United States v. Hubbell, Webster L.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 21, 1999 Decided June 1, 1999

No. 99-3044

United States of America,
Appellant

v.

Webster L. Hubbell,
Appellee

Appeal from the United States District Court
for the District of Columbia
(98cr00394-01)

Paul Rosenzweig, Associate Independent Counsel, argued
the cause for appellant. With him on the briefs were Ken-
neth W. Starr, Independent Counsel, Jay Apperson, Deputy
Independent Counsel, Joseph M. Ditkoff and Eric S. Drei-
band, Associate Independent Counsel.

 Peter J. Romatowski argued the cause for appellee. With
him on the brief were John W. Nields, Jr. and Laura S.
Shores.

Before: Silberman, Williams, and Tatel, Circuit Judges.

Opinion for the Court filed Per Curiam.

Per Curiam: The Office of Independent Counsel appeals
from the district court's dismissal, for vagueness, of one count
of a multi-count indictment returned against Webster L.
Hubbell. We reverse.

I.

The 15-count indictment alleges that Hubbell, acting as an
attorney for the Rose Law firm, assisted Madison Guaranty
Savings & Loan Association in a series of real estate transac-
tions, including the purchase of land, through Madison Guar-
anty's subsidiary, Madison Financial, and nominee purchaser
Seth Ward, Hubbell's father-in-law. Allegedly seeking to
conceal the improprieties in these transactions from the Fed-
eral Home Loan Bank Board, Hubbell assisted Madison
Guaranty in creating a fictitious paper record to deceive the
bank regulators about the nature of Madison's payments to
Seth Ward, and then concealed his representation of Seth
Ward from the Federal Deposit Insurance Corporation
(FDIC). The indictment further alleges that Hubbell lied to
federal investigators about these events.

Count 1 of the indictment,1 which incorporates by reference
the allegations above as set forth in the first 85 paragraphs of
the indictment, charges a violation of 18 U.S.C. s 1001 (1994).

__________
1 The remaining counts are as follows: Count 2 charges a
violation of 18 U.S.C. s 1032(2) (corruptly impeding the functions of
the FDIC and Resolution Trust Corporation (RTC)); Count 3
charges a violation of 18 U.S.C. s 1006 (fraud on the FDIC and
RTC); Counts 4 through 7 charge violations of 18 U.S.C. s 1007
(false statements to the FDIC); Counts 8 and 9 charge violations of
18 U.S.C. s 1001 (false statements to the RTC); Count 10 charges
a violation of 18 U.S.C. s 1621 (perjury); and Counts 11 through 15
charge violations of 18 U.S.C. ss 1341, 1346 (mail fraud).

At the time of Hubbell's conduct alleged here, s 1001 provid-
ed:

[W]hoever, in any matter within the jurisdiction of any
department or agency of the United States knowingly
and willfully falsifies, conceals or covers up by any trick,
scheme, or device a material fact, or makes any false,
fictitious or fraudulent statements or representations, or
makes or uses any false writing or document knowing the
same to contain any false, fictitious or fraudulent state-
ment or entry, shall be fined under this title or impris-
oned not more than five years, or both.

Id. Specifically, Count 1 alleges that Hubbell "did knowingly
and willfully falsify, conceal, and cover up by scheme material
facts about and related to the true nature" of his relationships
with Seth Ward, Madison Guaranty, and Madison Financial,
and that he made "materially false and fraudulent statements
and representations to the FDIC and the RTC" about these
relationships. Hubbell moved to dismiss this count for vague-
ness and to require election among multiplicitous counts. He
argued that, given the lack of specificity in identifying the
particular facts concealed, the indictment failed to "fairly
infor[m] [him] of the charge against which he must defend."
Hamling v. United States, 418 U.S. 87, 117 (1974); Fed. R.
Crim. P. 7(c)(1).

The district court granted the motion to dismiss Count 1
for vagueness (and as such did not reach the multiplicity
issue). The district court's reasoning, however, focused not
on the specificity of the allegations, but on whether s 1001
permits the charging of a scheme crime. The district court
first noted that, in Bramblett v. United States, 231 F.2d 489
(D.C. Cir. 1956), the "suggestion that s 1001 punishes a
'pattern of conduct' is dictum." United States v. Hubbell,
Crim. Act. No. 98-0394, Mem. Op. (D.D.C. Mar. 18, 1999),
reported at 1999 WL 152534, at *2; see Bramblett, 231 F.2d
at 491. Viewing the indictment as charging just such a
scheme or pattern of conduct, the district court concluded
that the allegations in the indictment went to the "scheme"
itself and were therefore insufficiently specific as to the

precise acts of concealment or falsification at issue. Although
the court acknowledged that the 85 paragraphs incorporated
by reference in Count 1 allege "many false statements and
acts of concealment," it described the charging language of
Count 1 itself as "nonspecific." Hubbell, 1999 WL 152534, at
*2. The government appealed.

