United States v. Rankin
Decision Date | 15 November 2019 |
Docket Number | No. 3:18-cr-00272 (JAM),3:18-cr-00272 (JAM) |
Citation | 422 F.Supp.3d 564 |
Parties | UNITED STATES of America, v. Drew RANKIN et al., Defendants. |
Court | U.S. District Court — District of Connecticut |
Douglas P. Morabito, Sarah P. Karwan, U.S. Attorney's Office, New Haven, CT, for Plaintiff.
Christopher M. Barrett, Craig A. Raabe, Izard, Kindall & Raabe, LLP, West Hartford, CT, William H. Paetzold, Moriarty, Paetzold & Sherwood, LLC, Glastonbury, CT, Hubert J. Santos, Trent Alan LaLima, Law Offices of Hubert J. Santos, Thomas J. Murphy, James John Healy, Cowdery & Murphy, LLC, Hartford, CT, Michael S. Bonnano, Geraghty & Bonnano, LLC, New London, CT, William F. Dow, III, Jacobs & Dow, LLC, Kenneth Rosenthal, Law Office of Kenneth Rosenthal, New Haven, CT, Michael Q. English, Tony Miodonka, Finn Dixon & Herling LLP, Stamford, CT, for Defendants.
OMNIBUS RULING RE DEFENDANTS' MOTIONS TO DISMISS THE INDICTMENT AND FOR OTHER RELIEF
A federal grand jury has returned an indictment charging the five defendants in this case with conspiring to and misappropriating funds for personal purposes. The five defendants were officers or directors of the Connecticut Municipal Electric Energy Cooperative (CMEEC), a public corporation created to provide low-cost electric power for certain member towns. The indictment alleges that the five defendants misused funds of CMEEC and the member towns for trips to the Kentucky Derby and to a luxury golf resort in West Virginia.
Defendants now move to dismiss the indictment and for other relief. They principally argue that the trips at issue were lawful "corporate retreats" and that the Government has overreached by criminalizing conduct that is allowed under state law. They also accuse the Government of a wide range of misconduct during the investigation of the case. One of the defendants moves for a severance, and all of the defendants seek bills of particulars.
I will mostly deny defendants' motions. I conclude that the indictment on its face validly alleges that the five defendants conspired to and misappropriated funds for personal purposes, notwithstanding their fact-based arguments that they acted for valid corporate purposes. I also conclude that there is no merit to defendants' claims that the indictment should be dismissed due to any misconduct by the Government. Lastly, I conclude there are no grounds for severance or for the grant of a bill of particulars.
The indictment alleges the following facts. CMEEC was "a cooperative public corporation created under the laws of the State of Connecticut to permit municipal electric utilities in Connecticut to join together for the purpose of furnishing efficient, low cost and reliable electric power in the municipalities' areas of operation." Doc. #1 at 1 (¶ 1). "CMEEC provided wholesale electric power to the Member Towns, who, in turn, provided electricity to residential and commercial ratepayers in their respective towns through each CMEEC Member's municipal utility." Id. at 1-2 (¶ 1). "CMEEC's purpose was to allow the Member Towns to provide electricity at a cheaper cost to their ratepayers than if the Member Towns were purchasing wholesale electric power on their own." Id. at 2 (¶ 1).
CMEEC's various "members" included several towns and taxing districts in Connecticut. Id. at 1 (¶ 1). Each of these "member towns" were "owners" of CMEEC, and each "executed an agreement through its respective municipal electric utility outlining the terms and conditions under which the CMEEC Members participated together in CMEEC." Id. at 2 (¶ 2).
CMEEC "was managed in its day-to-day activities" by a board of directors "made up of representatives from each Member Town." Id. at 3 (¶ 5). CMEEC's bylaws specified that CMEEC's chief executive officer was responsible for the preparation each year of a general administrative budget that would include all necessary expenses, and the board of directors was required to vote on CMEEC's budget approvals and revisions. Id. at 4 (¶ 7).
According to CMEEC's membership agreement, "all revenues less incurred expenses received by CMEEC" were designated as "CMEEC Margin." Id. at 4 (¶ 8). The CMEEC margin was required to be allocated and/or disbursed each month to each of the member towns to help keep their electricity costs stable for ratepayers. Ibid.
The five defendants in this case are:
According to the indictment, the five defendants joined in a criminal conspiracy from 2014 to 2017 "to conduct the business and affairs of CMEEC for their personal, pecuniary and financial benefit, and for the personal, pecuniary and financial benefit of their family members, friends, and associates." Id. at 6-7 (¶¶ 16-17). Defendants allegedly "planned, organized and directed lavish trips outside of the State of Connecticut including trips to the Kentucky Derby in Louisville, Kentucky, and to a luxury golf resort in West Virginia," and "[t]hese trips did not relate to CMEEC business, CMEEC Member business, and the furnishing of efficient, low-cost and reliable electric power to the Member Towns and their ratepayers." Id. at 7 (¶ 19).
