United States v. Rogers

• Decision Date: 11 June 2019
• Docket Number: Case No. 8:18-CR-00057-JLS
• Court: U.S. District Court — Central District of California
• Parties: UNITED STATES of America, Plaintiff, v. Tiffany ROGERS, Defendant.

389 F.Supp.3d 774

UNITED STATES of America, Plaintiff,

v.Tiffany ROGERS, Defendant.

Case No. 8:18-CR-00057-JLS

United States District Court, C.D. California.

Signed June 11, 2019

Ashwin Janakiram, Assistant US Attorney, AUSA - Office of the US Attorney General Crimes Section, Los Angeles, CA, Joseph Timothy McNally, Assistant US Attorney, Scott D. Tenley, Assistant US Attorney, AUSA - Office of US Attorney, Santa Ana, CA, for Plaintiff.

Reuven L. Cohen, Alyssa D. Bell, Gabriel L. Pardo, Marc S. Williams, Cohen Williams LLP, Los Angeles, CA, for Defendant.

ORDER DENYING MOTION TO DISMISS COUNTS 1-3, 5-7 AND 9-10 (DOC. 40)

ORDER DENYING MOTION TO DISMISS COUNTS 9-10 (DOC. 43)

The Hon. Josephine L. Staton, United States District Judge

This matter is before the Court on two defense motions. The first moves to dismiss Counts 1-3, 5-7, and 9-10 based on a statute of limitations issue that arises out of the sealing of the Indictment for 3 months. (Doc. 40, "SOL Motion"; see also Doc. 52 (sealed Opposition), Doc. 54 (in camera Habben Declaration), and Doc. 58 (Reply).) The second motion seeks dismissal of counts 9-10 of the Indictment, arguing that the Travel Act charges are not properly supported by the state-law predicate alleged in the Indictment. (Doc. 43, "Travel Act Motion"; see also Doc. 56 (Opposition) and Doc. 59 (Reply).)

As set forth below, the Court DENIES both motions.

I. Background

Defendant Tiffany Rogers is an orthopedic surgeon who performed spinal surgeries and who was indicted as part of the Drobot/Pacific Hospital kickback conspiracy/fraud scheme. (See generally Doc. 1, Indictment.) Defendant is alleged to have received kickbacks in exchange for referrals of patients needing spinal surgeries and other procedures. (Indictment ¶ 16(a)-(k).)¹ The Indictment alleges Defendant is associated with kickbacks totaling $35,000. (¶ 18.) The payments were allegedly disguised as payments pursuant to a bogus contract entered into for the purposes of concealing the kickback payments. (¶ 16(h)-(j).)

Based on these allegations, Defendant is charged with conspiracy, mail and wire fraud involving deprivation of honest services, and violations of the Travel Act by the use of a facility of interstate commerce in aid of an unlawful activity.² The overt acts in furtherance of the conspiracy alleged in the Indictment range from June 21, 2012 through April 4, 2013. (Indictment at 5 & 9-13.) The substantive offenses range from April 2, 2013 through July 3, 2013. (Id. at 14-19.) The Indictment was filed on March 21, 2018. (Id. )

The Indictment was sealed the same day it was filed. (Doc. 4.) In sealing the Indictment, the Magistrate Judge relied on the Government's Ex Parte Application to Seal ("Application"). (Doc. 3.) The Application purported to incorporate an "attached declaration" of the prosecutor, but no declaration was attached. (See generally id. ) The Indictment remained sealed until June 21, 2018, when the Magistrate Judge unsealed it at the request of the Government. (Docs. 11-12.)

II. SOL Motion to Dismiss

Defendant moves to dismiss Counts 1-3, 5-7, and 9-10 as untimely. The Government contends the statute of limitations was tolled from the time the Indictment was filed under seal to the time the seal was lifted, that is, from March 21, 2018 to June 27, 2018 ("the seal period").

A. Statute of Limitations and Sealed Indictments

The limitations period as to all counts is five years. 18 U.S.C. § 3282(a). "Generally speaking, the return of an indictment tolls the statute of limitations with respect to the charges contained in the indictment." United States v. Pacheco , 912 F.2d 297, 305 (9th Cir. 1990) (citations omitted). However, sealed indictments toll the limitations period from the date of the return of the indictment only if that indictment was sealed for "legitimate prosecutorial objectives." United States v. Bracy , 67 F.3d 1421, 1426 (9th Cir. 1995). Otherwise, the tolling period begins with the indictment's unsealing.

