United States v. Smith ( 1996 )

Opinions of the United
1996 Decisions States Court of Appeals
for the Third Circuit
5-6-1996
USA v. Smith
Precedential or Non-Precedential:
Docket 95-5257
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
N0. 95-5257
UNITED STATES OF AMERICA
v.
J. DAVID SMITH
David Smith,
Appellant
On Appeal From the United States District Court
For the District of New Jersey
(D.C. Crim. Action No. 94-cr-00524-1)
Argued October 26, 1995
BEFORE: STAPLETON, McKEE and GIBSON,* Circuit Judges
(Opinion Filed May 6, l996)
Faith S. Hochberg
United States Attorney
Kevin McNulty
Kimberly M. Guagdagno (Argued)
Patrick L. Rocco
Assistant U.S. Attorneys
970 Broad Street - Room 502
Newark, NJ 07102
Attorneys for Appellee
Dominic F. Amorosa (Argued)
233 Broadway, Suite 3008
New York, NY 10279
Attorney for Appellant
1
* Honorable John R. Gibson, United States Circuit Judge for the
Eighth Circuit, sitting by designation.
2
OPINION OF THE COURT
STAPLETON, Circuit Judge:
J. David Smith contends that multiple conspiracy
indictments have put him twice in jeopardy for the same offense.
The defendant was indicted in New Jersey for conspiring to
defraud GTECH, his employer, through a kickback scheme. On the
same day, he was indicted in Kentucky for conspiring to defraud
GTECH with a different co-conspirator, also through a kickback
scheme. After he was acquitted of the Kentucky charges, Smith
filed a pretrial motion in the New Jersey prosecution to dismiss
the conspiracy charges on double jeopardy grounds and both the
conspiracy and substantive charges on collateral estoppel
grounds. The court denied his motion, finding that he had failed
to make the required showing under United States v. Liotard, 817
F.2d 1074 (3d Cir. 1987), and that the issues raised in the New
Jersey indictment were not identical to those decided in the
Kentucky trial.
We will affirm.
I.
All charges against J. David Smith stem from his
employment with GTECH, a lottery service company located in Rhode
Island. Smith was the national sales manager for GTECH until
3
December 1993, with offices at the Rhode Island headquarters. He
also maintained a farm and residence in Kentucky. During the
time periods covered by the indictments, GTECH provided services
to the state lotteries of New Jersey and Kentucky, as well as
other states.
Steven D'Andrea and Joseph LaPorta are New Jersey
residents who owned and controlled three New Jersey consulting
companies, Benchmark Enterprises, Inc. ("Benchmark"), Sambuca
Consultants ("Sambuca"), and Production Group Incorporated
("PGI"). Luther Roger Wells, Jr., was a Kentucky resident who
owned Bluegrass Industrial ("Bluegrass") and Bluegrass Industrial
Distributors ("BID"). BID ostensibly provided ribbons used to
print lottery tickets. Karen Smith, the defendant's wife, lived
in Kentucky with her husband. She owned International Marketing
Concepts, Inc. ("IMC").
The Federal Bureau of Investigations ("FBI") began
investigating D'Andrea in June of 1993. Investigators had
Benchmark corporate records, GTECH records, and Smith's Kentucky
bank records subpoenaed. By April 11, 1994, the investigation
had produced information that prompted the New Jersey Division of
the United States Attorney's Office to send Smith a target
letter. Smith was thereafter advised that the FBI's evidence
indicated that he was involved in a kickback scheme to defraud
GTECH. Smith allegedly would arrange for service providers in
New Jersey, New York, Texas, and Kentucky to be engaged by GTECH
2
and to be paid for non-existent or over-valued services.1 These
service providers included Benchmark, Sambuca, and PGI in New
Jersey, and BID in Kentucky. In return, these service providers
would send kickbacks to third parties in Kentucky designated by
Smith. These third parties included IMC and Billy Adams, a
carpenter who frequently did work on Smith's farm. When IMC,
Adams, and the three other designated third parties received the
"consulting fees" from the service providers in the various
states, they would transmit the funds to Smith and his wife or
apply them for their benefit. According to an affidavit of
Smith's counsel, the United States Attorney sought Smith's
cooperation and threatened him with indictments in all four
states if he failed to cooperate. Smith declined to cooperate
and indictments against him were simultaneously returned in
Kentucky and New Jersey.
The federal grand jury in Kentucky returned a ten count
indictment charging Wells and Smith with conspiracy to commit
mail fraud in violation of 18 U.S.C. § 371, aiding and abetting
mail fraud in violation of 18 U.S.C. §§ 1341 & 1346, money
laundering in violation of 18 U.S.C. § 1956, and assisting in the
preparation of a false corporate tax return in violation of 26
U.S.C. § 7206(2). The fraud counts charged Smith and Wells of
defrauding GTECH of money and Smith's "honest services." See
1
Although the investigations uncovered activities in Texas and
New York, Smith limits his double jeopardy arguments to the
activities alleged in Kentucky and New Jersey.
