Governments Brief Obstruction Case Guy Neighbors Yellow House Case
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Case 2:08-mj-08077-JPO
Document 22
Filed 08/15/2008
Page 1 of 6
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS UNITED STATES OF AMERICA,
) ) Plaintiff, ) ) vs. ) ) No. GUY S. NEIGHBORS, ) and ) CARRIE NEIGHBORS, ) ) Defendants. ) ________________________________)
08-MJ-8077-01/02-JPO
GOVERNMENT’S BRIEF IN SUPPORT COMES NOW the United States of America, by and through Eric F. Melgren, United States Attorney for the District of Kansas, Terra D. Morehead, Assistant United States Attorney, for said District, and hereby responds to arguments raised by the defendants alleging that the Government failed to establish probable cause pertaining to the charge contained in the Complaint. The defendants’ argument to the Court was premised on the representation that under a prosecution for a violation of Title 18, United States Code § 1512(c), the Government would be required to prove that an “official proceeding” be pending or underway at the time of the offense and that it would have been necessary for the defendant’s to have been advised a Federal “official proceeding” was underway. In making this representation, the defendant’s cited and relied upon Arthur Andersen LLP v. United States (also referred to as Enron), 544 U.S. 696, 123 S. Ct. 2129 (2005). A review of Enron and other cases that follow clearly do not support the defendants’ position. The defendants herein are charged with on or about August 8, 2008, corruptly concealing a record, document, or other object, or attempting to do so, with the intent to
Case 2:08-mj-08077-JPO
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Filed 08/15/2008
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impair the object’s integrity and availability for use in an official proceeding; or, otherwise obstructing, influencing, or impeding any official proceeding, or attempting to do so, in violation of Title 18, United States Code § 1512(c). (Doc. 1.) There is no requirement that an official proceeding be pending or about to be instituted at the time of the offense. See Title 18, United States Code § 1512(f)(1).
There is also no requirement that the
Government establish the “state of mind” of the defendants that the official proceedings be Federal in nature. See Title 18, United States Code § 1512(g). The Enron case actually involved a violation of the 2000 version of § 1512(b)(2)(A) and (B), which involved someone knowingly using intimidation or physical force, threats, or corruptly persuading another person. . .with intent to. . .cause that person to withhold documents from or alter documents for use in an official proceeding. The facts established that Enron’s auditor, Arthur Anderson, instructed its employees to destroy documents pursuant to its document retention policy. The Supreme Court found the jury was not properly instructed on the elements of “corrupt persuasion” because the instructions failed to convey the requisite consciousness of wrongdoing, thereby reversing the conviction. 544 U.S. at 706, 125 S. Ct. 2128. The Court further held that § 1512(b)(1) encompasses a “nexus” requirement. 544 U.S. at 707-08, 125 S. Ct. 2129. This “nexus” requirement means that to convict a defendant of obstructing justice under that subsection, “the [obstructive] act must have a relationship in time, causation, or logic with the judicial proceedings.” United States v. Aguilar, 515 U.S. 593, 599, 115 S. Ct. 2357, 132 L.Ed.2d 520 (1995). The Government in Arthur Anderson had argued against finding a “nexus” requirement under § 1512(b)(1), because to convict a defendant under any of 18 U.S.C. § 1512's subsections, “an official proceeding ‘need not be pending or about to be instituted 2
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at the time of the offense.’ ” Arthur Andersen, 544 U.S. at 707, 125 S. Ct. 2129 (quoting 18 U.S.C. § 1512(e)(1), now codified at § 1512(f)(1)). However, the Court noted: “It is ... one thing to say that a proceeding ‘need not be pending or about to be instituted at the time of the offense,’ and quite another to say a proceeding need not even be foreseen. A ‘knowingly ... corrupt persuader’ cannot be someone who persuades others to shred documents under a document retention policy when he does not have in contemplation any particular official proceeding in which those documents might be material.” Id. at 707-08, 125 S. Ct. 2129. The facts as presented before the Court of the Neighbors’ conduct is quite distinguishable from the conduct of Enron’s auditior. It was clearly foreseeable in the case at hand that an official proceeding would or might