United States v. Reed

UNITED STATES OF AMERICA v. WALTER REED AND STEVEN REED

CRIMINAL ACTION NO. 15-100 SECTION "L"

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

November 28, 2016

ORDER & REASONS

Pending before the Court are Motions for Judgment of Acquittal and Arrest of Judgment (R. Doc. 261) and for New Trial (R. Doc. 263) filed by Defendant Walter Reed (W. Reed), and a Motion for Acquittal, New Trial, and Arrest of Judgment (R. Doc. 329) filed by Defendant Steven Reed (S. Reed). The Government opposes all of the motions in an Omnibus Response. (R. Doc. 337). Having read the parties' briefs, reviewed the applicable law, and heard the parties on oral argument, the Court now issues this Order & Reasons.

CONTENTS

I. BACKGROUND ................................................................................................................ 4

II. PRESENT MOTIONS ........................................................................................................ 6

A. Legal Standards ........................................................................................................... 6

1. Standard for Judgment of Acquittal ................................................................... 6

2. Standard for Arrest of Judgment ....................................................................... 7

3. Standard for a New Trial ................................................................................... 7

B. W. Reed's Motions for Judgment of Acquittal and Arrest of Judgment and for a New Trial ............................................................................................................................. 8

1. Federalism (Counts 1-8 and 10) ........................................................................ 9

(a) W. Reed's Arguments ................................................................... 10

(b) The Government's Response ........................................................ 13

(c) Analysis ......................................................................................... 14

2. Sufficiency of the Evidence - the Open House (Count 1), Thanksgiving Dinners (Count 4), church donations (Counts 2, 6, 8), Gift cards (Count 1, 11-14), St. Paul's High School (Counts 11-14), and Flowers to Christine Curtis (Count 5) ....... 26

(a) W. Reed's Arguments ................................................................... 26

(b) The Government's Arguments ...................................................... 29

(c) Analysis ......................................................................................... 31

3. The Tax Returns .............................................................................................. 35

(a) W. Reed's Arguments ................................................................... 35

(b) The Government's Arguments ...................................................... 36

(c) Analysis ......................................................................................... 38

4. The Hospital .................................................................................................... 40

(a) W. Reed's Arguments ................................................................... 40

(b) The Government's Arguments ...................................................... 40

(c) Analysis ......................................................................................... 41

5. Inappropriate merger of money laundering and wire fraud ............................. 42

(a) W. Reed's Arguments ................................................................... 42

(b) The Government's Arguments ...................................................... 43

(c) Analysis ......................................................................................... 43

6. Motion for Arrest of Judgment is Untimely and Unwarranted ....................... 45

(a) Government's Arguments ............................................................. 45

(b) Analysis ......................................................................................... 45

7. Exclusion of Critical Evidence ........................................................................ 45(a) W. Reed's Arguments ................................................................... 45

(b) The Government's Arguments ...................................................... 47

(c) Analysis ......................................................................................... 49

8. Introduction of Improper Evidence ................................................................. 54

(a) W. Reed's Arguments ................................................................... 54

(b) The Government's Arguments ...................................................... 56

(c) Analysis ......................................................................................... 56

9. Severance ......................................................................................................... 66

(a) W. Reed's Arguments ................................................................... 66

(b) The Government's Arguments ...................................................... 66

(c) Analysis ......................................................................................... 67

10. Prosecutorial Misconduct ................................................................................ 73

(a) W. Reed's Arguments ................................................................... 73

(b) The Government's Arguments ...................................................... 74

(c) Analysis ......................................................................................... 76

C. S. Reed's Motion for Judgment of Acquittal, Arrest of Judgment, or New Trial ..... 78

1. Ineffective Assistance of Counsel ................................................................... 78

(a) S. Reed's Arguments .................................................................... 78

(b) Government's Arguments ............................................................. 80

(c) Analysis ......................................................................................... 81

2. Pinkerton .......................................................................................................... 82

(a) S. Reed's Arguments .................................................................... 82

(b) Government's Arguments ............................................................. 83

(c) Analysis ......................................................................................... 83

3. Sufficiency of the Evidence ............................................................................. 85

(a) S. Reed's Arguments .................................................................... 85

(b) Government's Arguments ............................................................. 86

(c) Analysis ......................................................................................... 88

4. Paternity ........................................................................................................... 91

(a) S. Reed's Arguments .................................................................... 91

(b) Government's Arguments ............................................................. 91

(c) Analysis ......................................................................................... 92

III. CONCLUSION ................................................................................................................. 92

I. BACKGROUND

From 1985 to January 12, 2015, W. Reed served as the District Attorney for Louisiana's 22nd Judicial District. S. Reed is his son. On April 23, 2015, the United States Government filed an eighteen-count indictment charging Defendants W. Reed and S. Reed with conspiracy to commit wire fraud and money laundering, as well as substantive counts of wire fraud, money laundering, false statements on income tax returns, and mail fraud. On October 22, 2015, the Government filed a superseding indictment (the "Indictment"), adding an additional wire fraud count (Count 8) against W. Reed.

The gravamen of the conspiracy and wire fraud counts (Counts 1-8) is Defendants' alleged improper personal use of campaign funds. The jury found that W. Reed solicited campaign funds from donors on the premise that the funds would be used to facilitate his reelection, and then used those funds for personal expenses unrelated to his campaign or the holding of public office. Specifically, the wire fraud counts alleged that, inter alia, W. Reed used campaign donations to (i) recruit potential clients for his private legal practice, (ii) pay off various expenses incurred by S. Reed, (iii) pay for private and personal dinners, (iv) purchase flowers for personal reasons, (v) overpay his son for work allegedly performed on behalf of the Campaign, and (vi) host a housewarming party for friends and family unrelated to the Campaign or the holding of public office. Further, W. Reed and S. Reed were charged with engaging in money laundering (Counts 9 and 10)¹ when they caused two service providers for a campaign-related event to make payments to entities controlled by S. Reed in a manner that would disguise the payments as legitimate expenses when, in fact, the payments were for the Defendants'personal benefit. S. Reed was only charged with conspiracy to commit wire fraud, one count of wire fraud (Count 7) and money laundering.

In addition to the wire fraud and money laundering counts, the Indictment also alleged that W. Reed engaged in mail fraud when, in exchange for legal representation by the District Attorney's office, he deposited payments made by the St. Tammany Parish Hospital (the "Hospital") into his own personal bank accounts for private use. According to the Indictment, he arranged for checks to be sent to the District Attorney's office and then deposited them into his personal bank account when he knew these funds were actually intended for the Office of District Attorney....