Opinion
Case No. 2:17–cr–37–RJS–PMW
2017-07-21
UNITED STATES of America, Plaintiff, v. Claude R. KOERBER, Defendant.
Stewart C. Walz, Aaron B. Clark, Ruth J. Hackford–Peer, Ryan D. Tenney, Tyler L. Murray, US Attorney's Office, Salt Lake City, UT, for Plaintiff. Gregory G. Skordas, Rebecca H. Skordas, Skordas & Hyde, Marcus R. Mumford, Mumford PC, Salt Lake City, UT, for Defendant.
Stewart C. Walz, Aaron B. Clark, Ruth J. Hackford–Peer, Ryan D. Tenney, Tyler L. Murray, US Attorney's Office, Salt Lake City, UT, for Plaintiff.
Gregory G. Skordas, Rebecca H. Skordas, Skordas & Hyde, Marcus R. Mumford, Mumford PC, Salt Lake City, UT, for Defendant.
ORDER
ROBERT J. SHELBY, United States District Judge
Before the court are several pretrial motions filed by Defendant Claude Koerber, including a Motion to Dismiss the Indictment as Time–Barred, a Motion to Dismiss the Indictment as Impermissibly Broadened, a Motion to Dismiss the Indictment for Due Process Violations, a Motion to Dismiss the Indictment for Speedy Trial Act Violations, and a Motion to Suppress. The court will address each in turn.
Dkt. 73.
Dkt. 84.
Dkt. 75.
Dkt. 90.
Dkt. 89.
I. Motion to Dismiss the Indictment as Time Barred
Koerber first asks the court to dismiss the Indictment as time barred. By the time the current Indictment was returned, following dismissal of the 2011 Superseding Indictment without prejudice in the previous case, Koerber I , the statute of limitations had run on all charges. Thus, in bringing the new, otherwise-time-barred Indictment, the United States must rely on 18 U.S.C. § 3288, which allows a new indictment to be returned following the dismissal without prejudice of a previous indictment, even if otherwise time barred.
But the statute imposes a time limit: six months, or "in the event of an appeal, within 60 days of the date the dismissal of the indictment ... becomes final." This Motion turns on the interpretation of this provision. Specifically, it requires the court to decide whether the sixty-day or six-month term applies, and when the clock starts ticking.
The relevant dates are as follows: The 2011 Superseding Indictment was dismissed with prejudice in August 2014. The Tenth Circuit, in February 2016, reversed the with-prejudice determination and remanded on that point. In August 2016, Judge Parrish dismissed the 2011 Superseding Indictment without prejudice. The present Indictment was returned in January 2017.
Given these dates, Section 3288 tolled the statutes of limitations for the charges in the current Indictment only if the 6–month reindictment period applied, and only if the clock started ticking when Judge Parrish made the without-prejudice determination on remand (and not before). This is the United States' position. Koerber, by contrast, argues that the sixty-day term applies, that the clock started ticking when the Tenth Circuit reversed and remanded, and that even if the clock started, as the United States contends, with Judge Parrish's dismissal order, the charges in the indictment are still untimely under the sixty-day term. The court will first address whether the six-month or sixty-day provision applies, and will then determine when the clock starts.
A. Whether the Sixty–Day or Six–Month Provision Applies
The initial question is whether the sixty-day or six-month term applies to this case. The language of the statute is not entirely clear on this point. It states:
Whenever an indictment or information charging a felony is dismissed for any reason after the period prescribed by the applicable statute of limitations has expired, a new indictment may be returned in the appropriate jurisdiction within six calendar months of the date of the dismissal of the indictment or information, or, in the event of an appeal, within 60 days of the date the dismissal of the indictment or information becomes final, or, if no regular grand jury is in session in the appropriate jurisdiction when the indictment or information is dismissed, within six calendar months of the date when the next regular grand jury is convened, which new indictment shall not be barred by any statute of limitations.
While it might initially seem clear when the sixty-day term applies—"in the event of an appeal"—it turns out in practice that guidance is not entirely conclusive. Does it matter, for example, whether the initial dismissal occurred in the district court or on appeal? If the dismissal occurred in the district court, does it matter whether the dismissal itself or only the prejudice determination is appealed? Which term applies when the appellate court affirms dismissal (or dismisses in the first instance) but remands for a prejudice determination?The confusion surrounding the application of this term is evidenced by the cases cited in the parties' briefing, most of which reach competing conclusions on the term's proper application, and all of which the United States and Koerber both read as supporting their own interpretations of the statute. The Southern District of California, for example, decided that where a district court declined to dismiss for a Speedy Trial Act violation, and the appeals court reversed and remanded for a prejudice determination, the sixty-day provision applied because the court of appeals (not the district court) dismissed the indictment in the first instance. The Northern District of New York determined that where an appellate court vacated a jury verdict based on intervening law, and the United States then filed a superseding indictment within six months but beyond sixty days, the superseding indictment was timely because the sixty-day provision, according to the court, applied only where the district court dismisses an indictment, an appeal follows, and the dismissal becomes final outside Section 3288's six-month window. Not only do these cases—which the parties contend are the most on-point authority available —not address the procedural posture here, they don't agree on a rule governing the application of Section 3288's sixty-day provision more generally, and are thus not particularly helpful.
See United States v. Spanier , No. 16-CR-1545-BEN, 2016 WL 5870005, at *4 (S.D. Cal. Oct. 6, 2016).
See United States v. Bruno , No. 1:09-CR-29 (GLS), 2012 WL 12887067, at *4 (N.D.N.Y. Dec. 11, 2012).
The parties also contend the Ninth Circuit's decision in United States v. Shipsey , 363 F.3d 962 (9th Cir. 2004) is informative. Shipsey addressed a different amendment to § 3288, concluding that because Congress amended § 3288 to apply when an indictment is "dismissed for any reason" (in place of the previous language, which triggered the statute only when an indictment was "deficient or insufficient"), the statute applied to toll the statute of limitations even when the indictment was dismissed on speedy trial grounds. Here, neither party contends § 3288 does not apply, so Shipsey is not particularly informative.
In short, the text of Section 3288 is not clear on when the sixty-day provision should be applied, nor have courts interpreting the provision reached any consensus. What is clear, however, is the reason Congress added the sixty-day provision, and in the face of textual ambiguity, such legislative intent is relevant to deciphering a provision's meaning. The statute previously contained only the six-month provision, which meant the government, after an indictment was dismissed without prejudice, had to choose between appealing the dismissal (which would almost certainly take more than six months) or accepting the decision and bringing a new indictment within six months. Congress added the sixty-day provision to "make clear that the government need not face the unreasonable choice whether to pursue an appeal or accept the lower court's decision and commence a reprosecution." In other words, it was added so "the government can appeal ... and if unsuccessful, still have time in which to bring a new prosecution."
See Woods v. Standard Ins. Co. , 771 F.3d 1257, 1265 (10th Cir. 2014) ("If the statute's plain language is ambiguous as to Congressional intent, we look to the legislative history and the underlying public policy of the statute.").
134 Cong. Rec. S17360–02, 134 Cong. Rec. S17360–02, S17360, 1988 WL 182529.
Id.
Thus, according to Congress, the provision is relevant only to the situation where the government is in a position to choose between appealing or bringing a new indictment, which is to say, only when the indictment was dismissed by the district court without prejudice. And it is needed only when the government, after an appeal, is positioned to commence a reprosecution—meaning the appellate court affirmed the district court's dismissal without prejudice. Taken together, these premises lead to the conclusion that the sixty-day provision applies only when a district court dismisses an indictment without prejudice, the decision is then appealed, and the appellate court subsequently affirms the dismissal without prejudice. In any other situation, the six-month provision applies.
If it were dismissed with prejudice, the United States would have no ability to bring a new indictment. If the indictment were not dismissed to begin with, the United States would have no need to bring a new indictment.
The other alternatives—reversing the without-prejudice determination or reversing—would not leave the United States in a position to bring new indictment. If the without-prejudice determination were reversed, the United States would have no ability to bring a new indictment. If the dismissal itself were reversed, it would have no need, for the previous indictment would still be pending.
