United States v. White

Decision Date03 May 2017
Docket NumberCriminal Action No. 3:16-cr-00560-JMC-5
PartiesUnited States of America, Plaintiff, v. Harry Michael White, Defendant.
CourtU.S. District Court — District of South Carolina

Before the court is a motion by Defendant Harry Michael White ("Defendant") to dismiss the original indictment returned against him (ECF No. 132) pursuant to Fed. R. Crim. P. 12(b)(3)(A)(v), which, for the reasons that follow, the court DENIES.


On July 19, 2016, the Government filed a 20-count indictment ("original indictment") against Defendant and eight co-defendants arising from allegations of fraud in applying for and receiving benefits from federal programs established by the U.S. Department of Veterans Affairs and the Small Business Administration designed to assist qualifying small businesses. (See ECF No. 2.) The original indictment charges Defendant with conspiracy to defraud an agency of the United States, in violation of 18 U.S.C. § 371 (Count 1), and wire fraud, in violation of 18 U.S.C. § 1343 (Count 2). (Id.)

On October 18, 2016, Defendant filed the instant motion to dismiss the original indictment pursuant to Rule 12(b)(3)(A)(v). (ECF No. 132.) The motion raises two grounds for dismissal, both of which are based on the alleged violations of Defendant's rights under the Grand Jury Clause of the Fifth Amendment.1

First, Defendant argues that his rights were violated when the federal prosecutor in this matter answered a question posed by a juror at the grand jury hearing. (See ECF No. 132-1 at 2-5.) During the testimony of a federal law enforcement agent, the juror asked whether the federal government has a system in place to prevent fraudulent conduct like that alleged in the original indictment from occurring. (See id. at 2.)2 When the agent did not respond, the federal prosecutor stated, "I think—I think the answer is that this is it. This is the system." (Id. at 3.) Upon a follow-up question from the jury, the agent testified that "usually stuff like this—is so close knit within the company that essentially the only deterrence is—is right here." (Id.)

Defendant argues that the prosecutor's statement was impermissible during the grand jury hearing because he "assume[d] the role of both advocate and witness." (Id. at 5; see id. at 3 (noting that the prosecutor was "not a sworn witness").) In Defendant's view, the prosecutor should not have answered the juror's question, and doing so amounted to a violation of his ethical responsibilities. (See id. at 5 (citing Washington v. Hofbauer, 228 F.3d 689, 709 (6th Cir. 2000); U.S. Dep't of Justice, U.S. Attorneys' Manual § 9-11.010 (1997); Model Code of Prof'l Responsibility EC 5-9 (Am. Bar Ass'n 1980)).) Strangely, Defendant also argues that the prosecutor had an obligation to answer the juror's question and to do so accurately. (See id.) InDefendant's view, however, the prosecutor misled the grand jury by offering an inaccurate or incomplete answer to the question. (See id.) The prosecutor, Defendant contends, should have informed the jury that the federal government has means other than criminal prosecution—such as administrative proceedings, suspension, debarment, and civil claims brought in a suit by the government or in a qui tam action—to address alleged fraud in the administration of the programs at issue. (See id. at 3-4 (citing the False Claims Act, 31 U.S.C. §§ 3729-3733; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; 15 U.S.C. § 645; 13 C.F.R. §§ 124.1015, 125.32,3 127.700).) Defendant asserts that "[h]ad the grand jury been accurately and fully informed about the range of options available, [it] may well have concluded, as was [its] prerogative, that criminal prosecution was not necessary in this case." (Id. at 5; see also id. at 4 (explaining that, if it had been informed of other enforcement mechanisms, the grand jury "could have decided not to return a true bill because the case could proceed as a civil suit," but, because it was "given a false and misleading answer," it was "left to believe the only option to address the problems was criminal prosecution").)

Second, Defendant argues that his rights were violated when the prosecutor interrupted a juror's comment. (See id. at 3, 5-6.) The juror, apparently in an effort to explain her perception that alternative enforcement mechanisms might exist, began to relate that her relative had filed paperwork in connection with one of the programs at issue or a similar federal small-business assistance program. (See id. at 3.) Before her explanation proceeded any further, the prosecutor interrupted, stating "I'm going to stop you right there . . . . [U]nfortunately, we can't get into personal facts about . . . other [circumstances]." (Id.) Defendant asserts that the prosecutor'sinterruption was "improper and unfair," as the juror was "entitled to share her knowledge and experience with the grand jury" and was "free to bring with [her] [her] own life experiences and [her] common sense." (Id. at 3, 6.) Defendant explains that the prosecutor improperly influenced the jury, which amounts to an ethical violation (see id. at 6 (citing U.S. Dep't of Justice, U.S. Attorneys' Manual § 9-11.010)), and that he abused his special relationship to the grand jury, which amounts to a violation of Defendant's constitutional rights (see id. (citing United States v. Serubo, 604 F.2d 807, 817 (3d Cir. 1979))).