3
Indictment in United States v. Smith, ¶¶ 6, 19 (W.D. Ky.,
September 29, 1994).
Allegedly, Smith authorized BID to receive 8% brokerage
commissions on paper sales from RMF Business Forms, Inc., a New
York corporation, to GTECH and the Kentucky Lottery Corporation.
Wells set up BID for the sole purpose of receiving the brokerage
payments. Neither Wells nor BID provided services of any kind to
GTECH or the Kentucky Lottery Corporation. Smith had GTECH
employees in Kentucky fill out false invoices from Wells
requesting his 8% commission, which were then processed in Rhode
Island.
When Wells received his payments, he sent a portion to
IMC, Adams, and other designated third parties. The payments
were disguised as "consulting fees." The alleged conspiracy
lasted from April 1992 to February 1994, and a total of $31,000
was purportedly kicked back to Smith and his wife during this
period.
The Kentucky prosecution went to trial. After the
prosecution presented its case, the judge entered a judgment of
acquittal on all the charges pursuant to Fed. R. Crim. P. 29. He
found that (i) the record contained insufficient evidence
indicating that GTECH lost any money; (ii) a violation of GTECH's
intangible right to Smith's honest services could not support a
criminal fraud conviction; and (iii) the government failed to
prove that GTECH was unaware of the kickback payments and that
the payments were unauthorized. The judge found that the facts
4
indicated that GTECH had willingly paid BID fees for the purpose
of generating goodwill, and no fraud had occurred.
The New Jersey federal grand jury returned a nineteen
count indictment charging Smith, D'Andrea, and LaPorta with
conspiring unlawfully to transport money obtained by fraud in
violation of 18 U.S.C. § 371, transporting such money in
violation of 18 U.S.C. § 2314, violating the New Jersey
commercial bribery statute in violation of 18 U.S.C. § 1952, and
laundering the proceeds of their fraud in violation of 18 U.S.C.
§ 1956. See Indictment in United States v. Smith (D.N.J.,
September 29, 1994).
Allegedly, Smith met with D'Andrea and LaPorta in April
1992. LaPorta agreed to introduce GTECH employees to
representatives of the State of New Jersey to discuss
implementing a new lottery game called "Keno." Smith recommended
to officers of GTECH that GTECH employ Benchmark as a consultant
in New Jersey. He eventually had $579,047 in consulting fees
paid to Benchmark, and in return, D'Andrea and LaPorta gave Smith
$157,000 in kickbacks. Over the course of the alleged
conspiracy, Smith also directed GTECH to pay consulting fees to
PGI and Sambuca. As in the Kentucky scheme, the consultants sent
the payments to IMC, Adams, and other third parties in Kentucky
designated by Smith, who then applied the balance for the benefit
of Smith and his wife. The conspiracy allegedly lasted from
March 1992 to March 1994.
5
The trial in the New Jersey case was scheduled to
proceed in April 1995. In pretrial motions, Smith raised double
jeopardy and collateral estoppel as defenses to all the New
Jersey counts. Applying the analysis set forth in Liotard, the
court found, without an evidentiary hearing, that the conspiracy
charge was not barred because Smith had failed to make the
required non-frivolous showing that there had been only one
conspiracy. Issue preclusion was found to be inapposite since
none of the issues decided in Kentucky were presented by the New
Jersey indictment. Smith appeals the court's ruling on the
conspiracy charge and denial of collateral estoppel on all the
charges. He does not appeal the ruling that the substantive
charges are not barred by double jeopardy.
II.
The district court had subject matter jurisdiction
pursuant to 18 U.S.C. § 3231. Pretrial orders denying motions to
dismiss an indictment on double jeopardy grounds are within the
"collateral order" exception to the final order requirement. See
United States v. Esposito, 912 F.2d 60, 61 (3d Cir. 1990), cert.
dismissed, 498 U.S. 1075 (1991). Consequently, we have appellate
jurisdiction to consider Smith's appeal under 28 U.S.C. § 1291.
Our review of double jeopardy challenges is plenary. See United
States v. Ciancaglini, 858 F.2d 923, 926 (3d Cir. 1988). Since
collateral estoppel as a bar to reprosecution is a component of
the Double Jeopardy Clause, see Ashe v. Swenson, 397 U.S. 436,
6
445-46 (1970), and is an issue of law, see Swineford v. Snyder
County, 15 F.3d 1258, 1265 (3d Cir. 1994), our review of the
collateral estoppel claims is also plenary.
III.
