U.S. v. Rosen

Decision Date23 March 2005
Docket NumberNo. CR 03-1219 AHM.,CR 03-1219 AHM.
Citation365 F.Supp.2d 1126
PartiesUNITED STATES of America, Plaintiff, v. David F. ROSEN, Defendant.
CourtU.S. District Court — Central District of California

Michael Robert Doyen, Los Angeles, CA, Paul M. Sandler, Baltimore, MD, for defendant.

ORDER RE: DEFENDANT'S MOTIONS TO DISMISS THE INDICTMENT

MATZ, District Judge.

Defendant David Rosen ("Rosen") has been charged in four counts with causing false statements to be filed with the Federal Election Commission ("FEC"), in violation of 18 U.S.C. §§ 1001(a) and 2. Rosen moves to dismiss all counts in the indictment on three separate grounds: (1) the FEC is not within the executive branch of the Government of the United States and, accordingly, none of the false statements alleged in the Indictment was "within the jurisdiction of the executive, legislative or judicial branch of the Government" within the meaning of 18 U.S.C. § 1001(a); (2) venue in this Central District of California is improper; and (3) the indictment was unlawfully sealed. Rosen also moves to dismiss Counts Two, Three and Four based on multiplicity.

SUMMARY OF RULINGS

The Court DENIES Rosen's motion to dismiss the Indictment for "failure to allege elements" (as he puts it) of 18 U.S.C. § 1001, a jurisdictional challenge; DENIES Rosen's motion to dismiss the Indictment for improper venue; DENIES without prejudice Rosen's motion to dismiss the Indictment for unlawful sealing; and GRANTS IN PART and DENIES IN PART Rosen's motion to dismiss for multiplicity.

THE INDICTMENT

Defendant David Rosen, an experienced political fundraiser who has been associated with several campaigns for federal office, was the National Finance Director for the 2000 senatorial campaign of "Senator A."1 Indictment, ¶ 1. As part of the election campaign, a joint fundraising committee ("JFC") was established under the Federal Election Campaign Act of 1971 ("FECA"), 2 U.S.C. § 431(4), and organized under regulations promulgated by the FEC. Id., ¶ 2. The JFC was legally permitted to raise both "hard money" (federal funds) and "soft money" (non-federal funds), as well as accept "in-kind" contributions in the form of free or discounted goods or services. Id., ¶ 4.

The JFC was required to prepare and file financial disclosure reports with the FEC on a quarterly basis. Id., ¶ 6. The reports were to include, among other things, the total amount of all funds received and all disbursements made by the JFC in connection with joint fundraising activities, as well as the source and total amount of contributions, including in-kind contributions, received from prohibited sources such as corporations. Id. Additionally, the JFC was required to maintain documents related to contributions, donations and expenditures for inspection by the FEC. Id.

As National Finance Director for the campaign, Rosen's obligations included soliciting and collecting donations, assisting in planning for fundraising events, working with donors, and reviewing invoices and bills associated with fundraising events. Id., ¶ 7. Rosen's duties also included an obligation to accurately report to the JFC's FEC compliance officer in Washington, D.C., the source and amount of contributions received, and expenses incurred, from fundraising events. Id., ¶ 8. It was the compliance officer, however, who was responsible for preparing and filing the JFC's reports with the FEC. Id.

From in or about July 2000 to and including in or about August 2000, Rosen worked out of a media company's corporate offices in Los Angeles, California. He was planning an August 12, 2000, fundraising event to benefit the Senate campaign ("the Hollywood Gala"). Id., ¶ 10. The media company was affiliated with a "wealthy contributor" who pledged to underwrite the costs. Id., ¶ 9. Rosen was responsible for all fundraising, planning, costs, and expenses for the Hollywood Gala. Id., ¶ 10.

Between July 2000, up to and including in or about October 2000, the wealthy contributor paid more than $1.1 million to produce the Hollywood Gala. Id., ¶ 11. The contributor used several corporate entities he controlled to make these payments, which had to be disclosed to the FEC as in-kind contributions or donations. Id.

In or about August 2000 through October 2000, Rosen provided the JFC's compliance officer with information about the costs of the Hollywood Gala, in-kind contributions and donations received, all for the purpose of enabling the compliance officer to prepare the JFC's third-quarter filing with the FEC. Id., ¶ 13. Rosen understated the costs and approximately $1.1 million of in-kind contributions and donations made by the wealthy contributor. Id.

