Summary
dismissing indictment charging defendant with conspiracy to traffic in unauthorized devices for failure to allege an essential element—i.e., that defendant's actions affected interstate commerce
Summary of this case from United States v. BibbsOpinion
No. 99 CR 719
February 23, 2000
MEMORANDUM OPINION AND ORDER
Defendants have moved to dismiss Count I of the indictment, which seeks to allege a violation of 18 U.S.C. § 1029(b)(2), conspiracy to traffic in unauthorized access devices in violation of 18 U.S.C. § 1029(a)(2). Title 18 U.S.C. § 1029(a) requires, as a condition to rendering the conduct described in its various subsections punishable, that "the offense affects interstate or foreign commerce." 18 U.S.C. § 1029(a). An affect on interstate or foreign commerce is a jurisdictional element of this statute. United States v. Clayton, 108 F.3d 1114, 1116 (9th Cir.), cert. denied, 522 U.S. 893 (1997). The basis for the motion is that the indictment fails to allege that the charged conduct affected interstate commerce.
Count I alleges that the Illinois Department of Employment Security ("IDES") stored confidential earnings and employment information of persons assigned Social Security numbers. It is alleged that this information was stored in computers located in Chicago and Springfield. Illinois and was accessible "through computers in IDES offices throughout the State of Illinois." It is alleged that defendant Morris, a former IDES employee, owned a company called Morris Consultants which did business in Chicago, Illinois. Morris Consultants, the indictment alleges, "was hired by debt collection agencies and other businesses to obtain information that might help locate debtors." It is alleged that the Illinois Unemployment Insurance Act prohibits IDES employees from disclosing the confidential earnings and employment information stored on the IDES computers "unless required to do so for work-related purposes." It is alleged that Morris, together with IDES employees Cummings, Duniver and Harris, conspired to "use multiple unauthorized access devices" to obtain the confidential earnings and employment information. Specifically, it is alleged that Morris sought out the three IDES employees, that they agreed to obtain confidential information stored in the IDES computer system and disclose it to Morris in exchange for money and that Morris, doing business as Morris Consultants, sold the information he had purchased from Cummings, Duniver and Harris to debt collection agencies and other persons. Count I says nothing about the affect of these activities on interstate commerce. It alleges that three IDES employees in Illinois accessed computers in Illinois, obtained information from those computers and sold it to Morris, who in turn sold it to debt collection agencies. It does not indicate what kind of access devices were utilized (specifically, it does not indicate whether those access devices were instrumentalities of interstate commerce) and does not indicate whether the people whose information was accessed were in Illinois or elsewhere. Nor does it indicate whether the debt collection agencies to whom Morris Consultants sold the information were located in Illinois or elsewhere.
In United States v. Spinner, 180 F.3d 514 (3rd Cir. 1999), the defendant was charged in Count I of an indictment with a violation of 18 U.S.C. § 1029(a)(5), effecting transactions with 1 or more access devices issued to another person with intent to defraud. The count at issue failed to allege the interstate commerce element of the crime. The court held that because "`an indictment, to be sufficient, must contain all the elements of a crime,'" id. at 515 (quoting multiple cases), the indictment's failure to allege an effect on interstate commerce "was jurisdictionally defective." Id. The court vacated the defendant's guilty plea and conviction. See also United States v. Spruill, 118 F.3d 221, 227 (4th Cir.), cert. denied, 522 U.S. 1006 (1997) (failure of 18 U.S.C. § 844(e) indictment to allege that the subject threats were "by means of fire or an explosive" requires vacation of conviction and dismissal of indictment); United States v. Hooker, 841 F.2d 1225, 1226 (4th Cir. 1987) (dismissing RICO conspiracy indictment for failure to charge that the alleged enterprise had an affect on interstate commerce).
This result comports with the rule that an indictment which fails to allege an essential element of the offense sought to be charged must be dismissed. United States v. Du Bo, 186 F.3d 1177 (9th Cir. 1999). The rule serves two important purposes: first, it ensures that the defendant will be convicted only of an offense found by the grand jury, and second, it ensures that the indictment will allege an offense against the United States. Id. at 1180. While challenges to minor or technical deficiencies in an indictment may be overlooked, the complete failure to charge an essential element of a crime is a matter of substance which requires dismissal of the indictment. Id. at 1180-81.
