Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 1 of 21 PageID 2054IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION UNITED STATES OF AMERICA, CRIMINAL NO. 3-16CR-0516D Plaintiff, v. ALAN ANDREW BEAUCHAMP (01) RICHARD FERDINAND TOUSSAINT, JR. (02) WADE NEAL BARKER (03) WILTON MCPHERSON BURT (04) ANDREA KAY SMITH (05) CARLI ADELE HEMPEL (06) KELLY WADE LOTER (07) JACKSON JACOB (08) DOUGLAS SUNG WON (09) MICHAEL BASSEM RIMLAWI (10) DAVID DAESUNG KIM (11) WILLIAM DANIEL NICHOLSON IV (12) SHAWN MARK HENRY (13) MRUGESHKUMAR KUMAR SHAH (14) GERALD PETER FOOX (15) FRANK GONZALEZ JR. (16) ISRAEL ORTIZ (17) IRIS KATHLEEN FORREST (18) ANDREW JONATHAN HILLMAN (19) SEMYON NAROSOV (20) ROYCE VAUGHN BICKLEIN (21) Defendants. DEFENDANTS ANDREW J. HILLMAN AND SEMYON NARASOV’S MOTION TO DISMISS INDICTMENT Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 2 of 21 PageID 2055 TABLE OF CONTENTS Page I. INTRODUCTION ...............................................................................................................1 II. GOVERNMENT’S ALLEGATIONS .................................................................................2 III. MEMORANDUM OF LAW ...............................................................................................5 A. The Alleged Conspiracy Involving Hillman and Narasov Was a Separate Conspiracy that Was Complete More than Six (6) Years before the Indictment ................................................................................................................5 B. The Government Cannot Rely on the Presumption Hillman and Narasov’s Participation in the Alleged Conspiracy Continued into the Statute of Limitations Period ..................................................................................................13 IV. CONCLUSION ..................................................................................................................16 V. REQUEST FOR ORAL ARGUMENT .............................................................................16 i Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 3 of 21 PageID 2056 TABLE OF AUTHORITIES Cases Iannelli v. U.S., 420 U.S. 770 (1975) .................................................................................................................... 8 Kotteakos v. U.S., 328 U.S. 750 (1946) ............................................................................................................ 6, 7, 8 U.S. v. Adkinson, 158 F.3d 1147 (11th Cir.1998) ................................................................................................... 8 U.S. v. Bertolotti, 529 F.2d 149 (2d Cir. 1975)...................................................................................................... 12 U.S. v. Broce, 488 U.S. 563 (1989) .................................................................................................................. 12 U.S. v. Camiel, 689 F.2d 31 (3d Cir.1982)........................................................................................................... 9 U.S. v. Chandler, 388 F.3d 796 (11th Cir. 2004) .................................................................................. 6, 7, 8, 9, 10 U.S. v. Duffey, 456 Fed. Appx. 434 (5th Cir. 2012) ........................................................................................ 5, 9 U.S. v. Elam, 678 F.2d 1234 (5th Cir. 1982) .................................................................................................... 6 U.S. v. Evans, 970 F.2d 663 (10th Cir.1992) .................................................................................................. 10 U.S. v. Faulkner, 17 F.3d 745 (5th Cir. 1994) ........................................................................................................ 9 U.S. v. Kemp, 500 F.3d 257 (3d Cir. 2007)............................................................................................ 8, 10, 11 U.S. v. Lazar, No. SSSS 86 CR. 259, 1991 WL 29243 (S.D.N.Y. Feb. 27, 1991) .............................. 13, 14, 15 U.S. v. Lekacos, 151 F.2d 170 (2d Cir. 1945).................................................................................................... 7, 8 U.S. v. Njoku, 737 F.3d 55 (5th Cir. 2013) ........................................................................................................ 9 ii Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 4 of 21 PageID 2057 U.S. v. Papa, 533 F.2d 815 (2d Cir. 1976).......................................................................................... 10, 11, 12 U.S. v. Perez, 280 F.3d 318 (3d Cir. 2002)...................................................................................................... 