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United States v. DeNunzio

United States District Court, D. Massachusetts

August 14, 2015

UNITED STATES OF AMERICA
v.
DUSTIN J. DENUNZIO ANTHONY GATTINERI CHARLES A. LIGHTBODY

Page 136

          For Dustin J. DeNunzio, Defendant: Joshua S. Levy, LEAD ATTORNEY, Ropes & Gray LLP, Boston, MA; Todd Foster, LEAD ATTORNEY, PRO HAC VICE, Todd Foster Law Group, Tampa, FL; Aaron M. Katz, Ropes & Gray LLP - MA, Boston, MA.

         For Anthony Gattineri, Defendant: Michael J. Connolly, LEAD ATTORNEY, Laura B. Angelini, Rhiannon A. Campbell, Hinckley, Allen and Snyder, LLP, Boston, MA.

         For Charles A Lightbody, Defendant: Charles W. Rankin, LEAD ATTORNEY, Emmanuelle Deborah Debouverie, Michelle Menken, Rankin & Sultan, Boston, MA; Timothy R. Flaherty, Flaherty Law Offices, Boston, MA.

         For USA, Plaintiff: Kristina E. Barclay, LEAD ATTORNEY, U.S. Attorney's Office, Boston, MA; David J. Rubin, Office of the Attorney General, Boston, MA.

Page 137

         MEMORANDUM AND ORDER RE: DEFENDANTS' MOTION TO COMPEL AND REQUEST FOR EVIDENTIARY HEARING (DOCKET ENTRY # 168)

         MARIANNE B. BOWLER, United States Magistrate Judge.

         Defendants Dustin J. DeNunzio (" defendant DeNunzio" ), Anthony Gattineri (" defendant Gattineri" ) and Charles A. Lightbody (" defendant Lightbody" ) (collectively " defendants" ) move to compel two categories of exculpatory evidence under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963) (" Brady" ). (Docket Entry # 168). The government opposes production. (Docket Entry # 178).

         The first category consists of purportedly exculpatory material evidencing that Wynn Resorts, Ltd. (" Wynn" ) knew that defendant Lightbody, a convicted felon, held an ownership interest in a parcel of land in Everett, Massachusetts. Defendants reason that if Wynn knew about defendant Lightbody's interest before it signed an option agreement, then defendant Lightbody's interest was not material to its decision to purchase the property. The Indictment charges inter alia that, as part of a conspiracy, defendants concealed defendant Lightbody's financial interest from Wynn via materially false representations transmitted through wire communications from December 2012 through July 2013. Defendants therefore move to compel documents and information relating to Wynn's knowledge of defendant Lightbody's historical and continued interest in the Everett parcel.[1]

         The second category concerns any evidence and information regarding an alleged

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incident that occurred in the fall of 2013 and involved Joseph Flaherty (" Flaherty" ) and Stephen Matthews (" Matthews" ), both former members of the Massachusetts State Police. Defendants maintain that unidentified " members of the Massachusetts State Police and/or the Massachusetts Attorney General's Office" allowed Flaherty and Matthews " access to files concerning an ongoing joint state and federal investigation of the Defendants." (Docket Entry # 168) (emphasis added). The files were housed at a secure location " where wiretaps are performed" in the Massachusetts Attorney General's Office. (Docket Entry # 181-2). The location is " often referred to as the wiretap room." (Docket Entry # 181-2). Defendants submit that Flaherty and Matthews worked for Wynn and that their access to the wiretap room made them " part of the investigatory team in this matter." (Docket Entry # 168). Because allowing these individuals, as members of the investigatory team, access to the wiretap room " probably amounts to a violation of Massachusetts criminal law," evidence relating to the incident is exculpatory, according to defendants. (Docket Entry # 168). Defendants additionally argue that allowing Flaherty and Matthews, as civilians and private investigators, access to the wiretap room " raises serious concerns" and likewise probably amounts to a violation of Massachusetts criminal law, particularly in light of Flaherty's acknowledgment that he worked for Wynn in October and November 2013. (Docket Entry ## 169, 181, 178-2). Defendants also " request an evidentiary hearing on the apparent agency relationship between Matthews and Flaherty and the joint state/federal investigation team." (Docket Entry # 169).

         BACKGROUND[2]

         The Indictment charges defendants with wire fraud in violation of 18 U.S.C. § 1343, aiding and abetting wire fraud in violation of 18 U.S.C. § 2 and conspiracy to commit wire fraud in violation of 18 U.S.C. § 371.[3] As set out in the Indictment, from December 2012 to July 2013 defendants conspired to conceal defendant Lightbody's ownership interest in the Everett parcel from Wynn and the Massachusetts Gaming Commission (" MGC" ) " to obtain money from Wynn for the Everett Parcel." (Docket Entry # 3, ¶ 16). Defendants purportedly knew that defendant Lightbody's financial interest in the Everett parcel, given his criminal history, would adversely impact negotiations by FBT Everett, LLC (" FBT" ), which held title to the parcel, for " an option agreement" and " Wynn's ability to secure" a casino license. (Docket Entry # 3, ¶ 16). The Indictment further states that defendants obtained money by transmitting materially false representations in an email to Wynn's General Counsel that only defendant DeNunzio, defendant Gattineri and another individual had interests in FBT. (Docket Entry # 3, ¶ ¶ 19, 30, 47).

         Beginning in December 2012, defendants had defendant Lightbody's name " removed from FBT ownership documents" even though he " retained a financial interest" in the parcel. (Docket Entry # 3, ¶ 17). At the same time, defendant DeNunzio " asked FBT's attorney to draft paperwork" reflecting a transfer of defendant Lightbody's ownership interest to defendant Gattineri " in exchange for a $1.7 million promissory note." (Docket Entry # 3, ¶ 17). Between December 1 and 19, 2012, defendant DeNunzio " asked FBT's attorney to tell Wynn's representatives

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that" defendant Lightbody " no longer had an interest or was transferring his interest" in the Everett parcel to FBT. (Docket Entry # 3, ¶ 26).