The Fifth Amendment guarantees that no person shall "be
subject for the same offense to be twice put in jeopardy of life
or limb." U.S. Const. amend. V. The Supreme Court has
emphasized the importance of protecting individuals not only from
double punishment, but also from being twice subject to trial:
[T]he guarantee against double jeopardy assures an
individual that, among other things, he will not be
forced, with certain exceptions, to endure the personal
strain, public embarrassment, and expense of a criminal
trial more than once for the same offense. It thus
protects interests wholly unrelated to the propriety of
any subsequent conviction. . . . [E]ven if the accused
is acquitted, . . . he has still been forced to endure
a trial that the Double Jeopardy Clause was designed to
prohibit. Consequently, if a criminal defendant is to
avoid exposure to double jeopardy and thereby enjoy the
full protection of the Clause, his double jeopardy
challenge to the indictment must be reviewable before
that subsequent exposure occurs.
Abney v. United States, 431 U.S. 651, 661-62 (1977).
Following Abney, we established in United States v.
Inmon, 568 F.2d 326 (3d Cir. 1977), the procedure by which a
defendant could vindicate his double jeopardy rights prior to
trial. We held that "when a defendant has made a non-frivolous
showing that a second indictment is for the same offense for
which he was formerly in jeopardy, the government must prove by a
preponderance of the evidence that there were in fact separate
7
offenses before the defendant may be subjected to trial." Id. at
332. In allocating the burden of proof, the paramount
consideration was the "impracticality of placing the evidentiary
burden on" the defendant:
Inmon would be required to prove facts establishing the
charge of conspiracy to which he pleaded guilty and to
prove facts establishing the second conspiracy as well.
How he could do either, without access to the proof on
which the government proposed to rely and without the
ability to offer immunity to prospective witnesses, is
not readily apparent. Even after a trial on the first
indictment, the defendant would lack access to the
government's proof of the second offense.
Id. at 329-30.
We have been keenly aware of the difficulty of
vindicating double jeopardy rights prior to trial. We have
stressed that the possibility of making a non-frivolous showing
must be within the reach of a defendant innocent of the charges
and without knowledge of the evidence the government may put
forth. Were the threshold showing made any higher, a conspiracy
defendant would be without a meaningful opportunity to protect
his right to avoid exposure to a second trial for the same crime.
These considerations define an important difference between an
assessment of double jeopardy rights prior to an evidentiary
hearing and after a hearing or full trial when we have the
benefit of a developed record. Compare, e.g., Ciancaglini, 858
F.2d at 926-30; Liotard, 817 F.2d at 1077-79; and Inmon, 568 F.2d
at 329-33 with, e.g., United States v. Becker, 892 F.2d 265 (3d
Cir. 1989); United States v. Felton, 753 F.2d 276 (3d Cir. 1985);
and United States v. Inmon, 594 F.2d 352 (3d Cir.) (affirming
8
denial of double jeopardy claim after evidentiary hearing), cert.
denied, 444 U.S. 859 (1979).
Although the "same evidence" test is normally used to
ascertain whether successive prosecutions charge the same crime,
in Liotard we recognized that multiple conspiracy indictments
raised special concerns that the "same evidence test" might not
adequately address.2 "The danger is that successive indictments
against a single defendant for participation in a single
conspiracy might withstand same evidence scrutiny if the court
places undue emphasis upon the evidence used to prove the
commission of the overt acts alleged." Id. at 1078. We noted
that "[i]t is the agreement which constitutes the crime, not the
overt acts. . ." Id. (quoting Young, 503 F.2d at 1076). To
address this concern, we adopted the "totality of the
circumstances" test, which did not emphasize overt acts. From
prior cases of this Court that had implicitly used that test, we
extracted four factors to consider when determining whether there
was one or more agreements: (a) the "locus criminis" of the
alleged conspiracies; (b) the degree of temporal overlap between
the conspiracies; (c) the overlap of personnel between the
conspiracies, including unindicted co-conspirators; and (d) the
similarity in the overt acts charged and role played by the
2
The same evidence test asks whether "the evidence required to
support a conviction upon one of [the indictments] would have
been sufficient to warrant a conviction upon the other." United
States v. Young, 503 F.2d 1072, 1075 (3d Cir. 1974) (quoting
United States v. Pacelli, 470 F.2d 67, 72 (2d Cir. 1972), cert.
denied, 410 U.S. 983 (1973)).
9
defendant in each indictment. Id. If the defendant makes the
requisite showing, he is entitled to a pretrial evidentiary
hearing to adjudicate his double jeopardy claim. Id. at 1077.
