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U.S. v. CAREY

July 11, 2001

UNITED STATES, PLAINTIFF
v.
RONALD CAREY, DEFENDANT.



The opinion of the court was delivered by: Robert L. Carter, District Judge

  OPINION

Defendant Ronald Carey was charged in Indictment 01 Cr. 72 ("the Indictment") with five counts of making false statements in matters within the jurisdiction of the government (18 U.S.C. § 1001), and two counts of perjury before a grand jury (18 U.S.C. § 1623). He now moves to: (1) dismiss Counts One, Five, Six and Seven for improper venue; (2) transfer the case for trial to the United States District Court for the District of Columbia; (3) dismiss Counts One, Three, Four, Five, Six and Seven for failure to state an offense; (4) dismiss Counts One, Two, Five, Six and Seven for failure to state an offense; (5) strike certain language alleged to constitute surplusage from the Indictment; (6) preclude the government from introducing certain evidence concerning the ultimate disposition of two investigations into Carey's conduct; and (7) require the government to provide Carey with a bill of particulars.

BACKGROUND

In 1988, the government filed an action under the civil remedies provision of the Racketeer Influenced and Corrupt Organizations ("RICO") Act against, inter alia, the International Brotherhood of Teamsters ("IBT"), its General Executive Board ("GEB") and members of the GEB. (Ind. ¶ 11.) The government alleged, among other things, that the leaders of the IBT were operating the union in an undemocratic way and that the leadership had been corrupted by organized crime. Id On March 14, 1989, Judge Edeistein, United States District Judge of this court, signed an order setting the government's claims against the IBT defendants (the "Consent Decree").*fn1 Id.

The Consent Decree established an Independent Review Board ("IRB") to investigate allegations of corruption and influence from organized crime. (Ind. ¶ 12.) It required secret ballot elections by the IBT membership. Id. To ensure the proper functioning of the democratic process, the Consent Decree also provided that the court would appoint an Election Officer to oversee the 1991 IBT election of officers, and, upon request by the government, the 1996 IBT election. Id.

The government exercised its right to have the 1996 election supervised and, pursuant to the government's request, Judge Edelstein signed an order in 1995 that governed the supervision of the 1996 IBT election. (Ind. ¶¶ 12, 13.) Among other things, this order provided that an Election Officer and Election Appeals Master would be appointed by the court, and that they would report periodically to the court on the progress of the election. Id.

¶ 13.) The court retained exclusive jurisdiction to supervise the activities of the Election Officer and the Election Appeals Master. Id. Pursuant to this authority, the court approved the "Rules for the 1995-1996 IBT International Union Delegate and Officer Election" (the "Rules"), which would govern the election. Id. The court appointed Barbara Zack Quindel to act as Election Officer for the 1996 IBT elections. (Ind. ¶ 14.)

Carey, who had been elected General President of the IBT in the 1991 election, ran for reelection in 1996 against James P. Hoffa. (Id. ¶ 16.) After Quindel finished counting the ballots, she determined that 237, 028 IBT members voted for Carey and 221, 110 members voted for Hoffa. (Ind. ¶ 17.)

Following the election and a review of campaign contribution and expenditure reports, Quindel initiated an investigation into possible Rules violations. (Ind. ¶ 29.) On July 17, 1997, representatives of Quindel interviewed Carey under oath at a deposition. Id. On August 21, 1997, Quindel ordered a rerun of the 1996 IBT election after determining that misuse of IBT funds benefited the Carey campaign. Id. Shortly thereafter, Quindel discovered information that led her to recuse herself. See United States v. IBT, 247 F.3d 370, 376 (2d Cir. 2001). On September 29, 1997, Judge Edelstein designated former federal District Judge Kenneth Conboy as Election Officer "for the sole purpose of investigating and deciding the issue of disqualification of Ronald Carey from the rerun election." Id. In this capacity, Conboy questioned Carey under oath in a deposition on November 10, 1997, regarding his knowledge of improper campaign contributions. (Ind. ¶ 29.)

In March, 1997, the United States Attorney for the Southern District of New York initiated a grand jury investigation into, among other things, whether IBT funds had been used to finance the Carey campaign. (Ind. ¶ 29.) Carey testified under oath before the grand jury on July 16, 1997, October 1, 1997, and November 21, 1997. (Ind. ¶ 29.) Carey also testified, under oath, on October 28, 1997, before the IRB's Chief Investigator regarding his participation in, and/or knowledge of, a scheme to misappropriate IBT funds in an effort to aid his campaign. Id. In connection with the IRB, s investigation, Carey again testified at an IRB hearing on January 21 and 22, 1998. Id.

The government's position appears to be that Carey had knowledge of, and/or participated in, an unlawful scheme to fund his IBT presidential campaign whereby he would authorize contributions of IBT funds to various political groups and other organizations in exchange for donations to his IBT campaign from those groups or interested wealthy individuals.

DISCUSSION

(I.) Defendant's Motion to Dismiss Counts One, Five, Six and Seven for Improper Venue

Carey moves to dismiss Counts One, Five, Six and Seven for improper venue pursuant to Rule 12(b), F.R. Crim. P. These counts allege the making of material false statements in violation of 18 U.S.C. § 1001 ("§ 1001"). Carey asserts that venue is proper only in the District of Columbia because the statements took place there. The government contends that the statements were received in the Southern District of New York ("this district") in connection with Judge Edelstein's administration of the Consent Decree, and therefore venue is proper in this district.

