the Defendants' motion denied without prejudice.
As to those items, such as jewelry, "medallions," non-coin
collectibles, and coins that are not gold or silver that were allegedly
seized, the warrant clearly specified seizure of only "gold and silver
coins." Accordingly, the Government is directed to return any such items
to the Defendants immediately.
Finally, Defendants DuPurton and Paull seek recovery of "personal
records" that were seized by the Government from the premises pursuant to
the warrant. Other than stating that his records were identified as
"Bob's Personal Matters" on the Government's inventory sheet, DuPurton
does not describe the contents of the documents he claims are not
relevant to the prosecution. Paull describes the records he seeks to
recover as "personal records . . . regarding my sales and my customers.
Some of these records came from prior employment I had over a ten year
period . . . These records included my handwritten notes concerning
personal information about my customers such as their occupation, family
background, leisure activities, addresses and telephone numbers and
preferences regarding their coin collections." (Emphasis added). Paull's
description of the documents establishes that while some of his personal
documents relate to sales prior to his joining Numisgroup, others
apparently involve sales he made while at Numisgroup. Moreover, it is
undisputed that these documents were present in the Numisgroup offices at
the time the warrant was issued. Under these circumstances, Paull's
records may be relevant to the prosecution of this case, and his motion
to suppress and return these records is denied. Because DuPurton has
failed to even appraise the Court of the nature of the records he seeks
to recover, his motion is denied without prejudice.
B. As I to the Numisgroup Defendants' motion to dismiss the indictment
The Numisgroup Defendants contend that the indictment fails to allege
that they personally engaged in any illegal activity. According to them,
the indictment simply alleges that they engaged in the sale and cleaning
of coins, and that they may have overvalued certain coins, but did not
direct salespeople to lie or engage in any other acts of fraud. At the
outset, the Court notes that questions directed to the sufficiency of the
Government's evidence are not considered in ruling on a motion to dismiss
the indictment. U.S. v. Alfonso, 143 F.3d 772, 776 (2d Cir. 1998).
Rather, the indictment is sufficient as long as it contains the elements
of the offense charged and fairly informs the defendant of the charges
against him. U.S. v. Velastegui, 199 F.3d 590, 592 n. 2 (2d Cir. 1999).
Count one of the indictment alleges that "defendants . . . did
knowingly and intentionally conspire to devise and attempt to devise a
scheme or artifice to defraud and to obtain money by false and fraudulent
pretenses. . . ." To allege a conspiracy, the Government is merely
required, to allege that: (i) the defendant agreed with others to commit
the offense; (ii) he knowingly engaged in the conspiracy to commit the
offense that was the object of the conspiracy; and (iii) that an overt
act was committed by a member of the conspiracy in furtherance of the
conspiracy's object. U.S. v. Monaco, 194 F.3d 381, 386 (2d Cir. 1999);
Salameh, 152 F.3d at 145-46. Here, the indictment alleges that the
Numisgroup Defendants agreed with others to execute a scheme to defraud,
and that some thirty-three overt acts were undertaken in furtherance of
this conspiracy. While DuPurton argues that the acts specifically
attributed to him, such as cleaning coins, are not unlawful, the Court
observes that there is no requirement that the overt acts taken in
furtherance of the conspiracy be unlawful.
U.S. v. Montour, 944 F.2d 1019, 1026 (2d Cir. 1991) ("an overt act need
not be inherently criminal to support a conspiracy conviction").
Accordingly, the Court finds that Count One of the indictment is
sufficient to charge the Numisgroup Defendants with conspiracy.
The Numisgroup Defendants offer an additional argument for dismissal of
Count One, namely, that it actually alleges numerous individual
conspiracies and should therefore be dismissed as multiplicitous. The
Defendants' argument is without merit. The indictment alleges a single
conspiracy with a common goal among all participants — the
fraudulent sale of overvalued coins. The fact that this goal is achieved
primarily through the efforts of the individual salespersons does not
alter the fact that a single conspiracy exists. That a conspiracy may
involve multiple stages or spheres of operation is not sufficient to
transform a single conspiracy into multiple conspiracies. U.S. v.
