Zeek Rewards: Burks 2 Motions in Criminal Case Are Denied!

ZeekPaul Burks had filed two Motions, one to Dismiss Count Four of the indictment and another for a Hearing.

Here’s what the Judge said about the Dismissal Motion:

Review of Count Four reveals that the United States has alleged each element of the offense. Further, whether or not the government’s evidence will prove those elements is a matter for resolution at trial. Finally, defendant’s theory of constructive receipt is a defense and not a bar to the government bringing such charge. While of little moment at this point inasmuch as the Grand Jury has found probable cause, the government has forecast evidence which, if proved at trial, could support a finding by a jury that defendant conspired to impede the IRS by providing false FORMS 1099 for tax year 2011. The government’s responsive proffer indicates that as part of the scheme to defraud affiliates, defendant and others encouraged affiliates not to draw out “earnings” that they believed they had earned, but which earnings did not in fact exist. The government contends that defendant and others issued 1099s to affiliates in 2011 of approximately $96 million, when in fact the company earnings were only $37 million. Thus, the government appears to contend that the scheme’s use and issuance of the 1099s not only perpetuated the fraud on the affiliates, it also impeded the operations of the IRS. The government further argues that defendant’s constructive receipt theory is defective as not only can defendant not show that the money was “set apart” for each affiliate, as defendant could not set apart funds that were never received.
A motion to dismiss is governed by Rule 12(b)(3)(B), Federal Rules of Criminal Procedure. That rule provides that the court may dismiss a count where the indictment “fails to invoke the court’s jurisdiction or to state an offense.” Fed.R.Crim.P. 12(b)(3)(B). An indictment is defective if it alleges a violation of an unconstitutional statute, or if the “allegations therein, even if true, would not state an offense.” United States v. Thomas, 367 F.3d 194, 197 (4th Cir. 2004). Here, the court finds no reason to dismiss Count Four. The motion will be denied and defendant may renew the motion at the conclusion of the government’s evidence.

Next, comes the “Motion for an Evidentiary Hearing and Appropriate Relief Related to the Government’s Seizure and Handling of Confidential and Privileged Communications.”  The Judge responded:

Defendant, in reviewing the discovery, discovered that 148 privileged emails were in the government’s possession. The government contends that it did not know such were in its production and that no member of the prosecution team, including attorneys and agents, has reviewed any of those emails.

In essence, Burks was asking for a Kastigar Hearing, tthe definition of which is:

In Kastigar v. United States, 406 U.S. 441 (1972), the Supreme Court held that, where a witness who has invoked the Fifth Amendment is nevertheless compelled to testify by court order, the protection to insure that the prosecutors do not improperly benefit from the compelled testimony is a hearing in which the prosecutors must prove that its case will not be based on that evidence.

It looks like Burks did not provide sufficient grounds for such a hearing:

Here, defendant has made no showing that any member of the prosecution team has reviewed any of 148 emails at issue. Further, the government has stated that no member of the prosecution team ever reviewed the emails stating as follows: “the United States took careful steps to have the computer filter out all potentially privileged emails, went further to ensure all reviewing agents did the same in case the computer missed anything, and then put all such emails aside without anyone reviewing them.”




Absent some suggestion that the government prosecution team actually reviewed any of the emails, defendant has not made the threshold showing necessary to order a Kastigar hearing.

Based upon this, the Judge denied the Motion.