The opinion of the court was delivered by: WILLIAM J. NEALON, JR.
In this criminal case, predicated upon an alleged scheme to distribute obscene materials, there are several motions to dismiss the superseding indictments the United States (Government) has brought against the defendants.
The government seeks to join the offense of money laundering to obscenity, an issue of first impression. The defendants vigorously oppose such action on a variety of constitutional and statutory grounds and, accordingly, have moved to dismiss the indictment. In addition, they have adopted each others motions
and, thus, for purposes of clarity, the court will treat them as though they had been filed collectively. For reasons which follow, the court will deny the defendants' motions to dismiss.
The superseding indictment alleges the following: Defendant Philip J. Krasner (Krasner) created a series of corporations which distributed obscene materials. As the "beneficial owner of the companies," he oversaw the production, distribution and reaped the financial windfalls of an empire which marketed obscene materials throughout the United States. In furtherance of his scheme, he created a series of sham corporations, with both fictional and unwitting nonfictional directors, who invested and hid the proceeds of his illegal business. He also used the alias "P.J. Craig" to further conceal the workings of his obscenity ventures.
As noted, there were several corporations involved in the scheme. Index Publishing, Ltd., published Puritan International, one of the magazines alleged to be obscene. Pure Images, Inc., Stage III, Inc., and Graphic Distributors, Inc. distributed sexually explicit magazines and videotapes through advertising efforts in Puritan. William P. Lozo acted as a general manager over the businesses and supervised all employees while Stephen D. Lynch managed the warehouse and the accounting offices for the various corporations. The final two individual defendants, Stanley V. Bernstein and Jeffrey N. Chudyk, were editors of Puritan International with the latter carrying the additional duty of distribution director of another of Krasner's corporations not indicted here.
II. The Motions to Dismiss the Indictment.
The defendants have raised several challenges to the superseding indictment both in its entirety, and to specific counts: the first concerns the alleged pre-signing of the indictment by the United States Attorney; the second, the constitutionality of 18 U.S.C. § 1461, the crime of mailing obscene matter, wherein it does not allow the affirmative defense of mistake of fact; the third asserts that Counts II-VI fail to meet the requirements of the notice provisions of the Fifth and Sixth Amendments; the fourth raises the constitutionality of attaching the money laundering counts to the alleged obscenity violation; the fifth, asserts that the conspiracy count must fail due to the indictment's failure to allege that the defendants knew that they were conspiring to achieve an illegal objective; and, finally, they challenge the forfeiture counts on the same reasoning.
As an initial matter, the court would note that "in considering a defense motion to dismiss an indictment, the district court accepts as true the factual allegations as set forth in the indictment." United States v. Besmajian, 910 F.2d 1153, 1154 (3rd Cir. 1990) (citing Boyce Motor Lines v. United States, 342 U.S. 337, 343 n. 16, 96 L. Ed. 367, 72 S. Ct. 329 (1952)). In so doing, the court's inquiry is, of course, whether the indictment properly alleges a criminal offense. Id. Each argument will be addressed, seriatim.
A. The pre-signed indictment.
The defense alleges that it has reason to believe that the pre-signing of indictments before presentment to the grand jury is "common practice"
within the Middle District of Pennsylvania and unduly influences the outcome of its deliberations. A hearing is requested to determine whether, in fact, the indictment was pre-signed and, if it were, whether each grand juror received a copy of it as well as how long the matter was deliberated upon before the presentment was returned. Because the superseding indictment is 38 pages long and contains numerous counts, the defendants contend that if it were presented to the grand jury pre-signed, the jurors had copies of it and, if they deliberated on the matter only a short period of time, it should be dismissed as having been "rubber stamped."
In opposition, the government invokes the "long established policy' of secrecy [of grand jury minutes], older than our Nation itself." Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 399, 3 L. Ed. 2d 1323, 79 S. Ct. 1237 (1959) quoting United States v. Procter & Gamble, 356 U.S. 677, 681, 2 L. Ed. 2d 1077, 78 S. Ct. 983 (1958). It contends that the defendants cannot show a "particularized need" for disclosure of the grand jury minutes because their theory that the indictment was too long and complex for a quick presentment of a true bill is too speculative, and amounts to little more than a "hunch," citing United States v. Wolfson, 294 F. Supp. 267, 271 (D.Del. 1968).
