U.S. v. Hirko
| Decision Date | 31 August 2006 |
| Docket Number | Criminal No. H-03-93. |
| Citation | 447 F.Supp.2d 734 |
| Parties | UNITED STATES of America v. Joseph HIRKO. |
| Court | U.S. District Court — Southern District of Texas |
Norman Sepenuk, Attorney at Law, Per A. Ramfjord, Stoel Rives LLP, Portland, OR, for Joseph Hirko.
AMENDED ORDER*
Pending before the Court is Defendant Joseph Hirko's Motion to Dismiss Counts 2 through 6, 25 and 26 of the Fifth Superseding Indictment and Counts 2 through 6 of the Seventh Superseding Indictment on Grounds of Collateral Estoppel (Instrument No. 935), filed on December 8, 2005.
On March 11, 2003, the United States of America filed a multiple-count Indictment against Defendants Joseph Hirko, Kevin Howard, Scott Yeager, Rex Shelby, Michael Krautz (hereinafter "Defendants") and former Defendants Kenneth Rice and Kevin Hannon, charging them with conspiracy to commit wire fraud and securities fraud, and substantive counts of wire fraud, securities fraud, insider trading, and money laundering. The government filed a Fourth Superseding Indictment on July 22, 2004. (Instrument No. 340). On November 5, 2004, the government filed a Fifth Superseding Indictment. (Instrument No. 468). During the relevant times in the Indictment, Defendants served in various positions as executives to Enron Communications, Inc., later renamed as Enron Broadband Services ("EBS").
In the Fifth Superseding Indictment, Count One charged Defendant Hirko with conspiracy to commit securities fraud and wire fraud. (Instrument No. 468). Count Two of the Indictment charged Defendant Hirko with the substantive offense of securities fraud in connection with alleged false statements and material omissions made at a January 20, 2000 Analyst Conference. (Id.). Counts Three through Six charged Defendant Hirko with the substantive offense of wire fraud in connection with press releases issued by Enron Broadband Services on January 31, 2000 through May 15, 2000. (Id.). Counts Twenty-Three through Twenty-Six charged Defendant Hirko with insider trading based on trades of Enron stock made on February 18, 2000 through May 12, 2000. (Id.). Counts One Hundred Seventy-Two through One Hundred Seventy-Four charged Defendant Hirko with insider trading based on trades of Enron stock made on January 23, 2001 through January 26, 2001. Counts One Hundred Seventy—Five through One Hundred Seventy—Six charged Defendant Hirko with money laundering based on transactions on January 30, 2001 through February 1, 2001. (Id.).1
On April 18, 2005, through July 13, 2005, this Court conducted a jury trial on all of the charges pending against the Defendants. On July 20, 2005, the jury returned a verdict of not guilty for Defendant Hirko on Counts 23 and 24 charging insider trading based on trades on February 18, 2000 and April 20, 2000, respectively. The jury also returned a verdict of not guilty for Defendant Hirko on Counts 55 through 66 charging money laundering based on transactions made in the year 2000. (Instrument No. 869). The jury did not enter a verdict on the conspiracy count (Count 1), wire fraud counts (Counts 2-6), two counts of insider trading based on trades in May 2000 (Counts 25-26), three counts of insider trading based on trades in January 2001 (Counts 172-174), and money laundering counts based on transactions in January and February 2001 (Counts 175-176). As to these counts, the jury indicated that they were hopelessly deadlocked. (Id.).
On November 9, 2005, the government filed a Seventh Superseding Indictment charging Defendant Hirko with conspiracy to commit securities and wire fraud, securities fraud related to alleged false statements and omissions made at the 2000 Analyst Conference, two counts of wire fraud for press releases issued on April 11, 2000 and May 15, 2000, two counts of insider trading for trades made in May 2000, and three counts of insider trading based on trades made in January and February 2001. (Instrument No. 915). The Seventh Superseding Indictment indicated the government's intention to retry Defendant Hirko on the conspiracy, securities fraud, wire fraud and insider trading counts for which the jury failed to render a verdict. (Instrument No. 915). The Seventh Superseding Indictment removes all of the counts on which Defendant Hirko received a verdict of not guilty, but the Indictment is based on factual allegations similar to those asserted in the Fifth Superseding Indictment. (Id.). A comparison of the counts alleged in the Fifth Superseding Indictment and the Seventh Superseding Indictment is set forth below.
On December 8, 2006, Defendant Joseph Hirko filed a Motion to Dismiss Counts 2 through 6, 25 and 26 of the Fifth Superseding Indictment and Counts 2 through 6 of the Seventh Superseding Indictment on Grounds of Collateral Estoppel. (Instrument No. 969). Under the Double Jeopardy Clause of the Fifth Amendment and Doctrine of Collateral Estoppel, Defendant Hirko argues that the crimes charged in Counts 2 (securities fraud), Counts 3 through 6 (wire fraud), and Counts 25 and 26 (insider trading) of the Fifth Superseding Indictment; and Counts 2 (securities fraud), 3 and 4 (wire fraud), and 5 and 6 (insider trading) of the Seventh Superseding Indictment, were effectively litigated and decided against the government in the first trial. (Instrument No. 885). Defendant Hirko has not moved to dismiss Count 1 (conspiracy to commit wire and securities fraud) of the Fifth Superseding Indictment or Seventh Superseding Indictment. (Id.). Defendant Hirko has also not moved to dismiss Counts 172 through 174 of the Fifth Superseding Indictment or Counts 11 through 13 of the Seventh Superseding Indictment, which charge insider trading based on trades in January and February 2001.
In support of his Motion, Defendant Hirko argues that "the only rational basis on which the jury could have acquitted Mr. Hirko on the 2000 Money Laundering Counts and the February and April 2000 Insider Trading Counts is by finding that he did not engage in the alleged misrepresentations and omissions that formed the common factual basis of the securities fraud, wire-fraud and insider-trading counts in the Fifth Superseding Indictment." (Instrument No. 935, at 5).
On December 28, 2005, the United States filed a Response to Defendant Hirko's Motion to Dismiss on Grounds of Collateral Estoppel. (Instrument No. 947). The government argues that "[Defendant Hirko's] reliance on generalized verdicts of acquittal on a few counts does not give rise to a conclusion that the jury must have reached a decision that he did not commit the essential elements of the offenses now at issue in the Fifth and Seventh Superseding Indictments." (Id. at 3). In addition,...
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Brown v. United States
...Edgmon, 952 F.2d 1206, 1213-14 (10th Cir. 1991); United States v. Evans, 272 F.3d 1069, 1088 (8th Cir. 2001); United States v. Hirko, 447 F. Supp. 2d 734, 746-47 (S.D. Tex. 2006). Brown's argument that the Indictment failed to allege a predicate offense sufficient to show that he laundered ......