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State v. Murphy

Decided: November 6, 1986.


On appeal from Superior Court, Law Division, Union County.

Pressler, Gaulkin and Baime. The opinion of the court was delivered by Baime, J.A.D.


[213 NJSuper Page 405] An indictment was returned by the State Grand Jury charging defendant and 19 others with second degree conspiracy

(N.J.S.A. 2C:5-2) and numerous counts of third degree theft by deception (N.J.S.A. 2C:20-4). The indictment alleged that the conspirators defrauded 15 insurance companies of approximately $1,000,000 by presenting false claims based upon fictitious automobile accidents. According to the indictment, membership in the conspiracy included licensed physicians, members of the bar and various claims adjusters. Others allegedly falsely represented themselves as attorneys for the purpose of negotiating and settling fictitious insurance claims.

Following a protracted jury trial, defendant was found guilty of conspiracy and eight counts of theft by deception. At sentencing, the trial judge merged the substantive counts into the conspiracy conviction,*fn1 see State v. Connell, 208 N.J. Super. 688, 697 (App.Div.1986), and imposed a custodial term of seven years. As part of the sentence, defendant was ordered to serve two years and four months without parole eligibility and to pay a fine of $100,000.

On appeal, defendant seeks a reversal of his conviction arguing that he is entitled to a dismissal of the indictment with prejudice. Although phrased in a variety of ways, defendant's contention is grounded upon the claim of prosecutorial misconduct during the course of the grand jury proceedings. After the jurors were empanelled the deputy attorney general assigned to present the matter and his superior were advised that one of the jurors was employed by Allstate Insurance Company and one by State Farm Insurance Company. These carriers were alleged to have been among the victims of the fraudulent scheme. Rather than apprising the assignment judge of these facts, the deputy attorneys general permitted one of the jurors to remain on the panel and excused the other at her request from further service in the case. Defendant contends that the deputy attorneys general encroached upon a power expressly

reserved to the judiciary and that such prosecutorial impropriety requires vitiation of the conviction and dismissal of the indictment without any inquiry into whether or not he was prejudiced. Alternatively, defendant claims that the grand juror who remained serving in the case was biased and that his lack of impartiality tainted the entire grand jury proceedings.

The facts are not in dispute. The State Grand Jury was empanelled in April 1983. In his prefatory comments, Deputy Attorney General Walter Krako questioned the grand jurors concerning their knowledge of the parties and witnesses. In response, one of the grand jurors mentioned that she was employed by Allstate Insurance Company. Upon further interrogation, the juror denied possessing any knowledge of the persons or offices involved in the case and stated unequivocally that she could perform her obligation in an impartial manner.

At some later point, however, the juror contacted Krako's supervisor, Deputy Attorney General Michael Bozza, and apprised him of the fact that she was involved in litigation against Allstate. In light of the pending litigation the juror expressed her desire not to participate further in the grand jury proceedings. Deputy Attorney General Bozza agreed to excuse the juror from further service in the case. The juror was told that she would be informed when the matter concluded at which time she would be required to serve in other cases for the remainder of her term.

Although this conversation was not stenographically recorded, the facts were fully recited at a subsequent conference attended by the foreman of the grand jury and both deputy attorneys general. During these proceedings, which were transcribed, the foreman added that the juror never discussed the specific facts of the case in the presence of other jurors. Rather, any statements made by her concerning Allstate consisted solely of "generalities."

After the grand jury was apprised of the voluntary disqualification of the juror, further evidence ...

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