United States v. Morgan

• Citation: 493 F.Supp.3d 171
• Decision Date: 08 October 2020
• Docket Number: 1:18-CR-00108 EAW
• Parties: UNITED STATES of America, v. Robert MORGAN, Frank Giacobbe, Todd Morgan, and Michael Tremiti, Defendants.
• Court: United States District Courts. 2nd Circuit. United States District Court of Western District of New York

493 F.Supp.3d 171

UNITED STATES of America,

v.Robert MORGAN, Frank Giacobbe, Todd Morgan, and Michael Tremiti, Defendants.

1:18-CR-00108 EAW

United States District Court, W.D. New York.

Signed October 8, 2020

Joel L. Violanti, John D. Fabian, Kevin D. Robinson, Mary C. Kane, Richard D. Kaufman, Douglas A. Penrose, U.S. Attorney's Office, Buffalo, NY, Kathryn L. Smith, U.S. Attorney's Office, Rochester, NY, for United States of America.

Alexander Edward Basinski, Herbert L. Greenman, Justin D. Ginter, Lipsitz Green Scime Cambria LLP, Buffalo, NY, for Defendant Frank Giacobbe.

David Rothenberg, Michael Evan Rothenberg, Rothenberg Law, Rochester, NY, for Defendant Todd Morgan.

Joel M. Cohen, Alyssa Mary Ogden, Pro Hac Vice, Caitlin S. Walgamuth, Genevieve Barry Quinn, Pro Hac Vice, Lee Gordon Dunst, Zainab Ahmad, Pro Hac Vice, Gibson, Dunn & Crutcher, LLP, New York, NY, for Defendant Robert Morgan.

Donald M. Thompson, Rochester, NY, for Defendant Michael Tremiti.

DECISION AND ORDER

ELIZABETH A. WOLFORD, United States District Judge

Defendants Robert Morgan, Frank Giacobbe, Todd Morgan, and Michael Tremiti (hereinafter collectively "Defendants") stand accused by way of a 114-count Superseding Indictment returned by a federal grand jury on May 21, 2019, with a scheme spanning over a decade to defraud financial institutions and government-sponsored enterprises Freddie Mac and Fannie Mae in connection with the financing of multi-family residential apartment properties managed by Morgan Management, LLC ("Morgan Management"), and owned by various limited liability companies controlled by defendant Robert Morgan, as well as a related insurance fraud scheme charged against defendants Robert and Todd Morgan, spanning a more limited time period. (Dkt. 42). Defendants seek to dismiss the Superseding Indictment on the grounds that their statutory and constitutional rights to a speedy trial have been violated. (Dkt. 216; Dkt. 231; Dkt. 234; Dkt. 237).

The Court recognizes at the outset that the government has mishandled discovery in this case—that fact is self-evident and cannot be reasonably disputed. It is not clear whether the government's missteps are due to insufficient resources dedicated to the case, a lack of experience or expertise, an apathetic approach to the prosecution of this case, or perhaps a combination of all of the above. However, it is clear that the government's mistakes, while negligent, do not constitute willful misconduct undertaken in bad faith.

Ultimately, the government's failures to meet court-imposed deadlines prompted the Magistrate Judge to condition the exclusion of time from the speedy trial clock on the government's production of discovery by a certain deadline—and the government blew that deadline. The government "missed" and failed to process several devices seized pursuant to a search warrant executed in May 2018. As a result, the statutory speedy trial clock has expired, and the Superseding Indictment must be dismissed.

However, after careful consideration, including a detailed analysis of the adequacy of the government's electronic discovery production, the Court concludes that a dismissal with prejudice is unwarranted. The Court further concludes that Defendants’ constitutional rights to a speedy trial have not been violated. Accordingly, the Superseding Indictment is dismissed without prejudice.

I. BACKGROUND

A. Initial Indictment and Request to Extend Voluntary Discovery Deadline

The government originally filed charges in this case on May 22, 2018, by way of an Indictment returned against defendants Frank Giacobbe, Todd Morgan, and two others who have since pleaded guilty. (Dkt. 1; see Dkt. 30 (defendant Kevin Morgan plea agreement); Dkt. 36 (defendant Patrick Ogiony plea agreement)). The case was originally assigned to District Judge Lawrence J. Vilardo,¹ who issued a referral order to Magistrate Judge H. Kenneth Schroeder, Jr. pursuant to 18 U.S.C. §§ 636(b)(1)(A) and (b)(1)(B). (Dkt. 3). Defendant Frank Giacobbe was arraigned before Magistrate Judge Schroeder on May 23, 2018 (see 5/23/2018 Minute Entry), and defendant Todd Morgan was arraigned the following day (see 5/24/2018 Minute Entry). Magistrate Judge Schroeder issued a Scheduling Order requiring the completion of voluntary discovery by July 27, 2018, and the filing of pretrial motions by January 25, 2019, and with the parties’ consent, he granted an exclusion of time from the speedy trial clock from the date of the Scheduling Order (May 29, 2018) until the date for the filing of pretrial motions (January 25, 2019), pursuant to 18 U.S.C. §§ 3161(h)(7)(A) and (B)(iv). (Dkt. 16; see also 5/23/2018 and 5/24/2018 Minute Entries).

