Opinion ID: 553829
Heading Depth: 3
Heading Rank: 1

Heading: Misjoinder of Separate Conspiracies.

Text: 10 Appellants contend that the two conspiracies did not have a common end or shared goal, and are not interconnected except for the happenstance of some common participants. Joinder involving multiple defendants is governed by Federal Rule of Criminal Procedure 8(b), which provides: 11 Two or more defendants may be charged in the same indictment or information if they are alleged to have participated in the same act or transaction or in the same series of acts or transactions constituting an offense or offenses. Such defendants may be charged in one or more counts together or separately and all of the defendants need not be charged in each count. 12 While this circuit's law makes it difficult to prevail on a claim that there has been a misjoinder under Rule 8(b), there are definite limits to what the government can put together in a single indictment. Rule 8(b)'s language may not be read to embrace similar or even identical offenses, unless those offenses are related.... [T]here must be a logical relationship between the acts or transactions within the series. United States v. Perry, 731 F.2d 985, 990 (D.C.Cir.1984) (citations omitted). In Perry, this court upheld joinder in a drug prosecution, even though one of the defendants was not charged in one of the transactions, because the government showed a common scheme or plan spanning both transactions and both defendants. Similarly, in United States v. Brown, 823 F.2d 591, 598 (D.C.Cir.1987), this court applied the logical relationship test to find proper joinder in a case charging several members of the Original Hebrew Israelite Nation with a single overarching conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activity, followed by 68 specific counts charging fraudulent acts involving such items as forged checks and blank airline tickets (some of which were RICO predicate acts, while others were not). In this case, by contrast, the government has failed to show either a common scheme connecting the two conspiracies or any participation by Nicely in the SCT scheme and conspiracy. [T]he mere fact that two conspiracies have overlapping memberships will not authorize a single indictment if the conspiracies cannot be tied together into one conspiracy, one common plan or scheme. United States v. Velasquez, 772 F.2d 1348, 1353 (7th Cir.1985), cert. denied, 475 U.S. 1021, 106 S.Ct. 1211, 89 L.Ed.2d 323 (1986). 13 The government's position on appeal is that the record shows two substantially interrelated conspiracies, insofar as the appellants constructed a sophisticated apparatus to maintain the illusion that they were involved in legitimate, well-funded projects associated with United States intelligence groups. Misrepresentations made in the course of both schemes included claims that some of the appellants were employed by the CIA, that an Asian trust held vast gold reserves which EAT could invest, and that there was a still-secret currency reform proposal. The government insists that a necessary component of both schemes was the symbiotic (its word) relationship between Kelgre (run by Smith and Blankenship) and EAT (and its subsidiary Leeward, both run by Johnson and Koral), whereby each lent credibility to the other via fraudulent misrepresentations. The currency reporting violations occurred at the height of the ongoing fraud of SCT, and all the defendants (except Nicely) were involved in both frauds, whose common objective, according to the government, was to make money by charging fees for the performance of services. The proffer of this narrative to the district court at the pretrial hearing on appellants' motion for severance under Rule 8(b) was even less well-defined (evidently, the prosecutor characterized it as your all-purpose scam). In light of this court's suggestion in Perry that the propriety of initial joinder is to be determined by the representations and evidence before the district court prior to trial, 731 F.2d at 987, 990-91, it is arguable that the government should be precluded from post hoc justifications for joinder that were not presented prior to trial. 