Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cr-00022/USCOURTS-cand-4_06-cr-00022-17/pdf.json

Parties Involved:
Kenneth Gerald Bordewick
Defendant
USA
Plaintiff

Document Text:

United States District Court

For the Northern District of California

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UNITED STATES OF AMERICA, )

)

 Plaintiff, )

)

 V. )

) No. CR-06-00022-DLJ

KENNETH GERALD BORDEWICK, )

) ORDER

 Defendant. )

______________________________)

On November 16, 2007, the Court heard argument on

defendant Kenneth Bordewick's motion to dismiss Count One of

the superseding indictment, Mail Fraud, 18 U.S.C. § 1341, for

violation of the statute of limitations, and in the alternative

because Count One is duplicitous. Arguments were also heard on

Bordewick's motions to strike surplusage from the indictment

consisting of Bordewick’s aliases and certain allegations in

Count Two, Corrupt Obstruction of the Due Administration of the

Tax Laws, 26 U.S.C. § 7212(a).

Ethan Balogh appeared on behalf of defendant; Tom Moore

appeared for the government. Having considered the arguments

of counsel, the papers submitted, the applicable law, and the

record in this case, the Court hereby DENIES defendant's

motions to dismiss and DENIES the motions to strike surplusage. 

I. BACKGROUND

On January 10, 2006, a federal Grand Jury returned an

indictment charging Defendant with nine counts of mail fraud

and one count of corruptly interfering with the administration

of the tax laws. The indictment alleged a fraud scheme by

which Bordewick obtained approximately $44,000 that would have

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been paid out of an escrow to the IRS in satisfaction of a tax

lien. The escrow was in connection with the sale of as part of

his mother’s condominium. The nine counts of the indictment

charged that nine checks, none for more than $5,000, all made

payable to Bordewick’s roommate, were mailed to Bordewick’s

address, on January 31, 2001.

According to the indictment, the fraud scheme was

accomplished as follows: (1) Bordewick caused a fraudulent

Certificate of Release of Federal Tax Lien, which lien had been

filed on the sale proceeds from his mother’s condominium, to be

recorded with the Contra Costa County Recorder’s Office. (2)

Bordewick caused a fraudulent Mechanic’s Lien on his mother’s

condominium to be recorded with the Contra Costa County

Recorder’s Office in favor of Robert Morrison, Bordewick’s

roommate in Palm Springs, California. (3) Bordewick

represented, by fax and phone call, to Orange Coast Title

Company and its agents, with whom Bordewick opened the escrow

account for the sale of his mother’s condominium, that the

Release Certificate and Mechanic’s Lien were legitimately

recorded. (4) Orange Coast Title Company thereafter mailed

checks payable to Robert Morrison, the balance of the proceeds

from the sale of the condominium, to Bordewick’s address in

Palm Springs.

The text in the original indictment reads that Bordewick

“knowingly and intentionally devised and intended to devise a

scheme and artifice to defraud the IRS and to obtain at least

$44,000 by means of false and fraudulent pretenses,

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representations, and promises, well knowing that the pretenses,

representations and promises were false and fraudulent when

made.”

On September 6, 2007, a federal Grand Jury returned a

superseding indictment charging Bordewick with a single count

of mail fraud and an additional count of corruptly interfering

with the administration of the tax laws. The superseding

indictment has the same description of the fraudulent scheme as

the original indictment but charges only a single count of mail

fraud instead of nine separate counts. The government

explained that this was done because all the checks were

contained in a single mailing.

The text stating the charge against Bordewick was amended

to read that Bordewick “knowingly and intentionally devised and

intended to devise a scheme and artifice to defraud the IRS and

to obtain at least $44,000 by means of material false and

fraudulent pretenses, representations, and promises, well

knowing that the pretenses, representations and promises were

false and fraudulent when made, and well knowing that the false

and fraudulent pretenses, representations and promises were

material in that they would reasonably influence Orange Coast

Title Company to not pay the IRS demand for taxes in the amount

of $87,251.30, but instead to pay the balance of the proceeds

from the sale of the condominium, approximately $44,000, to his

friend, Robert Morrison.” (Italics added to indicate text not

found in the original indictment.)

