Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-00-03083/USCOURTS-caDC-00-03083-0/pdf.json

Parties Involved:
Robert Hitt
Appellee
United States of America
Appellant

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 22, 2001 Decided May 8, 2001

No. 00-3083

United States of America,

Appellant

v.

Robert Hitt,

Appellee

Appeal from the United States District Court

for the District of Columbia

(No. 99cr00353-09)

Chrisellen R. Kolb, Assistant U.S. Attorney, argued the

cause for appellant. With her on the briefs were Wilma A.

Lewis, U.S. Attorney, at the time the brief was filed, John R.

Fisher, Roy W. McLeese, III and Steven J. Durham, Assistant U.S. Attorneys.

Andrew L. Frey argued the cause for appellee. On the brief

were Dan Marmalefsky and Eric M. Acker.

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Before: Williams and Rogers, Circuit Judges, and

Silberman, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Rogers.

Dissenting opinion filed by Circuit Judge Williams.

Rogers, Circuit Judge: On October 19, 1999, the Grand

Jury returned a sixteen-count indictment for alleged fraudulent misrepresentations made to the United States Department of Commerce in connection with the sale by the McDonnell Douglas Corporation to the People's Republic of China of

machinery that was subject to export controls. Count One of

the indictment charged Robert Hitt, the Director of the China

Program Office at Douglas Aircraft Company, a wholly-owned

subsidiary of McDonnell Douglas, along with other defendants, with conspiring to violate the laws of the United

States, in violation of 18 U.S.C. s 371 (2000), by deceiving the

United States government in the process of completing the

sale of the equipment. The district court ruled that the

conspiracy alleged in Count One ended on September 14,

1994, when the Department of Commerce issued the export

licenses required to sell the machinery, and that the prosecution of Hitt was therefore barred by the five-year statute of

limitations. See United States v. Hitt, 107 F. Supp. 2d 29, 30

(D.D.C. 2000); see also 18 U.S.C. s 3282 (2000). The government appeals. We affirm.

I.

The indictment states that in the early 1990s, McDonnell

Douglas closed a manufacturing plant located in Columbus,

Ohio that had produced military aircraft for the United

States. See Count One pp 18-19. After closing this facility,

McDonnell Douglas and Douglas Aircraft Company (jointly,

"MDC") began negotiations with the China National AeroTechnology Import and Export Corporation ("CATIC") and

some of its subsidiaries1 for the sale of various pieces of

__________

1 The CATIC subsidiaries named in the indictment are the

China National Aero-Technology International Supply Company

("CATIC/Supply"), located in Beijing; CATIC (USA) Inc., a whollyowned subsidiary of CATIC located in El Monte, California; and

equipment from the plant. See Count One pp 21-39. Among

the equipment in which CATIC expressed an interest were

several "machining tools"--"large sophisticated pieces of

equipment used in the production of aircraft parts." Count

One p 19. These tools were subject to export controls and

required export licenses from the United States Department

of Commerce. See Export Administration Act of 1979, 50

U.S.C. app. ss 2401-2420 (1991); Export Administration

Regulations, 15 C.F.R. ss 768-99 (2001).2 Upon learning

that the Department of Commerce strongly discouraged

MDC's sale of the equipment, see Count One p 26, MDC,

through its legal department, informed CATIC that the requisite export licenses "would not be obtainable." Count One

p 28. CATIC, in turn, sought assistance from Robert Hitt "in

resolving the export license problem related to the sale of the

[machine tools]." Count One p 29. As Director of the China

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Program Office, Hitt was responsible for implementing the

"trunkline program,"3 a $1 billion contract between MDC and

CATIC for the manufacture of commercial aircraft in China.

See Count One p 35. This contract gave MDC and Hitt a

vested financial interest in maintaining a favorable business

relationship with CATIC and the Chinese government. See

Count One pp 35-36. When CATIC encountered difficulties

in its negotiations with MDC for the Columbus equipment,

CATIC alluded to the trunkline contract. See Count One

__________

TAL Industries, Inc., a wholly-owned subsidiary of CATIC/US

located in El Monte, California. CATIC is a People's Republic of

China government-formed corporation located in Beijing. See

Count One p 8. We refer to these defendants as "the CATIC

defendants," and to the People's Republic of China as "China."

2 Although the Export Administration Act expired on August

20, 1994, the government maintains that the export controls mandated by the Act remained in force pursuant to a series of Executive Orders. Because the instant appeal addresses solely Hitt's

statute of limitations challenge, the court has no occasion to address

this matter.

3 The indictment refers to the project as both "trunkline" and

"trunkliner." See, e.g., Count One pp 35, 38, 40, 41. We refer to

the program as "trunkline."

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p 35. MDC reacted to this pressure from CATIC, at one

point admitting "that negotiations with CATIC were being

conducted due to the pending $1 billion trunkliner program.

If not for the trunkliner, the slow paced negotiations ...

would be broken off in favor of auctioning equipment."

Count One p 38.

On February 15, 1994, MDC and CATIC entered into a

Purchase Agreement, under which MDC would sell to CATIC

various pieces of equipment from the Columbus plant, including the machine tools that were subject to export controls, for

$5.4 million. See Count One p 39. Under the Agreement,

MDC was responsible for applying for and obtaining export

licenses where necessary, and CATIC was responsible for

shipping and exporting all machine tools that required an

export license. See Count One p 39. In addition, the contract specified that title to the equipment would pass from

MDC to CATIC by July 5, 1994, "[u]pon completion of

removal from the Columbus, Ohio facility, and receipt by

MDC of the final thirty-five percent (35%) payment required." The contract also provided that the equipment must

be removed from the Columbus plant by July 5, 1994, or

MDC was required to pay for storage of the equipment at

another location. See Count One p 39(2).

On or about May 26, 1994, MDC and CATIC representatives submitted ten export license applications to the Department of Commerce. See Count One p 41. Each application

included (1) an application form, in which MDC represented

that the end-user for the equipment was the CATIC Machining Company in Beijing; (2) an "Export Justification" statement, indicating that the machine tools would be "used in the

trunkline program in conjunction with the production of 40

commercial aircraft in [China]," Count One p 41(b); and (3)

an "end-user and end-use statement," prepared by CATIC

representatives, stating that the equipment would be used to

produce parts for the trunkline program. Count One p 41(d).

Based on the information submitted by MDC and CATIC, the

Department of Commerce granted the export licenses on or

about September 14, 1994. See Count One p 42. The licenses authorized the export of the equipment for use at the

CATIC Machining Center in Beijing for purposes of the

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trunkline program. The licenses also required MDC to verify

the equipment's location and usage by performing quarterly

inspections of the CATIC facility and submitting quarterly

reports to the United States Government for a two-year

period.

After MDC and CATIC obtained the licenses, CATIC

arranged, on or about November 7, 1994, to ship the machine

tools to two separate points in China (contrary to the terms of

the export license), and ultimately to ship the equipment to a

factory in Nanchang, China that is allegedly involved in the

manufacture of military equipment. See Count One at WW 44,

47(l)-(n), 49, 51(21)-(24). On April 4, 1995, shortly after

MDC's required quarterly inspection of the CATIC facility,

MDC reported to the Department of Commerce that the

machine tools had been diverted to four different locations,

including the Nanchang facility. The government initiated an

investigation, which culminated in the indictment returned on

October 19, 1999.

The indictment charged one conspiracy Count and fifteen

substantive Counts.4 Hitt was charged only in Count One,

which charged him, MDC, CATIC, and two CATIC employees with conspiring to violate the laws of the United States, in

violation of 18 U.S.C. s 371, and with aiding and abetting

such a conspiracy, in violation of 18 U.S.C. s 2. Counts Two

through Fifteen charged the corporate defendants--MDC,

CATIC, and their affiliates--with statutory violations in connection with the allegedly fraudulent acquisition of the export

licenses: Count Two charged false statements by the CATIC

defendants; Counts Three, Fourteen, and Fifteen charged

false statements by MDC in connection with the applications

__________

4 Counts Two and Three charged violations of the False Statements Act, 18 U.S.C. s 1001 (2000); Counts Four through Fifteen

charged violations of the Export Administration Act, 50 U.S.C. app.

s 2410(a) and of 15 C.F.R. ss 787.5 and 87.5; and Count Sixteen

charged violation of the International Economic Emergency Act, 50

U.S.C. s 1705(b) (1991) and 15 C.F.R. s 787.5. In addition, all

Counts charged a violation of 18 U.S.C. s 2 (2000) for aiding and

abetting.

