United States v. Walsh

• Decision Date: 15 January 2016
• Docket Number: 15-cr-91 (ADS)
• Citation: 156 F.Supp.3d 374
• Parties: United States of America, v. Edward M. Walsh, Jr., Defendant.
• Court: U.S. District Court — Eastern District of New York

156 F.Supp.3d 374

United States of America,

v.Edward M. Walsh, Jr., Defendant.

15-cr-91 (ADS)

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

Signed January 15, 2016

United States Attorney's Office, Eastern District of New York, 610 Federal Plaza, Central Islip, NY 11722, by: Catherine Mary Marabile, Assistant U.S. Attorney, Raymond A. Tierney, Assistant U.S. Attorney.

Leonard Lato, Esq., 200 Motor Parkway, Suite C-17, Hauppauge, NY 11788, Attorney for the Defendant.

William D. Wexler, Esq., 816 Deer Park Avenue, North Babylon, NY 11703, Attorney for the Defendant.

ORDER

SPATT

, District Judge.

On March 6, 2015, a grand jury returned an Indictment (the “Indictment”) against the Defendant Edward M. Walsh, Jr. (the “Defendant”), an employee of the Suffolk County Sheriff's Office (“SCSO”). The Indictment alleges that from January 2011 to April 2014, the Defendant made false representations to the SCSO as to the amount of overtime and regular hours that he worked, and as a result, SCSO paid him for hours that he did not actually work.

The Indictment charges the Defendant with one count of theft of funds, 18 U.S.C. § 666(a)(1)(A)

, and one count of wire fraud, 18 U.S.C. § 1343. In addition, the Indictment gives the Defendant notice that in the event he is convicted of either count, the Government will seek forfeiture pursuant to 18 U.S.C. § 981(a)(1)(C) and 28 U.S.C. § 2461(c) of any property derived from proceeds traceable to the crimes charged.

Presently before the Court is the Defendant's motion to dismiss count one of the Indictment and to compel the Government to serve a bill of particulars.

The parties appeared before the Court for oral argument on January 15, 2016.

For the reasons set forth below, the Defendant's motion is denied.

I. BACKGROUND

The SCSO is a local government agency in Suffolk County, New York, which operated correctional facilities in Yaphank and Riverhead, New York. (Indictment ¶ 1.) Specifically, the SCSO provided “Suffolk County courthouse security and enforcement of all decrees, orders and mandates of the civil courts within the county”; “patrolled and investigated crimes committed on county-owned property”; and “oversaw all security matters within the correctional facilities it operated.” (Id. )

From 2010 to 2014, the SCSO “received in excess of $10,000 each calendar year under a federal program involving asset forfeiture monies and other forms of federal assistance.” (Id. at ¶ 2.)

The Defendant began his employment with the SCSO in December 1990. (Id. at ¶ 1.) On September 11, 2006, the Defendant was promoted to the position of SCSO Correction Officer III Investigator and “was assigned to work at the SCSO correctional facility in Riverhead as an aide to the Sheriff.” (Id. at ¶ 3.) During the period of his employment, the Defendant “was paid a portion of his wages from SCSO via direct deposit,” and “[a]ll such payments to [the Defendant]'s bank account in Suffolk County, New York were electronically transmitted through the State of Massachusetts.” (Id. at ¶ 4.)

In addition, since at least 2006 to the present, the Defendant was the Chairman of the Suffolk County Conservative Party (“SCCP”). (Id. at ¶ 7.)

On January 7, 2015, the Defendant was arrested pursuant to a complaint charging him with theft of funds in violation of 18 U.S.C. § 666(a)(1)(A)

. The complaint alleged that from January 2011 to April 2014:

in order to obtain compensation from the SCSO, the [D]efendant Edward M. Walsh, Jr. falsely represented to the SCSO that he had worked certain regular and overtime hours when, in fact, he did not work those hours. Contrary to his representations to the SCSO that he was working regular and overtime hours for the SCSO on numerous dates, [the Defendant] was, among other things, playing golf or performing work on behalf of the SCCP. In reliance on those false representations, the SCSO paid [the Defendant] wages for hours he did not work.

(Compl. at ¶ 8.)