This case does not fit that mold. Here, the district court dismissed with prejudice, meaning the United States' only option was to appeal or accept the decision—it was not "face[d with] the unreasonable choice whether to pursue an appeal or accept the lower court's decision and commence a reprosecution." Indeed, at that point, reprosecution was not an option. The Tenth Circuit subsequently reversed the with-prejudice determination and remanded for further proceedings, at which point the question whether the United States could reindict was still unanswered. Then, the district court ruled the dismissal was without prejudice. No appeal followed. Thus, the standard six-month reindictment term applied.
134 Cong. Rec. S17360–02, 134 Cong. Rec. S17360–02, S17360, 1988 WL 182529.
B. When the Clock Starts
Having concluded Section 3288's six-month provision applies, the court addresses when the six-month window started. The statute states the six-month clock starts on "the date of the dismissal of the indictment." The United States contends the 2011 Superseding Indictment was dismissed in Judge Parrish's August 2016 order, so that date should trigger the six-month period.
Koerber, by contrast, contends the dismissal triggering the reindictment clock occurred before Judge Parrish's ruling (in which case, the current Indictment would be time barred). He argues Judge Parrish did not actually dismiss the Indictment, she merely made a prejudice determination, so the trigger point for the § 3288 clock must have occurred sometime earlier. This argument has some surface-level appeal, but quickly falls apart. It implies either that Judge Waddoups's Dismissal Order was the ruling triggering the reindictment clock, or the Tenth Circuit's mandatewas. Koerber does not forcefully argue that Judge Waddoups's ruling started the clock, and for good reason: as discussed above, the United States had no option to seek reindictment at that point, the 2011 Superseding Indictment having been dismissed with prejudice . Rather, Koerber's primary argument is that the Tenth Circuit's mandate affirmed the dismissal, leaving only the prejudice determination to be made on remand, so the mandate should start the clock.
Koerber does not explicitly argue when the clock would start if the six-month provision applies, but instead argues this point in the context of the sixty-day provision. These provisions technically have different statutory triggers: the six-month provision begins on "the date of the dismissal of the indictment," and the sixty-day provision begins on "the date the dismissal of the indictment ... becomes final." But because Koerber's arguments with regard to the sixty-day provision have similar force with regard to the six-month provision, the court addresses those arguments here (rather than assuming Koerber, by not arguing the point, concedes the six-month clock started at Judge Parrish's order, rendering the current Indictment timely).
Putting aside for a moment that the dismissal itself was not appealed (so the Tenth Circuit neither affirmed nor reversed it), starting the clock at the mandate appears to do violence to § 3288. It is true, as Koerber argues, everyone at that point knew the Indictment would be dismissed (just as they knew when Judge Waddoups issued his Order, and only the prejudice determination was appealed). But at that point no prejudice determination had been made. And it makes little sense to start the clock to reindict before a prejudice determination is made because the United States, at that point, does not know whether it will even be permitted to seek reindictment.
The prejudice determination is a necessary precursor to reindictment, so it is properly considered part of the indictment's "dismissal," which starts the § 3288 clock. In other words, the "date of the dismissal of the indictment"—the § 3288 trigger starting the six-month clock—must mean the date on which both a dismissal and a prejudice determination have been made. Were it otherwise, as Koerber suggests, a diligent prosecutor would be required to expend the resources of the United States, the grand jury, the court, and relevant witnesses to obtain a new indictment, just in case the United States ultimately prevailed in arguing dismissal without prejudice. And if the defendant prevailed and obtained dismissal with prejudice, all that time and expense would go to waste. For this reason, the only rational reading of "the date of the dismissal" in § 3288 is the date when both dismissal and a prejudice determination have been made. In this case, that was Judge Parrish's August 2016 Order, which was issued less than six months before the current Indictment was returned.
What's more, this assumes the court issues an opinion within the six-month window. If the court, for example, takes the prejudice determination under advisement and ultimately issues an opinion beyond the six-month window, the government would be barred from reprosecution regardless of the court's ultimate prejudice determination. This would effectively penalize the United States for delay attributable to the judiciary—a separate branch of government with no involvement in the decision whether to reindict, and no participation in the process to obtain a new indictment.
In sum, the procedural history of this case does not fit into the 60–day exception Congress drafted into § 3288, so the default six-month term applies. And the triggering point to start the six-month clock was Judge Parrish's order determining the dismissal was without prejudice—the point at which the United States, for the first time since the Indictment was dismissed, actually had the option to seek a new indictment. The current Indictment was returned within six months of Judge Parrish's order, and was therefore timely. Koerber's Motion to Dismiss the Indictment on this basis is denied.
As is his request to enjoin future prosecution on the same allegations.
II. Motion to Dismiss the Indictment as Impermissibly Broadened
Koerber next contends that even if the current Indictment was timely under § 3288, the United States cannot rely on the previous Indictments to toll the statute of limitations because the current 2017 Indictment impermissibly broadened the 2011 Indictment (which, he argues, similarly impermissibly broadened the 2009 Superseding Indictment). He also argues that even if subsequent indictments did not impermissibly broaden previous indictments, the subsequent indictments still cannot rely on previous indictments for tolling because those previous indictments were invalid on due process grounds. Last, he argues the tax evasion counts must be dismissed as time barred because they were not properly pled in prior indictments, so those indictments never tolled the statute of limitations.
A. Whether the Indictments Impermissibly Broadened Previous Indictments
As discussed above, the statute of limitations had run on all charges by the time the 2017 Indictment was returned, so the United States had to rely on tolling for those charges. Similarly, when the 2011 Superseding Indictment was returned, the statute of limitations had run on thirteen of the twenty charges in the preceding Indictment, so the United States had to rely on tolling for those thirteen charges. The United States can rely on a prior indictment to toll charges in a subsequent indictment only if the charges in the subsequent indictment do not "broaden[ ] or substantially amend the charges in the [prior] indictment." Koerber contends that one or more charges in the 2011 Superseding Indictment and 2017 Indictment did broaden or substantially amend charges in preceding indictments, and on that basis the indictments should be dismissed (because the statute of limitations ran on any charges not properly tolled).
United States v. Davis , 953 F.2d 1482, 1491 (10th Cir. 1992).
Determining whether a charge impermissibly broadens or amends a charge in a prior indictment turns on notice to the defendant. The rationale for requiring that an indictment be returned within the statute of limitations is to "appris[e defendants] that they will be called to account for their activities and should prepare a defense," and to do so before "basic facts ... become obscured by the passage of time. Thus, any subsequent amendment of an indictment, even if made after the limitations period has run, does not run afoul of the rationale underlying the statute of limitations so long as the new charges do not materially change how the defendant must defend himself. The Tenth Circuit has framed this principle as requiring that "the allegations and charges contained in the superseding indictment [be] ‘substantially the same’ as those contained in the original indictment," in which case, "sufficient notice is presumed." And "substantially the same," in this context, means "that essentially the same facts were used to charge almost identical offenses."
Id. ("[N]otice is the touchstone in deciding whether a superseding indictment substantially changes the original charges.").
United States v. O'Bryant , 998 F.2d 21, 24 (1st Cir. 1993) ; United States v. Italiano , 894 F.2d 1280, 1282 (11th Cir. 1990).
Davis , 953 F.2d at 1491.
Id.
Thus, whether statutes of limitations for charges in the 2017 Indictment or 2011 Superseding Indictment were properly tolled turns on whether those charges broadened or substantially amended charges in a previous indictment. And that question turns on whether the prior indictments provided Koerber sufficient notice of the charges currently pending against him—that is, whether the subsequent charges were substantially the same as previous charges in that essentially the same facts were used to charge almost identical offenses. With this framework in mind, the court addresses thirteen discrete changes Koerber contends impermissibly broadened the indictments (ten between the 2009 and 2011 Superseding Indictments, and three between the 2011 Superseding Indictment and the 2017 Indictment).
The changes Koerber identifies all pertain to factual allegations, not substantive charges, though the analysis is the same. See Italiano , 894 F.2d at 1282 ("For purposes of the statute of limitations, the ‘charges’ in the superseding indictment are defined not simply by the statute under which the defendant is indicted, but also by the factual allegations that the government relies on to show a violation of the statute.").
i. 2011 Superseding Indictment—Change 1
Change 1 is the following:
Franklin Squires Investments, LLC, and Franklin Squires Companies, LLC, were Utah Limited Liability Companies associated with Defendant KOERBER and Founders Capital, over which the Defendant Koerber exercised almost complete control.