In applying the Liotard totality of the circumstances
analysis, we have understood that the ultimate inquiry presented
by conspiracy double jeopardy claims is whether there are two
agreements or only one. See Becker, 892 F.2d at 268 ("The
critical determination is whether one agreement existed."); see
also Ciancaglini, 858 F.2d at 927. To that end, we have not
applied the Liotard factors in a rigid manner, as different
conspiracies may warrant emphasizing different factors. See id.
at 930 ("[I]t is neither wise nor possible to attempt an
exhaustive listing of the factors that may enter into the
totality of the circumstances test. . . ."). In Becker, the
defendant was convicted in Pennsylvania of a conspiracy to
possess with intent to distribute marijuana in Pennsylvania, New
Jersey, and Massachusetts. He had a prior conviction in West
Virginia for a conspiracy to manufacture and distribute
marijuana, and argued that the West Virginia conviction barred
the Pennsylvania conviction. In this particular conspiracy case,
we found important the fact that the conspiracies had different
objects. The object of the West Virginia conspiracy had been to
manufacture and possess with intent to distribute. In contrast,
the Pennsylvania indictment alleged that the objects were to
smuggle, store, and distribute marijuana. "These were two
different objectives and agreements, and hence two conspiracies."
10
Becker, 892 F.2d at 268. Although we noted that the time periods
alleged in both indictments overlapped, such temporal overlap by
itself did not prove one conspiracy. Id. Similarly, when we
applied the totality of the circumstances test to successive RICO
prosecutions in Ciancaglini, we found most important the fact
that the indictments alleged different patterns of racketeering
activity. See 858 F.2d at 930. One indictment alleged a pattern
of illegal gambling and extortion; the other focussed on murder
and drug distribution. We noted that the outcome was sensitive
to a different mix of factors: "[U]nder our totality of the
circumstances test, a more significant overlap of time, or a more
substantial identity of overt acts or similarity in predicate
acts could dictate a different result." Id.Finally, we must keep in mind that a primary objective
of our jurisprudence in this area is to assure that the substance
of the matter controls and not the grand jury's characterization
of it. Thus, for example, the fact that the Kentucky indictment
here alleges a conspiracy to commit mail fraud while the New
Jersey one alleges a conspiracy to transport in interstate
commerce the proceeds of a fraud is wholly unimportant if the
evidence indicates that there was but one agreement to defraud
GTECH utilizing both the mails and the interstate transportation
of funds. E.g., Braverman v. United States, 317 U.S. 49 (1942);
United States v. Reyes, 930 F.2d 310, 312 (3d. Cir. 1991); United
States v. Morrow, 717 F.2d 800, 804 (3d Cir. 1983), cert. denied,
464 U.S. 1069 (1984). We must not allow the double jeopardy
11
clause to be subverted by artful pleading or by the selective and
strategic reservation of evidence in one prosecution so that it
can be used in a subsequent one premised upon the same agreement.
The government has argued here that the details and
scope of the criminal conspiracies as revealed by a simple
reading of the New Jersey and Kentucky indictments should control
our inquiry. We decline the government's invitation to look
solely to the acts as alleged in each indictment. Those acts
are, of course, primarily the overt acts which the grand jury
chose to allege in each instance. Undue emphasis on the alleged
overt acts is precisely the problem we sought to avoid when we
adopted the totality of the circumstances approach. That
approach requires us to look into the full scope of activities
described and implied in the indictments.
In Felton, for example, we looked not only to the overt
acts alleged but also to aspects of the conspiracy implied but
not emphasized or even described in the indictments. The
defendant Hathorn had already pled guilty in Florida to a charge
of conspiracy to possess with intent to distribute marijuana when
he was indicted in Pennsylvania as Felton's drug supplier. The
Pennsylvania indictment simply stated that Felton purchased large
quantities of marijuana from Hathorn in 1980. Prior to trial, an
evidentiary hearing had been held following a successful non-
frivolous showing, but the court denied his double jeopardy
claim. We reversed, finding that testimony indicated that
Hathorn was involved in one "continuing, albeit loosely
12
organized, conspiracy" to smuggle drugs into the country by plane
and distribute them. Felton, 753 F.2d at 279. Hathorn and his
co-conspirators had made at least four drug smuggling flights in
1980 and 1981. The smuggling flight that was the basis of the
Florida indictment was one of these flights, and at the
Pennsylvania hearing, an agent of the Drug Enforcement Agency
linked the marijuana sold to Felton to another of these flights.
We noted that these flights were very similar, all originating in
Atlanta, picking up marijuana in Columbia, and returning to
similar locations. Id. at 280. Had we not looked beyond the
acts alleged in the Pennsylvania indictment, we would not have
uncovered the operational and locational similarity of the
conspiracies in which Hathorn participated. Thus, we must look
to the entire record before the district court in examining the
totality of the circumstances to determine if the conspiracies
alleged in the two indictments truly are different agreements.
IV.
Using the Liotard factors as a framework for evaluating
the totality of the circumstances, we have carefully examined
Smith's double jeopardy claim. He insists that the indictments
paint a picture of a single, over-arching conspiracy in which he
acted in concert with IMC, Adams, his Kentucky and New Jersey co-
defendants, and others to divert funds from GTECH in Rhode Island
for the benefit of himself and his wife in Kentucky. While we
agree that the two alleged conspiracies are similar in location,
13
time frame, and the roles he played, Smith has failed to provide
a basis for inferring that all of the conspirators were tied
together into one conspiracy. There is some overlap among the
alleged conspirators, but he has shown no reason to believe that
the New Jersey defendants and Kentucky defendants may have been
committed to the same agreement.
