United States District Court, Southern District of New York
August 26, 2003
UNITED STATES OF AMERICA
STANLEY JOSEPH, DEFENDANT
The opinion of the court was delivered by: Laura Taylor Swain, District Judge
Defendant moves to compel the Government to provide a bill of particulars pursuant to Rule 7(f) of the Federal Rules of Criminal Procedure. For the following reasons, Defendant's motion is denied.
The following are the pertinent facts alleged in the Indictment. From 1996 through April 1999, one Jay Katz ("Katz"), who was also charged as a defendant in this case,*fn1 managed and controlled four magnetic resonance ("MRI") facilities. During the same period, Katz owned in excess of 90% of certain corporations that were registered with the IRS as subchapter S corporations and that did not maintain any offices or employees. The Indictment alleges that, in each of the calendar years 1996 through 1998, Katz caused the four MRI facilities to pay various amounts of billing and management fees to several of the S-corporations. Those corporations are alleged to have significantly underreported gross receipts or improperly deducted non-business [ Page 2]
related payments as purported business expenses on their Subchapter S tax returns for 1996-1998. Katz is also alleged to have underreported the amount of income he received from his S corporations on his individual returns for those years. Defendant Stanley Joseph ("Joseph") provided accounting services to Katz and the S-corporations, supervised the preparation of Katz's individual tax returns and the tax returns for Katz's S-corporations, and signed those returns as tax preparer for 1996 through 1998.
Count One charges Joseph with conspiring, with Katz and others known and unknown, to violate the income tax laws. Counts Twenty and Twenty-One charge Joseph with aiding and assisting in the preparation of Katz's false 1996 and 1997 individual returns. Counts Twenty-Two through Twenty-Nine charge Joseph with aiding and assisting in the preparation of certain of the false 1996 and 1997 S-corporation returns.
The discovery material produced by the Government in the instant case includes all of the tax returns at issue, the 1996-1998 bank records of the S-corporations at issue, and the bank records of the MRI companies identified in the Indictment. Additionally, the Government has produced the books and records relating to Katz maintained by Joseph's firm, and computer disks seized during a search of Katz's offices. The Government has also provided a list of all payments currently identified as amounts falsely deducted or omitted from the Katz income tax returns, and has identified which of those payments it contends Joseph knew to have been improperly deducted or omitted.
The purpose of a bill of particulars is to provide a defendant "with information about the details of the charge against him if this is necessary to the preparation of his defense, and [ Page 3]
to avoid prejudicial surprise at the trial." United States v. Torres, 901 F.2d 205, 234 (2d Cir. 1990) (internal quotation marks omitted). "A bill of particulars should be required only where the charges in the indictment are so general that they do not advise the defendant of the specific acts of which he is accused." Id. (quoting United States v. Feola, 651 F. Supp. 1068, 1132 (S.D.N.Y. 1987)). The Court has the discretion to deny a bill of particulars "`if the information sought by defendant is provided in the indictment or in some acceptable alternate form.'" United States v. Barnes, 158 F.3d 662, 665-66 (2d Cir. 1998) (quoting United States v. Bortnovsky, 820 F.2d 572, 574 (2d Cir. 1987)). "In exercising that discretion, the court must examine the totality of the information available to the defendant — through the indictment, affirmations, and general pre-trial discovery — and determine whether, in light of the charges that the defendant is required to answer, the filing of a bill of particulars is warranted." United States v. Bin Laden, 92 F. Supp.2d 225, 233 (S.D.N.Y. 2000). Defendant seeks the names of all unindicted co-conspirators on the ground that Joseph has no way of knowing who was involved in the conspiracy to which Katz has already plead and Joseph needs that information to defend himself against the charge that he knowingly participated in the scheme. Joseph argues that Katz had numerous employees and partners at the entities for which returns were prepared, and that he should not be "forced to guess" which of those individuals the Government will allege conspired with Joseph to prepare fraudulent returns. In evaluating requests for disclosure of the identity of unindicted co-conspirators, courts should consider such factors as: (i) the number of co-conspirators; (ii) the duration and breadth of the alleged conspiracy; (iii) whether the Government otherwise has provided adequate [ Page 4]
notice of the particulars; (iv) the volume of pretrial discovery; (v) the potential danger to co-conspirators and the nature of the alleged criminal conduct; and (vi) the potential harm to the Government investigation. United States v. Nachamie, 91 F. Supp.2d 565, 572 (S.D.N.Y. 2000). See also United States v. Falkowitz, 214 F. Supp.2d 365, 390-91 (S.D.N.Y. 2002) (applying "Nachamie factors" in evaluating demand for names of unindicted co-conspirators); United States v. Amendolara, No. 01 Cr. 694, 2002 WL 31368279, at *5 (S.D.N.Y. Oct. 21, 2002) (same); United States v. Lino, No. 00 Cr. 632, 2001 WL 8356, at *12 (S.D.N.Y. Dec. 29, 2000) (same). As in United States v. Reddy, 190 F. Supp.2d 558, 570 (S.D.N.Y. 2002), "the number of defendants [in this case] is small, the duration of the alleged acts was not long and the number of unnamed co-conspirators or parties allegedly assisting in the wrongdoing does not appear to be so large such that there is not much likelihood that Defendants would be surprised by the identity of these persons." Id. at 570. Unlike the enterprise in Lino, which "span[ned] a period of over five years and reach[ed] at least the securities of twelve companies and the operations of six brokerage firms," involving the manipulation of securities and pension fund fraud,*fn2 the allegations here concern essentially the preparation of specifically identified tax returns for businesses that were all owned or controlled by a single individual — Katz. "[A]ll of the charged transactions involve financial dealings in which a limited number of persons had an interest and as to which most, if not all, relevant information would have been confined to the Defendants and/or persons who reported to one or more of them directly or indirectly." See Reddy, 190 F. Supp.2d at 570. [ Page 5]
Moreover, in its supplemental response to Defendant's motion, the Government has represented to the Court and defense counsel that "to prevail at trial" the Government must prove that Joseph conspired with Katz to accomplish the object of the conspiracy, and thus "the identities . . . of unindicted coconspirators have no bearing on Joseph's guilt." See Govt.'s Letter dated August 13, 2003 at 2. Because the law of conspiracy would not ordinarily have required the Government to prove that Joseph specifically entered into an agreement with Katz to prove Joseph guilty of participating in the conspiracy charged in Count One,*fn3 the Government has effectively particularized its proof. Accordingly, for all of the foregoing reasons, there is no need for a bill of particulars identifying the unindicted co-conspirators referred to in the Indictment in order to enable Defendant adequately to prepare his defense; Defendant's motion is accordingly denied.*fn4 [ Page 6]
For the foregoing reasons, Defendant's motion for a bill of particulars is denied.