Additions will be denoted with underline. Deletions will be denoted with strikethrough.
Koerber contends he was not previously on notice that he had to defend against being in control of Franklin Squires Investments and Franklin Squires Companies, as opposed to merely being associated with them. But Paragraph 17 of the 2009 Superseding Indictment referred to "the Founders Capital [and] Franklin Squires entities" as "operated by Defendant Koerber." This is essentially the same allegation as "exercising almost complete control." Moreover, as the United States points out, the degree of control Koerber asserted is ultimately immaterial to the fraud charges, which require only Koerber's participation in the fraud with the requisite mens rea.
ii. 2011 Superseding Indictment—Change 2
Change 2 is the following:
Defendant KOERBER accepted money from individuals and companies through Founders Capital, and with the representation that Founders Capital would use the money to make "hard money" or bridge loans to other entities associated with Founders Capital...for the purpose of acquiring real property for use in the ‘Equity Mill.’ The Defendant KOERBER exercised control of these entities as well.
Koerber contends he previously had notice only that he had to defend the acts of himself and Founders Capital, but this change requires him to defend the acts of four other Equity Mill companies, with whom the 2009 Superseding Indictment alleged he was only "associated." He further contends this change affects defenses related to the disclosures he would have had to make to investors, because he would have to disclose that he controlled borrowing entities (in addition to Founders Capital, the lending entity). But Paragraph 16 of the 2009 Superseding Indictment alleged that Koerber "operated the businesses of Founders Capital and related entities," meaning those associated with Founders Capital, like the Equity Mill companies referred to above. Further, Paragraph 14 of that Indictment alleged that "most of the money placed with Founders Capital was not used for real estate purchases and ... a substantial amount of money was diverted to other purposes because Defendant KOERBER almost exclusively controlled the use of the funds placed into Founders Capital," so Koerber was on notice that he had to defend against the charge that money allegedly going to associated Equity Mill companies was under his control. The court concludes this change essentially recites the same facts as were contained in the 2009 Superseding Indictment.
iii. 2011 Superseding Indictment—Change 3
Change 3 is the following:
Defendant KOERBER knew these ads were false and misleading because Franklin Squires never made a profit in 2005, 2006 and 2007 and in fact lost money in those years, that the 1–5% paid on investors' money came from other investors' money as described below, and that the money invested was not safe. The investments placed in Founders Capital were not safe because when Founders Capital stopped making payments to investors in 2007, investors lost approximately $50 million.
Koerber contends he had no notice of this change because the 2009 Superseding Indictment did not list a dollar amount loss and it alleged only that Franklin Squires never made a profit, not that investors actually lost money. The gist of this paragraph, however, is that Franklin Squires's ads falsely portrayed the company as profitable and the investments as safe. While the additional detail of investors losing $50 million provides more evidence the investments were unsafe and the ads misleading, it does not fundamentally alter the nature of the allegations against which Koerber must defend. Nor does the addition that payments stopped, and that they stopped in 2007. Although Koerber contends he was unaware he needed to assert the defense that "investors did indeed receive payments, and even payments in full," he was on notice in the 2009 Superseding Indictment that the government would attempt to prove he was defrauding investors, that he was using investor money for personal purposes, that he was using investor money to pay other investors, that his companies never made a profit, despite ostensibly paying "interest" to investors, and that the entire scheme ended in 2008. Making explicit that Koerber stopped paying investors, and that he did so in 2007, does not materially change the defense Koerber must mount.
iv. 2011 Superseding Indictment—Change 4
Change 4 is the following:
"KOERBER told investors that the investment was risk free or that there was little risk because the investments were backed by real estate. Early in the scheme, promissory notes given by Founders Capital listed the address of property that was to serve as collateral for the money placed in Founders."
Koerber contends this addition requires him to alter his defense because it implies that some promissory notes listed property securing the note and some did not. Paragraph 10 of the 2009 Superseding Indictment, however, put Koerber on notice that the United States intended to argue that he represented to investors that their investments "[a]re usually backed, collateralized or secured by real property." And Paragraph 4 of the 2009 Superseding Indictment put Koerber on notice that he must defend against the charge that in reality, "most of the money placed with Founders Capital was not used for real estate purchases and ... a substantial amount of the money was diverted for other purposes." These are essentially the same allegations as the implication that some promissory notes were backed by real estate and some were not. v. 2011 Superseding Indictment—Change 5
Change 5 is the deletion of Paragraphs 10, 11, and 12 from the 2009 Superseding Indictment, which was motivated by the court's determination that the Indictment relied on privileged material. This deletion was a narrowing, not a broadening of the Indictment.
vi. 2011 Superseding Indictment—Change 6
Change 6 is the following:
"It was further a part of the scheme and artifice to defraud that Defendant KOERBER knew that most of the money placed with Founders Capital was not used for the "Equity Mill" or to fund real estate purchases and knew that a substantial amount of the money was diverted for other purposes because Defendant Koerber almost exclusively controlled the use of funds placed into Founders Capital."
Koerber contends this change exposes him to a conviction on the misuse of funds for the Equity Mill, in addition to misuse of funds for purchase of real estate more generally. Paragraph 5 of the 2009 Superseding Indictment alleges that Koerber's real estate program was "named the ‘Equity Mill,’ " so adding that detail here does not alter how he must defend the charge.
vii. 2011 Superseding Indictment—Change 7
Change 7 is the following:
For example, Defendant Koerber caused the following:
a. Over $850,000 to be spent on restaurants;
b. $800,000 to be loaned to an associate for a restaurant;
c. Over $1,000,000 to be spent on expensive automobiles;
d. Over $5 million to be spent making a movie;
e. Over $975,000 to be loaned to an unprofitable academy; and
f. Over $425,000 to be spent on the minting of coins.
Koerber contends he did not have notice that he needed to gather evidence related to the loan or the coin minting. Paragraphs 13–15 of the 2009 Superseding Indictment gave Koerber notice he had to defend against charges he used investor money for personal purposes, so adding two examples of that use does not substantially change how Koerber must defend himself.
viii. 2011 Superseding Indictment—Change 8
Change 8 adds the following paragraphs:
It was further a part of the scheme and artifice to defraud that despite spending some of the investors' money on the items in the immediately preceding paragraph, and others, ostensibly in order to make money, the Defendant KOERBER did not inform investors that the nature of their "investment" had changed until after the money was spent.
It was further a part of the scheme and artifice to defraud that the Defendant KOERBER also spent some of the investor's money under his control on personal expenses including the adoption of his children and having his teeth fixed.
Koerber contends this change has the same notice implications as the previous change, and that it additionally requires him to defend against the charge that he did not inform investors he had used money for personal purposes. These allegations, however, are merely "a slightly different mix of closely related" allegations and violations previously asserted and do not change the essential nature of the United States' theory.
Davis , 953 F.2d at 1491.
ix. 2011 Superseding Indictment—Change 9
Change 9 is the following:
It was further part of the scheme and artifice to defraud that despite the fact that neither Founders Capital nor Franklin Squires made a profit in 2005, 2006 and 2007, the Defendant KOERBER falsely and fraudulently stated in an article distributed to investors and potential investors that in 2005, the Franklin Squires Companies did $111 million in revenue and in 2006 theFranklin Squires Companiescompany [Franklin Squires] and the businesses in which Franklin Squires had a substantial interest generated revenues in excess of $500 million.
Koerber contends the original paragraph implies revenues of $111 million in 2005 and $500 million in 2006, but the change implies revenues of $111 million in 2005 and $611 million in 2006. The court disagrees. The plain language of the both the 2011 and 2009 Superseding Indictments states that Koerber represented $111 million in revenue for 2005 and $500 million in 2006.
x. 2011 Superseding Indictment—Change 10
Change 10 adds the following paragraph:
It was further part of the scheme and artifice to defraud that the article touting the profitability of the Defendant KOERBER's companies, the photographs of "his cabin" and his home, and the photographs of the Defendant in an expensive car and with his minted coins were published in the Creative Real Estate Lifestyles Magazine. The Defendant Koerber funded this magazine using some investor's funds, which the Defendant failed to disclose.
