United States v. Lindemuth

• Decision Date: 14 June 2017
• Docket Number: Case No. 16-40047-01-DDC
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. KENT E. LINDEMUTH, Defendant.
• Court: U.S. District Court — District of Kansas

UNITED STATES OF AMERICA, Plaintiff,
v.
KENT E. LINDEMUTH, Defendant.

Case No. 16-40047-01-DDC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS

June 14, 2017

MEMORANDUM AND ORDER

This matter comes before the court on four motions filed by defendant Kent Lindemuth: (1) Motion to Change Location of Trial (Doc. 44); (2) Motion to Sever Counts 114 and 115 (Doc. 46); (3) Motion to Dismiss Counts 1-103, 104, and 111 (Doc. 47); and (4) Motion to Dismiss Counts 1-103 (Doc. 48). The court considers and rules on each of these motions, separately, below.

Background

Mr. Lindemuth is a real estate developer in Topeka, Kansas, whose business dealings made him a visible member of the community. But things took a rough turn for Mr. Lindemuth. On November 9, 2012, Mr. Lindemuth filed six petitions for Chapter 11 bankruptcy in the United States Bankruptcy Court for the District of Kansas ("Bankruptcy Court") and became a debtor-in-possession. During his bankruptcies, Mr. Lindemuth disclosed that he had total debts of more than $3.5 million. Eventually, the Bankruptcy Court approved Mr. Lindemuth's Chapter 11 plan. The Bankruptcy Court issued the required final decrees and closed Mr. Lindemuth's bankruptcy cases on December 29, 2015.

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Sometime later, federal authorities charged Mr. Lindemuth with failing to disclose the purchase of 103 firearms during his bankruptcy proceedings. According to the government's charges, these firearms were worth more than $80,000. The government secured an indictment against Mr. Lindemuth on June 1, 2016, charging him with 103 counts of bankruptcy fraud by concealment and aiding and abetting bankruptcy fraud by concealment. Doc. 1. On December 14, 2016, the government secured a Sealed First Superseding Indictment charging that Mr. Lindemuth also had failed to disclose the existence of two bank accounts and two vehicles. Doc. 32. For simplicity, this Order refers to that First Superseding Indictment as "the Indictment."

The Indictment charges Mr. Lindemuth with 117 crimes in 115 separate counts. In counts 1 through 103, the Indictment charges Mr. Lindemuth with 103 separate counts of bankruptcy fraud by concealment under 18 U.S.C. § 152(1) and aiding and abetting bankruptcy fraud by concealment under 18 U.S.C. § 2. The Indictment bases these 103 counts on 103 alleged purchases of firearms that Mr. Lindemuth allegedly did not disclose during his bankruptcy proceedings. Counts 104 and 111 also charge Mr. Lindemuth with bankruptcy fraud by concealment and aiding and abetting bankruptcy fraud by concealment. These two counts are based on allegations that Mr. Lindemuth failed to disclose the existence of two bank accounts. Count 104 charges that Mr. Lindemuth failed to disclose the existence of a bank account at Envista Credit Union and failed to disclose that he had deposited more than $250,000 into that account during his bankruptcies. Count 111 charges that Mr. Lindemuth failed to disclose the existence of a bank account at US Bank and failed to disclose that he had deposited more than $1.5 million into that account during his bankruptcies. Counts 105 through 110 charge Mr. Lindemuth with five separate counts of money laundering under 18 U.S.C. § 1957. These five counts charge that Mr. Lindemuth made deposits and withdrawals to or from the undisclosed

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Envista Credit Union account. Counts 112 and 113 also charge Mr. Lindemuth with bankruptcy fraud by concealment and aiding and abetting bankruptcy fraud by concealment. The Indictment bases these two counts on Mr. Lindemuth's alleged failure to disclose that he owned a 2009 Ford Mustang worth $90,000 and a 2008 Ford GT 500 Mustang worth $150,000 during his bankruptcies. Counts 114 and 115 charge Mr. Lindemuth with receiving ammunition and firearms while under indictment in this case.

Between February 17, 2017 and February 20, 2017, Mr. Lindemuth filed a motion to change the venue of his trial (Doc. 44), a motion to unseal part of the grand jury transcript (Doc. 45), a motion to sever counts 114 and 115 from the other 113 counts of the Indictment (Doc. 46), and four different motions to dismiss (Docs. 47, 48, 49, 50). At a hearing on April 3, 2017, the court granted Mr. Lindemuth's motion to unseal part of the grand jury transcript (Doc. 45) and denied two of his motions to dismiss (Docs. 49, 50). Doc. 53. The court took the other four motions under advisement.

On April 5, 2017, the government secured the Second Superseding Indictment, which modifies the dates associated with the charges in counts 1 through 103. Doc. 56. It also adds a charge of perjury to the 115 other counts from the Indictment. Id. Then, on May 3, 2017, the government secured the Third Superseding Indictment, which charges Mr. Lindemuth with a third count of receiving firearms while under indictment. Doc. 71. The court has set Mr. Lindemuth's trial for September 12, 2017, in the Topeka, Kansas, federal courthouse.