"Locus criminis" is defined very simply as the
"locality of a crime; the place where a crime was committed."
Black's Law Dictionary 941 (6th ed. 1990). Smith argues that the
primary locations for both conspiracies was in Rhode Island,
where GTECH's headquarters and his office were located, and where
the funds were allegedly diverted, and Kentucky, where he
allegedly received the kickbacks. The government stresses that
all the acts alleged in the Kentucky indictment occurred in
Kentucky, and all those alleged in the New Jersey indictment
occurred in New Jersey. We agree with Smith that events
underlying the New Jersey and Kentucky indictments commence and
end at the same spots and that the geography of his alleged
criminal activity is consistent with the existence of what he
describes as an over-arching conspiracy. Although the
indictments focus on acts in different states, they both
implicate important acts in furtherance of the alleged
conspiracies in both Rhode Island and Kentucky.
With respect to the chronological component of the
Liotard analysis, extensive temporal overlap is apparent from the
record: the New Jersey conspiracy spanned March 1992 to March
14
1994, and the Kentucky conspiracy spanned April 1992 to February
1994.
Also, we agree with Smith that the government's
evidence indicates he played a virtually identical role in the
activities that the government characterizes as two conspiracies.
In each instance, he used his influence as national sales manager
to procure contracts or fraudulent sales for his alleged co-
conspirators. He then used his relationships with his creditors
and others in Kentucky to launder the kickback proceeds.
While we agree with Smith that these three factors are
consistent with a single conspiracy, they are neither alone nor
together dispositive in his case. Two conspiracies may be found
despite similarity in location, see, e.g., United States v.
Macchia, 35 F.3d 662, 671 (2d Cir. 1994); Ciancaglini, 858 F.2d
at 929, and extensive overlap in time periods, see, e.g.,
Macchia, 35 F.3d at 669-70; United States v. Brown, 926 F.2d 779,
782 (8th Cir. 1991); Becker, 892 F.2d at 268; Ciancaglini, 858
F.2d at 930. A defendant may play a similar role in multiple,
unrelated conspiracies. See, e.g., United States v. Robinson,
774 F.2d 261, 273-75 (8th Cir. 1985) (holding that organizer of
two similar, contemporaneous loan scams could be tried for each
loan scam conspiracy); United States v. Somers, 950 F.2d 1279,
1282 (7th Cir. 1991) (holding two, overlapping conspiracies were
distinct even though defendant acted as major distributor of
cocaine in each), cert. denied, 504 U.S. 917 (1992).
15
That brings us to the factor most critical in the
context of Smith's case -- the extent of the overlap of personnel
between the two alleged conspiracies. Smith correctly points out
that he and IMC and the other designated third parties in
Kentucky played a role in the activities alleged in both the
Kentucky indictment and the New Jersey indictment. To this
extent, there is an overlap. But Smith's argument, we believe,
misses a critical point.
An overlap in membership is useful to a double jeopardy
analysis to the extent that it helps determine whether the
alleged conspirators in both indictments were committed to the
same objectives and consequently were members of a single
conspiracy. When the same people are involved in the activities
which the government alleges to be undertaken in furtherance of
two different conspiracies, it will normally be possible to infer
that they were aware of each other, of each other's activities,
and of each other's objectives. When the activities are
interdependent or mutually supportive to any degree, the
inference becomes compelling that the participants are involved
in but one conspiracy. Even where there are participants in one
alleged conspiracy who are not involved in the activities of the
other alleged conspiracy, these inferences may still have
persuasive force when the common participants predominate.
However, in evaluating the degree of overlap-in-participants
factor in a particular case, one must look to the circumstances
of both the common participants and the participants apparently
16
connected with only one of the alleged conspiracies. When the
evidence indicates that the activities of the alleged
conspiracies are not interdependent or mutually supportive and
that there are major participants in each conspiracy who lack
knowledge of, or any interest in, the activities of the other,
this factor weighs heavily in favor of a conclusion that two
conspiracies exist.
The necessity of looking to the circumstances of all
participants in the two alleged conspiracies arises from basic
conspiracy law. A criminal agreement is defined by the scope of
the commitment of its co-conspirators. See generally Marcus, P.,
Prosecution and Defense of Conspiracy Cases, §§ 4:01-4:02 (1995).