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for the export licenses; and Counts Four through Thirteen

charged all corporate defendants with false statements and

violations of various export statutes. Count Sixteen charged

the CATIC defendants with making false and misleading

statements to the Department of Commerce after the export

licenses were issued.

Hitt moved to dismiss the charges against him on the

grounds that the conspiracy alleged in Count One extended

only to the United States' September 14, 1994, issuance of the

export licenses and was therefore time barred. The government opposed the motion, arguing that the conspiracy continued until the machine tools were shipped to China in or about

March 1995. The district court ruled as a matter of law that

the conspiracy alleged in the indictment ended when the

United States issued the export licenses, and that prosecution

of Hitt was therefore barred by the five-year statute of

limitations for conspiracy. See Hitt, 107 F. Supp. 2d at 30;

18 U.S.C. s 3282. The government appeals pursuant to 18

U.S.C. s 3731 (2000).

II.

"A conspiracy is a partnership in criminal purposes."

United States v. Kissel, 218 U.S. 601, 608 (1910). The

general federal conspiracy statute prohibits conspiracies "to

commit any offense against the United States" or "to defraud

the United States ... in any manner or for any purpose."5

18 U.S.C. s 371. To prosecute a defendant under s 371, "the

government must prove beyond a reasonable doubt that: (1)

two or more persons formed an agreement either to commit

an offense against or defraud the United States; (2) the

__________

5 The conspiracy statute provides:

If two or more persons conspire either to commit any offense

against the United States, or to defraud the United States, or

any agency thereof in any manner or for any purpose, and one

or more such persons do any act to effect the object of the

conspiracy each shall be fined under this title or imprisoned not

more than five years, or both.

18 U.S.C. s 371.

defendant knowingly participated in the conspiracy with the

intent to commit at least one of the offenses charged or to

defraud the United States; and (3) at least one overt act was

committed in furtherance of the common scheme." United

States v. Treadwell, 760 F.2d 327, 333 (D.C. Cir. 1985); see

also United States v. Wilson, 160 F.3d 732, 737 (D.C. Cir.

1998); United States v. Gatling, 96 F.3d 1511, 1518 (D.C. Cir.

1996). The five-year statute of limitations for a s 371 prosecution, see 18 U.S.C. s 3282, begins running "from the last

overt act during the existence of the conspiracy." Fiswick v.

United States, 329 U.S. 211, 216 (1946); see also Grunewald

v. United States, 353 U.S. 391, 397 (1957).

For the indictment to be timely with respect to Hitt, it

must show that no more than five years prior to the filing of

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the indictment (i.e., at a point no earlier than October 19,

1994) (1) the conspiracy, as contemplated by the agreement,

still existed, and (2) at least one overt act in furtherance of

the conspiracy occurred. See Grunewald, 353 U.S. at 397.

In examining whether these conditions are fulfilled, "the

crucial question ... is the scope of the conspiratorial agreement, for it is that which determines both the duration of the

conspiracy, and whether the act relied on as an overt act may

properly be regarded as in furtherance of the conspiracy."

Id. at 397; see also United States v. Bayer, 331 U.S. 532, 542

(1947). Key to determining the scope of the conspiracy--and

dispositive in the instant appeal--is the extent to which there

was a "meeting of minds" concerning the object of the

conspiracy. United States v. Rosenblatt, 554 F.2d 36, 38 (2d

Cir. 1977) (quoting Krulewitch v. United States, 336 U.S. 440,

448 (1949) (Jackson, J., concurring)); see also Treadwell, 760

F.2d at 336. "This does not mean that the conspirators must

be shown to have agreed on the details of their criminal

enterprise, but it does mean that the 'essential nature of the

plan' must be shown." Rosenblatt, 554 F.2d at 38 (quoting

Blumenthal v. United States, 332 U.S. 539, 557 (1947)).

To determine the scope of the alleged conspiratorial agreement, the court is bound by the language of the indictment.

See generally Grunewald, 353 U.S. at 397; see also United

States v. Craft, 105 F.3d 1123, 1127-29 (6th Cir. 1997);

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United States v. Roshko, 969 F.2d 1, 6-9 (2d Cir. 1992).

Adherence to the language of the indictment is essential

because the Fifth Amendment requires that criminal prosecutions be limited to the unique allegations of the indictments

returned by the grand jury. See Russell v. United States,

369 U.S. 749, 768-71 (1962); Stirone v. United States, 361

U.S. 212, 216 (1960); United States v. Lawton, 995 F.2d 290,

292-93 (D.C. Cir. 1993). As the Supreme Court has explained, an indictment's main purpose is "to inform the defendant of the nature of the accusation against him." Russell,

369 U.S. at 767. To this end, an indictment must "first,

contain[ ] the elements of the offense charged and fairly

inform[ ] a defendant of the charge against which he must

defend, and, second, enable[ ] him to plead an acquittal or

conviction in bar of future prosecutions for the same offense."

Hamling v. United States, 418 U.S. 87, 117 (1974) (citing

United States v. Debrow, 346 U.S. 374 (1953); Hagner v.

United States, 285 U.S. 427 (1932)). It is hence wellestablished that a defendant "cannot be held to answer a

charge not contained in the indictment brought against him."

Schmuck v. United States, 489 U.S. 705, 717 (1989); see also

Stirone, 361 U.S. at 215-17; United States v. Krasovich, 819

F.2d 253, 254-55 (9th Cir. 1987).

Upon examining the text of the indictment, the district

court concluded that "the grand jury believed that the single

goal of the alleged conspiracy was the acquisition of the

export licenses from the Department of Commerce, which

goal was achieved on September 14, 1994." Hitt, 107 F.

Supp. 2d at 32. On appeal, the government contends that the

true goal of the conspiracy extended to the actual export and

delivery of the machinery to unauthorized locations in China.

The government maintains that the district court failed to

construe the indictment as a whole, see, e.g., United States v.

Inryco, Inc., 642 F.2d 290, 294 (9th Cir. 1981), incorrectly

regarded portions of the indictment as surplusage, see, e.g.,

United States v. Rezaq, 134 F.3d 1121, 1134 (D.C. Cir. 1998),

and invaded the province of the jury by determining that

certain overt acts within the statutory period did not further

the goal of the conspiracy. See United States v. Wilson, 26

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F.3d 142, 159 (D.C. Cir. 1994). Specifically, the government

maintains that the district court disregarded several key

portions of the indictment indicating that the common goal of

all defendants was to export the machinery: (1) the latter

portion of the first sentence in Paragraph 44, which alleged

that "[a] goal of the conspiracy was to obtain export licenses

allowing the sale and exportation of machine tools to [China]" (emphasis added); (2) the heading in Paragraph 43--

"Scheme to Insure Completion of the Contract"; (3) statements of "Manners and Means" (pp 47-50) and "Overt Acts"

(p 51(21)-(25)) that refer to the shipment and delivery of the

tools to China, which occurred as late as March 1995 and thus

were within the statute of limitations period; and (4) the

explicit reference in Paragraph 43 to March 1995.

We review de novo the district court's legal conclusion

concerning the scope of the conspiracy. See United States v.

Dolan, 120 F.3d 856, 864 (8th Cir. 1997); United States v.

