United States v. Bentley

          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 ...