U.S. v. Ferguson

• Decision Date: 10 April 2006
• Docket Number: No. CRIM.A.1:06-33(GBL).,CRIM.A.1:06-33(GBL).
• Citation: 432 F.Supp.2d 559
• Court: U.S. District Court — Eastern District of Virginia
• Parties: UNITED STATES of America v. Ronald E. FERGUSON, Robert D. Graham, Christian M. Milton, and Elizabeth A. Monrad Defendants.

432 F.Supp.2d 559

UNITED STATES of America v. Ronald E. FERGUSON, Robert D. Graham, Christian M. Milton, and Elizabeth A. Monrad Defendants.

No. CRIM.A.1:06-33(GBL).

United States District Court, E.D. Virginia, Alexandria Division.

April 10, 2006.

Raymond E. Patricco, Jr., United States Attorney's Office, Alexandria, VA, for United States of America.

Philip Eric Urofsky, Cadwalader Wickersham & Taft, Bruce Charles Bishop, Steptoe & Johnson LLP, Thomas Abbenante, Hope Ivy Hamilton, Peter Hugh White, Mayer Brown Rowe & Maw LLP, Washington, DC, James Clyde Clark, Land Clark Carroll Mendelson & Blair PC, Alexandria, VA, for Ronald E. Ferguson, et al.

MEMORANDUM ORDER

LEE, District Judge.

THIS MATTER is before the Court on Defendants' Robert E. Ferguson, Robert D. Graham, Christian M. Milton, and Elizabeth A. Monrad's (collectively "Defendants") Motions to Transfer Venue to the District Court of Connecticut, under Federal Rule of Criminal Procedure 21(b). (Docket Nos. 25, 28, 32, and 35.) This is a criminal securities fraud case.¹ The government alleges that Defendants conspired to defraud investors through fraudulent insurance transactions involving American International Group, Inc. ("AIG"), General Reinsurance ("GenRe"), and other related entities.² The issue before the Court is whether the Court should grant Defendants' Motion to Transfer Venue to the United States District Court of Connecticut because the bulk of the witnesses and defendants reside in Connecticut and New York; seventy-eight (78) of the overt acts in the Indictment occurred in Connecticut and New York; and that the interests of justice, the convenience of the parties, the witnesses, and counsel requires transfer to Connecticut. The Court grants Defendants' Motion to Transfer Venue to the United States District Court of Connecticut because Defendants have demonstrated that adjudicating this matter in this district will result in a "substantial balance of inconvenience" to the defendants.

I. BACKGROUND

This is a criminal securities fraud case. The government alleges that Defendants conspired to defraud investors through fraudulent insurance transactions involving AIG, GenRe, and other related entities. In January 2005, the government investigated what it called a "massive" accounting fraud which led to the collapse of a Richmond, Virginia-based insurance company. (Gov't's Br. at, 2.) The government maintains that Federal Bureau of Investigation ("FBI") agents from Richmond Virginia learned of allegedly fraudulent insurance transactions involving AIG³ and GenRe.⁴ (Gov't's Br., at 2.) After the FBI agents in Richmond, Virginia learned of the allegedly fraudulent transactions, the United States Postal Inspection Service ("USPIS"), Washington Division Field Office, assumed primary responsibility of the investigation. (Gov't's Br., at 2.)

The USPIS investigation uncovered that Defendants and their coconspirators had allegedly agreed to help AIG misled shareholders, investors, and analysts in AIG's public financial statements and earnings reports. (Indictment ¶ 32.) The government alleges that Defendants caused AIG to disseminate its false financial statements to shareholders, including Hampton University and Kanawha Capital, both Virginia entities. (Indictment ¶ 33-73.) The government further alleges that AIG electronically sent false documents to the Securities and Exchange Commission's ("SEC") EDGAR website for public disclosure. (Indictment ¶¶ ggg, jjj, vvv, yyy, and zzz.) The government has stated that the United States Securities and Exchange Commission has located their computer server which hosts the EDGAR website in Alexandria, Virginia.

As a result of the USPIS investigation, two (2) of Defendants' alleged coconspirators pled guilty to conspiracy to commit securities fraud in the Eastern District of Virginia. On June 9, 2005, John Houldsworth pled guilty before Judge Claude M. Hilton, and on June 10, 2005, Richard Napier pled guilty before Judge James Cacheris. (Gov't's Br., at 2.) The United States Probation Office for the Eastern District of Virginia has prepared Presentence Investigation Reports for Mr. Houldsworth and Mr. Napier, and both are awaiting sentencing. (Gov't's Br., at 2.)

On February 16, 2006, Defendants were arraigned before this Court for their roles stemming from the same alleged conspiracy. The trial date set for this matter is May 22, 2006. Defendants now move the Court to transfer this case to the United States District Court in Connecticut.