To support this allegation, the complaint provides examples of regular and overtime hours that the Defendant allegedly represented to the SCSO that he had worked and was paid for. (See Compl. at ¶¶ 9–34.) It then alleged that records from the Defendant's cell phone, the Hampton Hills Golf & Country Club, Astoria Bank, the Suffolk County Federal Credit Union, TD Ameritrade, State Farm Insurance, and Foxwoods Casino, demonstrate that the Defendant was not at the SCSO Riverhead facility during the hours that he claimed to be working but was instead, among other things, playing golf, playing poker, and attending SCCP fundraising events. (See id. )

As previously noted, on March 6, 2015, a grand jury returned an Indictment charging the Defendant with one count of theft of funds and one count of wire fraud. Similar to the complaint, the Indictment alleges that from January 2011 to April 2014, the Defendant “falsely represented to the SCSO that he had worked certain regular and overtime hours, when in fact, he did not work those hours.” (Indictment at ¶ 6.)

On March 25, 2015, April 2, 2015, July 16, 2015, October 7, 2015, and October 16, 2015, consistent with its disclosure obligations set forth under Federal Rule of Criminal Procedure (“Fed. R. Crim. P.”) 16(a)

, the Government produced to the Defendant the following categories of documents: (i) SCSO attendance records; (ii) SCSO Internal Affairs records pertaining to the Defendant; (iii) a SCSO computer audit; (iv) SCSO timesheets; (v) the Defendant's golf records; (vi) the Defendant's telephone records; (vii) SCCP records; (viii) records from the Mohegan Sun casino; and (ix) the Defendant's bank records.

The Court will now address (A) the Defendant's motion to dismiss the theft of funds count; and (B) the Defendant's motion for a bill of particulars.

II. DISCUSSION

A. As to the Defendant's Motion to Dismiss Count One of the Indictment

As noted, the Indictment charges the Defendant with one count of Theft of Funds, 18 U.S.C. § 666

(“Section 666 ”), which statute states:

(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; or

(B) corruptly solicits or demands for the benefit of any person, or accepts or agrees to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business, transaction, or series of transactions of such organization, government, or agency involving any thing of value of $5,000 or more; or

(2) corruptly gives, offers, or agrees to give anything of value to any person, with intent to influence or reward an agent of an organization or of a State, local or Indian tribal government, or any agency thereof, in connection with any business, transaction, or series of transactions of such organization, government, or agency involving anything of value of $5,000 or more;

shall be fined under this title, imprisoned not more than 10 years, or both.

18 U.S.C. § 666(a)

.

In addition to the requirements in subsection (a) of Section 666, subsection (b)

requires the Government to show “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.”

Finally, subsection (c) states, “This section does not apply to bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business.” This provision is referred to by the parties as the “safe-harbor” provision.

The Defendant asserts that his conduct falls under the safe-harbor provision because “[h]e was a legitimate SCSO employee” and “had a legitimate salary.” (The Def.'s Mem. of Law at 15–16.) In support of this contention, the Defendant points to what it contends is the ordinary meaning, legislative history, and the relevant case law surrounding the safe-harbor provision. (See id. at 6–20.)

On the other hand, the Government contends that the question of whether the Defendant's conduct falls under the safe-harbor provision is a jury question and therefore, cannot be the subject of a pre-trial motion to dismiss the indictment. (See the Gov't Opp'n Mem. of Law at 9) Further, even if the Defendant's motion was procedurally proper, the Government asserts that the plain language, legislative history, and case law demonstrates that the safe-harbor provision may not be applied where, as here, a defendant received compensation on the basis of fraudulent overtime timesheets. (See id. at 10–18).

1. As to Whether the Defendant's Motion is Procedurally Proper

It is not entirely clear which Federal Rule of Criminal Procedure the Defendant is moving under. The Defendant's papers in support of this motion to dismiss do not provide the applicable rules or legal standards which entitles him to relief.

The Defendant has filed a legal memorandum asserting that the theft of funds count fails to state an offense because Section 666(c)

applies to bar prosecution of the conduct alleged in this case. (See the Def.'s Reply Mem. of Law at 25.)

Fed. R. Crim. P. 12(b)(3)(B)(v)

provides that a defendant can raise a defect in the indictment for “failure to state an offense” prior to trial “if the basis for the motion is then reasonably available and the motion can be determined without a trial on the merits.”

The Defendants' motion appears to be making such an argument, and therefore, the Court will construe the Defendant's motion as one made under Fed. R. Crim. P. 12(b)(3)(B)(v)

.

For purposes of Rule 12(b)(3)(B)(v)

, the Second Circuit has stated, “An indictment is sufficient...