The opinion of the court was delivered by: ACKERMAN
This matter comes before the court on several motions by the defendant, Daniel Richards. More specifically, defendant Richards moves to dismiss various parts of the indictment on several grounds and makes several discovery requests. Prior to addressing the substance of the motions, it is helpful to briefly set forth the background of this case.
The Farmers Home Administration ("FmHA"),
an agency of the United States Department of Agriculture, provides funding under the Rural Housing Program for the construction and renovation of low income rental housing units in rural areas. The defendant was a general partner in six limited partnerships that purchased rural housing projects in Pennsylvania and New Jersey under this program. Each project was required to rent apartments to low income tenants at rates below the prevailing market rates in those rural areas. In return, the FmHA subsidized the interest payments on the construction loans so that the effective rate of interest on such loans is 1%, rather than the prevailing market rate.
At the inception of each project, the defendant entered into loan agreements (one per partnership) with FmHA. Pursuant to the loan agreements, defendant's partnerships were required to establish four specific accounts for each project. The loan agreements provide that all of the accounts "shall be maintained in accordance with FmHA Regulation 7 CFR Part 1930-C." See Defendant's Memorandum in Support of Pretrial Motions Ex. A [hereinafter "Defendant's Br."]. One of these accounts was called the "reserve account." The partnerships were required to pay 1% of the total indebtedness per year into the reserve account. Furthermore, the regulation provides that "the reserve account is primarily used to meet the major capital expense needs of a project," see id. Ex. F. at 108, that the prior written consent of FmHA be obtained before any disbursements can be made from reserve accounts, see id. at 111, and that "all funds received and held in any account . . . shall be held in trust by the borrower for the loan obligation until used and serve as security for the FmHA loan or grant," id. at 104. Also in connection with each project, the FmHA entered into security agreements with the respective partnerships. The agreements granted the FmHA "a security interest in and an assignment of its interest in the following collateral, including the proceeds thereof: A. All accounts, . . . ." Id. Ex. B.
Defendant Richards admits that, in violation of the above mentioned regulation, he made periodic withdrawals from the reserve account without seeking or obtaining approval from the FmHA. As a result of this conduct, on February 9, 1995, the defendant received a "target letter" dated February 7, 1995, signed by Assistant United States Attorney, Howard Wiener, which informed the defendant that the "Inspector General of the Department of Agriculture has referred an investigative report to this office to determine whether [the defendant] should be prosecuted for various offenses, including the fraudulent conversion of property pledged to the Farmers Home Administration," and that the United States Attorney's Office would be presenting this matter to a federal grand jury. Defendant's Br. Ex. C. Upon receiving the letter, the defendant contacted Mr. Wiener and agreed to meet with him that afternoon, February 9, 1995.
Present at the meeting were the defendant, Mr. Wiener and the Department of Agriculture investigator. The defendant, who is an attorney himself but has not practiced criminal law, did not obtain an attorney for the meeting. Because the alleged fraudulent activity occurred in 1989 and early 1990, the five-year statute of limitations had already run as to the alleged fraudulent transactions that took place in 1989. Because the government was faced with the approaching expiration of the limitations period with respect to the alleged early 1990 transactions, Mr. Wiener advised Mr. Richards that the government would be presenting evidence to a federal grand jury in a matter of days. To alleviate this time pressure, the government proposed that Mr. Richards either appear before the grand jury within five days, await imminent indictment, or execute a waiver of the statute of limitations. Mr. Richards elected to waive the statute of limitations. Mr. Wiener drafted an agreement wherein the statute was tolled for 60 days from February 13, 1995 until April 14, 1995. See Defendant's Br. Ex. D. Mr. Richards executed the agreement. The only specific statute mentioned in the agreement, and it appears the only specific statute discussed by the parties, was Title 18 U.S.C. § 658, which prohibits, among other things, the fraudulent conversion of property "mortgaged or pledged to" the FmHA.