Thus, where a defendant is unaware of the overall objective of an
alleged conspiracy or lacks any interest in, and therefore any
commitment to, that objective, he is not a member of the
conspiracy. In Kotteakos v. United States, 328 U.S. 750 (1946),
for example, the indictment alleged a single conspiracy to obtain
loans from the FHA using fraudulent information. The evidence,
however, showed that while a single individual, Brown, was at the
"hub" of the scheme and assisted in the preparation of each loan
application, the other individuals in each loan transaction had
no interest in the success of any loan application other than
their own. As described in a subsequent Supreme Court case, the
evidence in Kotteakos did not show a single conspiracy:
Except for Brown, the common figure, no conspirator was
interested in whether any loan except his own went
through. And none aided in any way, by agreement or
otherwise, in procuring another's loan. The
17
conspiracies therefore were distinct and disconnected,
not parts of a larger general scheme, both in the phase
of agreement with Brown and also in the absence of any
aid given to others as well as in specific object and
result. There was no drawing of all together in a
single, over-all, comprehensive plan.
Blumenthal v. United States, 332 U.S. 539, 558 (1947). "The jury
could not possibly have found, upon [this] evidence, that there
was only one conspiracy." Kotteakos, 328 U.S. at 768.
In contrast, the Supreme Court in Blumenthal found that
the evidence showed a single conspiracy to market whiskey at
prices above the legal ceiling price in a manner that would
appear lawful. Even though some of the multiple participants in
the scheme were unaware of the identity or role of other
participants, all were committed to a single, common objective.
As the Court explained the evidence:
All knew of and joined in the overriding scheme. All
intended to aid the owner, . . . to sell the whiskey
unlawfully, though the two groups of defendants
differed on the proof in knowledge and belief
concerning the owner's identity. All by reason of
their knowledge of the plan's general scope, if not its
exact limits, sought a common end, to aid in disposing
of the whiskey. True, each salesman aided in selling
only his part. But he knew the lot to be sold was
larger and thus that he was aiding in a larger plan. He
thus became a party to it . . . ."
Blumenthal, 332 U.S. at 559.
Following the law established in Kotteakos and
Blumenthal, in numerous variance cases we have drawn a
distinction between multiple and single conspiracies based upon
the existence of a commitment to a single set of objectives. See
United States v. Kenny, 462 F.2d 1205, 1216 (3d Cir.) (holding
that "evidence of a large general scheme, and of aid given by
18
some conspirators to others in aid of that scheme" is sufficient
to establish single conspiracy), cert. denied, 409 U.S. 914(1972); see also Reyes, 930 F.2d at 313; United States v.
Theodoropoulos, 866 F.2d 587, 593 (3d Cir. 1989); United States
v. Adams, 759 F.2d 1099, 1109-10 (3d Cir.), cert. denied, 474
U.S. 906, and 474 U.S. 971 (1985).
We have found this distinction between multiple and
single conspiracies no less compelling in the double jeopardy
context. In Becker, we compared a conspiracy to grow and
distribute marijuana with a conspiracy to smuggle and distribute
foreign-grown marijuana and found decisive that "[t]hese were two
different objectives" and "hence two conspiracies." 892 F.2d at
268 (emphasis added). In Liotard, we compared two conspiracies
to steal different truckloads of goods from the same trucking
company. The government argued that the fact that the separate
heists were arranged in distinct conversations proved two
conspiracies. We held, however, that the defendant had made a
non-frivolous showing of a single conspiracy. We noted, inter
alia, that the conspirators in each alleged conspiracy were
committed to a common goal. "The . . . goal of each conspiracy
was, in addition to the personal enrichment of the participants,
the financial ruination of the alleged co-conspirators' employer
. . . ." 817 F.2d at 1077. We rejected the government's
contention because once all the conspirators had agreed to the
common objective, the organization of sub-plots would not be
"indicative of a separate conspiracy." Id. at 1079 n.8. As
19
succinctly stated by the court in United States v. Mintz, "[i]n a
double jeopardy analysis involving conspiracies, the court must
determine whether the two transactions were interdependent and
whether the Defendants were 'united in a common unlawful goal or
purpose.'" 16 F.3d 1101, 1104 (10th Cir.), cert. denied, 114 S.
Ct. 2723, and 114 S. Ct. 2760 (1994); see also Macchia, 35 F.3d
at 771-72 (examining interdependence as one factor in double
jeopardy analysis); United States v. Dortch, 5 F.3d 1056, 1063-64
(7th Cir. 1993) (same), cert. denied, 114 S. Ct. 1077 (1994);
United State v. Daily, 921 F.2d 994, 1007 (10th Cir. 1990) ("Of
principle concern is whether the conduct of the alleged co-
conspirators, however diverse and far-ranging, exhibits an
interdependence."), cert. denied, 502 U.S. 952 (1991). Cf.
United States v. Richerson, 833 F.2d 1147, 1154 (5th Cir. 1987)
(discussing interrelatedness of several conspiracies).
The ultimate purpose of the totality of the
circumstances inquiry is to determine whether two groups of
conspirators alleged by the government to have entered separate
agreements are actually all committed to the same set of
objectives in a single conspiracy. A non-frivolous showing of a
single conspiracy will be made when the record reveals a degree
of participant overlap, which together with other factors,
permits an inference that members of each alleged conspiracy were
aware of the activities and objectives of the other conspiracy
and had some interest in the accomplishment of those objectives.
