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U.S. v. FRUCHTER
July 11, 2000
UNITED STATES OF AMERICA,
PHILIP FRUCHTER, STEVEN FRUCHTER, LAWRENCE BRAUN, DAUDA YAGUE, A/K/A "CHEIK," MAMADOU SYLLA, MITCHELL GRAND, MIGUEL MERCEDES, SAMBA WILLIAM, MUNINAUTH PULCHAN, A/K/A "RAMISH," AND FRANK SINGH, DEFENDANTS.
The opinion of the court was delivered by: Batts, District Judge.
Defendants are charged in a forty-four (44) count Indictment
with racketeering, conspiracy, mail fraud, and numerous other
offenses. Defendants now move for various forms of relief.
On April 13, 1999, the Government filed a forty-four (44) count
Indictment charging Defendants with racketeering, conspiracy,
mail fraud, and numerous other offenses. Defendants are ten
principals, owners and employees of a mail sorting company called
American Presort, Inc. ("API").
Counts One and Two charge each of the Defendants with violating
the substantive and conspiracy provisions of the Racketeer
Influenced and Corrupt Organizations Act ("RICO"),
18 U.S.C. § 1962, based on their involvement in alleged mail fraud schemes
against the United States Postal Service ("USPS") and clients of
API, as well as acts of bribery of USPS employees, in violation
of 18 U.S.C. § 1962(c). Count Three charges each of the
Defendants with conspiracy to commit mail fraud, postage meter
fraud, false statements and bribery, in violation of 18 U.S.C. § 1341,
501, 1001 and 201. Counts Four through Fifteen charge each
of the Defendants with mail fraud against the USPS in violation
of 18 U.S.C. § 1341 and 1342. Count Sixteen charges Defendants
Steven Fruchter ("Steven Fruchter"), Philip Fruchter ("Philip
Fruchter") and Lawrence Braun ("Braun") with postage meter fraud
of 18 U.S.C. § 501 and 502. Count Seventeen charges Steven
Fruchter with postage meter fraud in violation of 18 U.S.C. § 501
and 502. Counts Eighteen through Twenty-Eight charge each of
the Defendants with making false statements in violation of
18 U.S.C. § 1001 and 1002. Count Twenty-Nine charges Steven
Fruchter, Philip Fruchter and Braun with mail fraud against API
clients in violation of 18 U.S.C. § 1341 and 1342. Counts Thirty
through Forty-Four charge Steven Fruchter, Philip Fruchter, Braun
and Dauda Yague ("Yague") with bribery of Postal Service
employees in violation of 18 U.S.C. § 201 and 202. The
Indictment also contains a forfeiture allegation against
Defendants Steven Fruchter, Philip Fruchter and Lawrence Braun.
Defendants move for various forms of relief. Defendant Steven
Fruchter seeks to dismiss Counts One and Two on the grounds that
the Counts fail to allege a "pattern of racketeering activity" as
required by 18 U.S.C. § 1962. Defendants Mamadou Sylla ("Sylla"),
Miguel Mercedes ("Mercedes"), Samba William ("William"),
Muninauth Pulchan ("Pulchan") and Frank Singh ("Singh") also seek
dismissal of Counts One and Two on the grounds that they did not
participate in the operation, management or direction of the
alleged substantive or conspiracy racketeering violations.
Defendants Braun, Mercedes, Pulchan and Singh move to dismiss
Count Four alleging that it is duplicitous. Defendants Mercedes
and Singh seek dismissal of Counts Five through Fifteen on the
grounds that these Counts fail to allege sufficiently the
fundamental mailing component of 18 U.S.C. § 1341. For the same
reason, Defendant Singh seeks dismissal of Counts Thirteen
through Twenty-Three. Defendant Pulchan seeks to dismiss Counts
Eighteen through Twenty-Eight on the grounds of multiplicity.
Defendant Singh moves to dismiss these same Counts, alleging they
constitute an ex post facto violation. Defendant Braun seeks to
dismiss Count Twenty-Nine on the ground that it is duplicitous.
Defendants Philip Fruchter, Yague and Pulchan seek to suppress
all physical evidence obtained through searches of API. In
addition, Defendant Philip Fruchter requests a Franks hearing
on the reliability of the information provided to the Magistrate
Judge at the time of the application of the search warrants. The
Defendants also request a suppression hearing, alleging that the
warrants were overbroad, the postal inspectors went beyond the
scope of the warrant and that the second warrant was the fruit of
the poisonous tree of the first warrant.
