Opinion
1:16CR205-2 1:16CR205-3 1:16CR205-4
04-16-2018
UNITED STATES OF AMERICA v. SHANNON MICHELLE DRAKE RONALD KEITH EARNEST ROBERT THOMAS TAYLOR
MEMORANDUM OPINION AND ORDER OSTEEN, JR., District Judge
Defendant Ronald Keith Earnest ("Earnest") has filed three motions which are factually related: Defendant Earnest's Motion to Dismiss the Indictment or in the Alternative Suppress his Grand Jury Testimony and all Statements for Fifth Amendment Violations and Request for Kastigar Hearing, (Doc. 145), Defendant Earnest's Motion to Dismiss the Indictment or in the Alternative Suppress his Grand Jury Testimony and all Statements for Sixth Amendment Violations and Request for Kastigar Hearing, (Doc. 148), and Defendant Earnest's Motion to Dismiss based upon Government Intrusion into the Attorney Client Relationship, (Doc. 151). The Government has responded to these motions. (See Doc. 176 (Sixth Amendment), Doc. 180 (attorney-client intrusion), Doc. 181 (Fifth Amendment).) A hearing was originally held on these and related motions on November 9, 2017 and continued to February 8, 2018. (Tr. of Nov. 9, 2017 Hr'g (Doc. 135) at 1; Tr. of Feb. 8, 2018 Hr'g (Doc. 212) at 1.) Both Earnest and the Government presented evidence at these hearings. This court has considered the affidavit of Ronald Keith Earnest, (see Def. Earnest's Mem. in Supp. of Mot. to Dismiss Based on Intrusion into the Attorney Client Relationship ("Earnest Atty Client Br."), Ex. 2, Aff. of Ronald Keith Earnest (Doc. 152-2)), all relevant evidence and pleadings, and the testimony presented at the hearings. This court incorporates by reference a separate order addressing the existence of an attorney-client relationship between Earnest and Smith Moore Leatherwood, LLP ("Smith Moore"), entered contemporaneously herewith, and all findings and conclusions therein. For the following reasons, this court finds that the motions should be denied.
Although the parties in this case have sealed their motions and supporting briefs, the court does not find it necessary to seal this Memorandum Opinion and Order. Although this court references Grand Jury testimony in passing, said references were addressed in open court at the motions hearing.
I. ANALYSIS
This court will consider arguments relating to the Sixth Amendment first and then take up arguments relating to the Fifth Amendment second.
A. Alleged Sixth Amendment Violations/Intrusion Into the Attorney-Client Relationship
With respect to an alleged Sixth Amendment violation, Earnest argues that he was not provided competent representation during the course of a Grand Jury investigation conducted by the United States during 2012 and 2013. (See generally Def. Earnest's Mem. in Supp. of Mot. to Dismiss (Doc. 149).) Earnest specifically argues that Smith Moore had a conflict of interest, (see id. at 11), failed to advise Earnest of his Fifth Amendment privilege and render other necessary advice, (see id. at 16-17), and failed to take steps to protect Earnest, (see id. at 17-18). Earnest further contends that the Government failed to notify the court of the conflict and move to disqualify Smith Moore. (See id. at 18-25.) Similarly, Earnest argues that the Government has improperly intruded upon and interfered in his attorney-client relationship with Smith Moore by demanding that GrandSouth Bank ("the Bank") produce internal investigative files even though those files were covered by Earnest's attorney-client privilege. (See Earnest Atty Client Br. (Doc. 152) at 9.)
All citations in this Memorandum Opinion and Order to documents filed with the court refer to the page numbers located at the bottom right-hand corner of the documents as they appear on CM/ECF.
For the reasons set forth in this court's order entered contemporaneously herewith, this court finds that no attorney-client relationship existed between Defendant Earnest and Smith Moore during 2012 and 2013. This court further finds there is no attorney-client privilege between Earnest and Smith Moore. Therefore, the Government's requests of the Bank for internal investigative materials compiled by counsel and the Government's receipt of materials from the Bank does not constitute an improper request or disclosure of materials.
