CORE TERMS: conspiracy,
overt act, indictment, statute of limitations, limitations period, prior
to trial, furtherance, statute of limitations period, conspirators,
dictum, pretrial, Drug Control Act, grand jury, pretrial hearing,
completion, reversal, conspiracy charge, probable cause, recommendation,
conspired, kickbacks, mandated, chain of reasoning, applicable statute,
matter of law, vacated
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COUNSEL: Daniel I. Small, U.S. DOJ, Organized Crime/Racketeering
Section, Washington, District of Columbia, S. Michael Levin, U.S. DOJ,
Miami, Florida, U.S. Attorney, S. Miami, Florida, William C. Bryson,
Washington, District of Columbia for Appellant.
(For/
Arthur
E.
Coia):
Joseph Beeler, Miami, Florida, James J. Hogan, Mami, Florida,
(For/Joseph J. Vacarro, Jr.): Joseph T. Travaline, Burlington,
Massachusetts, Martin Leppo, Leppo & Traini, Boston, Massachusetts,
Anthony M. Traini, Leppo & Traini, Boston, Massachusetts, for Appellee.
JUDGES: Tjoflat, Vance and Clark, Circuit Judges. Clark, Circuit
Judge, concurring in part and dissenting in part.
OPINIONBY: TJOFLAT
OPINION: [*1122]
TJOFLAT, Circuit Judge:
The United States appeals the dismissal on statute of limitations
grounds of an indictment alleging that
Arthur A.
Coia,
Arthur E.
Coia, Albert J. Le Pore, and Joseph
J. Vacarro, Jr., violated the conspiracy portion of the Racketeer
Influenced and Corrupt Organization Act (RICO),
18 U.S.C. § 1962 [**2] (d)
(1976). n1 We reverse.
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n1 Title
18 U.S.C. § 1962(d) provides: "It shall be unlawful for any person
to conspire to violate any of the provisions of subsections (a), (b), or
(c) of [
18
U.S.C. § 1962]."
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I.
On September 23, 1981, a federal grand jury in the Southern District of
Florida charged the four appellees and one other defendant in a
one-count indictment, alleging that they had conspired to engage in
labor racketeering, in violation of
18 U.S.C. § 1962(d). n2 The indictment alleged that the five
defendants conspired to use their influence over the Laborers
International Union of North America and its subordinate bodies and
affiliated employee benefit plans. According to the indictment, the
conspirators funneled the union's insurance and service business into
insurance and service companies they had set up, and then charged the
union members for the most expensive form of insurance. The conspirators
thereafter looted the insurance
[**3] premiums
through the use of kickbacks, payoffs, unearned salaries and fees, and
improper personal expenses.
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n2 The fifth defendant, Raymond L. S. Patriarca, was severed by the
district court and is not a party in this appeal.
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Prior to trial, the appellees moved to dismiss the indictment, claiming
in part that the indictment was not brought within the five-year statute
of limitations period. The district court referred the matter to a
magistrate for preliminary consideration and a report and
recommendation, pursuant to
28 U.S.C. § 636(b)(1)(B) (1976 & Supp. V 1982). After receiving the
magistrate's report the court heard argument thereon and on March 12,
1982, adopted the magistrate's recommendation and dismissed the
indictment. The government then filed this appeal.
The district court's dismissal was based on the following chain of
reasoning: first, a conspiracy under RICO requires for its completion
the performance of at least one overt act; second, for statute of
limitations purposes,
[**4] the
conspiracy will be deemed to have been completed at the time of
completion of the last overt act; third, the only overt act alleged in
the indictment that clearly fell within the statute of limitations
period (overt act No. 28) was insufficient on its face to satisfy the
requirement that it be in furtherance of the conspiracy. Therefore, the
court concluded that as a matter of law the indictment failed to satisfy
the statute of limitations and should be dismissed.
II.
