1980), cert. denied, 450 U.S. 916, 101 S. Ct. 1359, 67 L. Ed. 2d 341 (1981); United States v. Lippman, 492 F.2d 314, 317 (6th Cir. 1974), cert. denied, 419 U.S. 1107, 95 S. Ct. 779, 42 L. Ed. 2d 803 (1975). Nor need the government prove that the accused had actual knowledge that the obstructed party either conveyed information about the accused or was about to do so. United States v. Kozak, 438 F.2d 1062, 1065 (3rd Cir.), cert. denied, 402 U.S. 996, 91 S. Ct. 2180, 29 L. Ed. 2d 162 (1971). Rather, the scienter requirement of section 1510 is satisfied by a showing of a reasonably founded belief that information had been or was about to be given. Id. at 1066. See also United States v. Zemek, 634 F.2d at 1176; United States v. San Martin, 515 F.2d at 321. Thus in this case, the government's failure to allege either the existence of a criminal investigator or actual knowledge that an investigator was investigating Mego does not render the count legally insufficient. The government has alleged all the essential elements of a section 1510 offense with sufficient factual particularity to allow the defendant to prepare his defense. The motion to dismiss is thus denied.

 Defendants Abrams, Siegel and Pierce's Motion to Dismiss Count 17 as Legally Insufficient

 Defendants Abrams, Siegel and Pierce move to dismiss as legally insufficient Count 17 of the superseding indictment which also charges a violation of 18 U.S.C. § 1510. Defendant Abrams, joined by defendant Siegel and Pierce, argues that Count 17 should be dismissed because it fails to allege that he knew or reasonably believed that the disinterested members of the Audit Committee were about to communicate information to federal criminal investigators. Defendant Pierce reiterates the argument made by defendant Abrams in connection with Count 16 that the failure to allege the existence of a federal investigation at the time of the alleged acts of misrepresentation renders the count legally insufficient. Defendant Pierce also argues that the "charges should be dismissed to the extent that SEC employees constitute federal criminal investigators", asserting that no SEC employee can be a criminal investigator for the purposes of the statute prior to any communication between the SEC and either the United States Attorney's Office or another federal agency whose function is to conduct criminal investigations. We find all these arguments without merit.

 On a motion to dismiss, an indictment is to be read in a common sense manner. United States v. Anderson, 532 F.2d 1218, 1222 (9th Cir.), cert. denied, 429 U.S. 839, 97 S. Ct. 111, 50 L. Ed. 2d 107 (1976). This includes reading the indictment to include facts that are necessarily implied by the specific allegations made. United States v. Silverman, 430 F.2d 106, 111 (2d Cir. 1970), cert. denied, 402 U.S. 953, 91 S. Ct. 1619, 29 L. Ed. 2d 123 (1971). In this case, the government has alleged that defendants Abrams, Pierce and Siegel "did unlawfully, wilfully, knowingly and corruptly endeavor by means of misrepresentation to obstruct, delay, and prevent the disinterested members of the Audit Committee of the Mego Board of Directors, its special counsel and the members and employees of his law firm from communicating information relating to a violation of criminal statutes of the United States ... to the United States Attorney's Office, criminal investigators of the Department of Justice, the Securities and Exchange Commission and to other federal criminal investigators." Superseding Indictment at P 18. Fairly read, this allegation necessarily implies that defendant Abrams, Pierce and Siegel knew or reasonably believed that the members of the committee were about to communicate information to criminal investigators. One simply cannot "wilfully obstruct" or "knowingly prevent" an act without knowing, or at least reasonably believing, that that act is about to happen.