United Med. & Surgical Supply Corp., 989 F.2d 1390, 1398

(4th Cir. 1993). Consistent with our obligation to adhere to

the language of the indictment, and an indictment's primary

purpose of providing notice of the specific charges to the

defendant, we hold that the alleged conspiracy charged in

Count One ended with the issuance of the export licenses on

September 14, 1994. The indictment's references to subsequent events do not point to acts in furtherance of the alleged

conspirators' common goal and therefore may not be relied

upon to extend the conspiracy to a period within the statute

of limitations. See Grunewald, 353 U.S. at 405-06; Fiswick,

329 U.S. at 216-17.

A. Structure of Count One. Count One of the indictment begins with an "INTRODUCTION" that states in relevant part:

On or about September 14, 1994, the United States

Department of Commerce granted 10 export licenses to

[MDC] permitting [MDC] to export 13 large pieces of

machinery ... to [China] for use by ... [CATIC]. The

defendants ... made material false, fraudulent and misleading statements and material omissions on the appliUSCA Case #00-3083 Document #594368 Filed: 05/08/2001 Page 9 of 35
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cations, the end user certificates and in additional oral

and written submissions upon which the Department of

Commerce based its decision to issue the 10 export

licenses. [The Chinese corporate defendants] caused 6 of

the 13 pieces of machinery to be diverted to an unauthorized factory in Nanchang, [China], known to be used for

military production.

Count One p 1. Count One proceeds to review the regulatory

framework for the MDC-CATIC transaction, see Count One

pp 2-6; describe the equipment subject to export controls, see

Count One p 7; and identify the defendants, see Count One

pp 8-17. After providing this context, the indictment sets

forth the "Background to the Transactions." See Count One

pp 18-42. The "Background" details MDC's negotiations with

CATIC for the sale of the equipment from the Columbus

plant; MDC's vested financial interest in maintaining a favorable relationship with CATIC in light of the $1 billion trunkline program; and MDC's and CATIC's submission of the

materials necessary for obtaining the requisite export licenses. See id. The background discussion ends with the United

States' issuance of the export licenses on or about September

14, 1994. See Count One p 42.

Two key paragraphs follow. Paragraph 43 describes "THE

CONSPIRACY," and is subtitled "Scheme to Insure Completion of the Contract." Paragraph 43 states:

From in or about February, 1993 ... until in or about

March 1995 ... the defendants ... did unlawfully, willfully and knowingly combine, conspire, confederate and

agree together to commit offenses against the United

States, that is:

a. to willfully and knowingly make materially false

and fraudulent statements and representations and to

falsify, conceal and coverup [sic] by trick, scheme and

device material facts in matters within the jurisdiction

of the executive branch of the Government of the

United States ... in violation of [18 U.S.C. s 1001];

b. to willfully and knowingly make false and misleading statements and to conceal material facts from the

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United States Departments of Commerce and Defense

in the course of obtaining export licenses in violation of

[50 U.S.C. app. s 2410(a) and 15 C.F.R. s 787.5];

c. to use interstate wire communications, the mail

and interstate carriers in furtherance of a scheme to

defraud and to obtain property, that is export licenses

and machine tools for delivery to [China], by means of

false and fraudulent pretenses, representations and

promises in violation of [18 U.S.C. ss 1343 and 1341];

d. to possess, before on or about August 20, 1994,

machine tools with the intent to export them having

reason to believe that they would be exported in

violation of an export control imposed under Section 5

or 6 of the Export Administration Act, in violation of

[50 U.S.C. app. s 2410(b)(3) and 15 C.F.R.

s 787.1(a)(ii)(C)]; and

e. to buy and sell, before on or about August 20, 1994,

machine tools to be exported from the United States

subject to the Export Administration Regulations with

knowledge or reason to know that a violation of the

Export Administration Act is intended to occur with

regard to the transaction, in violation of [50 U.S.C.

app. s 2410(a) and 15 C.F.R. s 787.4(a)].

Count One pp 43.6

Paragraph 44 states the "Goal" of the conspiracy:

A goal of the conspiracy was to obtain export licenses

allowing the sale and exportation of machine tools to

[China]. [The CATIC defendants'] purpose, among others, was to obtain the Columbus plant machine tools for

unrestricted use at undisclosed facilities within [China].... [MDC] and Robert Hitt's purposes, among others, were: (a) to maintain the ongoing commercial relationship between [MDC] and CATIC and to promote the

prospects for existing and future business contracts be-

__________

6 Paragraph 43 refers to August 20, 1994, only to indicate that

at the outset of the alleged conspiracy the Export Administration

Act was in effect and had not yet been repealed by Congress.

tween the parties; and (b) to obtain swift approval from

the United States Department of Commerce of export

license applications by presenting seemingly credible and

non-controversial justification and end-user information

in the license applications, even if such information was

not truthful, so that [MDC] could avoid the storage costs

provisions and the buy-back provision of the Columbus

asset sales contract between the parties.[7]

Count One then lists the "Manners and Means" that the

defendants used "in seeking to achieve the goal of the conspiracy."8 Count One p 45. Paragraphs 46 through 48 describe the false and misleading information supplied by the

CATIC defendants regarding the machine tools' end user and

end use. Paragraphs 49 and 50 describe the false information

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to which MDC and Hitt certified in the applications and the

information that they concealed from Commerce Department

officials.

Finally, Paragraph 51 lists twenty-five alleged "Overt Acts"

committed by the defendants "[i]n furtherance of the conspiracy and to accomplish the objects thereof." These include (1)

Hitt, MDC, and CATIC's false and misleading statements to

government officials while applying for the export licenses;

(2) MDC's filing of the allegedly fraudulent export license

__________

7 As evidence that MDC's (and Hitt's) actions were in part

fueled by a desire to avoid these costs, Count One relies on a

January 13, 1994, memorandum, allegedly written by Hitt, which

states that "if an export license [were] not obtained ... [MDC]

would have a potential loss of $3.2 [million] ... [and] any costs to

store the assets past 1 May 1995 would have to also be assumed by

[MDC]." Count One p 40. After the government noted its appeal,

it was brought to the government's and the court's attention that

the memorandum was not authored by Hitt. The government no

longer relies on Paragraph 40, and absent this evidence, it is

unclear if the Grand Jury would attribute to Hitt all purposes listed

in Paragraph 44(b). For purposes of this appeal, we will assume

that the Grand Jury would.

8 Although Paragraph 44 refers to "[a] goal," the only goal

described in Count One appears in Paragraph 44.

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applications; and (3) CATIC's efforts to divert the machinery

to unauthorized locations. Five of these alleged overt acts

occurred after the export licenses were issued:

(21) On November 2, 1994, [MDC] signed two separate

delivery sheets authorizing the removal of [some licensable machine tools] to destination "red" and [some licensable machine tools] to destination "black."[9]

(22) In or about November 1994, CATIC caused cargo

that had been licensed for export to Beijing to be shipped

[to and unloaded at two separate locations].

(23) In or about November 1994, CATIC caused another

shipment of cargo that had been licensed for export to

Beijing to be shipped to and unloaded at two separate

ports....

(24) On or about February 18, 1995, CATIC caused ... a

machine tool licensed for export to Beijing[ ] to be ...

[shipped] to [an unauthorized location].

(25) Between in or about November 1994 and in or about

March 1995, CATIC caused six machines licensed for

export to Beijing to be delivered to Nanchang.

Count One p 51(21)-(25). Only Overt Act No. 25 refers to a

date as late as March 1995. Only Overt Act No. 21 refers to

MDC. The "delivery sheets" that Overt Act No. 21 alleges

MDC signed are not alleged to be shipping authorization

documents; rather, they are internal MDC records of

CATIC's contractually-obligated removal of certain machine

tools from the Columbus plant. The remaining four overt

acts within the statutory period, Overt Acts No. 22 through

25, relate solely to CATIC's efforts to ship the machine tools

to unauthorized locations after MDC obtained the requisite

export licenses.

From the plain language and structure of Count One, it

would follow that "The Conspiracy" envisioned by the Grand

Jury was confined to the defendants' false statements and

__________

9 We assume that, as alleged in Paragraph 47(b), destination

"red" referred to Shanghai, China, and destination "black" referred

to Xinyang, China.

concealment of information from Commerce Department officials while applying for the export licenses. The "Goal" of

the conspiracy, as described in Paragraph 44, did not encompass any event occurring after the export licenses' issuance

on September 14, 1994. Because Count One did not allege

that MDC and Hitt shared the separate purpose of the

CATIC defendants to divert the machine tools in violation of

the export licenses, the conspiracy was, as the district court

concluded, completed once the export licenses were issued.

See Hitt, 107 F. Supp. 2d at 30; see also Krasovich, 819 F.2d

at 255-56.

