United States v. Kolfage

Decision Date14 December 2020
Docket Number20 Cr. 412 (AT)
CourtUnited States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York

and TIMOTHY SHEA, Defendants.

20 Cr. 412 (AT)


December 14, 2020


ANALISA TORRES, District Judge:

Defendant Timothy Shea moves for an order transferring his case to the District of Colorado. Non-parties, We Build the Wall, Inc. ("We Build the Wall") and Kris Kobach, in his individual capacity and as general counsel for We Build the Wall, move for an order (1) modifying the sealed post-indictment restraining order issued on August 24, 2020, which prohibits the transfer of certain funds involved in Defendants' charged offenses, and (2) unsealing certain documents. For the reasons stated below, both motions are DENIED.


On August 17, 2020, a grand jury returned a sealed indictment charging Defendants, Brian Kolfage, Stephen Bannon, Andrew Badolato, and Timothy Shea, with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h). Indictment, ECF No. 2. The indictment alleges that Defendants fraudulently induced donors to contribute millions of dollars to an online crowdfunding campaign known as We Build the Wall. The indictment further alleges that Kolfage, Badolato, and Bannon made repeated false statements—on the crowdfunding website, We Build the Wall's website, and in social media, press releases, and donor solicitations—that

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money from the fundraising campaign would not be taken for Defendants' personal use, and that all funds would go to the campaign's stated mission: building a wall along the southern border of the United States. Id. ¶¶ 1, 9, 11-14. Despite these representations, Defendants allegedly took hundreds of thousands of dollars for their own personal use. Id. ¶ 17. We Build the Wall raised approximately $25,000,000. Id. ¶ 16.

As to Shea, the indictment alleges that he conspired to transfer to Defendants the funds raised by dint of the false statements. Id. ¶ 2. Shea, a Colorado resident, allegedly suggested via text message to Defendants that he create a shell corporation to send money to himself and Kolfage. Id. ¶ 20; Def. Mem. at 4. Consistent with this alleged proposal, Shea incorporated a limited liability corporation, which We Build the Wall then paid for "social media" work that was not performed. Indictment ¶ 21. These funds were then funneled to Shea and Kolfage. Id.

The indictment further contemplates that if Defendants were convicted, they would have to forfeit certain property involved in the alleged crimes under 18 U.S.C. § 981(a)(1)(c) and 28 U.S.C. § 2461(c). Indictment ¶¶ 34-35. The indictment was unsealed on August 20, 2020. ECF No. 3.

On August 24, 2020, the Court granted the Government's ex parte application for a sealed restraining order pursuant to 18 U.S.C. §§ 981, 982, 21 U.S.C. § 853, and 28 U.S.C. § 2461. The order restrains the transfer of funds into or out of three We Build the Wall bank accounts (the "Restraining Order"). Restraining Order at 1-2. The Court found probable cause to grant the Restraining Order because the Government's application (the "Restraining Order Application") and the supporting affidavit of United States Postal Inspector Troy Pittenger (the "Pittenger Affidavit"), both filed under seal, demonstrate that assets in the accounts "are subject to restraint and forfeiture as proceeds of a conspiracy to commit wire fraud, in violation of Title

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18, United States Code, Section 1343, and/or property involved in money laundering, in violation of Title 18, United States Code, § 1956." Id. at 1. The Government then served the Restraining Order on the banks that maintain the accounts. Gov't Opp'n to Modification at 2, ECF No. 42.

Though the Government had previously advised We Build the Wall and Kobach of its belief that the funds were subject to restraint and forfeiture, and though the Government had served document requests on Kobach individually,1 the Government did not inform them that it had obtained the Restraining Order until a month after it was issued. We Build the Wall Mot. at 6-9.

On October 13, 2020, We Build the Wall and Kobach filed a motion under seal seeking (1) an order modifying the Restraining Order to permit their access to funds that they claim are not connected with the charged offenses, or, (2) in the alternative, a hearing on whether the Restraining Order should be modified. Id. at 1. We Build the Wall and Kobach also moved to unseal the portions of the Restraining Order Application and the Pittenger Affidavit relied on by the Court, to the extent that such access could be granted pursuant to an appropriate protective order. Id.; We Build the Wall Reply at 12 n.9, ECF No. 52. Separately, on November 5, 2020, Shea moved to transfer his case to the United States District Court for the District of Colorado. Def. Mot., ECF No. 44.

