United States v. Michel
| Decision Date | 13 September 2022 |
| Docket Number | CRIMINAL 19-148-1 (CKK) |
| Parties | UNITED STATES OF AMERICA v. PRAKAZREL MICHEL (1), Defendant. |
| Court | U.S. District Court — District of Columbia |
OMNIBUS MEMORANDUM OPINION AND ORDER
Defendant Prakazrel Michel (“Defendant” or “Michel”), with co-Defendant Low Taek Jho (“Low”), is charged by indictment with a variety of criminal offenses arising from three alleged conspiracies to unlawfully launder foreign money to influence American elections and foreign policy. Before the Court are Defendant's four[1] motions to dismiss the indictment in part or in whole. For each motion, Defendant advances a different theory: (1) Counts 8-11 of the Superseding Indictment should be dismissed because the Foreign Agents Registration Act (“FARA”) is unconstitutionally vague and overbroad; (2) the entire Superseding Indictment should be dismissed because Michel relied on advice of counsel in undertaking the allegedly criminal actions; (3) the entire Superseding Indictment should be dismissed because the Government has selectively prosecuted Michel in violation of the First, Fifth, and Fourteenth Amendments; and (4) the entire Superseding Indictment should be dismissed because the Government has engaged in “outrageous conduct” in violation of the Fifth Amendment.
At this stage of briefing, all but one theory fails. In an abundance of caution, the Court shall set an evidentiary hearing on Defendant's final argument, that the Government returned the Superseding Indictment exclusively to punish Defendant for exercising his right to proceed to trial. Accordingly, and upon consideration of the Superseding Indictment, briefing relevant legal authorities, and record as a whole, the Court DENIES Defendant's [130] Motion to Dismiss Counts 8-11 (“FARA Counts”) in the First Superseding Indictment, DENIES Defendant's [131] Motion for an Order Dismissing the Instant Indictment Due to Selective Prosecution, DENIES Defendant's [132] Motion to Dismiss Due to Advice of Counsel, and DENIES IN PART AND HOLDS IN ABEYANCE IN PART Defendant's [133] Motion for an Order Dismissing the Indictment with Prejudice Due to Outrageous Government Conduct.[2]
For a more detailed explanation of the material facts alleged in the operative Superseding Indictment, the Court refers the reader to the latest memorandum opinion and order in this matter, ECF No. 153.
For purposes of a motion to dismiss, the Court must accept the facts alleged in the indictment as true. United States v. Craig, 401 F.Supp.3d 49, 54 (D.D.C. 2019). Accordingly, the facts recited here provide information pertinent to assessing Defendant's legal challenges to the Indictment, but should not be read to Id.
In summary terms, this criminal case centers on three alleged conspiracies. First, Michel and Low allegedly “secretly funnel[ed] foreign money . . . [from] other straw donors” to two political action committees that supported a candidate for President of the United States (“Candidate”) during the 2012 Presidential Election, “while concealing from the candidate, the committees, the FEC, the public, and law enforcement the true source of the money.” Indictment at 4-5. Michel and co-conspirators intended to funnel approximately $1,000,000, to be contributed via a June 2012 fundraiser that the Candidate would attend. Id. The emails suggest that Michel knowingly solicited contributions from foreign individuals via wires from offshore companies. See id. at 10. Michel organized several straw donors, providing them funds to themselves make individual contributions to political action committees supporting the Candidate. This scheme was so successful that it earned Michel and Low personal access to the Candidate on two separate occasions. See id. Throughout the conspiracy, Michel and his straw donors concealed the true, foreign source of the contributions in violation of 52 U.S.C. §§ 30109 and 20122, 18 U.S.C. §§ 1001(a)(1) and 2, and 18 U.S.C. §§ 1519 and 2.
