United States v. Saffarinia

• Citation: 424 F.Supp.3d 46
• Decision Date: 15 January 2020
• Docket Number: Crim. Action No. 19-216 (EGS)
• Parties: UNITED STATES of America v. Eghbal SAFFARINIA (a/k/a "Eddie Saffarinia"), Defendant.
• Court: U.S. District Court — District of Columbia

424 F.Supp.3d 46

UNITED STATES of America

v.Eghbal SAFFARINIA (a/k/a "Eddie Saffarinia"), Defendant.

Crim. Action No. 19-216 (EGS)

United States District Court, District of Columbia.

Signed January 15, 2020

Edward P. Sullivan, U.S. Department of Justice, Rosaleen Tobin O'Gara, U.S. Department of Justice Public Integrity Section, Washington, DC, for United States of America.

Eric Richard Nitz, Mololamken, LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

Emmet G. Sullivan, United States District Judge

On June 25, 2019, a federal grand jury returned a seven-count Indictment against Defendant Eghbal Saffarinia ("Mr. Saffarinia"), a former Assistant Inspector General for the United States Department of Housing and Urban Development's Office of Inspector General ("HUD-OIG"), charging him with one count of concealing material facts, in violation of 18 U.S.C. §§ 1001(a)(1) and 2, three counts of making false statements, in violation of 18 U.S.C. §§ 1001(a)(2) and 2; and three counts of falsifying records, in violation of 18 U.S.C. §§ 1519 and 2. See generally Indictment, ECF No. 1 at 3-18 ¶¶ 10-78.¹

Mr. Saffarinia moves to dismiss the Indictment pursuant to Federal Rule of Criminal Procedure 12(b). Mr. Saffarinia separately moves for an Order compelling the government to identify any known exculpatory information within its voluminous production, which consists of approximately 3.5 million pages of documents, pursuant to Brady v. Maryland , 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963). Upon careful consideration of the parties' submissions, the applicable law, and for the reasons explained below, the Court GRANTS IN PART and DENIES IN PART Mr. Saffarinia's Motion to Dismiss, and GRANTS IN PART and DENIES IN PART Mr. Saffarinia's Motion for Brady Material.

I. Background

The Court assumes the parties' familiarity with the factual background and the procedural history, which are set forth in greater detail in the Court's prior Opinion. See United States v. Saffarinia , No. CR 19-216 (EGS), 422 F.Supp.3d 269, 271–72, 2019 WL 5086913, at *1 (D.D.C. Oct. 10, 2019). The Court will provide an abbreviated overview of the relevant statutory scheme, and then briefly summarize the allegations set forth in the Indictment.

A. The Ethics in Government Act

"Enacted in the wake of the Watergate scandal," Trump v. Mazars USA, LLP , 940 F.3d 710, 714 (D.C. Cir. 2019), the Ethics in Government Act of 1978 ("EIGA"), 5 U.S.C. app. 4 §§ 101, et seq. , requires certain government employees to disclose "detail[s], with certain exceptions, [about] their income, gifts, assets, financial liabilities and securities and commercial real estate transactions[,]" United States v. Oakar , 111 F.3d 146, 148 (D.C. Cir. 1997) (citing 5 U.S.C. app. 4 § 102 ; United States v. Rose , 28 F.3d 181, 183 (D.C. Cir. 1994) ). Congress imposed these reporting requirements to "increase public confidence in the federal government, demonstrate the integrity of government officials, deter conflicts of interest, deter unscrupulous persons from entering public service, and enhance the ability of the citizenry to judge the performance of public officials." Id.

To that end, the EIGA established the Office of Government Ethics ("OGE") as a separate agency within the Executive Branch, see 5 U.S.C. app. 4 § 401(a), which provides "overall direction of executive branch policies related to preventing conflicts of interest on the part of officers and employees of any executive agency," id. § 402(a). An employee covered under the EIGA must file public financial disclosure reports "with the designated agency ethics official at the agency by which he [or she] is employed ...." Id. § 103(a). OGE and the employee's agency have the authority to "ensure compliance with government ethics laws and regulations[,]" but the "primary responsibility" lies with the employee's agency. 5 C.F.R. § 2638.501 ; see also Defs. of Wildlife v. U.S. Dep't of Interior , 314 F. Supp. 2d 1, 19 (D.D.C. 2004) ("OGE relies upon the agencies to perform these functions, but the results of the agency's investigations and its own conclusions about whether ethics violations actually occurred are not the final word if the OGE finds that more needs to be done.").

