## Facts

- Donoghue and two others were indicted in Kenton County, Kentucky for the common-law offense of criminal conspiracy.
- The indictment alleged an agreement to operate a small-sum lending business targeting poor wage earners with excessive, usurious interest and to prevent borrowers from recovering illegal interest paid.
- The alleged business operated as “Boone Loan Company,” making hundreds of loans typically ranging from $5 to $50 at approximately 240% to 360% annual interest.
- As part of the alleged scheme, the conspirators purportedly used unlawful means, including filing false ownership certificates, failing to file required true ownership disclosures, and operating as or for a foreign corporation without required state filings.
- Donoghue demurred, arguing the indictment did not state a public offense; the trial court sustained the demurrer and dismissed the indictment.
- The Commonwealth appealed from the dismissal.

## Issues

1. Whether Kentucky recognizes the common-law crime of conspiracy through reception of the English common law, and whether that crime is broad enough to reach the scheme alleged.
2. Whether the indictment sufficiently alleged a public offense of criminal conspiracy rather than merely civil usury or statutory regulatory violations.

## Decision

- The Kentucky Court of Appeals reversed the order sustaining the demurrer.
- The court held that Kentucky law includes the common-law offense of criminal conspiracy through reception of the English common law, unless modified by statute or inconsistent with state policy.
- The court concluded the indictment alleged a public offense: a coordinated, ongoing scheme injurious to the public and carried out by unlawful means.
- The case was remanded for further proceedings on the indictment (with two judges noted as dissenting).

## Legal Principles

- English common-law principles of general application, as received by Kentucky, remain enforceable—including common-law crimes—unless altered by constitution or statute or inconsistent with state public policy.
- Criminal conspiracy at common law includes an agreement by two or more persons to accomplish an unlawful object, or a lawful object by unlawful means, particularly when the combination tends to harm the public or contravene public policy.
- An indictment sufficiently charges conspiracy when it alleges (1) an agreement among participants, (2) an unlawful objective (or lawful objective pursued unlawfully), and (3) unlawful means or acts evidencing implementation, such that the conduct is framed as a public wrong rather than isolated private transactions.

## Conclusion

The court reinstated the indictment, holding that Kentucky’s received common law recognizes criminal conspiracy and that allegations of a systematic usurious lending enterprise coupled with fraudulent filings and regulatory evasion stated a prosecutable public offense.


Commonwealth v. Donoghue, 63 S.W.2d 3 (Ky. Ct. App. 1933)