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U.S. v. GAMBONE

September 12, 2000

UNITED STATES OF AMERICA,
V.
JOHN GAMBONE, SR., ANTHONY GAMBONE, WILLIAM MURDOCK, SANDRA LEE GAMBONE, JOHN GAMBONE, JR., AND ROBERT CARL MEIXNER.



The opinion of the court was delivered by: Padova, District Judge.

  MEMORANDUM

Before the Court are Defendants' Motion to Dismiss Count One of the Indictment, filed on June 26, 2000, and Defendants' Motion to Compel Election or Dismiss Count One of the Indictment as Duplicitous, filed on July 25, 2000. Defendant Sandra Lee Gambone also moves, separately, for dismissal of Count One, or, in the alternative, to compel election or order a separate trial.*fn1 The Government filed a response on July 25, 2000. Oral argument was held before the Court on August 23, 2000. The matter is fully briefed and ripe for decision. For the reasons that follow, the Court will deny Defendants' Motions to Dismiss Count One of the Indictment. The Court will also deny Defendants' alternative request to compel election.

I. BACKGROUND

On April 6, 2000, the Government filed a multi-count indictment against Defendants John Gambone, Sr., Anthony Gambone, William Murdock, Sandra Lee Gambone, John Gambone, Jr., and Robert Carl Meixner. Count One charges a conspiracy to defraud the United States in violation of 18 U.S.C. § 371. Counts Two through Sixty-seven charge violations of 26 U.S.C. § 7206 (fraud and false statements) of the Internal Revenue Code. Defendants seek to have Count One of the Indictment dismissed.

II. STANDARD

In considering a motion to dismiss an indictment or a portion of an indictment, the court accepts as true the well-pleaded factual allegations set forth in the indictment. See United States v. Besmajian, 910 F.2d 1153, 1154 (3d Cir. 1990). If the facts do not constitute a violation of federal law, the charges should be dismissed. See United States v. Stewart, Crim.Act. No. 96-583, 1997 WL 688815, *1, 1997 U.S. Dist.LEXIS 16947, at *2 (E.D.Pa. Oct. 23, 1997) (citing United States v. Polychron, 841 F.2d 833, 834 (8th Cir.), cert. denied, 488 U.S. 851, 109 S.Ct. 135, 102 L.Ed.2d 107 (1988)).

III. DISCUSSION

Defendants first move to dismiss Count One of the Indictment because it fails properly to allege a conspiracy to defraud the United States pursuant to the defraud clause of section 371. Defendants also move to dismiss Count One on the grounds it is duplicitous. In the alternative, Defendants ask the Court to compel the Government to choose from among the alleged conspiracies in Count One. The Court will consider these arguments in turn.

A. The Defraud Clause

Section 371 of Title 18 of the United States Code provides:

If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.

18 U.S.C. § 371 (1994).

The Court of Appeals for the Third Circuit has explained that section 371 describes two types of conspiracies: (1) a conspiracy to commit a substantive offense under a separate criminal statute (the "offense" clause); and (2) a conspiracy to defraud the United States (the "defraud" clause) without reference to another criminal statute. United States v. Alston, 77 F.3d 713, 718 (3d Cir. 1996). Count One alleges a conspiracy falling under the defraud clause.

A conspiracy to defraud the United States by frustrating the lawful information-gathering function of the Internal Revenue Service ("IRS") is commonly referred to as a "Klein conspiracy," named after the landmark decision of the United States Court of Appeals for the Second Circuit in United States v. Klein, 247 F.2d 908 (2d Cir. 1957). In Klein, the defendants participated in a scheme to import and sell Canadian whiskey in the United States in such a way as to minimize the amount of federal income tax that would be owed. In addition to the filing of false income tax returns, the Government provided substantial evidence of additional ...


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