Notwithstanding the Grand Jury's plain statement of the

one common goal of the conspiracy in Paragraph 44, and its

statement of the separate purposes of the MDC and the

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CATIC defendants, the government maintains that the alleged conspiracy continued until the machine tools were

shipped and delivered to China in March 1995. In support of

this contention, the government points to (1) Count One's

discussion of the Purchase Agreement, which, the government maintains, contemplates events occurring after the export licenses' issuance; (2) references to "Manners and

Means" and "Overt Acts" that extended to the statutory

period; and (3) references in Paragraph 43 to March 1995.

Although the language on which the government relies may

point to possible ambiguities in the indictment, the court must

construe the indictment in light of its principal purposes of

clarity and notice. See Russell, 369 U.S. at 769-71; Stirone,

361 U.S. at 215-16; Lawton, 995 F.2d at 292-93. Consequently, we adhere to the indictment's plain language.10

__________

10 Our dissenting colleague would interpret the language on

which the government relies as an indication that "the charged

conspiracy included the shipment and delivery of machine tools."

Dissenting Op. at 1. The plain language of the indictment, however, does not support such a conclusion. Unlike Forman v. United

States, 361 U.S. 416 (1960), where the Supreme Court interpreted

specific language in an indictment to charge a continuing conspiracy

to evade taxation, see id. at 423; Dissenting Op. at 9, the Grand

Jury in the instant case explicitly confined the conspiracy's goal to

"obtain[ing] export licenses." Count One p 44. Contrary to the

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B. Nature of the Purchase Agreement. The government points to two factors to demonstrate that the Purchase

Agreement reflected the broader goal of exporting the machinery. First, it contends that the title of the subheading

"Scheme to Insure Completion of the Contract" in Paragraph

43 indicates a "scheme that would culminate in the shipment

of the tools to locations selected by CATIC without regard for

the license requirements." Appellant's Reply Br. at 13. Insofar as the objective of the sale was to get the machine tools

to China, the government maintains, the contract would not

be completed until CATIC received the machinery and all

parties therefore received the benefits of the transaction.

Second, the government points to language in the "Goal"

paragraph to indicate that, in accord with the Purchase

Agreement, the parties contemplated the machinery's export.

Neither contention is convincing.

In the government's view, the subheading "Scheme to

Insure Completion of the Contract" refers to a Purchase

Agreement that contemplated the delivery of the machine

tools to China and that regarded the export licenses simply as

a means for completing the transaction.11 The subheading,

the government maintains, relates directly to the background

discussion of the Purchase Agreement in Paragraphs 1

through 42 of the indictment, where the Grand Jury described MDC's desire to maintain good relations with its

__________

view of the dissent, see Dissenting Op. at 3-4, the possible ambiguities in the indictment arise not from this clear statement of the

goal, but rather from Count One's references to events occurring

after the licenses were issued. Although the dissent relies on the

indictment's inclusion of these events to argue that a broader

conspiracy existed, the dissent points to no action or event within

the statutory period that was agreed upon by both parties.

11 We do not reach the government's contention that the district court incorrectly treated the text of this subheading as surplusage. See Hitt, 107 F. Supp. 2d at 32 n.3. Even if this was

error, we are unconvinced that the "scheme" to which the phrase

refers contemplates actions occurring after the issuance of the

export licenses.

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customer. The government further maintains that the Purchase Agreement itself contemplated the export of the machinery: The Agreement provided that MDC would "obtain

the [export] licenses and, in the event they failed to obtain

[them], [MDC] was required to buyback [sic] the tools."

Count One p 39(1). Moreover, the government continues, the

Purchase Agreement contemplated obligations for the parties

that arose after the export licenses were issued: CATIC, for

example, was to assume shipping costs, and each party was

responsible for paying the taxes in its respective country.

There are insurmountable obstacles to the government's

reliance on the background discussion in Paragraphs 1

through 42. Count One begins with an "INTRODUCTION,"

stating, "On or about September 14, 1994, the United States

Department of Commerce granted 10 export licenses...."

Count One p 1. After a discussion of the regulatory framework for export controls, see Count One pp 2-6, and a description of the sensitive equipment at issue, see Count One p 7,

and the parties to the transaction, see Count One pp 8-17, the

narration of events in the "Background" section, see Count

One pp 18-42, ends with the issuance of the export licenses.

These temporal limitations indicate the Grand Jury's focus on

the licensing process, not on events subsequent to the licenses' issuance. Such subsequent events, including the payment

of taxes and inspections required by the licenses, were collateral actions that were not part of the shared scheme nor

threatening to the success of that scheme. See Schmuck, 489

U.S. at 711-14.

As to the Purchase Agreement, the Grand Jury found it

relevant to refer to only three of its provisions: (1) the sale

price of $5.4 million; (2) MDC's obligation to obtain export

licenses where required and, "in the event they failed ...[,]

buyback [sic] the tools;" and (3) MDC's obligation to pay for

storage if any machine tools had not received an export

license by July 5, 1994, the deadline for CATIC's removal of

the equipment from the Columbus plant. Count One p 39.

The Grand Jury alluded to no contractual provision involving

the shipment of the machine tools once the export licenses

were issued. Indeed, under the terms of the Purchase

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Agreement, the contract would be completed once the licenses were issued, not when the machinery was delivered. Title would pass after the licenses were obtained, and after

MDC received the final payment (by July 1994), not upon

the equipment's arrival in China. Furthermore, upon issuance of the export licenses, the buy-back provision (which

was the last contingency to the sale) would be eliminated.

Hence, even if the Grand Jury had incorporated all provisions of the Purchase Agreement into Count One, the government could not support its view that "issuance of the

licenses did not complete the commercial transaction." Appellant's Br. at 18. Moreover, as Hitt observes in his brief,

the Purchase Agreement required CATIC to export the

machine tools "in accordance with the export licenses." A

"scheme to insure completion of the contract" would therefore contradict the government's "essential claim--that the

defendants conspired to assist CATIC's effort to violate the

licenses." Appellee's Br. at 48.

Second, the government contends that the language in the

"Goal" paragraph of Count One clarifies the parties' intention

to export the machinery. The government points to the first

sentence of Paragraph 44, which states that "[a] goal of the

conspiracy was to obtain export licenses allowing the sale and

exportation of machine tools to [China]." (emphasis added)

An analysis of Paragraph 44 as a whole, however, indicates

that the government's reliance on the emphasized phrase is

misplaced.12 The phrase on which the government relies

modifies the word "licenses," not the word "goal"; this again

__________

12 The plausibility of the dissent's interpretation assigning a

"broader meaning" to the goal stated in Paragraph 44, see Dissenting Op. at 3, arises not from the language of the indictment, but

rather from an intuitive belief that all conspirators must have been

aware of CATIC's ultimate purpose. The dissent cannot point to

language in Count One that substantiates that intuitive belief

because none of the events occurring within the statutory period

implies actions that were agreed upon by the parties. Thus, the

dissent's broader interpretation of the conspiratorial "goal" would

fail to satisfy the indictment's key purposes of clarity and notice.

See Russell, 369 U.S. at 765-77.

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indicates that the focus of the conspiracy charge was the

licensing process. More significant, however, is the language

that follows the first sentence of Paragraph 44. The paragraph proceeds to describe the different purposes of the

American and the Chinese defendants: "[The CATIC defendants'] purpose, among others, was to obtain the ... machine

tools for unrestricted use at undisclosed facilities within [China]." Count One p 44. The MDC defendants' (including

Hitt's) purposes, among others, were (1) to maintain a positive commercial relationship with CATIC and (2) to obtain the

export licenses. See id.

In view of the indictment's key purpose--to provide notice

to Hitt of the charges against which he should be prepared to

defend himself at trial, see Russell, 369 U.S. at 769-71;

Stirone, 361 U.S. at 216; Lawton, 995 F.2d at 292-93--the

district court properly placed great importance on the Grand

Jury's separate statement of the purposes of each group of

defendants, and its clear statement in Paragraph 44 that the

goal of the conspiracy was to obtain the export licenses.13

See Hitt, 107 F. Supp. 2d at 32-33. The purposes of the

MDC defendants coincided with those of the CATIC defendants only with respect to the export licensing process, which

was the only aspect of the transaction in which the MDC

defendants were involved. The CATIC defendants' purposes,

__________

13 The government contends that the separate "purposes" listed

in Paragraph 44 simply set forth the parties' distinct motivations for

entering the ultimate agreement--to divert the machine tools for

use at unauthorized locations in China. This broader goal, however,

is inconsistent with the Grand Jury's description of MDC's motivation. MDC would satisfy its purpose of maintaining a favorable

relationship with CATIC only by performing the acts that were

under its control, namely selling the machine tools to CATIC and

applying for the export licenses necessary to complete the sale.

