United States v. Rabbitt

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UNITED STATES OF AMERICA, v. JEAN E. RABBITT & KEVIN AGUILAR.

CRIMINAL ACTION No. 23-320 (MAS)

United States District Court, D. New Jersey

September 4, 2024

NOT FOR PUBLICATION

MEMORANDUM OPINION

MICHAEL A. SHIPP, UNITED STATES DISTRICT JUDGE.

This matter comes before the Court upon Defendant Jean E Rabbit's (“Defendant” or “Rabbitt”) omnibus motion (ECF No. 57). The United States of America (the “Government”) opposed (ECF No. 66), and Rabbitt replied (ECF No. 67). The Court has carefully considered the parties' submissions and decides the matter without oral argument pursuant to Local Civil Rule 78.1, which is applicable to criminal cases under Local Civil Rule 1.1. For the reasons set forth herein Rabbitt's omnibus motion is granted in part, denied in part.

I. BACKGROUND

A. The Indictment

On April 19, 2023, Rabbitt and Kevin Aguilar (“Aguilar”) (collectively, “Defendants”) were indicted in the District of New Jersey by a grand jury for the following Counts: (1) Conspiracy to Commit Bank Fraud, in violation of 18 U.S.C. § 1349 (Count 1); (2) Bank Fraud, in violation of 18 U.S.C. §§ 1344 and 2 (Counts 2-8); (3) Conspiracy to Commit Wire Fraud, in violation of 18 U.S.C. § 1349 (Count 9); (4) Wire Fraud, in violation of 18 U.S.C. §§ 1343 and 2 (Counts 10-12); (5) Conspiracy to Engage in Monetary Transactions in Property Derived from Specified Unlawful Activity, in violation of 18 U.S.C. § 1956(h) (Count 13); (6) Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity, in violation of 18 U.S.C. §§ 1957 and 2 (Counts 14,15^[1]);and(7) Aggravated Identity Theft, in violation of 18 U.S.C. §§ 1028A(a)(1) and 2 (Count 16). (Indictment ¶¶ 1-24, ECF No. 37.) Rabbitt was also indicted for False Statements in a Loan Application, in violation of 18 U.S.C. §§ 1014 and 2 (Count 17). (Indictment ¶ 24; see also Gov't's Opp'n Br. 4.)

B. The Instant Motion^[2]

On May 1, 2024, Rabbitt filed an omnibus motion raising several requests. (Def.'s Moving Br., ECF No. 57.) Specifically, Rabbitt seeks to: (1) dismiss Counts 1-9 and 13 of the Indictment “for failure to state an offense and failure to charge essential elements”; (2) sever Rabbitt's trial from Aguilar's to protect Rabbitt's Sixth Amendment Rights; (3) require the Government to disclose unredacted copies of already produced discovery or produce a privilege log of the same; (4) require the Government to disclose all Brady material in advance of trial; and (5) be permitted to file any additional motions or join any of Aguilar's motions as necessary. (Id.)

The Government opposed (Gov't's Opp'n Br., ECF No. 66) and Rabbitt replied (Def.'s Reply Br., ECF No. 67).

IL DISCUSSION

A. Motion to Dismiss Counts 1-9 and 13

1. Legal Standard

An indictment is sufficient if it is “a plain, concise, and definite written statement of the essential facts constituting the offense charged.” Fed. R. Crim. P. 7(c)(1); see also United States v. Resendiz-Ponce, 549 U.S. 102, 110 (2007) (“[D]etailed allegations ... are not contemplated by [Federal] Rule [of Criminal Procedure] 7(c)(1).”^[3]). Nevertheless, a defendant may move to dismiss an indictment for “lack of specificity” or “failure to state an offense.” Fed. R. Crim. P. 12(b)(3)(B). In the Third Circuit, an indictment is facially sufficient to warrant a trial on the merits if it:

(1) contains the elements of the offense intended to be charged, (2) sufficiently apprises the defendant of what he must be prepared to meet, and (3) allows the defendant to show with accuracy to what extent he may plead a former acquittal or conviction in the event of a subsequent prosecution.

United States v. Vitillo, 490 F.3d 314, 321 (3d. Cir 2007) (quoting United States v. Rankin, 870 F.2d 109, 112 (3d Cir. 1989)). Accordingly, an indictment that recites the statutory language of the offense charged is adequate “so long as there is sufficient factual orientation to permit the defendant to prepare his defense and to invoke double jeopardy in the event of a subsequent prosecution.” Rankin, 870 F.2d at 112; see also Resendiz-Ponce, 549 U.S. at 109 (“[A]n indictment parroting the language of a federal criminal statute is often sufficient.”); but see Russell v. United States, 369 U.S. 749, 765 (1962) (“Undoubtedly, the language of the statute may be used in the general description of an offense, but it must be accompanied with such a statement of the facts and circumstances as will inform the accused of the specific offense, coming under the general description, with which he is charged.” (citations omitted)). Yet, “such dismissals may not be predicated upon the insufficiency of the evidence to prove the indictment's charges.” United States v. DeLaurentis, 230 F.3d 659, 661 (3d Cir. 2000); United States v. Besmajian, 910 F.2d 1153, 1154 (3d Cir. 1990) (“In considering a defense motion to dismiss an indictment, the district court accepts as true the factual allegations set forth in the indictment.”).