occur. Before a defendant may be convicted of obstruction under § 1512(c)(1), he must believe that his acts will be likely to affect a pending or foreseeable proceeding . See Arthur Andersen, 544 U.S. at 707, 125 S. Ct. 2129; United States v. Kaplan, 490 F.3d 110, 125 (2d Cir.2007) (“[A] ‘knowingly ... corrupt persuader’ must believe that his actions are likely to affect a particular, existing or foreseeable official proceeding.”). See also United States v. Matthews, 505 F.3d 698, 707708 (7th Cir. 2007). When Carrie Neighbors received the call from her attorney, John Duma, after being contacted by individuals connected to her pending Federal prosecution, she was put on notice that authorities were looking into the defendants’ newest eBay scam. They had surreptitiously established a new eBay site under an assumed name (standupguycharles), obtaining a UPS mailbox in order to receive payments, maintaining a phone in the name of “Charlie,” and even getting a bank account in the name of an unwitting participant 3
Case 2:08-mj-08077-JPO
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(Charlie Rayton). Many of their purchases of items were done in cash and many of them there is no internal record to memorialize the transaction. There was nothing on the face of this newest venture that would associate the eBay business with Guy or Carrie Neighbors or Yellow House. This was obviously done to prevent potential buyers from knowing who they were truly dealing with and to thwart detection of their conduct by law enforcement. The purchase of ten to fourteen computers from Robert Samples, sometimes multiple brand news one at the same time, in the least, represents willful blindness that they were engaging, once again, in the business of receiving stolen property. Whatever benefit of the doubt the defendants might have been entitled to came to a halt on August 7, 2008, when they were informed that one of the three computers they had received from Samples was stolen from Kansas University. A reasonable person would have known, at that point, by failing to cooperate and return all of the stolen materials and turn over supporting documentation, an official proceeding would be imminent.
To further solidify the
Government’s assertion that the defendants’ engaged in obstructive behavior on August 8, 2008, was the fact that an obviously fraudulent document1 was presented to this Court during the preliminary hearing (Defendant’s Exhibit B) in an attempt to represent it as the document observed by Detective Riner on August 7, 2008; this is a clear reinforcement of the charge herein, that the defendants did not provide the document to Detective Riner on
1
Samples told Detectives Bialek and Riner that he received a total of $1,000.00 for the computer–$400.00 in a check and $600.00 in cash. It is interesting to note that while this document has the serial number and model number from the stolen K.U. computer from the initial report, it has no such information on the other two computers, although there is a notation of 3 Dell Laptop P.C.s. 4
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August 8, 2008, in order to prevent that document’s availability for production and use in an official proceeding. The defendants’ arguments to the Court relying on Enron were misapplied to the case at hand. There is certainly no requirement that official proceedings be pending or about to be initiated. Because of the original eBay case against the Neighbors, they were on notice that official proceedings under these circumstances were foreseeable. Likewise, the defendants’ state of mind need not be proven with respect to the circumstances that the official proceedings are Federal. The charge contained in the Complaint is a proper charge under the facts herein. The Government has presented probable cause that the defendants engaged in obstructive behavior and it will be for a jury to determine the ultimate issue. Respectfully submitted, Eric F. Melgren United States Attorney
s/ Terra D. Morehead TERRA D. MOREHEAD, # 12759 Assistant United States Attorney 500 State Avenue, Suite 360 Kansas City, Kansas 66101 (913) 551-6730 (telephone) (913) 551-6541 (facsimile) E-mail: [email protected] ELECTRONICALLY FILED Attorneys for Plaintiff
CERTIFICATE OF SERVICE I hereby certify that on the 15th day of August, 2008, the foregoing was electronically filed with the clerk of the court by using the CM/ECF system which will send a notice of 5
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electronic filing to the following: Cheryl Pilate Attorney for Guy Neighbors John Duma Attorney for Carrie Neighbors
s/ Terra D. Morehead TERRA D. MOREHEAD, # 12759 Assistant United States Attorney