Defendant Yague seeks suppression of his post-arrest statements
on the grounds that he was not advised of his Miranda rights
until after custodial interrogation began, that he did not
understand the rights when they were eventually given and thus he
did not validly waive his rights, and that his statements were
involuntary. Defendant Yague also requests a suppression hearing.
Defendants Sylla, Mitchell Grand ("Grand"), Mercedes, William,
Pulchan and Singh all seek severance from Defendants Steven
Fruchter, Philip Fruchter, Braun and Yague. Defendants argue that
they should not be prejudiced from the spillover of the evidence
against these four principal defendants and that Defendant Yague
gave a statement which implicates each of them. In the
alternative, Defendants argue that the Counts against them should
be severed from the Counts in which they are not named.
Defendants Braun, Grand, Sylla, and William seek various forms
of discovery including bills of particulars, Brady material and
404(b) material. Defendant Grand also seeks the preservation of
the rough notes of Government agents and early production of
Jencks Act material.
Finally, each Defendant joins in the motions of his
co-Defendants to the extent such action is beneficial.
Count One alleges substantive racketeering violations against
all of the Defendants. (Indictment ¶¶ 1-12.) Count Two
incorporates Count One by reference, and alleges that each of the
Defendants "agreed that a conspirator would commit at least two
of the acts of racketeering in the conduct of the affairs of the
enterprise." (Indictment ¶ 15.)
Defendant Steven Fruchter moves for dismissal of Counts One and
Two of the Indictment, for failure to allege a "pattern of
racketeering activity" as required by 18 U.S.C. § 1962.
Defendants Sylla, Mercedes, William, Pulchan and Singh also seek
dismissal of Counts One and Two on the grounds that they did not
participate in the operation, management or direction of the
alleged substantive or conspiracy racketeering violations, as
required in Reves v. Ernst & Young, 507 U.S. 170, 113 S.Ct.
1163, 122 L.Ed.2d 525 (1993).
a. Pattern of Racketeering
The crux of Stephen Fruchter's argument is that the alleged
predicate acts, when viewed in the context of API's day-to-day
operations, constitute "no more than a handful of isolated acts
that account for a minuscule percentage of the business of API."
(Stephen Fruchter Mem. at 8.) Thus, Stephen Fruchter argues, they
are "no more than sporadic activity." (Stephen Fruchter Mem. at
"Review of a criminal RICO indictment . . . is governed by Rule
7(c)(1) of the Federal Rules of Criminal Procedure, which only
requires that the indictment be a plain, concise and definite
written statement of the essential facts constituting the offense
charged." United States v. Reale, No. 96 Cr. 1069, 1997 WL
580778 at *5, (S.D.N.Y. Sept.17, 1997) (internal quotations
omitted). "An indictment need only provide a defendant with
sufficient notice to permit him to defend against the charges and
to bar future charges that may place him in double jeopardy."
United States v. Wang, No. 98 Cr. 0199, 1998 WL 556160 at *1,
(S.D.N.Y. Aug.31, 1998) (citing Hamling v. United States,
418 U.S. 87, 117, 94 S.Ct. 2887, 41 L.Ed.2d 590 (1974) and United
States v. Tramunti, 513 F.2d 1087, 1113 (2d Cir. 1975)).
A "pattern of racketeering activity" has three components: 1)
at least two predicate acts of racketeering activity within ten
years of one another; 2) interrelatedness of the predicate acts;
and 3) the predicate acts reveal "continued, or the threat of
continued, racketeering activity." United States v. Diaz,
176 F.3d 52, 93 (2d Cir. 1999).
The relatedness component may be satisfied by pleading
predicate acts that have "the same or similar purposes, results,
participants, victims, or methods of commission." Id. Further,
"[t]wo [predicate] . . . acts that are not related to each other
may nevertheless be related indirectly because each is related to
the RICO enterprise." United States v. Minicone, 960 F.2d 1099,
1106 (2d Cir. 1992) (internal quotations omitted).