Even if some form of attorney-client relationship existed between Earnest and Smith Moore during the Grand Jury investigation, this court does not find the conduct of Smith Moore or the Government violative of the Sixth Amendment. The Sixth Amendment right to counsel attaches only after judicial proceedings have been initiated against a defendant. See Moran v. Burbine, 475 U.S. 412, 428 (1986) (stating that the right to counsel attaches after the first formal charging proceeding); United States v. Ayala, 601 F.3d 256, 272 (4th Cir. 2010) (finding that a defendant's Sixth Amendment right doesn't attach before the Grand Jury). As a result, any action by either the Government or Smith Moore could not violate a constitutional right that had not attached at the time of Earnest's Grand Jury testimony. "There is therefore no right to counsel before the grand jury, and perforce no right under the sixth amendment to conflict-free counsel." United States v. Ramsey, 785 F.2d 184, 193 (7th Cir. 1986).
For these reasons, this court finds that Defendant's motions to dismiss based upon alleged Sixth Amendment violations, (Doc. 148), and improper intrusion into the attorney-client relationship, (Doc. 151), should be denied.
B. Alleged Fifth Amendment Violations
Earnest also argues that his Fifth Amendment privilege was violated because
he had no ability to knowingly and voluntarily waive his rights against self-incrimination. Although he was given advice of rights in the Grand Jury, his counsel's actual conflict of interest; the Government's failure to raise this conflict; and the mischaracterization of his status during the investigation made it impossible for him to make a knowing and voluntary waiver.(Def. Earnest's Mem. in Supp. of Mot. to Dismiss the Indictment or in the Alternative Suppress his Grand Jury Test. and all Statements for Fifth Amendment Violations and Request for Kastigar Hr'g ("Def. Earnest's Fifth Amendment Br.") (Doc. 146) at 1.)
The Fifth Amendment privilege is applicable to grand jury proceedings, but it requires exercise by the individual.
[T]he Fifth Amendment privilege against self-incrimination extends to grand jury proceedings.
Indeed, "the privilege against self-incrimination can be asserted 'in any proceeding, civil or criminal, administrative or judicial, investigatory or adjudicatory.'" Nonetheless, the privilege is normally not self-executing. As the Court stated in Minnesota v. Murphy, "a witness confronted with questions that the government should reasonably expect to elicit incriminating evidence ordinarily must assert the privilege rather than answer if he desires not to incriminate himself."United States v. Myers, 123 F.3d 350 (6th Cir. 1997) (citations omitted). In this case, even though Miranda-type warnings do not appear to be required in the grand jury setting, see United States v. Mandujano, 425 U.S. 564, 578-79 (1976) (plurality op.); United States v. Torcasio, 959 F.2d 503, 507 (4th Cir. 1992), abrogation on other grounds recognized by United States v. Hairston, 46 F.3d 361 (4th Cir. 1995), Earnest was warned of his privilege against self-incrimination and chose not to exercise that privilege. (See Def. Earnest's Fifth Amendment Br., Ex. 2, Ronald Earnest Mar. 27, 2013 Grand Jury Test. (Doc. 146-2) at 1.)
Because this court has found that an attorney-client relationship did not exist between Earnest and Smith Moore, and that Earnest did not have a Sixth Amendment right to counsel when he appeared before the Grand Jury, this court does not find arguments that Earnest's counsel labored under an actual conflict of interest or that the Government failed to raise this conflict persuasive. This court agrees that Earnest did not have counsel representing him before the Grand Jury, but as explained further in this court's order entered contemporaneously herewith, this court has found the evidence insufficient to establish that Earnest took steps to obtain an attorney to represent him in his individual capacity nor is there evidence that Earnest communicated such an intention to Smith Moore.
This court does have concern over the advice of rights provided by the prosecutor in this case, apparently to all of the witnesses appearing before the Grand Jury. It appears each of the witnesses were advised that "Under the Sixth Amendment of the United States Constitution, you have a right to consult with an attorney of your choice before answering questions." (See, e.g., Def. Earnest's Fifth Amendment Br., Ex. 2, Ronald Earnest Mar. 27, 2013 Grand Jury Test. (Doc. 146-2) at 1; United States' Opp'n to Def. Shannon Drake's Mot. to Dismiss the Indictment ("Government's Opp'n Br."), Ex. 1, Cheryl Gustavson Dec. 14, 2015 Grand Jury Test. (Doc. 233-1) at 5; Government's Opp'n Br., Ex. 2, Yolanda Simpson Jan. 27, 2016 Grand Jury Test. (Doc. 233-2) at 5.) This court has not been able to find any authority to suggest a Sixth Amendment right applies to Grand Jury proceedings. To the contrary, it does not, as the Government specifically argues in its response. (See Government's Resp. to Def. Ronald Earnest's Mot. to Dismiss and Request for Kastigar Hearing (Doc. 181) at 4-5.)
