Free Motion to Dismiss - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB

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Filed 01/04/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 04-cr-00103-REB UNITED STATES OF AMERICA, Plaintiff, v. 1. NORMAN SCHMIDT,

Defendants.

AMENDED SUPPLEMENT TO MOTION TO DISMISS SECOND SUPERSEDING INDICTMENT

Defendant, Norman Schmidt, by his court appointed counsel, Peter R. Bornstein, submits his amended supplement to motion to dismiss second superseding indictment. This amended supplement is submitted because counsel was previously unable to upload the attachment to the supplement on the CM/ECF system due to computer issues. Therefore, the attachment, Testimony of Stephanie Hahn, is attached to this amended supplement. Defendant Schmidt moves this Court for an order dismissing the second superseding indictment on the grounds that the Defendant was denied his rights to an impartial grand jury by the procedure used in obtaining this indictment. As grounds in support of his motion, Defendant Schmidt states to the Court as follows: 1. 2005. The grand jury returned a second superseding indictment on September 14,

This indictment was returned by a separate and independent grand jury

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denominated Federal Grand Jury 04-1. This was not the same independent grand jury that returned the original indictment or the previous superseding indictment. 2. A comparison of this second superseding indictment with the two previous

indictments demonstrates that there are substantial and material differences in the number of crimes charged, the individual counts charged, and the substance of the counts charged. For example, the original indictment had 55 substantive counts and a forfeiture count denominated Count 57. This indictment has 47 substantive counts and a different forfeiture count denominated Count 48. The original indictment had 9 mail fraud counts, while the instant indictment has 8 mail fraud counts. Moreover, mail fraud counts 7, 8, and 9 are entirely new. 3. The original indictment had 12 wire fraud counts, while the second

superseding indictment has 7 wire fraud counts. The original Count 13 no longer appears in the indictment. The original Count 15 no longer appears in the indictment. The original Count 17 no longer appears in the indictment. The original Count 19 no longer appears in the indictment. The original Count 21 no longer appears in the indictment. However, Count 17 of the new indictment was not charged in the earlier indictment. A similar analysis can be made in the securities fraud charges and the money laundering charges. 4. Prosecutorial discretion is not unlimited or boundless. The Framers,

considering the grand jury an institution central to the protection of our basic liberties, interposed in the law enforcement process to safeguard citizens against governmental oppression. United States v. Calandra, 414 U.S. 338, 344 (1974). Conduct of the grand jury must be accomplished within the mandatory requirements of the indictment clause of the Fifth Amendment to the United States Constitution and Rule 6 of the Federal Rules of 2

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Criminal Procedure. A defendant in a criminal case has a constitutional and statutory right to indictment by an unbiased grand jury. United States v. Burke, 700 F.2d 70, 82 (2nd Cir. 1983); United States v. Law Firm of Zimmerman, 738 F. Supp. 407, 411 (D. Colo. 1990). (Quoting United States v. Williams, 899 F.2d 898, 903 (10th Cir. 1990) ("to be independent and informed, the grand jury must be able to obtain all relevant evidence, since only then can its judgment truly be informed.") 5. In this case, the grand jury met on this case on September 12, 2005 and

again on September 14, 2005. There were earlier meetings on August 10 and 11, 2005. 6. At the September 12 meeting of the grand jury, Agent Stephanie Hahn

delivered to the grand jury 22 transcripts of witnesses considered by the earlier grand jury in 2003. Agent Hahn further delivered an additional 9 transcripts of witnesses who testified before the grand jury that returned the original indictment in 2004. Finally, Agent Hahn delivered 3 transcripts used on August 10, 2004, to obtain the first superseding indictment. These transcripts total hundreds of pages. 7. Agent Hahn also delivered to the grand jury on September 12, 2005, 211

exhibits, most of which were originally presented in connection with the testimony from the earlier grand juries. 8. The prosecutor told the grand jury that they were free to read some, all or

none of the earlier transcripts at their discretion and could look at some, all or none of the earlier exhibits at their discretion. The grand jury was not given sufficient time to read either individually or collectively the proffered testimony and exhibits from the earlier grand jury. No witness appeared to attempt to summarize the testimony of each of the delivered transcripts or to summarize the previously considered exhibits. 3

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9.

Witness Agent John Marcy was asked to look at counts of the proposed

indictment projected onto a screen. He testified that "based on his investigation" the alleged facts were true, or the defendants had committed those acts, or he verified the crime was committed. 10. In some instances, the agents merely described a count of the indictment in

general terms without specific references to the material elements of the charge and how the "victim's" testimony would establish the element of securities fraud, mail fraud, or wire fraud. 11. The testimony, exhibits and work of the prior grand jury was not properly

summarized for Grand Jury 04-1. 12. Adopting this procedure denied the Defendant his constitutional and statutory

right to an indictment by an unbiased grand jury which was convened to protect wrongfully accused individuals against mistaken and vindictive prosecutions. 13. The grand jury is not just an arm of the U.S. Attorney's Office or of the Justice

Department for the purpose of rubber-stamping indictments. See United States v. Dionisio, 410 U.S. 1, 16-17 (1973). Ex parte bain, 121 U.S. 1 (1987). 14. Additionally, testimony was given by Charles Reinhardt to the effect that

Norman Schmidt had a previous conviction for a felony. This prejudicial testimony violated his right to an unbiased grand jury. 15. Attached to this amended supplement to Defendant Schmidt's motion is the

testimony of Agent Stephanie Hahn from September 12, 2005.

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16.

Defendant requests an evidentiary hearing at which to present additional

evidence, grand jury transcripts, and argument regarding the substance of this supplement and the earlier motion. Respectfully submitted this 4th day of January, 2006. THE LAW OFFICES OF PETER R. BORNSTEIN s/ Peter R. Bornstein Peter R. Bornstein The Law Offices of Peter R. Bornstein 1600 Broadway, Suite 2300 Denver, CO 80202 Telephone: 303-861-2500 Facsimile: 303-861-0420 E-mail: [email protected] Attorney for Defendant Norman Schmidt

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CERTIFICATE OF SERVICE (CM/ECF) I hereby certify that on this 4th day of January, 2006, I electronically filed the foregoing Amended Supplement to Motion to Dismiss Second Superseding Indictment with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses: Matthew T. Kirsch, Esq. Wyatt B. Angelo, Esq. Assistant U.S. Attorneys [email protected] [email protected] [email protected], [email protected] [email protected] Paul B. Daiker, Esq. [email protected] [email protected] Ronald Gainor, Esq. [email protected] Thomas E. Goodreid, Esq. [email protected] Thomas J. Hammond, Esq. [email protected] Declan J. O'Donnell, Esq. [email protected] Daniel T. Smith, Esq. [email protected] Robert Patrick Sticht, Esq. [email protected]

s/ Heather M. Bolton Heather M. Bolton, Legal Assistant to Peter R. Bornstein

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