18 U.S.C. § 1956. Cole is charged with six counts and Spanjol is charged with two counts of failing to file Internal Revenue Service currency transaction reports in violation of 31 U.S.C. §§ 5313 and 5322(b). Cole is charged with three counts and Spanjol is charged with one count of interstate travel in aid of racketeering in violation of 18 U.S.C. § 1952. Cole and Spanjol are charged with one count of violating the Arms Export Control Act, 22 U.S.C. § 2778.
On April 18, 1989, Cole entered a plea of guilty to the charges in the superseding indictment. The remaining defendants have not been arraigned on the superseding indictment.
II. Motions to Inspect Grand Jury Testimony :
Two motions are before the Court which seek an inspection of the grand jury testimony by the defendants, or in the alternative, an in camera inspection of the grand jury testimony by the Court. One motion was filed jointly by Mir and LBS Bank, and the other was filed by Bijedic. Both motions allege that the Government failed to present substantial and material exculpatory evidence to the grand jury.
The Third Circuit has not decided whether a prosecutor has a duty to present exculpatory evidence to a grand jury. U.S. v. Ismaili, 828 F.2d 153, 165 (3d Cir. 1987), cert. denied, 485 U.S. 935, 108 S. Ct. 1110, 99 L. Ed. 2d 271 (1988). However, the Third Circuit recognized that a majority of courts considering the issue have decided that such a duty does not exist. Id., 828 F.2d at 165 n.13.
The district courts in this circuit have rejected such a blanket rule. Generally, courts in this circuit have held that when a prosecutor is aware of substantial exculpatory evidence, the evidence should be disclosed to the grand jury if it could reasonably cause the grand jury not to indict. United States v. Litman, 547 F. Supp. 645, 649 (W.D. Pa. 1982). See also, United States v. Fisher, 692 F. Supp. 495, 504 (E.D. Pa. 1988); Kudisch v. Overbeck, 618 F. Supp. 196 (D.N.J. 1985). To prevail on their motions to have the Court inspect the grand jury testimony, the defendants must show that the prosecutor's failure to introduce the evidence was deliberate. Litman, 547 F. Supp. at 650.
The defendants have a heavy burden of proof. Such a standard of proof is necessary to prevent the grand jury proceedings from becoming a "minitrial" on the merits and forcing the trial judge to review the grand jury minutes every time the defendant alleges that exculpatory evidence was not presented to the grand jury. See id., 547 F. Supp. at 649. The rationale for the rule is clear-"Even if an indictment is filed, the defendants could only be found guilty after a guilty plea is accepted or after the completion of a criminal trial in which guilt was established beyond a reasonable doubt." Id.
The allegations made by Bijedic do not require this Court to conduct an examination of the grand jury testimony. Bijedic alleges that the Government withheld evidence that the seals on the trunk containing $ 500,000 in cash, which was transported from Chicago to Yugoslavia on August 11, 1988, were not official Yugoslavian seals but were seals purchased by Cole from a stationary store. In addition, Bijedic alleges that the Government knew that his signature on the alleged courier letter was a forgery.
The facts offered in support of Bijedic's allegations are insufficient to cause the Court to conduct an in camera inspection. Bijedic has failed to show that the Government knew of any exculpatory evidence. Specifically, there is no evidence that the Government knew the seals were not authentic when it presented the case before the grand jury. The evidence regarding the seals suggests, at most, that the Government conducted a negligent investigation by failing to discover what an authentic Yugoslavian diplomatic seal looked like.
Similarly, there is no evidence that the Government knew Bijedic's signature was forged on the alleged courier letter. Bijedic contends that the Government must have known because his experts' findings were made available to the Government. However, the Government is not required to accept the findings of the defendants' experts as fact. Bijedic also contends that an affidavit by Louise Hodess, a Customs agent involved in the investigation, proves that the Government knew that the signature was forged. That affidavit states that Mary Mochary, Privileges and Immunities Section, Legal Advisors Office, of the United States State Department determined that the purported courier letter was invalid. Although the affidavit reveals that something about the letter was improper, it does not state that Ms. Mochary determined that the letter was a forgery.
