United States District Court, S.D. California
ORDER DENYING MOTION TO DISCLOSE GRAND JURY
TRANSCRIPTS; DENYING MOTION TO COMPEL DISCLOSURE OF
CONFIDENTIAL IDENTITIES; DENYING MOTION TO SEVER; DENYING
MOTION TO STRIKE SURPLUSAGE
Hon.
Jeffrey T. Miller United States District Judge
Pursuant
to Fed.R.Crim.P. 6(e)(3)(E)(ii) and Rule 16, Defendant
Bentley moves for disclosure of certain grand jury
transcripts and for disclosure of the identifies of potential
witnesses, respectively. Pursuant to Fed.R.Crim.P. 7(d) and
Rule 8(b), Defendant Eugene Cioe moves to strike surplusage
from the indictment and to sever counts in the Superseding
Indictment (“SI”), respectively. Defendants
Bentley and Cioe join in each other’s motions. Having
carefully considered the matters presented, the court record,
appropriate legal authorities, and the arguments of counsel,
the court denies the motion for disclosure of grand jury
transcripts, denies the motion to compel disclosure of the
identities of certain witnesses, denies the motion to sever
counts, and denies the motion to strike alleged surplusage
from the SI.
Background
The SI,
filed on June 4, 2015, alleges counts for (1) conspiracy to
defraud the United States (theft of public property; false
and fictitious claims); (2) - (4) three counts of false,
fictitious, and fraudulent claims in violation of 28 U.S.C.
287; (5) - (6) one count for theft of public property in
violation of 18 U.S.C. §641; and (7) witness tampering
in violation of 18 U.S.C. §1512(b)(1). Only counts (1) -
(4) are charged against Cioe. Bentley is charged in all
counts [Counts (5) and (6) relate to charges that Bentley
converted roofing materials from the Navy], including a
forfeiture count.
Defendant
Bentley, a former civilian employee at the Navy Facilities
Command Southwest (“NAVFAC”), supervised crews
that do roofing, welding, paving, fencing, and other
construction projects on Navy bases. Bentley also authorized
purchases of materials from local suppliers, including
co-defendant Cioe. Cioe owned and operated a fencing business
(initially Alcem Fence Co., Inc. and later, Cioe Fencing and
Material Supply). The central allegation is that Bentley and
Cioe used Bentley’s supervisory position to personally
profit in a scheme to defraud the Navy.
The
Government specifically identifies three transactions in its
briefing: (1) Bentley is alleged to have removed a chain-link
fence from a Navy base and delivered it to his home in
Ocotillo, California. A crew from Alcem and one NAVFAC
employee installed the stolen fencing around Bentley’s
property. Bentley then had the Navy pay to install a new
fence to replace the stolen one. (2) In early 2013, Bentley
allegedly used Navy funds to purchase materials for a roof on
his deceased father’s house, claiming the material
would be used at Navy Base Coronado. Bentley paid E.R., a
NAVFAC employee who reported directly to Bentley, to install
the roof using Navy materials. Once a criminal investigation
commenced, E.R. was interviewed. E.R. told Bentley about the
investigation and Bentley allegedly asked E.R. to obstruct
the investigation by making false statements to the agents.
(3) In May 2014, Bentley was tasked to complete a fence
project in a parking lot on Naval Base Coronado. On May 14,
2014, Cioe sent Bentley an invoice to provide labor and
materials in the amount of $2, 304 for the first phase of the
core drilling project. Bentley then authorized the funds and
suggested “Cioe Material Sales” as the source.
Navy Fleet Supply then paid $2, 304 to Cioe Fencing and
another $2, 460 for the second phase of the project. Despite
paying over $4, 700 to complete the fence, there is allegedly
no evidence that Cioe Fencing did any work in exchange for
the payments. Indeed, a NAVFAC employee allegedly completed
the core drilling project.
The SI
alleges that numerous checks (about 40 to 50) were issued by
Cioe to Bentley in various amounts from $76 to $8, 800. These
amounts are identified as kickbacks allegedly received by
Bentley.
Bentley’s
Motion to Disclose Grand Jury Transcripts
Defendant
Bentley, joined by Cioe, seeks disclosure of the grand jury
transcripts. He believes the grand jury was misled by the
Government because (1) co-defendant Cioe did, in fact,
install the disputed fencing; and (2) the Government did not
introduce any evidence that Cioe overcharged the Navy.
Bentley explains that Cioe, pursuant to a grand jury
subpoena, produced invoices and backup documents in the form
of “Job Tickets” and “Cost Breakdown
Sheets.” The Job Tickets identify the employees who
performed the work and the Cost Breakdown Sheets report the
total labor, materials, equipment, and profit on each job.
Bentley contends that the Government did not disclose this
information to the grand jury.
Fed.R.Crim.P.
6(e)(3)(E)(ii) provides that the court may disclose grand
jury transcripts to “a defendant who shows that a
ground may exist to dismiss the indictment because of a
matter that occurred before the grand jury. . . .” To
obtain grand jury transcripts, a defendant must show a
particularized need. Defendant must show (1) disclosure is
needed to avoid a possible injustice; (2) the need for
disclosure is greater than the need for continued secrecy;
and (3) the request for disclosure is structured to cover
only the needed material. United States v. Perez, 67
F.3d 1371, 1387 (9th Cir. 1995). Defendant fails to meet the
burden to show the requisite need. The Government correctly
notes that “the government has no obligation to
disclose substantial exculpatory evidence to a grand jury,
” United States v. Bingham, 653 F.3d 983, 999
(9th Cir. 2011), and “an indictment valid on its face
is not subject to challenge on the ground that the grand jury
acted on the basis of inadequate or incompetent
evidence.” United States v. Calandra, 414 U.S.
338, 345 (1974).
Defendant
requests access to the grand jury transcripts to review the
testimony and documentary evidence presented to the grand
jury for the “proposition that co-defendant Cioe and
his companies did not perform the disputed work.”
Specifically, Defendant argues that evidence of the
“Job Tickets” and “Cost Breakdown
Sheets” show that Cioe performed “the disputed
work.” Defendant does not identify which
“disputed work” he is referring to (or the
reliability of the bare allegation). More importantly, the SI
identifies that Cioe did not perform the contracted work (or
was overpaid for the work). To the extent the work was
correctly performed, that is a defense to the charges.
Further, the Government represents that it has reviewed all
70 Job Tickets and Cost Breakdown Sheets and has determined
that none correspond to the May/June 2014 time period of the
disputed work and, therefore, “could not possibly
establish that Cioe performed the disputed work.”
Finally, absent a further showing, Defendant’s theory,
supported by unsubstantiated and speculative allegations,
fails to show that disclosure is needed to avoid a possible
injustice. Defendant’s arguments fail to establish a
particularized need.
In sum,
the court denies the motion to disclose grand jury
transcripts.
Bentley’s
Motion to Compel Disclosure Identities
Defendant
Bentley, joined by Cioe, moves to compel the Government to
disclose redacted names (and contact telephone numbers) in
materials provided to the defense. Bentley represents that
the Government has produced interview memoranda of its
witnesses in which certain names were redacted. As some of
the witnesses ...