United States v. Sampson

• Decision Date: 12 August 2015
• Docket Number: No. 13–CR–269 (S–5)(DLI).,13–CR–269 (S–5)(DLI).
• Citation: 122 F.Supp.3d 11
• Parties: UNITED STATES of America, v. John SAMPSON, Defendant.
• Court: U.S. District Court — Eastern District of New York

122 F.Supp.3d 11

UNITED STATES of America,

v.John SAMPSON, Defendant.

No. 13–CR–269 (S–5)(DLI).

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

Signed Aug. 12, 2015.

Alexander A. Solomon, Daniel A. Spector, Paul A. Tuchmann, United States Attorneys Office, Eastern District of New York, Brooklyn, NY, for United States of America.

Nathaniel H. Akerman, Joshua N. Colangelo–Bryan, Dorsey & Whitney, New York, NY, for Defendant.

OPINION AND ORDER

DORA L. IRIZARRY, District Judge:

Defendant John Sampson (the "Defendant") was charged in an eleven-count indictment with embezzlement, conspiracy to obstruct justice, obstruction of justice, witness and evidence tampering, concealment of records, and false statements to law enforcement officers. Defendant moves to (i) dismiss Counts 1 and 2 of the indictment as time barred or for lack of subject matter jurisdiction, and (ii) sever Count 11 of the indictment as improperly joined. (See Fifth Superseding Indictment ("SSI")¹ , Dkt. Entry 121; Mem. of Law in Support of Def. John Sampson's Pretrial Mot. to Dismiss and to Sever ("Def.'s Mem."), Dkt. Entry No. 63.) The government opposes. (See Gov't's Omnibus Mem. of Law in Opposition to Def.'s Pretrial Mots ("Gov't's Mem."), Dkt. Entry No. 66.) For the reasons set forth below, Defendant's motion to dismiss Counts 1 and 2 of the indictment is granted, and Defendant's motion to sever Count 11 is denied.

THE INDICTMENT

Defendant was indicted by a Grand Jury in the Eastern District of New York for embezzlement under 18 U.S.C. § 666 (Counts 1 and 2), conspiracy to obstruct justice (Count 3) under 18 U.S.C. § 1512(k), obstruction of justice under 18 U.S.C. § 1503 (Count 4), witness and evidence tampering under 18 U.S.C. § 1512 (Counts 5–7), concealment of records under 18 U.S.C. § 1519 (Count 8), and making false statements to law enforcement officers under 18 U.S.C. § 1001 (Counts 9–11). (SSI ¶¶ 52–55, 58–73, Dkt. Entry No. 121.) Defendant entered into a tolling agreement with the government, which tolled the statute of limitations from February 1, 2013 up to and including May 17, 2013 (the "tolling period") and excluded the tolling period from any statute of limitations calculations. (Statute of Limitations Tolling Agreement attached as "Exhibit A" to Gov't's Mem. at ¶ 4.) The following facts relate to Counts 1, 2, and 11 only.

Counts 1 and 2 of the SSI charged Defendant with embezzling money while acting as a court-appointed referee for foreclosure proceedings conducted by the Supreme Court of the State of New York in Kings County.² (SSI, ¶¶ 4–26, 52–55.) Specifically, the SSI states that, "[s]ince approximately 2002, the [D]efendant ... embezzled hundreds of thousands of dollars in funds from escrow accounts relating to foreclosure proceedings involving four Brooklyn real estate properties;" however, Defendant was charged only in relation to two properties. (Id. ¶ 5.) As a referee, Defendant was responsible for selling foreclosed properties and using the proceeds to repay fees, outstanding mortgages, and liens. (Id. ¶ 12) Through his position, Defendant oversaw the sales of a property located at 165 Forbell Street in Brooklyn, New York (the "Forbell Street Property"), the subject of Count 1, and another located at 1915 Eighth Avenue (the "Eighth Avenue Property"), the subject of Count 2. (Id. ¶ 15.) The state court orders directing the foreclosure and sale of these properties also directed Defendant to repay the mortgages and liens, deposit the proceeds of the sales into escrow accounts opened in his name in specified banks, file a referee's report of sale, and forward any surplus funds to the Clerk of the Court. (Id. ¶ 18, 21; J. of Foreclosure and Sale Forbell Street Property ("Forbell St. Jgmt.") attached as "Exhibit A" to Decl. of Nathaniel H. Akerman in Supp. of Def. John Sampson's Pretrial Mot. to Dismiss and to Sever ("Akerman Decl.") at 4, Dkt. Entry No. 64 (directing "that said referee then deposit the balance of said proceeds of sale in his own name as Referee in Citibank, N.A."); J. of Foreclosure and Sale Eighth Street Property ("Eighth St. Jgmt.") attached as "Exhibit E" to Akerman Decl. at 4 (directing "that said Referee then deposit the balance of said proceeds in his/her own name as Referee in Independence Savings Bank, Montague St. Branch, Bklyn").)³ The judgments of foreclosure and sale also directed Defendant to remit the surplus funds to the Kings County Clerk within five days of filing his reports. (Forbell St. Jgmt. at 6; J. Eighth St. Jgmt. at 6.)

