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United States v. Martin

January 19, 2006

UNITED STATES OF AMERICA
v.
GREGORY MARTIN, DEFENDANT.



The opinion of the court was delivered by: Cedarbaum, J.

OPINION

Defendant Gregory Martin moves to dismiss the indictment against him for conspiracy to commit wire fraud and wire fraud. For the reasons that follow, the motion is denied.

BACKGROUND

Martin, together with defendants David Appelbaum and Rene Poulin, is charged with wire fraud under 18 U.S.C. § 1343 and with conspiracy to commit wire fraud. The indictment alleges that the defendants "devised and effectuated a scheme to fix a horse race by giving a racehorse a performance-enhancing substance, and then profit from their actions by placing bets on that racehorse to win a horse race."

Martin moves to dismiss both counts of the indictment on the ground that the acts that the defendants allegedly conspired to undertake do not constitute wire fraud. Martin argues that the scheme defendants allegedly devised was not a "scheme to defraud," within the meaning of the wire fraud statute, and that the use of the wires allegedly contemplated by the conspirators was not in furtherance of such a scheme. Martin also argues that the substantive wire fraud charge must be dismissed because the indictment does not allege that Martin had the requisite fraudulent intent to commit wire fraud and does not allege that Martin used the wires. Furthermore, Martin contends, the indictment does not allege sufficient facts to establish a basis for venue in the Southern District of New York for either charge. Martin also seeks an order releasing the grand jury minutes and for a bill of particulars.

DISCUSSION

I. Conspiracy to Commit Wire Fraud

To the extent that Martin moves to dismiss the indictment because it fails to charge him with a crime, analysis of his claim is limited to an examination of the face of the indictment. "[A]n indictment is sufficient if it, first, contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense." United States v. Alfonso, 143 F.3d 772, 776 (2d Cir. 1998)(quoting Hamling v. United States, 418 U.S. 87, 117 (1974)).

To charge Martin with the crime of conspiracy to commit wire fraud, the indictment must allege that Martin "agreed with another to commit the offense" of wire fraud; "that he knowingly engaged in the conspiracy with the specific intent to commit [wire fraud]; and that an overt act in furtherance of the conspiracy was committed." United States v. Monaco, 194 F.3d 381, 386 (2d Cir. 1999). Martin argues that the indictment fails to charge conspiracy to commit wire fraud because the acts that the defendants allegedly conspired to commit do not constitute wire fraud.

The wire fraud statute, 18 U.S.C. § 1343, provides that: Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.

The "essential elements of a mail [or wire] fraud violation are

(1) a scheme to defraud, (2) money or property [as the object of the scheme], and (3) use of the mails [or wires] to further the scheme." Fountain v. United States, 357 F.3d 250, 255 (2d Cir. 2004)(alterations in original)(quoting United States v. Dinome, 86 F.3d 277, 283 (2d Cir. 1996)).

A. Scheme to Defraud

Martin first argues that the scheme to dope a horse, which he allegedly conspired to devise, is not a "scheme to defraud" within the meaning of the wire fraud statute because the scheme did not involve any misrepresentations or fraudulent omissions. However, a misrepresentation or omission is not a necessary element of a "scheme to defraud" under the wire fraud statute. As the Second Circuit determined in United States v. Trapilo, 130 F.3d 547 (2d Cir. 1997), in dismissing defendants' argument that smuggling is not an act within the meaning of a "scheme to defraud," the meaning of "scheme to defraud" is "measured by a non-technical standard. It is a reflection of moral uprightness, of fundamental honesty, fair play and right dealing in the general [and] business life of members of society." Id. at 550 n.3 (internal quotations and citations omitted). The court held that the allegation that defendants engaged in smuggling "without an allegation of misrepresentation or deceit" was sufficient to allege a "scheme to defraud" under the wire fraud statute. Id. ("Because the act of smuggling violates fundamental notions of honesty, fair play and right dealing, it is an act within the meaning of a 'scheme to defraud.'"); see also A. Terzi Prods., Inc. v. Theatrical Protective Union, 2 F. Supp. 2d 485, 501 (S.D.N.Y. 1998)("I read Trapilo as underscoring the accepted notion that a defendant, by his conduct alone, can intend to deceive another and engage in a scheme to defraud, even though the defendant's statements themselves contain no misrepresentations. Smuggling is the perfect example of such conduct because, while smuggling might involve no statement at all, its sole purpose is to ...


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