The government presents three alternative grounds for reversal: the
district court erred in resolving prior to trial the factual issue of
whether the conspiracy continued into the statute of limitations period
as alleged in the indictment; the district court erred in concluding
that a RICO conspiracy requires an allegation and proof of an overt act
as an element of the crime; and the district court erred in determining
that overt act No. 28 as listed in the indictment was not in furtherance
of the conspiracy. The United States alleged, as overt act No. 28, that
on or about October 19, 1976, defendant Le Pore wrote a check for $2,000
to himself out of funds provided in part by Joseph Hauser. The account
was in
[**5] the name
of "Albert J. Lepore Attorney." In his argument to the district court,
the prosecutor stated that the conspirators used this account to convey
the impression that the funds represented remuneration for legal
services and, therefore, that this was part of the "laundering" process
of the kickbacks involved in the RICO violation, thereby constituting
[*1123] an
act in furtherance of the conspiracy.
The government's three grounds for appeal are each, if correct,
individually sufficient to justify a reversal of the district court.
With regard to the first, the government is in error concerning the
propriety of the district court's dismissal of the indictment prior to
trial. It is perfectly proper, and in fact mandated, that the district
court dismiss an indictment if the indictment fails to allege facts
which constitute a prosecutable offense.
Rule 17.1 of the Federal Rules of Criminal Procedure grants the
court the power to hold pretrial conferences, "to consider such matters
as will promote a fair and expeditious trial." This rule is essentially
a codification of the court's inherent power to manage the litigation
before it. Rule 17.1 operates in conjunction with rules
[**6] 12(a) &
(b) which grant the defendant the right to make certain motions prior to
trial. The advisory committee notes to rule 12(b) (subdivisions (1) &
(2)) list, among other things, insufficiency of the indictment under the
applicable statute of limitations as specifically capable of
determination prior to trial. Rule 12(e) requires that the court make a
pretrial determination on these pretrial motions unless there is good
cause not to do so. Rule 12(e) further states that "where factual issues
are involved in determining a motion, the court shall state its
essential findings on the record." This clearly indicates that findings
of fact as well as of law are within the province of the district court
to make in pretrial proceedings.
Therefore, in this case, we need not explore whether the district
judge's determination that overt act No. 28 could not constitute an
overt act in furtherance of the conspiracy was one of law or a
combination of law and fact. Either determination was permitted, indeed
mandated, by the Federal Rules of Criminal Procedure.
III.
The problem with the district judge's dismissal of the indictment is not
that it was beyond his authority, but rather, that
[**7] it was
based on an erroneous notion of the substantive law. The district
court's holding that a RICO conspiracy charge requires an allegation of
an overt act was based on a reasonable, though incorrect, adoption of
dicta from earlier Fifth Circuit cases. n3 In
United States v. Phillips, 664 F.2d 971, 1038, (5th Cir. Unit
B 1981),
cert. denied sub. nom.
Meinster v. United States, 457 U.S. 1136, 102 S. Ct. 2965, 73 L.