On October 7, 1998, Defendant sold the Forbell Street Property, signed his referee report, and deposited approximately $80,000 in surplus funds from the Forbell Street Property into a Chase Bank account in his name (not a Citibank account as directed by the state court). (SSI, ¶ 19; Chase Bank Account Statements attached to Akerman Decl. as "Exhibit D"; Referee's Report of Sale Forbell Street Property attached to Akerman Decl. as "Exhibit B" at 3.)⁴ Thus, Defendant was supposed to remit the surplus funds to the Kings County Clerk by October 12, 1998.⁵ On or about February 13, 2008, Defendant transferred $8,000 from the Chase Bank account into his personal bank account. (SSI, ¶ 20.) Defendant never deposited the surplus funds with the Kings County Clerk. (Id. )

On June 28, 2002, Defendant sold the Eighth Street Property, signed his referee report, and deposited approximately $80,000 in surplus funds from the sale into an HSBC account in his name (not in an Independence Savings Bank account as directed by the state court). (SSI, ¶ 22; HSBC Account Statements attached as "Exhibit A" to Reply Mem. of Law in Supp. of Def.'s Mot. ("Def.'s Reply"), Dkt. Entry No. 71.) Thus, Defendant was supposed to remit the surplus funds to the Kings County Clerk by July 3, 2002.

On July 21, 2006, a balance of $55,167.94 remained in the HSBC account, which Defendant combined with a bank check for $27,500 to purchase a bank check in the amount of $82,667.94 (the "2006 Bank Check"). (Id. ¶ 24.) Defendant made the 2006 Bank Check payable to the "Kings County Clerk Office." (Id. ) However, Defendant never deposited the 2006 Bank Check with the Kings County Clerk. (Id. ¶ 25.) Instead, on or about and between June 7, 2008, Defendant exchanged the 2006 Bank Check for eight bank checks worth $10,000 each and one bank check for $2,667.94, all made payable to John Sampson. (Id. ) On or about and between June 12, 2008 and January 12, 2009, Defendant redeemed for cash three of the $10,000 bank checks, negotiated the $2,667.94 bank check, and deposited two of the $10,000 bank checks into his personal account. (SSI, ¶ 26.) Defendant never repaid the surplus funds to the Kings County Clerk. (Id. ) Collectively, these transactions shall be referred to as the "2008 transactions."

Count 11 of the SSI charges Defendant with making materially false, fictitious and fraudulent statements and representations to Federal Bureau of Investigation ("FBI") agents about an outstanding sales tax balance owed by a liquor store in which the Defendant allegedly has a financial interest. (SSI, ¶¶ 43–46, 50–51, 72–73.) From 1997 through the present, Defendant served as a member of the New York State Senate ("Senate"). In or about December 2011, John Sampson acquired an ownership interest with four other partners in a liquor store in Brooklyn, New York, which ownership he subsequently concealed from his Senate staff members. (Id. ¶¶ 10, 40.) When acquired, the liquor store owed an outstanding sales tax balance. (Id. ) Defendant, without disclosing his interests, allegedly repeatedly directed one of his Senate staff members to resolve the liquor store's outstanding sales tax obligation. (Id. ¶ ¶ 43–46.) On July 27, 2012, FBI agents interviewed Defendant about his involvement in the liquor store. (Id. ¶ 47.) Defendant allegedly admitted to the FBI agents that he had an ownership interest in the liquor store, but falsely denied that he had asked his Senate staff member to resolve the liquor store's tax issues. (Id. ¶¶ 50–51, 73.)

DISCUSSION

I. Counts 1 and 2 are Time Barred

As to Counts 1 and 2, Defendant is charged with violating 18 U.S.C. § 666, which states, in pertinent part:

(a) Whoever, if the circumstance described in subsection (b) of this section exists—(1) being an agent of an organization, or of a State, local, or Indian tribal government, or any agency thereof—(A) embezzles, steals, obtains by fraud, or otherwise without authority knowingly converts to the use of any person other than the rightful owner or intentionally misapplies, property that—(i) is valued at $5,000 or more, and (ii) is owned by, or is under the care, custody, or control of such organization, government, or agency....

(b) The circumstance referred to in subsection (a) of this section is that the organization, government, or agency receives, in any one year period, benefits in excess of $10,000 under a Federal program involving a grant, contract, subsidy, loan, guarantee, insurance, or other form of Federal assistance.

18 U.S.C. § 666(a) -(b). The statute of limitations for 18 U.S.C. § 666 violations is five years. 18 U.S.C. § 3282.

A. The Parties' Arguments

The government has alleged that the statute of limitations for the embezzlement charges began running when the Defendant converted the surplus funds to his own use via the 2008 transactions. Defendant disagrees with the government, contending instead that the embezzlement occurred at the point of the initial taking, i.e., from the day after Defendant was obligated to deposit the surplus funds to the Kings County Clerk for each foreclosure sale. (Def.'s Mem. at 12–13.) Defendant was required by the state court foreclosure and sales judgments to deposit the surplus funds with the Kings County Clerk within five days of filing his referee reports. Additionally, Defendant cites to New York Real Property Actions and Proceedings Law ("RPAPL") that also requires "[a]ll surplus moneys arising from the [foreclosure] sale...