United States District Court, D. Massachusetts
ORDER ON MOTIONS TO DISMISS (DOC. NOS. 135, 136, 139,
Sorokin, United States District Judge.
government has charged defendant Ross McLellan with
conspiring to commit, and committing, securities fraud and
wire fraud when he was an executive for State Street Bank.
Doc. No. 282. McLellan has filed four motions seeking
dismissal of various combinations of the charges against
The government has opposed each motion. After careful
consideration, the motions are DENIED for the reasons set
forth below. For purposes of this Order, familiarity with the
facts alleged in the Superseding Indictment is
challenging the sufficiency of an indictment bear a heavy
burden.” Perry, 37 F.Supp.3d at 550 (citing
United States v. Troy, 618 F.3d 27, 34 (1st Cir.
2010)). The question presented by a motion seeking dismissal
of a lawfully returned criminal indictment “is not
whether the government has presented enough evidence to
support the charge, but solely whether the allegations in the
indictment are sufficient to apprise the defendant of the
charged offense.” United States v. Savarese,
686 F.3d 1, 7 (1st Cir. 2012); accord United States v.
Stepanets, 879 F.3d 367, 372 (1st Cir. 2018). Because
dismissal of an indictment “directly encroaches upon
the fundamental role of the grand jury, ” the
circumstances under which a trial court properly may invoke
its authority in this regard are “extremely
limited.” Whitehouse v. U.S. Dist. Court, 53
F.3d 1349, 1360 (1st Cir. 1995). Generally, an indictment is
sufficient if it “describes all of the elements of the
charged offense using the words of the relevant criminal
statute.” United States v. Wells, 766 F.2d 12,
22 (1st Cir. 1985) (citing Hamling v. United States,
418 U.S. 87, 117 (1974)); see Stepanets, 879 F.3d at
372 (“An indictment need not say much to satisfy these
requirements . . . .”).
court must deny a motion to dismiss [a criminal indictment]
if the motion relies on disputed facts.”
Stepanets, 879 F.3d at 372. Where a defendant's
motion to dismiss depends “on disputed facts that [he]
want[s] found in [his] favor, ” such as
“contested facts surrounding the commission of the
alleged offense, ” the “situation . . . calls for
a trial, not a dismissal on pretrial motions, ” as
“no court may consider [such facts] before
trial.” Id. at 375 (quotation marks omitted).
arguments depend on viewing this case through the lens he
prefers and considering an array of facts not contained
within the four corners of the Superseding Indictment.
E.g., Doc. No. 139 at 5 & n.3 (attaching a chart
analyzing certain transactions at issue and arguing that the
alleged victims “received precisely” what they
“bargained for”: “the successful completion
of the desired transition at or below the agreed-upon
cost”). The Court, however, may not consider such
information in resolving a motion to dismiss in a criminal
action. United States v. Ngige, 780 F.3d
497, 501-03 (1st Cir. 2015).
Motion to Dismiss Counts Two and Three and So Much of
Count One as Charges Conspiracy to Commit Securities Fraud,
to Exclude Evidence of Extraterritorial Transitions and
Transactions, and Motion for Related Discovery (Doc. No.
first motion, McLellan argues that a “majority of the
securities transactions at issue were conducted entirely
extraterritorially and hence fall outside the scope of”
the relevant securities laws and regulations. Doc. No. 148 at
2, 24-25. Likewise, he argues any fraud alleged is foreign,
not domestic, and is therefore also beyond the reach of the
wire fraud statute. Id. McLellan's
“extraterritoriality” motion is DENIED.
parties disagree about whether the criminal statutes at issue
here apply extraterritorially. As to the securities laws, the
Court need not resolve that dispute to rule on McLellan's
motion. Even assuming those laws do not reach purely
extraterritorial conduct, the Superseding Indictment, on its
face, alleges conduct that falls squarely within the reach of
15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5.
E.g., Doc. No. 282 at ¶¶ 12(d), 17-18, 24,
28, 34-38 (referencing “securities traded in the United
States, ” “U.S. securities, ” “U.S.
equities trades, ” “U.S. trades, ” and
various actions taken by traders located in the United
States); see Morrison v. Nat'l Austl. Bank Ltd.,
561 U.S. 247, 269-70 (2010) (adopting “transactional
test” under which reach of securities laws depends on
“whether the purchase or sale is made in the United
States, or involves a security listed on a domestic
exchange”). McLellan's arguments to the contrary
rely on facts beyond the charging documents-facts to which
the government has not stipulated for present purposes, and
which the government has not agreed are appropriately
considered now. The Court may not dismiss charges (or
determine, now, that conduct was extraterritorial) on the
basis of such facts. Stepanets, 879 F.3d at 372, 375.
as the original two wire fraud charges are concerned,
McLellan's argument fares no better. Addressing the
extraterritorial application of a criminal statute with
language similar to 18 U.S.C. § 1343, the First Circuit
concluded that Congress had indicated an intent to reach
conduct beyond the United States by “explicitly
appl[ying]” the statute “to transmissions between
the United States and a foreign country.” United
States v. Lyons, 740 F.3d 702, 718 (1st Cir. 2014).
However “cursory” McLellan believes the First
Circuit's analysis in Lyons was, this Court is
guided by it. The wire fraud statute explicitly references
transmissions “in interstate or foreign
commerce, ” § 1343 (emphasis added), and the two
transmissions at issue here were either made or received by
McLellan in the United States, Doc. No. 282 at ¶ 54.
Under these circumstances, there is no basis for dismissing
the charges alleging wire fraud based on extraterritoriality.
dismissal, McLellan requests: 1) that the conspiracy charge
be narrowed to exclude any allegations regarding the
“Irish Corporation” and the “Dutch Pension
Fund” transitions; 2) that all evidence regarding the
same two transitions be excluded at trial; 3) that evidence
relating to “extraterritorial transactions that formed
part of the remaining four transitions” be excluded at
trial; and 4) that the government be required “to
specify the basis for its categorization of each transition
and securities transaction as domestic.” Doc. No. 148
at 24-25. Each of these requests is DENIED. The Superseding
Indictment contains no specific factual allegations regarding
the “Irish Corporation” or the “Dutch
Pension Fund” transitions. As such, there are no
allegations to strike or narrow at this time.
to exclude evidence of extraterritorial transitions (or
extraterritorial transactions within a larger transition) are
premature. The Court is not presently in a position to
assess-and the government surely does not
share-McLellan's view that such evidence is
“irrelevant to proof of the offenses charged, ”
id. at 25, let alone to engage in the weighing
required by Federal Rule of Evidence 403. Challenges such as
these can be presented via motion in limine before the trial,
when the Court will consider the relevance and admissibility,
including pursuant to Rule 404(b), of such evidence.
the Court perceives no basis upon which to allow
McLellan's request for specifics regarding the
government's theory of why each transition and/or
transaction is “domestic, ” which the government
aptly characterizes as ...