The indictment goes on to list various aspects of defendants' conduct that were additional "parts" of this conspiracy:
The indictment then alleges dozens of overt acts in furtherance of the conspiracy. Id. at 9-17 (¶¶ 26-61). These allegations focus on four different trips from 2015 to 2016—two to the Kentucky Derby and two to a luxury golf resort in West Virginia as described below.
Kentucky Derby trip—April/May 2015
The first trip was to the Kentucky Derby for several days in late April and early May 2015. The arrangements for this trip began in June 2014 when defendant Rankin (who was CMEEC's chief executive officer) executed a purchase order for more than $200,000 to pay for the trip without identifying the trip expenses in any budget presented to the CMEEC board of directors. Id. at 9 (¶ 27). Defendant Pryor (who was CMEEC's chief financial officer) directed that a new "contra-margin" account be created for the costs of the Kentucky Derby trips to come from the CMEEC margin account, allegedly in violation of the CMEEC membership agreement and without a vote of the CMEEC board of directors or consent of the member towns. Ibid. (¶ 28).
About 30 people were invited to take part in the 2015 Kentucky Derby trip, including all of the defendants except DeMuzzio, and guests including certain CMEEC board members, employees, friends, and associates. Id. at 9-10 (¶ 31). Among the invitees were defendant Sullivan's brother, sister-in-law, and his minor son. Ibid. The trip costs included a charter plane from Connecticut to Kentucky, event tickets, hotel rooms, food, and gift bags. Id. at 9 (¶ 27), 11 (¶ 35).
In a pamphlet prepared for the attendees, Rankin described the trip as a "2015 Strategic Retreat: Members and Guests Appreciation Celebration," adding "[a]re you ready for some genuine Kentucky Experience and Derby Fun?" Id. at 10 (¶ 32). The pamphlet described the trip as dedicated to "tak[ing] a few moments to celebrate and honor you as dedicated and awesome Board Members and your Strategic Guests/Partners." Ibid. The total cost for this trip was about $294,917, all paid for "with Member Towns' funds from the CMEEC Margin account." Id. at 11 (¶ 35).
West Virginia golf trip—August 2015
The second trip was to a luxury golf resort in West Virginia in August 2015 about three months after the Kentucky Derby trip. Id. at 11-12 (¶¶ 39-43). This trip included only the defendants Rankin, Sullivan, Bilda, and DeMuzzio. Before the trip, Rankin emailed Sullivan, Bilda, and DeMuzzio describing the trip as one to "evaluate the location" for another strategic retreat. Id. at 11-12 (¶ 39). Sullivan (who...
To continue reading
Request your trial-
United States v. Jackson
... ... v. Perez, 575 F.3d 164, 166-67 (2d Cir ... 2009) (internal quotation marks omitted) (quoting United ... States v. Alfonso, 143 F.3d 772, ... 776-77 (2d Cir. 1998)); see also United States ... v. Rankin, 422 F.Supp.3d 564, 578 (D. Conn ... 2019) (“[T]he federal rules do not authorize judges to ... engage in a pre-trial inquest to decide if the prosecution ... will have enough evidence to prove its case at trial.”) ... (citing Costello v. United States, ... ...
-
United States v. Regan
... ... Rule 12(b)(2) of the Fed. R. Crim. P ... bars the defendant's motion seeking to challenge the ... sufficiency of the government's evidence prior to trial ... United States v. Piper , 2012 WL 4757696 at *2 (D ... Vermont 2012); United States v. Rankin , 422 ... F.Supp.3d 564, 878 (D. Conn. 2019) ... Therefore, ... it is recommended that the defendant's motion to dismiss ... Counts 1, 3 and 4 of the Indictment be denied ... D ... Defendant's Motion to Sever Counts 1 and 5 ... ...
-
United States v. Rankin
...preclude evidence that the judge believes will not suffice to carry the government's burden to prove guilt beyond a reasonable doubt. See id. at 578. I declined engage in “a prohibited factual inquest that the defendants' position is correct or compelled as a matter of law.” Id. at 585.[174......
-
United States v. Burdorf
... ... addressed on a pretrial motion to dismiss an ... indictment.” United States v. Alfonso, 143 ... F.3d 772, 776-777 (2d Cir. 1998); United States v ... Piper, 2012 W.L. 4757696 at *2 (D. Vermont 2012); ... United States v. Rankin, 422 F.Supp.3d 564, 578 (D ... Conn. 2019). Once again, “a court cannot test the ... sufficiency of the government's evidence on a motion to ... dismiss.” United States v. Sampson, supra ... The United States Supreme Court has stated: ... In a number of cases the ... ...