Opinion
Crim. File No. 01-70(3) (PAM/JGL)
July 20, 2001
MEMORANDUM AND ORDER
This matter is before the Court on the Government's appeal of United States Magistrate Judge Jonathan G. Lebedoff's Order dated June 22, 2001, granting Defendant Gloria Jane Quinn's Motion for Relief from Improper Joinder pursuant to Fed.R.Crim.P. 8(b). The Court must modify or set aside any portion of the Magistrate Judge's Order found to be clearly erroneous or contrary to law. See 28 U.S.C. § 636(b)(1)(A); Fed.R.Civ.P. 72(a); Local Rule 72.1(b). Based on a review of the record and the submissions of the parties, the Court respectfully reverses the Magistrate Judge's Order.
BACKGROUND
On April 26, 2001, through a Superseding Indictment, Defendant Gloria Jane Quinn was charged, along with her alleged co-conspirators Robert John Kane and Gerard Damien Kane, with conspiracy to obtain money and property by defrauding persons intending to purchase Australian opal distributorships and/or opals from them. (See Superseding Indictment ¶¶ 2-182.) In addition, each Defendant was charged with mail fraud and wire fraud. (See id. ¶¶ 184-87.) The Superseding Indictment also charged Defendant Robert Kane with numerous counts of income tax evasion and money laundering. (See id. ¶¶ 188-94.) Neither Defendant Quinn nor Defendant Gerard Kane were charged under those counts. Thereafter, Defendant Quinn filed a Motion for Relief from Improper Joinder with Magistrate Judge Lebedoff. She argued that because she was not named in the tax evasion or money laundering counts she could not be properly tried with Defendant Robert Kane. The Magistrate Judge agreed that the tax evasion and money laundering counts lacked the necessary connection to the conspiracy, mail fraud, and wire fraud counts, and concluded that joinder was improper under Rule 8(b). (See Magistrate Judge Order at 6-7.) The Government now appeals.
DISCUSSION
Rule 8(b) of the Federal Rules of Criminal Procedure provides that "[t]wo or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses." "Rule 8(b) has been interpreted to require some common activity involving all the defendants which embraces all the charged offenses, but it is not necessary that every defendant have participated in or be charged with each offense." United States v. O'Connell, 841 F.2d 1408, 1431 (8th Cir. 1988). Moreover, "[t]here is a preference in the federal system for joint trials of defendants who are indicted together." Zafiro v. United States, 506 U.S. 534, 537 (1993). As a result, the prerequisites for joinder under Rule 8(b) are to be liberally construed. O'Connell, 841 F.2d at 1432. If a court determines, however, that joinder is improper under Rule 8(b), the defendants must be tried separately. See United States v. Bledsoe, 674 F.2d 647, 657 (8th Cir. 1982) (vacating conviction because of misjoinder and remanding for new trial). Severance is also appropriate if joinder, while technically proper under Rule 8(b), would result in undue prejudice to the movant. See Fed.R.Crim.P. 14.
In this case, Quinn does not contend that Rule 14 applies, nor does she suggest that joinder would result in any prejudice to her. Instead, she simply argues that joinder was improper under Rule 8(b). As an initial matter, the Court notes that the Government did not fully address the applicability of Rule 8(b) in its papers or argument before the Magistrate Judge. Instead, the Government argued against the application of Rule 14. This failure was "not inconsequential" to the Magistrate's decision, and indeed greatly hindered the Magistrate Judge's analysis: "It would be improper for the Court to infer or make arguments on a party's behalf." (Magistrate Judge Order at 6 n. 2.) On appeal, this Court has had the benefit of full briefing by the Government on the propriety of joinder under Rule 8(b). As a result, this Court reaches a different conclusion than the Magistrate Judge.
The Magistrate Judge concluded that the Superseding Indictment failed to specifically allege that all of the offenses were somehow connected. (See id. at 7-8.) Under Eighth Circuit law, whether the face of the indictment must indeed contain the requisite connection between the offenses contained in the indictment is somewhat unclear. See United States v. Grey Bear, 863 F.2d 572, 575 (8th Cir. 1988) (en banc) (5-5 decision) (joinder of defendants proper when indictment alleges "some common conspiracy or scheme connecting all acts of the series") (Lay, C.J., Heaney, McMillian, Arnold, and Wollman, JJ., joining); id. at 584 (joinder of defendants proper when "indictment requires joint proof, or there is a logical relationship among the charged offenses") (John R. Gibson, J., Fagg, Bowman, Magill, and Beam, JJ., joining). Nevertheless, after carefully reviewing the Superseding Indictment, the Court is satisfied that it sufficiently sets forth the requisite connection among the counts.
The tax evasion and money laundering counts specifically explain that the money used to further the tax evasion and money laundering was directly derived from the conspiracy to defraud unwitting purchasers of opal distributorships in which each Defendant participated. The tax evasion counts state that Defendant Robert Kane failed to declare "substantial taxable income from the sale of opal distributorships and/or opals." (Superseding Indictment ¶¶ 188-92.) Moreover, the tax evasion is alleged to have occurred during the temporal parameters of the conspiracy: 1993-1998. (See id. ¶¶ 2, 188-92.) The money laundering counts are similarly connected to the conspiracy, mail fraud, and wire fraud counts against Defendant Quinn. By its very nature, money laundering requires that the financial transactions in question must have been designed in whole or in part to conceal and disguise the proceeds of unlawful activity. See 18 U.S.C. § 1956(a)(1)(B)(i). The unlawful activity in this case was specified as mail fraud and wire fraud, i.e., counts 2-50 of the Superseding Indictment. (See Superseding Indictment ¶¶ 193-94.) Indeed, the money characterized as "laundered" in counts 56-100 allegedly came from some of the specifically identified victims of the conspiracy. (See id. ¶¶ 15-182, 193.) Thus, the alleged conspiracy, mail fraud, and wire fraud served as predicate acts to Defendant Robert Kane's tax evasion and money laundering. In other words,
[w]hen read as a whole the indictment reflects a sequence of connected events with the defendants being involved at various points in the continuum. Thus, while the [tax evasion and money laundering] charges arose at a later point in time, the events involved in the charges . . . were precipitated by and were linked to the fraudulent acts that had been committed earlier.
United States v. Rimell, 21 F.3d 281, 289 (8th Cir. 1994). Therefore, the Court is satisfied that all of the counts contained in the Superseding Indictment were sufficiently connected to meet Rule 8(b)'s requirements.
Not only is joinder proper under the tenets of Rule 8(b), the Court finds that a joint trial in this case will "promote efficiency and `serve the interests of justice by avoiding the scandal and inequity of inconsistent verdicts.'" Zafiro, 506 U.S. at 537 (Richardson v. Marsh, 481 U.S. 200, 210 (1987).
CONCLUSION
For the foregoing reasons, and upon all of the files, records, and proceedings herein, the Court reverses United States Magistrate Judge Jonathan G. Lebedoff's Order dated June 22, 2001, granting Defendant Gloria Jane Quinn's Motion for Relief from Improper Joinder pursuant to Fed.R.Crim.P. 8(b). Defendant Gloria Jane Quinn's Motion for Relief from Improper Joinder is denied. Accordingly, IT IS HEREBY ORDERED that:
The Government's Appeal (Clerk Doc. No. 81) is GRANTED;
Magistrate Judge Lebedoff's Order Granting Defendant Gloria Jane Quinn's Motion for Relief from Improper Joinder (Clerk Doc. No. 73) is REVERSED; and
Defendant Gloria Jane Quinn's Motion for Relief from Improper Joinder (Clerk Doc. No. 55) is DENIED.