"The continuity prong of a RICO pattern `is both a closed-and
open-ended concept, referring either to a closed period of
repeated conduct, or to past conduct that by its nature projects
into the future with a threat of repetition.'" Diaz, 176 F.3d
at 93 (citing H.J. Inc. v. Northwestern Bell Tel. Co.,
492 U.S. 229, 241, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989)). Closed-end
continuity may be demonstrated by "a series of related predicates
extending over a substantial period of time." Cofacredit, S.A.
v. Windsor Plumbing Supply Co., 187 F.3d 229, 242 (2d Cir. 1999)
(in context of civil RICO, closed-end continuity shown when
predicate acts occur over period of two or more years). The
continuity prong also may be satisfied by showing open-end
continuity; for open-end continuity, the predicate acts need not
extend over a substantial period of time, but there must be "a
threat of continuing criminal
activity beyond the period during which the predicate acts were
Here, it is clear that Count One of the Indictment has
sufficiently alleged a pattern of racketeering activity. The
Indictment alleges fifty-one (51) predicate acts occurring
between approximately June 1994 and June 14, 1997. (Indictment ¶¶
6-12.) Relatedness is also sufficiently pled, as all of the
predicate acts are alleged to have the same purpose and results,
namely, defrauding of the USPS and certain clients of API.
Further, the acts are alleged to have been committed by many of
the same Defendants, and are grouped in the Indictment according
to methods of commission. See United States v. Gelb,
881 F.2d 1155, 1163 (2d Cir. 1989) (relatedness in criminal RICO satisfied
where each of defendant's schemes "sought to cheat the [United
States] Postal Service by not paying the appropriate postage;"
acts included burying unpaid mail beneath layers of metered, paid
mail, use of stolen postage meter, tampering with postage meters,
and bribery of USPS employees).
The alleged predicate acts span three years, thus closed-end
continuity is sufficiently pled. The nature of the alleged
predicate acts suggests that open-end continuity is also
sufficiently pled, since a jury could infer that similar acts
would have continued but for the intervention of law enforcement.
See Gelb, 881 F.2d at 1163-64 (continuity satisfied in criminal
RICO when predicate acts continued over five years and "but for
their discovery surely would have continued").
Accordingly, Stephen Fruchter's motion to dismiss Counts One
and Two, for failure to plead sufficiently a pattern of
racketeering activity, is hereby DENIED.
Defendants Mercedes, Pulchan, Singh, Sylla and William also
move to dismiss Counts One and Two pursuant to Reves v. Ernst &
Young, 507 U.S. 170, 113 S.Ct. 1163, 122 L.Ed.2d 525 (1993),
asserting that they did not participate in the operation or
management of the enterprise or play a part in directing the
enterprise's affairs.*fn1 (See, e.g., Singh Mem. at 1-2; Sylla
Mem. at 1-6.)
Specifically, Singh asserts that a defendant must be alleged to
have a managerial or operational role in the operation of the
enterprise in order to be subject to RICO liability, (Singh Mem.
at 1-2), and that the RICO charges against Singh allege only
aiding and abetting liability, not substantive RICO or RICO
conspiracy. (Id. at 2.) Pulchan, Sylla and William assert that,
notwithstanding Sylla's title as "production manager" and
Pulchan's job description as a "night shift manager," their
duties were "strictly ministerial" and "involved almost no
exercise of discretion at all." (Sylla Mem. at 5; Pulchan Notice
of Motion ¶¶ 12-13; Ltr. from Daniel Nobel, Esq., dated Dec. 21,
1999, at 1-2, 3.) In addition to the foregoing arguments,
Mercedes asserts that he is only one of the technicians who
worked with the Bell & Howell mail sorting machines. (Mercedes
Mem. at 68.)
The provision of the RICO statute under which the Defendants
are charged in Count One provides that "[i]t shall be unlawful
for any person employed by or associated with any enterprise
engaged in . . . interstate . . . commerce, to conduct or
participate, directly or indirectly, in the conduct of such
enterprise's affairs." 18 U.S.C. § 1962(c). In interpreting this
provision, the Supreme Court, in Reves, 507 U.S. 170, 179, 113
S.Ct. 1163, 122 L.Ed.2d 525 (1993), held that to "participate . .