The 2009 Superseding Indictment previously stated that Koerber bought expensive cars, showed photographs of his mansion, claimed he owned a cabin, and minted his own gold coins. Koerber contends the above change adds allegations that there was a magazine article depicting these things, that Koerber caused the article to be published, and that he funded the magazine as part of the scheme. But the 2009 Superseding Indictment gave Koerber notice of the character of fraud he would have to defend against (e.g., using investor money for personal gain), and this change represents merely "a slightly different mix of closely related" allegations, not a change to the essential nature of the United States' theory.
Id.
Thus, none of the changes Koerber identifies in the 2011 Superseding Indictment impermissibly broaden or substantially amend the 2009 Superseding Indictment. Koerber contends, however, that even if the 2011 Superseding Indictment did not impermissibly broaden the 2009 Superseding Indictment, the current 2017 Indictment impermissibly broadened the 2011 Superseding Indictment. Koerber points to three changes:
i. 2017 Superseding Indictment—Change 1
Change 1 is the following:
Founders Capital, LLC (Founders Capital) was a Utah Limited Liability Company formed in or around April 2005 and associated with Defendant KOERBER , and over which the Defendant KOERBER exercised almost complete financial control. Founders Capital received
investment monies, sometimes termed as loans, form victims of the scheme and artifice to defraud alleged below.
Koerber contends this change is impermissible for the same reason the first change he identified in the 2011 Superseding Indictment was impermissible: he was not on notice he had to defend against the actions of Founders Capital generally. But, as discussed, paragraph 17 of the 2009 Superseding Indictment referred to "the Founders Capital [and] Franklin Squires entities" as "operated by Defendant Koerber." This is essentially the same allegation as "exercising almost complete control." Moreover, as the United States points out, the degree of control Koerber asserted is ultimately immaterial to the fraud charges, which require only Koerber's participation in the fraud with the requisite mens rea.
ii. 2017 Superseding Indictment—Change 2
Change 2 is the following:
It was further a part of the scheme and artifice to defraud that Defendant KOERBER represented to investors and potential investors that through the "Equity Mill," substantial amounts of money could be made. Defendant KOERBER , until the scheme collapsed, paid varying amounts of interest on the money provided to Founders Capital, but most generally 5% per month to its first line investors.
Koerber contends this change requires him to defend against the new allegation that the scheme collapsed and that the collapse marked the end of interest payments. The 2009 Superseding Indictment put Koerber on notice that he must defend against allegations that his interest payments to investors would be at issue, that investors lost significant amounts of money, and that the scheme ended in 2008. The additional evidentiary detail that the end was a collapse, that investors stopped receiving interest payments at some point, and that point was when the scheme collapsed, does not change the manner in which Koerber must defend himself.
iii. 2017 Superseding Indictment—Change 3
Change 3 is the following:
It was further a part of the scheme and artifice to defraud that Defendant KOERBER used investors' money for purposes not disclosed to many investors and potential investors with Founders Capital, such as for Defendant KOERBER's personal housing, other personal expenses, expensive automobiles, investments into restaurants, and unsecured loans to other businesses and entities.
Koerber contends he was not previously on notice he had to defend against the charge that he lost investor money, as opposed to Founders Capital money not received from investors. The 2009 Superseding Indictment put Koerber on notice he had to defend against charges that investors invested money in Founders Capital, that he used money "invested with Founders Capital" for "purposes other than real estate bridge loans and to fund the purchase of real property," that the "nature of [the investors'] ‘investment’ had changed," that he "spent some of the investors' money under his control on personal expenses," and that "[o]ver $50 million [in] investor funds were used to make Ponzi payments." Koerber was on notice that the United States planned to argue he spent investor money.
In sum, none of the changes Koerber has identified to the 2011 Superseding Indictment or the current 2017 Indictment impermissibly broadened or substantially amended charges or allegations from previous indictments. By the time the statute of limitations had run on all of the pending charges against Koerber, he had notice of what he needed to defend himself. The court declines to dismiss the current Indictment or strike any of its allegations.
B. Whether Previous Indictments Were Invalid on Due Process Grounds
Koerber next contends that even if none of the indictments impermissibly broadened previous indictments, one or more of the indictments was invalid on due process grounds, and were therefore not validly pending and could not toll the statutes of limitations. This argument relies on findings and conclusions by Judge Waddoups in Koerber I , and, specifically, on his conclusion that a due process violation had occurred under United States v. Ballivian . The court fully addresses this argument in Section III below, and based on that analysis declines to conclude that one or more indictments were invalid on due process grounds.
819 F.2d 266, 267 (11th Cir. 1987).
C. Whether the Tax Evasion Charges Are Time Barred
Koerber's final argument is that the tax evasion charges are time barred because they have consistently been improperly pled, and those charges in the previous indictments therefore did not toll the statutes of limitations. This argument turns on whether the indictments properly allege an affirmative act of evasion, which is a material element of tax evasion. And specifically, it turns on whether failing to file a return, coupled with "causing various business entities under the control of the Defendant Koerber to pay personal expenses on his behalf," sufficiently alleges an affirmative act of evasion.
The court notes that for eight years Koerber declined to challenge the sufficiency of this pleading, and raises it only now, after the statute of limitations has run. It is true, as Koerber points out, that "[t]he failure of an indictment to state an offense is a fatal defect that may be raised at any time." United States v. Bullock , 914 F.2d 1413, 1414 (10th Cir. 1990). The court questions, however, whether a defendant may raise for the first time the sufficiency of a pleading only after the statute of limitations has run, and then argue not only that it was insufficiently pled, but that it is time barred as well. But the court need not address the issue, because the parties did not brief it, and, as discussed below, the Motion can be resolved on other grounds.
Affirmative acts of evasion can "be inferred from conduct such as ... covering up sources of income, handling one's affairs to avoid making the records usual in transactions of the kind, and any conduct, the likely effect of which would be to mislead or conceal." Causing a business entity to pay personal expenses, and not filing a return, constitutes covering up a source of income and is conduct likely to mislead or conceal. Each of the indictments contains this allegation, so these charges were validly pending and tolled the statute of limitations on the tax charges.
Spies v. United States , 317 U.S. 492, 63 S.Ct. 364, 87 L.Ed. 418 (1943).
Because Koerber has not demonstrated that any indictments impermissibly broadened or substantially amended a prior indictment, that a prior indictment was invalid on due process grounds, or that charges were improperly pled, he has not shown any charges are time barred for lack of tolling, and the Motion to Dismiss on this basis is denied.
III. Motion to Dismiss for Due Process Violations
Next is Koerber's Motion to Dismiss for Due Process Violations. In this Motion, Koerber argues the Indictment should be dismissed for various due process violations that occurred in Koerber I . Alternatively, he requests a Kastigar -like hearing in which the United States would be required to prove by a preponderance of the evidence that it is able to proceed to trial without relying on privileged or previously-suppressed evidence. Finally, he asks that United States attorneys and staff previously exposed to his privileged information be disqualified from the case.
A. Due Process Violations in Koerber I
The court first addresses Koerber's argument that the Indictment should be dismissed on due process grounds. Koerber argues that under an Eleventh Circuit case, United States v. Ballivian , an indictment may be dismissed if the defendant can show "government misconduct" in conjunction with actual prejudice, a substantial threat of actual prejudice, or a pattern of widespread and continuous misconduct. Koerber provides seven grounds on which he contends his due process rights were violated: (1) the 2009 interviews; (2) violations of the attorney-client privilege; (3) grand jury abuse; (4) pretrial delay; (5) discovery abuses; (6) conscience-shocking government conduct; and (7) general violations that warrant invocation of the court's inherent supervisory power. The court will address each in turn.
819 F.2d 266, 267 (11th Cir. 1987).
Koerber first contends the United States' conduct in connection with the 2009 interviews warrants dismissal because Judge Waddoups previously concluded that conduct constituted a due process violation. He further contends Judge Waddoups's remedy of suppression was not sufficient, and because he suffered prejudice, dismissal under Ballivian and related cases is appropriate. Koerber filed this Motion before the court's June 30 ruling in which it determined Judge Waddoups's legal conclusions related to the suppression issue had no preclusive effect in this case, and in which it declined to follow his conclusions that the United States had engaged in misconduct, that the misconduct constituted a Fifth Amendment violation, and that suppression was warranted. Because Koerber's present argument seeking dismissal based on the 2009 interviews seemingly hinges on these conclusions by Judge Waddoups, and because the arguments were presented before the court announced those conclusions were not binding in this case, the court denies this portion of Koerber's Motion without prejudice to Koerber reasserting these arguments in a separate motion if he determines there is reason, apart from Judge Waddoups's legal conclusions, to do so.