         On December 19, 2012, Wynn and FBT entered into the option agreement. (Docket Entry # 3, ¶ 12). The agreement required Wynn to pay FBT $100,000 each " month for the right to purchase the Everett Parcel" in the event MGC awarded Wynn a " destination resort casino license." (Docket Entry # 3, ¶ 12).

         During this time period, Wynn was working with a public affairs consulting group known as ML Strategies, LLC (" ML Strategies" ), " a wholly-owned subsidiary of Mintz Levin." (Docket Entry ## 169-4, 169-5). ML Strategies, which had worked with Wynn for a number of years,[4] served as a general advisor to Wynn's " effort to secure a license . . . in Massachusetts for a destination casino." (Docket Entry # 169-4). Before signing the option agreement, ML Strategies helped Wynn identify potential sites for a casino, including a location in Foxboro, Massachusetts. Wynn " withdrew from that location" when it became clear that the Foxboro community and Foxboro officials were not interested in a casino. (Docket Entry # 169-4).

         In or around the fall of 2012, Steven Tocci (" Tocci" ), president of ML Strategies, explored a number of other locations for Wynn. " [S]ometime in the fall of 2012," he became interested in the Everett parcel and reached out to Wynn regarding the location. (Docket Entry # 169-4). Wynn instructed Tocci to query Everett officials in order to avoid " go[ing] through the same experience that [Wynn] had in Foxboro." (Docket Entry # 169-4). Having received a receptive response, Tocci believed the site " was worth a visit by the Wynn folks." (Docket Entry # 169-4). Accordingly, Matt Maddox (" Maddox" ) of Wynn, accompanied by Tocci, " took a quick look at the site" and the surrounding area.

         Later in the fall, Tocci and Maddox returned to the site and met with defendant DeNunzio and Paul Lohnes (" Lohnes" ), another owner,[5] at or near the property. Meeting with two of the owners at or near the property demonstrates that Wynn was seriously considering locating a casino on the Everett parcel. At the time of the meeting, Tocci understood that defendant DeNunzio and Lohnes owned the property because " they said it at that meeting" and Maddox or someone else had " looked at the Registry of Deeds records" and found out " the owners of the property." (Docket Entry # 169-4). Tocci additionally understood that defendant Gattineri was the third owner of the property. (Docket Entry # 169-4).

         James Michael Flood (" Flood" ), an employee of the DeNunzio Group,[6] stated that he and defendant DeNunzio met with two representatives of Wynn (Maddox and Kim Sinatra) at the Everett parcel in the fall of 2012. Flood testified that defendant DeNunzio told " 'the Wynn folks'" that, " 'we have a partner who has a checkered past, but we're in the process of getting him out of the property.'" (Docket Entry # 169, p. 14).[7]

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          " Towards December" 2012, Tocci acknowledged " there was an inquiry from a reporter from the Boston Business Journal " to Nancy Sterling (" Sterling" ) of ML Strategies asking whether she was " 'aware of other possible owners'" of the property. (Docket Entry # 169-5). Sterling relayed the information to Tocci, which led Bob Havern (" Havern" ) of ML Strategies to find out if there was any truth to the matter. According to Tocci, Havern reported that there was " 'no truth to it'" and there were " 'only three owners.'" [8] (Docket Entry # 169-5). Tocci does not remember any specific names mentioned as part of the inquiry. (Docket Entry # 169-5). He did not consider the matter " all that serious at that point, because" he knew the Registry of Deeds had been checked and it listed the " three people." (Docket Entry # 169-5). He also stated that, " [I]f it was something, we should find out if there's anything else we needed to know." (Docket Entry # 169-5).

         On the same day or a day later, Tocci advised Wynn that, " 'There's something going on. I'm not sure exactly what it is.'" (Docket Entry # 169-5). The day after the reporter's inquiry, Tocci spoke with Mayor DeMaria about various matters and mentioned that a reporter from the Boston Business Journal had contacted ML Strategies about the ownership of the Everett parcel. (Docket Entry ## 169, 169-5). More specifically, Tocci told Mayor DeMaria that a reporter " 'was chasing around about the land deal'" and that, " 'If there is anybody in that deal who has any kind of a criminal background, I know Wynn, and they're not going forward.'" (Docket Entry # 169, p. 9).[9] Mayor DeMaria then asked Tocci, " 'Who are you talking about?'" and, when Tocci replied that he did not know, Mayor DeMaria " said, 'Was it Lightbody?'" [10] (Docket Entry # 169, p. 9). Tocci replied that he did not " 'know the name.'" (Docket Entry # 169, p. 9). Tocci also stated this was the first time he had heard the name Lightbody and that, after the conversation and the publication of a December 14, 2012 article in the Boston Business Journal, Tocci focused on negotiating a host agreement. (Docket Entry # 169-5). Tocci's grand jury testimony reads that, " It was clear to us that there were still three owners, the registered owners, and we had a very tight timeline . . . to negotiate a host agreement, and . . . carry on an election . . .." (Docket Entry # 169-5). At another point during his grand jury testimony, Tocci explained that " sometimes" he does not " place a lot of trust in newspaper articles." (Docket Entry # 169-5).

         On January 14, 2013, after Wynn signed the option agreement, it submitted an application to MGC along with a non-refundable $400,000 license fee to locate a destination resort casino on the Everett parcel. (Docket Entry # 3, ¶ 13). On January 17, 2013, defendant DeNunzio emailed Wynn's General Counsel and " falsely" stated ...


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