Where, as here, the government "has provided the court with a "full proffer' of the facts it intends to introduce at trial to establish venue, the Court may decide whether venue is proper before trial." United States v. Mittal, 1999 WL 461293, at *4 (S.D.N.Y. July 7, 1999) (Koeltl, J.). Since the defendant is charged in more than one count, venue must be proper with respect to each count. See United States v. Beech-Nut Nutrit. Corp., 871 F.2d 1181, 1188 (2d Cir. 1989). pursuant to the Sixth Amendment, venue is proper in the "district wherein the crime shall have been committed."*fn2 However, venue for a continuing offense, that is, an offense begun in one district and completed in another, or committed in more than one district, may be prosecuted in any district in which such offense was "begun, continued, or completed." 18 U.S.C. § 3237(a).

Courts have held that a false statement under § 1001 may constitute a continuing offense where there exists a "geographic discontinuity between the defendant's physical making of the statement, whether oral or written, and the actual receipt of that statement by the relevant federal authority." United States v. Bin Laden, 2001 WL 579815, at *2 (S.D.N.Y. May 29, 2001) (Sand, J.). Accordingly, charges under § 1001 may be prosecuted in the district in which the false statement was prepared, mailed or uttered, and in any district into which the statement was "propelled" by the defendant and received or acted upon by the government. Cf. United States v. Candella, 487 F.2d 1223, 1228 (2d Cir. 1973)

Here, the allegedly false statements were made in the District of Columbia to an election officer (Count One), the Chief Investigator to the IRB (Count Five), and the IRB itself (Counts Six and Seven). These officials were appointed pursuant to the Consent Decree to supervise and investigate IBT activity and were charged by the Consent Decree and subsequent court rulings*fn3 to file reports and submit decisions to the court for its approval.*fn4 IBT officers, members and employees were obligated to "cooperate fully" with the Election Officer and IRB, and were warned that failure to cooperate placed them in reach of disciplinary action and criminal sanctions. See, e.q., Consent Decree at 20; United States v. IBT, 45 F. Supp.2d 309, 312 (S.D.N.Y. 1999) (Edelstein, J.) ("IBT members . . . who provide false statements to the Election Officer face possible criminal sanctions [under] 18 U.S.C. § 1001."). At all times, Judge Edelstein retained exclusive jurisdiction to implement the Consent Decree. Carey therefore knew, or reasonably should have known, that his false statements would be "propelled" to and acted upon in this district.*fn5 See United States v. Kim, 246 F.3d 186, 193 (2d Cir. 2001) (finding venue proper in district where it was foreseeable that fraudulent invoices would be acted upon). *fn6

The Second Circuit has noted that even if venue appears proper under a continuing offense theory, a court should also "ask whether the criminal acts in question bear 'substantial contacts' with any given venue." United States v. Saavedra, 223 F.3d 85, 93 (2d Cir. 2000) (citing United States v. Reed, 773 F.2d 477, 481 (2d Cir. 1985)). The "substantial contacts" test set forth in Reed articulates four factors that courts should consider in determining venue: (1) the site of defendant's acts; (2) the elements and nature of the crime; (3) the locus of the effect of the criminal conduct; and (4) the suitability of the district for accurate factfinding. See Reed, 773 F.2d at 481.*fn7

In this case, although factor one points to venue in the District of Columbia, the remaining factors indicate that venue is proper in this district as well. One of the essential elements of § 1001 is that a false statement be made, not in private, but in a "matter within the jurisdiction of . . . the Government of the United States." In order for the government to prove the jurisdictional element in this case, it must prove that the false statements arose under the Consent Decree issued by Judge Edelstein in this district.

As to the effects of the crime, the court notes that under the limited facts of this case, the false statements, like the perjury in Reed, appear "fully analogous to contumacious conduct." Reed, 773 F.3d at 484. Carey's allegedly false statements were made to officials appointed pursuant to the Consent Decree, for the sole purpose of ridding the IBT of corruption. As such, his statements had the effect of obstructing the court's continued efforts to ensure the integrity of its rulings. "As in the case of criminal contempt, a court unable to punish false testimony affecting its proceedings would be at the mercy of the limited resources and prosecutorial priorities of a foreign district." Id. 773 F.3d at 484.*fn8

Lastly, this district is suitable for factfinding, since it produced the underlying Consent Decree, it has been the site of continued law enforcement efforts to rid the IBT of corruption, and many of the witnesses are located here. Cf. Saavedra, 223 F.3d at 93 (finding district suitable for factfinding where it "has been the site of concerted law enforcement efforts to disable the Latin Kings' racketeering activities," even though action in question occurred elsewhere).

Under the facts as described in the government's proffer, venue in this district is proper. Accordingly, the motion to dismiss Counts One, Five, Six, and Seven is denied.

(2) Defendant's Motion for Transfer

Carey next contends that the court should transfer this case to the District of Columbia pursuant to Rule 21(b), F.R. Crim. P. Generally, "a criminal prosecution should be retained in the original district," unless the interests of justice require a transfer. United States v. Guastella, 90 F. Supp.2d 335, 338 (S.D.N.Y. 2000) (Kram, J.). The defendant bears the burden of establishing the need for transfer. See Id.

In ruling on a Rule 21(b) motion, a court should consider a variety of factors, including: (a) location of the defendant; (b) location of possible witnesses; (c) location of events at issue; (d) location of relevant documents and records; (e) potential disruption of defendant's business; (f) expense to the parties; (g) location of defense counsel; (h) relative accessibility of the place of trial; (i) docket conditions of each potential district; and (j) any other special circumstance that might bear on the desirability of transfer Platt factors"). See Platt v. Minnesota Mining & Mfg. Co., 376 U.S. 240, 243-44 (1964). No one of these considerations is dispositive, and"[i]t remains for the court to try to strike a balance and determine which ...


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