Submitted: February 10, 1998
On appeal from the Superior Court of New Jersey, Law Division, Camden County.
Before Judges Conley, Wallace and Carchman.
The opinion of the court was delivered by: Wallace, Jr., J.A.D.
Defendant William A. McLaughlin was convicted of second degree conspiracy, N.J.S.A. 2C:5-2 (count one); second degree theft by deception, N.J.S.A. 2C:20-4 and N.J.S.A. 2C:2-6 (count two); fourth degree forgery, N.J.S.A. 2C:21-1(a) (count four); and fourth degree falsifying records, N.J.S.A. 2C:21-4(a) and N.J.S.A. 2C:2-6 (count five). The trial Judge had previously dismissed count three, an official misconduct charge, at the end of the State's case.
At sentencing, defendant entered into a plea agreement for a separate indictment and pled guilty to third degree theft by deception, N.J.S.A. 2C:20-4 and N.J.S.A. 2C:2-6, and fourth-degree falsifying records, N.J.S.A. 2C:21-4a. As part of the agreement, the State recommended a sentence concurrent with the sentence for defendant's trial convictions and moved to dismiss two remaining counts. On the trial convictions, the trial court merged count one into count two and imposed a term of ten years with a two year parole disqualifier on count two, imposed a concurrent term of eighteen months on count four, and imposed a concurrent term of eighteen months on count five. In addition, the trial court imposed fines of $270,000 payable to the Commissioner of Insurance and ordered defendant to pay restitution to the victim in the amount of $271,305.33. Consistent with the plea agreement, the trial court imposed a concurrent term of four years on the theft count and a concurrent term of nine months on the falsifying records count. The trial court also imposed a fine of $10,000 payable to the Commissioner of Insurance, ordered restitution of $8,000 and dismissed the two other counts in the indictment.
On appeal, defendant argues: (1) his statement was given in violation of his Miranda *fn1 rights and should not have been admitted into evidence; (2) the trial court erred in refusing to voir dire the members of the jury; (3) he was denied a fair trial when he was not permitted to retain counsel of his own choice; (4) the trial court erred in imposing a fine pursuant to N.J.S.A. 17:33A-5; and (5) the trial court failed to consider his ability to pay in ordering restitution. We find no error warranting reversal of defendant's convictions, but we are constrained to reverse the fines and restitution imposed.
Between 1985 and 1990, defendant owned and operated American Truck and Equipment Appraisers, an insurance appraisal company. Defendant and his son-in-law, Joseph Hunter, appraised damaged vehicles and heavy equipment for insurance companies, such as USF&G, and were paid for their services on a per estimate basis. One of defendant's contacts at USF&G was claim supervisor, William Herbster.
According to Herbster, who was later indicted along with defendant and ultimately accepted a plea bargain, defendant approached him in 1985 regarding a scheme to defraud USF&G. Defendant explained that he would encourage people to obtain automobile insurance with USF&G, submit phony claims on their behalf, and notify Herbster of the claims. Herbster agreed to watch for these claims, sign off on them, retrieve the checks before they were mailed to the claimants and insureds, and give the checks to defendant. Herbster testified that defendant assured him that he would recruit new insureds and would provide phony police reports, appraisals, and photos.
Hunter, who was also indicted and agreed to a plea bargain, confirmed that defendant worked with Herbster to collect on fraudulent insurance claims. He claimed that defendant kept a blank police report pad and mapped out accidents using "matchbox" cars. Further, he saw defendant endorse numerous checks payable to various people, some fictitious, and then cash them at cash checking stores.
Constance Hardison, who also accepted a plea bargain, maintained an office in her home where she worked as defendant's secretary. Hardison admitted she filled out phony police reports at defendant's direction. She stated that defendant kept a box of photographs of damaged cars which he would use for claims.
Robert Santopietro, a state investigator with the Insurance Fraud Section of the Division of Criminal Justice, testified that on June 11, 1991, he telephoned defendant who was then living in Florida. As a result of this conversation, defendant agreed to return to New Jersey to give a statement regarding certain insurance claims filed with USF&G. Santopietro claimed that defendant was cooperative, did not assert any of his rights, and gave a statement admitting his involvement in the submission of twenty-four fraudulent claims. Defendant's taped statements were played for the jury.