In response, the Government argues that Defendant's assertions are not enough to overcome the presumption of regularity that cloaks grand jury proceedings. (See ECF No. 137 at 1-3 (citing United States v. R. Enters., Inc., 498 U.S. 292, 301 (1991); United States v. Loc Tien Nguyen, 314 F. Supp. 2d 612 (E.D. Va. 2004)).) In the Government's view, allegations of misconduct at a grand jury hearing should not result in dismissal of the indictment unless the misconduct is alleged to undermine the grand jury's determination that there is probable cause to believe that the accused committed the offense asserted. (See id. at 4 (citing United States v. Calandra, 414 U.S. 338 (1974)).) Absent this sort of prejudice from the alleged misconduct, the Government explains, dismissal is inappropriate. (See id. at 3-4 (citing Bank of N.S. v. United States, 487 U.S. 250, 251 (1988); United States v. Chapman, 209 F. App'x 253, 274 (4th Cir. 2006) (argued but unpublished); In re United States, 441 F.3d 44 (1st Cir. 2006)).)

On February 24, 2017, the court held a hearing on the motion to dismiss and decided to take the matter under advisement. (See ECF No. 185.) Thereafter, on March 22, 2017, the Government filed a 21-count superseding indictment ("superseding indictment") againstDefendant and his co-defendants.4 (ECF No. 204.) Count 1 in the superseding indictment charges Defendant with substantially the same offense—conspiracy to defraud an agency of the United States, in violation of § 371—as charged in Count 1 in the original indictment. (Compare ECF No. 2 at 1-15, with ECF No. 204 at 1-14.)5 The superseding indictment omits the § 1343 wire fraud charge against Defendant found in Count 2 of the original indictment, but it includes, in Count 11, a charge against Defendant for major fraud, in violation of 18 U.S.C. § 1031, that had been charged only against several co-defendants in Count 11 of the original indictment. (Compare ECF No. 2 at 24-25, with ECF No. 204 at 22-23.) Counts 21 and 22 of the superseding indictment, which are not found in the original indictment, assert against Defendant two counts of making materially false statements in a matter within the jurisdiction of a federal agency, in violation of 18 U.S.C. § 1001. (See ECF No. 204 at 27-28.)


Rule 12(b)(3)(A)(v) allows a defendant to move to dismiss an indictment based on an "error in the grand-jury proceeding or preliminary hearing." Fed. R. Civ. P. 12(b)(3)(A)(v). Dismissal of an indictment because of misconduct before the grand jury is appropriate only if the misconduct has constitutional dimensions or "amounts to a violation of one of those few, clear rules which were carefully drafted and approved by [the Supreme Court] and by Congress to ensure the integrity of the grand jury's functions." United States v. Williams, 504 U.S. 36, 46 (1992) (internal quotation marks and citation omitted). Defendants alleging such misconduct "bear theburden of rebutting the 'presumption of regularity attached to a grand jury's proceeding.'" United States v. Alvarado, 840 F.3d 184, 189 (4th Cir. 2016) (brackets omitted) (quoting United States v. Bros. Constr. Co. of Ohio, 219 F.3d 300, 314 (4th Cir. 2000)). However, even if a defendant meets his burden of establishing misconduct during the grand jury proceedings, at least where the misconduct does not amount to a constitutional violation, "dismissal of the indictment is appropriate only 'if it is established that the [misconduct] substantially influenced the grand jury's decision to indict,' or if there is 'grave doubt' that the decision to indict was free from the substantial influence of such [misconduct]." Bank of N.S., 487 U.S. at 256 (quoting United States v. Mechanik, 475 U.S. 66, 78 (1986)). Because the court's authority to dismiss an otherwise facially valid indictment on the ground of misconduct during the grand jury proceedings "directly encroaches upon the fundamental role of the grand jury," the exercise of that authority "is appropriately reserved . . . for extremely limited circumstances." Whitehouse v. U.S. Dist. Ct., 53 F.3d 1349, 1360 (1st Cir. 1995) (citing Bank of N.S., 487 U.S. at 263).


The grand jury's return of the superseding indictment raises the issue of whether Defendant's motion to dismiss the original indictment is now moot, an issue the court briefly addresses first. Concluding that the motion is not moot, the court then considers the merits of the motion to dismiss.

A. Mootness

"A ...

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