United States v. Hubbell

Citations: 44 F. Supp. 2d 1; 1999 U.S. Dist. LEXIS 5938; 1999 WL 152534Docket: Crim. Action 98-0394 (JR)

Court: District Court, District of Columbia; March 18, 1999; Federal District Court

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In the case of United States v. Webster L. Hubbell, the court examines four pretrial motions related to criminal charges against Hubbell, brought by Independent Counsel Kenneth Starr. The indictment alleges that between 1985 and 1995, Hubbell engaged in various acts of deception to protect his father-in-law from scrutiny by federal regulators, including lying to the RTC and FDIC and providing false testimony before Congress. The indictment includes multiple counts under 18 U.S.C. sections, covering offenses such as concealing material facts, corrupting government functions, and mail fraud.

Specifically, the court considers a motion to dismiss Count 1, which charges Hubbell with a "scheme" to conceal facts, citing vagueness. It also addresses motions to dismiss other counts on grounds of ambiguity, informal immunity, and requests for a bill of particulars. The court grants the motion to dismiss Count 1 for vagueness, determining that the indictment did not provide sufficient specificity for Hubbell to prepare a defense or avoid double jeopardy. However, the remaining motions to dismiss are denied, affirming that the other charges remain valid. The court emphasizes the necessity for indictments to clearly outline the elements of the offense and to inform the defendant adequately.

Count 1 presents complex interrelations among defendant Hubbell, the Rose Law Firm, a specific lawyer from 1985-1986, Seth Ward, Madison Guaranty, Madison Financial, and the IDC/Castle Grande real estate transactions. It incorporates 85 paragraphs alleging false statements and acts of concealment but lacks specificity regarding any particular act of concealment or fraudulent statement, rendering it vague. The count claims that from March 1989 to December 27, 1995, in the District of Columbia and elsewhere, Hubbell knowingly falsified and concealed material facts about the relationships involving him, the Rose Firm, and associated parties, thus making materially false statements to the FDIC and RTC, violating 18 U.S.C. § 1001.

Hubbell contends that Count 1 is a vague "catch all" accusation that does not clearly inform him of the specific offense, which hinders his ability to prepare a defense and could lead to a jury's conviction based on generalities rather than specific acts, potentially violating his due process rights. The Office of Independent Counsel (OIC) argues that Count 1 is sufficiently specific, asserting that under 18 U.S.C. § 1001, the focus is on the overall scheme rather than individual acts. The OIC cites three cases to support this position, but none serve as controlling authority, and the cited cases do not convincingly bolster the argument regarding the necessity of detailing specific false statements or concealment acts. The excerpt references Bramblett v. United States, which dealt with statute limitations rather than the punishability of schemes, and United States v. Heacock, which involved a broader pattern of conduct under § 1001.

The appellant in Heacock did not challenge the imposition of charges under 18 U.S.C. § 1001, and the Fifth Circuit did not address whether § 1001 penalizes the scheme itself or acts executed by trick, scheme, or device. Instead, the decision focused on rejecting the defendant's argument to suppress evidence obtained more than five years prior to the indictment. The court clarified that the statute of limitations for a "scheme" crime starts when each overt act of the scheme occurs, as prosecution can only proceed once those acts are completed. The term "scheme crime" refers to crimes with a scheme as an element, not as their primary basis. 

In United States v. Culoso, the defendant faced charges for conspiracy and a scheme to defraud the Small Business Administration through false applications and documents. The district court dismissed a motion to dismiss based on the statute of limitations, emphasizing that the scheme to conceal involved acts conducted within five years of the indictment. The court distinguished between participation in a scheme to conceal material facts and making affirmative false statements, noting that § 1001 explicitly allows prosecution for both as separate offenses. Previous cases affirmed that § 1001 encompasses these distinct offenses, which require different proofs to establish. The passage clarifies that § 1001 does not penalize schemes as a standalone category but distinguishes between falsifying through a scheme and making false statements. The case United States v. London further illustrates this by detailing counts of concealment without specifying the scheme itself, thereby reinforcing the separate nature of the offenses outlined in § 1001.

The Fifth Circuit ruled that the "trick, scheme, or device" language in 18 U.S.C. § 1001 is an essential element of the crime that must be proven, rather than mere surplusage. This interpretation aligns with policy considerations to avoid penalizing mere concealments or false statements that do not constitute affirmative acts. The court emphasized that only conspiracy laws punish schemes themselves, while § 1001 punishes specific acts of falsification. Since the affirmative acts in this case were not clearly charged, the charges must be dismissed for failing to adequately inform the defendant of the accusations.

As Count 1 is dismissed, the issue of whether it is multiplicitous with Counts 4-9 is moot. However, the argument that Counts 4-9 are multiplicitous is rejected. These counts involve separate instances of lying to the FDIC or RTC on different dates. The test for multiplicity requires each count to specify a distinct lie; if proven, the government will not need to elect among these counts.

Regarding Count 10, which charges perjury based on an allegedly ambiguous statement made by Hubbell during a congressional inquiry, the defense argues for dismissal on the grounds that the phrase "the nature of the matters" lacks a clear true or false interpretation and that the indictment misrepresents the context of the statement.

An ambiguous or imprecise statement cannot be verified or proven false, as illustrated by United States v. Lattimore, where a perjury charge was dismissed due to the vagueness of the term "sympathizer." In contrast, the statement in question is clear, indicating that the defendant was aware his former law firm represented Madison but lacked knowledge of the specifics. If the defendant was aware of the details regarding the Rose Law Firm's representation, his statement to Congressman Chrysler would be false. Context is important; in United States v. Tonelli, a defendant's denial was misinterpreted due to a change in context, leading to a conviction for perjury. However, no such contextual trap is present in this case. The issues of whether the statement was willfully false or material remain unresolved and are appropriate for jury consideration if the government's case survives a motion under Rule 29. Additionally, the defendant claims that remarks made by Associate Independent Counsel W. Hickman Ewing during his grand jury appearance provided him immunity from prosecution for previous false statements to various investigative bodies. The defendant argues that Ewing's comments should be interpreted favorably to suggest a promise not to indict him for earlier inconsistent statements.

Informal immunity grants by prosecutors are recognized by the Court of Appeals, allowing such immunity to arise from assurances made to potential grand jury witnesses. This informal immunity can be either limited to the testimony provided or transactional, offering broader protection against prosecution. The enforcement of these immunity grants is treated similarly to contract law, with courts favoring defendants due to the unequal bargaining power in these agreements. However, a defendant's belief in the existence of informal immunity must be objectively reasonable and corroborated. The interpretation of such agreements heavily relies on the contemporaneous views of legal counsel.

In the case at hand, Hubbell's claim of receiving informal transactional immunity is not supported by the evidence, as the language used by Ewing does not support such a finding and would require unreasonable interpretation. While there is some plausibility to Hubbell's claim regarding statements made to the FDIC and RTC in 1995, his belief in having immunity is uncorroborated. Notably, Hubbell did not raise concerns about immunity after receiving a "target letter" in 1998. 

The ruling concludes that there was no grant of transactional immunity, although the implications of Ewing's December 1995 assurances regarding Hubbell's grand jury testimony remain unresolved. Additionally, the motion for a bill of particulars is denied, as the remaining charges are sufficiently clear for the defendant to understand and prepare a defense. Other defense motions related to statutory immunity and preindictment delay are still under consideration. The Office of Independent Counsel (OIC) seeks confirmation that the ruling suppresses testimony rather than acknowledges it as covered by pocket immunity, which is granted.