11 U.S. v. Portela, 167 F.3d 687 (1st Cir.1999) ...................................................................................................... 10 U.S. v. Quintero, 38 F.3d 1317 (3d Cir. 1994)........................................................................................................ 8 U.S. v. Robinson, 774 F.2d 261 (8th Cir.1985) ..................................................................................................... 11 U.S. v. Smith, 82 F.3d 1261 (3d Cir. 1996)........................................................................................ 6, 8, 10, 12 U.S. v. Somers, 950 F.2d 1279 (7th Cir. 1991) .................................................................................................. 11 U.S. v. Therm-All, Inc., 373 F.3d 625 (5th Cir. 2004) .................................................................................................... 15 U.S. v. Toler, 144 F.3d 1423 (11th Cir. 1998) ................................................................................................ 10 U.S. v. Yanotti, 415 F. Supp. 2d 280 (S.D.N.Y. 2005)........................................................................... 14, 15, 16 Statutes 18 U.S.C.A. § 3282 ....................................................................................................................... 13 iii Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 5 of 21 PageID 2058 Defendants Andrew J. Hillman (“Hillman”) and Semyon Narosov (“Narosov”), pursuant to Federal Rule of Criminal Procedure 12, respectfully move this Court to dismiss the Indictment [D.E. 1] against them and state in support: I. INTRODUCTION While certainly imaginative, the Government’s charging document in this case is nonetheless fatally flawed as to Hillman and Narasov. Indeed, through just a smattering of allegations, the Government has attempted, albeit inappropriately, to circumvent the inflexible five-year statute of limitations associated with violations of 18 U.S.C. § 371 and ground criminal liability for alleged conduct by Hillman and Narasov that indisputably – and at the insistence of some of their co-defendants – ceased over six years prior to the return of a true bill in this case. In spite of this fact, which ironically is supported by the Government’s own discovery, the Government still lurches forward, disregarding the Indictment’s obvious legal infirmities. First, the Indictment alleges a “rimless wheel” conspiracy between Hillman and Narasov and only a few of their co-defendants at Forest Park Medical Center Dallas (“FPMC” or “Forest Park”), as opposed to a model “hub-and-spoke” conspiracy that extends to all nineteen (19) of their co-defendants and the actions of all those defendants. To that point, noticeably absent from the Indictment is any stated nexus at all between Hillman and Narasov and any of the alleged referral source defendants.1 The natural by-product is a detached, isolated conspiracy that ended in the fall of 2010 when Hillman and Narasov were terminated by FPMC, not a general conspiracy that continued without their presence “through in or about January 2013.” As a result, the Government has missed its mark by waiting until November 16, 2016 to obtain a true bill against Hillman and Narasov, and the Indictment should be dismissed. 1As discussed further below, this void likewise applies to the Government’s discovery in this case. 1 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 6 of 21 PageID 2059 Second, even if Hillman and Narasov were part of an alleged general § 371 conspiracy, this single conspiracy charge against them is still barred by the statute of limitations. While the Government may generally rely on the presumption of continuity in conspiracy cases to show participation in a conspiracy continued into the statute of limitations period, it is barred from relying on it in this case because the presumption is directly negated by the Government’s own unrefuted evidence of Hillman and Narasov’s termination from the conspiracy in late 2010. In other words, the presumption of continuity cannot apply when – as is the case here – the Government has failed to allege (or even present evidence of) illegal activities by Hillman and Narasov within the limitations period. Thus, even if Hillman and Narasov were part of the alleged general conspiracy, the Government’s prosecution is still barred by the statute of limitations. For these reasons and those discussed below, the Indictment should be dismissed as to Hillman and Narosov. II. GOVERNMENT’S ALLEGATIONS On November 16, 2016, a federal grand jury sitting in the Northern District of Texas returned a sealed twenty-count Indictment, charging twenty-one individuals with various fraudulent