The superseding indictment states, in the caption, four

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aliases which Bordewick has allegedly used. The second count

of the superseding indictment, the alleged endeavor to

corruptly obstruct the due administration of the tax laws, also

states an allegation of the recordation of the Mechanic’s Lien

in favor of Robert Morrison.

Bordewick has brought three motions challenging the

superseding indictment. In his first motion, he argues that

the it is time-barred. Bordewick asserts that in the original

indictment, Mail Fraud was not validly alleged, which means

that the five-year statute of limitations was not tolled, and

that it expired on January 31, 2006. He has moved in the

alternative that Count One charges two different schemes of

Mail Fraud, making it duplicitous. Bordewick would have the

government elect one scheme on which to proceed to trial and

dismiss any allegation of the other scheme. Bordewick also

contends that his aliases, as well as the allegations in Count

Two that he caused a Mechanic’s Lien to be recorded in favor of

Robert Morris, are surplusage.

II. ANALYSIS

A. The Statute of Limitations for Mail Fraud was Tolled by

the Original Indictment.

A violation of 18 U.S.C. § 1341, Mail Fraud, has a statute

of limitations of five years. 18 U.S.C. § 3282. Generally

speaking, the return of an indictment tolls the statute of

limitations with respect to the charges contained in the

indictment. United States v. Pacheco, 912 F.2d 297, 305 (9th

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Cir. 1990). If the counts in a superseding indictment

“materially broaden” or substantially amend the charges in the

original indictment, the statute of limitations would not be

tolled as to those charges. United States v. Salmonese, 352

F.3d 608, 622 (2d Cir. 2003). When charges from an original

indictment are duplicated in a superseding indictment the

defendant cannot claim he lacked notice of those charges. 

Pacheco, 912 F.2d at 305. To determine whether the superseding

indictment impermissibly changed the charges in the original

indictment it is necessary to examine each indictment

carefully. United States v. Sears, Roebuck & Co., 785 F.2d

777, 779 (9th Cir. 1986).

The materiality of the false statements or representations

is an element of fraud in the federal criminal fraud statutes

(18 U.S.C. §§ 1341, 1343, 1344), despite its omission from the

text of these statutes. United States v. Neder, 527 U.S. 1,

20-25 (1999). Neder makes clear that in order to prove fraud,

the government must prove the materiality of the falsehoods. 

See id. The materiality inquiry focuses on whether the false

statement had a natural tendency to influence or was capable of

influencing the intended victim. United States v. Rashid, 383

F.3d 769, 778 (8th Cir. 2004), sentence vacated on Booker

grounds sub nom. Abu Nahia v. United States, 546 U.S. 803

(2005). The Ninth Circuit has held that a fraud indictment’s

failure to recite an essential element of the charged offense,

namely the materiality of the scheme or artifice to defraud, is

a fatal flaw requiring dismissal of the indictment. Unites

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States v. Omer, 395 F.3d 1087, 1089 (9th Cir. 2005).

The Ninth Circuit in Omer relied on United States v. Du

Bo. 186 F.3d 1177 (9th Cir. 1999). The Du Bo court held that

an indictment that does not allege an essential element of the

offense, even if the element is absent from the statutory

language, is deficient on its face. Id at 1179. The Du Bo

court relied on the common law purpose of the grand jury,

holding that such a deficient indictment fails to ensure that

the defendant was indicted on the basis of the facts presented

to the grand jury. Id (citing United States v. Rosi, 27 F.3d

409 414 (9th Cir. 1994) and Hale v. Henkel, 201 U.S. 43, 59

(1906)). The basis, then, for dismissing a fraud indictment

that does not allege materiality is that the grand jury might

not have found that the misrepresentations were material based

on the facts presented to it. See id and Omer, 395 F.3d at

1089. 