Earnest also argues that a Fifth Amendment violation occurred because he was misled by the prosecutor's statements that he was not a target or subject of the investigation, but was merely called as a fact witness. Under these circumstances, including the misleading statement by the prosecutor, Earnest contends it was "impossible for him to make a knowing and voluntary waiver" of his Fifth Amendment privilege. (See Def. Earnest's Fifth Amendment Br. (Doc. 146) at 2.)
Courts have consistently held that the failure to provide target warnings to a grand jury witness is not a matter of constitutional concern. See United States v. Washington, 431 U.S. 181, 189 (1977); United States v. Crocker, 568 F.2d 1049, 1055-56 (3d Cir. 1977), abrogated on other grounds by United States v. Gaudin, 515 U.S. 506 (1995). However, courts in some instances have expressed a preference that target warnings be given. See United States v. Pacheco-Ortiz, 889 F.2d 301, 310 (1st Cir. 1989); Crocker, 568 F.2d at 1049. Nevertheless, unlike a failure to warn of target status, Earnest argues that the Government gave inaccurate and misleading information with respect to his status when he appeared, waived his Fifth Amendment privilege, and testified before the Grand Jury.
Although Earnest argues his privilege against self-incrimination was not knowingly and voluntarily waived, he points to no case law supporting such a requirement. To the contrary, other circuits have found that a witness not understanding their privilege against self-incrimination is not a basis for suppressing grand jury testimony. See United States v. Babb, 807 F.2d 272, 276-77 (1st Cir. 1986) (citing United States v. Wong, 431 U.S. 174, 177-79 (1977)).
Nonetheless, the Fifth Amendment further provides that "[n]o person . . . shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law." U.S. Const. amend. V. Intertwined with the guarantee of due process is a requirement of "fundamental fairness." See, e.g., Lassiter v. Dep't of Social Servs. of Durham Cty., 452 U.S. 18, 24-25 (1981). Courts in some instances have tied misleading government conduct leading to a defendant's detrimental reliance to due process requirements of fair play. See United States v. Harvey, 848 F.2d 1547, 1555 (11th Cir. 1998) ("When the government by its conduct, here grossly negligent conduct, has created the situation leading to misunderstandings regarding the nature of a plea agreement and the scope of immunity granted, the fair play dictated by due process requires nothing less than that the doubts as to either be resolved in favor of the individual misled." (citation omitted)), vacated by en banc panel on other grounds, 869 F.2d 1439 (11th Cir. 1989).
In Earnest's case, this court is not convinced on the evidence that the prosecutor did in fact mislead Earnest when he advised that Earnest was neither a target nor subject, but merely a fact witness. Although Defendant has raised a number of issues which cause this court concern as to the prosecutor's representations and this court will find the prosecutor's comments misleading with respect to Shannon Drake, this court does not find a misrepresentation by the prosecutor as to Earnest.
Even if this court were to find the prosecutor's advice to Earnest misleading, there is no non-speculative evidence presented to suggest any effect the advice had on Earnest as this court does not find an attorney-client relationship was established or that Earnest sought his own counsel. Earnest never alleges that he and Medford consulted on the decision to testify nor the content of any advice rendered by Medford. Earnest's affidavit relies instead on what did not happen, such as advice as to his right to remain silent.
"The Attorney General and United States Attorneys retain 'broad discretion' to enforce the Nation's criminal laws. They have this latitude because they are designated by statute as the President's delegates to help him discharge his constitutional responsibility . . . ." United States v. Armstrong, 517 U.S. 456, 464 (1996) (citations omitted). "[T]he Government retains 'broad discretion' as to whom to prosecute." Wayte v. United States, 470 U.S. 598, 607 (1985) (citations omitted). In exercising that discretion, the Government is under no constitutional or statutory duty to advise an individual of a target warning. See Washington, 431 U.S. at 189; Crocker, 568 at 1055-56. This court cannot compel the Government to make someone a target or subject of an investigation or to notify that individual of such status. Nor is this court aware of any prohibition on a change in status of an individual as an investigation progresses. In other words, there is no constitutional or statutory duty that prohibits a prosecutor from proceeding with an investigation targeting an individual after that individual has been advised that he or she is neither a target nor subject of an investigation. Those are all matters for the exercise of the discretion of the Attorney General generally.