Defendant testified at trial. He admitted submitting false claims to USF&G and confirmed that he had prepared fake appraisals, supplied phony photos of wrecked vehicles, prepared phony police reports, and forged signatures when necessary. He estimated that he stole approximately $607,550, but personally received only about $348,000, all of which he subsequently spent. He explained that in order to maintain his business, it was necessary for him to spend upwards of $80,000 per year "wining and dining" insurance company executives. He also revealed that he harbored a great resentment against insurance companies after several claims he submitted, in conjunction with the death of his wife and father and following an accident in which he sustained injuries, were unfairly denied.
As noted above, the jury convicted defendant of conspiracy, theft by deception, forgery, and falsifying records. This appeal followed.
We first consider defendant's contentions that the trial court erred in failing to suppress his statement of June 15, 1991. Specifically, defendant argues that his statement was "tainted" because it was recorded after he had been subjected to two days of custodial interrogation which occurred without any explanation of his Miranda rights.
The critical facts as presented at the Miranda hearing follow. Santopietro, who had been involved in the USF&G investigation since its inception in 1987, telephoned defendant in Florida and asked him to fly to New Jersey to discuss his involvement with certain fraudulent USF&G insurance claims. Santopietro stated that defendant responded that he had been wondering when he was going to be contacted regarding the investigation. Defendant agreed to return to New Jersey if the State paid for his airfare. A round-trip ticket was subsequently purchased for defendant and he flew to Newark Airport the next day.
Santopietro and Investigator Allen Buecker met defendant at the Newark Airport and drove him to a motel near Trenton. After arranging to return the following morning to drive defendant to the Hughes Justice Complex, the investigators left the motel. No investigators were posted at the motel and defendant retained his return airline ticket. Defendant was not restricted in any way.
The next morning, Buecker met defendant at the motel and drove him to the Justice Complex where Santopietro was waiting with three other investigators and a large number of insurance files in a grand jury room. The investigators were not armed and wore plain clothes. Prior to questioning defendant, Santopietro reminded him that his cooperation was voluntary and that he was free to leave. Defendant did not express any desire to leave either at that point or at any other point during the subsequent questioning. Santopietro stated that he made it clear to defendant that the goal of this initial questioning was defendant's refamiliarization with the files before giving a taped statement.
Santopietro took several breaks during the interview. Defendant was permitted to leave the room alone in order to use the restroom, the pay phone, and to get lunch at the cafeteria downstairs. He was given an allowance to cover food expenses and any additional transportation costs during his stay in New Jersey. Defendant returned to the grand jury room after lunch and continued to respond to Santopietro's questions. That evening Buecker transported defendant back to the motel and arranged to meet him the next morning.
Santopietro recalled that the next day proceeded in much the same manner. Prior to any questioning, Santopietro again advised defendant that his presence was voluntary. Because the interview was taking longer than expected, Santopietro asked defendant to postpone his return to Florida from Friday until Saturday. Defendant agreed. That evening, defendant was then driven back to his motel.
On Saturday, June 15, 1991, defendant was again transported to the Hughes Justice Complex. Defendant revealed that he had taken a cab to a nearby bar the prior evening to meet Andrew McElhenny, another target in the investigation, and that the two had spent the night in defendant's motel room. Thereafter, Santopietro once again reminded defendant that his presence was entirely voluntary. A recording device was then placed on the table in front of defendant. Santopietro read defendant his Miranda rights. Defendant then read his rights back to Santopietro and signed a waiver form. Santopietro stated that defendant did not exercise any of his rights to remain silent or to have an attorney present. Defendant gave a recorded statement, admitting that he had committed insurance fraud. After the statement was completed, Santopietro and Buecker drove defendant to the airport for his return flight to Florida.
