U.S. v. Chalmers
| Decision Date | 25 January 2006 |
| Docket Number | No. S3 05 CR.59(DC).,S3 05 CR.59(DC). |
| Citation | 410 F.Supp.2d 278 |
| Parties | UNITED STATES of America v. David B. CHALMERS, Jr., Oscar S. Wyatt, Jr., Tongsung Park, John Irving, Ludmil Dionissiev, Catalina del Socorro Miguel Fuentes, a/k/a "Cathy Miguel," Mohammed Saidji, Bayoil (USA), Inc., Bayoil Supply & Trading Limited, Nafta Petroleum Company Limited, Mednafta Trading Company Limited, and Sarenco, S.A., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Michael J. Garcia, United States Attorney for the Southern District of New York, by Edward O'Callaghan, Stephen Miller, Michael Farbiarz, Assistant United States Attorneys, New York, NY, for the United States.
Stillman & Friedman, P.C., by Paul Schectman, Glen Kopp, New York, NY, for Defendant David B. Chalmers, Jr. Welsh & Recker, P.C., by Catherine M. Recker, Philadelphia, PA, for Defendants Bayoil Companies.
Dechert LLP, by David M. Howard, Philadelphia, PA, for Defendant Ludmil Dionissiev.
The Parker Law Firm, by Carl A. Parker, Port Arthur, TX, Miller & Chevalier Chartered, By Richard A. Hibey, Washington, D.C., for Defendant Oscar S. Wyatt, Jr.
In this case, the defendants are alleged to have engaged in a scheme to defraud the United Nations Oil-for-Food Program and the people of Iraq. The Superseding Indictment alleges that certain defendants, in concert with others, paid secret and illegal surcharges to the Government of Iraq for the right to participate in the Oil-for-Food Program, thereby obtaining the ability to purchase oil from Iraq when they otherwise would have been prohibited by law from doing so.
Before the Court are three motions by the defendants to compel discovery. First, David B. Chalmers, Jr., Ludmil Dionissiev, Bayoil (USA), Inc., and Bayoil Supply & Trading Limited (together, the "Bayoil Defendants") seek an order compelling the Government1 to provide a bill of particulars. Second, the Bayoil Defendants and defendant Oscar S. Wyatt, Jr., seek an order compelling the Government to provide discovery of all materials within the custody and control of all agencies of the United States that have investigated the Oil-for-Food Program. Third, the defendants Bayoil (USA), Inc., and Bayoil Supply & Trading Limited (together, the "Bayoil Companies") seek an order compelling the Court to order the Government to produce all statements of all alleged corporate agents discoverable under Rule 16(a)(1)(C). For the reasons set forth below, the motions are granted in part and denied in part.
As alleged in the Superseding Indictment, S3 05 Cr. 59(DC), the facts are as follows:
In August 1990, less than a week after the Iraqi army invaded Kuwait, the United States and the United Nations (the "U.N.") imposed economic sanctions on the Government of Iraq. These sanctions prohibited the United States and all members of the United Nations from trading in any Iraqi commodities or products, including Iraqi oil. (Indictment ¶ 1; see also Bayoil Br. at 2).
In April 1995, convinced of the need for a "temporary measure to provide for the humanitarian aid of the Iraqi people," the Security Council of the U.N. authorized the Government of Iraq to sell oil under certain limited conditions. (Bayoil Br. at 2; see Indictment ¶ 2). Principally, the conditions required that the proceeds of all sales of Iraqi oil were to be deposited into an escrow bank account monitored by the U.N. and used to purchase humanitarian goods for the benefit of the Iraqi people. In May 1996, the Iraqi government agreed to the terms set out by the Security Council and the United Nations Office of Iraq Programme, also known as the Oil-for-Food Program, was established. (Indictment ¶¶ 2, 3).
During the operation of the Oil-for-Food Program, federal law prohibited United States companies and individuals from doing business with the Government of Iraq unless they received a license from the Department of Treasury. (Indictment ¶ 4). Under the Program, the Iraqi government had total control over the selection of the companies and individuals who were to receive the right to purchase Iraqi oil. Sometime in 2000, officials of the Iraqi government allegedly began conditioning the distribution of allocations of oil on the recipient's willingness to pay a secret surcharge to the Government of Iraq. Under this surcharge scheme, several hundred million dollars (or more) were allegedly paid to the Iraqi government through front companies and/or bank accounts controlled by the Iraqi government. (Indictment ¶¶ 6, 7).