When, as here, a defendant claims that there was a single hub and
20
spoke conspiracy despite the presence of spoke conspirators who
lacked knowledge of each other's activities, a factfinder will be
unable to infer the existence of but one conspiracy in the
absence of evidence that the activities of the spoke participants
were, to some degree, interdependent or mutually supportive.
In the context of this case, we must look to whether
Wells and his companies and D'Andrea and LaPorta and their
companies were engaged in any common activities that are alleged
in either or both indictments or are otherwise revealed in the
record, or if their respective schemes were interdependent in any
way. The answer to this inquiry is readily apparent -- there is
nothing to indicate that the co-conspirators named in the
Kentucky indictment and those named in the New Jersey indictment
engaged in any common activities or that their respective schemes
were interdependent.
The lack of common activities or interdependence is the
root problem with Smith's position. He gives us no reason to
believe that the New Jersey and Kentucky conspiracies were
interdependent or mutually supportive in any way. He can
identify nothing in the record suggesting that Wells was actually
aware of D'Andrea and LaPorta, or vice versa, and he cannot point
to any common activities engaged in for the benefit of all
participants. The co-conspirators in each state derived no
benefit, financial or otherwise, from Smith's activities in the
other state, nor was the success of the conspiracy in one state
contingent on the success of the conspiracy in the other. To the
21
contrary, what the record reveals of the economics of the
kickback schemes strongly suggests that Wells had no motive to
commit himself to anything beyond the receipt of his commissions
and that the same is true for D'Andrea and LaPorta and their
consulting fees. From the lack of mutual awareness and
interdependence, economic or otherwise, we can only conclude that
each group of conspirators had an interest in and were committed
only to receiving their own unearned compensation.
Smith also suggests that the indictments show that he
may have been involved in a hub or core conspiracy that planned
the subconspiracies in each state. Such a core conspiracy
conceivably could exist even where the subconspiracies are not
interdependent except for the overlap in membership and common
planning. Put differently, he is suggesting that there may be
three conspiracies, one core conspiracy and two or more
subconspiracies, and that acquittal on one subconspiracy
precludes prosecution on the others. We agree that if Smith,
IMC, and the other designated third parties in Kentucky
conspired, they may well have been core conspirators in an
interstate conspiracy headed by Smith.3 The possibility that a
core conspiracy existed, however, does not change our conclusion.
3
The current record would permit a trier of fact to infer that
(1) the kickbacks paid by the service providers in both Kentucky
and New Jersey were intended to, and did, benefit Mrs. Smith; (2)
IMC received kickbacks from the service providers in both
Kentucky and New Jersey and passed them on to, or applied them
for the benefit of, Mr. and Mrs. Smith; and (3) Mrs. Smith was
the sole principal in IMC. Based on these inferences, we believe
a trier of fact could further infer that Smith, Mrs. Smith and
22
If Smith had perceived the opportunity to defraud GTECH
through the submission of fraudulent invoices from service
providers, and acting alone like Brown in Kotteakos, had
independently recruited service providers in several states to
submit such invoices, arranged for the payment of the invoices by
GTECH, and received kickbacks from the service providers in each
state, he and the service providers in each state, like Brown and
each of the loan applicants, would have been members of separate
conspiracies. Under the principles discussed in Kotteakos and
applied in subsequent decisions,4 the service providers in each
state, assuming that they lacked commitment to the success of
Smith's overall, interstate scheme to defraud, would have been
members of distinct conspiracies, and Smith could have been
prosecuted separately for each.
IMC were aware of, and committed to, the success of an interstate
conspiracy to defraud GTECH.
4
See, e.g., Robinson, 774 F.2d at 265, 273-75 (holding that
"mastermind" behind two similar loan scams involving different
sets of co-conspirators could be tried for both conspiracies);
United States v. Korfant, 771 F.2d 660, 662 (2d Cir. 1985)
(holding that company participating in two price fixing schemes
with different sets of co-conspirators could be tried for both
because "[t]he participation of a single common actor in what are
allegedly two sets of conspiratorial activities does not
establish the existence of a single conspiracy . . . . This is
true even where the common actor is alleged to have directed both
sets of activities") (citations omitted); United States v. Papa,
533 F.2d 815, 822 (2d Cir. 1976) (holding that defendant could be
tried for two conspiracies with different co-conspirators because
he "was the director of two unrelated chains distributing
narcotics" and "the mere fact that he supervised each chain does
not transform two separate conspiracies into one" (emphasis
added)); see also Somers, 950 F.2d at 1282 (holding that cocaine
distributor could be convicted of two, contemporaneous
conspiracies to distribute cocaine in same locality where
distributees and suppliers differed in each conspiracy).