In this case, if the Indictment was sealed and maintained under seal for legitimate prosecutorial objectives, then no count is barred by the statute of limitations. However, if the Indictment was not maintained under seal for any legitimate prosecutorial objective, or if its unsealing was unreasonably delayed, then only Counts 4 and 8 are timely.³

B. Legitimate Prosecutorial Objectives

Where the limitations period expires on charges in an indictment under seal, the Government bears the burden of establishing its sealing serves legitimate prosecutorial objectives. See, e.g. , United States v. Srulowitz , 819 F.2d 37, 41 (2d Cir. 1987) (explaining that "the government, if challenged, must demonstrate legitimate prosecutorial purposes for the secrecy of the indictment"). The Government contends that legitimate prosecutorial objectives in this case tolled the statute of limitations during the seal period. Specifically, the Government describes an ongoing criminal investigation and the ongoing involvement of cooperating witnesses, including covert activity by those witnesses. These reasons were not proffered by the Government when it sought the Magistrate Judge's Order to seal the Indictment, and although the Government referred to a declaration intended to be offered in support of the seal application, the declaration was (presumably inadvertently) omitted.

However, as the Court held previously in a related case, the question of whether a sealed indictment tolls the limitations period is determined by a consideration of the record after a defendant challenges the sealing, which is necessarily after the seal is lifted. See United States v. Gross , 370 F.Supp.3d 1139, 1143-46 (C.D. Cal. 2019). Therefore, the Court focuses on the current record to determine whether maintaining the Indictment under seal served legitimate prosecutorial objectives.

Here, the Government describes two related legitimate prosecutorial objectives that were served by the sealing of the Indictment. First, the Government presents evidence that there was an ongoing criminal investigation. (See Opp. at 15-20; Habben Decl. ¶¶ 6-9 & Ex. B (describing the ongoing investigation, activities, and actual and anticipated results).)⁴ Second, the Government presents evidence that the ongoing investigation included continuing covert activity by cooperating witnesses. (See Opp. at 23-25; Habben Decl. ¶¶ 10-19 & Ex. C.)

Defendant argues that the investigation into related charges against her or against alleged co-conspirators was not a legitimate basis to seal the existing charges against her. (SOL Mot. at 7-12.) Defendant argues that tolling the limitations period based on investigation of related charges gives the Government the ability to unfairly circumvent the limitations period to serve its own "investigative convenience," to avoid triggering the Speedy Trial Act deadlines, and to otherwise deprive the accused of the benefit of the limitations period. (Id. at 11.) Defendant relies upon cases holding that the limitations period is not tolled while the Government continues to investigate conduct not yet charged but that could lead to related charges against the accused. See, e.g., United States v. Gigante , 436 F. Supp. 2d 647, 658 (S.D.N.Y. 2006) ("Whatever the legitimate prosecutorial purposes are that justify the sealing of an indictment, surely they do not include the need for additional time to decide whether to bring an additional charge."); see also United States v. Stehl , No. CR 12-995 ABC, 2013 WL 12170491, at *8 (C.D. Cal. Nov. 27, 2013) (citing Gigante ). Defendant argues that this authority, developed where the Government continued to investigate a defendant whose indictment was under seal, applies with even greater force to continued investigations into a defendant's alleged co-conspirators. (SOL Mot. at 8-9.)

In the Ninth Circuit, however, the investigation of related charges constitutes a legitimate prosecutorial objective justifying the sealing of an indictment. See Bracy , 67 F.3d at 1426-27 (finding no abuse of discretion where district court relied on, inter alia , "the ongoing nature of [the Government's] investigation into" a related illegal organization to toll the limitations period of charges in a sealed indictment as to four individual defendants). Indeed, Stehl did not determine that an ongoing investigation could not provide the basis for maintaining an indictment under seal, but rather that the government had failed to offer any evidence as to why its ongoing investigation took as long as it did. See 2013 WL 12170491, at *9.

Here, the Government has provided evidence that sealing the Indictment promoted the legitimate prosecutorial interest in protecting the integrity of the evidence related to the investigation. The Government points out that unsealing the Indictment gives rise to the duty to disclose discovery that can include the statements of alleged co-conspirators and witnesses regarding the matters still under investigation. The case agent explains the danger associated with a witness's exposure to others' statements. (See Habben Decl. ¶ 9.)

Likewise, facilitating the ongoing covert activity by cooperating witnesses described by the Government is a legitimate prosecutorial objective. (See Opp. at 23-25; Habben Decl. ¶¶ 10-19.) As Agent Habben recounts, the more public the Pacific Hospital investigation became, the less effective the covert activity became. (Id. ¶¶ 11, 16-17 & 19.) He also notes that the efficacy of covert activity experienced an uptick during the seal period. (Id. ¶ 14.)

Moreover, as noted by the Court at the hearing, this case arises out of a much larger investigation involving many defendants who either engaged in or are alleged to have engaged in complicated financial transactions and contractual arrangements specifically designed to cover up illegal conduct. The participants in this scheme are alleged to have set up entire systems of deceit to cover up the primary deceit. The participants...