Ed. 2d 1354 (1982), the court stated that "some overt action by one
of the conspirators in furtherance of the conspiracy," must be proved in
order to satisfy the requirements of
18 U.S.C. § 1962(d). The sole support offered by the
Phillips
court for this proposition was a citation to a footnote in
U.S. v. Sutherland, 656 F.2d 1181, 1186-87, n. 4 (5th Cir.1981),
cert. denied,
455 U.S. 949, 102 S. Ct. 1451, 71 L. Ed. 2d 663 (1982). In neither
case was the proposition necessary for the holding. Tracing this line of
cases back further to its origin, we find that
Sutherland offers
as its sole support for the overt act requirement,
U.S. v. Fuiman, 546 F.2d 1155, 1158 [**8] (5th
Cir.),
cert. denied,
434 U.S. 856, 98 S. Ct. 176, 54 L. Ed. 2d 127 (1977). In
Fuiman,
the court held that in a conspiracy case brought under the Drug Control
Act,
21 U.S.C. §§ 952 & 963, an overt act is required.
Fuiman was
not a RICO prosecution; therefore, it is not on all fours with the
instant case. It is similar, however, in that
21 U.S.C. §§ 952, 963, like the RICO conspiracy statute, makes no
reference to an overt act as an element of the crime. In citing the "
'overt act ' requirement of the federal conspiracy statutes,"
id.,
the
Fuiman court implied that such an element is implicit in
21 U.S.C. § 952.
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n3 In
Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981)
(en banc), this circuit adopted as precedent the decisions of the former
Fifth Circuit decided prior to October 1, 1981.
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Whether
Fuiman requires us to read an overt act requirement into
the RICO conspiracy
[**9] statute
is a question we need not address, because in
U.S. v. Rodriguez, 612 [*1124] F.2d
906 (5th Cir.1980) (en banc),
cert. denied sub. nom.
Albernaz v. United States, 449 U.S. 835, 101 S. Ct. 108, 66 L.
Ed. 2d 41 (1980), the court held that an overt act is not essential
to a conspiracy charge under the Drug Control Act. n4 Thus, the chain of
reasoning which supports the assumed overt act requirement in RICO cases
in this circuit is without support and must fall of its own weight.
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n4 The court stated:
We recognize some confusion in the Circuit as to whether an
indictment charging a conspiracy to violate the Drug Control Act
must set out and the Government must prove at least one overt act.
Consistent with the majority of our decisions we now expressly hold
that these indictments do not require allegation or proof of
an overt act.
Rodriguez, at 919 n. 37 (citations omitted, emphasis in
original).
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The only appellate court to have faced the
[**10]
question of whether a RICO conspiracy requires an overt act is the
Second Circuit Court of Appeals. In
United States v. Barton, 647 F.2d 224, 237 (2d Cir.1981),
cert. denied,
454 U.S. 857, 102 S. Ct. 307, 70 L. Ed. 2d 152 (1981), the court
held that "while the general conspiracy statute [
18
U.S.C. § 371 (1976)], requires proof of an overt act, the RICO
conspiracy [statute] does not."
This Second Circuit holding is both eminently reasonable and consistent
with the Supreme Court's holding in
Singer v. United States, 323 U.S. 338, 340-42, 65 S. Ct. 282,
283-84, 89 L. Ed. 285 (1945), in which the Court concluded that
because the particular conspiracy statute it was construing, did not, on
its face, require an overt act, no overt act requirement should be
implied. The Court noted that this was consistent with the common law of
conspiracy.
Nash v. United States, 229 U.S. 373, 378, 33 S. Ct. 780, 782, 57
L. Ed. 1232 (1912).
IV.
The applicable statute of limitations provides: "No person shall be
prosecuted, tried, or punished for any offense, not capital, unless the
indictment is found
[**11] . . .
within five years after such offense shall have been committed."
18 U.S.C. § 3282 (1976). The statute begins to run when the crime is
complete.
See
Toussie v. United States, 397 U.S. 112, 90 S. Ct. 858, 25 L. Ed.
2d 156 (1970).
It is the question of when a crime is complete that is the raison d'etre
of our earlier inquiry into whether a RICO conspiracy requires the
commission of an overt act. The Supreme Court in
Fiswick v. United States, 329 U.S. 211, 216, 67 S. Ct. 224, 227,
91 L. Ed. 196 (1946), held that a conspiracy requiring an overt act
is deemed complete for statute of limitations purposes at the time of
completion of the last overt act. This is a rule of statutory
construction, rather than a factual determination of whether a
conspiracy existed at a particular point in time. With respect to
conspiracy statutes that do not require proof of an overt act, the
indictment satisfies the requirements of the statute of limitations if
the conspiracy is alleged to have continued into the limitations period.
The conspiracy may be deemed to continue as long as its purposes have
neither been abandoned nor accomplished.
