Free Response in Opposition - District Court of Colorado - Colorado

Case 1:04-cr-00103-REB

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Filed 04/23/2007

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Criminal Case. No 04-cr-00103-REB-01 UNITED STATES OF AMERICA Plaintiff, v. 1. NORMAN SCHMIDT, Defendant. _____________________________________________________________________ GOVERNMENT'S RESPONSE TO DEFENDANT SCHMIDT'S MOTION FOR ACCESS TO GOVERNMENT FINANCIAL DATABASE _____________________________________________________________________ The Government, by Wyatt Angelo and Matthew T. Kirsch, the undersigned Assistant United States Attorneys, hereby requests that defendant Schmidt's MOTION FOR ACCESS TO GOVERNMENT FINANCIAL DATABASE [#1135] be denied for the reasons set forth below: 1. On April 23, 2004, the government provided defense counsel with a list of the bank records then in the government's possession and indicated that it would make those records available for either inspection or copying upon request. These records constituted the vast majority of the bank records obtained to date by the government in connection with this case. After many defense counsel requested copies of all of those records, the government had those records duplicated. On June 29, 2004, copies of all of those records were made available to defense counsel.

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2.

The government has received a small number of additional bank records as the case has progressed, including a few foreign bank records and records from accounts discovered after the return of the indictment, such as accounts in the name of Rocky Mountain Sports Promotions, LLC, and High Track Team, LLC. Copies of those records were made available to defense counsel as soon as practicable after their receipt by the government. The government believes that its final substantive production of bank records was 122 pages of additional records received from National Commercial Bank (SVG) Limited, located in St. Vincent and the Grenadines, produced on April 19, 2006.1

3.

As a part of the government investigation, a company which contracts with the FBI has been provided with originals or copies of all of the bank records obtained during the investigation. That company has entered the information from those records into a database, which the government has then used during its analysis of financial aspects of the case.

4.

On March 2, 2007, the government provided defense counsel with initial drafts of the charts marked as Government Exhibits 9500A through 9514A, which summarize the financial transactions related to the money laundering counts contained in the SECOND SUPERSEDING INDICTMENT. On March 22, 2007, the government provided defense counsel with revised versions of these charts. On that same day, the government provided defense counsel with copies of

On February 28, 2007, the government produced redacted versions of Federal Reserve wire transfer records. Un-redacted versions of these records had been produced some time before. 2

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Government Exhibits 9500A through 9514B, which included excerpts of bank records, all separately exhibited, which pertain directly to the money laundering counts. The government also provided account summaries prepared by law enforcement agents and printouts from its database which identified each transaction contained in the account summaries. Finally, the government provided copies of Government Exhibits 9600 through 9608, additional summary charts which document the withdrawals from supposed "non-depleting" accounts which benefitted the defendants or their immediate family members, as well as printouts from the government database which identified each transaction contained in the summaries. All of the information contained in the database printouts is based on the bank records which were provided to defense counsel in June of 2004. The government has continued to provided updated versions of some of the exhibits described above to the extent that such updates have been created. 5. At trial, the only exhibits described above which the government intends to offer as substantive evidence are Government Exhibits 9500A through 9514B. As described above, these documents summarize the contents of the voluminous bank records which cannot conveniently be examined in court and are relevant to the charged money laundering counts. See Fed. R. Evid. 1006. Copies of the originals of these documents have been available to defense counsel since June of 2004. Id. These summaries exist completely independently of the government's database and should be admissible pursuant to Rule 1006 of the

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Federal Rule of Evidence. See United States v. Kaatz, 705 F.2d 1237, 1245 (10th Cir. 1983). 6. The government intends to request leave of the Court to use the remainder of the exhibits described above (Government Exhibits 9500A through 9514A and 9600 through 9608) as demonstrative or pedagogical aids to summarize and illustrate IRS Special Agent Stockley's anticipated testimony concerning his review of bank records and other records, such as corporate records. The Court has the authority to allow the use of summaries for this purpose pursuant to Rule 611(a) of the Federal Rules of Evidence. United States v. Downen, 496 F.2d 314, 319-20 (10th Cir. 1974) (affirming trial court's decision to allow government to present and jury to view during deliberations a summary chart not admitted into evidence); United States v. Bray, 139 F.3d 1104, 1111-12 (6th Cir. 1998); see also United States v. Behrens, 689 F.2d 154, 161-62 (10th Cir. 1982) (affirming the admission of a summary chart pursuant to Rule 1006 which aided the jury in organizing the evidence). The government expects to be able to demonstrate the reliability and helpfulness of these demonstrative summaries during Special Agent Stockley's testimony. This testimony will obviously be subject to cross-examination by counsel for defendant Schmidt, during which counsel will be able to ask questions concerning the "reliability, accuracy, and fairness" of the summaries. 7. Defendant Schmidt cites no authority which supports his request for the database or the queries of that database on which the demonstrative summary