Berger, 224 F.3d 107, 114-15 (2d Cir. 2000). The Defendants' remaining
arguments that DuPurton lacked knowledge of the fraudulent activities of
rogue sales persons is a matter of fact to be decided by the jury.
Counts Two through Thirty-Four each allege that the defendants "did
knowingly and intentionally devise . . . a scheme or artifice to defraud
and to obtain money by materially false and fraudulent pretenses" and
mailed invoices to various addresses by United States Mail to do so. The
elements of a charge of mall fraud are (i) a scheme to defraud; (ii) to
obtain money or property; and (iii) use of the mails to further the
scheme. U.S. v. Autuori, 212 F.3d 105, 115 (2d Cir. 2000); U.S. v.
Kinney, 211 F.3d 13, 17 (2d Cir. 2000). The language of the indictment
clearly alleges each of these elements. Moreover, taken as a whole, the
indictment clearly describes the "scheme or artifice" to entail
Numisgroup making false representations as to the value of coins sold.
Numisgroup and DuPurton are specifically alleged as defendants
participating in each count. Accordingly, the indictment sufficiently
states counts of mail fraud against the Numisgroup Defendants.
Therefore, the motions by the Numisgroup Defendants to dismiss the
indictment are denied.
C. As to the motions for severance
The Numisgroup Defendants seek severance of their trial from that of
the other Defendants on the ground that DuPurton intends to introduce
evidence which would exonerate him and incriminate his Co-Defendants.
DuPurton does not provide details of this evidence, other than to
characterize it as "certain self-incriminating statements of
co-defendants that are exculpatory as to him." Defendant Smith also seeks
severance of his trial from his co-defendants, relying on DuPurton's
claim that he intends to present an antagonistic defense.
There is a preference in the federal system for joint trials of
defendants who are indicted together, Zafiro v. U.S., 506 U.S. 534, 537,
113 S.Ct. 933, 122 L.Ed.2d 317 (1993), and the court should sever trials
of co-defendants under Rule 14 only if there is a serious risk that a
joint trial would compromise a specific trial right of one of the
defendants, or prevent the jury from making a reliable judgment about
guilt or innocence. Id. at 539, 113 S.Ct. 933; U.S. v. Rahman, 189 F.3d 88,
122 (2d Cir. 1999). Defenses that incriminate a co-defendant "are not
prejudicial per se" and the trial court has the discretion to tailor
appropriate relief under the facts of the particular case. Id. at 539, 113
S.Ct. 933; Salameh, 152 F.3d at 116. Indeed, the Supreme Court has held
that, instead of severance, "limiting instructions often will suffice to
cure any risk of prejudice." Id. at 539, 113 S.Ct. 933. A defendant
seeking severance because he intends to present a defense antagonistic to
his codefendant must, at a minimum, make a factual demonstration that
"acceptance of [his] defense would tend to preclude the
acquittal of [the] other [defendant]." Salameh, 152 F.3d at 116.
DuPurton argues that his defense strategy will first entail attempting
to disprove that any of his salespeople made fraudulent representations
concerning the coins they sold. He also intends to contend that any such
statements "were beyond [the] knowledge and/or control" of the
corporation and himself. The jury's acceptance of either of these
defenses would not prevent the jury from acquitting the other
Defendants, and thus, the defenses are not sufficiently antagonistic to
require severance under Zafiro.
As to DuPurton's claim that he intends to offer "self-incriminating
statements of co-defendants that are exculpatory as to him," the Court is
unable to determine how he intends to present such evidence. Unlike the
typical situation in Bruton v. U.S., 391 U.S. 123, 88 S.Ct. 1620, 20
L.Ed.2d 476 (1968) and Gray v. Maryland, 523 U.S. 185, 192, 118 S.Ct.