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I. Motion to Transfer

Shea argues that because he is a resident of Colorado and has no connections to the Southern District of New York, his case should be transferred to the United States District Court for the District of Colorado in the interest of justice. Def. Mot.; Def. Mem. at 1, ECF No. 45.

A. Legal Standard

"As a general rule a criminal prosecution should be retained in the original district." United States v. Parrilla, No. 13 Cr. 360, 2014 WL 1621487, at *13 (S.D.N.Y. Apr. 22, 2014) (internal quotation marks and citation omitted), aff'd sub nom. United States v. Kirk Tang Yuk, 885 F.3d 57 (2d Cir. 2018). However, under Federal Rule of Criminal Procedure 21(b), "[u]pon the 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, any victim, and the witnesses, and in the interest of justice."

To determine if transfer is proper, the Court considers the ten factors set forth in Platt v. Minnesota Mining & Manufacturing Co.:

(1) location of . . . defendant; (2) location of possible witnesses; (3) location of events likely to be in issue; (4) location of documents likely to be involved; (5) disruption of defendant's business unless the case is transferred; (6) expense to the parties; (7) location of counsel; (8) relative accessibility of place of trial; (9) docket conditions of each district; and (10) any other special elements which might affect the transfer.

376 U.S. 240, 243-44 (1964). In addition, courts should consider the convenience of "any victim." United States v. Calk, No. 19 Cr. 366, 2020 WL 703391, at *2 (S.D.N.Y. Feb. 12, 2020). Courts "should not give any one factor preeminent weight nor should it assume that the quantity of factors favoring one party outweighs the quality of factors in opposition." United States v. Spy Factory, Inc., 951 F. Supp. 450, 455 (S.D.N.Y. 1997). Rather, how the factors are

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weighed is committed to the sound discretion of the district court. United States v. Maldonado-Rivera, 922 F.2d 934, 966 (2d Cir. 1990). Ultimately, the defendant carries the burden of showing that "the interests of justice require transfer." United States v. Estrada, 880 F. Supp. 2d 478, 482 (S.D.N.Y. 2012); see also United States v. Posner, 549 F. Supp. 475, 477 (S.D.N.Y. 1982) ("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." (internal citation omitted)).

B. Application of the Platt Factors

1. Location of Defendant

The first factor weighs somewhat in favor of transfer. Shea resides in Colorado, and his family and business are located there. Def. Mem. at 8. However, a defendant's residence "is [neither] dispositive [n]or has independent significance in determining whether transfer is warranted," though it may be considered in reference to the other factors. United States v. Riley, 296 F.R.D. 272, 276 (S.D.N.Y. 2014) (citing Platt, 376 U.S. at 245); Maldando-Rivera, 922 F.2d at 965. Nevertheless, absent countervailing concerns, the fact that Shea resides in Colorado weighs in favor of transfer. See Spy Factory, 951 F. Supp. at 456.

2. Location of Possible Witnesses

The second factor does not weigh in favor of transfer. To demonstrate that the location of possible witnesses favors transfer, the defendant cannot use "naked allegation[s] that witnesses will be inconvenienced by trial in a distant forum." Riley, 296 F.R.D. at 276. Instead, the defendant must "offer specific examples of witnesses' testimony and their inability to testify

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because of the location of the trial" including "concrete demonstrations" of the proposed testimony. Id.

Shea states that he intends to call in his case-in-chief a number of character witnesses from Colorado, and claims that "[t]raveling to the Southern District of New York will result in the inconvenience of a number of people throughout the trial, particularly in light of the difficulty of travel during the COVID-19 pandemic." Def. Mem. at 9; Def. Reply at 3, ECF No. 54. Shea does not, however, identify the witnesses or their testimony, nor does he offer any details as to why they cannot travel to New York other than that "their travel expenditures will be costly and burdensome." Id. This is insufficiently specific to demonstrate that this factor weighs in favor of transfer, even at this early stage of the case. See United States v. Blakstad, No. 19 Cr. 486, 2020 WL 5992347, at *4 (S.D.N.Y. Oct. 9, 2020) (finding this factor did not weigh in favor of defendant where he "merely assert[ed] that his 'witnesses are located in Southern California,' and that bringing them to Manhattan 'can make their use impractical'"); United States v. Avenatti, No. 19 Cr. 374, 2019 WL 4640232, at *3 (S.D.N.Y. Sept. 24, 2019) ("[T]ransfer is unwarranted based on the mere possibility that unnamed,...

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