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charts described above are based. Rules 102 and 1008 of the Federal Rules of Evidence make general references to the Court's role in assuring the general fairness of trial proceedings, but neither contains any requirement that the government produce this type of work-product in connection with demonstrative aids. Rule 1006's requirement of advance production of records on which summaries are based, to the extent it applies to demonstrative summaries, has been met by the government's production almost three years ago of the bank records to which the summaries relate. Finally, neither of the cases cited by defendant Schmidt addresses his claim that he is entitled not only to underlying records but to the government's work-product used to analyze and examine those underlying records. See Downen, 496 F.2d at 319-21; United States v. Conford, 336 F.2d 285, 287-88 (10th Cir. 1964). 8. The more germane provision in determining the government's obligation to produce its database is Rule 16(a)(2) of the Federal Rules of Criminal Procedure, which excepts from the government's required discovery "reports, memoranda, or other internal government documents made by an attorney for the government or other government agent in connection with investigating or prosecuting the case." Courts have routinely relied on this provision (or its predecessor) to reject defense requests for materials similar to those requested by defendant Schmidt. See, e.g., United States v. Robinson, 439 F.3d 777, 779-80 (8th Cir. 2006) (rejecting defense request for production of "internal documents used by the government to calculate gross receipts, business

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expenses, and taxes owed by" the defendant); United States v. Shoher, 555 F. Supp. 346, 357 (S.D.N.Y. 1983) (rejecting defense request for production of "the outcome of [the government's] investigatory efforts to trace funds allegedly diverted by the defendants" when the government had already provided all relevant bank records); United States v. Wahlin, 384 F. Supp. 43, 48 (W.D. Wis. 1974) (rejecting defense request for production of IRS work papers and audits performed on defendant); United States v. Abrams, 29 F.R.D. 178, 183 (S.D.N.Y. 1961) (rejecting defense request for schedules "compiled from original documents for the Government investigators' own purposes"). 9. The timing of defendant Schmidt's motion also raises questions. Although his defense counsel have known of the existence of the government's database for months, if not years, the request for access to the database was not filed until it became obvious that the government's case-in-chief was nearing its conclusion. The request follows on the heels, however, of defendant Schmidt's OBJECTION TO THE GOVERNMENT'S DECLARATIONS PURPORTED TO BE OFFERED PURSUANT TO RULE 902(11) OF THE FEDERAL RULES OF EVIDENCE [# 1109], in which he argued that a span of several weeks had not provided his counsel with sufficient time to review the bank records which the government has marked as separate trial exhibits. Given that the government expects Special Agent Stockley to testify late this week or early next week, the government does not understand how defendant Schmidt's counsel expects to suddenly gain, midtrial, the capability for thorough and efficient review of bank records which they

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lacked at the time of filing of their previous Objection. THEREFORE, the government respectfully requests that defendant Schmidt's MOTION FOR ACCESS TO GOVERNMENT FINANCIAL DATABASE [#1135] be denied. Respectfully submitted this 23d day of April, 2007. TROY A. EID United States Attorney

s/Matthew T. Kirsch Matthew T. Kirsch Wyatt B. Angelo Assistant United States Attorneys 1225 17th Street, Suite 700 Denver, CO 80202 Phone: (303) 454-0100 Fax: (303) 454-0402 email: [email protected] [email protected]

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CERTIFICATE OF SERVICE (CM/ECF) I hereby certify on this 23d day of April, 2007, I electronically filed the foregoing GOVERNMENT'S RESPONSE TO DEFENDANT SCHMIDT'S MOTION FOR ACCESS TO GOVERNMENT FINANCIAL DATABASE with the Clerk of the Court using the CM/ECF system which will send notification of such filing to the following e-mail addresses:

Peter Bornstein, Esq. [email protected] Thomas Hammond, Esq. [email protected] Declan J. O'Donnell, Esq. [email protected]

Richard N. Stuckey, Esq. [email protected] Thomas Goodreid, Esq. [email protected] Ronald Gainor, Esq. [email protected]

s/Matthew T. Kirsch Matthew T. Kirsch Assistant United States Attorney 1225 17th Street, Suite 700 Denver, CO 80202 Phone: (303) 454-0100 Fax: (303) 454-0402 email: [email protected]

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