In the instant case, Omer is inapposite. Omer concerns

the dismissal of an indictment, whereas the issue here is one

of the relation-back of charges in a subsequent indictment. 

See id. The question of whether or not the grand jury would

have found the misrepresentations material is laid to rest by a

superseding indictment where, on the same facts, the jury did

make an explicit finding of materiality. Cf. id. 

The only remaining question for purposes of the tolling of

the statute of limitations, then, is whether Bordewick was on

notice of the charges against him. See Pacheco, 912 F.2d at

305. Because materiality is a necessary component of any

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allegation of Mail Fraud, Bordewick was on notice when the

original indictment alleged “a scheme and artifice to defraud”

without an explicit allegation of materiality. See Neder 527

U.S. at 22-25. In the superseding indictment, where no new

facts were alleged, the explicit allegation of materiality does

not “materially broaden or substantially amend the original

charges” of Mail Fraud in the first indictment. Cf. Salmonese,

352 F.3d at 622. In the instant case, this Court must DENY

Bordewick's motion to dismiss Count One of the superseding

indictment for violating the statute of limitations.

B. There is no Duplicity in Count One of the Superseding

Indictment.

An indictment must include a plain, concise, and definite

written statement of the essential facts constituting the

offense charged. Fed. R. Crim. P. 7(c)(1). Rule 8(a) of the

Federal Rules of Criminal Procedure requires that a single

count of an indictment may only charge one offense. United

States v. Aguilar, 756 F.2d 1418, 1420 n. 2 (9th Cir. 1985). 

Bordewick argues that Count One of the superseding indictment

charges two separate acts of fraud. One alleged fraud was

against the IRS and was accomplished by recording the

Certificate of Release of the tax lien. The second alleged

fraud was against Bordewick’s mother and was accomplished by

recording the Mechanic’s Lien in favor of Bordewick’s roommate. 

Bordewick would have the Court require the government to elect

one of these fraud schemes to prove at trial.

In fact, the superseding indictment unambiguously alleges

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in paragraph 11 a single scheme to defraud the IRS. The

allegation of the additional facts regarding the use of a

fraudulent Mechanic’s Lien provides motive for the fraud on the

IRS. Such motive evidence is relevant and admissible at trial. 

Fed. R. Evid. 404(b). This allegation of motive is

appropriately included in the indictment. See United States v.

Moss, 9 F.3d 543, 550 (6th Cir. 1993). The government may

prove all the acts alleged in Count One at trial. The

government need make no election.

C. There is no Surplusage in the Indictment

Rule 7(c) of the Federal Rules of Criminal Procedure

requires that an indictment set forth “a plain, concise, and

definite written statement of the essential facts constituting

the offense charged.” Rule 7(d) authorizes the court to strike

surplusage from an indictment “to protect a defendant against

prejudicial or inflammatory allegations that are neither

relevant nor material to the charges.” United States v.

Ramirez, 710 F.2d 535, 544-45 (9th Cir. 1983). Allegations in

the indictment that are never read to the jury are not

prejudicial and therefore need not be stricken. United States

v. Hedgepeth, 434 F.3d 609, 613 (6th Cir. 2006).

While some court’s have a practice of providing a copy of

the indictment, or reading it verbatim to the jury, this Court

does not. The Court will, according to its usual practice,

screen irrelevant, prejudicial material from the jury,

including any unnecessary contents of the indictment. There

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is, therefore, no surplusage in the indictment. See Hedgepeth,

434 F.3d at 613. Nothing will be stricken in the superseding

indictment.

III. CONCLUSION

For the reasons stated above, Bordewick's motions are

DENIED. The original indictment tolled the statute of

limitations for the charge of Mail Fraud by alleging a

fraudulent scheme, thereby putting Bordewick on notice that he

must defend against the materiality of the falsehoods in that

scheme. There is no duplicity in the first count of the

superseding indictment inasmuch as only one fraudulent scheme

is alleged and charged. The superseding indictment contains no

surplusage.

IT IS SO ORDERED

Dated: December 5, 2007

_________________________ D. Lowell Jensen

United States District Judge

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