Federal criminal conspiracy.

• Author: Siegel, Richard
• Position: Twenty-First Annual Survey of White Collar Crime

1. INTRODUCTION II. ELEMENTS OF THE OFFENSE A. Agreement B. Illegal Goal C. Knowledge, Intent, and Participation D. Overt Act III. DEFENSES A. Statute of Limitations B. Variance C. Multiplicitous Indictment D. Withdrawal E. Other Defenses IV. Co-CONSPIRATOR HEARSAY RULE A. Evidentiary Issues B. Sixth Amendment Issues V. ENFORCEMENT A. Vicarious Liability B. Joinder and Severance C. Acquittal of Other Co-Conspirators VI. SENTENCING I. INTRODUCTION

   Under 18 U.S.C. [section] 371 (the "Act") it is a crime to conspire to commit any offense against the United States or to defraud the United States. (1) A conspiracy is distinct from the substantive crime contemplated by the conspiracy (2) and is charged as a separate offense. (3) Acquittal on a conspiracy charge does not bar prosecution based on the substantive offense. (4) Likewise, acquittal of the substantive offense does not necessarily bar conviction on the conspiracy count (5) unless the government's theory of illegal conspiracy depends upon the defendant's knowledge of and assistance with the substantive count. (6)

   The Supreme Court described the gravity of the conspiracy offense:

   [f]or two or more to ... combine together to commit ... a breach of the criminal laws is an offense of the gravest character, sometimes quite outweighing, in injury to the public, the mere commission of the contemplated crime. It involves deliberate plotting to subvert the laws, educating and preparing the conspirators for further and habitual criminal practices. And it is characterized by secrecy, rendering it difficult of detection, requiring more time for its discovery, and adding to the importance of punishing it when discovered. (7) In addition to [section] 371, specific provisions in numerous federal statutes also proscribe conspiracy. (8) These provisions attach to the particular substantive offenses specified in the statute in which they appear. Section 371, on the other hand, applies generally to any conspiracy where the goal is to "commit any offense against the United States, or to defraud the United States" (9) and criminalizes any agreement to violate a civil or criminal federal law. (10) However, if conspiracy to violate a civil law is to result in a conspiracy conviction, it must inflict actual damage onto the civil plaintiff, a requirement that does not exist for conspiracies to violate criminal laws. (11)

   Conspiracy, the prosecutor's "darling," (12) is one of the most commonly charged federal crimes. (13) The offense of conspiracy is construed broadly by courts and, consequently, is applied by prosecutors to a variety of situations. (14) "[I]t is clear that a conspiracy charge gives the prosecution certain unique advantages and that one who must defend against such a charge bears a particularly heavy burden." (15)

   Nonetheless, the essential features of a conspiracy--secrecy and concealment (16)--make conspiracies difficult to prosecute, especially if the conspiracy is successful. Consequently, the law lessens the government's burden of proving the essential elements by requiring only a showing of the "essential nature of the plan and [the conspirators'] connections with it" to ensure that conspirators do not "go free by their very ingenuity." (17)

   Section II of this article outlines the basic elements of a conspiracy offense under [section] 371. Section III sets forth the defenses available to challenge charges brought under the statute. Section IV presents the evidentiary and constitutional guidelines governing admissibility of co-conspirator hearsay testimony at trials involving conspiracy charges. Section V surveys various procedural and substantive rules regarding enforcement of the statute. Finally, section VI discusses sentencing for a conspiracy conviction.

2. ELEMENTS OF THE OFFENSE

   Criminal conspiracy has four elements, each of which the prosecution must prove beyond a reasonable doubt. (18) A conspiracy exists where there is: (i) an agreement between at least two parties (ii) to achieve an illegal goal (iii) where the parties possess knowledge of the conspiracy and with actual participation in the conspiracy and (iv) where at least one conspirator committed an overt act in furtherance of the conspiracy. (19)

