United States District Court, N.D. West Virginia, Martinsburg
MEMORANDUM OPINION AND ORDER
M. GROH, CHIEF UNITED STATES DISTRICT JUDGE
before the Court is a Motion to Dismiss the Indictment
pursuant to Federal Rule of Criminal Procedure 12(b)(3)(B)(v)
filed by the Defendants on February 3, 2017. ECF No. 159. The
Government filed a Response on February 9, 2017. ECF No. 161.
On February 10, 2017, the Defendants filed an Amendment to
their motion, to include copies of contracts between Kids
Against Drugs (“KAD”) d/b/a Big Bucks Bingo of
Berkeley County and two different charities. ECF No. 163. On
February 15, 2017, the Defendants filed a motion for leave to
file reply [ECF No. 164], which the Court granted on March 7,
2017. ECF No. 172.
Defendants were originally charged in a fifty-three-count
indictment in which they are alleged to have committed mail
fraud, conspired to launder money, aided and abetted money
laundering, aided and abetted unlawful monetary transactions
and operated an illegal gambling business. In a prior Order,
the Court dismissed count fifty-three for lacking adequate
specificity. See ECF No. 126. The Defendants'
instant motion asks this Court to dismiss the indictment in
its entirety because the alleged conduct charged in the
indictment does not state a violation of the federal mail
fraud statute. The Government argues that the requisite
elements for charging the Defendants with mail fraud have
been satisfied, and the indictment should not be dismissed.
indictment “must be a plain, concise, and definite
written statement of the essential facts constituting the
offense charged.” Fed. R. Crim. P. 7(c)(1). “One
of the principal purposes of an indictment is to apprise the
accused of the charge or charges leveled against him so he
can prepare his defense.” United States v.
Fogel, 901 F.2d 23, 25 (4th Cir. 1990). The Fourth
Circuit has upheld as sufficient indictments that did not
allege specific acts in violation of cited statutes. See,
e.g., United States v. Kelly, 462 F.2d 372, 374
(4th Cir. 1972) (finding that an “indictment, basically
in the words of the statute, contained a sufficient statement
of every essential element of the crime charged to enable
defendants to present their defense”).
found constitutional, “an indictment must (1) indicate
the elements of the offense and fairly inform the defendant
of the exact charges and (2) enable the defendant to plead
double jeopardy in subsequent prosecutions for the same
offense.” United States v. Williams,
152 F.3d 294, 299 (4th Cir. 1998); see also Hamling v.
United States, 418 U.S. 87, 117 (1974) (finding that
“an 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”
(internal citations omitted)). These criteria make certain
that a defendant enjoys his or her constitutionally
guaranteed rights “under the Fifth Amendment, which
provides that a defendant cannot be prosecuted for a capital
or infamous crime except on presentment or indictment of a
grand jury, and under the Sixth Amendment, which provides
‘that a defendant must be informed of the nature and
cause of the accusation against him.'” United
States v. Darby, 37 F.3d 1059, 1063 (4th Cir. 1994)
(quoting United States v. Daniels, 973 F.2d 272 (4th
Cir. 1992) (internal quotations omitted)). If an indictment
is missing any essential element of the offense, it is
invalid, and a bill of particulars cannot cure the defect.
United States v. Loayza, 107 F.3d 257, 260 (4th Cir.
Rule 12(b)(3)(B)(v), a defendant may move to dismiss an
indictment on the ground that the indictment fails to state
an offense. “In ruling on a pre-trial motion to dismiss
an indictment for failure to state an offense, the district
court is bound by the four corners of the indictment.”
United States v. Boren, 278 F.3d 911, 914 (9th Cir.
2002). “A motion to dismiss an indictment can be
determined before trial ‘if it involves questions of
law rather than fact.'” United States v.
Cortez-Ruiz, No. 15-CR-00114-LHK, 2016 WL 7034057, at *2
(N.D. Cal. Dec. 2, 2016) (quoting United States v. Shortt
Accountancy Corp., 785 F.2d 1448, 1452 (9th Cir. 1986),
cert. denied, 478 U.S. 1007, (1986)).
indictment is sufficient if it . . . enables the Court to
determine whether the facts alleged are sufficient in law to
withstand a motion to dismiss or to support a
conviction.” Winer, 323 F.Supp. at 605 (citing
United States v. Fargas, 267 F.Supp. 452 (S.D.N.Y.
1967); United States v. Luros, 243 F.Supp. 160 (D.
Iowa 1965); see also Rule 7(c) Fed. R. Crim. P.).
The Supreme Court has long held that a bill of particulars
cannot cause an indictment that is sufficient on its face to
become fatally flawed. Dunlop v. United States, 165
U.S. 486, 491 (1897) (explaining that “[i]f the
indictment be not demurrable upon its face, it would not
become so by the addition of a bill of particulars”).
mail fraud statute was “enacted in 1872, as part of a
recodification of the postal laws.” McNally v.