conduct related to the ownership and operation of FPMC, a Dallas-area surgical hospital that purportedly focused on the provision of out-of-network services. [D.E. 1]. According to the Indictment, FPMC was founded by co-defendants Richard Ferdinand Toussaint, Jr. (“Toussaint”), Wade Neal Barker (“Barker”), Alan Andrew Beauchamp (“Beauchamp”), and Wilton McPherson Burt (“Burt”), and managed by Beauchamp and Burt (collectively, “FPMC owners and managers”). The Indictment alleges that the hospital, through these owners and managers, paid “approximately $40 million in bribes and kickbacks to surgeons, primary care physicians, chiropractors, lawyers, workers’ compensation 2 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 7 of 21 PageID 2060 preauthorization specialists, and others … in exchange for those individuals referring certain patients to FPMC”. [D.E. 1, ¶¶ 2, 13]. In return for their portion of the alleged bribe and kickback payments, Hillman and Narasov allegedly contributed patient referrals through a hospital consulting company they owned to “FPMC or to surgeons who performed medical procedures, including surgeries,” at FPMC.2 [D.E. 1, ¶35]. For these efforts, Hillman and Narasov allegedly received bribe and kickback payments from Forest Park totaling $190,000, which represents less than one-half percent (0.5%) of the total kickbacks the Forest Park managers and owners paid to all their various referral sources during the course of the alleged general conspiracy. [D.E. 1, ¶¶ 2, 35, 45, 63]. FPMC allegedly funneled these payments to Hillman and Narasov through co-defendant Jackson Jacob’s (“Jacob”) shell entity, Adelaide Business Solutions.3 [D.E. 1, ¶¶15, 118]. Oddly, none of the eleven other referral source defendants named in the Indictment, many of whom are surgeons – Douglas Sung Won, Michael Bassem Rimlawi, David Daesung Kim, William Daniel Nicholson IV, Shawn Mark Henry, Mrugeshkumar Kumar Shah, Gerald Peter Foox, Frank Gonzalez Jr., Israel Ortiz, Iris Kathleen Forrest and Royce Vaught Bicklein – are connected in any way to Hillman and Narasov and their purported efforts to steer patients to FPMC. [D.E. 1]. Instead, of the approximately nineteen (19) pages and ninety-eight (98) paragraphs solely dedicated to comprising the “Manner and Means of the Conspiracy” section of 2 Notably, the Indictment does not identify any of the patients Hillman and Narasov allegedly referred to Forest Park or any evidence showing the payments received in 2010 were tied to patient referrals. 3 Paragraph 15 alleges that certain coconspirators used Adelaide along with another of Jacob’s companies to “funnel bribe and kickback payments to surgeons, primary care physicians, chiropractors, lawyers, workers’ compensation preauthorization specialists, and others in exchange for individuals referring patients to FPMC or to surgeons who used the hospital’s facilities to perform certain medical procedures, including surgeries.” [D.E. 1]. 3 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 8 of 21 PageID 2061 Count 1, Hillman and Narasov are cited only four (4) times for any specific conduct, and on each occasion, there is no identifiable link to any of the above-listed referral source defendants.4 [D.E. 1]. Also absent from the Indictment are any allegations that Hillman and Narasov participated in the alleged conspiracy after September 2010. [See generally D.E. 1]. Indeed, the last allegation in the Indictment implicating Hillman and Narasov relates to a payment they received from Forest Park in September 2010. [See D.E. 1, ¶118]. Thus, there is no dispute that according to the Indictment, as well as the evidence in this case, Hillman and Narasov did not engage in any alleged criminal conduct or participate in any alleged conspiracy over a year before the statute of limitations began to run on November 16, 2011. [See generally D.E. 1]. Further, the Indictment cannot be amended to allege any conduct involving Hillman and Narasov after September 2010. Although the Government conveniently omitted any reference to Hillman and Narasov’s termination from Forest Park in the Indictment, its own discovery unequivocally shows Hillman and Narasov were terminated from the conspiracy in 2010. Out of the over 100 persons the Government interviewed in connection with its four year investigation, only a handful of persons even mention Hillman and Narasov and of those who do, none mention any participation by Hillman and Narasov after late 2010. These interviews and the Government’s other evidence unequivocally establish Hillman and Narasov were fired from 4 Paragraph 63 identifies the aggregate amount in bribe and kickback payments Hillman and Narasov (and others) received