II. DISCUSSION

A. Standard of Review

Upon a defendant's motion, the court may transfer the proceeding, or one or more counts, against that defendant to another district for the convenience of the parties and witnesses and in the interest of justice. FED. R.CRIM. P. 21(b). The decision whether to transfer a case is committed to the sound discretion of the district court. See United States v. Heaps, 39 F.3d 479, 482 (4th Cir.1994) (citing United States v. Espinoza, 641 F.2d 153, 162 (4th Cir.1981), cert. denied, 454 U.S. 841, 102 S.Ct. 153, 70 L.Ed.2d 125 (1981)).

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; and, necessarily, any such determination must take into account any countervailing considerations which may militate against removal.

United States v. U.S. Steel Corp., 233 F.Supp. 154, 157 (S.D.N.Y.1964). On appeal the district court may only be reversed if it has `abused its discretion. Heaps, 39 F.3d at 482.

B. Analysis

The Court grants Defendants' Motion to Transfer Venue to the United States District Court of Connecticut because Defendants have demonstrated that having this matter adjudicated in this district will result in a "substantial balance of inconvenience" to the defendants. For a defendant to succeed on a Motion to Transfer Venue under Federal Rule of Criminal Procedure 21(b), the defendant must demonstrate that prosecution of the case in the district where the count was properly filed would "result in a substantial balance of inconvenience" to the defendant. United States v. Hurwitz, 573 F.Supp. 547, 552 (S.D.W.Va.1983) (citing United States v. Baltimore & Ohio R.R., 538 F.Supp. 200, 205 (D.D.C.1982)) (quoting United States v. Jones, 43 F.R.D. 511, 514 (D.D.C.1967)). In considering the inconvenience to the defendant, the court may weigh the:

(a) location of the defendant;

(b) location of witnesses;

(c) location of events likely to be in issue;

(d) location of documents and records;

(e) disruption of the defendant's business;

(f) expense to the parties;

(g) location of counsel;

(h) relative accessibility of place of trial;

(i) docket conditions in each district; and

(j) any other specific element which might affect the transfer.

Heaps, 39 F.3d at 483 (citing Platt v. Minnesota Mining & Manufacturing Co., 376 U.S. 240, 243-44, 84 S.Ct. 769, 11 L.Ed.2d 674 (1964)); United States v. Smallwood, 293 F.Supp.2d 631, 640 (E.D.Va.2003). In weighing these factors here, the Court finds that Defendants have demonstrated that adjudicating this matter in this district will result in a "substantial balance of inconvenience" to the defendants.

a. Location of the defendants

The Court finds that Defendants have shown that adjudicating this case in the Eastern District of Virginia will result in a "substantial balance of inconvenience" because three (3) out of the four (4) Defendants reside closer to the Connecticut courthouse than to the Alexandria courthouse. The Supreme Court has held that criminal defendants have no right, Constitutional or otherwise, to be tried in their home district. Platt, 376 U.S. at 245, 84 S.Ct. 769 ("Art. III, [§] 2, of the Constitution provides that `The Trial of all Crimes ... shall be held in the State where the said Crimes shall have been committed. . . .'"). "The provision for trial in the vicinity of the crime is a safeguard against the unfairness and hardship involved when an accused is prosecuted in a remote place." Id.

However, the Fourth Circuit has held that a defendant should be tried in a court close to where the defendant lives. See, e.g., United States v. Lenihan, 19 F.3d 1430, 1994 WL 102149, at *4 (4th Cir. March 29, 1994) (unpublished). See also United States v. Lima, No. 34 CR 800, 1995 WL 348105, at *3 (N.D.Ill. June 1, 1995) (unpublished) (transferring venue because the proposed venue "would cause less disruption of his family life."); United States v. Russell, 582 F.Supp. 660, 662 (S.D.N.Y.1984) (reasoning that "wherever possible, defendants should be tried where they reside"). "To the extent that there is a `policy' favoring the trial of defendants where they reside [and] this `policy' is in tension with the more general presumption that `a criminal prosecution should be retained in the original district,'" the matter should remain in the original district unless the interests of justice require transfer. See United States v. Spy Factory, Inc., 951 F.Supp. 450, 464 (S.D.N.Y.1997); see also Espinoza, 641 F.2d at 162 (denying a defendant's motion to transfer venue based on the contention that he had the right to be tried in the jurisdiction of his residence). The Court finds that the interests of justice require transfer in this case.

Mr. Ferguson

Defendants assert that Mr. Ferguson "has lived and worked in Connecticut for thirty-four years." (Def.'s Mot., at 7.) However, the government argues that on the day of the arraignment Mr. Ferguson advised the United States Probation Office ("USPO") that he currently resides in Florida. (Gov't's Br., at 7.) The government further argues that, since the arraignment, Mr. Ferguson has been supervised by a USPO officer in Fort Meyers, Florida. (Id.) Additionally, the government notes that Mr. Ferguson has indicated that he intends to stay in Florida...