SECTION 371 CONSPIRACY AND DOUBLE JEOPARDY
Conspiracy in violation of 18 U.S. C. Section 371 is frequently charged in criminal securities fraud and other white collar cases. The crux of the statute is its prohibition of an agreement to do an illegal act. The conspiracy statute contains two prohibitions. One prohibits a conspiracy “to commit any offense against the United States . . . “ while the second it to “defraud the United States.” In U.S. v. Rigas, No. 08-3218 (3rd Cir. Decided May 12, 2010) the government argued that these alternatives permitted successive prosecutions for conspiracy on overlapping facts but where there were different substantive charges. The Court rejected the claim, finding that separate prosecutions may violate the double jeopardy clause of the Fifth Amendment.
John Rigas was the founder of Adelphia Communications Corporation. His son Timothy was a board member and the Chief Financial Officer. Prior to its collapse in 2002 Adelphia was one of the largest cable television in the United States. Following the collapse of the company John and Timothy Rigas were indicted in the Southern District of New York for a wide ranging conspiracy to loot Adelphia and to conceal its weak financial condition from the public. A jury returned a verdict of guilty on the Section 371 conspiracy charge and several substantive offenses but acquitted the two men on wire and bank fraud charges.
Subsequently, both men were indicted in the Middle District of Pennsylvania on one count of conspiracy in violation of Section 371 and six counts of tax evasion. The conspiracy count claimed the two defendants attempted to defraud the United States by evading millions of dollars in taxes on the money and property they took from Adelphia which was at the center of the looting charges in the New York action.
The Rigases moved to dismiss the conspiracy count on double jeopardy grounds. The district court denied the motion but a panel of the Third Circuit remanded the case for an evidentiary hearing on the question of double jeopardy. The government’s petition for rehearing was granted however. In a seven to four ruling, the court vacated and remanded the case to the district court for an evidentiary hear.
The Double Jeopardy Clause prohibits repeat trials for the same offense, not for the same conduct. The key test was established years ago by the Supreme Court in U.S. v. Blockburger, 284 U.S. 299 (1932). There the Court held that where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied is if each provision requires proof of a fact which the other does not. This test however only applies where when the question is if Congress intended to separately punish violations of distinct statutory provisions. The test does not apply where a single statutory provision was violated.
Where only one statute is involved the question is one of congressional choice. The analysis of this question begins with the statutory text. Considering the plain language of Section 371 the Court concluded that the most natural reading of the language selected by Congress is that it creates one offense, not two. This is evident from the fact that the statute defines “either” one of two options as a violation of the statute. The use of the disjunctive clearly demonstrates that the statute creates one offense which can occur in two ways. This is consistent with the fact that when congress creates two distinct offenses it typically utilizes multiple subsections or separates clauses with semicolons to enumerate the separate crimes. This conclusion is also consistent with the rulings of several circuits on challenges to Section 371 counts in indictments based on duplicity which is the improper joining of distinct and separate offenses in a single count.
Since Section 371 is one offense, the question here is whether the government improperly split one conspiracy into two prosecutions which is prohibited by the Double Jeopardy Clause. Most circuits follow a totality of the circumstances approach to analyze this question. The focus of this analysis is whether there is one agreement or two. Key questions include: 1) whether there was a common goal among the conspirators; 2) if the agreement contemplated bringing to pass a continuous result that would not continue without the continuous cooperation of the conspirators; and 3) the extent to which the participants overlap in the various dealings. Analyzing these factors here supports the claim of the defendants. Accordingly, the case is remanded to the district court for an evidentiary hearing.