6
Document 22
Filed 08/15/2008
Page 1 of 6
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF KANSAS UNITED STATES OF AMERICA,
) ) Plaintiff, ) ) vs. ) ) No. GUY S. NEIGHBORS, ) and ) CARRIE NEIGHBORS, ) ) Defendants. ) ________________________________)
08-MJ-8077-01/02-JPO
GOVERNMENT’S BRIEF IN SUPPORT COMES NOW the United States of America, by and through Eric F. Melgren, United States Attorney for the District of Kansas, Terra D. Morehead, Assistant United States Attorney, for said District, and hereby responds to arguments raised by the defendants alleging that the Government failed to establish probable cause pertaining to the charge contained in the Complaint. The defendants’ argument to the Court was premised on the representation that under a prosecution for a violation of Title 18, United States Code § 1512(c), the Government would be required to prove that an “official proceeding” be pending or underway at the time of the offense and that it would have been necessary for the defendant’s to have been advised a Federal “official proceeding” was underway. In making this representation, the defendant’s cited and relied upon Arthur Andersen LLP v. United States (also referred to as Enron), 544 U.S. 696, 123 S. Ct. 2129 (2005). A review of Enron and other cases that follow clearly do not support the defendants’ position. The defendants herein are charged with on or about August 8, 2008, corruptly concealing a record, document, or other object, or attempting to do so, with the intent to
Case 2:08-mj-08077-JPO
Document 22
Filed 08/15/2008
Page 2 of 6
impair the object’s integrity and availability for use in an official proceeding; or, otherwise obstructing, influencing, or impeding any official proceeding, or attempting to do so, in violation of Title 18, United States Code § 1512(c). (Doc. 1.) There is no requirement that an official proceeding be pending or about to be instituted at the time of the offense. See Title 18, United States Code § 1512(f)(1).
There is also no requirement that the
Government establish the “state of mind” of the defendants that the official proceedings be Federal in nature. See Title 18, United States Code § 1512(g). The Enron case actually involved a violation of the 2000 version of § 1512(b)(2)(A) and (B), which involved someone knowingly using intimidation or physical force, threats, or corruptly persuading another person. . .with intent to. . .cause that person to withhold documents from or alter documents for use in an official proceeding. The facts established that Enron’s auditor, Arthur Anderson, instructed its employees to destroy documents pursuant to its document retention policy. The Supreme Court found the jury was not properly instructed on the elements of “corrupt persuasion” because the instructions failed to convey the requisite consciousness of wrongdoing, thereby reversing the conviction. 544 U.S. at 706, 125 S. Ct. 2128. The Court further held that § 1512(b)(1) encompasses a “nexus” requirement. 544 U.S. at 707-08, 125 S. Ct. 2129. This “nexus” requirement means that to convict a defendant of obstructing justice under that subsection, “the [obstructive] act must have a relationship in time, causation, or logic with the judicial proceedings.” United States v. Aguilar, 515 U.S. 593, 599, 115 S. Ct. 2357, 132 L.Ed.2d 520 (1995). The Government in Arthur Anderson had argued against finding a “nexus” requirement under § 1512(b)(1), because to convict a defendant under any of 18 U.S.C. § 1512's subsections, “an official proceeding ‘need not be pending or about to be instituted 2
Case 2:08-mj-08077-JPO
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Filed 08/15/2008
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at the time of the offense.’ ” Arthur Andersen, 544 U.S. at 707, 125 S. Ct. 2129 (quoting 18 U.S.C. § 1512(e)(1), now codified at § 1512(f)(1)). However, the Court noted: “It is ... one thing to say that a proceeding ‘need not be pending or about to be instituted at the time of the offense,’ and quite another to say a proceeding need not even be foreseen. A ‘knowingly ... corrupt persuader’ cannot be someone who persuades others to shred documents under a document retention policy when he does not have in contemplation any particular official proceeding in which those documents might be material.” Id. at 707-08, 125 S. Ct. 2129. The facts as presented before the Court of the Neighbors’ conduct is quite distinguishable from the conduct of Enron’s auditior. It was clearly foreseeable in the case at hand that an official proceeding would or might occur. Before a defendant may be convicted of obstruction under § 1512(c)(1), he must believe that his acts