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Valley of Lakes RICO Class Action against PNCBANK, et al.
ripped edge: Criminal Doc's


				:	VIO:	15 USC 1703(a)(2)(a)
	vs.					15 USC 1703(a)(2)(b)
				:		15 USC 1703(a)(2)(c)
PHILIP COHEN			:		18 USC 1341
		Defendants			18 USC 2



	On July 25, 1980, Defendant Jack Halperin and 

Philip Cohen were indicted by a Grand Jury in the City 

of Scranton in the Middle District of Pennsylvania.  The 

Indictment charged the Defendant with thirteen (13 Counts 

of Interstate Land Sales violation and twenty (20) Counts 

of Mail Fraud.  On August 4, 1980, Defendant Jack Halperin, 

by his respective counsels, filed a Motion to Dismiss the 

Indictment and Brief in support thereof.  On August 14, 

1980, Defendant Jack Halperin, by his respective counsels, 

filed a Supplemental Motion to Dismiss the Indictment 

without Supporting Brief.  The government shall respond 

to the initial Motion to Dismiss the Indictment filed by 

the Defendant as no Brief in support of the Supplemental 

Motion to Dismiss the Indictment has been filed by the 

Defendant, Jack Halperin.


	The Defendant, Jack Halperin, in this matter 

asserts two propositions in support of his Motion to Dis-

miss the Indictment.  The first being that the Indictment 

charging violations of 15 U.S.C., section 1703, Sub-

section (a)(2)(a), (a)(2)(b), (a)(2)(c), should be dis-

missed as 15 U.S.C., Section 1703 et seq. imposes liability


against a developer or as defined in 15 U.S.C., section 

1701.  Furthermore, the Defendant avers that the govern-

ment has failed to allege this essential element, thus 

necessitating dismissal of the Indictment.  Secondly, 

the Defendant alleges that Counts 1 through 13 charging 

violations of 15 U.S.C., section 1703 et seq. must be 

dismissed because of the violation occurring beyond the 

Statute of Limitations.

	The Defendant wrongfully asserts that the allega-

tions contained in Counts numbered 1 through 13 of the 

Indictment charging violation of 15 U.S.C., section 1703, 

do not meet the critical and necessary elements of the 

offense as charged.  A review of Section 1701 of Title 15 

United States Code, defines "developer" in several terms, 

and clearly delineates various classes of persons in legal 

associations which fit within the definition of "developer".  

Section 1701, Paragraph 4, states as follows:

	"Developer" means any person who, directly 
	or indirectly, sells or leases, or offers 
	to sell or lease, or advertises for sale or 
	lease any lots in a subdivision;

furthermore, Subsection 2 of 1701 states:

	"Person" means an individual, or an un-
	incorporated organization, partnership, 
	association, corporation, trust or estate;

Section 5 defines "agent" as:

	"Agent" means any person who represents, 
	or acts for or on behalf of, a developer 
	in selling or leasing, or offering to sell 
	or lease, any lot or lots in a subdivision; 
	but shall not include an attorney at law 
	whose representation of another person 
	consists solely of rendering legal services.

	A fair reading of the Indictment together with 

the statutes charged, reflects that the Counts against 

the Defendant are proper.  Section 1701, 15 U.S.C., clearly 

defines a "person" to include an individual.  The De-

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fendant, Jack Halperin, is an individual.  Moreover, the 

allegations contained in the Indictment clearly estab-

lishes that Jack Halperin not only was a developer him-

self, but also acted through the corporation, High Vista, 

Inc., and directly or indirectly, sold lots in the Sub-


	Paragraph 5 of the Introduction of the Indictment 

states that Jack Halperin was the President, Chairman of 

the Board of Directors and Stockholder of High Vista, Inc., 

and at all times relevant hereto, was directly responsible 

for the management of High Vista, Inc. and its affiliate 

corporation.  Paragraph 5 not only indicates that the De-

fendant was the moving force behind High Vista, Inc., and 

responsible for its entire operation, but also outlines 

his specific responsibilities.

	The Indictment repeatly alleges that the De-

fendant, Jack Halperin, was responsible for officers, agents 

and individuals of High Vista, Inc., and the Valley of Lakes 


	Paragraphs 5, 12, 22, 23, & 24, the Introduction, 

Counts 1 through 13, Paragraph C(1), Count #1, and the 

Introduction, County Nos. 14 through 33, reiterate the 

Jack Halperin Agency relationship with the Subdivision.  

It is apparent from various allegations contained in the 

Indictment with statutory definition of 15 U.S.C., section 

1701, it is seen that this defendant easily fits within 

the definition as mentioned.

	In the case cited by the Defendants, Bartholomew 

v. North Hampton National Bank of Easton, 584 F2d 1288 

(3rd Circuit 1978( the Court held:

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	"In view of the fact that the Land Sales Act 
	clearly limits liability for untrue state-
	ments and omissions of material facts to 
	those who satisfy statutory definitions of 
	developers or agents of developers and that 
	the Act further defines "developers" as 
	persons who directly or indirectly engage
	in selling . . . " Page 1292.