Koerber's next argument is that intrusions into his attorney client privilege in Koerber I constituted a due process violation, and because he was prejudiced, dismissal of the indictment is appropriate. Here, Koerber relies on Shillinger v. Haworth , where the Tenth Circuit held that a prosecutor's intentional intrusion into the attorney-client relationship in most cases constitutes a per se violation of the Sixth Amendment. But Koerber doesn't allege a Sixth Amendment violation; rather, he contends his "rights under the Due Process Clause have been violated by prosecutorial misconduct occurring prior to indictment." The "prosecutorial misconduct" alleged here is the United States' 2009 interviews and their alleged use of privileged information.As discussed, the court will not adopt Judge Waddoups's ruling that the 2009 interviews violated Koerber's constitutional rights, and Koerber has not otherwise shown in this briefing that they do. As to the "To Our Lenders" letter that was relied on in the 2009 Indictments, and was later deemed privileged, Koerber has not shown how the United States' previous reliance on that letter (before it was deemed privileged) constituted a Fifth or Sixth Amendment violation. After the letter was deemed privileged, the United States brought the 2011 Superseding Indictment and removed charges and allegations related to the letter. Judge Waddoups determined, after reviewing the grand jury transcripts, that the privileged letter had nothing to do with the 2011 Superseding Indictment, and Koerber has given this court no reason to revisit that conclusion. Rather, Koerber's argument seems to be that the residual taint from the letter continues to infect the case because it became a roadmap to the subsequent investigation and prosecution.
70 F.3d 1132, 1142 (10th Cir. 1995).
See Dkt. 75 at 23 (quoting United States v. Kennedy , 225 F.3d 1187, 1194 (10th Cir. 2000) ).
Dkt. 237 at 2.
Even assuming Koerber is prejudiced by the United States' past exposure to the "To Our Lenders" letter, it does not appear to the court that the United States engaged in any misconduct related to the letter. Koerber produced the letter to the United States, and over two years later, the United States contacted Koerber over a different document he produced that the United States believed may have been privileged, at which point Koerber claimed privilege over a range of documents, including the "To Our Lenders" letter. After some litigation—during which the Magistrate concluded the United States acted "in good faith" —Judge Waddoups determined the letter was privileged, and the United States returned or destroyed copies of the privileged letter (save for three missed copies that were later discovered by the United States and destroyed in May 2017). The United States returned a new indictment that, as discussed, Judge Waddoups concluded in no way relied on the privileged letter.
Koerber I , Dkt. 95, at 5.
Dkt. 165.
Dkt. 237 at 2.
Nothing about this conduct establishes the United States engaged in misconduct related to the letter. Indeed, Judge Waddoups, when he determined the letter to be privileged, concluded there was no "evidence that the government was ... intentionally try[ing] to interfere with [Koerber's] privilege in its interactions with his attorneys and related persons." Because Koerber has not shown the United States engaged in misconduct related to the privileged letter, this is not a basis to dismiss the indictment.
Id. at 1 n.1.
Koerber next contends that the Indictment should be dismissed for "grand jury abuse." Koerber's argument is not entirely clear on this point, but it appears he believes the grand jury that returned the current Indictment must have relied on either suppressed or privileged evidence because the current Indictment is so similar to previous indictments. Koerber has provided no evidence to support these allegations. Indeed, contrary to these allegations, Judge Waddoups reviewed the grand jury proceedings related to the 2011 Superseding Indictment and determined the privileged letter played no role in those proceedings. And as to the 2009 interviews, even if the grand jury had relied on the previously-suppressed interviews (an allegation, again, that is unsupported by any evidence), such reliance is now immaterial because the suppression order is no longer in effect.
Dkt. 237 at 2.
Koerber also contends the Indictment should be dismissed because pretrial delay compromised his due process rights to a fair trial. In so arguing he cites extensively to Judge Waddoups's Dismissal Order, but that order was reversed, and in the subsequent Dismissal Order, Judge Parrish made clear that Koerber was "culpable for much of the delay in this case." Koerber has not shown that any delay attributable solely to the United States compromised his due process right to a fair trial.
Dkt. 500 at 16.
Koerber next argues that the United States' discovery abuses warrant dismissal of the Indictment. He contends the United States purposefully delayed the case to contribute to the staleness of important evidence. As just discussed, the delay findings on which Koerber primarily relies were part of a Dismissal Order that was later reversed, and the subsequent Dismissal Order comes to a different conclusion, pinning much of that delay on Koerber. Even assuming the United States was less-than-careful with some of its discovery decisions in this case, Koerber has not shown this conduct rises to the level warranting dismissal of the Indictment.
Koerber also argues that the United States' conduct "shocks the universal sense of justice," and the Indictment should therefore be dismissed. In so arguing he relies on Judge Waddoups's conclusions that prosecutors "have been strikingly unwilling to conform their own conduct to the Constitution, the applicable ethical standards, rules and statutes." The court, however, has declined to adopt Judge Waddoups's conclusion that the United States violated the Constitution, ethical standards, rules, or statutes. Thus, the United States' failure to own up to these alleged violations does not shock the universal sense of justice.
Koerber II , Dkt. 75 at 33 (citing Koerber I , Dkt. 472 at 15).
Koerber's final argument is that even if the United States' conduct does not rise to the level of a due process violation, it does constitute "reckless disregard," so the court should invoke its supervisory powers to dismiss the Indictment. He contends the United States exhibited reckless disregard because it "violated recognized rights," it "threatened judicial integrity by polluting the administration of justice," and it "must be deterred to prevent future misconduct." As discussed, Koerber has not shown the United States has engaged in misconduct sufficiently serious to warrant dismissing the Indictment, and the court declines to exercise its supervisory powers to do so.
Id. at 36.
B. Kastigar –Type Hearing & Disqualification of Prosecutors
Koerber alternatively requests a "Kastigar -type hearing" where the United States would be required to show it can proceed to trial without relying on previously-suppressed or privileged evidence. Because the court declines to follow the Koerber I Suppression Order, a Kastigar -type hearing on that basis is not necessary. Nor is it necessary with regard to the privileged letter. As discussed, Judge Waddoups already reviewed the grand jury proceedings for the 2011 Superseding Indictment and concluded the privileged letter played no part in that Indictment, and Koerber has provided no reason to question the United States' representation that it is not currently relying on the privileged letter. Finally, for the same reasons Koerber's due process and Kastigar -related requests are denied, the court declines to disqualify the prosecutors on the case.
As discussed, much of this Motion relied on orders previously filed in Koerber I , and specifically, the Koerber I Suppression Order. The court has now ruled it is not bound by and will not follow the Koerber I Suppression Order, but did so after the current Motion was filed. As stated above, to the extent the Motion's arguments do not rely on the Suppression Order or any other Koerber I Order, the Motion is denied. To the extent arguments rely on Koerber I orders, these parts of the Motion are denied without prejudice to Koerber reasserting them if he believes he has a basis to do so independent of reliance on Koerber I findings and conclusions.
IV. Motion to Dismiss for Speedy Trial Act Violations
Koerber also moves to dismiss the Indictment under the Speedy Trial Act. He first contends Judge Parrish impermissibly exceeded the Tenth Circuit's mandate, that she should have dismissed the 2011 Superseding Indictment with prejudice, and that the court should now do so. He next argues that the Speedy Trial Act was violated after remand, but before the current Indictment was returned. Last, he argues the Speedy Trial Act was violated after the current Indictment was returned. The court addresses each argument in turn.
