Federal Conspiracy Charges: One of the Most Powerful Prosecutorial Tools in the Government’s Arsenal
When most people think about the criminal justice system, they think of crimes perpetrated by individuals or small groups in discrete, specific actions. An employee stealing from his employer commits embezzlement. Three people who stick up a bank together all commit bank robbery. Prosecutors generally charge these as discrete offenses.
There are, however, times when the Government will seek to bring down a larger group of individuals who commit offenses over a long period of time. For these situations, federal prosecutors have conspiracy as a possible charge in their toolbelt.
What is a federal conspiracy?
There are a number of criminal conspiracy statutes in the United States Code. Under 18 U.S.C. 371, it is illegal to conspire to commit any other federal crime. This is the general conspiracy statute under federal law.
A conspiracy is an agreement between two or more individuals to commit a criminal act. So every conspiracy has at least two elements:
- There was an agreement to commit an illegal act;
- The accused voluntarily entered into that agreement;
Certain conspiracy statutes require a third element:
- At least one person committed (or attempt to commit) an overt act in furtherance of the conspiracy.
- The act that is committed need not be a crime itself.
[Compare to conspiracy to commit money laundering— has no overt act requirement. See Whitfield v. United States, 543 U.S. 209, 219 (2005)(18 U.S.C. 1956(h); conspiracy to violate the Controlled Substances Act—has no overt act requirement) United States v. Shabani, 513 U.S. 10, 13-4 (1994)(21 U.S.C. 846). See also, United States v. Pascacio-Rodriguez, 749 F.3d 353, 361-362 (5th Cir. 2014)(“[A] survey of federal conspiracy statutes reveals that Congress has sometimes required an overt act, but more often it has not. The general federal conspiracy provision, which applies to conspiracy ‘to commit any offense against the United States, or to defraud the United States … in any manner or for any purpose,’ requires an overt act. In more specifically tailored conspiracy statutes, the majority do not require an overt act. A review of conspiracy provisions that might generally be described a pertaining to nonviolent crimes reveals that at least 15 such provisions require an overt act, while at least 99 do not. Among the federal statutes that deal with conspiracies to commit crimes that arguably would be within the definition of a crime of violence … eight”).]
There are four very important repercussions of a conspiracy-based prosecution for persons facing charges in a federal court:
- Conspiracies do not require the completion of an offense to establish guilt.
- Statements that would be considered inadmissible hearsay in a trial for a traditional prosecution are fair game in a conspiracy trial.
- Participants who have very limited involvement or who do not benefit very much from their participation, can become wrapped up in very serious federal prosecutions and face substantial prison time.
- The statute of limitations does not begin until the date of the last act committed in furtherance of the common plot.
We will discuss these principles in detail later on in this article.
In its strictest sense, conspiracies are comprised of “agreements” to break the law. A federal definition for conspiracy used in instructions to jurors states:
A “conspiracy” is an agreement between two or more persons to join together to accomplish some unlawful purpose. It is a kind of “partnership in crime,” in which each member becomes the agent of every other member. (Fifth Circuit Pattern Jury Instruction)
Federal law also authorizes a very draconian description regarding how small a person’s role may be to be vulnerable to prosecution. That same jury instruction states:
One may become a member of a conspiracy without knowing all the details of the unlawful scheme or the identities of all the other alleged conspirators. If a defendant understands the unlawful nature of a plan or scheme on one occasion, that is sufficient to convict him for conspiracy even though the defendant had not participated before and even though the defendant played only a minor part.
Even more striking is the unabashed principles that the conspiracy need not succeed in order for participants to be guilty or that participants have a true understanding of the scope of the conspiracy. That instruction also states:
The government need not prove that the alleged conspirators entered into any formal agreement, nor that they directly stated between themselves all the details of the scheme. Similarly, the government need not prove that all of the details of the scheme alleged in the indictment were actually agreed upon or carried out. Nor must it prove that all the persons alleged to have been members of the conspiracy were such, or that the alleged conspirators actually succeeded in accomplishing their unlawful objectives.
While the federal definition for conspiracy is broad and draconian, it does not apply to persons who are merely present while the law is being broken or who inadvertently assists in the conspiracy.
Mere presence at the scene of an event, even with knowledge that a crime is being committed, or the mere fact that certain persons may have assembled together and discussed common aims and interests, does not necessarily establish proof of the existence of a conspiracy. Also, a person who has no knowledge of a conspiracy, but who happens to act in a way that advances some purpose of a conspiracy, does not thereby become a conspirator.
Common federal conspiracy offenses are
- Conspiracy to Commit Offense or Defraud the United States (18 USC 371),
- Conspiracy to Commit Wire Fraud or Mail Fraud (18 USC 1341, 1343, and 1349),
- Conspiracy to commit Health Care Fraud (18 USC 1347),
- Conspiracy to Pay Illegal Kickbacks (42 USC 1320(a)-7b),
- Conspiracy to Commit Money Laundering (18 USC 1956(i)(2) and 1957),
- Racketeering (18 USC 1962), Conspiracy to commit Securities Fraud (15 USC 77),
- Conspiracy to Possess Drugs with Intent to Deliver (21 USC 841 and 846).
Federal Conspiracy Principles
Conspiracies do not require the completion of an offense to establish guilt.