Subsequently, the Office of the Federal Public Defender was appointed to represent Mr. Richards. On April 10, 1995, a second waiver was executed by the defendant, after consultation with his attorney, which tolled the limitations period from April 15, 1995 through May 15, 1995. On May 12, 1995, a third waiver was executed by the defendant, which tolled the limitations period from May 15 until May 31, 1995. Both of these waivers incorporated the first waiver by reference.
During this time period, the parties engaged in plea negotiations. In her brief, the public defender represented that she told Mr. Wiener that, in the defendant's view, § 658 was inapplicable to the facts of this case.
Defendant's Br. 5. After being advised of the defendant's position regarding the inapplicability of § 658, the government raised for the first time the possible applicability of Title 18 U.S.C. § 666 to the defendant's alleged conduct. See Defendant's Br. at 5; Government's Br. at 10. The government asserted that the same underlying facts gave rise to a violation of § 666, which prohibits, among other things, the fraudulent conversion of property, valued at more than $ 5,000, from an organization that receives, in any one year, benefits in excess of $ 10,000 from a Federal program. See 18. U.S.C. § 666(a)(1)(A).
The parties failed to reach a plea agreement, and on May 30, 1995, a grand jury returned a 12 count indictment. Counts 1 through 6 charged the defendant with violating §§ 666(a)(1)(A) and 2. Each count alleges a separate fraudulent conversion of funds from the reserve account of one of the defendant's six partnerships, and that the partnership in each count received at least $ 10,000 in interest credit subsidies and rental subsidies from the FmHA per year. Counts 7 through 12 charged the defendant with violating of §§ 658 and 2. The factual allegations underlying these counts correspond to counts 1 through 6. In other words, the allegedly fraudulent transaction that provides the factual basis underlying count 1, also provides the factual basis of count 7, and so on. The difference between the two sets of charges is that in counts 7 through 12 it is alleged that the money in the reserve counts was "mortgaged or pledged to" the FmHA, and not that the partnerships were organizations that received over $ 10,000 in benefits from a federal program in any one year.
Subsequently, on November 21, 1995, a superseding indictment was filed in this case. Counts 1 through 6 remained the same. Counts 7 through 12 in the original indictment became counts 13 through 18 in the superseding indictment. Counts 7 through 12 in the superseding indictment charge the defendant with six additional counts of violating § 666(a)(1)(A). More specifically, these counts charge that between January 1, 1990 and December 31, 1990, the defendant fraudulently converted additional moneys from the partnerships by failing to transfer money into the reserve account. There is one count per partnership.
Now before the court are defendants' motion to dismiss the indictment and motion for discovery. First, I will address the motion to dismiss, then the discovery issues.
I will address the defendant's various grounds for dismissing various parts of the indictment in turn.
First, defendant argues that counts 1 through 6 should be dismissed because they are brought in violation of the statute of limitations. Specifically, defendant argues that, pursuant to the parties' written waiver agreement, he waived the statute of limitations only as it applies to the § 658 charges and not as the statute of limitations applies to charges brought pursuant to any other criminal statute.
The statute of limitations is not jurisdictional, but rather is an affirmative defense that may be waived, either implicitly by failing to raised it in the district court either before or at trial, see United States v. Karlin, 785 F.2d 90, 91-92 (3d Cir.), cert. denied, 480 U.S. 907, 94 L. Ed. 2d 522, 107 S. Ct. 1351 (1987), or explicitly through a written waiver agreement that is knowingly and voluntarily entered into with the government, see United States v. Spector, 55 F.3d 22, 24 (1st Cir. 1995) (citing United States v. Wild, 179 U.S. App. D.C. 232, 551 F.2d 418, 422-24 (D.C. Cir.), cert. denied, 431 U.S. 916, 53 L. Ed. 2d 226, 97 S. Ct. 2178 (1977)). In this case, defendant Richards does not dispute that he knowingly and voluntarily entered into the waiver agreement. The dispute is whether or not the defendant only waived the limitations period as it related to violations of a specific statute (i.e., § 658) or whether he waived it as to his alleged underlying conduct which would give rise to violations of both §§ 658 and 666. Therefore, the issue is one of interpreting the waiver agreement.
