Opinion ID: 1435420
Heading Depth: 4
Heading Rank: 1

Heading: Kemp Test

Text: The first Kemp factor is whether there was a common goal among the conspirators. Kemp, 500 F.3d at 287. The Government urges us to focus on the objectives of the conspiracies charged in the two indictments, arguing that the object of the New York conspiracy was to commit securities fraud, wire fraud, bank fraud, to file false reports with the SEC, and to falsify the books and records of Adelphia, while the object of the Pennsylvania conspiracy was to defraud the IRS. However, this argument misses the point of the totality of the circumstances test. In Liotard, we specifically rejected including objects of the charged conspiracies in that test. 817 F.2d at 1078 n. 7. It is well established that a single conspiratorial agreement can envisage the violation of several statutes. See, e.g., Braverman v. United States, 317 U.S. 49, 53, 63 S.Ct. 99, 87 L.Ed. 23 (1942). Further, the Government's approach would give undue weight to the grand jury's characterization of the Rigases' conduct, instead of focusing on the substance of the matter. J. David Smith, 82 F.3d at 1267. Thus, in considering whether the defendants had a common goal we look to the underlying purpose of the alleged criminal activity. See, e.g., United States v. Greenidge, 495 F.3d 85, 93 (3d Cir.2007) (describing common goal as to make money by depositing stolen and altered corporate checks into business accounts); Kelly, 892 F.2d at 259 (describing common goal as to make money selling `speed'). As set forth above, in the Pennsylvania Indictment the Government alleges that, after a particularly high tax bill, the Rigases decided that they would never pay [a] large amount of taxes again. Pennsylvania Indictment at 6, ¶¶ 1-2. To accomplish this purpose, the Rigases decided that Rigas family members should not take large salaries from Adelphia, but should `live out of the company.' Id. To avoid detection, the Rigases engaged in sham transactions to conceal their use of corporate assets. Of course, to conceal their income from the Government, the Rigases also had to conceal it from the public in general, including shareholders. The New York Indictment simply targeted this aspect of the Rigases' scheme. Further, it is not dispositive that the conspiracy charged in the New York Indictment was broader than the Pennsylvania Indictment. The charges in both indictments relate to a common goal of enriching the Rigases through Adelphia. A master conspiracy [can involve] more than one subsidiary scheme. United States v. Kenny, 462 F.2d 1205, 1216 (3d Cir.1972). The allegations related to conversion of Adelphia funds by the Rigases  a subsidiary scheme within the New York Indictment  appear to be the same in both indictments.
The second Kemp factor is whether the agreement contemplated bringing to pass a continuous result that will not continue without the continuous cooperation of the conspirators. Kemp, 500 F.3d at 287. The first part of this factor overlaps with the time factor from the Liotard test. In evaluating the cooperation part of this factor we look to whether there was evidence that the activities of one group were necessary or advantageous to the success of another aspect of the scheme or to the overall success of the venture. United States v. Greenidge, 495 F.3d 85, 93 (3d Cir.2007) (internal quotation marks, ellipsis, and citation omitted). In other words, we consider whether all aspects of the scheme were interdependent. Cf. Kemp, 500 F.3d at 289 ([I]nterdependence serves as evidence of an agreement; that is, it helps establish whether the alleged coconspirators are all committed to the same set of objectives in a single conspiracy. (internal citation and quotation marks omitted)). As to time, the Pennsylvania Indictment covers a wider time span than the New York Indictment, but again the key years in both conspiracies are the same. The Pennsylvania Indictment alleges that the conspiracy lasted from November 1989, through the date of the indictment [2005], but only describes overt acts occurring between 1998 and 2002. [13] Pennsylvania Indictment at 2. The majority of the allegations in the conspiracy count relate to the period between 1996 and 2002. The alleged tax loss is further limited to the period of 1998 to 2000. [14] The New York Indictment charged a conspiracy between 1999 and May 2002. However, the New York Indictment suggests that the Rigases' conspiratorial conduct began well before 1999. The Bill of Particulars further alleges that the Rigases began using Adelphia funds for their personal benefit [f]rom at least ... 1993. Bill of Particulars ¶ 81. Because the New York Indictment does not purport to reach the origin of the Rigases' conspiracy, we do not find it significant that its charges began later than those in the Pennsylvania Indictment. As to interdependence, we again reiterate that the Government claims that the Rigases appropriated money from Adelphia to avoid taking salaries on which they would have had to pay income tax. See Pennsylvania Indictment at 6, ¶¶ 1-2 (JOHN J. RIGAS and TIMOTHY J. RIGAS stated to an Adelphia employee that they would never pay this large amount of taxes again.; Timothy Rigas told Adelphia employees that the Rigas family members should not take large salaries from Adelphia, but should `live out of the company.') Further, the Rigases had to hide their misuse of Adelphia's corporate assets from the public in order to avoid detection of their income by the Government.
Both the Liotard and Kemp tests direct us to consider overlap in the participants of the two conspiracies. The Rigases were the main actors in both indictments. Other members of the Rigas family are also central to both indictments. The New York Indictment named a number coconspirators including Michael Rigas, Michael Mulcahey, James R. Brown, and Timothy A. Werth. [15] Although other Rigas family members were not specifically named in the New York indictment many of the allegations relate to the Rigas family, including John Rigas's wife, sons, daughter and son-in-law. New York Indictment ¶ 2. For example, the New York Indictment alleges that Adelphia advanced substantial amounts of cash to other members of the Rigas Family, id. ¶ 169, and that the Rigases caused Adelphia to file a Form 10-K which falsely understated the total amount of compensation to ... another member of the Rigas Family by failing to include the[se] cash advances, id. ¶ 173. The Bill of Particulars also listed at least nine members of the Rigas family who used the Adelphia corporate aircraft for personal travel. Similarly, the Pennsylvania Indictment alleges that the Rigases conspired with others known and unknown. It also alleges that the Rigases caused Michael Rigas, James Rigas, and Ellen Rigas to under-report their income.