 As to defendant Pierce's argument concerning the nonexistence of a federal criminal investigation at the time of his alleged misrepresentation, we repeat the point made in response to defendant Abram's objections to Count 16: to prove a violation of section 1510, the government need not prove that an investigation was actually taking place. See United States v. Zemek, 634 F.2d at 1176-1177; United States v. Lippman, 492 F.2d at 317. Contrary to defendant Pierce's suggestion that this conclusion has "no basis in the legislative history" of section 1510, see Memorandum of Law in Support of the Omnibus Motion for Pretrial Relief at 8, we find that this result comports with the express intent of the House Committee that recommended its passage. *fn2" Nor do we find that United States v. Grande, 620 F.2d 1026 (4th Cir.), cert. denied, 449 U.S. 830, 101 S. Ct. 98, 66 L. Ed. 2d 35 (1980), cited by defendant Pierce, requires dismissal of this count. Grande reversed a conviction under section 1510 for insufficiency of proof that the defendant had known that the threatened individual was about to give information to a federal investigator, as opposed to any other law enforcement official. Id. at 1037. In this case, however, the government has specifically alleged that defendants prevented certain individuals from communicating information to federal agents. Accepting these allegations as true for the purposes of this motion, the indictment is sufficient under Grande. *fn3"

 We do not accept defendant Pierce's argument that, as a matter of law, no employees of the SEC could possibly constitute federal criminal investigators for the purposes of this case. The Securities Act of 1933, 15 U.S.C. § 77a et seq., and the Securities Exchange Act of 1934, 15 U.S.C. § 78a et seq., "explicitly empower the SEC to investigate possible infractions of the securities laws with a view to both civil and criminal enforcement". Securities & Exch. Comm'n v. Dresser Industries, 202 U.S. App. D.C. 345, 628 F.2d 1368, 1376 (D.C.Cir.), cert. denied, 449 U.S. 993, 101 S. Ct. 529, 66 L. Ed. 2d 289 (1980). Since section 1510(b) defines a "criminal investigator" as "any individual duly authorized ... to conduct or engage in investigations of or prosecutions for violations of the criminal laws of the United States" (emphasis added), SEC employees would appear to fall within the statutory language. At best, therefore, defendant Pierce has raised a question of fact concerning the status of SEC employees in this case, which is, of course, a matter to be left for trial. *fn4"

 Motions to Dismiss Count 17 as Duplicitous

 Defendants Pierce and Abrams also argue that Count 17 is impermissibly duplicitous, that is, that it charges more than one offense in a single count in violation of Fed.R.Crim.P. 8(a). These defendants note that Count 17 alleges multiple acts of misrepresentation on four separate occasions as constituting the single charge of obstruction of justice. Asserting that the gist of section 1510 is the unlawful endeavor and that each alleged misrepresentation should be viewed as a separate endeavor, they conclude the government has charged four offenses in a single count. We disagree.

 While Fed.R.Crim.P. 8(a) proscribes the charging of more than one offense in one count, Fed.R.Crim.P. 7(c) specifically authorizes alleging in a single count that a single offense was committed by more than one means. The charging of multiple means constituting a single and continuing offense is thus permitted even though the components of that single offense may otherwise be treated as separate offenses. United States v. Kearney, 451 F. Supp. 33, 36 (S.D.N.Y.1978). The question that arises, therefore, is whether the statute under which the defendants have been charged " "by its very nature, contemplates that several separate transactions form a single, continuing scheme, and may therefore be charged in a single count.' " Id. (quoting United States v. Daley, 454 F.2d 505, 509 (1st Cir. 1972)). The language of 18 U.S.C. § 1510 is significant in this regard. Section 1510(a) proscribes the willful endeavor "to obstruct, delay or prevent the communication of information relating to a violation of" federal criminal laws "by means of" bribery, misrepresentation, threats and the like. The gist of the statute is thus the endeavor to obstruct; this endeavor may be attempted by several means. The structure of section 1510 is thus distinct from those of the statutes considered in United States v. Kearney, 451 F. Supp. at 37 (18 U.S.C. § 1702-obstruction of correspondence) or United States v. Tanner, 471 F.2d 128, 138-139 (9th Cir.), cert. denied, 409 U.S. 949, 93 S. Ct. 269, 34 L. Ed. 2d 220 (1972) (18 U.S.C. § 837-transportation of explosives), both cited by defendant Pierce in support of his argument for duplicity here. More similar is 18 U.S.C. § 1503, *fn5" the obstruction of justice statute, which has been specifically found to ...


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