II.

The government contends that the district court erred by
confusing two distinct questions--whether Count 1 properly
charges an offense under the "conceal[s] ... by scheme"
clause of s 1001, and whether Count 1 is too vague to inform
the defendant of the charge against him. As to the first
question, the government asserts that governing precedent,
as well as principles of statutory construction, tell us that
s 1001 allows prosecution of "scheme crimes." Hubbell re-
sponds that s 1001 does not define a separate offense of
committing a scheme; it merely limits the type of conceal-
ments that violate the statute. Hubbell's argument, however,
cannot be squared with our prior decision in Bramblett, which
expressly held that the plain language of s 1001 permits the
charging of scheme crimes. In that case, the defendant, a
member of Congress, filed a false designation with the Dis-
bursing Office of the House of Representatives claiming that
he had hired a clerk; he then proceeded to collect the
phantom-clerk's monthly paychecks. The defendant argued
that the prosecution under s 1001 was time-barred because
the crime was complete when the designation was filed, more
than three years before the indictment was returned. We
rejected that argument, however, explaining that "the indict-
ment [did] not merely charge the making of a false state-
ment," but instead alleged a falsification by scheme. By
"falsifying a material fact, and in leaving it on file, thereby
continuing the falsification in order repeatedly to partake of
the fruits of the scheme," the defendant committed a continu-
ing crime of falsification by scheme that "fairly falls within
the terms of section 1001." Bramblett, 231 F.2d at 491. To
the extent that the district court concluded that Count 1 did
not properly charge an offense under s 1001, it was in error.

 Turning to the asserted vagueness, we do not see how
Count 1, having incorporated by reference the 85-paragraph
introductory section detailing the allegations, can be thought
insufficient to "fairly inform[ ] [the] defendant of the charge
against which he must defend." Hamling, 418 U.S. at 117.
As the government points out, the indictment sets forth the
acts of falsification and concealment; the nature of the
scheme by which these material facts were falsified and
concealed; and the material facts that Hubbell concealed
from the FDIC and RTC. The district court seems to have
ignored the incorporation by reference of this material (which
it conceded "allege[s] many false statements and acts of
concealment," Hubbell, 1999 WL 152534, at *2). That the
"charging language" itself did not allege specific acts of
concealment is of no moment--the purpose of incorporation is
to supply those specifics. Hubbell's additional (and somewhat
inconsistent) argument that the indictment fails to give suffi-
cient notice because it provides too much detail is, to be
charitable, unconvincing. It cannot be the case that the more
elaborate the scheme or the more numerous the acts of
concealment, the less able the government is to charge a
crime under s 1001.

Hubbell's argument that Count 1 of the indictment includes
too many allegations of falsifications and concealments can be
alternatively viewed as a claim that the indictment is duplici-
tous--an argument raised in passing below and renewed here
as part of Hubbell's vagueness claim. Duplicity is the joining
in a single count of two or more distinct and separate
offenses. See United States v. Mangieri, 694 F.2d 1270, 1281
(D.C. Cir. 1982); Charles Alan Wright, 1A Federal Practice
and Procedure: Criminal s 142, at 7 (3d ed. 1999). Hubbell
contends that by charging numerous false statements and
acts of concealment in Count 1, the indictment impermissibly
charges multiple offenses in one count. But this construction
of the indictment makes sense only if s 1001 does not state
an offense for a scheme crime--which it clearly does. See
Bramblett, 231 F.2d at 491 (multiple acts of concealment as
part of one continuing scheme constitutes one offense); see
also United States v. Shorter, 809 F.2d 54, 56 (D.C. Cir. 1987)

(when two or more acts would constitute an offense standing
alone, those acts may instead be charged in a single count if
those acts could be characterized as part of a single, continu-
ing scheme), abrogated on other grounds by Daubert v.
Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993). Cf.
Mangieri, 694 F.2d at 1282 (indictment not duplicitous where
each count included several misrepresentations as part of one
fraudulent loan application transaction).

The district court, having dismissed Count 1, did not reach
Hubbell's argument that the indictment is multiplicitous, i.e.,
that individual false statements were charged separately as
false statements in Counts 4 through 9 and again in Count 1
as part of a falsification or concealment by scheme. We
agree with the government that multiplicity claims are better
sorted out post-trial. The factual issues as to what state-
ments were made and what acts of concealment were commit-
ted, as well as whether the later acts or statements further
impaired the operations of government, see, e.g., United
States v. Cisneros, 26 F. Supp.2d 24, 44 (D.D.C. 1998) (citing
United States v. Salas-Camacho, 859 F.2d 788, 791 (9th Cir.
1988), need development at trial, and attempting to decide
such issues pre-trial would be premature.

* * * *

For the foregoing reasons, we reverse the district court's
dismissal of Count 1 of the indictment.

So ordered.