Indictment in Sears Fraud Case Reinstated

A federal appeals court on Thursday once again reinstated a criminal indictment against Sears, Roebuck in a U.S. Customs Service fraud case that has been the focus of a long-running battle between the appellate court and the chief federal judge in Los Angeles.

Sears--which has been facing the on-again, off-again charges for nearly nine years--was under indictment again this week after the U.S. 9th Circuit Court of Appeals revived the case for the fourth time, rejecting arguments that the company’s right to a speedy trial had been violated in the lengthy jurisprudential debate.

Judge Manuel Real, the chief federal jurist in Los Angeles, had three times dismissed the indictment, siding with Sears’ argument that the original prosecutor had badgered witnesses during grand jury proceedings before the indictment was returned against the retailer in 1980.

After the third dismissal, the appeals court ordered Real to re-assign the case to another judge, saying his highly critical statements about the government prosecutor and his repeated dismissals were evidence of “an appearance of his unwillingness to preside in this case.”

Real, calling the reassignment order an assault on the independence of trial judges, appealed the order to the U.S. Supreme Court and gave up the case to Judge A. Andrew Hauk only after the high court refused to take the case.

Hauk responded by dismissing the indictment yet again during the first hearing he set and by imposing monetary sanctions on the prosecution, which he later reversed.

“This is the fourth time around now. How many warnings do you want?” Hauk asked Justice Department lawyers.

Fourth Appeal Filed

The government appealed for a fourth time, and with Thursday’s order, prevailed yet again.

Judge Betty B. Fletcher, writing for a three-member panel of the court, said government lawyers did not “unnecessarily delay” or violate the Speedy Trial Act when, faced with Real’s refusal to reassign the case and being uncertain how to proceed, they failed to take official action to schedule the case for trial.

“Judge Hauk recognized that the government had contacted the district court twice in order to encourage the court to (officially accept the appeals court’s reversal of the dismissal),” the court said. “Thus, Judge Hauk at most implicitly found that the government had been negligent in adopting a rather cautious approach in its efforts to persuade the court. . . .”

The indictment, which involves events that occurred as long as 21 years ago, accuses Sears of concealing more than $1.1 million in rebates and credits that it had privately arranged with suppliers in Japan in order to avoid certain duties imposed by U.S. authorities on merchandise sold in this country for prices below those charged in their home market.