Second, the Indictment alleges a broad conspiracy beginning in March 2017 to assist the Malaysian Prime Minister in convincing the President of the United States to order the Department of Justice to drop investigations into Low for graft related to a Malaysian sovereign wealth fund. See id. at 24, 30-33. Michel and Low worked with George Higginbotham, at that time an attorney at the United States Department of Justice, Elliott Broidy, a businessman and former Deputy Finance Chair of the Republican National Committee, and Nickie Lum Davis, a California businesswoman and a foreign agent operating at the behest of the People's Republic of China. Both Higginbotham and Broidy have pleaded guilty before this Court for their roles in this conspiracy, Broidy to “Conspiracy to Serve as an Unregistered Agent of a Foreign Principal, in violation of 18 U.S.C. § 371” and Higginbotham to “Conspiracy to Make False Statements to a Bank in violation of 18 U.S.C. § 371.” Plea Agreement at 1, ECF No. 8, United States v. Broidy, Crim A. No. 20-0210 (CKK) (Oct. 20, 2020); Plea Agreement at 1, ECF No. 14, United States v. Higginbotham, Crim. A. No. 18-343 (CKK) (Nov. 30, 2018). Lum Davis has also pleaded guilty, to failure to register under FARA and aiding and abetting, in violation of 18 U.S.C. § 2 and 22 U.S.C. §§ 612 and 618(a), for her role in the conspiracy. Mem. of Plea Agreement at 2, ECF No. 15, United States v. Lum Davis, CR. No. 20-00068 LEK (Aug. 31, 2020).
In this conspiracy, beginning in or around March 2017, Michel allegedly assisted Low in executing a retainer agreement with Higginbotham and funneling illicit wire transfers from Low to Higginbotham, Lum Davis, and Broidy. Indictment at 29. The Indictment identifies specific emails and wire transfers in March 2017 formalizing the agreement between Low and his coconspirators. Id. at 30. Michel played a crucial role in facilitating and fraudulently concealing these wire transfers that funded the scheme. Id. at 29-30. It also details a purported meeting on May 2, 2017, in which the parties strategized how to best exert influence on the President of the United States and his administration. Id. at 31. It further describes Michel's role in drafting talking points for the Malaysian Prime Minister on the issue for an upcoming meeting between the Malaysian Prime Minister and the President of the United States. See id. at 33.
Third and finally, Michel conspired with Lum Davis, Higginbotham, Broidy, Low, and a government official of the People's Republic of China to lobby the President of the United States and his administration to extradite a Chinese national and dissident back to the People's Republic of China. Id. at 34. The conspiracy with the Chinese government began on May 18, 2017, when Michel traveled to Hong Kong to meet with his co-conspirators and, upon his arrival, was shuttled from Hong Kong to Shenzhen, China. See id. There, the Chinese minister allegedly told the coconspirators that he “was having trouble scheduling meetings with certain high-ranking United States government officials.” Id. at 34. The Indictment describes subsequent meetings and wire transfers in August and September 2017, including in Macau, China, in which the co-conspirators allegedly discussed the structure of additional payments from Low to further the backchannel lobbying campaign. Id. at 36-37. It also claims Low told the co-conspirators that he was “concerned that United States banks would not allow him to transfer large sums of money in or through the United States financial system.” Id. at 36. Michel allegedly suggested that the money be mischaracterized as “funds for entertainment purposes” to conceal their true source. Id.
Finally, the Indictment adds two counts for criminal conduct allegedly completed after the end of the three conspiracies. After the filing of the first indictment in this case, ECF No. 1, Michel purportedly threatened two witnesses to change their testimony before the Government. The Indictment identifies two texts by date that it alleges “intimidate[d], threaten[ed], and persuade[d]” potential witnesses after the inception of this case. First, the Indictment alleges that Michel “caused a text message to be sent” on July 14, 2019, “threatening [a] [s]traw [d]onor [] with potential legal and reputational harm, including threatening to refer [them] to the United States Department of Justice for criminal investigation” allegedly “in an effort to cause [them] to falsely characterize” a conduit payment from Michel “as a loan” and to stop them “from providing testimony.” Id. at 22. Second, the Indictment claims Michel “caused a text message to be sent threatening to refer” a witness “to federal law enforcement . . . in an effort to cause him to withhold his testimony.” Id. at 23.
The Government commenced this criminal matter with the filing of the first indictment on July 14, 2019. At that time, the operative indictment included only the first, election-fraud conspiracy. See United States v. Michel, Crim. A. No. 19-148 (CKK), 2019 WL 579669, at *1-2 (D.D.C. Nov. 6 2019). On August 30, 2019, Defendant filed his first motion for a bill of particulars, which the Court granted in part on November 6, 2019. Id. at *1. The Court ordered the Government to identify all individuals in the indictment whom the Government intended to characterize as co-conspirators at trial. Id. at *18. This case entered a lull...
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