A. Whether Judge Parrish Exceeded the Tenth Circuit's Mandate
Koerber first argues the Indictment should be dismissed with prejudice for Speedy Trial Act violations because Judge Parrish exceeded the Tenth Circuit's mandate on remand. The Tenth Circuit reviewed Judge Waddoups's treatment of the three factors related to a speedy trial prejudice determination and reversed and remanded on two of the factors. On the first factor, the seriousness of the offense, the Tenth Circuit concluded Judge Waddoups did not acknowledge that the seriousness of the offense in this case favored dismissal without prejudice, and he included three impermissible considerations related to this factor. With regard to the second factor, the facts and circumstances that led to dismissal, the Tenth Circuit determined Judge Waddoups correctly concluded and considered that on several occasions the United States did not adequately ensure valid ends-of-justice findings accompanied continuances, that the United States exhibited a "pattern of neglect" with regard to motions it filed, and that it engaged in questionable discovery practices, all of which resulted in a "strong inference of tactical delay." But the Tenth Circuit concluded Judge Waddoups abused his discretion on this factor by not considering Koerber's responsibility for Speedy Trial Act delays. Last, on the third factor, the impact of reprosecution on the administration of the Speedy Trial Act and the administration of justice, the Tenth Circuit concluded Judge Waddoups did not abuse his discretion by "referring back to [his] analysis on the second factor" to determine that the United States engaged in a pattern of neglect and delay, and by concluding that given the resulting prejudice to Koerber, this factor weighed in favor of dismissal with prejudice.
Koerber I , Dkt. 481 at 18–23.
Id. at 26–37.
Id. at 38.
Id. at 41–44.
The Tenth Circuit then "reverse[d] and remand[ed] to the district court for reconsideration in accordance with [its] opinion." It instructed that the district court should first properly consider the seriousness-of-the-offense factor (meaning "weigh that factor in favor of dismissing without prejudice"), and that it should "include Koerber's role in the delay, if any, in its evaluation of the second factor." The Tenth Circuit suggested the court "need not reevaluate (but should still include) the other facts and circumstances upon which it relied to dismiss Koerber's case with prejudice."
Id. at 45.
Id.
Id.
On remand, Judge Parrish reevaluated the factors and concluded: (1) as directed by the Tenth Circuit, the seriousness-of-the-offense prong weighed heavily in favor of dismissal without prejudice; (2) the circumstances-leading-to-dismissal prong was a draw after Judge Parrish found that in addition to the United States' delay in Koerber I , Koerber was actually responsible for much of the delay; and (3) the reprosecution prong—which had previously turned on prejudice caused by the United States' delay—was somewhat mitigated on remand given the new findings that Koerber was responsible for much of the delay, and now weighed only "modestly" in favor of dismissal with prejudice. Thus, comparing the weight of the three factors—(1) heavily in favor of dismissal without prejudice, (2) draw, and (3) modestly in favor of dismissal with prejudice—Judge Parrish concluded the Indictment would be dismissed without prejudice.
Koerber contends that Judge Parrish misinterpreted the Tenth Circuit's mandate by both doing too much and doing too little. He argues Judge Parrish (1) improperly reevaluated the third impact-of-reprosecution prong when the Tenth Circuit found no abuse of discretion on that prong, and (2) failed to explicitly include in its analysis all of the "other facts and circumstances" Judge Waddoups originally relied on.
On the first point, Koerber argues the Tenth Circuit affirmed on the third impact-of-reprosecution prong, but Judge Parrish reevaluated that prong anyway. The Tenth Circuit, however, merely concluded that "the district court did not slight or ignore this factor," and instructed, as discussed, that the court "need not reevaluate (but should still include) the other facts and circumstances upon which it relied to dismiss Koerber's case with prejudice." Judge Parrish did just that. She recognized the Tenth Circuit affirmed on this factor and for that reason included Judge Waddoups's analysis of the factor in her consideration: "This court has previously determined that this factor weighs in favor of dismissal with prejudice. That determination was upheld by the Tenth Circuit. Accordingly, this court's earlier analysis is still applicable and will not be repeated here."
Dkt. 481 at 45.
Dkt. 500 at 16.
She then recognized, however, that the court's earlier analysis—and the Tenth Circuit opinion affirming it—was based heavily on findings it made in "its analysis of the second factor," including its determination that the Speedy Trial Act violation was a result of the United States' intentional delay and that Koerber was prejudiced by it. The Tenth Circuit, however, instructed Judge Parrish on remand to "include Koerber's role in the delay, if any, in its evaluation of the second factor." Because Judge Parrish concluded in the second factor that Koerber contributed significantly to the delay, and because Judge Waddoups's consideration of the third factor had been premised on his determination that the United States was solely responsible for delay (a determination, as discussed, that was reversed), it was entirely proper for Judge Parrish to reevaluate that factor in light of her new findings that in fact Koerber contributed to delay as well. Indeed, it would arguably have been error not to consider the effect of that change. Regardless, the Tenth Circuit did not cabin Judge Parrish's discretion in this regard, and "unless the district court's discretion is specifically cabined, it may ... exercise discretion in determining the appropriate scope" of remand. Judge Parrish's decision to reevaluate the third impact-of-reprosecution prong was not an abuse of discretion.
Id. ; see also Dkt. 481 at 41 n.27 ("In considering this factor, the district court also referred back to its analysis of the second factor, including its tactical-delay finding and the other instances of the government's unacceptable conduct in prosecuting Koerber.").
Dkt. 481 at 45.
Koerber's other argument is that Judge Parrish did not explicitly recite all the findings Judge Waddoups made. He contends she did not detail the "specific government failures" justifying dismissal (and instead referred "only generally" to a "pattern of neglect"), she failed to reference "[t]he government's tactical delay and discovery practices that amounted to more than a year of unjustified delay," and she neglected to note the "[g]overnment's illegitimate appeal" and its bad faith.
Dkt. 90 at 5–6.
The Tenth Circuit did not mandate that Judge Parrish recite all of Judge Waddoups's prior findings; it stated she "need not reevaluate (but should still include) the other facts and circumstances upon which [Judge Waddoups] relied to dismiss Koerber's case with prejudice." This is exactly what Judge Parrish did. She first recognized that "the Tenth Circuit instructed this court on remand to ‘weigh [the first] factor in favor of dismissing without prejudice,’ " and consequently did so. She then recognized with regard to the second factor that:
Dkt. 481 at 45.
Dkt. 500 at 14.
[t]his court already concluded that the United States exhibited a "pattern of neglect" and that its failure "contributed to the speedy trial delay." Similarly, the district court concluded that deficiencies in orders prepared by the United States and approved by the court were "symptomatic of the Government's pattern of neglect and dilatory conduct in managing the Speedy Trial Act clock in this case." The district court concluded that the Government's conduct raised a "strong inference of tactical delay in its prosecution of this case.
Id.
Then, as instructed, Judge Parrish weighed these findings against her own findings that Koerber also caused much of the delay, and concluded the second factor was therefore a draw. Last, as to the third factor, she recognized that "[t]his court has previously determined that this factor weighs in favor of dismissal with prejudice. That determination was upheld by the Tenth Circuit. Accordingly, the court's earlier analysis is still applicable and will not be repeated here." She then included her new finding that Koerber contributed some to delay, and determined, after considering Judge Waddoups's findings related to this factor, that the new delay findings "somewhat mitigated" the previous determination that the third factor weighed strongly in favor of dismissal with prejudice. This analysis in no way exceeded the Tenth Circuit's mandate.
Id. at 16.
Id.
B. The Post–Remand, Pre–Indictment Speedy Trial Violation
Koerber next argues the Speedy Trial Act was violated after the Tenth Circuit remanded the case but before the current Indictment was returned. This argument relates back to Koerber's Motion to Dismiss as Time Barred, which the court denied above in Section I. In that Motion, Koerber argued the dismissal of the 2011 Superseding Indictment became final on appeal, and on that basis the 60–day period in the 18 U.S.C. § 3288 tolling statute applied (which would render the current Indictment untimely). Here, Koerber argues alternatively that if the dismissal did not become final on appeal, then a new 70–day Speedy Trial Act clock started on the date the mandate was returned, and was thereafter violated.
Dkt. 90 at 7.
This ignores that at that time there was no pending Indictment on which the clock could run. Indeed, Koerber did not press for a speedy trial during that time, and even if he had done so, it was not yet clear at that point whether the United States would be allowed to continue its prosecution, the with-prejudice determination having not yet been made. And even if the clock had restarted and run out, Koerber's remedy would be dismissal—which is what happened anyway. The court will not dismiss based on a post-remand, pre-Indictment speedy trial violation.