Like plea agreements, a waiver of the statute of limitations is a pretrial agreement between the state and defendant. United States v. Levine, 658 F.2d 113, 124 (3d Cir. 1981). Therefore, because plea bargains are governed by the law of contracts, see United States v. Bogusz, 43 F.3d 82, 94 (3d Cir. 1994), cert. denied, 115 S. Ct. 1812 (1995), I will apply the same principles to the waiver agreement in this case, see Spector, 55 F.3d at 25 ("assuming" that principles of contract law are useful in analyzing agreements to waive the statute of limitations).
Furthermore, "courts should consider not only contract principles but also ensure that the . . . bargaining process is attended by safeguards to insure the defendant [receives] what is reasonably due in the circumstances." United States v. Moscahlaidis, 868 F.2d 1357, 1361 (3d Cir. 1989) (quotation omitted). Therefore, although "the parties must strictly adhere to their promises" see Bogusz, 43 F.3d at 94 (citing United States v. Badaracco, 954 F.2d 928, 939 (3d Cir. 1992)), "the government cannot resort to a rigidly literal approach in the construction of language." Moscahlaidis, 868 F.2d at 1361 (citation omitted). Rather,
in determining whether the terms of an . . . agreement have been violated, [the] court must determine whether the government's conduct is inconsistent with what was reasonably understood by the defendant when entering [the agreement].
Badaracco, 954 F.2d at 939 (quotation omitted) (emphasis added).
Thus, the question is what did the defendant reasonably understand the agreement to mean when he entered it. In answering this question, the language of the waiver agreement must be analyzed.
Paragraph 2 of the agreement describes the factual allegations underlying the offenses. See Defendant's Br. Ex. D at P 2. It describes the fraudulent conversion of the reserve accounts, and also alleges that the FmHA had a security interest in the reserve accounts. The latter is the jurisdictional element of a § 658 offense. No where is there a factual allegation in the agreement that the partnerships received benefits from a federal program of greater than $ 10,000, i.e., there is no mention of the jurisdictional element of a § 666 offense.
However, paragraph 3 states that the conduct described in paragraph 2 "will in all likelihood result in [Richards'] indictment for, among other things, fraudulent conversion of property pledged to FmHA, pursuant to Title 18 United States Code, Section 658." Id. (emphasis added). Thus, this paragraph seems to indicate that the defendant was on notice that his alleged conduct may give rise to charges under statutes other than § 658.
On the other hand, paragraph 5 provides that Richards was informed "that under federal law (18 U.S.C. section 3282) there is a five year statute of limitations for the fraudulent conversion offenses (18 U.S.C. § 658) [he] allegedly committed, all of which are described in more detail in paragraph 2 above." Id. This paragraph arguably supports the defendant's position that the parties were only talking about § 658.
However, the following two portions of the agreement, when combined with paragraph 3, lead me to conclude the defendant's "reasonable understanding" of the agreement, see Badaracco, 954 F.2d at 939, at the time he signed it was that he was waiving the statute of limitations as it applied to all criminal charges, regardless of the specific statute, that may arise from his alleged conduct, i.e., the alleged fraudulent conversion of the reserve accounts in February and March of 1990. First, in paragraph 7, the agreement states that Richards
believe[s] that it is in [his] interest to waive the statute of limitations for all the unauthorized withdrawals in February and March 1990 for which the statute of limitations has not yet run.
Id. at P 7 (emphasis added). In paragraph 9, the agreement provides that
I, DANIEL D. RICHARDS, do voluntarily waive the federal statute of limitations as it applies to the possible fraudulent conversion charges for the unauthorized withdrawals from the reserve accounts during February and March 1990 . . ., as set forth and described above . . . .
Id. at P 9 (emphasis in original).
These two portions of the agreement only refer to the alleged acts of fraudulent conversion and not to a specific statute. Therefore, when combined with paragraph 3, which put the defendant on notice that his alleged conduct might result in him being indicted under statutes in addition to § 658, these portions of the agreement indicate that the defendant reasonably understood the agreement to have constituted a waiver of the statute of limitations for all criminal violations arising from the ...