Although the government secured two superseding indictments after Mr. Lindemuth filed the pending motions, the court rules those motions based on the charges in the Indictment because Mr. Lindemuth's motions target that document. The court believes that its rulings will inform the parties, narrow the issues, and guide the future course of this case.

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Analysis

I. Motion to Change Location of Trial

In his first motion, Mr. Lindemuth asks the court to move his trial from the Topeka, Kansas, federal courthouse to the Kansas City, Kansas, federal courthouse. Although Mr. Lindemuth seeks an intra-district transfer, the court relies on Federal Rule of Criminal Procedure 21 (which governs inter-district transfers) for guidance. United States v. Walker, 890 F. Supp. 954, 958 n.5 (D. Kan. 1995). Mr. Lindemuth relies on two subsections of Rule 21: Rule 21(a) and Rule 21(b). The court begins its discussion with his Rule 21(a) arguments.

A. Transfer Under Rule 21(a)

Under Rule 21(a), the court must transfer a case to another venue "if the court is satisfied that there exists in the district where the prosecution is pending so great a prejudice against the defendant that the defendant cannot obtain a fair and impartial trial at any place fixed by law for holding court in that district." This rule applies when "prejudice in the community will make it difficult or impossible to select a fair and impartial jury." Id. at 958 (citations omitted). Whether to grant a change of venue motion, however, is discretionary. Id. Therefore, "[t]he facts must compel and not merely support venue transfer before an abuse of discretion will be found by an appellate court." Id. (quoting United States v. Hunter, 672 F.2d 815, 816 (10th Cir. 1982), abrogated on other grounds by United States v. Call, 129 F.3d 1402 (10th Cir. 1997); further citations omitted).

Here, Mr. Lindemuth asks for a change of venue, arguing that the Topeka-based, pre-trial media coverage of this case, his previous bankruptcies, and him in general likely will prevent him from "obtain[ing] the unbiased jury that is essential to a fair trial" in Topeka. Doc. 44 at 1-

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2. So, Mr. Lindemuth asserts that holding the trial in Topeka will violate his due process rights, and thus asserts that the court must transfer the trial as a matter of law.

Pre-trial publicity can give rise to a due process violation—and thereby require a transfer—in two ways: "(1) where prejudice is presumed because the publicity was 'sufficiently prejudicial and inflammatory and [it] . . . saturated the community where the trial was held,' or [(2)] where the defendant establishes actual prejudice resulting from the publicity." Walker, 890 F. Supp. at 959 (citations omitted). Presumed prejudice may appear before jury selection, but actual prejudice cannot appear until jury selection, at the earliest. See House v. Hatch, 527 F.3d 1010, 1023-24 (10th Cir. 2008) (explaining the difference between presumed and actual prejudice, stating that "[a]ctual prejudice 'manifest[s] at jury selection' when voir dire reveals 'the effect of pretrial publicity . . . is so substantial as to taint the entire jury pool.'" (citation omitted)). Here, then, Mr. Lindemuth asserts that presumed prejudice exists.

As the party requesting transfer, Mr. Lindemuth "bears the burden of establishing the presumption of prejudice." Walker, 890 F. Supp. at 959 (citations omitted). This is not an easy burden to bear. As the Supreme Court noted a few years ago, "[a] presumption of prejudice . . . attends only the extreme case." Skilling v. United States, 561 U.S. 358, 381 (2010). Indeed, "prejudice will only be presumed where publicity 'created either a circus atmosphere in the court room or a lynch mob mentality such that it would be impossible to receive a fair trial.'" Gardner v. Galetka, 568 F.3d 862, 888 (10th Cir. 2009) (quoting Goss v. Nelson, 439 F.3d 621, 628 (10th Cir. 2006)). "Pre-trial publicity in topical criminal cases is inevitable,"¹ and "[a] criminal defendant is not constitutionally entitled to a trial by jurors ignorant about relevant issues and

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events."² "Simply showing that all the jurors knew about the case and that there was extensive pretrial publicity will not suffice . . . ." Id. (quoting Hale v. Gibson, 227 F.3d 1298, 1332 (10th Cir. 2000)). So, pre-trial publicity affects a defendant's constitutional rights "only when it dictates the community's opinion as to guilt or innocence." Walker, 890 F. Supp. at 958 (quoting Abello-Silva, 948 F.2d at 1176). Thus, Mr. Lindemuth must establish that "an irrepressibly hostile attitude pervaded the community" to prove presumptive prejudice from pre-trial publicity. Stafford v. Saffle, 34 F.3d 1557, 1566 (10th Cir. 1994) (quoting Abello-Silva, 948 F.2d at 1176).

The content of the complained-of publicity is critical to determining whether to transfer a trial. See Coleman v. Kemp, 778 F.2d 1487, 1491 (11th Cir. 1985) ("Because the presumed prejudice claim requires an extensive evidentiary showing to...