The dissent would hold that by documenting CATIC's removal of

the machine tools from the Columbus plant, MDC "concretely and

actively helped CATIC realize the shared goal of delivery to China."

Dissenting Op. at 5. That MDC later helped CATIC realize its

ultimate goal is distinct from indicating that MDC shared this goal

for purposes of the conspiracy defined by the Grand Jury.

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which extended beyond the common goal of the conspiracy,

therefore cannot serve to broaden the definition of the conspiratorial agreement. As this court observed in Wilson, 160

F.3d at 737-38, the motivation of a single conspirator does not

necessarily define the common goal of the conspiracy.

C. "Manners and Means" and "Overt Acts." The government also looks to the "Manners and Means" and "Overt

Acts" paragraphs of Count One for support of its broad

definition of the scope of the conspiracy. The introductory

paragraph under "Manners and Means" states that all defendants (including Hitt) "would and did use the following manner and means, among others, in seeking to achieve the goal

of the conspiracy." Count One p 45 (emphasis added). The

government contends that all of the manners and means

listed in Paragraphs 47 through 50, including actions taken

and information concealed "from in or about February, 1993

... to in or about March 1995," Count One p 46, were in

furtherance of "the" goal of the conspiracy. See Count One

pp 47-50. In addition, the government points to five overt

acts listed in Paragraph 51 that occurred within the statutory

period. See Count One p 51(21)-(25). We are unpersuaded

that the language under either of these headings expands the

scope of the conspiracy.

The government's reliance on the "Manners and Means"

paragraphs is misplaced. First, the introductory sentence

refers to "the" goal of the conspiracy. See Count One p 45.

The only goal defined by the Grand Jury appears in Paragraph 44: "to obtain export licenses." Count One p 44. The

Grand Jury did not state the goal in terms of ensuring

completion of the Purchase Agreement or diversion of machinery once it arrived in China. Hence, this introductory

sentence cannot redefine or expand the scope of the conspiracy. Second, as in the "Goal" paragraph, the "Manners and

Means" paragraphs distinguish between the activities of the

MDC and CATIC defendants. See Count One pp 47-50.

From Count One's repeated distinction between the actions

and goals of each group of defendants, it reasonably follows

that the manners and means attributed to CATIC were not in

furtherance of the alleged conspirators' common goal. FinalUSCA Case #00-3083 Document #594368 Filed: 05/08/2001 Page 19 of 35
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ly, the structure of the "Manners and Means" paragraphs

indicates that the inclusion of events occurring after September 14, 1994, and of the parties' alleged concealment of

shipping information, were intended to illustrate the defendants' false statements and misrepresentations "[o]n the applications for the ten export licenses." Count One p 49; see

also Count One pp 47-48. Paragraphs 47 and 48--entitled

"False Statements Regarding the End User" and "False

Statements Regarding the End Use"--include references to

actions by CATIC occurring within the statutory period and

as late as March 25, 1995. See, e.g., Count One pp 47(l )-(n).

These events, however, are submitted in support of the

contention that CATIC "well knew [its statements] to be false

and misleading at the time the applications were filed."

Count One p 47. Similarly, Paragraphs 49 and 50--entitled

"False Statements and [O]missions [R]egarding the [E]nd

[U]ser" and "False Statements and Omissions Regarding End

Use"--refer to MDC's alleged concealment of shipping information indicating an alternative delivery site for the machine

tools. See, e.g., Count One pp 49(b), (d). Contrary to the

government's contentions, this does not indicate that CATIC's

shipment and diversion of the machine tools furthered the

conspiratorial goal. Rather, MDC's alleged acts of concealment support the conclusions set forth at the beginning of

Paragraphs 49 and 50: first, that "[o]n the applications for

the ten export licenses [MDC] certified ... the end user[ ] to

be the CATIC Machining Company ... in Beijing, when in

truth and in fact, they knew, had reason to know and acted

with willful blindness to the fact that this end user designation was false and misleading," Count One p 49; and second,

that MDC's export justification statement "identif[ied] the

trunkline program as the end use, when in truth and in fact,

[MDC] knew, had reason to know and acted with willful

blindness to the fact that this end use designation was false

and misleading." Count One p 50.

The government further relies on the indictment's inclusion

of Overt Acts No. 21 through 25, which occurred within the

statutory period. See Count One p 51(21)-(25); supra Part

II.A. These five overt acts, however, do not in themselves

extend the scope of the conspiracy into the statutory period

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unless the acts were committed in furtherance of the alleged

conspirators' common goal. See Grunewald, 353 U.S. at 397;

Fiswick, 329 U.S. at 216-17; Craft, 105 F.3d at 1128-29;

Roshko, 969 F.2d at 6-9; United States v. Davis, 533 F.2d

921, 926-29 (5th Cir. 1976). Only then could a jury properly

be allowed to determine whether the overt acts in question

actually furthered the common goal of the conspiracy. See

Wilson, 26 F.3d at 159 (citing cases). Overt Acts No. 21

through 25 do not satisfy this threshold requirement. Rather, they are only consistent with the purpose that the indictment attributed to the CATIC defendants: to divert delivery

of machinery to unauthorized locations. As previously discussed, Overt Acts No. 22 through 25 relate to CATIC's

diversion of the equipment to unauthorized locations; Overt

Act No. 21, the only overt act within the statutory period that

refers to MDC at all, merely discusses MDC's internal documentation of CATIC's contractually-obligated removal of the

equipment from the Columbus plant. Hence, none of these

five overt acts was in furtherance of the only common goal

stated in the indictment: the issuance of export licenses. As

a result, inclusion of Overt Acts No. 21 through 25 in the

indictment is insufficient to extend the conspiracy beyond the

goal stated in Paragraph 44. See Craft, 105 F.2d at 1128.

D. Reference in Paragraph 43 to March 1995. The

government's final contention focuses on the introductory

sentence of Paragraph 43 under "Scheme to Insure Completion of the Contract," which states that the conspiracy

spanned from "in or about February, 1993 ... until in or

about March 1995." Count One p 43. Because Paragraph 43

does not provide insight as to the conspirators' common goal,

however, it cannot by itself expand the conspiracy to reach

the statutory period.

Paragraph 43 is the only paragraph in the indictment that

seeks to describe the agreement among the parties. Indeed,

it is the only paragraph in which the indictment uses the word

"agree." See Count One p 43. The paragraph proceeds to

charge a criminal agreement among the alleged conspirators

to commit five offenses against the United States, in violation

of 18 U.S.C. s 371. See supra Part II.A. The government

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contends that "[e]ach of the underlying statutory violations

subsumed within the conspiratorial agreement reflects the

conspirators' endeavor to secure the delivery of the tools to

China in accordance with CATIC's wishes." Appellant's Br.

at 30. This scheme, the government maintains, continues "as

long as the parties derive [its] anticipated economic benefits."

Id.

A reading of the plain language of the indictment does not

support the government's contentions. First, paragraphs

43(d) and (e) are expressly limited to acts that took place "on

or before August 20, 1994," and therefore refer to events

occurring outside the limitations period.14 Second, Paragraph

43(b) charges the defendants with fraudulent actions concerning the export licenses, and thus cannot be construed to

extend beyond the point when the licenses were issued.

Third, Paragraph 43(c), although worded more broadly, focuses on the defendants' efforts to "defraud" the United States,

an act that, as the district court concluded, could only occur in

reference to the export licenses that the United States granted.15 See Hitt, 107 F. Supp. 2d at 35-36. This only leaves

__________

14 The government contends that Paragraphs 43(d) and (e)

should not be limited to August 20, 1994, because Paragraph 3

states that "the system of export controls established pursuant to

the Export Administration Act and implemented by the Export

Administration Regulations was continued in effect pursuant to a

series of Executive Orders," namely Executive Order 12924, 59 Fed.

