United States v. All Assets Held at Bank Julius Baer & Co.

520 F.Supp.3d 71

UNITED STATES of America, Plaintiff,

v.ALL ASSETS HELD AT BANK JULIUS BAER & CO., LTD., Guernsey Branch, Account Number 121128, In the Name of Pavlo Lazarenko, et al., Defendants In Rem.

No. 04-cv-798 (PLF/GMH)

United States District Court, District of Columbia.

Signed December 30, 2020

Daniel Hocker Claman, Adam Jeffrey Schwartz, Teresa Carol Turner-Jones, U.S. Department of Justice, Washington, DC, for Plaintiff.

Bryant Everett Gardner, Winston & Strawn LLP, Washington, DC, Doron Weinberg, Weinberg & Wilder, San Francisco, CA, for Defendants.

MEMORANDUM OPINION AND ORDER

G. MICHAEL HARVEY, UNITED STATES MAGISTRATE JUDGE

In 2004, the United States filed this civil forfeiture case in rem against funds held in certain bank accounts the government alleges are traceable to money laundering and extortion activities of former Ukrainian Prime Minister Pavel Lazarenko. In July 2005, Mr. Lazarenko filed a claim to certain of the Defendant funds, including funds held in an account at Bank Julius Baer in Guernsey (the "Bank Julius Baer Guernsey Account"), asserting that he is their beneficial owner. In April 2020, Claimant Pavel Lazarenko submitted a motion for partial summary judgment as to the Bank Julius Baer Guernsey Account, claiming that the government cannot trace those funds to the criminal activity alleged in the operative complaint. In support of his motion, Mr. Lazarenko filed excerpts from a 2016 deposition of non-party Peter Kiritchenko. Those excerpts (ECF Nos. 1268-1, 1268-2, 1268-3) were filed under seal pursuant to a protective order entered in this case. Presently pending before the Court is Mr. Lazarenko's motion to unseal the excerpts of Mr. Kiritchenko's deposition testimony, arguing that the information contained in the excerpts is already in the public domain and that the public's right of access to judicial proceedings weighs in favor of their disclosure. Mr. Kiritchenko filed a two-page opposition as a pro se third party, asserting that many of the facts in his testimony are not already in the public record and that their dissemination could lead to threats and other harm to him and his family. The government took no position on the motion. Mr. Lazarenko's motion to unseal is granted because, although not all of the information at issue is already publicly available, much of it is, and the strong presumption in favor of public access to judicial proceedings counsels in favor of unsealing.¹

I. BACKGROUND

The history of this over-fifteen-year-old case is extensive. Indeed, the history relevant to this motion reaches back as far as 1998, when Mr. Lazarenko was detained by Swiss authorities on suspicion of laundering money while he was a government official in Ukraine. In 1999, Universal Trading & Investment Co. ("UTICO") filed a civil case (asserting it was the assignee of claims belonging to Ukraine) against Mr. Lazarenko and his associate, Mr. Kiritchenko, alleging that they and others "were participants in ‘a criminal organization and enterprise designed to steal large sums of money from the Government of Ukraine.’ " UTICO v. Kiritchenko , No. C-99-3073, 2007 WL 2669841, at *1 (N.D. Cal. Sept. 7, 2007) (quoting the second amended complaint). In May 2000, a grand jury in the United States District Court for the Northern District of California indicted Mr. Lazarenko on multiple counts related to allegations of money laundering committed while he was a government official in Ukraine; the first count of the indictment named Mr. Kiritchenko as a co-conspirator. Indictment, United States v. Lazarenko , No. 00-cr-284 (N.D. Cal. May 18, 2000), ECF No. 1; see also Second Superseding Indictment, United States v. Lazarenko , No. 00-cr-284 (N.D. Cal. July 19, 2001), ECF No. 143. One month later, a Swiss court convicted Mr. Lazarenko in absentia of money laundering related to his abuse of public office in Ukraine for personal gain. ECF No. 20 at 11.

In 2004, Mr. Lazarenko was convicted in the Northern District of California on fourteen money laundering counts, eight of which were affirmed by the Ninth Circuit in 2009. United States v. Lazarenko , 564 F.3d 1026, 1037–40, 1047 (9th Cir. 2009). At Mr. Lazarenko's criminal trial, Mr. Kiritchenko testified for five days as a cooperating witness for the government pursuant to a plea deal. See United States v. Lazarenko , 624 F.3d 1247, 1250 n.3 (9th Cir. 2010) ("The government filed an information against Kiritchenko. As part of a plea deal, he testified for the government at Lazarenko's trial."). Mr. Kiritchenko testified about financial transactions allegedly made in connection with Mr. Lazarenko's corruption, bribery and extortion schemes in Ukraine, where Mr. Lazarenko demanded 50 percent of the profits from and 50 percent ownership of companies (including Mr. Kiritchenko's own company, Agrosnabsbyt) in exchange for letting them do business in the region. See ECF No. 509-7 at 15–17.

