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U.S. v. Conner

United States District Court, S.D. New York
Feb 8, 2001
00 Cr. 731(GBD) (S.D.N.Y. Feb. 8, 2001)

Opinion

00 Cr. 731 (GBD)

February 8, 2001


MEMORANDUM ORDER


Defendants move this Court to transfer this case to the Western District of Kentucky pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure. The Government opposes the motion for transfer. For the reasons set forth below, the motion is denied.

On July 12, 2000, a grand jury sitting in the Southern District of New York returned a 36 count indictment charging the three defendants with conspiracy and insider trading. As set forth more fully in the indictment, the Government alleges that the defendants traded securities using confidential non-public business information obtained from a co-conspirator not named as a defendant in the case, John J. Freeman. Freeman worked part-time in New York for Custom Staffing, an independent temporary staffing agency. From approximately May 1997 to June 1998, he was assigned to Goldman Sachs. From approximately October 1998 to January 2000 he was assigned to CS First Boston.

While at Goldman Sachs and CS First Boston, Freeman's job assignments provided him with access to confidential information in connection with mergers, acquisitions and other business transactions. It is alleged that Freeman then took this nonpublic information and disclosed it to individuals in exchange for a share of the profits earned from trading on this information.

While in an online "chatroom," Freeman allegedly became acquainted with James Cooper, an insurance agent in Bowling Green, Kentucky, another co-conspirator separately charged. During their online discussions, Freeman allegedly offered to provide nonpublic information in exchange for ten percent of the trading profits. Using the inside information, Cooper allegedly purchased securities or options issued by companies involved in numerous Goldman Sachs or CS First Boston Deals, thereby earning illegal profits.

In or about late 1997, Cooper allegedly informed defendant Chad Conner that he was receiving inside information from Freeman. Cooper then allegedly opened a brokerage account at Morgan Keegan Company, Inc., ("Morgan Keegan"), a broker deal located in Bowling Green, Kentucky, with Defendant Conner serving as his registered representative. Defendant Conner then executed trades on behalf of Cooper and Cooper's brother based on inside information. Additionally, Defendant Conner allegedly purchased securities in his own account and conducted trades in other client accounts, thereby earning substantial illegal profits for his clients and producing substantial commissions for himself. He then allegedly passed the information on to co-defendant Gordon Allen for his use in purchasing and selling securities. Defendant Allen also, in turn, allegedly passed this information on to co-defendant Jon Geibel to utilize in obtaining illegal profits.

In February 2000, Cooper allegedly informed Defendant Conner that Freeman was considering leaving CS First Boston to return to Goldman Sachs. In a recorded conversation, Defendant Conner allegedly told Cooper that he thought that would be a good idea because CS First Boston deals were so thinly traded. Defendant Conner then allegedly arranged to pay Freeman an advance payment for the next deal if he returned to Goldman Sachs, by leaving money in a locker in the Greyhound bus terminal in Atlantic City, New Jersey. In another recorded conversation, Defendant Conner allegedly agreed to send the locker key to Freeman, so that he could retrieve the money from the locker without the two ever seeing each other. Defendant Conner then allegedly transported approximately $5,000 from Bowling Green, Kentucky to the vicinity of Atlantic City, New Jersey where he was arrested.

Rule 21(b) of the Federal Rules of Criminal Procedure states that "[f]or the convenience of parties and witnesses, and in the interest of justice, the court upon motion of the defendant may transfer the proceeding as to that defendant or any one or more of the counts thereof to another district." In determining whether transfer is appropriate under Rule 21(b), this Court considers the following factors: (a) location of the defendants; (b) location of the possible witnesses; (c) location of the events likely to be at issue; (d) location of relevant documents and records; (e) disruption of the defendants' businesses if transfer is denied; (f) expenses to the parties; (g) location of counsel; (h) relative accessibility of the place of trial; (i) docket conditions of each potential district; and (j) any other special circumstance or elements which might affect the transfer. Platt v. Minnesota Mining Mfg. Co., 376 U.S. 240, 244(1964); United States v. Maldonado-Rivera, 922 F.2d 934, 966 (2d Cir. 1990); United States v. Keuylian, 602 F.2d 1033, 1039 (2d Cir. 1979). No one factor is dispositive and this Court must strike a balance to determine which factor is most important in its decision Id.; see also United States v. The Spy Factory, 951 F. Supp. 450, 455 (S.D.N.Y. 1997) (finding that "[a] Court should not give any one factor preeminent weight nor should it assume that the quantity of factors favoring one party outweighs the quality of factors in opposition.") Moreover, determining whether or not to grant a motion for transfer is in the sound discretion of the district court. Maldonado-Rivera, 922 F.2d at 966.

Generally, "a criminal prosecution should be retained in the original district," unless the interests of justice require a transfer. United States v. Guastella, 90 F. Supp.2d 335, 338 (S.D.N.Y. 2000). "To warrant a transfer from the district where an indictment was properly returned it should appear that a trial there would be so unduly burdensome that fairness requires the transfer to another district of proper venue where a trial would be less burdensome . . ." United States v. Posner, 549 F. Supp. 475, 477 (S.D.N.Y. 1982) (quoting United States v. United States Steel Corp., 233 F. Supp. 154, 157 (S.D.N.Y. 1964). Additionally, the defendant bears the burden of justifying a transfer under Rule 21(b).Id.