Because a conspiracy is not based upon the accomplishment of an offense, but rather the mere agreement to commit that offense, a scheme or plan need not succeed in order for the Government to prosecute. Instead, for a conspiracy to be performed, the agreement, and sometimes an overt act in furtherance of the conspiracy, need only occur.
This is one of the reasons that undercover investigation techniques are sufficient to bring a case. Many securities fraud schemes are proven by an agent posing as a would-be investor who manages to elicit false statements while soliciting investments. The fact that the agent will likely never actually provide money to the conspirator does not provide a shield. The mere agreement by the conspirator with other conspirators to attempt to accomplish a fraud is sufficient to convict.
Also, certain federal offenses require proof of some sort of overt act to convict. This means that in addition to an unlawful agreement, any one of the conspirators would need to perform some act that advances the conspiracy. For example, if one of the persons within the same group of securities fraudsters opened a bank account in a dummy name to receive deposits, such action would likely be enough to convict the conspirators even if they did not actually successfully solicit a rube investment.
It is worth noting that conspiracies do not require proof of an overt act. The two most common examples of such offenses are drug conspiracies and money laundering conspiracies.
Statements that would be considered inadmissible hearsay in a trial for a traditional prosecution are fair game in a conspiracy trial.
Under Federal Rule of Evidence 801(d)(2)(e) a co-conspirator’s statement made during and in furtherance of a conspiracy is admissible. This means that if a low-level meth dealer tells a cooperator that a mid-level drug dealer gave him some meth, that cooperator could testify in a court of law as to what the low level dealer told him about the mid-level dealer. What’s more, that statement could be used against both the low-level dealer and mid-level dealer. This is allowed whether the cooperator is prosecuted or not.
This has tremendous consequences for defendants on trial and defendants who have been convicted and are facing punishment. This means that the government can present information as evidence against a person without actually presenting someone with actual, direct knowledge of the actions that are being presented. Without that conspiracy doctrine, such a statement could never be used against the mid-level dealer. Put another way, this provision allows the Government to use something a witness (cooperator) heard but doesn’t know him or her self, against a person in a court of law.
It is important to understand that this provision does not just apply to drug cases, the Government can use things a conspirator ‘heard’ against others in healthcare cases, or money laundering cases, or any other conspiracy case.
When it comes to punishment, such statements have a cumulative effect. Because facts often become inflated when repeated to others, rumors can increase drug quantity amounts and loss amounts during a defendant’s punishment. Since sentences in drug cases are driven by quantity and in fraud cases are driven by loss amount, this is particularly important.
Participants who have very limited involvement or who not very much benefit from their participation, can become wrapped up in very serious federal prosecutions and face substantial prison time.
Since federal law does not require proof that a particular co-conspirator to know the scope of a particular conspiracy to be guilty, small participants who often received little or no enrichment, can face significant sentences under federal law.
For example, in a mortgage fraud conspiracy, a person may participate in a three false inspections making $100 each time. Even though that person had no idea how many mortgage brokers, dummy customers, and branch managers were involved, or how much money was being made in the conspiracy, he could face years in prison based upon very large loss amounts. It is not particularly different from holding an employee at a Walmart responsible for the branch manager at a different location than which he works.
The statute of limitations does not begin until the date of the last act committed in furtherance of the common plot.
Conspiracies often span years. The statute of limitations for a co-conspirator does not start running until the last date an act is committed in furtherance of the conspiracy. Toussie v. United States, 397 U.S. 112, 122 (1970)(statute of limitations begins to run with the last overt act in furtherance of the conspiracy). This means individuals can be brought to court many years after their own last bad act.
Federal Conspiracy Charges: An Example
Imagine a home health provider who bills Medicaid for home visits that never happened. For this hypothetical imagine the following:
- The owner of the company hires four people to “recruit” Medicare recipient to apply for home health care claiming they are non-ambulatory and needing diabetic medication.
- The owner finds two doctors willing to falsely claim to Medicaid that these recruits are actually diabetic and need such services.
- The owner employs five nurses who create false billing sheets claiming to have visited the recruits.
- Finally, the company has an office manager who submits the false billings to Medicaid.
- Over the course of two years, the owner bills Medicaid for a total of 45 fraudulent patients. For their trouble, each patient gets $20 of each $100 dollars billed to Medicaid.
Here’s how a prosecutor is going to do the math:
- There are 58 co-conspirators. (1 owner + 4 recruiters + 2 doctors + 5 nurses + 1 office manager + 45 recruits)
- The total loss amount is conservatively $108,000. (45 recruits billing $100 a month for 24 months.)
Ultimately, conspiracy prosecutions are serious business that require significant effort, expertise, and energy to combat. People facing these types of allegations need to take steps to try to demonstrate that they did not enter an unlawful agreement or that their participation was not meant to further an unlawful activity. If someone has some level of criminal exposure, significant expertise and energy needs to be expended to show prosecutors that they were not large players and should seeks resolutions that limit exposure to that person.
Understanding of federal law, the strategies, tactics, and priorities of federal prosecutors, as well as financial and business practices applicable to the particular case are critical in defending people facing these serious accusations.
Call us at (817) 203-2220 for a complimentary strategy session. Our team of former prosecutors and Board Certified Criminal Lawyers are here to help. During this call we will:
- Discuss the facts of your case;
- Discuss the legal issues involved, including the direct and collateral consequences of the allegation; and
- Discuss the defenses that apply to your plan and in general terms discuss our approach to your case.
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Also published on Medium.