The EIGA and its implementing regulations, 5 C.F.R. §§ 2634 et seq. , require members of the Senior Executive Service ("SES") to file public financial disclosure reports. See generally 5 U.S.C. § app. 4 § 101(f)(3).² Disclosures for SES members are made using the "OGE Form 278." Saffarinia , 422 F.Supp.3d at 279–80, 2019 WL 5086913, at *8. Each report "shall include a full and complete statement" of the required information. 5 U.S.C. app. 4 § 102(a) (emphasis added). Failure to comply with the EIGA, its regulations, and the OGE Form 278 may subject the filer to civil penalties and criminal prosecution. E.g. , 5 U.S.C. app. 4 § 104(a)(1) (outlining civil penalty for knowingly and willfully falsifying required information); 5 C.F.R. § 2634.701(b) (substantially similar); id. § 2634.701(c) ("An individual may also be prosecuted under criminal statutes for supplying false information on any financial disclosure report."); id. § 2638.501 (stating that "the [OGE] Director will refer possible criminal violations to an Inspector General or the Department of Justice"); OGE Form 278 at 12 ("Knowing and willful falsification of information required to be filed by section 102 of [the EIGA] may also subject [the filer] to criminal prosecution.").³

B. Factual Background

The criminal charges here stem from Mr. Saffarinia's alleged falsifications and omissions in his OGE Forms 278. See Indictment, ECF No. 1 at 2 ¶ 4.⁴ From 2012 until 2017, Mr. Saffarinia served as HUD-OIG's Assistant Inspector General for Information Technology ("IT"), and later as the Assistant Inspector General for Management and Technology. Id. at 2 ¶ 3. As an SES member, Mr. Saffarinia had a "legal duty" to submit the OGE Forms 278 on May 12, 2014, May 16, 2015, and April 26, 2016, respectively. See id. at 2 ¶ 4, 18 ¶ 78. Mr. Saffarinia, however, failed to disclose his liabilities in excess of $10,000 from "Person A or his neighbor to his supervisors, agency ethics officials or counsel, or on his [OGE Forms 278]." Id. at 17 ¶ 75.

Person A and Mr. Saffarinia were friends from college, and Person A owned an IT company ("Company A") in Virginia. Id. at 3 ¶¶ 6, 9. In 2013, Mr. Saffarinia received a loan from Person A in the amount of $80,000, but Mr. Saffarinia did not report it on his OGE Forms 278. Id. at 9-10 ¶¶ 37-41, 18 ¶ 78. Pursuant to a promissory note that was executed in 2015, Mr. Saffarinia received $90,000 from his neighbor, but Mr. Saffarinia did not disclose that liability on his OGE Forms 278. Id. at 17 ¶ 75.

At HUD-OIG, Mr. Saffarinia also served as Head of Contracting Activity, overseeing "procurement review and approval processes, including IT contracts[.]" Id. at 2 ¶ 5. During the period that Mr. Saffarinia received payments from Person A, Mr. Saffarinia steered government business, as well as gave competitive advantages, to Company A, and Mr. Saffarinia disclosed confidential government information to Person A and Company A. Id. at 3-4 ¶¶ 11-12, 4 ¶ 12, 14 ¶ 61. In 2012, Mr. Saffarinia caused Company B to enter into a business partnership with Person A and Company A, and Company A later served as Company B's subcontractor on a multi-year, $30 million IT services contract for HUD-OIG. Id. at 6 ¶ 18. In 2013, HUD-OIG approved additional funding in the amount of $78,000 for Company A's subcontract with Company B. Id. at 10 ¶ 42. Company A received more than one million dollars as Company B's subcontractor from 2012 to 2015. Id. at 9 ¶ 36.

Mr. Saffarinia hired his friend and former business partner, Person B, as the head of HUD-OIG's new predictive analytics department. Id. at 3 ¶¶ 7, 9. And Person B became the sole member of a technical evaluation panel for a government contract at Mr. Saffarinia's direction. Id. at 16 ¶ 72. For that contract, Person B rejected thirteen bid proposals, and HUD-OIG awarded it to Person A and Company A. Id. From 2013 to 2014, Mr. Saffarinia caused HUD-OIG to recompete Company B's IT services contract, and he caused Company C to enter into a business partnership with Company A in order for both companies to submit a joint bid for the recompete contract. Id. at 11 ¶ 47. Mr. Saffarinia directed one of his subordinates to meet with Person A and Company C's owner for the formation of the partnership and the submission of the joint bid. Id. at 12 ¶ 50. HUD-OIG awarded the recompete contract, which was worth more than $17 million, to Company C. Id. at 11 ¶ 47. Company A became a subcontractor for Company C, and Company A was expected to receive roughly nine million dollars. Id.

C. The Indictment

The charges against Mr. Saffarinia fall into three categories: (1) concealing material facts, in violation of 18 U.S.C. § 1001(a)(1) ("Count I"); (2) making false statements, in violation of 18 U.S.C. § 1001(a)(2) ("Counts II-IV"); and (3) falsifying records, in violation of 18 U.S.C. § 1519 ("Counts V-VII"). See generally Indictment, ECF No. 1 at 3-18 ¶¶ 10-78. Count I alleges that from "early 2012, and continuing thereafter until at least in or about mid-2016, in the District of Columbia and elsewhere, in a manner within the jurisdiction of the Executive Branch of the Government of the United States," Mr. Saffarinia "did knowingly and willfully falsify, conceal, and cover up by trick, scheme, and device material facts ...." Id. at 3-4 ¶ 11. Count 1 asserts that Mr. Saffarinia violated § 1001(a)(1) by concealing four facts: (1) "the nature and extent of [Mr. Saffarinia's] financial relationship with Person A, including payments from Person A to [Mr. Saffarinia] totaling at least $80,000; (2) Mr. Saffarinia's "unauthorized disclosure of confidential government information to Person A"; (3) Mr. Saffarinia's "efforts to steer government contracts to Person A and Company...