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UNITED STATES v. O'NEILL

January 18, 1979

UNITED STATES
v.
Alfred E. S. O'NEILL



The opinion of the court was delivered by: POLLAK

MEMORANDUM

I.

 Defendant Alfred E. S. O'Neill asserts that counts 4, 5, 7-9, 11, 12, 14, 15, 17-22, 24-26, and 29-50 of the indictment against him are duplicitous that is, that each count charges two offenses. *fn1" He asks that the Government be required to elect which of the offenses in each count it will proceed on at trial, or, in the alternative, that these counts of the indictment be dismissed. Each of the assertedly duplicitous counts alleges either (1) O'Neill made two false statements to a federally insured bank in order to obtain a loan, *fn2" or (2) O'Neill made two false statements to a federally insured bank in order to obtain release of collateral. *fn3" Defendant contends that each false statement alleged in each count constitutes a separate offense under 18 U.S.C. § 1014, and two of them cannot be alleged in a single count. The Government asserts that each application for a loan, or each attempt to obtain the release of collateral, constitutes a single transaction, and that the totality of false statements whether one, two, or many made in support of each separate application or attempt constitutes but a single offense. The Government contends further that if O'Neill made either of the false statements charged in each challenged count, he is guilty of the offense charged.

 II.

 Duplicitous indictments must be guarded against because of their potential for prejudice to a defendant:

 
One vice of duplicity is that a general verdict for a defendant on that count does not reveal whether the jury found him not guilty of one crime or not guilty of both. Conceivably this could prejudice the defendant in protecting himself against double jeopardy. Another vice of duplicity is that a general verdict of guilty does not disclose whether the jury found the defendant guilty of one crime or of both. Conceivably, this could prejudice the defendant in sentencing and in obtaining appellate review. A third vice of duplicity is that it may prejudice the defendant with respect to evidentiary rulings during the trial, since evidence admissible on one offense might be inadmissible on the other. . . . Finally, there is no way of knowing with a general verdict on two separate offenses joined in a single count whether the jury was unanimous with respect to either.

 United States v. Starks, 515 F.2d 112, 116-17 (3d Cir. 1975). The traditional remedy for duplicity is a requirement that the Government elect which of the charges in the indictment it will proceed upon. Id. 117.

 I conclude that the counts contained in this indictment are not duplicitous. Unless care is taken, however, certain of the evils of duplicity might attend a trial upon this indictment. While I will not order the Government to elect which falsehood it will pursue in each count or suffer dismissal of the counts, I will order partial relief, designed to meet the particular problems raised by this indictment.

 III.

 The fact that many counts of this indictment allege two false statements as the basis for a single charge under 18 U.S.C. § 1014 *fn4" does not require a conclusion that the counts are duplicitous. "We know of no rule that renders an indictment duplicitous because it charges as one joint offense a single completed transaction instead of charging in separate counts as many offenses as the evidence at the trial might conceivably sustain." Korholz v. United States, 269 F.2d 897, 901 (10th Cir. 1959), Cert. denied, 361 U.S. 929, 80 S. Ct. 367, 4 L. Ed. 2d 352 (1960), quoting Mellor v. United States, 160 F.2d 757, 762 (8th Cir.) Cert. denied, 331 U.S. 848, 67 S. Ct. 1734, 91 L. Ed. 1858 (1947). The complexities of modern economic life often make it difficult to determine what ought to be one functional unit for the purposes of prosecution. As a result, the Government must have, within certain limits, discretion to charge an entire criminal episode in a single count, United States v. Tanner, 471 F.2d 128, 138 (7th Cir.), Cert. denied, 409 U.S. 949, 93 S. Ct. 269, 34 L. Ed. 2d 220 (1972), and, indeed, the Ninth Circuit has commended the Government for doing so where multiple punishment of defendants would clearly be inappropriate. Cohen v. United States, 378 F.2d 751, 754 (9th Cir.), Cert. denied, 389 U.S. 897, 88 S. Ct. 217, 19 L. Ed. 2d 215 (1967).

