United States District Court, E.D. Kentucky, Central Division, Lexington
MEMORANDUM OPINION & ORDER
Gregory F. Van Tatenhove, United States District Judge.
federal criminal defendant in the United States is generally
charged by way of an indictment returned in open court by a
grand jury. An indictment gives a defendant notice of the
crimes charged against him so he can adequately prepare a
defense. Federal Rule of Criminal Procedure 12(b) allows for
the dismissal of an indictment prior to trial if the charging
document suffers from certain defects. Defendants Gerald G.
Lundergan and Dale C. Emmons seek relief under this
provision. The Defendants have filed several motions for
dismissal of the Indictment returned against them on the
grounds that the Indictment fails to allege violations of
law. Because the Indictment complies with the requirements of
the United States Constitution, the multiple motions to
dismiss filed by both Mr. Lundergan and Mr. Emmons will be
August 2018, a federal grand jury returned an Indictment
against Gerald G. Lundergan and Dale C. Emmons, including ten
counts against Mr. Lundergan and six counts against Mr.
Emmons. [R. 1.] Both Defendants were charged with one count
of conspiracy to defraud the United States in violation of 18
U.S.C. § 371, one count of unlawful corporate campaign
contributions in violation of 52 U.S.C. §§ 30118
and 30109(d)(1)(A)(i) as well as 18 U.S.C. § 2, two
counts of making false statements in violation of 18 U.S.C.
§§ 2 and 1001(a)(2), and two counts of
falsification of records in violation of 18 U.S.C.
§§ 2 and 1519. Id. Against Mr. Lundergan,
the indictment adds two additional violations of 18 U.S.C.
§ 1001(a)(2) and two additional violations of 18 U.S.C.
§ 1519. Id. The thirty-page Indictment alleges
Mr. Lundergan and Mr. Emmons conspired to make illegal
contributions of corporate money to Candidate A and Political
Committee 1 and then caused Political Committee 1 to make
false statements to and file false records with the Federal
relevant times, Mr. Lundergan was the owner of the Lundergan
Companies, which include S.R. Holding Co., Inc., the
Lundergan Group, Signature Special Events, and Lundy's
Special Events. [R. 34-1 at 1; R. 1 at ¶ 1.] During the
same time, Mr. Emmons worked as a political consultant and
served as a corporate officer of Emmons & Company, Inc.
[R. 1 at ¶ 2.] Candidate A, a family member of Mr.
Lundergan, announced her United States Senate campaign on
July 1, 2013, and held a kickoff event on July 30, 2013, at
the Carrick House, a property owned by Mr. Lundergan. [R.
33-1 at 4; R. 1 at ¶¶ 5-6.] Candidate A won her
primary election on May 20, 2014, but she lost in the general
election on November 4, 2014. Id. Both Mr. Lundergan
and Mr. Emmons actively participated in Candidate A's
campaign, with Mr. Lundergan allegedly overseeing campaign
fundraising activities and payments to consultants and
vendors while Mr. Emmons provided political consulting
services to both Candidate A and Political Committee 1. [R. 1
at ¶¶ 7-8.]
Government asserts that Mr. Lundergan coordinated consultants
and vendors to provide campaign services to Candidate A and
Political Committee 1, but rather than billing Political
Committee 1, these vendors were directed to bill S.R. Holding
Co., Inc. Id. at ¶ 14. Then, S.R. Holding Co.
allegedly paid these vendors and consultants, but did not
seek reimbursement from Political Committee 1 or Candidate A.
Id. at ¶¶ 15-16. Mr. Emmons, working as a
political consultant, purportedly sought and received payment
for his services through S.R. Holding Co. and Mr. Lundergan,
rather than through Political Committee 1. Id. at
¶ 17. Furthermore, the Government asserts that Mr.
Emmons also directed certain vendors to bill Emmons &
Company, Inc. for their services to the campaign, but instead
of receiving reimbursement from Political Committee 1, Emmons
& Company sought and received reimbursement from S.R.
