role as a middle man at the settlement table is not sufficient to impose on him a duty to the RTC or Bell. See Hooper v. Commonwealth Land Title Ins. Co., 285 Pa. Super. 265, 427 A.2d 215, 217 (Pa. Super. 1981)("Merely because the [settlement agent] received the funds to satisfy [the judgment creditor of the seller's] judgment does not make it an agent of the creditor."). As the Pennsylvania Superior Court noted in Hooper, "title insurance protects the buyer. The duty of the insurer runs only to its insured and not to third parties who are not a party to the contract." 427 A.2d at 217.
The Government counters this argument by asserting that § 1032 does not require a duty to disclose in order to prove concealment. Gov't. Resp. Br. at 1. We have already rejected this contention. The Government then goes on to fish for duties wherever it might find them, arguing without citation to any case that while Seitz might not have a "duty to persons outside of the title insurance contract[,] . . . Seitz's actions and role related to the charges in the indictment surely constitute a duty for the purposes of whether § 1032 was violated." Gov't. Resp. Br. at 3. To the extent we can decipher this sentence, it would seem to suggest that "surely" a duty to the RTC existed because Seitz sat at the settlement table with Spano, a bad person.
Specifically, the Government asserts that Spano hired Seitz "to conduct a series of real estate closings," and that Seitz owed a duty to Spano "to do certain things on behalf of Spano, including facilitating construction loan payoffs to Bell." Gov't. Resp. Br. at 3. The Government continues that "Seitz is charged with purposefully not discharging those duties in order for Spano to ultimately pocket the payoff monies when his workout negotiations with the RTC were complete." Id. at 3. The Government also asserts that "it is undisputably the defendant's duty to obtain clean title on behalf of the title insurance company. That duty inherently includes removal of the construction lien by making the payoff. Seitz ignored these duties in order to facilitate the crime." Id. at 3 n.2.
While it is true that Seitz owed a duty to the title insurance company, and that the buyer could have an action against the title insurance company for failing to obtain clean title, nowhere in the Government's response does it point out any duty Seitz owed to the RTC or to Bell. The mere fact that Seitz may have breached his duties, if any, to Spano, or to the title insurance company or even to the buyer, is insufficient to establish any duty to the RTC or to Bell such that it is appropriate to impose federal criminal liability for nondisclosure.
For the foregoing reasons, we find that the acts alleged in the indictment do not allege that Seitz violated 18 U.S.C. § 1032(1).
"Corrupt" Actions under § 1032(2) and (3)
and Aiding And Abetting Under 18 U.S.C. § 2
Likewise, there is nothing in the indictment to suggest that Seitz "corruptly" impeded the RTC's functions, "corruptly" endeavored to place assets beyond the reach of the RTC, or aided and abetted Spano's criminal activities.
It appears to us that for the purposes of this motion the standards of culpability under each of these theories are similar enough to address together.
The section-by-section analysis in the legislative history of § 1032 shows that "the corruptly requirement means that the defendant's conduct must be engaged in 'voluntarily and intentionally, and with the bad purpose of accomplishing either an unlawful end or result, or a lawful end or result by some unlawful method or means. The motive to act corruptly is ordinarily a hope or expectation of either financial gain or other benefit to one's self, or some aid or profit or benefit to another.'" H. R. Rep. No. 101-681(I), at 173 n.3 (1990)(quoting 1 E. Devitt and C. Blackmar, Federal Jury Practice and Instructions § 34.08 (3d ed. 1978)), reprinted in 1990 U.S.C.C.A.N. 6472, 6579 n. 3. See also United States v. Rooney, 37 F.3d 847, 854 (2d Cir. 1994), which held that in a prosecution for bribery under 18 U.S.C. § 666, and in light of Congressional direction that the statute was not meant to chill lawful business transactions, the defendant's "conduct in this case cannot be considered 'corrupt' because he violated no official or public duty owed to the government or the public at large."
With regard to 18 U.S.C. § 2, our Court of Appeals has explained that "in order to aid and abet another to commit a crime, it is necessary that the accused willfully associate himself in some way with the criminal venture, and willfully participate in it, as he would in something he wishes to bring about; that is to say, that he willfully would seek, by some act or omission of his, to make the criminal venture successful." United States v. Waller, 607 F.2d 49, 51 (3d Cir. 1979)(quoting with approval the jury instructions of the district judge).
Seitz concisely summarizes our problems with the Government's theories of ancillary or vicarious liability against him:
According to Count Six, Carl Seitz, at the direction of defendant Spano, set up escrow accounts for the benefit of Bell Savings Bank, paid $ 876,000.00 in payoff proceeds from the sale of homes into those escrow accounts, and failed to notify Bell or the RTC of the existence of the payoff proceeds; subsequently, at a time when Bell and the RTC no longer had a legal interest in the payoff proceeds, Seitz delivered the total amount of the payoff proceeds, with interest, to Spano who at that time was legally entitled to receive them from Seitz. There is nothing in Count Six to suggest that Carl Seitz stood to benefit financially or in any other way from the concealment of the escrow accounts from the RTC or Bell Savings Bank or that he did any act that furthered the concealment. In the absence of any act of concealment by Carl Seitz, the government must necessarily fall back on a theory of omission, and a theory of omission brings us right back to our first proposition, i.e., that an omission cannot be charged as criminal conduct in the absence of a duty to reveal.