1151, 140 L.Ed.2d 294 (1998), in which the Government seeks to introduce
a confession by one defendant which would incriminate a co-defendant,
DuPurton would not be offering his statement as evidence against his
co-defendant, and thus, would be unable to introduce the statement as a
nonhearsay admission under Fed.R.Evid. 801(d)(2). ("A statement is not
hearsay if . . . the statement is offered against a party. . . ."); U.S.
v. Harwood, 998 F.2d 91, 97-98 (2d Cir. 1993) (defendant could not
introduce statement made by co-defendant as admission by party
opponent). Moreover, academically, the Court has difficulty envisioning
how DuPurton intends to harmonize the introduction of an allegedly
inculpatory statement by a co-defendant with his stated intent to present
a defense that no fraudulent representations were made by any of the
salespersons (although the Court is aware that alternative defenses may
be asserted). In any event, the Court is not prepared to grant severance
of DuPurton's trial on the basis of his vague description of the evidence
he intends to offer, particularly in light of the well-established
preference for joint trials in the federal system.
Accordingly, the Defendants' motions for severance are denied.
D. As to the Bill of Particulars
Both the Numisgroup Defendants and Paull move for a Bill of
Particulars. The Numisgroup Defendants request that the Government
specifically identify individuals referred to in the indictment as simply
"employees" or "others"; to specify which coins were allegedly
misrepresented and the Government's estimate of the true value of those
coins; and which corporate Defendants are alleged to be responsible for
each mailing. Paull additionally requests information regarding the
specific nature of the false representations; the identity of the person
actually mailing the fraudulent matter; and the amount of money obtained
from each fraud.
The Court finds that the superseding indictment is sufficiently
specific as to the essential elements of each count. An indictment is
sufficient if it contains the elements of the offense charged and fairly
informs a defendant of the charge against which he must defend and
enables him to pursue the matter and not run afoul of future prosecutions
for the same offense. U.S. v. Walsh, 194 F.3d 37, 44 (2d Cir. 1999);
U.S. v. Davidoff, 845 F.2d 1151, 1154 (2d Cir. 1988); McKay, 70 F.
Supp.2d at 212. As the Second Circuit has stated:
The function of a bill of particulars is to provide
defendant with information about the details of the
charge against him, if this is necessary to the
preparation of his defense, and to avoid prejudicial
surprise at trial. . . . A bill of particulars should
be required only where the charges of the indictment
are so general that they do not advise the defendant
of the specific acts of which he is accused. . . .
Acquisition of evidentiary detail is not the function
of a bill of particulars. . . . So long as the
was adequately informed of the charges against him and
was not unfairly surprised at trial as a consequence
of the denial of the bill of particulars, the trial
court has not abused its discretion.
U.S. v. Torres, 901 F.2d 205, 234 (2d Cir.), cert. den. 498 U.S. 906, 111
S.Ct. 273, 112 L.Ed.2d 229 (1990) (emphasis added).
The superseding indictment is sufficiently specific. It tracks the
language of the statute on each count, McKay, 70 F. Supp.2d at 212; U.S.
v. Aliperti, 867 F. Supp. 142 (E.D.N.Y. 1994), and sufficiently appraises
the Defendants of enough specific detail surrounding each allegation to
enable them to prepare a defense. Much of the information, such as the
identity of the corporate Defendant alleged to be responsible for each
mailing or the coins alleged to be the subject of the false statements,
should be readily apparent to the Defendants from their own records. In
addition, the Government has made extensive disclosure of evidence to the
Defendants and is under a continuing obligation to do so, largely
ameliorating any need for a bill of particulars to flesh out allegations
in the indictment. Walsh, 194 F.3d at 47 ("a bill of particulars is not
necessary where the government has made sufficient disclosures concerning
its evidence and witnesses by other means").
Accordingly, the motions by the Numisgroup Defendants and Paull for a
Bill of Particulars is denied.
E. As to the motions for various discovery
The Numisgroup Defendants also move for discovery of evidence involving
Michael Zelen, the Government's alleged Confidential Informant, pursuant
to Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963).