23
The question posed by Smith's possible participation in
a core conspiracy is whether this conclusion would be different
if the evidence were to show that Smith, while independently
recruiting the service providers in each state, had secured the
commitment of his wife, IMC, and perhaps other core conspirators
to his overall, interstate scheme to defraud. While we have
found surprisingly little authority on the point, we are
convinced that the answer is "no." Because a conspiracy is
defined by the scope of commitment of its participants, the
existence of a master, core conspiracy would not change the
character of the agreements with the service providers. Each has
its own distinct scope of commitment and membership. Whether or
not there was a core conspiracy, we perceive no reason why Smith
cannot be prosecuted both for his conspiracy with the Kentucky
service provider and for his conspiracy with the New Jersey
service providers. As Justice Stevens observed in United States
v. Broce, the fact that there may be an ongoing, core conspiracy
is not inconsistent with the prosecution of a member of that
conspiracy for separate illegal agreements with others entered
into in furtherance of the overall objective of the core
conspiracy:
[T]he continuous, cooperative effort among Kansas
highway contractors to rig bids, which permeated the
Kansas highway construction industry for more than 25
years . . . was unquestionably a single, continuing
conspiracy that violated § 1 of the Sherman Act, 15
U.S.C. § 1. It does not necessarily follow, however,
that separate bid-rigging arrangements carried out in
furtherance of an illegal master plan may not be
prosecuted separately.
24
. . . .
There is something perverse in the assumption that
respondents' constitutional rights may have been
violated by separately prosecuting them for each of two
complete and flagrant violations of the Sherman Act
simply because they may also have been guilty of an
ongoing and even more serious violation of the same
statute for more than a quarter of a century.
488 U.S. 563, 580-81 (Stevens, J., concurring). See also Dortch,
5 F.3d at 1063 ("While it is likely that [defendants] only had
one agreement with each other, that does not prevent them, as a
partnership, from joining more than one conspiracy to distribute
cocaine in the East St. Louis/St. Louis area. '[T]he guarantee
against double jeopardy does not insulate a criminal from
punishment for subsequent offenses merely because he chooses to
continue committing the same type of crime.' West, 670 F.2d at
681.").5
As we have indicated, a non-frivolous showing of a
single conspiracy under Liotard's totality of circumstances
approach is not a high threshold. The defendant need only be
able to identify alleged facts and other evidence which, if
credited, gives reason to believe that any alleged conspiratorial
activity was in furtherance of a single conspiracy. Having
considered the totality of circumstances in Smith's case, we
5
This case does not present the issue of whether the
government, having first prosecuted a defendant for an over-
arching core conspiracy, can then prosecute him for a
subconspiracy with one who is not a core conspirator to
accomplish one of the objectives of the core conspiracy.
Arguably, this would be akin to a subsequent prosecution for a
lesser included offense. Since the Kentucky prosecution here was
limited to the conspiracy to defraud GTECH in the transactions
involving Kentucky invoices, we, of course, express no opinion on
that issue.
25
conclude that he has failed to make a non-frivolous showing
because there is nothing in the record that suggests that the New
Jersey defendants and Kentucky defendants are tied together into
a single conspiracy by a commitment to a single set of
objectives. Our conclusion is the same whether we examine the
totality of the circumstances for a single conspiracy or for a
core conspiracy with multiple subconspiracies.
V.
Smith contends that under Ashe v. Swenson, 397 U.S. 436(1970), the government is collaterally estopped from prosecuting
him in New Jersey. He argues that because the Kentucky district
court found no "intent to defraud" GTECH on both the conspiracy
and mail fraud counts, the government is precluded from proving
any intent to defraud GTECH in New Jersey, defeating the
conspiracy and substantive fraud charges set forth in the
indictment there. We are unpersuaded.
The findings of the trial judge in Kentucky were, of
course, limited to the charges before him. They were accordingly
limited to the payments made by GTECH to Bluegrass and the
illegal kick-back payments made by it. The court concluded that
the government had not proved that the payments were made in
furtherance of a scheme to defraud GTECH. While the government
should not be permitted to attempt to contradict these factual
findings in the New Jersey case, there is no reason to believe
that it will attempt to do so. Clearly, there is no conflict
26
between those findings and the facts alleged in the New Jersey
indictment and, accordingly, there is no basis for not allowing
the case to proceed to trial.6
VI.
The April 5, 1995, order of the district court will be
affirmed.
6
Insofar as the conspiracy charge is concerned, the defendant's
double jeopardy and collateral estoppel claims both turn on
whether there is but one conspiracy. Smith recognizes this fact
himself. In the section of his brief arguing for estoppel, he
states that "[w]hen one considers that the Government fragmented
the single alleged fraud into two separate indictments for
tactical reasons, the acquittal in Kentucky was in reality an
acquittal for the whole fraud, no matter how the Government
divided up the charge." Appellant's Brief at 36-37. As we have
indicated, we perceive no bar to the government's proceeding to
attempt to prove the New Jersey conspiracy.
27