   A. Agreement

   The first element and the "essence" of a conspiracy "is an agreement to commit an unlawful act." (20) The agreement must be between two or more persons, (21) including married spouses, (22) agreeing to work together toward a common goal. (23) However, it is not necessary for the government to prove a formal agreement. (24) The existence of a conspiratorial agreement may be demonstrated through circumstantial evidence (25) or may be inferred from the defendants' actions, (26) including by prior participation in criminal activities, (27) but when the government seeks to establish a conspiracy by inference, it must prove each aspect of the alleged conspiracy. (28) Knowledge of, and participation in, a conspiracy satisfies the agreement prong in the absence of an express agreement. (29) However, "a defendant's mere presence at the scene of a criminal act or association with conspirators does not constitute intentional participation in the conspiracy, even if the defendant has knowledge of the conspiracy." (30)

   The bilateral conspiracy requirement of [section] 371 requires at least two nongovernmental actors. (31) An agreement between two actors, one of whom is a government agent, cannot support a conspiracy conviction. (32) However, a government agent can serve as a link between a true conspirator and a defendant if the conspiracy involves criminal actors who know that multiple conspirators beyond the government agent are involved. (33)

   In addition, the Wharton's Rule (34) doctrine states that an agreement by two persons to commit a particular crime cannot be prosecuted as a conspiracy if the commission of the crime itself requires the participation of two persons. (35) If, however, the number of actual conspirators exceeds the number required to commit the substantive offense, the government may charge the conspiracy separately. (36) However, where "the immediate consequences of the crime rest on ... society at large," rather than the parties themselves, a conspiracy conviction will not be barred by Wharton's rule. (37)

   Corporations, their officers, agents, or employees can conspire with one another in violation of [section] 371. (38) The intra-corporate conspiracy doctrine generally does not apply to criminal cases under [section] 371 because it would prohibit holding a corporation acting on its own liable under conspiracy charges by allowing the corporation to hide behind its corporate veil. (39) In the antitrust context, however, the "intra-corporate conspiracy doctrine" expressly provides that a parent corporation and its wholly-owned subsidiary are not legally capable of conspiring with each other in violation of [section] 1 of the Sherman Act because there is a complete unity of interest between the two entities. (40)

   B. Illegal Goal

   The second element of a federal conspiracy is the presence of an illegal goal. (41) Specifically, the government must establish that the aim of the conspiracy was to defraud or hinder a lawful federal government objective (the "defraud clause") (42) or to violate a federal law (the "offense clause"). (43)

   The language of [section] 371's "defraud" clause is "not confined to fraud as that term has been defined in the common law." (44) Section 371 broadened the definition of fraud under conspiracy. (45) Under [section] 371, fraud reaches "any conspiracy for the purpose of impairing, obstructing, or defeating the lawful function of any department of [the] government." (46) Virtually any method used to defraud the United States will suffice for the purposes of the statute. (47)

   The language in Hammerschmidt v. United States (48) requires that the means to defraud be dishonest. (49) However, in cases both prior and subsequent to Hammerschmidt, the Supreme Court has upheld conspiracy convictions that did not specifically charge dishonest or deceptive means in the indictment. (50) Some circuits have affirmed convictions on conspiracy counts absent allegations of fraud or dishonesty, (51) while other circuits require such a showing. (52)

   The "offense" clause of [section] 371 is not limited to offenses committed against the United States or its agents; it applies to any conspiracy that does or is intended to violate federal law. (53) The object of the conspiracy must be the violation of a specific federal statute in order to fall within the offense clause. (54) Concert of action is sufficient to prove this element, and thus it is not necessary that the conspirators intend for the conspiracy to violate federal law or know that the conspiracy will violate federal law. (55) In cases where the offense and defraud clauses overlap, an indictment must charge a violation of either the offense or defraud clause. (56) However, a defendant charged with a violation of the offense clause may also be charged under the broader defraud clause, as long as the indictment provides sufficient notice of the charges. (57)

   C. Knowledge, Intent, and Participation

   The third element is that the defendant knew of the conspiratorial agreement and voluntarily participated in it. (58) The defendant's knowing participation in the conspiracy can also be inferred from circumstantial evidence. (59) The government need not prove the defendant knew all the details (60) or objectives (61) of the conspiracy, or that the defendant knew the identity of all the participants in the conspiracy. (62) Acts committed by the defendant that furthered the objectives of the conspiracy are often sufficient to demonstrate that the defendant was a knowing participant. (63)

   Alternatively, once the government proves the existence of a conspiracy and the defendant's intent to further it, evidence of only a "slight connection" between the defendant and the...