United States v. Boutros
| Decision Date | 17 December 2019 |
| Docket Number | Criminal No. 19-mj-00264 |
| Parties | UNITED STATES OF AMERICA, v. TRICIA STEELE BOUTROS, Defendant. |
| Court | U.S. District Court — District of Columbia |
Defendant is charged by Complaint with one count of Wire Fraud, in violation of 18 U.S.C. § 1343, and one count of Aggravated Identity Theft, in violation of 18 U.S.C. § 1028. After the Court ordered Defendant's release subject to conditions on October 28, 2019, the Government, on November 21, 2019, moved to revoke Defendant's release conditions. First, the Government asserted that Defendant committed "Wire Fraud, in violation of 18 U.S.C. § 1343, Bank Fraud, in violation of 18 U.S.C. § 1344, and First Degree Fraud, in violation of 22 D.C. Code §§ 3221(a), 3222(a)(1)." Government's Motion to Revoke Release ("Government's Motion") (ECF No. 10) at 6. Second, the Government asserted that Defendant violated the condition of release which prohibits Defendant from conducting "any transaction over $1,000[,]" except for child support and rent, without the prior approval by Pretrial Services. Order Setting Conditions of Release (ECF No. 9) at 2. During a hearing on December 9, 2019, the Government declined to argue that Defendant violated federal and state criminal fraud laws. During the same hearing and during another hearing on December 11, 2019, the Government did, however, assert another violation of law to support its motion for revocation. See Notice of Filing (ECF No. 19). The Government introduced evidence of an executed search warrant which revealed that a package containing controlled substances was addressed to Defendant at her home address. Defendant disputed the Government's characterization of the financial transactions and the information revealed through the executed search warrant.
The undersigned conducted hearings on the Government's Motion on December 9, 2019 and December 11, 2019. Upon consideration of the evidence offered by the parties, the proffers and arguments of counsel, and the entire record herein, the undersigned ordered Defendant held without bond pursuant to 18 U.S.C. § 3148(b)(1)(A) and 18 U.S.C. § 3148(b)(1)(B). The findings of fact and statement of reasons in support of the Order of Revocation and Detention follow.
The Bail Reform Act of 1984, 18 U.S.C. § 3141, et seq., provides, in pertinent part, that if a judicial officer "shall order an order of revocation and detention if, after a hearing, the judicial officer . . . finds that there is . . . probable cause to believe that the person has committed a Federal, State, or local crime while on release." 18 U.S.C. §§ 3148(b), (b)(1)(A). Additionally, a judicial officer "shall order an order of revocation and detention if, after a hearing, the judicial officer . . . finds that there is . . . clear and convincing evidence that the person has violated any other condition of release." Id. §§ 3148(b), (b)(1)(B).
If a judicial officer finds that the Government meets its burden on either of these grounds, the judicial officer shall enter an order of revocation only if "based on the factors set forth in section 3142(g) of this title, there is no condition or combination of conditions of release that will assure that the person will not flee or pose a danger to the safety of any other person or the community" or "the person is unlikely to abide by any condition or combination of conditions of release." Id. §§ 3148(b)(1)(A)-(B). If there is probable cause to believe that the person on release committed a federal, state or local felony, "a rebuttable presumption arises that no condition or combination of conditions will assure that the person will not pose a danger to the safety of any other person or the community." Id. § 3148(b)(1)(B).
The Government offered the testimony of FBI Special Agent Joshua A. Huckel, and the exhibits attached to the Government's filings associated with the Motion to Revoke Pretrial Conditions. (ECF Nos. 10, 15, 16, 19). Defendant offered as evidence two exhibits which the court received during the December 9, 2019 hearing. (ECF No. 20). Pretrial Services also filed a Status Report. (ECF No. 18). Upon consideration of all of the evidence, the Court now makes the following factual findings to supplement the ones set forth on the record on December 11, 2019.
Defendant maintains three accounts at issue here: a Charles Schwab brokerage account, a Paxos Trust Company LLC account, and a Paxful account. Paxos offers cryptocurrency products and services. Paxful is a peer-to-peer market for cryptocurrency.
On October 25, 2019, Defendant transferred $14,000 and $16,000 from her Charles Schwab account to her Paxos account.