will be likely to affect a pending or foreseeable proceeding . See Arthur Andersen, 544 U.S. at 707, 125 S. Ct. 2129; United States v. Kaplan, 490 F.3d 110, 125 (2d Cir.2007) (“[A] ‘knowingly ... corrupt persuader’ must believe that his actions are likely to affect a particular, existing or foreseeable official proceeding.”). See also United States v. Matthews, 505 F.3d 698, 707708 (7th Cir. 2007). When Carrie Neighbors received the call from her attorney, John Duma, after being contacted by individuals connected to her pending Federal prosecution, she was put on notice that authorities were looking into the defendants’ newest eBay scam. They had surreptitiously established a new eBay site under an assumed name (standupguycharles), obtaining a UPS mailbox in order to receive payments, maintaining a phone in the name of “Charlie,” and even getting a bank account in the name of an unwitting participant 3
Case 2:08-mj-08077-JPO
Document 22
Filed 08/15/2008
Page 4 of 6
(Charlie Rayton). Many of their purchases of items were done in cash and many of them there is no internal record to memorialize the transaction. There was nothing on the face of this newest venture that would associate the eBay business with Guy or Carrie Neighbors or Yellow House. This was obviously done to prevent potential buyers from knowing who they were truly dealing with and to thwart detection of their conduct by law enforcement. The purchase of ten to fourteen computers from Robert Samples, sometimes multiple brand news one at the same time, in the least, represents willful blindness that they were engaging, once again, in the business of receiving stolen property. Whatever benefit of the doubt the defendants might have been entitled to came to a halt on August 7, 2008, when they were informed that one of the three computers they had received from Samples was stolen from Kansas University. A reasonable person would have known, at that point, by failing to cooperate and return all of the stolen materials and turn over supporting documentation, an official proceeding would be imminent.
To further solidify the
Government’s assertion that the defendants’ engaged in obstructive behavior on August 8, 2008, was the fact that an obviously fraudulent document1 was presented to this Court during the preliminary hearing (Defendant’s Exhibit B) in an attempt to represent it as the document observed by Detective Riner on August 7, 2008; this is a clear reinforcement of the charge herein, that the defendants did not provide the document to Detective Riner on
1
Samples told Detectives Bialek and Riner that he received a total of $1,000.00 for the computer–$400.00 in a check and $600.00 in cash. It is interesting to note that while this document has the serial number and model number from the stolen K.U. computer from the initial report, it has no such information on the other two computers, although there is a notation of 3 Dell Laptop P.C.s. 4
Case 2:08-mj-08077-JPO
Document 22
Filed 08/15/2008
Page 5 of 6
August 8, 2008, in order to prevent that document’s availability for production and use in an official proceeding. The defendants’ arguments to the Court relying on Enron were misapplied to the case at hand. There is certainly no requirement that official proceedings be pending or about to be initiated. Because of the original eBay case against the Neighbors, they were on notice that official proceedings under these circumstances were foreseeable. Likewise, the defendants’ state of mind need not be proven with respect to the circumstances that the official proceedings are Federal. The charge contained in the Complaint is a proper charge under the facts herein. The Government has presented probable cause that the defendants engaged in obstructive behavior and it will be for a jury to determine the ultimate issue. Respectfully submitted, Eric F. Melgren United States Attorney
s/ Terra D. Morehead TERRA D. MOREHEAD, # 12759 Assistant United States Attorney 500 State Avenue, Suite 360 Kansas City, Kansas 66101 (913) 551-6730 (telephone) (913) 551-6541 (facsimile) E-mail: [email protected] ELECTRONICALLY FILED Attorneys for Plaintiff
CERTIFICATE OF SERVICE I hereby certify that on the 15th day of August, 2008, the foregoing was electronically filed with the clerk of the court by using the CM/ECF system which will send a notice of 5
Case 2:08-mj-08077-JPO
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Filed 08/15/2008
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electronic filing to the following: Cheryl Pilate Attorney for Guy Neighbors John Duma Attorney for Carrie Neighbors
s/ Terra D. Morehead TERRA D. MOREHEAD, # 12759 Assistant United States Attorney
6
