United States v. Fisher

273 F.Supp.3d 354

UNITED STATES of America,

v.Georgina FISHER, Defendant.

15–CR–19–A

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

Signed June 28, 2017

Maryellen Kresse, Mary C. Kane, U.S. Attorney's Office, Buffalo, NY, for United States of America.

Randall P. Andreozzi, Andreozzi Bluestein Weber Brown, LLP, Clarence, NY, for Defendant.

DECISION AND ORDER

HONORABLE RICHARD J. ARCARA, UNITED STATES DISTRICT JUDGE

The Defendant, Georgina Fisher, is charged with eight counts of structuring, in violation of 31 U.S.C. § 5324(a)(1). She has made a number of arguments for dismissal, based primarily on the Government's conduct before the grand jury, as well as the Government's efforts to forfeit her home in the event of a conviction. In a previous Decision and Order (the "December 2016 Decision and Order," Docket No. 149), the Court declined to adopt Magistrate Judge Scott's Report and Recommendation (Docket No. 107) to the extent it recommended dismissing the superseding indictment for alleged grand jury misconduct. The Court noted, however, that "Judge Scott identified the Sixth Amendment as an alternate ground for dismissal." Docket No. 149 at 16. Thus, the Court requested additional briefing on whether Fisher's motion to dismiss on Sixth Amendment grounds had any continuing validity in light of the Court's December 2016 Decision and Order.

As discussed below, the Court assumes for purposes of this Decision and Order that the Government's conduct—namely, seeking to protect its claimed interest in Fisher's home—violated the Sixth Amendment's Counsel Clause. At bottom, however, that assumed violation resulted from advocating the incorrect (but reasonable) legal position that Fisher's home is, in its entirety, subject to forfeiture. Thus, the most appropriate remedy for the assumed violation would be to direct the Government to lift its lis pendens on Fisher's home so that she could access her home equity and fund her defense. But the Government lifted its lis pendens long ago. And Fisher has not shown how the more drastic remedy she seeks—dismissal—is necessary to "restore [her] to the circumstances that would have existed had there been no constitutional error." United States v. Stein , 541 F.3d 130, 144 (2d Cir. 2008) (quotation marks and brackets omitted). Fisher has, therefore, not shown that she is entitled to dismissal for an alleged Sixth Amendment violation.

BACKGROUND

The Court assumes familiarity with its December 2016 Decision and Order, which detailed the grand jury proceedings in this case, and which rejected Fisher's argument that the AUSA's conduct before the grand jury required dismissal. The Court also assumes familiarity with this case's lengthy and complicated procedural history. That procedural history is central to Fisher's motion to dismiss on Sixth Amendment grounds. The Court has carefully reviewed the record and, therefore, only briefly summarizes those parts of the record that are relevant to Fisher's Sixth Amendment claim.

Fisher, as noted, is charged with eight counts of causing a financial institution to fail to file transaction reports—i.e., structuring—in violation of 31 U.S.C. § 5324(a)(1). The superseding indictment alleges that Fisher structured $74,000 in money orders over a ten-day period.

The basis for Fisher's Sixth Amendment claim is the superseding indictment's forfeiture allegation, as well as the Government's efforts to defend that allegation and the lis pendens it placed on Fisher's home.¹ The forfeiture allegation states that, in the event of a conviction, the Government will seek forfeiture in the form of a $74,000 money judgment, as well as real property located at Theresa Lane, in Niagara Falls, New York. See Docket No. 20 at 10 (Superseding Indictment). That property is titled in Fisher's name. Id. As the Government proffered before Judge Scott (Docket No. 34 at 7:9–9:13), and as the investigating IRS Special Agent testified before the grand jury (A–97:9–A–99:16), the Government claims that Fisher purchased over $300,000 in structured money orders, which she used to pay off her mortgage. Fisher then, according to the Government, took out a line of credit secured by her home, used the line of credit to buy the Theresa Lane home, sold her first home, and used the proceeds to pay off the line of credit.

The superseding indictment alleges, and the Government maintains, that in the event of a conviction the Theresa Lane property is forfeitable pursuant to 31 U.S.C. § 5317(c)(1)(A). See Docket No. 20 at 10; Docket No. 29 at 6–8; Docket No. 60 at 4–5. The parties strenuously disagree, however, over the degree (if any) to which the Theresa Lane property is subject to forfeiture. This is because a significant portion of Fisher's alleged structuring was barred by the statute of limitations. Thus, although the Government presented the grand jury with evidence that Fisher structured over $300,000 in money orders (which, according to the Government, she ultimately used to purchase the Theresa Lane property), the superseding indictment, as noted, alleges that Fisher structured only $74,000 in money orders.