2. Motion to Dismiss Count 1

First, Rabbitt argues that Count 1 of the Indictment, charging conspiracy to commit bank fraud, must be dismissed because: “(1) it fails to state an offense by charging conspiracy to attempt bank fraud, which is not a crime under a proper reading of the relevant statutes; (2) it omits the materiality element of bank fraud; and (3) it omits the intent-to-defraud element of [§] 1344(1).” (Def.'s Moving Br. 3.) The Court addresses each in turn.

a. Failure to State an Offense

Rabbitt asserts that Count 1 improperly charges her “not only with conspiring to commit bank fraud, but also conspiring to attempt bank fraud” which is “not a cognizable offense.” (Id. at 4.) Specifically, Rabbitt states that § 1349 covers conspiracies and attempts, not conspiracies to attempt offenses or attempts to conspire to commit such offenses. (Id. at 5.) Rabbitt concedes that she is unaware of any caselaw on the particular question, but offers out-of-jurisdiction cases in other statutory contexts for support. (Id. at 5-6.)

As an initial matter, the Court clarifies that Count 1 charges Defendants with conspiracy to commit bank fraud. (Indictment ¶¶ 1-4.) In fact, plain reading of the Indictment reveals that Defendants are charged with succeeding in their conspiracy to commit bank fraud, which led to approval of approximately $3.3 million in PPP loans. (Indictment ¶¶ 2-4.) See United States v. Menendez, 137 F.Supp.3d 688, 692 (D.N.J. 2015), aff'd, 831 F.3d 155 (3d Cir. 2016) (“[C]riminal indictments are to be read as a whole and interpreted in a common sense manner.” (quoting United States v. Lee, 359 F.3d 194, 209 (3d Cir. 2004))).

Taking a closer read, the term “attempt” is included in the Indictment to track the statutory language. Conspiracy to commit bank fraud is prohibited by 18 U.S.C. § 1349, which provides that “[a]ny person who attempts or conspires to commit any offense under this chapter shall be subject to the same penalties as those prescribed for the offense . 18 U.S.C. § 1349. To prove bank fraud, which is an offense under the relevant chapter,

the evidence must establish beyond a reasonable doubt that a defendant “knowingly execut[ed], or attempt[ed\ to execute, a scheme or artifice-(1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises.”

United States v. Vargas, 629 Fed.Appx. 415,418 (3d Cir. 2015) (emphasis added) (quoting 18 U.S.C. § 1344).

More importantly, the Third Circuit has affirmed convictions charging defendants with the same charge that Defendants face under Count 1. See, e.g., United States v. King, No. 18-379, 2021 WL 3783157, at *1 (D.N.J. Aug. 24, 2021) (jury found defendant guilty on all counts, which included conspiracy to commit bank fraud in violation 18 U.S.C. § 1349 and three counts of bank fraud in violation of 18 U.S.C. § 1344), aff'd sub nom., United States v. Kusi, No. 20-1095, 2021 WL 5505399 (3d Cir. Nov. 24, 2021); United States v. Duncan, No. 21-187, 2022 WL 1213466, at *2 (D.N.J. Apr. 22, 2022) (“Defendant pleaded guilty to a charge of conspiracy to commit bank fraud in violation of 18 U.S.C. §§ 1344 and 1349.”).

As such, the Court finds Rabbitt's out-of-jurisdiction caselaw on other statutory contexts unconvincing to find that Count 1 must be dismissed.

b. Materiality Element

Next, Rabbitt asserts that the Government fails to charge the materiality element of bank fraud because “the word ‘material'” is left out of Count 1. (Def.'s Moving Br. 7-8.) Rabbitt argues that any references to “materially fraudulent applications” or “materially false statements” in the Indictment are insufficient because “they appear in sections of the count that the [G]ovemment is not strictly required to prove.” (Id. at 8.)

Indeed, the Supreme Court has held that although the teim “material” is not explicitly included in the statutory language, “materiality of falsehood is an element of the federal. . . wire fraud[] and bank fraud statutes.” Neder v. United States, 527 U.S. 1, 25 (1999). This is because “the word ‘fraudulent' clearly encompasses the notion of materiality.” United States v. Stewart, 151 F.Supp.2d 572, 584 (E.D. Pa. 2001), opinion corrected, No. 96-583,2007 WL 2032930 (E.D. Pa. July 12, 2007);^[4] see also United States v. Klein, 476 F.3d 111, 113 (2d Cir. 2007), as corrected (Mar. 8, 2007) (“It is true that a bank fraud conviction requires a showing that the fraudulent conduct was material, Neder, 527 U.S. at 25, although the bank fraud statute does not contain that actual word. 18 U.S.C. § 1344.” (cleaned up))).

Critically however, Rabbitt's...