We think that a brief recital of the charges adequately demonstrates that the Illinois
Insurance Exchange is well within the ambit of the “any person” of 18 U.S.C. §1033(c)(1). The

motion to dismiss is denied.

JrmsoB, Moe —

JAMES B. MORAN
Sémlor Judge U.S. District Court

Masn$, 24, 2002


Defendant contends that “any person” must be an official regulator or its agent. Otherwise, the
statute would be so overinclusive as to be nonsense; it would bring within the ambit even a
misrepresentation to a next door neighbor.

But “any person” extends beyond regulators, The reference to “any officer, employee or
agent of such person engaged in the business of insurance...” makes that clear. The references
(which are not exclusive) following “any person” and the penalty section make equally clear that
the statute reaches insurance fraud that can affect the financial stability of the insurance business.

Here the “any person” is the Illinois Insurance Exchange. Defendant claims, and the
government does not dispute, that the Illinois Insurance Exchange is not a governmental body.
The indictment spells out, however, how it is involved in the regulatory process. According to
the indictment, the Illinois Insurance Exchange provided regulatory and financial oversight of its
member insurance syndicates, including defendant’s insurance business. That oversight included
maintaining records of the financial condition of defendant’s business. As a condition of
authority to transact business on the Exchange, defendant’s business was required to submit
accurate information respecting its financial condition to the Exchange. According to the
indictment, defendant caused fraudulent information to be furnished to the Exchange, thereby
concealing that the business was insolvent. As a result, the Exchange and the Illinois Department
of Insurance did not learn of the insolvency until shortly before the Department went to court for
an order to cease operations and to cancel outstanding insurance policies. The business was

placed into liquidation.


Minute der Form (06/97)

United States District Court, Northern District of Illinois

(2)

Name of Assigned Judge James B. Moran Sitting Judge if Other
or Magistrate Judge . than Assigned Judge
CASE NUMBER 01 CR 1129 DATE 3/29/2002
CASE United States of America vs. Joseph Nicosia
TITLE
{In the following box (a) indicate the party filing the motion, ¢.g.. plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
f the motion bei .
MOTION: of the motion being presented.]
Memorandum Opinion and Order
DOCKET ENTRY:
qd) Q Filed motion of [ use listing in “Motion” box above.] .
(2) Oo Brief in support of motion due
(3) Oo Answer brief to motion due. . Reply to answer brief due.
(4) im) Ruling/Hearing on. set for at
(5) a Status hearing[held/continued to] [set for/re-set for] on set for at
(6) QO Pretrial conference[held/continued to] [set for/re-set for] on set for at .
(7) Oo Trial{set for/re-set for] on at
(8) im] [Bench/Jury trial] [Hearing] held/continued to at
(9) im} This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) (General Rule 21 CUFRCP4i(a)\(1) OOFRCP41(a)(2).
(10) Ml [Otherdocket entry] Enter Memorandum Opinion and Order. Defendant’s pretrial motions numbers
10, 13, and 14 are denied and 8, 9, 11, and 12 are denied as moot.
(il) ff [For further detail see order attached to the original minute order.]
No notices required, advised in open court.
No notices required, umber of rice
Notices mailed by judge’s staff.
Notified counsel by telephone. MAR 29 2002
wv | Docketing to mail notices.
Msi 40450 fm, wicinMclen | IS
Copy to judge/magistrate judge.
courtroom date mailed notice
WAH deputy's
initials ———
UE Dateltime received in
central Clerk's Office sailing deputy initials



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLJNOIS

EASTERN DIVISION
UNITED STATES OF AMERICA )
)
Plaintiff, )
)
v. ) No. 01 CR 1129
) Honorable James B. Moran
JOSEPH NICOSIA, )
} DOCEETED
Defendant. )

WAR 29’ 200
MEMORANDUM OPINION & ORDER

Defendant has filed seven pretrial motions. We rule upon them as follows:

1. Motion for Discovery under Rule 16(a)(1)(A). The motion is denied as moot.
This is an open file case. Whatever the government has it is willing to shase with defendant.

2. Motion to File Additional Motions. The motion is denied. If there is some
reasonable basis for filing some motion hereafter, we will consider it then. +

3, Motion for Production of Summary of Experts’ Testimony and Statements The
motion is denied as moot. The government has no experts and does not intend to employ any. If
the government changes it mind, it is under an obligation to so advise defendant.

4. Motion for Government’s Disclosure of 404(b)and “Intricately Related” Evidence.
The motion is denied as moot. The government has not determined that it will offer any 404(b)
evidence and will provide reasonable notice if it intends to do so. As for “intricately related”
evidence, the government has agreed that this is an open file case.

5. Motion for Production of Exculpatory Material and for Disclosure of

Impeachment Information. The motion is denied as moot. The government recognizes its Brady


and Giglio obligations (which do not extend to evidence that someone has no information,
implicating or exculpating defendant, and, again, it is an open file case.

6 Motion to Sever Counts. Defendant seeks to sever the tax fraud counts from the
insurance fraud counts, That motion is denied. The counts concern interrelated transactions, the
same evidence is relevant to both the insurance and tax charges, and defendant does not identify
any particular prejudice by their joinder. The counts have been properly joined under F.R, Crim.
P. 8.

7. Motions to Dismiss Counts One through Ten for Failure to State a Cause of
Action. That motion is denied.

Both the government and the defendant rest upon the plain wording of the statute. 18
U.S.C. §1033(c)(1) reads in relevant part as follows:

Whoever is engaged in the business of insurance and whose
activities affect interstate commerce. . . knowingly makes any false
entry of material fact in any book, report, or statement of such
person engaged in the business of insurance with intent to deceive
any person, including any officer, employee, or agent of such
person engaged in the business of insurance, any insurance
regulatory official or agency, or any agent or examiner appointed
by such official or agency to examine the affairs of such person,
about the financial condition or solvency of such business shall be
punished as provided in paragraph (2).

(2) The punishment for an offense under paragraph (1) is a fine as
provided under this title or imprisonment for not more than 10
years, or both, except that if the false entry in any book, report, or
statement of such person jeopardized the safety and soundness of
an insurer and was a significant cause of such insurer being placed
in conservation, rehabilitation, or liquidation by an appropriate
court, such imprisonment shall be not more than 15 years.
(Emphasis supplied.)