Holding Co. Id. at ¶ 18. Invoices associated
with these payments ostensibly indicated the payments were
for “consulting services.” Id. These
payments potentially were submitted after the campaign,
though they compensated for services rendered during the
campaign. Id. at ¶ 19.
alleged scheme, Mr. Lundergan and Mr. Emmons concealed these
payments from Political Committee 1, the Federal Election
Commission, and the public, resulting in Political Committee
1 filing reports that did not accurately portray the source
and amount of contributions as required by law. Id.
at ¶ 20. The Indictment continues on to allege a list of
payments for campaign expenses made from bank accounts held
by S.R. Holding Co. and Emmons & Company. Id. at
Lundergan filed six separate motions to dismiss. [R. 33; R.
34; R. 35; R. 36; R. 37; R. 38.] Mr. Emmons moved to join
those motions and Mr. Lundergan's replies. [R. 41; R.
65.] The Government filed no objections to Mr. Emmons's
requests for joinder, instead responding to Mr.
Lundergan's motions as if the motions were filed by both
Defendants. [See R. 51; R. 53; R. 54; R. 55; R. 56.]
Accordingly, Mr. Emmons's Motions for Joinder [R. 41; R.
65] are granted, and the Court will address the motions to
dismiss as to both Mr. Lundergan and Mr. Emmons, ultimately
denying them all.
grand jury indictments have a purpose. As the Supreme Court
explained in Russell v. United States, our use of
the indictment today is rooted in the guarantees set forth in
the Fifth and Sixth Amendments to the United States
Constitution. See 369 U.S. 749, 760-61 (1962). The
Fifth Amendment provides that “No person shall be held
to answer for a capital, or otherwise infamous crime, unless
on a presentment or indictment of a Grand Jury . . ., ”
U.S. CONST. amend. V, and according to the Sixth Amendment,
“In all criminal prosecutions, the accused shall enjoy
the right . . . to be informed of the nature and cause of the
accusation . . . .” U.S. CONST. amend. VI. Out of this
constitutional framework comes two criteria for federal
indictments. An indictment must first set forth the elements
of the offense charged, thereby giving notice to a defendant
of the accusations he must face. Second, an indictment must
be sufficiently specific so that a defendant may plead double
jeopardy, if charged in a subsequent proceeding with the same
crime based on the same facts. See Russell, 369 U.S.
at 763-64; United States v. Martinez, 981 F.2d 867,
872 (6th Cir. 1992). With these requirements in mind, the
Court finds the Indictment returned against Mr. Lundergan and
Mr. Emmons passes constitutional muster.
numerous times in each of the six motions to dismiss, Mr.
Lundergan and Mr. Emmons attempt to litigate the facts of
this matter. Motions to dismiss before trial are capable of
determination if the motion raises questions of law, not
facts. United States v. Jones, 542 F.2d 661, 664
(6th Cir. 1976). A District Court may make preliminary
findings of fact if such findings are necessary to determine
the presented questions of law, but such findings cannot
“invade the province of the jury.” United
States v. Craft, 105 F.3d 1123, 1126 (6th Cir. 1997).
When a Defendant instead claims the allegations included in
the indictment are false or untrue, this is not a question of
law, but rather a fact to be tried by the jury. Universal
Milk Bottle Service v. United States, 188 F.2d 959, 962
(6th Cir. 1951).
Defendants vigorously argue they had no intent to violate
campaign finance regulations, and therefore, the Indictment
must be dismissed. [See e.g. R. 33-1 at 28-35; R.
36-1 at 21-32.] First, they claim that the payments were not
reported to the Campaign because such payments were
inadvertently categorized as “personal” and would
potentially violate the personal use ban for campaign funds.
[R. 33-1 at 30-31.] Additionally, in an attempt to
demonstrate that their failure to report the spending was
accidental, Defendants claim that once they became aware of
their missteps, S.R. Holding Co. immediately billed and
sought reimbursement from the Campaign for the very expenses
outlined in the Indictment. [R. 36-1 at 26.] They maintain
that the Government has failed to demonstrate Defendants'
knowledge or intent to defraud. Id. at 27-28.
