United States v. DeCicco

UNITED STATES OF AMERICA v. GARY P. DECICCO and PAMELA M. AVEDISIAN

CRIMINAL ACTION NO. 18-10013-RGS

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

March 19, 2020

MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO SEVER COUNTS

STEARNS, D.J.

In this clumsily structured sixteen-count indictment, two separate but related conspiracies are charged against defendants Gary DeCicco and Pamela Avedisian. Counts 1 and 2 charge DeCicco and Avedisian with wire fraud arising out of the short sale of a home at 321 Nahant Road in Nahant, Massachusetts. Counts 15 and 16 charge DeCicco and Avedisian with conspiring to impede the efforts of the Internal Revenue Service (IRS) to assess and collect federal income taxes owed by DeCicco, arising from the profits of various business ventures on which he and Avedisian had collaborated during their common-law marriage. Sandwiched between the two conspiracies are twelve counts (Counts 3 through 14) variously charging DeCicco with bank fraud and conspiracy to commit bank fraud, wire fraud, and unlawful monetary transactions. Avedisian is not charged in any of these counts, and her name is barely mentioned in the narrative: In Count 3 she is said to have signed a check that was used to repay an unnamed coconspirator of DeCicco's for an investment in a DeCicco real estate project styled as The Mills at Pulaski, LLC;¹ in Count 7, a damaged Maserati that figured in a dispute between DeCicco and his insurer is said to have been registered in Avedisian's name. Nothing else of substance is alleged against Avedisian.

In a joint motion, DeCicco and Avedisian seek to sever the indictment into four separate trials as follows: (1) the wire fraud scheme concerning the short sale of the 321 Nahant property, involving both defendants (Counts 1 and 2); (2) the tax fraud scheme involving both defendants (Counts 15 and 16); (3) the bank fraud conspiracy and the unlawful monetary transactions involving DeCicco and an unnamed co-conspirator who together acquired a mortgage loan secured by 58 Pulaski (Counts 3-4 and 9-14); and (4) the wire fraud and attempted wire fraud attributed to a scheme devised by DeCicco to submit false invoices to his insurance companies seeking payouts on two sunken boats and the damaged Maserati (Counts 5-8).

Neither defendant objects to the joining of Counts 1 and 2, or Counts 15 and 16 (each set pairing a conspiracy count with a related substantive count). Rather, the defendants contend that the government's effort to prosecute the four groupings of counts in one trial violates Fed. R. Crim. P. 8. They further contend that even if the requirements of Rule 8 are met, "a single trial would unfairly prejudice defendants under Rule 14." Dkt # 203 at 8. The government takes the position that the joinder of all four groupings of counts is proper because all of the charged offenses "constitute parts of a common scheme or plan, that is, Defendants' conspiracy to defraud the IRS and evade the payment of taxes owed by DeCicco."² Dkt # 210 at 9. The government also argues that joinder is appropriate because "there is substantial overlap in the evidence" among the groupings of counts." Id.

Joinder of charges under Rule 8 and severance under Rule 14.

"[T]he general rule is that those indicted together are tried together to prevent inconsistent verdicts and to conserve judicial and prosecutorial resources." United States v. DeCologero, 530 F.3d 36, 52 (1st Cir. 2008), quoting United States v. Soto-Beníquez, 356 F.3d 1, 29 (1st Cir. 2003). Federal Rule of Criminal Procedure 8(a) governs joinder of offenses, while Rule 8(b) governs joinder of defendants. "Although, on its face, Rule 8(a) is not confined to single-defendant indictments, most courts have taken the position that it is so limited and, where more than one defendant is involved, Rule 8(b) alone provides the appropriate standards for joinder." United States v. Turkette, 632 F.2d 896, 907 (1st Cir. 1980), rev'd on other grounds, 452 U.S. 576 (1981); see also King v. United States, 355 F.2d 700, 704 (1st Cir. 1966) ("Rule 8(b) is not to be implemented by Rule 8(a)."). Rule 8(b) provides:

The indictment or information may charge 2 or more defendants if they are alleged to have participated in the same act or transaction, or in the same series of acts or transactions, constituting an offense or offenses. The defendants may be charged in one or more counts together or separately. All defendants need not be charged in each count.

"Under the rule, the government may charge serial transactions, and indict persons jointly, on the basis of what it reasonably anticipates being able to prove against the defendants, collectively, measured as of the time the indictment is handed up." United States v. Natanel, 938 F.2d 302, 306 (1st Cir. 1991). In determining whether counts are properly joined under Rule 8(b), a court is to consider whether there is "some relatedness between offenses [because this] is necessary for there to be a series of acts or transactions." Turkette, 632 F.2d at 907. "Relatedness of offenses can be established by demonstrating that essentially the same facts must be shown for each of the consolidated crimes." United States v. MacDonald & Watson Waste Oil Co., 933 F.2d 35, 60 (1st Cir. 1991), quoting Turkette, 632 F.2d at 907-908.