In response to requests from the compliance officer for documentation supporting the costs of the concert portion of the Hollywood Gala, Rosen instructed a member of the Hollywood Gala planning team to obtain a fictitious invoice in the amount of $200,000 for the concert production costs, knowing that the costs were substantially greater than that figure. Id., ¶ 14. In or about August and September 2000, Rosen faxed receipts and invoices for goods and services provided at the Hollywood Gala. The faxes were sent from Los Angeles to the JFC's compliance officer in Washington, D.C., and they included the fictitious $200,000 invoice. Id., ¶ 15. In addition, Rosen withheld other true costs of the Hollywood Gala from the compliance officer. Id.

In or about October 2000, Rosen provided a summary of costs, in-kind contributions and donations associated with the Hollywood Gala to the JFC's compliance officer, knowing that the compliance officer would use this information to prepare mandatory FEC filings. Id., ¶ 16. Rosen also used the telephone and "fax" machine to provide the compliance officer with additional financial information. Id. When the compliance officer asked Rosen about some of the in-kind contributions and Hollywood Gala expenses that Rosen had provided, Rosen informed the compliance officer over the telephone that the numbers were accurate. Id., ¶ 17.

On or about October 15, 2000, the compliance officer submitted the JFC's Third Quarterly Report to the FEC, covering the time period of July 1, 2000 through September 30, 2000. On Schedule H-3 of Form 3X, the JFC reported to the FEC that it received $366,564.69 in in-kind contributions in connection with the Hollywood Gala, when in fact the JFC had received approximately $1.1 million in in-kind contributions and donations. Id., ¶ 18.

On or about January 30, 2001, the JFC filed a required amended report and disclosed additional expenses for the Hollywood Gala on Schedule H-3, this time reporting $401,491 in in-kind contributions and donations. Id., ¶ 19.

In response to an inquiry from the FEC regarding the Hollywood Gala, on or about July 30, 2001, the treasurer of the JFC submitted a letter to the FEC stating that the JFC's accounting of in-kind contributions for the Hollywood Gala was accurate and repeating the $401,419 figure for non-federal in-kind contributions and donations. Id., ¶ 21.

The treasurer sent the foregoing letters in reliance on information provided by Rosen. Id.

In Counts One through Three, the government charges Rosen under 18 U.S.C. §§ 10012 and 2. These counts all allege that he knowingly and willfully caused a materially false, fictitious and fraudulent statement and representation to be made to the FEC. Count One alleges that Rosen caused the JFC to file a report with the FEC on October 15, 2000 falsely declaring that the JFC received only $366,564.69 in in-kind contributions for the Hollywood Gala, when in fact, as Rosen knew, the JFC received substantially more than that amount. Id. Count Two alleges that Rosen caused the JFC to file an amended report with the FEC on January 30, 2001 falsely declaring that the JFC only received $401,419.03 in in-kind contributions for the Hollywood Gala, when in fact, as Rosen knew, the JFC received substantially more than that amount. Id. Count Three alleges that Rosen caused the JFC to send to the FEC a July 30, 2001 letter that falsely stated that the JFC had raised $401,419.03 for the Hollywood Gala, when in fact, as Rosen knew, the JFC received substantially more than that amount. Id.

In Count Four, the government charges Rosen under 18 U.S.C. §§ 1001 and 2 with knowingly and willfully causing a false writing and document to be made to the FEC. Specifically, the government alleges that Rosen caused individuals involved with the production of the Hollywood Gala to create a fictitious invoice for $200,000 and that Rosen provided this fictitious invoice to JFC compliance officers as support for expenses incurred, knowing that the JFC would rely on this document in preparing filings with the FEC and that the document would be available for inspection by FEC officials conducting an audit or review of the JFC's fundraising activities.

DISCUSSION
I. Motion to Dismiss for "Failure to Allege Elements"

The indictment alleges that the FEC is an independent regulatory agency whose mission is to administer and enforce the FECA. ¶ 5. It does not allege that the FEC is within the executive, legislative or judicial branch of the government. Rosen argues that the entire Indictment should be dismissed because § 1001 (as amended in 1996) does not prohibit false statements to the FEC. He argues that the FEC is an independent agency that is not within the executive branch of the government, and that because § 1001 prohibits the making of a "false, fictitious, or fraudulent statement" "within the jurisdiction of the executive, legislative, or judicial branch of the Government," there is no jurisdiction under 18 U.S.C. § 1001 for statements made to the FEC.

The government argues that the FEC is in the executive branch and that § 1001 covers statements to the FEC today, just as it indisputably did prior to the 1996 amendments.

The Court DENIES Defendant's motion to dismiss for "failure to allege elements"...

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