United States v. Eury

Decision Date27 January 2021
Docket Number1:20CR38-1
CourtU.S. District Court — Middle District of North Carolina

THOMAS D. SCHROEDER, Chief District Judge.

Before the court are three separate motions by Defendant Craig Stanford Eury, Jr., to dismiss the indictment. (Docs. 21, 23, 24.) Eury also seeks to compel grand jury materials. (Doc. 25.) A hearing was held on December 10, 2020, and the court ordered supplemental briefing. All motions are now fully briefed (Docs. 31-34, 43-46, 52-55). For the reasons set forth below, the motions will be granted in part and denied in part.


Eury filed his motions to dismiss pursuant to Federal Rule of Criminal Procedure 12(b). Because these are pre-trial motions, the court accepts as true the Government's version of the facts, as set forth in the indictment and, where applicable, the bill of particulars. See United States v. Thomas, 367 F.3d 194, 197 (4th Cir. 2004) ("To warrant dismissal of the indictment, [the defendant] would need to demonstrate that the allegations therein, even if true, would not state an offense."); United States v. Roof, 225 F. Supp. 3d 438, 455 (D.S.C. 2016) (reviewing facts in both indictment and bill of particulars on defendant's motion to dismiss).

This case stems from the 2014 indictment and plea agreement of International Labor Management Corporation ("ILMC"), a now-defunct business that prepared visa applications on behalf of client companies for temporary alien workers under the H-2A and H-2B visa programs. (Doc. 1 ¶ 1.) Eury founded ILMC in 1994 and was president until 2008, after which he remained the owner and retained control over the management and finances of the company. (Id. ¶ 3.) During the relevant time Eury was also the director of the North Carolina Grower's Association ("NCGA"), a North Carolina non-profit in the business of obtaining H-2A agricultural workers for its member farmers. (Id. ¶ 8; Doc. 17 at 5.)

In January 2014, a federal grand jury returned an indictment against ILMC, charging the company with 40 felony violations of federal law, including encouraging and inducing aliens to enter and reside in the United States for commercial advantage, obtaining visas by fraud, and engaging in monetary transactions with criminal proceeds. (Doc. 1 ¶ 12.) In July 2014, ILMC pleaded guilty to the charges against it (the "ILMC Plea Agreement").1 (Id. ¶ 13.) The court accepted the plea on July 31 after a change of pleahearing (id.), and ILMC ceased operations thereafter when the U.S. Department of Labor issued a notice debarring ILMC from participating in the H-2A and H-2B visa programs (id. ¶ 18).

Relevant here, the ILMC Plea Agreement included a forfeiture provision in which ILMC "consent[ed] and agree[d] to forfeit . . . all assets . . . including, without limitation all bank accounts, cash on hand, furnishings, fixtures, and equipment, accounts receivable, computers, intellectual property, and any other property, tangible or intangible, belonging in whole or in part" to ILMC. (Id. ¶ 15.) The ILMC Plea Agreement also contained an agreement to consent to a money judgment in the amount of $1,120,000.2 (Id. ¶ 16.) On October 30, the court entered an order of forfeiture against ILMC, which noted that ILMC had agreed to "immediately and voluntarily release and forfeit all property constituting or derived from proceeds from the criminal violations" and directed that the order of forfeiture for $1,120,000 be included in the criminal judgment in ILMC's criminalcase (the "Forfeiture Order"). (Id. ¶ 19.) The Government alleges that, as of the filing of the current indictment against Eury, ILMC had a remaining balance of $829,327 on its money judgment. (Id. ¶ 22.)

In the current indictment against Eury, the Government alleges that he has interfered with the forfeiture of two items of ILMC property which the Government contends was forfeited to the United States as part of the ILMC Plea Agreement: the Guest Worker Program, which is a computer program jointly developed for ILMC and NCGA to facilitate the application of H-2A and H-2B visas; and the ILMC Database, which consists of proprietary ILMC business information including client and worker data. (Id. ¶¶ 9-10.) The Government contends that ILMC had an interest in both the Guest Worker Program and the ILMC Database, that both were property of ILMC, and that as such both had been forfeited to the Government pursuant to the ILMC Plea Agreement and Forfeiture Order. (Id. ¶ 23.)

