Because the court is neither bound by nor finds sufficient guidance in Frequency Electronics and Broderson, this court declines to follow those cases. Therefore, for the reasons stated above, the court holds that the major fraud statute punishes each execution of a scheme to defraud the government, not individual acts in the furtherance of each execution. The court must next determine whether the indictment charging defendants with one count of major fraud for each submission of an invoice to the government is multiplicitous.
B. Multiplicitous Counts
In determining whether the indictment charging defendants with multiple counts of major fraud is multiplicitous the court again turns to cases discussing the multiplicity issue in the context of the bank fraud statute. Determining what constitutes an "execution" depends upon the particular facts of each case. See e.g., United States v. Wall, 37 F.3d 1443, 1446 (10th Cir. 1994); Lilly, 983 F.2d at 303; Heath, 970 F.2d at 1402; Lemons, 941 F.2d at 318; Molinaro, 11 F.3d at 859-60. The Eighth Circuit held that "the first step in determining the number of offenses is to ascertain the contours of the scheme; once that is done, each execution of that scheme is a separate offense." United States v. Rimell, 21 F.3d 281, 287 (8th Cir. 1994), cert. denied, 130 L. Ed. 2d 362, 115 S. Ct. 453 (1995), petition for rehearing denied, 130 L. Ed. 2d 677, 115 S. Ct. 784 (1995). The First Circuit stated that the central question is "whether a jury could plausibly find that the actions described in the [disputed] counts of the indictment, objectively viewed, constituted separate executions of the [bank fraud] scheme." Lilly, 983 F.2d at 303 (alteration in original).
In determining the unit of offense created by the bank fraud statute, courts have looked to a variety of factors. For example, one court examined whether the scheme involved more than one transaction, bank or sum of money. Lilly, 983 F.2d at 304 (finding a single execution of a scheme where the defendant "assigned to a single bank a single package of documents that consistently misstated a single material fact in order to obtain a single loan, the proceeds of which funded a single real estate purchase"). Another court held that two separate loans from a single bank constituted a single execution of a scheme because the two loans were "integrally related; one could not have succeeded without the other." Heath, 970 F.2d at 1402.
By contrast, in United States v. Poliak, 823 F.2d 371 (9th Cir. 1987), cert. denied, 485 U.S. 1029, 99 L. Ed. 2d 901, 108 S. Ct. 1586 (1988), the defendant set up a check-kiting operation involving three checking accounts at three separate banks in the names of three fictitious businesses. The defendant was charged with ten counts of bank fraud, one for each check written during the scheme. The court held that each time the defendant wrote a check, a separate execution of the scheme to defraud occurred. 823 F.2d at 372.
Likewise, several courts have held that multiple transactions may have a common purpose but constitute separate executions of a scheme when each transaction involves a new and separate obligation to be truthful. Molinaro, 11 F.3d 853; United States v. Harris, 805 F. Supp. 166 (S.D.N.Y. 1992). In Harris, the defendants were charged with misrepresenting the net worth of their corporation to obtain a loan and with six separate extensions of that loan. The court concluded that "each separate extension of the original loan agreement was a separate execution of the charged scheme to defraud the banks." Id. at 175. The court reasoned that the defendants were under a new obligation to be truthful each time that they sought an extension. Id.
The government argues that cases construing the bank fraud statute demonstrate that it is the "movement" of money between financial institutions that constitutes a separately chargeable execution of a scheme to defraud. See Gov.'s Opposition to Def. Connor's Motion to Dismiss, Doc.16, at 12, and cases cited therein. The government concludes that the submission of each invoice is properly charged as a separate execution of the scheme because each invoice sent to the Army caused the movement of money from the Army to defendants. Id. at 13. The court disagrees. None of the cases cited by the government justify the conclusion that the mere movement of money constitutes a separately chargeable execution of a scheme. Rather, courts that considered the issue have found that the movement of money is a relevant factor in determining whether a single or multiple executions of bank fraud have occurred. This was the reasoning used in United States v. Brandon, 17 F.3d 409, 422 (1st Cir. 1994), cert. denied sub nom. Ward v. United States, 130 L. Ed. 2d 34, 115 S. Ct. 81 (1994), a case relied upon by the government, in which the court said that "the number of movements of money involved in the scheme" was a factor, among others, in determining whether the charge was multiplicitous. 17 F.3d at 422 (citing Lilly, 983 F.2d at 305). The Brandon court went on to reason that "each time an identifiable sum of money is obtained by a specific fraudulent transaction, there is likely to be a separate execution of the scheme to defraud." Brandon, 17 F.3d at 422 (emphasis added to original). Significantly, in finding that a scheme to defraud was not multiplicitous, the Brandon court reasoned further that
the scheme was not designed to get a set amount, or a preconceived sum of money. Instead, the scheme functioned by obtaining as many loans as possible depending on the number of buyers [the defendant] could recruit to apply for the mortgages. The structure of the scheme was such that individual buyers would be brought in to submit separate loan applications which would be fraudulently prepared and then sent on to [the bank] for approval and the disbursement of the funds for that individual sale. [The bank] approved each loan separately based on each individual application and each loan corresponded to an individual piece of property, that is, a separate condominium unit. Objectively viewed, each loan application appears to be a repeated execution of the basic scheme and not simply an additional step or stage of one unitary transaction. Although only one bank was involved in the scheme, there were over 176 separate loans to 79 different buyers involving many separate movements of money from [the bank] to the mortgage brokers and from the mortgage brokers to [the defendant] during the fifteen months in which the scheme was in operation.