After Mr. Lazarenko's conviction, in which the jury found that he both conspired with and extorted money from Mr. Kiritchenko, Mr. Kiritchenko sought monetary restitution from Mr. Lazarenko pursuant to the Mandatory Victims Restitution Act of 1996, 18 U.S.C. § 3663A, and the Victim and Witness Protection Act of 1982, 18 U.S.C. § 3663. See Lazarenko , 624 F.3d at 1249–50. In connection with his claim, Mr. Kiritchenko testified in a post-trial restitution proceeding that Mr. Lazarenko extorted money from him.² United States v. Lazarenko , 555 F. Supp. 2d 1029, 1032 (N.D. Cal. 2008), rev'd , 624 F.3d 1247 (9th Cir. 2010). As Mr. Kiritchenko's restitution claim was proceeding, he testified about similar subjects—such as Mr. Lazarenko's demanded 50/50 split of Mr. Kiritchenko's businesses—in a deposition taken in the UTICO case, excerpts of which were filed in connection with a motion for summary judgment in that action. Annex D to Plaintiff's Motion for Summary Judgment Against Defendants Brancross U.S. Holdings Inc., BRC Property Holdings LLC, Xanadu Property Holdings, and Petro Kiritchenko, UTICO , No. C-99-3073 (N.D. Cal. July 6, 2007), ECF Nos. 1445–1449, 1451–1452.

Meanwhile, in May 2004—after Mr. Lazarenko's indictment in the Northern District of California but before his conviction in that case—the government filed this in rem civil forfeiture action seeking to recover more than $230 million contained in several overseas accounts that it asserts are traceable to a number of criminal schemes allegedly perpetrated by Mr. Lazarenko.³ ECF No. 1. As relevant here, the government alleges that all of the funds in the Bank Julius Baer Guernsey Account are traceable to Mr. Lazarenko's personal account at Bank Julius Baer in Zurich, Switzerland, which were themselves deposits from an entity called Nakosta. ECF No. 1305 at 4–5. The government asserts that those Nakosta funds were transferred to Mr. Lazarenko as part of the bribery and extortion schemes described by Mr. Kiritchenko in his deposition testimony. Id. at 6–7.

In April 2020, Mr. Lazarenko filed a motion for partial summary judgment as to funds held in the Bank Julius Baer Guernsey Account, claiming that the government cannot establish the connection between the Nakosta funds and the criminal activity alleged in the operative complaint in this case. ECF No. 1269 at 1–2. In support of that motion, Mr. Lazarenko filed excerpts from a deposition of Mr. Kiritchenko taken in this case in September 2016. ECF Nos. 1268-1 through 1268-3 (excerpts from Mr. Kiritchenko's deposition transcript filed under seal). Mr. Lazarenko filed those excerpts under seal because Mr. Kiritchenko had designated the deposition transcript as "protected" pursuant to a protective order entered in this case. As relevant here, that order provides that a party or non-party may so designate material when that party "reasonably believes" the material (1) "not to be in the public domain" and (2) to contain material such as personally identifiable information or information that is "otherwise confidential and/or sensitive." ECF No. 1086 at 2, 11 (protective order); ECF No. 1258 (Mr. Lazarenko's motion to file documents, including Mr. Kiritchenko's deposition transcripts, under seal); ECF No. 1262 (order granting motion to file under seal). Mr. Lazarenko argues that Mr. Kiritchenko's testimony helps prove that the government cannot establish a connection between the alleged criminal schemes and the Nakosta funds in the Bank Julius Baer Guernsey Account. ECF No. 1269 at 5–7. The government argues the opposite is true, and refers to the same testimony, in conjunction with expert reports and bank records, as proof that the funds in the Bank Julius Baer Guernsey Account are traceable to Mr. Lazarenko's criminal activity. ECF No. 1305 at 6–7 (government's sealed opposition to Mr. Lazarenko's summary judgment motion as to the Bank Julius Baer Guernsey Account).

Mr. Lazarenko now seeks to unseal the excerpts from Mr. Kiritchenko's deposition. ECF 1297. As noted, Mr. Lazarenko filed the excerpts under seal because Mr. Kiritchenko designated them as "protected" under the operative protective order (ECF No. 1258), apparently believing them not to be in the public domain and to contain confidential or sensitive information. Mr. Lazarenko now contends that those excerpts were improperly designated because the identified information is already in the public domain and the material thus does not meet the first requirement of the protective order. ECF No. 1279; ECF No. 1297. Specifically, he contends that the subject matter of the excerpts was previously disclosed in Mr. Kiritchenko's public testimony at Mr. Lazarenko's 2004 criminal trial and the 2007 proceeding in which Mr. Kiritchenko sought restitution from Mr. Lazarenko; his deposition testimony in the UTICO case that was filed publicly in connection with a motion for summary judgment in that action; and his statements to various law enforcement authorities, such as Swiss prosecutors and the FBI, which have been...