United States District Court, D. Massachusetts
DOUGLAS P. WOODLOCK, District Judge.
James Fields was CFO of LocatePlus, a business providing online access to public records and other information for a fee. The government charged that Fields, in conspiracy with his codefendant LocatePlus CEO Jon Latorella, sought to inflate the stock price of LocatePlus artificially by deceiving the public about the financial health of the company. He also was said to divert company funds to his own uses.
The scheme involved inflating LocatePlus receivables by recording debt from a fake company called Andover Secure Resources and by recording inflated revenues from a fake contract with a fake company called Omni Data. The Omni Data fraud was funded in part by a public offering of stock in a company called Paradigm Tactical Products, which involved false SEC filings and false public statements.
A jury found Fields guilty of conspiring to commit securities fraud (Count 1), and engaging in or aiding and abetting: securities fraud (Count 2), material omissions and false statements by a corporate officer to an accountant (Counts 3-10), false statements in required SEC filings (Counts 11-19 & 27), wrongful certification by a corporate officer (Counts 20-26), aggravated identity theft (Count 28), and a monetary transaction in property derived from unlawful activity (Count 29).
In connection with sentencing, I confronted an array of post-conviction motions: a motion to dismiss based on due process violations (Dkt. No. 351), a renewed motion for judgment of acquittal (Dkt. No. 354), and a motion for a new trial (Dkt. No. 356). I informed the parties orally that I was denying the motions except to the extent of granting a judgment of acquittal regarding Count 28, the aggravated identity theft charge. I promised that a fully reasoned written opinion regarding the issues would follow. This is that opinion.
II. MOTION TO DISMISS
A. Prosecutorial Misconduct
Fields alleged that misconduct by AUSA Victor Wild led to a violation of his due process rights.
One set of allegations involved Wild's involvement with penny-stock company Evermedia. Wild served on the Board of Evermedia, which retained Blake Godbout and Geoffrey Chalmers as counsel. Godbout and Chalmers, in turn, served as counsel to LocatePlus in civil litigation against Fields. In addition to conflict of interest problems, Fields' attorney Barry Pollack asserts he received indications from Godbout in April 2009 that Wild had disclosed to Godbout information about the grand jury investigation into Fields, in violation of Fed. R. Crim. P. 6(e). Fields also alleges that Wild facilitated violations of 18 U.S.C. § 207 by meeting with Ken Kaiser, who participated in meetings with the FBI on behalf of LocatePlus after having recently retired from the agency. See 18 U.S.C. § 207(c) (prohibiting a former federal employee from appearing before his former agency, regarding matters that were pending under his authority, within a year of leaving federal service). Beginning in May 2007, Fields participated in a series of proffer sessions with the government, apparently in hopes of obtaining a plea deal as a cooperating witness. Fields alleges, however, that once Pollack confronted Wild about the potential improprieties discussed above, the government turned its attention to using co-conspirator Dan O'Riordan, VP of operations at LocatePlus, as a cooperating witness. Fields complains that, despite what was far less actual cooperation by O'Riordan-a single proffer session in December 2009, years after Fields began cooperating, that provided little new information-O'Riordan received a favorable plea arrangement.
Fields faults Wild for failing to reveal various relevant details at O'Riordan's sentencing before Judge Wolf. For example, Wild represented to the court that O'Riordan had been fully cooperative with the government "from the very beginning." He failed to disclose, however, that O'Riordan had perjured himself before the Massachusetts Securities Division in 2006 and subsequently relocated to Texas. Wild also failed to reveal the arguably more extensive cooperation provided by Fields. As a result, Fields argues, Judge Wolf sentenced O'Riordan to 6 months of imprisonment, below even the 2 years of imprisonment recommended by the government.
The plea deal offered to Fields shortly before his trial, meanwhile, required Pollack not to advocate for a sentence of less than 4 years of imprisonment. This, Fields says, violated the spirit, if not the letter, of 18 U.S.C. § 3661 ("No limitation shall be placed on the information concerning the background, character, and conduct of a person convicted of an offense which a court of the United States may receive and consider for the purpose of imposing an appropriate sentence.").