Assuming, arguendo, that the diplomatic seals were not authentic and that Bijedic's signature was forged, and that the Government had knowledge of both of these facts, an inspection of the grand jury testimony is still not warranted. To prevail on his motion, Bijedic must show that the exculpatory evidence could reasonably have led the grand jury not to indict if the evidence was presented. This he failed to do because the charges against him are not limited to the diplomatic seals or the courier letter. After examining the superseding indictment, the Court determines that the presentation of the alleged exculpatory evidence would not reasonably have led the grand jury not to indict.
The allegations made by Mir and LBS Bank do not require this Court to conduct an examination of the grand jury minutes. Mir and LBS Bank contend that some of the tapes made by the Government exculpate them. They conclude that the fact of the indictment by the grand jury establishes that the Government failed to present the tapes with the exculpatory evidence to the grand jury. Mir and LBS Bank point to the tapes made by the Government on May 11, 1988 and June 1, 1988.
After having reviewed the transcripts of the tapes made on those two days, the Court concludes that the grand jury would have indicted Mir and LBS Bank whether or not those tapes were played. While some statements made on those days are favorable to Mir and LBS Bank, the statements do not exonerate Mir and LBS Bank of all participation in the alleged conspiracy.
The allegations of Mir and LBS Bank are strikingly similar to those presented to Judge Brotman in United States v. Kraselnick, 702 F. Supp. 480 (D.N.J. 1988). In Kraselnick, the defendants, a bank and several officers of the bank, were indicted for failing to file CTRs in connection with several cash transactions in violation of, inter alia, 18 U.S.C. § 371. The defendants moved to dismiss the indictment. They contended that the Government failed to present "overwhelming proof" that the defendants did not have the requisite specific intent to commit the crimes charged in the indictment. Id., 702 F. Supp. at 486. The motion to dismiss the indictment was denied, without any inspection of the grand jury testimony by the court, on the ground that the allegations were insufficient. Id.
Bijedic, Mir and LBS Bank have failed to allege facts sufficient to warrant an in camera inspection of the grand jury minutes by the Court. A fortiori, they have failed to allege facts sufficient to require the Court to order an inspection of the testimony by the defendants. Accordingly, their motions for inspection of grand jury testimony will be denied.
III. Motions to Dismiss the Superseding Indictment :
Two motions are before the Court which seek to have the superseding indictment dismissed. One motion was filed by Mir and LBS Bank, and the other was filed by Bijedic. Those motions will be denied.
Mir and LBS Bank first contend that the superseding indictment should be dismissed for prosecutorial misconduct in the grand jury proceedings. The alleged misconduct is identical to the misconduct alleged in their motion requesting an inspection of the grand jury testimony. This argument is insufficient for the reasons given by the Court in denying their motion for inspection of the grand jury testimony.
Second, Mir and LBS Bank seek to have the superseding indictment dismissed for failure to charge Mir and LBS Bank with a crime. The superseding indictment charges that Mir and LBS Bank knowingly filed CTRs for the transactions of March 24, 1988 and April 1, 1988 which contained material omissions and misstatements of fact in violation of 31 U.S.C. § 5324. That section provides that:
No person shall for the purpose of evading the reporting requirements of [ 31 U.S.C. § 5313(a)] with respect to such transaction . . . (2) cause or attempt to cause a domestic financial institution to file a report required under [ 31 U.S.C. § 5313(a)] that contains a material omission or misstatement of fact . . . .
Mir and LBS Bank contend that the purported omissions and misstatements of fact did not relate to matters required by 31 U.S.C. §§ 5313(a) and 5324; therefore, no crime was charged.