The Guest Worker Program was created by a computer consultant, Charles Snell, and his company, Data AnyWare, in June 2006. (Doc. 17 at 2.) The program was paid for by ILMC and NCGA and was structured based on their business operations. (Id.) Data AnyWare retained the right to reuse certain aspects of the base computer code as part of the agreement. (Id. at 2-3.) However, the Government contends that Snell considered the program to be theintellectual property of ILMC and NCGA and would only transfer any aspect of the program to another company with the express authority of Eury. (Id. at 5; Doc. 52.) Each company was given an individual access point to access data contained on the Guest Worker Program. (Doc. 17 at 3.) With certain limited exceptions, the data contained on each so-called company "silo," such as the ILMC Database, was confidential to each company and could not be accessed by other companies or by the general public. (Id.) The ILMC Database was comprised of ILMC-specific business data including confidential information about its clients, visa applications, guest workers, and billing information. (Id.)

The Government alleges that Eury, after the ILMC Plea Agreement, took control of the Guest Worker Program and the ILMC Database and directed their transfer to two other companies, National Agricultural Consultants, LLC ("NAC") and Application Services and Administrative Programs, LLC ("ASAP"). (Doc. 1 ¶¶ 29-32.) NAC was formed on August 3, 2014 -- three days after the court accepted ILMC's guilty plea -- by a former employee of ILMC for the purpose of providing continued visa services to former ILMC clients using ILMC's Guest Worker Program and its contents. (Id. ¶¶ 26-27.) ASAP was another entity in the temporary worker field; Eury partly owned and controlled the company's finances andoperations. (Id. ¶¶ 6-7.)3 The Government contends that Eury directed Snell to transfer the Guest Worker Program and the ILMC Database to ASAP on August 7, 2014, one week after ILMC pleaded guilty. (Doc. 17 at 7.) Later, Eury directed Snell to grant NAC access to the ILMC Database. (Id. at 8-9.) These actions allowed ASAP and NAC to continue to serve former ILMC clients. (Id. at 8-10.) Neither ASAP nor NAC paid for this transfer of ILMC property. (Id. at 7, 10.) The Government alleges that NAC and ASAP, at the direction of Eury, agreed to a "subscription model" whereby NAC utilized the Guest Worker Program and ILMC Database to serve former ILMC clients, who would pay a recruiter fee to ASAP for each worker brought into the United States on an H-2A visa. (Id. at 10.) Because Eury was a co-owner of ASAP, this arrangement allowed him to receive money from former ILMC clients. (Id.) The Government alleges that between August 2014 and December 2015, NAC clients, who were former ILMC clients, paid ASAP a total of $544,132, a "substantial portion" of which was directly transferred to Eury for his personal use. (Id.) The Government alleges Eury took further steps to conceal the transfer of the Guest Worker Programand ILMC Database, such as directing Snell to create a separate NAC server to host the programs. (Id. at 10-11.)

In January 2020, a federal grand jury returned the present nine-count indictment against Eury. (Doc. 1.) Counts 1 and 2 allege mail fraud, in violation of 18 U.S.C. §§ 1341 and 2; Count 3 alleges obstruction of an official proceeding -- here, the forfeiture action against ILMC, in violation of 18 U.S.C. §§ 1512(c)(2) and 2; Count 4 alleges theft of government property, in violation of 18 U.S.C. §§ 641 and 2; and Counts 5 through 9 allege money laundering, in violation of 18 U.S.C. §§ 1957 and 2. On March 18, 2020, Eury moved for a bill of particulars. (Doc. 13.) The court held a hearing on June 12 and, in part due to the Government's willingness to comply, subsequently granted the motion, and the Government provided the bill of particulars on June 26. (Doc. 17.) Eury then filed the four present motions which, after a hearing and supplemental briefing, are ready for decision.

A. Standard of Review and Elements of the Crimes Charged

"There is no federal criminal procedural mechanism that resembles a motion for summary judgment in the civil context." United States v. Yakou, 428 F.3d 241, 246 (D.C. Cir. 2005). Instead, Federal Rule of Criminal Procedure 12(b) provides that "[a] party may raise by pretrial motion any defense, objection, orrequest that the court can determine without a trial on the merits." Fed. R. Crim. P. 12(b)(1).4

"A motion to dismiss an indictment tests whether the indictment sufficiently charges the offense the defendant is accused of committing." United States v. Bowling, 108 F. Supp. 3d 343, 348 (E.D.N.C. 2015) (citations omitted). An indictment "must be a plain, concise, and definite written statement of the essential facts constituting the offense charged." Fed. R. Crim. P. 7(c)(1). "[A]n indictment is sufficient if it, first, contains the elements of the offense charged and fairly informs a defendant of the charge against which he must defend, and, second, enables him to plead an acquittal or conviction in bar of future prosecutions for the same offense." Hamling v. United States, 418 U.S. 87, 117 (1974).

Although Rule 12(b)(1) "authorizes courts to rule on motions involving questions of law, courts will not rule on motions involving questions of fact." United States v. Souder, No. 1:08CR136-1, 2009 WL...

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