Fields suggests a variety of remedies for the alleged misconduct, including dismissal of the indictment, dismissal of the counts on which the government relied most directly on the testimony of O'Riordan to obtain convictions (Counts 1, 27, and 28), or requiring the government to re-offer its plea deal to Fields without the limitation on advocacy as to a particular term of imprisonment. Fields requested, at the very least, that I hold a hearing on these matters to determine the appropriate course.
I begin by noting that the plea deal offered to Fields did not violate 18 U.S.C. § 3661; limiting a defendant's advocacy as to a specific sentence length is quite different from withholding information from the court. Neither did the plea deal between the government and O'Riordan violate 18 U.S.C. § 201(c)(2). The improprieties suggested by Fields, even if true, do not indicate that the government went so far as in effect to pay O'Riordan for false testimony, cf. United States v. Singleton, 165 F.3d 1297, 1302 & n.2 (10th Cir. 1999). Moreover, a promise of leniency to a cooperating witness does not violate 18 U.S.C. § 201(c)(2), United States v. Lara, 181 F.3d 183, 197 (1st Cir. 1999). To the extent the alleged improprieties raised concerns about the reliability of O'Riordan's testimony for purposes of determining guilt or innocence on the charges against him, Fields had a full and fair opportunity to cross-examine him at trial and took advantage of that opportunity.
At bottom, Fields finds it unfair that O'Riordan received an attractive cooperation plea agreement while he did not. Fields attempts to constitutionalize the issue, relying on the Supreme Court's opinions in Lafler v. Cooper, 132 S.Ct. 1376 (2012), and its companion case Missouri v. Frye, 132 S.Ct. 1399, 1406 (2012). Lafler and Frye support a constitutional dimension to the plea bargaining process because "[t]he Sixth Amendment requires effective assistance of counsel at critical stages of a criminal proceeding, " Lafler, 132 S.Ct. at 1385, and plea bargaining is one such "critical stage, " id. at 1392; see also id. at 1388 ("criminal justice today is for the most part a system of pleas, not a system of trials").
The Supreme Court, however, long ago foreclosed the idea that there is an independent entitlement to a plea offer or plea bargain, the deprivation of which might be the subject of due process scrutiny. See Frye, 132 S.Ct. at 1406 (citing Weatherford v. Bursey, 429 U.S. 545 (1977)); see also Weatherford, 429 U.S. at 561 ("[T]here is no constitutional right to plea bargain; the prosecutor need not do so if he prefers to go to trial. It is a novel argument that constitutional rights are infringed by trying the defendant rather than accepting his plea of guilty."). This makes sense from a separation of powers perspective. Having courts scrutinize these matters would intrude on executive prosecutorial functions in a way that scrutiny of ineffective assistance of defense counsel does not-even if the remedy for ineffective assistance is similar to one of Fields' suggested remedies for unfair dealing during plea bargaining. Cf. Lafler, 132 S.Ct. at 1391 (proper remedy for ineffective assistance in advising defendant to reject plea was requiring government to re-offer plea).
In the final analysis, Fields presented a tale of some questionable intrigue, but nothing that amounts to a violation of due process or indicates that he failed to receive a fair trial. I do not ignore the generalized allegations of misbehavior by Wild, which if substantiated with particularity might be the basis for contempt proceedings, see Fed. R. Crim. P. 6(e)(7) (specifying contempt as remedy for violations of grand jury secrecy), or other sanctions. The alleged conflicts of interest presented by his involvement with Evermedia, for acquiescing in Kaiser's violation of 18 U.S.C. § 207(c), or for his alleged withholding of information at O'Riordan's sentencing might, if substantiated, also lead to sanctions. That said, the allegations are not sufficiently supported in the record before me. The evidence of Wild's alleged disclosure of grand jury information references nothing more than the type of generalized topics of discussion, common and not inappropriate among representatives of the government and representatives of the changing cast of characters in fraud investigations who may be cast alternatively as victims, subjects or targets. The question of culpability in Kaiser's criminal conduct is a matter for charging decisions by the Department of Justice. Moreover, Wild's alleged omissions at sentencing were of relatively stale historical information. Given that O'Riordan's perjury at the Massachusetts Securities Division in 2006 substantially predated the federal grand jury subpoena served on him in September 2009, at which point it was accurate that he was fully cooperative with the government, any omission seems relatively de minimis.