C. The Post–Indictment Speedy Trial Violation
Koerber next argues that the speedy trial clock has run on the current Indictment. The Indictment was returned January 18, 2017, and Koerber made his initial appearance on February 16 (the parties dispute which of these two events started the speedy trial clock). Koerber filed a Motion to Compel on March 14 (the parties dispute whether this Motion tolled the Speedy Trial clock). Judge Benson held a status conference that same day, the United States filed a Motion to Continue the trial two days later, and Judge Warner granted the Motion the following month, on April 12 (the parties dispute on which of these dates the trial was actually continued). In arguing the Speedy Trial clock has run, Koerber contends: (1) the clock began when the Indictment was returned, not, as is typically the case, when he made his first appearance; (2) his Motion to Compel did not toll the speedy trial clock because the court ultimately denied the Motion without prejudice; and (3) Judge Benson continued the trial at the March hearing (albeit without the proper ends-of-justice findings), and Judge Warner's subsequent Order continuing the trial and his attendant ends-of-justice findings were merely improper retroactive findings that do not suffice to toll the clock.
The court is not persuaded that Koerber is correct that the clock begins when the Indictment was returned, rather than when he first appeared, but it declines to decide the issue at this time because the court's resolution of the other two issues renders the question moot. That is, because the court concludes Koerber is mistaken about his other two points, even if the clock did start when the Indictment was returned, the clock has not run out. The court will address these other two arguments in turn.
Koerber's first argument is that his Motion to Compel—which the United States relies on to toll the speedy trial clock from March 14 through April 14—did not actually toll any time because the court denied the motion without prejudice and without reaching the merits. In his opening brief, Koerber cited no case law in support of this argument. Indeed, he did not even explicitly argue that the Motion to Compel did not toll the Speedy Trial Clock, but merely noted that the court's denial "compounded the Speedy Trial Act problem." Perhaps for this reason, the United States never responded to this argument in its opposition. Only in his reply did Koerber explicitly make the argument that "the motion to compel discovery did not toll the STA clock," at that point spending nearly four pages arguing the issue.
Id. at 9.
Dkt. 108 at 7–10.
Nonetheless, the court has reviewed the case law Koerber cited in his reply, and concludes his position is unsupported. None of the case law Koerber cites stands for the proposition that motions that are ultimately denied without prejudice and without reaching the merits do not toll the Speedy Trial Clock. This case is not, as Koerber contends, like United States v. Mentz , where the Sixth Circuit determined that a Rule 16 Motion for Discovery did not toll the speedy trial clock because the Motion was irrelevant (as discovery proceeded automatically, without need for a motion), and the court never took the motion under advisement, nor did it ever rule on the motion.
See United States v. Mentz , 840 F.2d 315, 327–29 (6th Cir. 1988).
Koerber's Motion asked the court to compel production of discovery the United States previously refused to produce (unlike Mentz , where the defendant "did not need to file a formal motion seeking discovery from the government"). The Motion was fully briefed, and the court took it under advisement and ultimately ruled on it (again, unlike Mentz ). And the reason the ruling was a denial without prejudice to Koerber refiling his Motion was that earlier that day, Koerber had, for the first time since the new Indictment was returned, accepted appointed counsel. For months Koerber asserted his right to proceed pro se, notwithstanding invitations from the court to appoint counsel. When he changed course and decided to accept appointment of an attorney, the court provided him an opportunity to refile his pro se motions (or file updated motions) "if [he] wish[ed] to do so after consulting with recently appointed counsel." Koerber has cited no authority for the proposition that such a denial retroactively renders a motion unable to toll the speedy trial clock while it is pending, nor has the court found any.
Id. at 328.
Dkt. 60.
See Dkt. 58.
Dkt. 60.
Koerber's next argument is related to the continuance of the trial, and whether that continuance properly tolled the speedy trial clock. Both parties agree the trial was continued from April 24 to August 7. Koerber contends Judge Benson continued the trial during his March 14 status conference, and not until Judge Warner's April 14 Order were proper tolling-related ends-of-justice findings made, rendering the tolling retroactive and therefore invalid. The United States, by contrast, contends that Judge Benson did not continue the trial, and that the continuance occurred later in Judge Warner's April 14 Order concurrently with the ends-of-justice findings.
The trial has since been continued another two weeks, to August 21, on Koerber's request.
Any doubt on this point can be put to rest by reviewing the transcript of Judge Benson's hearing, which makes clear that he did not continue the trial. In relevant part, he stated:
• "I think for right now we better leave the trial date ... [at] April 24th."
• "I'm going to keep the trial date where it is."
• "I don't think we have accomplished much today. I have learned a bit more about your positions. ... If I knew this case better I would feel more confident just to set a trial date and tell you both to work toward it in good faith .... I'm not quite to the point where I feel comfortable doing that today."
• "[I]t looks like it is going to be in the fall. That would be my crystal ball guess, the fall or maybe even late in the year."
• "We'll say we're going to set it tentatively for the first full week of August, which begins on August 7th."
Dkt. 132 at 24.
Id.
Id. at 26
Id. at 29.
Id. at 31.
In the minute entry for the hearing, Judge Benson wrote, "Govt will file a motion to continue the jury trial set for April 24, 2017 at 8:30 p.m." And two days later, the United States did just that. On April 11, Judge Warner held a hearing at which he represented that the "[c]urrent trial date is the 24th of this month, which by any stretch of the imagination is just a little bit too quick, so we're going to have to continue that trial." He later stated that "the Government's motion to continue is granted" and made preliminary ends-of-justice findings. The following day he issued an order making ends-of-justice findings and formally granting the United States' Motion to Continue the trial until August 7.
Dkt. 23.
Dkt. 26.
Dkt. 61 at 22.
Id. at 38.
Dkt. 52.
At no point did Koerber object that in fact the case had already been continued, and that the ends-of-justice findings would be untimely. Indeed, in a pro se motion filed after Judge Benson's hearing but before Judge Warner's, Koerber conceded Judge Benson's August 7 trial date was "tentative." And in a recently-filed motion to further continue the trial, Koerber's current counsel argued that "up through April, Mr. Koerber was relying upon Judge Benson's statement that the August 7 trial date was ‘tentative’ and that he would be allowed more time to prepare for trial if necessary. Mr. Koerber was entitled to make decisions and priorities based upon that promise. ... [T]he court, following Judge Benson's recusal, made clear it intended to keep August 7 as a firm trial date ...." Thus, seemingly nobody (including Koerber and his counsel) ever viewed Judge Benson's discussion about timing as actually continuing the trial date—except, apparently, in the context of this Motion.
Dkt. 31.
Dkt. 117.
The court concludes the speedy trial clock has not run following the new Indictment. Even crediting Koerber's argument that the clock started when the Indictment was returned on January 18, 2017, the time between Indictment and a March 1 Stipulated Motion for Protective Order (subtracting one day for Koerber's arraignment, 18 U.S.C. § 3161(h)(1) ), was 40 days. The March 1 Motion was resolved the same day, the United States filed a Motion on March 2, and that Motion was resolved March 3, after which nothing happened until Koerber filed his Motion to Compel on March 14, at which point 50 days had run. That Motion was denied without prejudice on April 14, and on the same day, Judge Warner entered his Order continuing the trial until August 7 and excluding time from April 24 (the previous trial date) through August 7. Thus, 10 more days ran between April 14 and April 24, meaning 60 days have run off the 70–day speedy trial clock. Koerber's Motion to Dismiss on this basis is denied.
Koerber's final argument is that Judge Parrish improperly concluded that his Sixth Amendment speedy trial rights were not violated in Koerber I based on alleged tactical delay and prejudice he suffered. Unlike the other orders in Koerber I , Judge Parrish's Order dismissing the 2011 Superseding Indictment with prejudice was a final order that was essential to the judgment, so it is likely binding on this court. Nonetheless, the court notes that even if it could (and were inclined) to revisit the decision, it would similarly reject Koerber's Sixth Amendment argument.
Dkt. 90 at 9.
See Bobby v. Bies , 556 U.S 825, 834, 129 S.Ct. 2145, 173 L.Ed.2d 1173 (2009).