United States, 483 U.S. 350, 356 (1987) (noting that
“the original impetus behind the mail fraud statute was
to protect the people from schemes to deprive them of their
money or property”). The statute 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, or to sell, dispose of, loan, exchange, alter, give
away, distribute, supply, or furnish or procure for unlawful
use any counterfeit or spurious coin, obligation, security,
or other article, or anything represented to be or intimated
or held out to be such counterfeit or spurious article, for
the purpose of executing such scheme or artifice or
attempting so to do, places in any post office or authorized
depository for mail matter, any matter or thing whatever to
be sent or delivered by the Postal Service, or deposits or
causes to be deposited any matter or thing whatever to be
sent or delivered by any private or commercial interstate
carrier, or takes or receives therefrom, any such matter or
thing, or knowingly causes to be delivered by mail or such
carrier according to the direction thereon, or at the place
at which it is directed to be delivered by the person to whom
it is addressed, any such matter or thing, shall be fined
under this title or imprisoned not more than 20 years, or
18 U.S.C. § 1341.
Fourth Circuit has explained Mail fraud is established when
the Government proves “that the defendant (1) knowingly
participated in a scheme to defraud and (2) mailed, or caused
to be mailed anything ‘for the purpose of executing
such scheme.'” United States v. Gillion,
704 F.3d 284, 294 (4th Cir. 2012) (quoting United States
v. Pierce, 409 F.3d 228, 232 (4th Cir. 2005)); see
also United States v. Murr, 681 F.2d 246, 248 (4th Cir.
1982); Pereira v. United States, 347 U.S. 1, 8
(1954). Courts have extensively considered the meaning and
application of these two elements, and the words within each,
over the past century. This Court examines each element in
Supreme Court first construed the meaning of the phrase
“any scheme or artifice to defraud” two decades
after 18 U.S.C. § 1341 was enacted. See Durland v.
United States, 161 U.S. 306 (1896). The court held that
the phrase should be interpreted broadly in the context of
property rights. Id. Responding to the court's
decision, Congress “codified the holding of
Durland in 1909, and in doing so gave further
indication that the statute's purpose is protecting
property rights.” McNally, 483 U.S. at 357.
Supreme Court has long held that “to defraud”
refers to “wronging one in his property rights by
dishonest methods or schemes, ” and generally signifies
“the deprivation of something of value by trick,
deceit, chicane or overreaching.” Hammerschmidt v.
United States, 265 U.S. 182, 188 (1924). Congress's
“codification of the holding in Durland in
1909 does not indicate that [it] was departing from this
common understanding. . . . [T]he second phrase simply made
it unmistakable that the statute reached false promises and
misrepresentations as to the future as well as other frauds
involving money or property.” McNally, 483 at
has been defined as causing “injury or loss to (a
person or organization) by deceit.” Black's Law
Dictionary 516 (10th ed. 2014). Webster's similarly
defines it as “to take or withhold from (one) some
possession, right, or interest by calculated misstatement or
perversion of truth, trickery, or other deception.”
Webster's Third New International Dictionary 593
(2002). Looking at the “common-law root of the federal
fraud statutes, ” to be guilty of fraud, “an
offender's purpose must be to injure.” United
States v. Sadler, 750 F.3d 585, 590 (6th Cir. 2014)
(internal quotations omitted). In 2016, the Eleventh Circuit
consulted these definitions and explained the difference
between deceiving and defrauding. See
United States v. Takhalov, 827 F.3d 1307, 1310 (11th
Cir. 2016). “[T]o defraud, one must
intend to use deception to cause some injury; but one can
deceive without intending to harm at all.”
Id. at 1312. Accordingly, “a schemer who
tricks someone to enter into a transaction has not
‘schemed to defraud' so long as he does not intend
to harm the person he intends to trick.” Id.
Second Circuit reached the same conclusion in United
States v. Regent Office Supply Co. Under the
Government's theory of the case, “fraud may exist
in a commercial transaction even when the customer gets
exactly what he expected and at the price he expected to
pay.” 421 F.2d 1174, 1180 (2d Cir. 1970). The
Regent court rejected the Government's theory.
Explaining that the purpose of a scheme to defraud
“must be to injure, ” the court found that there
was no proof any customer had actually been defrauded.
Id. at 1181. “As a result of the transactions
of which the untrue statements were a part, money and
property changed hands.” Id. “[F]alse
representations were made, and . . . they were made by
defendants' agents with knowledge of their
falsehood.” Id. According to the Government,
an inference should be made that the customers “were
induced to part with their money because of the false
representations, and that such calculated inducement
amount[s] to fraud” under 18 U.S.C. § 1341.
Id. Accordingly, the court found that although an
intent to deceive and even to induce was likely shown, that
alone is not enough to “constitute the
‘fraudulent intent' required by the statute.”
Id. The mail fraud statute requires “evidence
from which it may be ...