for the referral of patients to FPMC. [D.E. 1.] Paragraph 99 notes that on January 13, 2009, “Burt sent a spreadsheet to Beauchamp with proposed monthly payments … to Hillman’s and Narosov’s company, along with expected monthly surgeries or referrals”. [D.E. 1.] Paragraph 117 references an email sent by Hillman to Beauchamp and co- defendant Andrea Kay Smith (“Smith”) on August 25, 2010, in which Hillman allegedly claims “credit” for a surgical case at the hospital; the Indictment fails to identify which specific surgeon Hillman is referencing. [D.E. 1.] Paragraph 118 asserts that on September 17, 2010, Beauchamp, Jacob, and others paid and caused to be paid $40,000 to Hillman and Narasov for patient referrals to FPMC. [D.E. 1.] 4 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 9 of 21 PageID 2062 Forest Park in late 2010 and, thus, did not, and could not, participate in the alleged conspiracy beyond 2010. III. MEMORANDUM OF LAW To charge Hillman and Narasov, the Government must show they were part of Forest Park’s general conspiracy, and their participation continued into the statute of limitations period. It is clear from the Indictment allegations Hillman and Narasov were not involved in the alleged general conspiracy and to the extent they were involved in any conspiracy, it was a separate conspiracy that was completed more than six (6) years prior to the Indictment. It is also undisputed Hillman and Narasov’s participation in any conspiracy ended in September 2010. While the Government may generally rely on the presumption of continuity in conspiracy cases to show the participation continued into the statute of limitations period in the absence of overt acts by a defendant, the Government is barred from relying on it in this case, because of its own evidence conclusively establishing Hillman and Narasov’s termination from the alleged conspiracy in 2010. Accordingly, the prosecution of Hillman and Narasov is barred by the statute of limitations, and the Indictment must be dismissed. A. The Alleged Conspiracy Involving Hillman and Narasov Was a Separate Conspiracy that Was Complete More than Six (6) Years before the Indictment Although the Indictment charges a single conspiracy with multiple criminal objects, the Indictment allegations evidence several, separate conspiracies. The Indictment identifies the Forest Park managers and owners as the key conspirators, who constructed a network of doctors and other sources that would directly or indirectly refer patients to Forest Park for surgeries or other medical services. Each of these agreements with the co-conspirators to refer patients to Forest Park is a separate conspiracy connected only by the key conspirators. Cf. U.S. v. Duffey, 456 Fed. Appx. 434, 440-442 (5th Cir. 2012) (evidence supported finding of multiple 5 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 10 of 21 PageID 2063 conspiracies to rob banks even though all of the conspiracies had three bank robbers in common, two of which had significant responsibilities in planning the robberies). In a classic “hub-and-spoke” conspiracy, the central core conspirators are the hub and each group of co-conspirators form a spoke leading out from the center in different directions. U.S. v. Chandler, 388 F.3d 796, 807 (11th Cir. 2004) (citing Kotteakos v. U.S., 328 U.S. 750, 755 (1946)). The core conspirators move from one spoke to the next, recruiting distinct groups of co-conspirators to carry out distinct functions, which aggregately accomplish an illegal enterprise. Id. However, the Supreme Court dubbed conspiracies in which the spokes are not connected to each other as a “rimless wheel” on the premise there is no rim unifying all of the spokes into a single, illegal enterprise. Kotteakos, 328 U.S. at 755; see U.S. v. Smith, 82 F.3d 1261, 1271 (3d Cir. 1996) (“A criminal agreement is defined by the scope of the commitment of its co-conspirators[;] [t]hus, where a defendant is unaware of the overall objective of an alleged conspiracy or lacks any interest in, and therefore any commitment to, that objective, he is not a member of the conspiracy.”).5 In Kotteakos, several different defendants fraudulently obtained loans though a single key conspirator. 