	Clearly, the definition cited in this case can 

be applied to the Defendant, Jack Halperin, who is not 

only the developer individually, but the alter ego of 

High Vista, Inc., a developer as alleged in the first 

paragraph of the Introduction of the Indictment.  The 

government maintains that the definitions contained in 

Sections 2, 4 and 5 of 15 U.S.C., section 1701, are all 

inclusive and are intended to encompass any entity or 

syndication which is engaged directly or indirectly in the 

sale or lease of undeveloped real estate.  It also becomes 

apparent that the intent of the statutes is not to allow 

any party to escape criminal liability under 15 U.S.C., 

section 1703, merely by reason of their legal definition 

or form of syndication.

	Furthermore, the Indictment charges violation of 

18 U.S.C., section 2. That statute uses the language, 

"whoever either aids the commission of a crime or whoever 

causes an act to be done which if directly performed by 

him or another would be an offense, is punishable as a 

principal".  This statute adds further credence to the 

proposition that an individual may be charged and convicted 

of a crime that he participates in and associates himself 

with and cannot avoid responsibility although the act is 

performed, allegedly, by another.  Nye Nissen v. United 

States, 336 U.S. 613, 619 and U.S. v. Provenzano, 334 F2d 

678 (C.A. 3, 1964).

			- 4 -

	In conclusion, it is apparent that the Defendant 

clearly fits within the definition of Sections 2, 4 and 5 

of 15 U.S.C., section 1701, and also 18 U.S.C., section 2. 

Therefore, Indictment has properly charged the Defendant in 

violation of 15 U.S.C., section 1703 et seq.

	Defendant misinterprets the three year Statute of 

Limitations contained in 15 U.S.C., section 1711.

	The Statute of Limitations for violation of 15 

U.S.C., section 1703 et seq., is a general Statute of Limita-

tions found in section 3282 of 18 U.S.C. This Statute of 

Limitations is applied to non-capital offenses in states 

as follows:

	"Except as otherwise expressly provided by 
	law, no person shall be prosecuted, tried 
	or punished for any offense, non-capital un-
	less the indictment is found, or the infor-
	mation is instituted within five years next 
	after such offenses shall have been committed."

	Since all of the alleged offenses have occurred 

within the five years preceding the Indictment, Counts 1 

through 13 are not beyond the Statute of Limitations and 

do not warrant dismissal.

	The three-year Statute of Limitations contained 

in 15 U.S.C., section 1711, exclusively deals with Civil 

Remedies and Liabilities formulated in Section 1709 of 15 

U.S.C. This Statute stands for the proposition that a 

purchaser or lessee may bring an action at law or an equity 

against the developer or agent if the sale or lease was 

made in violation of Section 1703(a) of this Title.

	Section 1709 deals with the civil liabilities a 

violator will incur when he defrauds a purchaser or lessee.  

This action must be maintained by a purchaser or a lessee.  

It is not instituted on behalf of the government for 

criminal violations.  Rather, it affords a defrauded person

			- 5 -

an opportunity to sue a developer or aid him civilly, at 

law or in equity, so that he may be made whole.  Section 

1709 goes on further to state "in a suit authorized by 

the subsection, the Court may order damages, specific per-

formance, or such other relief as the Court deems fair, 

just and equitable".

	An intelligent reading of 15 U.S.C., section 

1711, in conjunction with 1709 to which it refers, clearly 

states that its applicability is limited to civil action.  

In the notes following Section 1709, note 6(a), page 22, 

15 U.S.C.f it is explained that the provisions of this 

chapter were designed for the protection of the consumer. 

Rockefeller v. The High Sky, Inc., D.C. PA 1975f 394 F. 

Supp. 303.  It is not designed for the enforcement of 

crimes by the government, rather 15 U.S.C., section 1703, 

undertakes that purpose, and as such, the general Statute 

of Limitations contained in 18 U.S.C., section 3282 pre-

vails.  Title 15 does not, in any manner, supercede the 

scope of 18 U.S.C., section 3282.

	In the Bloom Case cited by Defendant's counsel, 

says absolutely nothing pertinent to the case at bar.  

The original legislation taken from 15 U.S.C., section 

1711, that is, section 78(i) of 15 U.S.C., covered exclu-

sively remedies available to consumers from a civil 

standpoint.  See page 598, 78 FRD. 591, 1977. The defend-

ant also cites United States Code Congressional and Admin-

istrative News at page 2354, concerning the legislative 

history of the aforesaid statute.  Again, the Defendant 

clearly misinterprets the meaning of 15 U.S.C., section 

1711.  The bill amending the Statute of Limitations affect-

ing all violations related to the property part of State-

ment of Record to three years applies to civil actions

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Valley of Lakes RICO Class Action against PNCBANK, et al.

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