The Government's efforts to protect its interest in the Theresa Lane property began when the Government filed a notice of lis pendens on the property, two weeks after the grand jury handed up the original indictment. See Docket No. 7.²

After an exchange of letters between the AUSA and Fisher's counsel regarding Fisher's desire to use her equity in the Theresa Lane property to fund her legal defense—an effort the Government stated it would oppose—Fisher filed a motion seeking a hearing pursuant to United States v. Monsanto , 924 F.2d 1186 (2d Cir. 1991) (en banc ). See Docket No. 21. In Monsanto , the Second Circuit "concluded that the Fifth and Sixth Amendments entitle a presumably innocent criminal defendant to an adversarial, pre-trial hearing to address two questions: (1) whether there is probable cause to believe that the defendant committed the crimes providing a basis for forfeiture; and (2) whether there is probable cause to believe that the properties are properly forfeitable." United States v. Bonventre , 720 F.3d 126, 130 (2d Cir. 2013) (citing Monsanto , 924 F.2d at 1203 ).

The Government opposed Fisher's Monsanto motion for two reasons. First, the Government argued, Fisher had not shown that she lacked funds with which she could fund her defense. See Docket No. 29 at 8–10. And second, the Government argued that Fisher had not shown that "there is a bona fide reason to believe that the grand jury or the court erred in finding probable cause to believe the [Theresa Lane] property was subject to forfeiture."Id. at 10. The Government also argued that Fisher could not prove that the Theresa Lane property was untainted because, according to the Government, "she fail[ed] to provide any explanation surrounding any and all of the financial activities that led to, are traceable to[,] and were involved in the purchase of the Theresa Lane property." Id. at 12.

Fisher replied that, contrary to the Government's suggestion, neither her husband nor her mother would fund her defense (Docket No. 31 at 10); that, absent a home equity loan, she lacked sufficient funds to pay for her defense, id. ; and that she had a "bona fide reason to believe that the grand jury erred in finding probable cause to believe the [Theresa Lane] property was subject to forfeiture." Id. As to her last argument, Fisher noted that the superseding indictment alleged that she had structured $74,000. But, she argued, that allegation did not justify forfeiture of both a $74,000 money judgment and the entire approximate $170,000 value of the Theresa Lane property. Id. at 10–11.

The parties appeared before Judge Scott for oral argument on June 9, 2015. Among other things, the AUSA gave Judge Scott a brief summary of the evidence presented to the grand jury as to the structuring charges, as well as how Fisher's alleged structuring is traceable to the Theresa Lane property. Docket No. 34, Tr. 6:9–9:13. Fisher again replied that the superseding indictment alleged only $74,000 in structuring—not the more than $300,000 alleged by the Government. Tr. 11:22–12:13. Addressing this argument, the AUSA responded that, although the superseding indictment alleged only $74,000 in structuring, "[t]he overall relevant conduct is something that we're going to ask the sentencing court to consider in the event of a conviction." Tr. 20:1–3. Moreover, the AUSA argued, the Government's lis pendens was intended to "preserv[e] [the Government's] interest in that property in the event [the Defendant] is convicted," at which time the Government would "turn to the issue of whether or not the property, Theresa Lane, is involved in or traceable to her criminal activity." Tr. 21:10–14. See also Tr. 28:10–14 ("We would have a relevant conduct hearing showing that this conduct began before what's set forth in the indictment. It was a pattern. It was a scheme and, accordingly, that it involved $300,000.")

Several weeks later, Judge Scott filed an order finding that Fisher was entitled to a Monsanto hearing. Docket No. 37. Relying on the Second Circuit's decision in United States v. Bonventre , 720 F.3d 126 (2d Cir. 2013), Judge Scott concluded that Fisher had met the low burden necessary to warrant a hearing. See id. at 3 (quoting Bonventre 's holding that the Second Circuit "do[es] not believe that the defendant must make a formal prima facie showing that the funds were illegitimately restrained ... beyond providing a basis for bringing a motion for a Monsanto or Monsanto -like hearing in the moving papers").

The Government appealed Judge Scott's order. See Docket No. 41. At the Government's request, Judge Scott stayed the Monsanto hearing until this Court resolved the Government's appeal. See Docket Nos. 47 & 48. Shortly after oral argument, the Court summarily affirmed Judge Scott's order. Docket No. 51.

Two days before the scheduled Monsanto hearing, the...