Reg. 43437 (1994). Again, the court's obligation is to adhere to the

plain language of the indictment to ensure that the defendant has

received adequate notice of the charges brought against him. See

Russell, 369 U.S. at 762-69. Neither Paragraph 43(d) or (e)

charges a violation of E.O. 12924 or of Section 203 of the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C.

s 1702 (1991), which provides the statutory authority for the continued enforcement of the EAA's export restrictions. The plain

language of Paragraphs 43(d) and (e) thus indicates that the Grand

Jury charged offenses that occurred on or before the EAA's expiration.

15 Paragraph 43(c) states that the defendants, including Hitt,

conspired

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the boilerplate language of Paragraph 43(a), which tracks the

language of 18 U.S.C. s 1001. See Hitt, 107 F. Supp. 2d at

35. Absent specific allegations in the indictment concerning a

broader scope of the conspiracy, this cannot serve as a catchall, umbrella section for the government. The government,

as it has been warned, "cannot simply charge an offense by

using the general language of the statute or the common law,

but must accompany the generic language 'with such a statement of the facts and circumstances as will inform the

accused of the specific offense, coming under the general

description, with which he is charged.' "16 Treadwell, 760

F.2d at 337 (quoting Hamling, 418 U.S. at 117-18).

__________

to use interstate wire communications, the mail and interstate

carriers in furtherance of a scheme to defraud and to obtain

property, that is export licenses and machine tools for delivery

to [China], by means of false and fraudulent ... representations ... in violation of [18 U.S.C. s 1343 and 1341].

The government concedes that MDC and Hitt could not logically

have conspired to obtain "machine tools for delivery to [China],"

because MDC already owned the tools. See Appellant's Br. at 26

n.8. The government contends, however, that MDC and CATIC

conspired to "deprive the United States of its ability to control the

export of these tools ... by submitting false license applications."

Id. Hitt responds that the government's claim under 18 U.S.C.

ss 1343 and 1341 is foreclosed by Cleveland v. United States, 121 S.

Ct. 365 (2000), which states that licenses "do[ ] not create a property interest." See id. at 372. Because Hitt sought dismissal of

Count One on statute of limitations grounds, we have no occasion to

decide whether the mail and wire fraud statutes apply or whether

export licenses constitute property under Cleveland.

16 The government further contends that the term "conceal" in

Paragraphs 43(a) and (b) and the charged violation of 15 C.F.R.

s 787.5 in Paragraph 43(b) broaden the scope of the conspiracy

because they charge MDC and Hitt with failing to disclose changes

of material fact to licensing officials even after the export licenses

were issued. As discussed infra Part II.C, in Count One the Grand

Jury alleged concealment not as independent acts in furtherance of

the conspiracy, but rather in support of its conclusion that MDC

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Nor may the government rely on the "economic benefits"

theory, under which the "scheme" is deemed to extend until

the conspirators receive the economic rewards of the agreement. See, e.g., United States v. Northern Improvement Co.,

814 F.2d 540, 542 (8th Cir. 1987); United States v. Mennuti,

679 F.2d 1032, 1035 (2d Cir. 1982); United States v. Walker,

653 F.2d 1343, 1347-48 (9th Cir. 1981). In the instant case,

the anticipated economic benefits of the "scheme" would

extend the duration of the conspiracy only if all defendants

contemplated those benefits and agreed to receive them. See

Girard, 744 F.2d at 1171-74. As discussed, the plain language of the indictment indicates that only the CATIC defendants intended to divert the machinery to an unauthorized

location in China. Under the indictment, this economic reward of the transaction was not agreed upon by all defendants and therefore may not be used as a basis to extend the

scope of the conspiracy.

For these reasons, we conclude that a common-sense reading of the indictment indicates that the Grand Jury defined a

conspiracy that ended with the Department of Commerce's

issuance of the export licenses. It is clear from the indictment why MDC and Hitt participated in the fraudulent

scheme to obtain the export licenses: They sought to maintain good relations with the Chinese government, especially in

light of the substantial financial gain represented by the

MDC-CATIC joint venture. MDC would satisfy this objective by selling to CATIC the equipment that it desired, and

by obtaining the export licenses that would allow CATIC to

transport the machinery to China. Under the Purchase

__________

and Hitt provided false and misleading information in the export

license applications. Furthermore, the obligations imposed by 15

C.F.R. s 787.5 are triggered upon a "change of material fact or

intention" occurring after MDC submitted the export license applications. 15 C.F.R. s 787.5(a)(3). No such change is alleged in

Count One; rather, the false information that is the basis of the

conspiracy charge was known to the defendants before they submitted the export license applications. Thus, Paragraph 43(b)'s reference to 15 C.F.R. s 787.5 does not expand the conspiracy to actions

occurring after the licenses were issued.

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Agreement, that would complete the transaction, as CATIC

was responsible for the machinery's removal and transportation. Although the consequence of MDC's alleged fraudulent

acquisition of the export licenses might be CATIC's unauthorized use of the machinery, this does not indicate that

CATIC's actions upon acquiring the machine tools would be

part of the conspiratorial agreement. As the Supreme Court

explained in Fiswick, "[t]hough the result of a conspiracy may

be continuing, the conspiracy does not thereby become a

continuing one ... '[C]ontinuous co-operation of the conspirators to keep it up' is necessary." 329 U.S. at 216 (citations

omitted); see also United States v. Doherty, 867 F.3d 47, 61-

62 (1st Cir. 1989).

The government is hardly unaware of the inconsistency in

its attempt to expand the scope of the conspiratorial agreement beyond the plain language of the indictment. In response to questioning during oral argument, the government

claimed that the conspiracy charge would remain valid even if

an intervening event--such as the sinking of the ship that

transported the equipment or a change of heart by the

Chinese government--impeded the actual delivery of the

machinery to the unauthorized locations. If delivery or shipment of the machinery was unnecessary to the common goal

of the conspirators, then by definition the government cannot

extend the conspiracy past the issuance of the export licenses.

Thus, the government may not rely on Overt Acts No. 21

through 25, and on Count One's sporadic references to events

within the statutory period, to expand the conspiracy or

modify its goal.17 See Grunewald, 353 U.S. at 406; Fiswick,

329 U.S. at 216-17; Craft, 105 F.3d at 1123; Roshko, 969

F.2d at 6-8; Davis, 533 F.2d at 928. Defining the goal of the

__________

17 Insertion of "March 1995" in Count One was apparently an

effort to avoid the five-year limitations deadline. MDC executed six

waivers of the statute of limitations, "[i]n consideration of the

federal government delaying any final decision with respect to the

filing of criminal or administrative charges...." Hitt states in his

brief that although the government obtained waivers of the statute

of limitations from MDC and all but one of the CATIC defendants,

it never sought such a waiver from him. See Appellee's Br. at 9.

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conspiracy in the broad manner that the government proposes would frustrate not only the indictment's purpose of giving

notice to a defendant, but also the purpose of having a statute

of limitations. See Grunewald, 353 U.S. at 401-02 (citing

Krulewitch, 336 U.S. at 455-56 (Jackson, J., concurring));

Doherty, 867 F.2d at 61-62. Count One does not allege that

the defendants had the common purpose of diverting the

machinery to unauthorized locations. If the government envisioned a broader common goal for the conspirators, namely

"shipment of the tools to locations selected by CATIC without

regard for the license requirements," Appellant's Reply Br. at

13, it was obligated to ensure that the Grand Jury stated that

goal with certainty and thereby conformed to the "basic

principles of fundamental fairness" underlying the two key

purposes of an indictment--notice to the defendant and protection against double jeopardy. Russell, 369 U.S. at 763,

765-66.

Accordingly, we affirm the order of the district court

dismissing Count One of the indictment against Hitt.

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Williams, Circuit Judge, dissenting: The indictment--read

as a whole--fairly informs the defendant that the charged

conspiracy included the shipment and delivery of machine

tools and thus included the alleged overt acts committed

within the five-year limitations period. I would reverse the

district court's dismissal of Count One.

Though the indictment is long, the gist of its story--

assumed to be true for these purposes--is simple enough.