The allegations - even as generalized allegations - were nevertheless serious enough that I have, as I earlier indicated to the parties I would, considered referring the matter to Judge Wolf, who dealt directly with AUSA Wild in the prosecution of O'Riordan. After considering that initiative, I have determined not to make such a reference formally.
More pertinently to the motion presented to me, the alleged misconduct - even if substantial and fully substantiated - does not justify upsetting the verdict against Fields in a prosecution handled by Assistant United States Attorneys other than Wild, following a trial in which the government provided ample evidence in support of Fields' guilt, and where the government had legitimate (if debatable) reasons for distinguishing between Fields and O'Riordan. To the extent questions remained about the relative culpability of Fields and O'Riordan, and the extent to which O'Riordan's sentence properly reflects his culpability, I essentially addressed such matters at sentencing so far as they concern the relative culpability of Fields.
B. Brady Violation
Fields also asserted that the government violated its Brady obligations by waiting until mid-trial to disclose the notes taken by agents in the course of witness interviews. Fields argued that these notes revealed that Nicholas Bouchard, another finance department employee at LocatePlus, had an independent role in the fraud involving Paradigm Tactical Products. Fields says he could not raise this issue without risking the credibility of counsel, however, because attorney Pollack had argued to the jury in opening that Fields' culpability was closer to that of Bouchard than to that of Latorella and O'Riordan.
Fields cannot establish that the evidence was material, as necessary to make out an actionable Brady violation. Kyles v. Whitley, 514 U.S. 419, 434 (1995) (question is whether, in the absence of the undisclosed evidence, trial resulted in "a verdict worthy of confidence"); Drumgold v. Callahan, 707 F.3d 28, 38-39 (1st Cir. 2013) ("Evidence is material if there is a reasonable probability' that, had it been disclosed, the result of the proceeding would have been different."). The isolated additional detail about Bouchard's role does not detract from the evidence establishing Fields' role in the conspiracy. To the extent the information goes to the culpability of Fields relative to his co-conspirators, it is another consideration that was weighed at his sentencing, and was timely disclosed for that purpose.
C. Proffer Agreement
Finally, Fields argued that the government improperly threatened to introduce statements made in his proffer sessions. The government, however, was permitted to raise the proffer statements if Fields contradicted them at trial. Fields cannot complain that the government raised possible contradictions with the court; there would be no other way to resolve whether Fields actually contradicted himself.
Fields also complains about pre-trial disclosure of the proffer statements to the court. The government essentially argues that Fields opened the door to presentation of his proffer statements because they were used to support the motions to sever made by him and Latorella. In any event, even if the government technically breached its promises under the proffer agreement - and I do not believe it did - Fields has not demonstrated how disclosure of the statements only to the court affected the integrity of the indictment, the trial, or the verdict.
III. MOTION FOR JUDGMENT OF ACQUITTAL
Fields moved for judgment of acquittal under Fed. R. Crim. P. 29. A judgment of acquittal may be entered "only if the evidence, viewed in the light most favorable to the government, could not have persuaded any trier of fact of the defendant[s] guilt beyond a reasonable doubt." United States v. Mubayyid, 658 F.3d 35, 47 (1st Cir.2011). A trial judge "is not to weigh the evidence or assess the credibility of witnesses when [he] judges the merits of a motion for acquittal, " Burks v. United States, 437 U.S. 1, 16 (1978), but must instead "take into account all evidence, both direct and circumstantial, and resolve evidentiary conflicts and credibility disputes in favor of the jury's verdict." United States v. Valerio, 676 F.3d 237, 244 (1st Cir. 2012).
A. Aggravated Identity Theft
Count 28 charged Fields with aggravated identity theft, 18 U.S.C. § 1028A(a)(1). The statute provides that:
Whoever, during and in relation to [certain enumerated felonies, including mail and wire fraud], knowingly transfers, possesses, or uses, without lawful authority, a means of identification of another person shall, in addition to the punishment provided ...