Defendants argue that this Court should transfer this action because all three defendants in this case reside, are employed and have their offices in or near the Western District of Kentucky. Defendants further argue that alleged co-conspirators and potential witnesses also reside and work in or near that district. Additionally, the alleged illegal trades took place at the offices of Morgan Keegan in Kentucky, and the alleged records of these trades and the witnesses to these transactions are also located in the Western District of Kentucky. Moreover, defendants' attorneys are also located in or near the district to which they request that this case be transferred. Defendants assert that it will be both time consuming and expensive for the case to proceed in the Southern District of New York.

The Government argues that this Court should not exercise its discretion to transfer this case to the Western District of Kentucky. The prosecution asserts that many of the events in this case took place in or near New York. Additionally, the bulk of the Government's documents and exhibits are in New York. Relocating these documents, as well as the Government attorneys and case agent would add great expense to this prosecution. The Government also argues that the fact that this matter was investigated, charged and handled through the pretrial stage in this district weighs against defendant's motion to transfer.

Although defendants reside and work in or near the Western District of Kentucky, this Court is not persuaded that the interests of justice would be served if the case were transferred to that district. Defendants assert that transfer of this case would be less costly to them and more convenient. However, "inconvenience to the defendant or his business is not, by itself, a sufficient basis for transfer." United States v. Culoso, 461 F. Supp. 128, 136 (S.D.N.Y. 1978). While there is a general "policy" which favors trying a defendant where he or she resides, this "policy" is balanced against the presumption that a "criminal prosecution should be retained in the original district." United States v. The Spy Factory, 951 F. Supp. 450, 464 (S.D.N.Y. 1997). Moreover, criminal defendants do not have a constitutional right to a trial in the district in which they live. Platt v. Minnesota Mining Mfg. Co., 376 U.S. 240, 254 (1964) (citing U.S. Const. art. III, § 2 which provides that "The trial of all Crimes . . . shall be held in the State where the said Crimes shall have been committed.") Therefore, while this Court finds that defendants' residence and place of work are important factors to consider, they are not dispositive factors.

Additionally, while defendants assert that potential witnesses in the case are located in the Western District of Kentucky, they fail to mention which specific witnesses they intend to call on their behalf and for whom it would be inconvenient to travel to the Southern District of New York. See e.g. United States v. Guastella, 90 F. Supp.2d 335, 338-9 (S.D.N.Y. 2000) (finding that since defendants did not indicate why their witnesses would not be able to testify in New York they had not met their "burden of proving that the location of necessary and relevant witnesses compels a transfer."); United States v. The Spy Factory, 951 F. Supp. 450, 458 (S.D.N.Y. 1997) (finding that "generally, a naked allegation that witnesses will be inconvenienced by a trial in a distant forum will not suffice for transfer . . . Defendants must offer specific examples of witnesses' testimony and their inability to testify because of the location of the trial.") Most Government witnesses are to be found in New York. The defendants' simple assertion that "[t]he alleged co-conspirators and witnesses, Benjamin Cooper and James Cooper, also reside and work in or near Bowling Green [Kentucky]" does not persuade this Court to transfer this case to a district more convenient to unspecified potential defense witnesses.

Additionally, most of the physical evidence, such as records of the various trades and transactions which are located in Kentucky, also exist in New York, as they have been produced pursuant to Government subpoenas. Therefore, defendants' argument that the documents and records relevant to this case are retained in the offices of Morgan Keegan in Bowling Green, Kentucky, does not persuade this Court that transfer is appropriate. Neither does defendants' argument that their retained counsel are located outside of this district. Whether this case is transferred, or remains in this district, either the Government attorneys, or the defendants' attorneys will be inconvenienced by the venue of the action.

The defendants must recognize that "every litigation, particularly a criminal prosecution, imposes burdens upon a defendant and brings in its wake dislocation from normal occupational and personal activities."United States v. Culoso, 461 F. Supp. 128, 136 (S.D.N.Y. 1978) (quotingUnited States v. United States Steel Corp., 233 F. Supp. 154, 157 (S.D.N.Y. 1964)). Both the Western District of Kentucky and the Southern District of New York are proper venues for this action. However, the indictment was returned in this district. Given the nature of the evidence and the balance of inconvenience in either district, this Court finds that it is appropriate for the case to remain in the Southern District of New York. Therefore, upon a consideration of all the relevant factors, this Court will not exercise its discretion to transfer this case.

Defendants' motion to transfer this case to the Western District of Kentucky is DENIED.

SO ORDERED:


Summaries of

U.S. v. Conner

United States District Court, S.D. New York
Feb 8, 2001
00 Cr. 731(GBD) (S.D.N.Y. Feb. 8, 2001)
Case details for

U.S. v. Conner

Case Details

Full title:UNITED STATES OF AMERICA, Plaintiff, v. CHAD CONNER, GORDON ALLEN and JON…

Court:United States District Court, S.D. New York

Date published: Feb 8, 2001

Citations

00 Cr. 731(GBD) (S.D.N.Y. Feb. 8, 2001)