This issue has been raised prematurely. Mir and LBS Bank assume that the only alleged misstatements or omissions charged by the Government relate to the identity of the depositor and/or the source of the funds. The Government contends, however, that "nearly all the material information on the [CTRs] . . . were false and that [LBS Bank] and Mir knowingly filed them with knowledge of their falsity." Assuming, arguendo, that Mir and LBS Bank had no duty to disclose the identity of the depositor or the source of the funds, other omissions or misstatements may exist. Accordingly, this issue should be raised at the conclusion of the Government's case-in-chief at trial when the Court can better determine the evidence supporting the alleged misstatements or omissions.
Bijedic seeks to dismiss Count I and Count XXII of the superseding indictment for various alleged ambiguities. In the alternative, Bijedic requests that alleged surplusage be stricken and that the Government provide a bill of particulars.
To the extent that Bijedic contends that the indictment is insufficient, the indictment must be examined employing the test enunciated in United States v. Addonizio, 451 F.2d 49 (3d Cir. 1971), cert. denied, 405 U.S. 936, 30 L. Ed. 2d 812, 92 S. Ct. 949 (1972):
The true test of the sufficiency of an indictment is not whether it could have been made more definite and certain, but whether it contains the elements of the offense intended to be charged, "and sufficiently appraises the defendant of what he must be prepared to meet, and, in case any other proceedings are taken against him for similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction."
Id., 451 F.2d at 58, quoting Hagner v. United States, 285 U.S. 427, 431, 76 L. Ed. 861, 52 S. Ct. 417 (1932).
Examining Count I of the superseding indictment against the rule stated in Addonizio, the Court finds that the superseding indictment is not sufficient. Although Count I contains all the elements necessary to prove a violation of 18 U.S.C. § 371 for conspiracy, it does not sufficiently inform Bijedic of the offense charged "so that he will not be misled while preparing his defense," United States v. Brozyna, 571 F.2d 742, 746 (2d Cir. 1978), and it does not show with accuracy the extent to which he may plead a former acquittal or conviction.
Paragraph 41 of the "Overt Acts" section of Count I of the superseding indictment alleges that ". . . Cole gave the undercover agent a copy of a letter bearing the signature of the defendant Bahrudin Bijedic notifying the United States Department of State that Spanjol and Cole were assigned to the diplomatic service of Yugoslavia as couriers." Paragraph 39 of the "Overt Acts" section of Count I of the superseding indictment alleges that the Customs agent "brought the trunk containing $ 500,000 to the Consulate General of Yugoslavia in Chicago where seals with printing of the Consulate general were affixed on it." Those paragraphs do not inform Bijedic whether he is charged with signing the courier letter and affixing the seals on the trunk, or whether those acts were accomplished by another defendant.
The ambiguities of paras. 39 and 41 raise a concern with the Court regarding jeopardy and the parameters of the charges Bijedic is defending. Accordingly, the Court finds that a bill of particulars as to these paragraphs is appropriate to inform Bijedic of the precise charges against him and to establish the parameters of the Government's case.
See United States v. Smith, 776 F.2d 1104, 1111 (3d Cir. 1985).
Likewise, the Court finds that Count XXII of the superseding indictment does not meet the test of Addonizio. Although that count sufficiently states the elements of the offense charged, the charge is too vague to allow Bijedic to adequately prepare his defense. Accordingly, the Court will direct that the Government provide all defendants with a bill of particulars pursuant to Fed. R. Crim. P. 7(f) outlining the facts relating to Count XXII.
Bijedic's motion to strike surplusage from the superseding indictment will be denied. After reviewing the superseding indictment, the Court does not find that any of the challenged sections are "not relevant to the crime charged and are inflammatory and prejudicial." United States v. Napolitano, 552 F. Supp. 465, 480 (S.D.N.Y. 1982).
IV. Motions to Sever :
Two motions are before the Court which seek to sever the trial. One motion was filed jointly by Mir and LBS Bank, and the other was filed by Bijedic. Both motions allege misjoinder under Fed. R. Crim. P. 8(b), and, in the alternative, seek to have the Court sever the trial pursuant to Fed. R. Crim. P. 14. Specifically, Mir, LBS Bank and Bijedic seek to sever the parties, and, in the alternative, seek to sever Count I and Count XXII from the remaining counts. At the hearing held on May 9, 1989, counsel for Spanjol stated that he would object to severing the parties but would not object to severing offenses.