Santopietro acknowledged that defendant was a possible target of the investigation in June 1991, and that he had advised defendant, either during the telephone call or upon his arrival in New Jersey, that he had a right to counsel. Santopietro did agree however, that prior to Saturday, June 15, 1991, he did not read defendant his rights. Santopietro noted that there were no charges pending against defendant at the time of the interview and that he did not intend to arrest defendant at that time, even though defendant had admitted his involvement in the insurance fraud scheme on each day.
Based upon this testimony, the trial Judge was satisfied that defendant was not in custody, that Miranda warnings were not necessary, and that defendant's statement had been given voluntarily.
It is clear that certain warnings are required when an individual is subjected to custodial interrogation by law enforcement officers. Miranda v. Arizona, 384 U.S. 436, 444, 86 S. Ct. 1602, 1612, 16 L. Ed. 2d 694, 706-07 (1966). These warnings include instructing the individual that he has a right to remain silent, that any statement he makes may be used against him, and that he has the right to the presence of an attorney. Stansbury v. California, 511 U.S. 318, 321, 114 S. Ct. 1526, 1528, 128 L. Ed. 2d 293, 298 (1994). Custodial interrogation is "questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way." Miranda, supra, 384 U.S. at 444, 86 S. Ct. at 1612, 16 L. Ed. 2d at 706-07. Accord Stansbury, supra, 511 U.S. at 321, 114 S. Ct. at 1528, 128 L. Ed. 2d at 298; State v. Keating, 277 N.J. Super. 141, 144 (App. Div. 1994). In determining whether a custodial interrogation has occurred, a court must examine all of the circumstances surrounding the interrogation. Stansbury, supra, 511 U.S. at 321, 114 S. Ct. at 1528-29, 128 L. Ed. 2d at 298; State v. O'Loughlin, 270 N.J. Super. 472, 477 (App. Div. 1994); State v. Coburn, 221 N.J. Super. 586, 596 (App. Div. 1987), certif. denied, 110 N.J. 300 (1988).
Custody will be found "'if the action of the interrogating officers and the surrounding circumstances, fairly construed, would reasonably lead a detainee to believe he could not leave freely.'" O'Loughlin, supra, 270 N.J. Super. at 477 (quoting Coburn, supra, 221 N.J. Super. at 596). Some of the relevant circumstances a court may consider in making this determination include the length of the interrogation, the place and time of the interrogation, the nature of the questions, the conduct of the police, the status of the suspect, and other such factors. See State v. P.Z., 152 N.J. 86, 102-03 (1997); State v. Smith, 307 N.J. Super. 1, 9 (App. Div. 1997); State v. Pierson, 223 N.J. Super. 62, 67 (App. Div. 1988). This inquiry must be done on a case-by-case basis by examining the totality of the attendant circumstances. O'Laughlin, supra, 270 N.J. Super. at 477.
Defendant contends that his "interrogation" by Santopietro during the first two days of his stay in New Jersey was custodial because: (1) it took place in a state grand jury room or "a law enforcement location"; (2) during the lengthy "interrogation," defendant was cut off from the outside world; (3) it is "doubtful" defendant could have left the building at any point throughout the interrogation; (4) the State purchased defendant's airplane ticket, picked him up at the airport, and transported him to and from the Hughes Justice complex, thereby controlling defendant's movements; and (5) the State selected his motel and determined his flight plans. We reject each of these arguments.
It is custodial interrogation and not the mere focus upon a particular suspect which implicates the requirement that the Miranda warnings be given. State v. Graves, 60 N.J. 441, 448 (1972); Coburn, supra, 221 N.J. Super. at 595. While the Hughes Justice Complex is a state building, it is not a police headquarters. None of the investigators present in the grand jury room wore uniforms or carried guns. Defendant was not cut off from the outside world; rather, he was offered numerous breaks during which he was permitted to freely move about the building, use the telephone and the restrooms, and purchase food. Defendant was also repeatedly reminded that he was free to leave at any time and that his participation was completely voluntary. Although the State did purchase defendant's airline ticket and provide him with free transportation, defendant was permitted to retain possession of his return ticket. No investigators were posted at his motel. Defendant admitted that he left the motel premises and had a guest in his room without the investigators' knowledge. Although the State ...