Facing reduced government business, McDonnell Douglas

Corporation, a defense contractor, decided to shut down its

military aircraft plant in Columbus, Ohio. After considerable

negotiation, McDonnell Douglas agreed to sell for $5.4 million

various machine tools from the plant to China National AeroTechnology Import and Export Corporation ("CATIC"), its

partner in an ongoing $1 billion joint venture. Indictment,

Count One p p 18, 21-39. Some of the equipment could be

legally shipped to China only with export licenses from the

Commerce Department; the contract stated that if they could

not be obtained McDonnell Douglas would have to buy the

equipment back. Id. at p 39. Before the deal was made,

Robert Hitt, then the Director of the China Program Office at

Douglas Aircraft (a wholly-owned division of McDonnell

Douglas), was called in to help resolve any problems in

obtaining the licenses. Id. at p 29. In submissions to the

Commerce Department, both contracting parties falsely stated that the tools would be used only in a Beijing facility

dedicated to the development of civilian aircraft as part of the

joint venture. Id. at p p 41, 50. On September 14, 1994 the

Commerce Department granted the licenses. Id. at p 42. In

November 1994, CATIC arranged, with the help of McDonnell Douglas, to ship the equipment to two different ports

(some 600 miles apart) in China. Id. at p p 51(21)-(23). During approximately the next four months, CATIC diverted six

machines (licensed for export to Beijing) to a factory in

Nanchang. Id. at p 51(25). At the request of the Commerce

Department, McDonnell Douglas inspected the machine tools

in China and reported that the terms of the licenses had been

violated--setting off a Commerce Department investigation

that ultimately led to the October 19, 1999 indictment before

us. See United States v. Hitt, 107 F. Supp. 2d 29, 31 (D.D.C.

2000).

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The key issue here is whether Count One of the indictment

alleges a conspiracy continuing beyond October 19, 1994 and

is thus properly chargeable under the five-year statute of

limitations. See Fiswick v. United States, 329 U.S. 211, 216

(1946) (statute "runs from the last overt act during the

existence of the conspiracy."). Count One explicitly alleges

five overt actions taken after that date, see Count One p 51

(21-25), but these five acts would not count for our purposes

unless performed pursuant to the conspiracy. "[T]he crucial

question in determining whether the statute of limitations has

run is the scope of the conspiratorial agreement, for it is that

which determines both the duration of the conspiracy, and

whether the act relied on as an overt act may properly be

regarded as in furtherance of the conspiracy." Grunewald v.

United States, 353 U.S. 391, 397 (1957). In fact the indictment provides ample signs that the claimed conspiracy extended not merely to the securing of export licenses (issued

September 14, 1994) but also to the shipment of the equipment to China through actions that bring the conspiracy well

within the five-year window.

* * *

An indictment need not be perfectly crafted to survive

judicial scrutiny. "The true test of the sufficiency of an

indictment is not whether it could have been made more

definite and certain, but whether it contains the elements of

the offense intended to be charged, and sufficiently apprises

the defendant of what he must be prepared to meet." United

States v. Debrow, 346 U.S. 374, 376 (1953) (internal quotations

omitted) (emphasis added). It must "fairly inform[ ]" the

defendant of the charge, Hamling v. United States, 418 U.S.

87, 117 (1974), and tell him of its nature "with reasonable

certainty," United States v. Simmons, 96 U.S. 360, 362 (1877).

We read the indictment "in its entirety," and construe it

"according to common sense with an appreciation of existing

realities." United States v. Inryco, Inc., 642 F.2d 290, 294

(9th Cir. 1981).

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Our specific task is to determine whether the alleged

actions within five years of the indictment promoted the

object of the alleged conspiracy. The query is similar to

resolving claims that a trial court's permissive evidence rulings broadened the indictment. While indictments cannot be

"constructively amended" outside of the grand jury (to permit

introduction of evidence), they are interpreted reasonably:

In order to prevail on his claim of constructive amendment, [a defendant] must show that the proof at trial "so

altered an essential element of the charge that, upon

review, it is uncertain whether the defendant was convicted of conduct that was the subject of the grand jury's

indictment." No constructive amendment occurs "where

a generally framed indictment encompasses the specific

legal theory or evidence used at trial." Accordingly, we

have "consistently permitted significant flexibility in

proof, provided that the defendant was given notice of

the core of criminality to be proven at trial."

United States v. Berger, 224 F.3d 107, 117 (2d Cir. 2000)(internal citations omitted). Taken as a whole, this indictment

adequately apprises Hitt that the conspiracy extended beyond

the receipt of the export licenses and encompassed the shipment of the equipment to China.

A natural starting place is the language explicitly addressing the goal of the conspiracy--"to obtain export licenses

allowing the sale and exportation of machine tools to [China]." Count One p 44 (emphasis added). Taken alone, this

passage is susceptible of the narrow reading assigned by the

majority--that the goal was only to secure the licenses, with

the parties lacking any shared purpose as to actual export or

delivery. But the broader meaning asserted by the government is quite plausible. When a person says he wants to

obtain "a visa allowing travel to Beijing," the literal reading--

that he is indifferent to the use of the visa--is possible but

not necessarily likely. That depends on context. The remainder of the indictment, as we shall see, shows that the

grand jury was asserting that the parties' jointly intended to

get the tools to China. The written contract between McDonUSCA Case #00-3083 Document #594368 Filed: 05/08/2001 Page 29 of 35
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nell Douglas and CATIC focused on obtaining the export

licenses, to be sure, but parties can be (and often are) accused

of having a conspiratorial agreement beyond that memorialized in a legitimate sales deal. There is no parol evidence

rule that prevents a criminal agreement from being broader

than a contract to which it is related.

Having chosen the narrow reading of the statement of

conspiratorial "goal," the majority then discounts everything

in the indictment inconsistent with that reading. See Maj. Op.

at 18-19 (saying that CATIC defendants' alleged purposes

"extended beyond the common goal" of the conspiracy and

thus cannot "broaden" its definition); 19 (saying that "Manner and Means" paragraphs cannot "expand" or "redefine"

scope of conspiracy because grand jury did not state goal in

broad terms); 20-21 (saying that overt acts cannot be accepted as stated because this would "extend" scope beyond stated

goal); 21 (saying that stated duration of conspiracy to March

1995 cannot be accepted because it would conflict with alleged

goal and would "expand" conspiracy); 23 (saying that Paragraph 43(a) cannot function as a "catch-all, umbrella section"

for the government because of its "generic language"); 24

(saying that economic benefit to McDonnell Douglas from

completing shipment must be disregarded because only CATIC was interested in delivery of the equipment). The more

conventional approach, when confronted with an ambiguity, is

to assume that other provisions of the document as a whole

may shed light on the meaning of the ambiguous passage.

Here they do indeed--the statements of purposes, of means

and manner, of duration of the conspiracy, and of overt acts

all point to the broader meaning. See Count One p p 1, 43-

50, 51(21)-(25).

The indictment says that the CATIC defendants--unsurprisingly--cared about shipment: They wanted to get the

equipment for "unrestricted use at undisclosed facilities within [China], including Nanchang, a factory known for its

military production." Id. at p 44. And McDonnell Douglas

and Hitt are explicitly said to have purposes that would

extend beyond the issuance of the licenses: They wanted to

"maintain the ongoing commercial relationship between

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McDonnell Douglas and CATIC and to promote the prospects

for existing and future business contacts between the parties." Id. Obviously McDonnell Douglas's purpose of maintaining a favorable commercial relationship with CATIC

would have been thwarted if the licenses were obtained but

never used; thus McDonnell Douglas's alleged purpose fits

the broader meaning, and only the broader meaning, of the

stated goal.

The majority asserts that McDonnell Douglas "would satisfy its purpose ... only by performing the acts that were

under its control, namely selling the machine tools to CATIC

and applying for the export licenses necessary to complete

the sale." Maj. Op. at 18 n.13 (emphasis added). This

reflects a mistaken idea of what was under McDonnell Douglas's control. In fact the indictment explicitly alleges an

affirmative post-October 19, 1994 act that was under McDonnell Douglas's control, namely filling out forms coded to get

the equipment to the two intended sites in China. See Count

One p 51 (21) (November 2, 1994 act); see also id. at p 47(b)

(explaining coding system). Thus McDonnell Douglas concretely and actively helped CATIC realize the shared goal of

delivery to China.