. in the conduct of the enterprise's affairs, one must
participate in the operation or management
of the enterprise." The Supreme Court noted that while "RICO
liability is not limited to those with primary responsibility for
the enterprise's affairs . . . some part in directing the
enterprise's affairs is required." Id. at 179, 113 S.Ct. 1163.
The Supreme Court also held that the word "participate," as used
in the RICO statute, was more restrictive than the phrase "aid
and abet," which encompasses all assistance rendered by works,
acts, encouragement, support, or presence. Id. at 178, 113
However, if any conclusion may be drawn from the plethora of
post-Reves decisions, it is only "that the commission of crimes
by lower level employees of a RICO enterprise may be found to
indicate participation in the operation or management of the
enterprise but does not compel such a finding." United States v.
Allen, 155 F.3d 35, 42 (2d Cir. 1998) (emphasis in original).
As the Court has already noted, an indictment is legally
sufficient "when it charges a crime (1) with sufficient precision
to inform the defendant of the charges he must meet and (2) with
enough detail that he may plead double jeopardy in a future
prosecution based on the same set of events." Reale, 1997 WL
580778 at *5 (citing United States v. Stavroulakis,
952 F.2d 686, 693 (2d Cir. 1992)).
Upon thorough examination of Counts One and Two of the
Indictment, the Court finds Counts One and Two to be legally
sufficient. Both Counts sufficiently track the language of the
RICO statute and set forth the time and place of the alleged
crimes. (See, e.g., Indictment ¶¶ 2, 14.) The allegations in
both Counts adequately "inform the defendant[s] of the charges
[they] must meet" and provide them with enough detail to enable
them to plead double jeopardy in any future prosecution based on
the same events. Stavroulakis, 952 F.2d at 693. Indeed, the
Indictment lists fifty-one predicate acts with specific dates for
each of those acts.
Defendants' arguments that the Reves test cannot be met, are
premature. Defendants argue that the Indictment is legally
insufficient because the Government will not be able to establish
that they were involved in the operation or management of the
enterprise. What the Defendants appear to be challenging is not
the sufficiency of the Indictment, so much as the adequacy of the
evidence upon which the Indictment is based. See, e.g., United
States v. Elson, 968 F. Supp. 900, 905 (S.D.N.Y. 1997) (noting
difference between sufficiency of indictment and adequacy of
evidence to support the charges).
However, it is well established that an indictment that is
valid on its face, such as the Indictment here, may not be
dismissed on the ground that it is based on inadequate or
insufficient evidence. See Reale, 1997 WL 580778 at *6
(collecting cases). Any challenge to the sufficiency of the
evidence should be made pursuant to Rule 29 of the Federal Rules
of Criminal Procedure. See United States v. Harris, 805 F. Supp. 166,
172 (S.D.N.Y. 1992), aff'd, 79 F.3d 223 (2d Cir. 1996)
(denying pretrial motion to dismiss indictment on ground that
evidence was insufficient and stating that close of Government's
case was appropriate time for such a motion); see also United
States v. Payden, 613 F. Supp. 800, 809 (S.D.N.Y.) aff'd,
768 F.2d 487 (2d Cir. 1985) (it is "well established that a facially
valid indictment . . . may not be challenged on the ground that
it was based on inadequate evidence."). Accordingly, Defendants'
motion to dismiss Counts One and Two for failure to satisfy the
Reves test is DENIED.
2. Count Four and Count Twenty-Nine
"An indictment is duplicitous if it joins two or more distinct
crimes in a single count." United States v. Aracri,
968 F.2d 1512, 1518 (2d Cir. 1992). The prohibition against duplicitous
indictments serves the following policy considerations:
avoiding the uncertainty of whether a general verdict
of guilty conceals a finding of guilty as to one
crime and a finding of not guilty as to another,
avoiding the risk that the jurors may not have been
unanimous as to any one of the crimes charged,
assuring the defendant adequate notice, providing the
basis for appropriate sentencing, and protecting
against double jeopardy in a subsequent prosecution.
United States v. Margiotta, 646 F.2d 729, 733 (2d Cir. 1981)
(internal citations omitted).
However, "acts that could be charged as separate counts of an
indictment may instead be charged in a single count if those acts
could be characterized as part of a single continuing scheme."
Aracri, 968 F.2d at 1518. Further, an indictment may allege "in
a single count that . . . the defendant committed [the offense] .