This court notes that "the internal guidelines of a federal agency, that are not mandated by statute or the constitution, do not confer substantive rights on any party." United States v. Craveiro, 907 F.2d 260, 264 (1st Cir. 1990); see also United States v. Caceres, 440 U.S. 741, 749-55 (1979). The designation of "target" is not mandated by statute or the constitution. Nevertheless, "[a]n agency of the government must scrupulously observe rules, regulations, or procedures which it has established." United States v. Heffner, 420 F.2d 809, 811 (1969). Even if a defendant has no substantive right to notice of a "target" designation, a prosecutor knows what the term means as the term is defined by the Department of Justice and fully understands what is communicated when an individual or counsel are told the individual is not a target.
The terms "target" and "subject" carry no inherent constitutional or statutory significance. They are terms of art, created by the Department of Justice ("DOJ") to communicate specific information to attorneys and individuals during the course of a criminal investigation by the United States. Specifically, the DOJ defines a "target" as "a person to whom the prosecutor or the grand jury has substantial evidence linking him or her to the commission of a crime, and who, in the judgment of the prosecutor, is a putative defendant." Dep't of Justice, U.S. Attorneys' Manual § 9-11.151 (emphasis added). A "subject" is defined by the DOJ as "a person whose conduct is within the scope of the grand jury's investigation." Id.
"Putative" is defined as: "Reputed; believed or supposed by most people." Black's Law Dictionary (10th Ed. 2014).
As explained by the Third Circuit in Crocker, "the test as to whether a witness is a target of a grand jury investigation cannot be whether he 'necessarily' will be indicted, but whether according to an objective standard he could be indicted." 568 F.2d at 1054 (emphasis added). --------
Earnest points to a number of facts which he contends are probative that he was a target or subject of the Grand Jury investigation during 2012 and 2013. (See, e.g., Def. Earnest's Fifth Amendment Br. (Doc. 146) at 9-20.) The Government responds that Earnest was not a target of the Grand Jury at the time he testified, as much of the evidence that led to his indictment were not uncovered until after Earnest testified. (Government's Resp. to Def. Ronald Earnest's Mot. to Dismiss and Request for Kastigar Hearing (Doc. 181) at 7.)
After careful review of the record, this court is not able to conclude that Earnest was a target or subject of the Grand Jury investigation, nor is this court able to conclude that the prosecutor's comments were misleading at the time Earnest testified. The fact that Earnest's name was mentioned or that Earnest was the subject of some inquiry is not sufficient to permit a finding that the prosecutor misled when he said Earnest was neither a target nor a subject. The evidence does not support a finding that the prosecutor or the Grand Jury was in possession of substantial evidence linking Earnest to the commission of a crime, even if they may have asked about him and may have received testimony of a relationship between Gregory Harrison and Earnest. Furthermore, no evidence has been presented that in the judgment of the prosecutor, Earnest was a putative defendant.
This court's findings as to Shannon Drake will be issued in a forthcoming order. Those findings, as well as other matters, such as advising Grand Jury witnesses of their "Sixth Amendment right," all cause this court some concern with the manner in which the Grand Jury investigation was handled. Nevertheless, this court does not find that Earnest was misled into waiving his Fifth Amendment right.
II. CONCLUSION
For the reasons stated herein,
IT IS HEREBY ORDERED that Defendant Earnest's Motion to Dismiss the Indictment or in the Alternative Suppress his Grand Jury Testimony and all Statements for Fifth Amendment Violations and Request for Kastigar Hearing, (Doc. 145), is DENIED.
IT IS FURTHER ORDERED that Defendant Earnest's Motion to Dismiss the Indictment or in the Alternative Suppress his Grand Jury Testimony and all Statements for Sixth Amendment Violations and Request for Kastigar Hearing, (Doc. 148), is DENIED.
IT IS FURTHER ORDERED that Defendant Earnest's Motion to Dismiss based upon Government Intrusion into the Attorney Client Relationship, (Doc. 151), is DENIED.
This the 16th day of April, 2018.
/s/_________
United States District Judge