Moreover, at least until the licenses were used, McDonnell

Douglas could advance the joint interests of the alleged

conspirators by keeping quiet. The indictment includes an

allegation of "conceal[ing]" by trick, scheme or device material facts in the jurisdiction of the executive branch (Count One

p 43(a)) in violation of 18 U.S.C. s 1001 and asserts that the

conspiracy went on until March 1995 (Count One s 51 (25)),

when the tools were delivered to Nanchang.1 The majority

__________

1 The indictment also explicitly alleges violation of 15 CFR

s 787.5, which imposes a continuing obligation to disclose: "Every

person who has made any representation, statement, or certification

must notify, in writing, the Bureau of Export Administration ... of

any change of any material fact or intention from that previously

represented, stated, or certified." 15 CFR s 787.5(a)(3); see also

55 Fed. Reg. 31,176 (1990). Because this reference is located in a

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nonetheless throws out the period of shipment and delivery

on the ground that inclusion of the period needed for the

conspirators to reap the full benefits could properly "extend

the duration of the conspiracy only if all defendants contemplated those benefits and agreed to receive them." Maj. Op.

at 24. But McDonnell Douglas's benefits included the relationship enhancement that completed shipment would bring,

and in any event the cases allow inclusion of the period

needed for each conspirator to receive his or her share of the

benefits. See United States v. Mennuti, 679 F.2d 1032, 1036

(2d Cir. 1982) ("Similarly, even if the main objective of the

conspiracy in this case was to defraud [the insurance company], the conspiracy continued until its other objectives, including [one co-conspirator's] own payoff, were achieved."). And,

given that the scheme of deceit and concealment is alleged to

have culminated in a specific event (i.e., the delivery occurring

in March 1995), there is no risk of defendants' being charged

with an eternal conspiracy. Properly understood, the indictment thus falls easily on the permissible side of the line

drawn by then-Judge Breyer in United States v. Doherty, 867

F.2d 47 (1st Cir. 1989), distinguishing between receiving the

fruits of an enterprise in "one action, or a handful of actions,

taking place over a limited period of time," id. at 61, and

receiving them in the form of a "lengthy, indefinite series of

ordinary, typically noncriminal, unilateral actions, such as

receiving salary payments," id. The former is permissible,

the latter often not. Here the indictment is of the former

type.

From the government's acknowledgment at oral argument

that the indictment would remain valid even if the ship

containing the equipment sank before it reached China, the

majority concludes that "[i]f delivery or shipment of the

machinery was unnecessary to the common goal of the conspirators, then by definition the government cannot extend

the conspiracy past the issuance of the export licenses." Maj.

Op. at 25. On this basis, the majority simply reads out of the

__________

subsection that appears to be focused on "obtaining" the licenses,

Count One s 43(b), I do not rely on it.

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indictment all five post-October 19, 1994 overt acts. Id. But

the government did not say that the shipment was unnecessary to achieve the conspiracy's goal; it said only that the

indictment would still be valid if the shipment were not

successful. See Oral Argument Tr. at 10. This reflects a

standard truth of conspiracy law: One can be convicted of

conspiracy even if the goal is not realized, so long as there is

an overt act in furtherance of the goal. See United States v.

Treadwell, 760 F.2d 327, 333 (D.C. Cir. 1985); Wayne R.

LaFave, Modern Criminal Law 645 (2d ed. 1988). The sunk

ship hypothetical is relevant only in that such a sinking

would, in all likelihood, have conclusively thwarted the parties' shared goal, thus ending the conspiracy. If that had

occurred more than five years prior to indictment, the indictment for conspiracy would be time barred. But no ship sank,

and indeed the equipment didn't even leave Ohio until after

the key date of October 19, 1994.

Most telling is the indictment's list of overt acts, expressly

stated by the indictment to be "[i]n furtherance of the

conspiracy and to accomplish the objects thereof." Count

One p 51 (emphasis added). Five of the listed acts--including

the shipment and diversion of the tools--plainly occurred

after October 1994, within the statute of limitations for conspiracy. See id. at p p 51(21)-(25). Though the majority

suggests otherwise, see Maj. Op. at 13, 14-15 n.10, it is

irrelevant (1) that Hitt did not personally perform any of

these acts, (2) that the records executed in Overt Act 21 are

internal McDonnell Douglas records, (3) that four out of five

acts relate to CATIC's shipping efforts, and (4) that the

parties did not agree specifically as to each of the acts.

When parties join a scheme, they become responsible for the

entirety of its execution, "joined together by their knowledge

of its essential features and broad scope," Blumenthal v.

United States, 332 U.S. 539, 558 (1947), and either party's

ignorance of the details of the overt acts committed by the

other is of no consequence. Id. See also Pinkerton v.

United States, 328 U.S. 640, 646-47 (1946); United States v.

Curry, 977 F.2d 1042, 1058 (7th Cir. 1992) ("The government

is not required to prove any overt acts with regard to a

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particular defendant within the limitations period; instead,

the government is required to prove that the conspiracy

existed into the limitations period and that the defendants did

not withdraw before that period.").

The majority refuses to read the indictment as a whole

when it argues that these acts are not in furtherance of the

conspiracy because they do not relate to the receipt of the

export licenses. See Maj. Op. at 21. Although overt acts

cannot extend the scope of the conspiracy unless they were

committed in furtherance of a common goal, see id., an

indictment's allegations of overt acts can help interpret its

other language. Accord Williamson v. United States, 207

U.S. 425, 458 (1908) (using limited character of alleged overt

acts to support narrow reading of remainder of indictment).

Since only a single conspiracy is charged, the majority's

reasoning implies that the grand jury's inclusion of these acts

was unnecessary or mistaken. But we should not excise part

of the indictment lightly. See United States v. Rezaq, 134

F.3d 1121, 1134 (D.C. Cir. 1998) ("[A] motion to strike surplusage [from the indictment] should be granted only if it is

clear that the allegations are not relevant ... "; "Rule 7(d)

has been strictly construed against striking surplusage.")

(internal quotations and citations omitted).

The Manner and Means section of the indictment is in full

accord. The grand jury alleged that "in seeking to achieve

the goal of the conspiracy" CATIC "did ship the equipment to

locations not reflected in such export applications," and

McDonnell Douglas and Hitt concealed from the government

"that separate packing instructions, designating two ports of

delivery, were being employed for all of the licensable machine tools." Count One p p 45, 47, 49(b)(2). The majority

discards the allegedly false statements made to the Commerce Department and other activities after the licenses were

issued, using the now familiar argument that these couldn't

have been in fulfillment of the conspiracy's goal, as narrowly

construed by the majority. See Maj. Op. at 19-20. But the

indictment specifies that the conduct described under Manners and Means was to "achieve the goal of the conspiracy."

The necessary implication is that the better reading of the

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"goal" statement is the broader one encompassing efforts to

deliver the goods.

Finally, the indictment states in at least three places that

the conspiracy ended in or around March 1995. Count One

p p 43, 47(n), 51(25). In Forman v. United States, 361 U.S.

416 (1960), overruled on other grounds, Burks v. United

States, 437 U.S. 1, 18 (1978), the Supreme Court was similarly

confronted with an ambiguous indictment that alleged its

duration in years and asserted some overt acts even in the

year of indictment. It explicitly relied on the overt acts to

resolve the ambiguity. See 361 U.S. at 423.

* * *

Robert Hitt may be entirely innocent of the charges. Or

the government may in fact be unable to prove his joinder in

the broader goal of the conspiracy and thus his complicity in

the activities after issuance of the licenses. But the indictment's unequivocal assertions of McDonnell Douglas's purposes, of the conspiracy's duration, of the manner and means

of execution that involve completion of the shipment, and of

the overt acts looking to that completion plainly resolve the

indictment's ambiguous statement of the conspiracy's goal,

making clear that it charges a conspiracy reaching into the

five-year window. Since the indictment adequately apprised

Hitt of the scope of the charged conspiracy, the statute of

limitations defense cannot properly rest on its language.

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