14 We need not, however, decide the question of whether the propriety of joinder depends solely on what the government demonstrated prior to trial because we believe that even the government's explanation after trial is inadequate. This is most definitely not a situation where the prosecutors convey a sketchy explanation of the factual basis for the joinder to the district court prior to trial and then bolster the claim by the evidence adduced a trial. Here the reverse seems to have happened, namely a tenuous connection suggested prior to trial whose flimsiness became stark when put to the test at trial. Indeed, the government's unfortunate choice of the word symbiotic to now describe the basis for joinder is telling. The term evokes images of two very dissimilar creatures deriving some mutual benefit from each other's proximity (e.g., a hippopotamus and the small bird that eats ticks off its hide), but no one would understand their symbiosis as grounds for placing both animals in the same taxonomic group. We recognize, of course, that symbiosis technically refers to a range of mutually beneficial relationships between organisms, some of which are non-essential while others involve true interdependence. To that extent, one could find the non-essential variety of symbiosis present in this case, and our holding is in no way meant to foreclose the possibility of joining distinct but mutually interdependent conspiracies in a single indictment. Cf. Brown, 823 F.2d at 598 (numerous mutually interdependent scams properly made out a single, overarching conspiracy to conduct the affairs of an enterprise through a pattern of racketeering activities); Perry, 731 F.2d at 990. 15 Originally, the government's main arguments in support of joinder were that both conspiracies were against the Treasury Department and that evidence of each conspiracy would be cross-admissible in the case of the other under Federal Rule of Evidence 404(b). (This latter claim will be taken up below.) In denying the Rule 8(b) motion to sever, the district court relied on the common victimization of the Treasury Department. See Mem. Op. at 8 (Both are conspiracies to defraud the United States Treasury Department.). However, at the close of the government's case, the court struck the allegation from Count I averring that the Treasury Department was the victim of the SCT conspiracy, but nevertheless denied defendants' renewed motions for severance. Once that allegation was struck from the indictment, there was no common victimization of Treasury left in the case, and severance on grounds of misjoinder then was necessary. Cf. United States v. Ong, 541 F.2d 331, 337-38 (2d Cir.1976) (holding that dismissal of the count justifying joinder will require severance if the defendants will be prejudiced by the joinder or if the dismissed count had not been alleged by the government in good faith), cert. denied, 429 U.S. 1075, 97 S.Ct. 814, 50 L.Ed.2d 793 (1977). The government must have known the flimsiness of this allegation in light of the Supreme Court's recent decision in Tanner v. United States, 483 U.S. 107, 128-32, 107 S.Ct. 2739, 2751-54, 97 L.Ed.2d 90 (1987) (rejecting an expansive interpretation of 18 U.S.C. Sec. 371 since a conspiracy to defraud a private corporation does not constitute a conspiracy to defraud the United States unless the defendants had conspired to cause the private entity to make misrepresentations to a government agency). 16 Beyond the similarity in membership, the government points to nothing in common between the two conspiracies more specific than the common use of falsehoods to make money. The district court appears to have accepted the government's argument that both conspiracies shared a common method insofar as they both relied on falsehoods about the relationship between Kelgre and EAT. See Mem. Op. at 8. Telling lies, even elaborate ones, cannot be the hook for joining otherwise unrelated conspiracies. The SCT conspiracy did in volve various misrepresentations by four of the appellants suggesting that EAT had received the Treasury Department contract to implement a secret currency reform project, part of which it might subcontract to SCT. The currency reporting conspiracy, by contrast, did not involve monies obtained by fraud or any representations at all about nonexistent government contracts, and the whole scheme had run its course within a couple of weeks. The IRS sting operation, which had not targeted any of the appellants originally, stumbled upon Phillip Nicely just as he was seeking to associate with Kelgre. Because the currency reporting conspiracy predated legislation adding money laundering as a separate federal offense, see Pub.L. 99-570 (Oct. 27, 1986), codified at 18 U.S.C. Sec. 1956, the government had to utilize parts of the Bank Secrecy Act, 31 U.S.C. Secs. 5313, 5322, and the regulations promulgated thereunder, to build its money laundering case. Indeed, Smith's readily identifiable violations of those regulations, set off against the ongoing SCT conspiracy, laid the foundation for charging all five defendants with a conspiracy to defraud the United States. 17 In short, the government's justification for joinder of the conspiracies was expounded in thoroughly conclusory terms. United States v. Jackson, 562 F.2d 789, 795 (D.C.Cir.1977) (footnote omitted). The government's choice of the word symbiotic on appeal to explain the link between the conspiracies is symptomatic of its inability to articulate a nexus between the schemes, and identifying the common objective as making money and the shared modus operandi as telling lies are patently insufficient grounds for joinder. 18