On October 30, 2019, a person by the initials J.S. in Myrtle Beach, South Carolina, who suffers from Parkinson's Disease, gave computer access to someone J.S. knew as "Jack Wilson" and an unnamed associate of "Jack Wilson." These men contacted J.S. on multiple occasions about what they called "software updates" to a program on J.S.'s computer which provides remote access, "Team Viewer." After several calls, J.S., on October 30, 2019, acquiesced to their request for computer access on October 30, 2019. A day or two later, several transfers from J.S.'s account took place, one of which was a $29,000 transfer from J.S.'s Charles Schwab Inherited IRA account and Defendant's Charles Schwab brokerage account. Another transfer reflected a $5000 transfer to an account maintained by "Rockwell Capital Management" at the State Bank of Southern Utah in Las Vegas, Nevada. Another transfer was attempted to an account maintained by Ran Longjun at the Bank of China in Hong Kong, but that transfer was not fulfilled. In one call with Agent Huckel, J.S. explained that J.S. made the wire transfers. In another call with Agent Huckel, J.S. explained that "Jack Wilson" and the unnamed associate hacked into J.S.'s computer.
On October 31, 2019, Defendant, through her Paxful account name, "freedc," made three transfers of Bitcoin to a user with the username "RedWomen." In total, these three transfers included bitcoin valued at $29,000.
On November 7, 2019, Charles Schwab reversed J.S.'s wire transfer to Defendant's Charles Schwab brokerage account. Defendant attempted to dispute the reversal with Schwab, characterizing the transfer as related to an exchange for "property" in a chat session with a Schwab employee. Defendant's efforts were unsuccessful.
Defendant urged this Court to find that these transactions were merely the consummation of an agreement reached on October 25, 2019, which predated the Court's imposition of pretrial release conditions. At a hearing, Defendant, through her counsel, conceded that there was no direct evidence of such an agreement. Defendant maintained, however, that Paxful chat logs and the sequence of transactions leads to an inference that Defendant innocently believed that "RedWomen" was either J.S. or a broker to J.S., and that Defendant and "RedWomen" essentially agreed to a currency conversion between bitcoin and U.S. dollars. As a result of that agreement, Defendant maintains that she transferred funds to Paxos on October 25, 2019 and received payment through the wire transfer from J.S. without knowing the circumstances surrounding the transfer. Chat transcripts with "RedWomen" reveal that Defendant believed "RedWomen" was acting on behalf of J.S.
The Court finds that Defendant offered no evidence of an agreement predating October 28, 2019. Defendant, through her counsel, also conceded that Defendant did not seek prior approval from Pretrial Services. The Court therefore finds that there is clear and convincing evidence that Defendant's transfers of funds after October 28, 2019 were in violation of her conditions of release.
On November 8, 2019, another judge of this Court authorized a search warrant for a package addressed to Defendant at her home address. The affiant for the search warrant, a United States Postal Inspector, believed that the sender from Dallas, Texas, was "a supplier from the Dark Web[,]" and that the package contained controlled substances. The seized package contained 70 "Soma" pills, a narcotic prescription drug also known as Carisoprodol, which is a Schedule IV controlled substance under the Controlled Substances Act. The Postal Inspector also noted that three additional parcels had been sent from the same Dallas, Texas sender to Defendant at her home address. The Government represented that these packages were sent on September 12, October 3, and October 23, 2019. The seized package reflected a date of November 5, 2019. Counsel for Defendant conceded that these three previous packages reached Defendant's apartment building but contested the inference that she actually received them. Counsel for Defendant also noted that Defendant is a recovering addict. On October 28, the Court ordered drug testing as a condition of pretrial release. Pretrial Services reported that the testing did not reveal a positive result for any substance. Carisoprodol, however, is not among the substances for which Pretrial Services tests. The Court finds that there is probable cause to believe that Defendant attempted to and conspired to possess controlled substances after October 28, 2019.
The Court finds that the evidence clearly and convincingly demonstrates that Defendant engaged in financial transactions over $1,000 without PSA approval after the Court ordered pretrial conditions of release prohibiting such transactions on October 28, 2019. The record reveals four post-October 28, 2019 transactions that are greater than $1,000, unrelated to child support or rent, and not approved by PSA: the...
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