328 U.S. at 752-54. Although the defendants knew the key conspirator was “acting 5 Although the Fifth Circuit has expressed dissatisfaction for these types of analogies because not every conspiracy can be fit into this mold, it nevertheless applies the same factors that the Supreme Court and other circuits have applied in determining whether the facts evidence a single or multiple conspiracies. See U.S. v. Elam, 678 F.2d 1234, 1246 (5th Cir. 1982) (rejecting application of figurative analogies such as “wheels”, “rims”, and “hubs” as not being appropriate for all conspiracies but nevertheless applying the same factors to determine whether the facts showed a single conspiracy). These factors, as discussed below, demonstrate that the allegations in the Indictment support multiple conspiracies rather than a single conspiracy. Because the facts in this case closely align with those in Kotteakos, this Motion will apply the analogy used by the Supreme Court in that case. This analogy, while disfavored by the Fifth Circuit, is the best way to understand the particular conspiracy at issue in this case. It, however, does not change the analysis or ultimate conclusion that the alleged general conspiracy is actually a set of separate and distinct conspiracies. 6 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 11 of 21 PageID 2064 as a broker for a number of other persons, who were getting loans in fraud of the [National Housing] Act, and who were making false representations to the bank like those which they themselves were making”, the Second Circuit held this was not enough to make them confederates. U.S. v. Lekacos, 151 F.2d 170, 173 (2d Cir. 1945), rev’d sub nom. Kotteakos, 328 U.S. 750.6 They did not have “any interest in the success of any loans but their own; there was no interest, no venture, common to them and anyone else but [the key conspirator] himself.” Id. (emphasis added). Thus, there was no evidence connecting the various defendants to each other; they were connected only to the central conspirator. Id. In reviewing the district court’s decision, the Supreme Court explained the district court “confuse[d] the common purpose of a single enterprise with the several, though similar, purposes of numerous separate adventures of like character.” Kotteakos, 328 U.S. at 769. The Supreme Court noted, [T]he pattern was ‘that of separate spokes meeting at the common center,’ though we may add without the rim of the wheel to enclose the spokes. The proof therefore admittedly made out a case, not of a single conspiracy, but of several, notwithstanding only one was charged in the indictment. Id. at 755. Thus, “where the ‘spokes’ of a conspiracy have no knowledge of or connection with any other, dealing independently with the hub conspirator, there is not a single conspiracy, but rather as many conspiracies as there are spokes.” Chandler, 388 F.3d at 807 (citing Kotteakos, 328 U.S. at 754-55). Like Kotteakos, in the Government’s alleged conspiracy at Forest Park, there is no connection between the various spokes. The Forest Park owners and managers are the only 6 The Supreme Court adopted the Second Circuit’s analysis that the charged single conspiracy was actually multiple conspiracies but reversed the Second Circuit’s determination the error in charging them as a single conspiracy was not prejudicial. Kotteakos, 328 U.S. at 755, 774. 7 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 12 of 21 PageID 2065 persons common to the alleged distinct undertakings.7 The Government’s Indictment is devoid of allegations that Hillman and Narasov had any agreement with any of the other doctors or other referral sources related to the general conspiracy. See id. (quoting Iannelli v. U.S., 420 U.S. 770, 777, n. 10 (1975) (“What distinguishes the offense of conspiracy from a substantive offense, is that the ‘agreement is the essential evil at which the crime of conspiracy is directed.’”)). Rather, the allegations in the Indictment are undisputed that the only connection between the doctors and other referral sources were the Forest Park managers and owners. Further, there are no allegations Hillman and Narasov knew about any of the other agreements with the Forest Park managers and owners or the overall alleged scheme. See Chandler, 388 F.3d at 806 (citing U.S. v. Adkinson, 158 F.3d 1147, 1155 (11th Cir.1998) (recognizing “the Government must prove the existence of an agreement to achieve an unlawful objective and the defendant’s knowing participation in that agreement”)); U.S. v. Quintero, 38 F.3d 1317, 1337 (3d Cir. 1994) (explaining the government must prove the defendant knew he was part of a larger drug operation to establish a single conspiracy). Even if Hillman and Narasov knew other persons engaged in similar relationships with the Forest Park managers and owners, as was the case in Kotteakos, that fact alone is still not sufficient to make them confederates. As the Supreme Court recognized, “Thieves who dispose of their loot to a single receiver- a single ‘fence’- do not by that fact alone become confederates: they may, but it takes more than knowledge that he is a ‘fence’ to make them such.” Kottteakos, 328 U.S. at 755 (quoting Lekacos, 151 F.2d at 173). The absence of a common goal and the absence of overlapping membership among or interdependence of the various spokes of the conspiracy is fatal to the Government’s ability to 7It is of no consequence that the hub of this conspiracy involved multiple individuals. See U.S. v. Kemp, 500 F.3d 257, 291 (3d Cir. 2007); Smith, 82 F.3d at 1271-72. The inquiry is not focused on the number of individuals who make up the hub but rather on the character of the agreements between the spokes. Id. 8 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 13 of 21 PageID 2066 plead, and ultimately prove, a single conspiracy. See id. at 754-55; Chandler, 388 F.3d at 811.8 While the Government’s Indictment alleges the smaller, distinct conspiracies have the same goal, there is no evidence they have a common goal. See Chandler, 388 F.3d at 811 (recognizing that “although each of these alleged spoke conspiracies had the same goal, there was no evidence that this was a common goal” (emphasis in original)). The allegations that each defendant sought to benefit and enrich himself through the receipt of bribes and kickbacks by entering into separate and distinct agreements with the Forest Park managers and owners does not show that each defendant was aware of or sought anything larger than its own alleged redemptions. Cf. id. at 811 (holding that although each spoke had the same goal of redeeming game stamps for money, there was no evidence this was a common goal or that each spoke was aware it was participating in anything larger than its own redemptions).9 “Each spoke represent[s] a separate scheme joined by no overall objective to be achieved by multiple actions.” Id.; see also U.S. v. Camiel, 689 F.2d 31, 37 (3d Cir.1982) (holding the government failed to prove a common, unified scheme between the officials of both houses of the Pennsylvania General Assembly in offering “no- show” patronage positions, because while both houses offered these positions, “there was a dearth of evidence presented that could link the relevant activities of the two legislative bodies”). Not only is the alleged conspiracy missing a common goal, but there is no alleged interdependence among the alleged parties. See Chandler, 388 F.3d at 811 (citing U.S. v. Toler, 8 The Fifth Circuit applies the same factors to determine whether there was a single conspiracy or there were multiple conspiracies. See U.S. v. Faulkner, 17 F.3d 745, 761 (5th Cir. 1994) (same); see also U.S. v. Njoku, 737 F.3d 55, 69 (5th Cir. 2013) (applying similar analysis in context of double jeopardy claim); U.S. v. Duffey, 456 Fed. Appx. 434, 439 (5th Cir. 2012) (same). 9 “In a drug conspiracy, in which the object of the conspiracy is clearly illegal and there are various clandestine functions to perform, the conspirators can be charged with knowledge that others are performing these different functions. In this case, however, such knowledge may not be imputed to defendants since each of their redemptions was complete unto itself.” Chandler, 388 F.3d at 811 n. 21. 9 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 14 of 21 PageID 2067 144 F.3d 1423, 1426 (11th Cir. 1998) (“In order to prove a single, unified conspiracy as opposed to a series of smaller, uncoordinated conspiracies, the Government must show an interdependence among the alleged co-conspirators.”)).10 The combined efforts of the separate and distinct conspiracies were not required to ensure the success of the others. See Kemp, 500 F.3d at 289 (“In evaluating interdependence, we consider how helpful one individual’s contribution is to another’s goals.”); U.S. v. Portela, 167 F.3d 687, 697 (1st Cir.1999) (explaining “a single conspiracy [exists] if the continued health of the trafficking and distribution network necessarily depends on the continued efforts of multiple suppliers”); U.S. v. Evans, 970 F.2d 663, 670 (10th Cir.1992) (“Interdependence is present when each alleged coconspirator ... depend[s] on the operation of each link in the chain to achieve the common goal.” (alterations in original) (internal quotation marks omitted) (citation omitted). Rather, each alleged conspiracy acted autonomously and was an end in and of itself. See Smith, 82 F.3d at 1271 (concluding there was no interdependence between two kickback schemes because “[t]he co-conspirators in each state derived no benefit, financial or otherwise, from Smith’s activities in the other state, nor was the success of the conspiracy in one state contingent on the success of the conspiracy in the other”). Hillman and Narasov’s actions did not further the efforts of the other individual conspiracies or the conspiracy as a whole, nor were they necessary for the