[**12]
United States v. Grammatikos, 633 F.2d 1013, 1023 (2d Cir.1980).
See
United States v. Kissel, 218 U.S. 601, 31 S. Ct. 124, 54 L. Ed.
1168 (1910).
Both in the indictment and at the pretrial hearing, the government
consistently alleged that the conspiracy continued well into the
limitations period. It is clear from both the transcript of the pretrial
hearing, and the order dismissing the indictment, that the district
judge ignored this, fixing his mind and basing his holding exclusively
on the nonexistence of a presumptively required overt act. There was not
the slightest hint of an alternative holding that regardless of the
overt act requirement, the government failed to allege sufficient facts
to conclude that the conspiracy extended into the limitations period.
Even if the district court had made such a holding, it is doubtful that
we could affirm.
Since both the conspiracy itself and its enduring nature may be proven
[*1125]
circumstantially,
United States v. Hamilton, 689 F.2d 1262, 1269 n. 3 (6th
Cir.1982), cert. denied sub. nom.
Wright v. United States, 459 U.S. 1117, 103 S. Ct. 753, 74 L. Ed.
2d 971 (1983), [**13] any
indictment alleging facts in the time period close to the commencement
of the limitations period could support an inference that the conspiracy
continued into the limitations period. Moreover, as the Sixth Circuit
has said in a similar case, "where a conspiracy contemplates a
continuity of purpose and a continued performance of acts, it is
presumed to exist until there has been an affirmative showing that it
has terminated."
United States v. Mayes , 512 F.2d 637, 642 (6th Cir.1975),
cert. denied
422 U.S. 1008, 95 S. Ct. 2629, 45 L. Ed. 2d 670 (1975). Further,
noting that (1) a grand jury has already found probable cause that a
conspiracy continued into the statute of limitations period, and (2)
discovery procedures in criminal proceedings are substantially limited,
the district court should not require the government to launder its
evidence in the presence of the defendant prior to trial. The district
court should approach with delicacy and circumspection the question of
whether to dismiss a case on the ground that, at trial, the proof, as a
matter of law, would fail to establish the commission of the charged
offense within the limitations period.
[**14]
Given that (1) the district court's dismissal of the indictment was
based solely on a statute of limitations rationale; (2) the pretrial
hearing was conducted, and the court's order of dismissal was written,
with an erroneous view of the law; (3) the indictment on its face
satisfied the statute of limitations; and (4) the grand jury found
probable cause to issue the indictment, we conclude that the district
court's order must be vacated and the indictment reinstated.
VACATED and REMANDED for further proceedings.
CONCURBY: CLARK (In Part)
DISSENTBY: CLARK (In Part)
DISSENT: CLARK, Circuit
Judge, concurring in part and dissenting in part.
I concur in the reversal of the district court's dismissal of the
indictment. I agree with the majority that the indictment on its face
satisfies the statute of limitations. I agree with the majority opinion
that the RICO statute does not require an overt act and I agree to the
correctness of
United States v. Barton, 647 F.2d 224 (2d Cir.1981) cert.
denied,
454 U.S. 857, 102 S. Ct. 307, 70 L. Ed. 2d 152 (1981).
The reason for my dissent is that, in my opinion, our court is bound by
our holding in
United States v. Phillips, 664 F.2d 971, 1038 (5th Cir. Unit B
1981), [**15]
cert. denied sub. nom.
Meinster v. United States, 457 U.S. 1136, 102 S. Ct. 2965, 73 L.
Ed. 2d 1354 (1982). The majority states that the holding in
Phillips is dictum. The rule in our circuit requiring that we follow
precedent does not make a distinction for holdings which are dictum.
See
United States v. Adamson, 665 F.2d 649, 656 n. 19 (5th Cir. Unit
B 1982). The main reason for following dictum is the difficulty in
determining what is and is not dictum. I believe that en banc
consideration is required before the panel can overrule
Phillips, supra.