As previously noted, considerations of judicial efficiency favor joint trials, and as a rule, a conspiracy allegation is ordinarily enough of a connecting link between multiple offenses to permit joinder. United States v. Rehal, 940 F.2d 1, 3 (1st Cir. 1991). However, a court may sever defendants' trials "if 'there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence.'" DeCologero, 530 F.3d at 52, quoting Zafiro v. United States, 506 U.S. 534, 539 (1993); see also Fed. R. Crim. P. 14(a) ("If the joinder of offenses or defendants in an indictment, an information, or a consolidation for trial appears to prejudice a defendant or the government, the court may order separate trials of counts, sever the defendants' trials, or provide any other relief that justice requires."). Nonetheless, "the quantum of prejudice that typifies virtually any multi-defendant trial . . . clearly does not justify a severance." United States v. Pierro, 32 F.3d 611, 615 (1st Cir. 1994).

1. Joinder of Counts 1-2 with Counts 15-16.

Counts 1 and 2, and 15 and 16, name both DeCicco and Avedisian. Counts 1 and 2 relate to the short sale conspiracy. Count 1 charges a conspiracy in 2016 "to reduce the mortgage debt owed on 321 Nahant by engaging in a sham short sale of the property from AVEDISIAN to DECICCO," Dkt # 99, ¶ 14, using wire communication in interstate commerce. Count 2 involves an allegedly fraudulent wire transfer of $571,850 from the account of "Closing Attorney 2" at Citizens Bank Massachusetts to a Wells Fargo Bank account in California in connection with the execution of the scheme alleged in Count 1. Separately, Count 15 alleges that from April of 2012 to December of 2017, Avedisian and DeCicco "conspired with each other to defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful government functions of the IRS, an agency of the United States, in ascertaining, computing, assessing and collecting federal income taxes." Id. ¶ 77. Count 16 charges tax evasion covering the same time period. The joinder of Counts 1 and 2 is clearly proper under Rule 8(b),³ as is joinder of Counts 15 and 16.⁴

These two sets of counts are also sufficiently related to one another within the meaning of Rule 8(b). The short sale scheme and tax evasion scheme clearly share a basis in fact: DeCicco and Avedisian's dealings with respect to the purchase of Atlantis Marina Docs, LLC, and The Mills at Pulaski, LLC, are central to the government's ability to prove defendants' participation in a common scheme to frustrate the collection efforts of the IRS. In pursuit of this end, the juggling of funds among bank accounts alleged in ¶ 24 of the indictment is incorporated into each of counts 1, 2, 15, and 16. Moreover, the "purchase" of 321 Nahant - the object of the short-scale scheme - is alleged as an overt act "in furtherance of the tax conspiracy charged in Count 15." Dkt # 210 at 9; see also Dkt # 99, ¶ 79(v).⁵ Accordingly, evidence proving the short sale scheme will inevitably overlap with evidence necessary to prove the tax fraud conspiracy. See United States v. Alemany Rivera, 781 F.2d 229, 236 (1st Cir. 1985) (finding terms of Rule 8(b) met where "the evidence necessary to prove that [a defendant engaged in practices relevant to certain counts of an indictment] overlapped with the evidence necessary to prove the frauds alleged in the remaining counts of the indictment.").

The temporal interconnectedness of the two schemes further supports the government's assertion that there will be evidentiary overlap. The short sale scheme and the associated wire fraud charge are alleged to have occurred in 2016 - within the 2012-2017 timeframe of the alleged tax conspiracy and the associated tax evasion charge. Compare United States v. Sabean, 885 F.3d 27, 43 (1st Cir. 2018) (addressing Rule 8(a) and noting that "temporal and factual commonality weighs heavily in favor of allowing joinder"), with United States v. Randazzo, 80 F.3d 623, 627 (1st Cir. 1996) (finding joinder of tax crimes and other offenses improper under Rule 8(a) where (unlike here) the relationship between the tax crimes and other charged offenses was "pure happenstance").

Nor would the joining of Counts 1 and 2 with Counts 15 and 16 offend Rule 14. Defendants first argue that "[t]he spillover prejudice of introducing evidence that defendants traded in luxury vehicles, boats, or properties risks a miscarriage of justice in any trial of the bank or insurance frauds." Dkt # 203 at 12. The evidence is what it is, and...