 It is true that Section 1014 prohibits the utterance of "Any false statement or report" (emphasis added) to influence the action of a federally insured bank, and thus two false statements or reports can be seen as two offenses. Bins v. United States, 331 F.2d 390 (5th Cir. 1964), Cert. denied, 379 U.S. 880, 85 S. Ct. 149, 13 L. Ed. 2d 87 (1964) (two false forms submitted to influence action on a single loan constitute two offenses). It is often difficult to determine, however, where one false statement leaves off and another picks up, or when the two false statements are so closely related that they form one functional unit. In many of these counts, O'Neill is charged with representing to a bank that a certain insurance policy would have a future cash surrender value and that the policy had been assigned to him, both of which representations are said to be knowing falsehoods. Yet it is quite clear that, functionally speaking, these are not separable falsehoods. The bank would not have given any loan in reliance upon these policies unless it believed both of the statements were true; if either is false, the policy is worthless as collateral. *fn5" The difficulty of determining whether one representation or two has been made is underscored by defendant's own handling of this motion. In count 15, among others, the indictment alleges that the defendant asserted, in connection with the attempt to get a single loan, that two insurance policies would have a future cash surrender value and that they had both been assigned to him. He attacks the count as duplicitous because it alleges a false statement concerning future cash surrender value and a false statement concerning assignment of the policies. He does not assert, however, that the count alleges Four falsities, as he might have: defendant might have argued that the representation that the two policies would have a cash surrender value is two statements; similarly concerning their assignment.

 Given the difficulty of conceptualizing the proper transactional unit solely in terms of single or multiple statements, it may prove helpful to look at the evil which the statute seeks to prevent. The statute seeks to prevent losses to federally insured banks resulting from fraudulent transactions. See Kay v. United States, 303 U.S. 1, 6, 58 S. Ct. 468, 471, 82 L. Ed. 607 (1938). Each pair of misrepresentations charged in a single count was aimed at a single allegedly fraudulent transaction; and it is the attempt to induce a fraudulent transaction, and the losses to federally insured banks resulting therefrom, rather than simply the falsehoods, which Congress was seeking to prevent. *fn6"

 This is the analysis followed in most of the analogous cases. In Cohen v. United States, supra, the defendant was charged in a single count of use of a wire communication facility to place a single interstate bet, 18 U.S.C. § 1084(a), although several telephone calls had been made. The Government was commended for "treating all such calls for the same purpose during a brief period as one crime subject to a single statutory penalty. 378 F.2d at 754; Accord, United States v. Kelley, 395 F.2d 727 (2d Cir.), Cert. denied, 393 U.S. 963, 89 S. Ct. 391, 21 L. Ed. 2d 376 (1968). In Cohen and Kelley, the argument for finding the indictment duplicitous was stronger than it is here, because each phone call is an easily identifiable unit, Cf. Bins v. United States, supra note 6, whereas here, O'Neill's alleged falsehoods are not as readily separable. In Korholz v. United States, supra, an employer and one of its officers were alleged in a single count to have bribed a union officer in violation of the Taft-Hartley Act's prohibition of payments by employers to union officials. The Court held the charge not duplicitous, despite the fact that thirteen separate payments were involved, because all the payments were part of a single scheme with a single object: influence over a single N.L.R.B. election. This is similar to the situation in which O'Neill finds himself: he is charged with making two false statements in order to influence action on a single loan. Again, the payments in Korholz are more readily separable into distinct units than the misrepresentations of which O'Neill is accused.

 And in United States v. Browning, Inc., 572 F.2d 720 (10th Cir.), Cert. denied, 439 U.S. 822, 99 S. Ct. 88, 58 L. Ed. 2d 114 (1978), the District Court had dismissed as duplicitous a count alleging that the defendants had avoided customs duty on twenty-six guns by falsifying documents concerning their value. The Court of Appeals reversed, stating that "The trial court was concerned about the fact that the prosecutors stated in open court that the treating of this as one transaction rather than twenty-six was in the defendants' best interest. This does not call for a sanction against the government." Id. at 726. The Court reinstated the count and remanded to the District Court for trial. The ...


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