It is well established that cases involving the joinder of multiple defendants are governed by Rule 8(b). United States v. Kopituk, 690 F.2d 1289, 1312 (11th Cir. 1982), cert. denied. 463 U.S. 1209, 77 L. Ed. 2d 1391, 103 S. Ct. 3542 (1983). See generally 1 C. Wright, Federal Practice and Procedure § 144 (1982). Rule 8(b) provides that:
(b) Joinder of Defendants. 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.
A motion under Rule 8(b) alleging misjoinder must be addressed to the pleadings. United States v. Somers, 496 F.2d 723, 729 (3d Cir.), cert. denied, 419 U.S. 832, 42 L. Ed. 2d 58, 95 S. Ct. 56 (1974). See also, Schaffer v. United States, 362 U.S. 511, 514, 4 L. Ed. 2d 921, 80 S. Ct. 945 (1959). Generally, Rule 8(b) is satisfied if the indictment charges a single conspiracy, even though one or more, but not all of the defendants, are charged with various substantive counts arising from the same conspiracy. See United States v. Weinrich, 586 F.2d 481, 495 (5th Cir. 1978), cert. denied, 441 U.S. 927, 60 L. Ed. 2d 402, 99 S. Ct. 2041 (1979).
"A single, continuing conspiracy is demonstrated where the evidence proves that the essential feature of the existing conspiracy was a common plan or scheme to achieve a common, single, comprehensive goal." Blumenthal v. United States, 332 U.S. 539, 557-59, 92 L. Ed. 154, 68 S. Ct. 248 (1947). A single core conspiracy may attract different members at different times and involve different sub-groups committing acts in furtherance of the overall plan. See United States v. Simmons, 679 F.2d 1042, 1050 (3d Cir. 1982), cert. denied, 462 U.S. 1134, 77 L. Ed. 2d 1370, 103 S. Ct. 3117 (1983).
The problem most troubling to the Court is whether the allegation in Count XVIII of the superseding indictment relating to violations of the Arms Export Control Act, 22 U.S.C. § 2778 is part of the core conspiracy charged in Count I. During the trip to Yugoslavia on April 9, 1988, Cole and Spanjol are alleged to have caused the transportation of special warfare equipment which required a special export license. To further complicate this issue, a reference to conversations regarding the smuggling of controlled technology in the "Overt Acts" section of the conspiracy count in the original indictment was removed from the superseding indictment.
At this stage in the proceedings, however, the Court may not judge the Government's case to determine whether a single conspiracy or multiple conspiracies exist. "Provided that the conspiracy charge is put forward in good faith, the combination of a conspiracy count with counts charging acts in furtherance of the conspiracy will survive attack under Rule 8(b)." Somers, 496 F.2d at 730. The question of whether a single or multiple conspiracies existed is a fact question for the jury. United States v. Smith, 789 F.2d 196, 200 (3d Cir.), cert. denied, 479 U.S. 1017, 93 L. Ed. 2d 720, 107 S. Ct. 668 (1986). As the defendants have made no allegation of bad faith on the part of the prosecution in drafting the superseding indictment, the Court may not pre-judge the Government's case. Accordingly, joinder is proper under Rule 8(b).
The decision to grant or deny a motion for severance under Rule 14 rests in the sound discretion of the trial court. United States v. Reicherter, 647 F.2d 397, 400 (3d Cir. 1981). Before relief may be granted under that rule, the defendant must show "clear and substantial prejudice." United States v. Gorecki, 813 F.2d 40, 43 (3d Cir. 1987). "Defendants are not entitled to severance merely because the evidence may be more damaging against a co-defendant and there is a danger of spillover." United States v. DiPasquale, 561 F. Supp. 1338, 1347 (E.D. Pa. 1983), aff'd, 740 F.2d 1282 (3d Cir. 1984), cert. denied, 469 U.S. 1228, 84 L. Ed. 2d 364, 105 S. Ct. 1227, 105 S. Ct. 1226, (1985).