It is axiomatic that the need for secrecy in grand jury proceedings has deep roots in our jurisprudence:
Its establishment in the constitution "as the sole method of preferring charges in serious criminal cases" indeed "shows the high place it [holds] as an instrument of justice." Ever since this action by the Fathers, the American grand jury, like that of England, "has convened as a body of laymen, free from technical rules, acting in secret, pledged to indict no one because of prejudice and to free no one because of special favor." Indeed, indictments may be returned on hearsay, or for that matter, even on the knowledge of the grand jurors themselves. To make public any part of its proceedings would inevitably detract from its effacy. Grand jurors would not act with that independence required of an accusatory and inquisitorial body. Moreover, not only would the participation of the jurors be curtailed, but testimony would be parsimonious if each witness knew that his testimony would soon be in the hands of the accused.
Pittsburgh Plate Glass, 360 U.S. at 399, 400 (citations omitted) (emphasis supplied). Of course, Rule 6(e) does not provide a blanket prohibition against disclosure of grand jury minutes. Instances which adequately demonstrate a "particularized need" may warrant an inquiry into the minutes of such a proceeding. Id. at 400. In considering the effects of disclosure, the inquiry extends beyond the particular grand jury at issue to the "effect upon the functioning of future grand juries." Douglas Oil Co. v. Petrol Stops Northwest, 441 U.S. 211, 221, 60 L. Ed. 2d 156, 99 S. Ct. 1667 (1979).
As noted above, the defendants argument is as follows: if the grand jurors received copies of a pre-signed 38-page indictment, and if they spent a "small" amount of time deliberating on the charges it contained, it must follow that the pre-signing of the indictment unduly influenced their decision by encouraging them to "rubber stamp" it. This logic is flawed for several reasons. First, it assumes that an indictment "X" number of pages in length requires "X" amount of time for deliberation to be valid. Applying a formula as a means of ascertaining a meaningful grand jury inquiry is unacceptable. Second, it fails to take into account other factors that might facilitate a prompt return of an indictment such as the fact that the decision of the grand jury does not have to be unanimous; that it merely determines probable cause and not ultimate guilt or innocence; and, along that same vein, the case, as presented to it, is one-sided in favor of the prosecution, uninterrupted by the adversarial atmosphere and formalities of open court. Finally, it incorrectly implies that grand jurors will avoid their sworn duty to carefully deliberate on the charges before recommending them and "rubber stamp" the indictment if given the opportunity to do so.
Thus, because the defendants have not been able to show a direct correlation between the alleged pre-signing of the superseding indictment and the probability of it having been "rubber stamped," the court will not disturb the secrecy of the grand jury minutes as no "particularized need" has been demonstrated by the defendants and, accordingly, their motion will be denied.
B. The Constitutionality of 18 U.S.C. § 1461.
The constitutionality of 18 U.S.C. § 1461
has been contested based upon its failure to allow a defendant to advance the affirmative defense of mistake of fact. The defendants contend that they should be allowed to present evidence that they had a good faith, albeit mistaken, belief that the materials that they shipped would not offend the contemporary community standards of the recipient community. While recognizing the scienter requirement of Hamling v. United States, 418 U.S. 87, 41 L. Ed. 2d 590, 94 S. Ct. 2887 (1974) (a defendant need not know the legal status of the material he distributes to be convicted under § 1461; all that is required is that he know the "contents and character" of the material shipped), they argue that Hamling created a "gap" between the scienter required in knowing the character and contents of the materials shipped and failing to know that those same materials are legally obscene. Thus, the assertion continues that it is constitutionally permissible to demonstrate to a jury the affirmative defense of a "reasonable, good faith belief that the items were not obscene."
The gravamen of the government's opposition is that a defense must negate the requisite mens rea of a particular element of an offense to be valid. As noted above, the scienter requirement of § 1461, as articulated in Hamling, requires knowledge of the contents and character, and not actual knowledge of the legal status, of the allegedly obscene matters shipped. The government insists that the fact that the defendants may have been mistaken as to what would offend the community standards of the destination locale would have no bearing on the issue of whether the defendants knew the contents and character of the materials they shipped, the actual mens rea component of the offense. While it may be permissible to assert a mistake of fact defense in the context of whether they knew of the contents and character of the alleged obscene matter, as would be consistent with Hamling, the defense, as the defendants wish to apply it, would, in effect, circumvent Hamling's scienter requirement. It is the government's position that the defendants' constitutional challenge to the statute should be rejected because the proffered mistake, if believed by a jury, would not negate the requisite mens rea of the offense.
It cannot be disputed that the ultimate question of obscenity is a legal conclusion that is predicated upon certain factual findings. See Miller v. California, 413 U.S. 15, 37 L. Ed. 2d 419, 93 S. Ct. 2607 (1973). The basic ...