The Bayoil Defendants, Wyatt, and others allegedly participated in the surcharge scheme, paying millions of dollars to the Government of Iraq outside of the Oil-for-Food Program. By participating in the surcharge scheme, defendants allegedly "caused funds to be diverted from the Oil-for-Food Bank Account that otherwise would have been available to purchase humanitarian goods under the Oil-for-Food Program." (Indictment ¶¶ 22, 23).
The Bayoil Defendants were charged in a four-count Indictment unsealed on April 14, 2005. On October 21, 2005, a Superseding Indictment, S2 05 Cr. 59(DC), was unsealed containing the same four counts as the Indictment but adding additional defendants, including Wyatt. Following oral arguments on these motions, a third Indictment was filed containing a fifth count against an additional defendant, Tongsun Park. S3 05 Cr. 59(DC). The instant motions were filed and argued based on the October 21, 2005, indictment, but the first through fourth counts are the same in both indictments. Accordingly, the Court treats the instant motions as being directed at the current indictment, S3 05 Cr. 59(DC) (the "Superseding Indictment").
The Superseding Indictment charges Wyatt, the Bayoil Defendants, and others with: one count of conspiracy to commit wire fraud and to engage in prohibited financial transactions with Iraq in violation of 18 U.S.C. §§ 371 & 1349; one count of wire fraud in violation of 18 U.S.C. §§ 1343, 1349 & 2; one count of engaging in prohibited financial transactions with Iraq in violation of 18 U.S.C. §§ 2332d & 2; and one count of violation of the International Emergency Economic Powers Act, 50 U.S.C. § 1701 et seq. Count Five of the Superseding Indictment charges Park with conspiracy to act as an unregistered agent of a foreign government, to violate the Foreign Agents Registration Act, and to launder money.
These motions followed.
I discuss each motion in turn.
The Bayoil Defendants move for a bill of particulars pursuant to Rule 7(f) of the Federal Rules of Criminal Procedure. Specifically, they seek specification of the wire transmissions, financial transactions, instances of alleged travel "to and from Iraq," and false and fraudulent representations or material omissions alleged to be illegal in Counts One and Two, as well as identification of alleged co-conspirators and the victims of the alleged fraud. The Government opposes the motion, arguing that the Superseding Indictment and discovery provide sufficient information to enable defendants to effectively defend the charges against them.
"The function of a bill of particulars is to provide [a] defendant with information about the details of the charge against him ... and to avoid prejudicial surprise at ... trial." 1 Charles Alan Wright, Federal Practice and Procedure: Criminal 3d § 129, at 650 (1999) ("Wright"); see United States v. Torres, 901 F.2d 205, 234 (2d Cir.1990). A bill of particulars may serve the additional purpose of enabling a defendant to plead double jeopardy should he be prosecuted a second time for the same offense. See United States v. Bortnovsky, 820 F.2d 572, 574 (2d Cir.1987).
A defendant is not entitled to a bill of particulars as a matter of right. See United States v. Bin Laden, 92 F.Supp.2d 225, 233 (S.D.N.Y.2000) (quoting Wright, 1 Federal Practice and Procedure § 129, at 648). Rather, a bill of particulars is required "only where the charges of the indictment are so general that they do not advise the defendant of the specific acts of which he is accused." Torres, 901 F.2d at 234 (quoting United States v. Feola, 651 F.Supp. 1068, 1132 (S.D.N.Y.1987)).
The decision whether to grant a bill of particulars rests within the district court's discretion. United States v. Panza, 750 F.2d 1141, 1148 (2d Cir.1984); see also Fed.R.Crim.P. 7(f) (). To determine if a bill of particulars is necessary for the adequate preparation of a defense, the court may consider "the complexity of the offense, the clarity of the indictment, and the degree of discovery otherwise available to the defendants." United States v. Shoher, 555 F.Supp. 346, 349 (S.D.N.Y.1983). The court must also determine whether the information sought has been provided elsewhere, such as through discovery, prior proceedings, or the indictment itself, which may obviate the need for a bill of particulars. United States v. Strawberry, 892 F.Supp. 519, 526 (S.D.N.Y.1995).2
The Bayoil Defendants seek particulars in three categories: (i) specific transactions, transmissions, and false representations or omissions; (ii) the identity of other co-conspirators; and (iii) the identity of alleged victims.
The Bayoil Defendants argue that "the Superseding Indictment provides [them] with little more than the obvious fact that they have been indicted for unlawful conduct (wire transmissions, financial transactions and travel) related to the Oil-for-Food Program." (Bayoil Br. at 13). The Government responds that the Superseding Indictment is sufficiently detailed. The Government further argues that it has provided the defendants with a significant amount of discovery and...
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