In this case, the analysis under Rule 14 must focus on "whether the evidence is such that the jury cannot be expected to 'compartmentalize' it and then consider it for its proper purposes." United States v. Dansker, 537 F.2d 40, 62 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 50 L. Ed. 2d 748, 97 S. Ct. 732 (1977). The defendants have failed to persuade the Court that a jury would be unable to compartmentalize the evidence in this case. The alleged events occurred during precise time periods, and the involvement of Mir and LBS Bank does not overlap with the involvement of Bijedic at all. Moreover, the acts charged in Count XVIII are clearly delineated and involve only Cole and Spanjol. Therefore, the Court finds the participation of each defendant may be isolated without difficulty by the jury at trial.
The real fear of the defendants does not seem to be that a jury would be unable to compartmentalize the evidence, but that Mir, LBS Bank and Bijedic may suffer some sort of guilt by association. Absent extraordinary circumstances not present in this case, the possibility of guilt by association does not provide grounds for severance. See, United States v. Boyd, 595 F.2d 120, 125 (3d Cir. 1978); DiPasquale, 561 F. Supp. at 1348. Accordingly, the motions to sever the trial will be denied.
V. Motion for a Change of Venue
Before the Court is Bijedic's motion to transfer the action for improper venue. In a conspiracy, venue is appropriate where any of the overt acts occurred. Hyde and Schneider v. United States, 225 U.S. 347, 367, 56 L. Ed. 1114, 32 S. Ct. 793 (1912); United States v. Boyance, 329 F.2d 372, 375 (3d Cir.), cert. denied, 377 U.S. 965, 12 L. Ed. 2d 736, 84 S. Ct. 1645 (1964). "In a conspiracy case, a conspirator may be tried in a district with which he has had no contact if his co-conspirators have committed overt acts there." United States v. Bloom, 78 F.R.D. 591, 607-08 (E.D. Pa. 1977).
The indictment alleges several overt acts committed within the Eastern District of Pennsylvania. Having already determined that Bijedic is properly joined in Count I of the superseding indictment charging conspiracy, venue is proper in this district. Accordingly, the motion for a change of venue will be denied.
VI. Motion to Recognize the Applicability of Consular Immunity :
Before the Court is Bijedic's motion to recognize the applicability of consular immunity under two treaties to which the United States is a party. Bijedic argues that consular immunity is applicable under the Most Favored Nations ("MFN") clause in Article II, Convention Defining the Rights, Privileges and Immunities of Consular Officers, October 14, 1881, United States-Serbia, 22 Stat. 968, T.S. No. 320 (hereinafter "U.S.-Serbian Consular Convention"). In the alternative, Bijedic contends that immunity is applicable under the Vienna Convention On Consular Relations, April 24, 1963, 21 U.S.T. 77, T.I.A.S. No. 6920, 596 U.N.T.S. 261 (hereinafter "Vienna Convention"). The Government contends that the U.S.-Serbian Consular Convention does not afford Bijedic immunity and that the applicability of the Vienna Convention cannot be determined until after trial.
Article II of the U.S.-Serbian Consular Convention provides that:
The consuls-general, consuls, vice-consuls and consular agents of the two High Contracting parties shall enjoy reciprocally, in the states of each other, all the privileges, exemptions, and immunities that are enjoyed by officers of the same rank and quality of the most favored nation.
The U.S.-Serbian Consular Convention is still in force. See U.S. Department of State, Treaties in Force (Dept. of State Pub. 9430) at 252 (1988).