They seek "instruction[s] he received from his supervisory agents,
[records] of contacts [the Government] made with him, what kind of
promises were made to him, [and] whether he was instructed to record his
dealings with the putative targets." The Government has already produced
a plea agreement relating to a charge faced by Zelen in Pennsylvania.
Brady requires the Government to disclose material exculpatory evidence
known to it but does not require the government to disclose all evidence
in its possession that might assist defense preparation. U.S. v.
Middlemiss, 217 F.3d 112, 123 (2d Cir. 2000). The Government asserts that
it is aware of its Brady obligations, that it has turned over all
applicable materials to the defense, and that it acknowledges its
continuing duty to do so. In the absence of a particularized showing by
the defense that certain materials covered by Brady are being withheld,
the Court accepts the Government's good faith assertion as sufficient.
U.S. v. Jones, 2000 WL 1448640 (S.D.N.Y. 2000); U.S. v. Juliano, 2000 WL
640644 (S.D.N.Y. 2000).
Accordingly, the Numisgroup Defendants' motion for additional discovery
F. As to the motion to quash the grand jury subpoenas
The Defendants moved to quash grand jury subpoenas served upon several
former employees of Numisgroup on the grounds that the Government sought
their testimony to assist in preparation for trial, not for genuine
On November 15, 2000, this Court heard from both counsel on the
Defendants' motion to quash the subpoenas. At that time, the Court denied
the Defendants' motion to the extent that the subpoenas sought
information concerning new victims or crimes not contained in the current
indictment. The Court sees no reason to revisit the November 15, 2000
ruling at this time.
G. DuPurton's motion for bail modification
Defendant DuPurton separately submitted a letter application for a
modification of his bail conditions. Following
arraignment, DuPurton was released on a bail package consisting of a bond
secured by real property worth approximately $200,000 and $40,000 in
cash. In April 2000, the bail package was modified to permit DuPurton to
engage in limited transactions with other coin dealers under specific
DuPurton's current application for bail modification is ambiguous.
After reciting the history of the case, DuPurton's counsel states that he
has been unable to engage in any permitted coin transactions because all
of his assets have been frozen by the Government. The following paragraph
expresses DuPurton's belief that the Government's case is without merit,
and that it has dramatically affected DuPurton's ability to make a
living. Counsel then explains that the case imposes a significant burden
on counsel for preparation and presentation of the defense case. The
final paragraph states "we respectfully request that the conditions of
bail be modified so that $40,000 presently being held by the Court as a
portion of the security underlying the personal recognizance bond . . . be
released so that it can be used for legal fees and expenses related to
the defense of the case." The Government has indicated that it takes no
position on this request.
The Court is inclined to read the portion of DuPurton's letter
regarding his inability to make the coin transactions because of the
Government seizure as an explanation why he now needs to obtain the
$40,000 in cash to continue financing his defense. The Court finds that
the continued financing of a defense is an acceptable basis for modifying
the bail conditions, while replenishment of an inventory to begin making
wholesale coin transactions is not. Therefore, in light of the
Government's failure to object to DuPurton's request, the bail conditions
are modified to permit DuPurton to withdraw the $40,000 deposited with
this Court and to expend such funds solely for fees and expenses
connected with the defense of this case.
For the foregoing reasons, the motions to suppress all evidence seized
pursuant to the search warrant are DENIED. The motions to suppress and
return those coins seized pursuant to warrant that the Government does
not intend to offer as evidence at trial are GRANTED UNLESS the
Government files a superseding indictment containing a forfeiture count
within 30 days of December 1, 2000. The motions to suppress and return
items of jewelry and coins that are not gold or silver, and non-coin
collectibles is GRANTED. The motions by the Numisgroup Defendants to
dismiss the indictment are DENIED. The motions for severance are DENIED.
The motions for additional discovery are DENIED. The motion to quash the
grand jury subpoena is DENIED on the terms set by this Court on November
15, 2000. Defendant DuPurton's motion for bail modification is GRANTED,
and the Clerk of the Court is directed to release the $40,000 deposited
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