Whether a defendant's Sixth Amendment speedy trial rights have been violated turns on (1) the length of the delay, (2) the reasons for the delay, (3) the defendant's assertion of his right, and (4) prejudice to the defendant. Koerber's argument on this point is one paragraph long and does not mention, much less address these factors. But in the interest of completeness, the court will review them.
See Barker v. Wingo , 407 U.S. 514, 530, 92 S.Ct. 2182, 33 L.Ed.2d 101 (1972).
On the first factor, the length of delay in Koerber I was fairly long, and weighs in favor of finding a violation. As to the reasons for delay, Judge Parrish found, and this court agrees, that Koerber was responsible for much of the delay in Koerber I , so the factor is at best a draw. On the third factor, while there was undoubtedly delay in Koerber I , Judge Parrish found, and this court agrees, that Koerber delayed asserting his right to a speedy trial and consistently resisted any attempt to set a trial date, which means this factor weighs against him. Last, as Judge Parrish found, while Koerber suffered some prejudice in Koerber I , much of the prejudice was his own making, so this factor weighs only modestly in favor of dismissing. As Judge Parrish concluded, the second factor—which "is entitled to strong evidentiary weight in determining whether the defendant [was] being deprived of the right"—weighs heavily against him, and for that reason the court concludes this factor outweighs the first and third factors. The court therefore declines to dismiss for a Sixth Amendment speedy trial violation.
V. Motion to Suppress
In Koerber's final Motion he moves to suppress all statements obtained from Brad Jacobsen, Michael Isom, Jerel Clerk, and Matson Magleby, as tainted by the United States' alleged intrusion in Koerber's attorney-client relationship. The thrust of this motion is Koerber's allegations that: (1) Jacobsen previously represented Koerber; (2) the United States subsequently interviewed Jacobsen and obtained information Jacobsen gave Koerber regarding formation of Koerber's companies; and (3) that interview interfered with Koerber's attorney-client relationship in violation of the Fifth and Sixth Amendments. Isom, Clerk, and Magleby are not themselves attorneys, and Koerber has not argued an independent attorney-client relationship with any of them. Rather, he contends any interference related to them is derivative of interference in the Koerber–Jacobsen relationship. As such, the threshold question is whether that relationship existed, and whether the United States impermissibly intruded on it.
Koerber does argue that Isom, by virtue of his work with Founders Capital, had access to Koerber's privileged material, so the United States' interview of Isom violated Rule 4.2. Though Koerber does not make this explicit, the implicit argument is that a Rule 4.2 violation can constitute a constitutional violation, and therefore be the basis for suppression. As discussed, the court is not adopting the legal conclusion from Koerber I that a Rule 4.2 violation can constitute a constitutional violation, and Koerber has not argued (aside from reliance on the Koerber I Suppression Order) that the court should so conclude. Thus, any interference related to Isom must derive from the Koerber–Jacobsen relationship.
Koerber contends Jacobsen previously represented Koerber and advised him about formation of two of Koerber's companies, Franklin Squires and Founders Capital. The United States, he argues, knew about this representation, but nonetheless conducted an interview of Isom with Jacobsen present before the first Indictment was returned, which Koerber argues is an interference with the attorney-client relationship in violation of the Fifth Amendment. He further contends that after the Indictment was returned, the United States conducted an interview of Jacobsen, which he argues is an interference with the attorney-client relationship in violation of the Sixth Amendment. Koerber provides no evidence to support these allegations.
The United States does not dispute the interviews occurred, but it contends that Jacobsen never represented Koerber. Indeed, determining whether Jacobsen represented Koerber, the United States argues, was the very reason for interviewing him. The United States provided the interview report of Jacobsen, which represents that Jacobsen met with Koerber in 2002 for "an hour or two," "Jacobsen did not give Koerber any legal advice during the meeting," and ultimately Jacobsen's firm "did not give Jacobsen permission to represent Koerber."
Dkt. 100–4.
The court notes that the United States' evidence strongly suggests Koerber and Jacobsen never had an attorney-client relationship (and Koerber provides no evidence to the contrary), but the court need not resolve this question, and declines to hold an evidentiary hearing to do so, because even assuming Koerber was represented by Jacobsen, he has not made the requisite showing for Fifth or Sixth Amendment suppression.
As to the Sixth Amendment, this protection attaches only after indictment, and is therefore relevant only to the post-Indictment meeting with Jacobsen. That meeting, however, doesn't implicate the Sixth Amendment because notwithstanding the dispute over Koerber's representation in 2002, there is no dispute that Jacobsen did not represent Koerber in 2009 when the United States interviewed Jacobsen, so as a matter of law, "there could have been no invasion of [Koerber's] attorney-client relationship with [Jacobsen] resulting from th[at] interview[ ]."
United States v. Kennedy , 225 F.3d 1187, 1194 (10th Cir. 2000).
Id. A prosecutor's interview with a defendant's former attorney may constitute any number of violations, including, for example, an ethical violation, but it does not constitute a Sixth Amendment violation, which is what Koerber alleged here. See id. (noting although "the Sixth Amendment was not implicated ... the former attorney may have breached his ethical obligation of confidentiality" (citing United States v. Rogers , 751 F.2d 1074, 1077–78 (9th Cir. 1985) )).
As discussed, Sixth Amendment protections attach only upon Indictment, so the United States' pre-indictment interviews of Isom with Jacobsen present do not implicate the Sixth Amendment. But they could implicate the Fifth Amendment, because "[m]isconduct by law enforcement officials in collecting incriminating evidence," even before indictment, "may rise to the level of a due process violation when the misconduct is outrageous enough to shock the conscience of the court."
Id.
But before the court holds an evidentiary hearing to determine whether a due process violation has occurred, Koerber must "demonstrate an issue of fact as to each of the following three elements: (1) the government's objective awareness of an ongoing, personal attorney-client relationship between its [agent] and the defendant; (2) deliberate intrusion into that relationship; and (3) actual and substantial prejudice." Koerber has not raised an issue of fact as to whether his alleged relationship with Jacobsen was "ongoing" when Jacobsen attended the United States' interview of Isom; rather, he stated Jacobsen represented him only in relation to "the earliest formation of Franklin Squires and Founders Capital." Nor has he shown the United States had any "objective awareness" of the relationship when they interacted with Jacobsen. Koerber represented in a previous filing in Koerber I that he told the United States about his relationship with Jacobsen during the 2009 interviews—a year after the United States' preindictment contact with Jacobsen.
Id. at 1195 (quoting United States v. Voigt , 89 F.3d 1050 (3rd Cir. 1996).
Dkt. 89.
Dkt. 100–5.
Nor has he raised a fact issue about prejudice resulting from the preindictment meeting with Isom and Jacobsen. The Tenth Circuit has suggested reviewing this prong requires "examining all of the information [Koerber] alleges the government discovered in violation of his attorney-client relationship." But Koerber, in his papers, doesn't identify any information allegedly discovered; rather, he seeks suppression of "any information the government obtained from Mr. Jacobsen or his client, Mr. Isom, or any fruit derived therefrom," contending the United States "used meetings with Mr. Jacobsen and Mr. Isom to obtain information concerning Mr. Koerber's reliance on the advice of Mr. Jacobsen to create a roadmap for their case." This showing is insufficient to examine what prejudice, if any, Koerber suffered as a result of the interview with Isom.
Kennedy , 225 F.3d at 1196.
Dkt. 89 at 2.
In sum, Koerber has not raised an issue of fact about whether he had an ongoing attorney-client relationship with Jacobsen at the time of the meetings (nor that the United States was aware of one to the extent it existed), and he "has not made the requisite showing of prejudice to warrant an evidentiary hearing." Thus, Koerber has not demonstrated a basis to suppress on Fifth Amendment grounds. Nor, as discussed above, has he provided a basis to suppress on Sixth Amendment grounds. His Motion to Suppress is denied.
Kennedy , 225 F.3d at 1196.
CONCLUSION
For the reasons above, Koerber's Motion to Dismiss the Indictment as Time–Barred, Motion to Dismiss the Indictment as Impermissibly Broadened, Motion to Dismiss the Indictment for Due Process Violations, Motion to Dismiss the Indictment for Speedy Trial Act Violations, and Motion to Suppress are DENIED.
Dkt. 73.
Dkt. 84.
Dkt. 75.
Dkt. 90.
Dkt. 89.
SO ORDERED this 21st day of July, 2017.