Bijedic argues that the MFN clause in the U.S.-Serbian Consular Convention is self-executing and automatically raises the immunity afforded to Yugoslavian consular officers. Therefore, Bijedic contends that Yugoslavian consular officers should be granted the full immunity afforded to Soviet consular officers in the Consular Convention and Protocol, July 13, 1968, United States-Soviet Union, 19 U.S.T. 5018, T.I.A.S. No. 6503 (hereinafter "U.S.-Soviet Consular Convention"). The Government does not contest the validity of either treaty, the extent of the immunity afforded to Soviet consular officers in the U.S.-Soviet Consular Convention, or the validity of the MFN clause in the U.S.-Serbian Consular Convention. Rather, the Government argues that the MFN clause in the U.S.-Serbian Consular Convention is not self-executing, but requires the beneficiary of the clause to issue a written statement promising to provide U.S. consular officers with reciprocal immunity. Since such a written statement has not been issued by Yugoslavia, the Government contends that Bijedic, as consul-general, is not entitled to an increased level of immunity under the U.S.-Serbian Consular Convention.
The analysis of a treaty must begin "with the text of the treaty and the context in which the written words are used." Air France v. Saks, 470 U.S. 392, 396-97, 84 L. Ed. 2d 289, 105 S. Ct. 1338 (1985). The text of the MFN clause in Article II of the U.S.-Serbian Consular Convention includes the phrase ". . . shall be reciprocal . . . ." The plain meaning of this phrase is that the MFN clause is self executing. Cf. United States v. Chindawongse, 771 F.2d 840, 848 n.10 (4th Cir. 1985) (phrase in MFN clause of consular convention-"shall be entitled on condition of reciprocity"-requires special agreement before a raise in level of immunity), cert. denied, 474 U.S. 1085, 88 L. Ed. 2d 898, 106 S. Ct. 859 (1986). In this case, unlike Chindawongse, the treaty language mandates reciprocity; the grant of immunity is not conditional.
The plain meaning accorded to the language of the U.S.-Serbian Consular Convention controls unless the "application of the words of the treaty according to their obvious meaning effects a result inconsistent with the intent or expectations of its signatories." Sumitomo Shoji America, Inc. v. Avagliano, 457 U.S. 176, 180, 72 L. Ed. 2d 765, 102 S. Ct. 2374 (1982), quoting Maximov v. United States, 373 U.S. 49, 54, 10 L. Ed. 2d 184, 83 S. Ct. 1054 (1963). See also MacNamara v. Korean Air Lines, 863 F.2d 1135, 1143 (3d Cir. 1988). The course of conduct of parties to an international agreement is evidence of the parties intent. O'Connor v. United States, 479 U.S. 27, 33, 93 L. Ed. 2d 206, 107 S. Ct. 347 (1986).
The intent of Yugoslavia and the United States as evidenced by their prior conduct contradicts the plain meaning of the U.S.-Serbian Consular Convention. Before 1923, the United States viewed all MFN clauses as "conditional," that is, requiring reciprocity on the part of the country claiming the benefits of a treaty between the United States and a third country. See generally, 5 G. Hackworth, Digest of International Law, 271-75 (1943). Subsequent to 1923, the United States adopted the unconditional MFN clause in commercial treaties. See id.
Notwithstanding the adoption of unconditional MFN clauses in commercial treaties after 1923, the United States did not change its view that MFN clauses in consular conventions were conditioned on reciprocity. In 1931, the Legal Adviser of the Department of State wrote, "The recent change in our treaty-making policy as regards matters of commerce does not effect earlier treaties which do not contain the unconditional most-favored-nations clauses. . . . At no time have the favored nations provisions in our Consular Conventions been construed by the Department as other than conditional provisions." Id. at 274. In response to a 1931 inquiry from Switzerland regarding the application of an MFN clause in an 1850 treaty with that country, the U.S. Department of State wrote:
This Department has consistently held that the most-favored-nation clause with respect to rights and privileges of consular officers does not embrace unconditionally specific rights and privileges which are granted on the basis of reciprocity to consular officers of third countries, but that the right to enjoy such specific rights and privileges is embraced in the most-favored-nations clause in the event that the country whose consular officers assert such rights or privileges thereunder accords in fact the same rights and privileges to American consular officers in their territories.