On July 27, 2018—the deadline set by Judge Schroeder for the completion of voluntary discovery—the government filed a motion to extend that deadline by 120 days. (Dkt. 19). The government largely attributed the need for additional time to the volume of data seized by the government during execution of a search warrant shortly before the return of the Indictment at the offices of Morgan Management and Frontier Cybercenter. (Id. at 4-5). Specifically, on May 14 and 15, 2018, the government seized pursuant to a search warrant eight computers, two iPhones, and five external hard drives (including the Barracuda Message Archiver) from the offices of Morgan Management. (See Dkt. 157-1 at 86-97). Additional electronic information was obtained from Frontier Cybercenter, where Morgan Management maintained certain servers and computers. (Dkt. 19 at 4; see Dkt. 157-1 at 91-92, 96).

A status conference was conducted before Magistrate Judge Schroeder on August 6, 2018. (Dkt. 23; see 8/6/2018 Minute Entry). The government explained that the volume of materials seized in May 2018 pursuant to the search warrant, necessitated the government putting in place a different document management system to handle the electronically stored information ("ESI"), and this resulted in delays in the production of even the pre-search warrant material. (Dkt. 23 at 3-4, 9, 12). The government reiterated its position set forth in its written motion that the 120-day extension of time would be sufficient to complete voluntary discovery. (Id. at 19).

At the time, Magistrate Judge Schroeder raised speedy trial concerns:

MAGISTRATE JUDGE: But do you now realize the conundrum the government's creating in the context of speedy trial?

AUSA PENROSE: Yes, Judge.

(Id. at 27). Instead of granting the government the full 120-day extension requested, the Magistrate Judge set a deadline of August 24, 2018 for the government to provide pre-search warrant data to the defense (id. at 21), and further required that the government complete its processing of the search warrant material by September 28, 2018, and turn over Rule 16 material from the search warrant material by October 12, 2018 (id. at 32; see also 8/6/2018 Minute Entry). In addition, he scheduled a status conference for October 31, 2018, at which time it was contemplated that a new scheduling order for pretrial motions would be discussed. (Dkt. 23 at 33, 36-37). The parties agreed that the speedy trial clock remained stopped through January 24, 2019, pursuant to the original Scheduling Order. (Id. at 37).

B. October 31, 2018 Status Conference and Document Production Protocol

In advance of the October 31, 2018 status conference, counsel for Todd Morgan, David Rothenberg, Esq., filed a report on October 29, 2018, contending that the government had failed to comply with the Magistrate Judge's deadlines because discovery seized pursuant to the May 2018 search warrant still had not been produced, and the electronic discovery that had been produced contained technical deficiencies. (Dkt. 24 at 3). Mr. Rothenberg stated that no discovery had been produced from many of the devices that were seized pursuant to the May 14, 2018 search warrant. (Id. at 4-6).

A status conference was conducted before Magistrate Judge Schroeder on October 31, 2018. (Dkt. 184; see 10/31/2018 Minute Entry). At the outset of that conference, the Magistrate Judge stated that he was "very disturbed by the government's—I won't call it foot dragging, incompetent may be too strong a term, but it seems to me that this is a problem that is being created by the government's inability to do what it's supposed to do." (Dkt. 184 at 3). The government disagreed with defense counsel's claim that there were technical deficiencies with the electronic discovery. (Id. at 3-5). The government also represented at that conference that it had produced all discovery other than that which had hit on a privilege term and was going through the filter review process,² although it admitted that it had only completed that production that day and did not meet the Magistrate Judge's deadline of October 12, 2018. (Id. at 6-7).

Mr. Rothenberg countered that, in fact, there were multiple technical deficiencies with the electronic discovery, leading him to conclude that "whatever vender they are working with is incompetent and producing these things in a manner that makes it close to impossible for us to use." (Id. at 9-12). Mr. Rothenberg raised the issue of whether a motion to dismiss the indictment should be filed because of the government's failure to comply with the deadline for production of voluntary discovery,³ prompting the following response:

MAGISTRATE JUDGE: Well, that would be a pretty severe sanction. Obviously I'm not talking off the top of my head, I'm not indicating in any way what the outcome of such a motion would be. I do know that all I could do would be a Report and Recommendation, since it would be a Motion to Dismiss, and that would be for the district judge to whom the case is assigned to actually pass on the merits. But I am struggling with this problem of a carrot and a stick and not having an appropriate stick by which I can apparently get at least the government to comply with my scheduling order. One thought that came into my mind, but I'm not sure

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