Defendants' arguments concerning these facts are
premature and misplaced. The Indictment alleges clearly that
both Mr. Lundergan and Mr. Emmons “knowingly and
voluntarily” committed these crimes. [R. 1 at 5, 21,
22, 23, 24, 25, 26, 27, 28, and 29.] The Indictment is not
meant to prove the facts of the case; such task is
left for trial. Instead, an indictment is sufficient so long
as the alleged facts, if true, give rise to the offense
charged. United States v. Landham, 251 F.3d 1072,
1079-80 (6th Cir. 2001). “Allegations of the indictment
essential to prove the offense charged and the pleas in
answer to such allegations require a trial of the general
issue.” Universal Milk Bottle Service v. United
States, 188 F.2d 959, 962 (6th Cir. 1951). According to
the Indictment, the Defendants “knowingly and
willfully” made contributions, “knowingly and
willfully” caused false statements to be made, and
“knowingly and willfully” caused false records to
be submitted to the United States Government. [See
generally, R. 1.] After a lengthy recitation of the
relevant transactions, the Indictment alleges the Defendants
“knowingly and willfully caused contributions
of corporate money” by S.R. Holding Co. to be made to
Candidate A and Political Committee 1, they
“knowingly and willfully caused the submission
of a materially false, fictitious, and fraudulent statement,
” and they “knowingly concealed, covered
up, falsified, and made false entries in a record and
document, and caused others to do so, with the
intent to impede, obstruct, and influence the
investigation. . . .” [R. 1 at 21-29 (emphasis added).]
Each charge of the indictment specifically alleges the
element of intent, and in order to find the Defendants guilty
of any charge, the jury will need to determine whether the
Defendants possessed this requisite intent. Mr. Lundergan and
Mr. Emmons insist that any such violation of campaign finance
law was unintentional, and thus the charges must be
dismissed. However, this is an issue of fact to be tried by
the jury. Universal Milk Bottle Service, 188 F.2d at
962. Such is not a determination for the Court prior to
Mr. Lundergan and Mr. Emmons ask this Court to determine
whether the relevant payments were “vendor payments,
” and thus not subject to the same campaign finance
regulations. [R. 35-1 at 10-22.] To host campaign events,
candidates for public office necessarily must contract with
commercial vendors, such as rental companies, caterers, audio
and visual technicians, or venue spaces. The law recognizes
that candidates do not typically have these resources
available internally and sometimes must contract with outside
vendors to facilitate campaign events. Therefore, the
services of the vendors are subject to somewhat different
regulations. For example, vendors are permitted to provide
food and beverage at a discounted rate to a candidate, so
long as the aggregate value of that discount is no more than
$1, 000 per election and so long as the candidate is at least
paying for the vendor's cost of the food and beverages.
11 C.F.R. § 100.78. Additionally, commercial vendors are
permitted to extend credit to candidates, so long as the
credit is extended within the ordinary course of business and
the vendor followed established procedures and normal
practice in doing so. 11 C.F.R. § 116.3.
“commercial vendor” is defined as “any
persons providing goods or services to a candidate or
political committee whose usual and normal business involves
the sale, rental, lease, or provision of those goods or
services.” 11 C.F.R. § 116.1. The Defendants here
argue that S.R. Holding Co., the Lundergan Group, Signature
Special Events, and Lundy's Special Events were all
commercial vendors, and the payments at issue were made to
the Lundergan Companies' sub-vendors. [R. 35-1 at 10-11.]
Therefore, because these payments all went to vendors and
sub-vendors, the payments for goods and services are not
considered “contributions.” Id. at 12.
As vendors, the companies also had the ability to extend
credit to the candidate and then collect on that credit after
the campaign, so the bills submitted to Candidate A and
Political Committee 1 after the investigation began were
simply in the normal course of business as a vendor.
Id. at 12-20.
the Indictment alleges that Mr. Lundergan and Mr. Emmons
caused contributions of corporate funds to be made
to Candidate A and Political Committee 1. [R. 1 at 6, 21.] In
order for a jury to find them guilty of these charges, the
jury will need to decide whether the payments made were, in
fact, contributions. Incorporated into their denial of the
allegations, Mr. Lundergan and Mr. Emmons insist, again, that
these services were simply “inadvertently not invoiced,
” arguing, again, a lack of intent. As stated
previously, “Allegations of the indictment essential to
prove the offense charged and the pleas in answer to such
allegations require a trial of the general issue.”
Universal Milk Bottle Service v. United States, ...