. . by one or more specified means." Fed R. Cr. P. 7(c)(1)
The policy considerations regarding duplicitous indictments
"suggests that a single count of an indictment should not be
found impermissibly duplicitous whenever it contains several
allegations that could have been stated as separate offenses . .
. but only when the failure to do so risks unfairness to the
defendant." Margiotta, 646 F.2d at 733 (stating that risk of
unfairness is "slight" in case of mail fraud "where the essence
of the alleged wrong is the single scheme to defraud and the
various mailings, though they are technically acts that violate
the federal statute, are really the jurisdictional bases for
federal prosecution"). See also United States v. King, No.
98-CR-91A, 2000 WL 362026 at *24 (W.D.N.Y. Mar.24, 2000) (denying
motion to dismiss on alleged duplicity of mail and wire fraud);
United States v. Gordon, 990 F. Supp. 171, 178 (E.D.N.Y. 1998)
(finding multiple transactions and acts alleged in one count of
money laundering permissible and not duplicitous; defendant had
notice of charges against him and could ascertain scope of double
jeopardy); United States v. Brewer, 768 F. Supp. 104, 105
(S.D.N.Y. 1991) (two acts of credit card fraud could be charged
in single count of indictment as part of single scheme to
Accordingly, Defendants' motion to dismiss Counts Four and
Twenty-Nine on grounds of duplicity is hereby DENIED as to both
3. Counts Eighteen through Twenty-Eight
Defendant Singh argues that Counts Eighteen through
Twenty-Eight should be dismissed because they allege eleven
instances of criminal conduct where, "[i]n essence, the conduct
alleged is a single act." (Singh's Mem. at 6.) Singh relies on
United States v. Molinaro, 11 F.3d 853 (9th Cir. 1993), which
dealt with specific language in the bank fraud statute,
18 U.S.C. § 1344, language not present in the statute at issue here,
18 U.S.C. § 1001.
"An indictment is multiplicitous when it charges a single
offense as an offense multiple times, in separate counts, when,
in law and fact, only one crime has been committed." United
States v. Walsh, 194 F.3d 37, 46 (citations omitted). "The basic
inquiry is whether each offense charged requires proof of a fact
which the other does not." United States v. Reed, 639 F.2d 896,
905-906 (2d Cir. 1981) (internal citations omitted; citing
Blockburger v. United States, 284 U.S. 299, 52 S.Ct. 180, 76
L.Ed. 306 (1932)).
Counts Eighteen through Twenty-Eight charge eleven different
instances of false statements, each of which occurred on eleven
distinct dates, each in violation of 18 U.S.C. § 1001. In order
to obtain a conviction on each of Counts Eighteen through
Twenty-Eight, the Government would have to prove that a separate
and distinct false statement was made, in violation of
18 U.S.C. § 1001, on each of the dates alleged in the Indictment. Any of
the Defendants could be convicted of one of the alleged
violations yet be acquitted of another; thus, Counts Eighteen
through Twenty-Eight are not multiplicitous. See United States
v. Biaggi, 675 F. Supp. 790, 799-800 (S.D.N.Y. 1987) (multiple
violations of same statute may be charged in multiple, separate,
counts). Accordingly, Defendant Singh's motion to dismiss Counts
Eighteen through Twenty-Eight is hereby DENIED.
Defendant Singh also argues that Counts Eighteen through
Twenty-Eight must be dismissed because they violate the ex post
facto clause of the Constitution. U.S. Const. art. I, § 9. Singh
argues that dismissal is necessary because 18 U.S.C. § 1001 was
amended on October 11, 1996, and the Indictment charges Singh
with violating 18 U.S.C. § 1001 before and after October 11,
1996, but only tracks the language of 18 U.S.C. § 1001 after its
Prior to October 11, 1996, the statute read, in pertinent part:
Whoever, in any matter within the jurisdiction of
any department or agency of the United States
knowingly and willfully falsifies, conceals or covers
up by any trick, scheme, or device a material fact,
or makes any false, fictitious or fraudulent
statements or representations, . . . or makes or uses
any false, fictitious or fraudulent statement or
entry . . .
18 U.S.C. § 1001 (1976) (emphases added) (current version at
18 U.S.C. § 1001 (1999)). After amendment in October 11, 1996, ...