The government argues that Count I is adequate because it alleges not a substantive offense but conspiracy It cites Wong Tai v. United States, 273 U.S. 77 (1927) and United States v. Kahn, 381 F.2d 824 (7th Cir.), cert. denied, 389 U.S. 1015 (1967), among other cases, for the principle that a conspiracy indictment need not allege "with precision all the elements essential to the offense which is the object of a conspiracy." Kahn, supra at 829. The cases cited by the government, however, do not address the circumstance present here, where an element essential to the offense and to the exercise of federal jurisdiction is nowhere alleged in the count being challenged. In Wong Tai, for instance, the Court announced the principle described by the government, but the case speaks entirely in generalities as to what, if anything, was missing from the challenged indictment in that case. Kahn, in the court's view, supports the defendants' argument more than it supports the government's. There, the challenged count sought to charge a conspiracy to violate 18 U.S.C. § 656, 657, 1005 and 1006, statutes which require, as an essential element of the prohibited conduct, that the alleged offender be an officer, agent, employee or otherwise connected to a financial institution. Defendants argued that the requisite capacity was not alleged. The court found, however, that the count alleged that defendants controlled the management and operations of the involved financial institutions and that the count's overt acts specified that the defendants acted in the necessary capacities. The key point on which the Kahn decision rests is that it is sufficient for the essential elements to be described in the overt acts of a conspiracy count, not that they need not be described at all:
Reading Count I of the indictment as a whole, we hold that its allegations of control of management and operation, together with the factual allegations of overt acts, naming or at least intimating each of the defendants to have an official position with some of the financial institutions involved, satisfy the requirement that at least one of the conspirators be `connected in any capacity' with the institutions named in the count.381 F.2d at 831.
United States v. Hooker, supra, is closely analogous to the case at bar. In Hooker, Count III of the indictment alleged a conspiracy to violate RICO, 18 U.S.C. § 1962(c). An affect on interstate commerce is an essential element of the RICO statute, but no affect on interstate commerce was alleged in Count III, nor were facts pleaded which showed an affect on interstate commerce. The court vacated defendant's conviction, holding that where an element that is necessary to establish the federal government's jurisdiction over the crime is omitted from an indictment, the indictment cannot stand.
The government argues that it "has not found any other case in any circuit which follows Hooker." Government's Consolidated Response at 3. However, the Fourth Circuit has recently cited Hooker with approval, see Spruill, supra at 227, as has the Third Circuit. See Spinner, supra at 516. While these two cases address the failure of indictments charging substantive offenses to plead an essential element, this court does not believe that the fact that Count I of the instant indictment charges conspiracy makes any less essential the need for the indictment to make clear that the grand jury found probable cause to believe that the defendants' conduct affected — or if carried out would have affected — interstate commerce. If the grand jury did not so find, neither the government nor this court has any jurisdiction to proceed with this prosecution.
The court notes, although the government has not made this argument, that Count II alleges that IDES was an enterprise which engaged in and the activities of which affected interstate commerce. There are cases which state that where elements missing in one count are alleged in other counts, it is not necessary to set aside convictions premised on the defective count. See, e.g., United States v. Esposito, 771 F.2d 283, 289 (7th Cir. 1985), cert. denied, 475 U.S. 1011 (1986). In Esposito, however, the court specifically noted that no motion had been made to dismiss the defective counts before trial and while "failure of an indictment to charge an offense is subject to review and dismissal at any stage, including appeal," id. at 288, vacating convictions after a case is already tried, when it is clear that the grand jury, in considering other counts, found the essential element in question, "would be an extreme example of a technicality." Id. at 289. The Esposito rule makes sense in the context of appellate review of a conviction. If, however, this case were to go to trial and the jury were to acquit the defendants of the offense charged in Count II, there would be no avoiding the difficulties posed by the defective Count I. In the present case, an appropriate motion has been made before jeopardy has attached, and this court sees no reason to strain to sustain a defective indictment and run the risk that the entire prosecution will ultimately be held to have been a nullity.
Count I's failure to allege an essential, jurisdictional element of the substantive offense charged as the object of the conspiracy is fatal. Count I of the indictment is dismissed.