continued existence of the central core’s conspiracy. Each of the agreements the Forest Park managers and owners had with each referral source represented an independent agreement. See Kemp, 500 F.3d at 290 10 “Chain-shaped conspiracies [unlike the alleged conspiracy in this case] present the classic examples of interdependence.” Kemp, 500 F.3d at 289. This type of conspiracy is commonly found in narcotics cases. “The basic reasoning of these cases is that a narcotics conspiracy moving large quantities of raw drugs from importer through myriad channels to the addict consumer is akin to a vertically integrated loose-knit business combination. From the interdependence which exists between each level of the vertical chain, agreement among all parties facilitating the successful operation of the chain is presumed. This presumption, however, is not unbounded.” U.S. v. Papa, 533 F.2d 815, 820 (2d Cir. 1976). 10 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 15 of 21 PageID 2068 (concluding “there was an insufficient degree of interdependence between [several of the co- conspirators],” which made it “difficult to conceive” how their activities “were interdependent or mutually supportive” to support a single conspiracy charge). The performance of one agreement did not depend on the performance of another. But see U.S. v. Perez, 280 F.3d 318, 347 (3d Cir. 2002) (holding the drug sellers and the drug smuggler were interdependent, because “[the dealers] depended on a scheme involving [the smuggler and the middleman] and the shipment from the Philippines to possess and distribute the illegal drug”). Moreover, Hillman and Narasov’s complete absence from the alleged conspiracy during its last three (3) years shows their continued participation was not necessary to the operation or continuation of the conspiracy and that the agreements among the other spokes were not connected to the agreement with their company.11 The Government also failed to plead any overlapping membership between the separate and distinct conspiracies. The only members common to each conspiracy are the Forest Park managers and owners and the companies they used to funnel the payments to their referral sources. See U.S. v. Somers, 950 F.2d 1279, 1282 (7th Cir. 1991) (holding two, overlapping conspiracies were distinct even though defendant acted in each as a major cocaine distributor); U.S. v. Robinson, 774 F.2d 261, 273-75 (8th Cir.1985) (holding organizer of two similar, contemporaneous loan scams could be tried for both loan scam conspiracies); Papa, 533 F. 2d at 822 (holding “the mere fact [defendant] supervised each chain [of distribution of narcotics] does not transform two separate conspiracies into one”); U.S. v. Bertolotti, 529 F. 2d 149, 155 (2d Cir. 11Further, the absence of any allegations that any doctors (indicted or not) were fired along with Hillman and Narasov also undermines the Government’s general conspiracy theory. If Hillman and Narasov were connected to any of these doctors, their relationship would presumably have been terminated with the termination of Hillman and Narasov’ relationship with Forest Park in the fall of 2010. 11 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 16 of 21 PageID 2069 1975) (recognizing the presence of two defendants in each of the four transaction was not, and has never been, a sufficient nexus to make them a single conspiracy). There are no allegations Hillman and Narasov had any agreements with any of the other doctors or other referral sources or that Hillman and Narasov were otherwise connected to these sources. Rather, the allegations in the Indictment are undisputed that each of the arrangements between the Forest Park managers and owners operated as independent and distinct conspiracies. See Papa, 533 F.2d at 821 (“While it is obviously impractical and inefficient for the government to try conspiracy cases one defendant at a time, it has become all too common for the government to bring indictments against a dozen or more defendants and endeavor to force as many of them as possible to trial in the same proceeding on the claim of a single conspiracy when the criminal acts could be more reasonably regarded as two or more conspiracies, perhaps with a link at the top.” (citation omitted)). Thus, not only is there no evidence of Hillman and Narasov’s knowledge of the “hub”, but there is no connection between the various spokes of the conspiratorial “wheel.” Accordingly, the alleged conspiracy involving Hillman and Narasov’s company was a separate and distinct conspiracy.12 See Bertolotti, 529 F. 2d at 154-156 (reversing conspiracy conviction where the evidence showed multiple conspiracies rather than a single conspiracy as alleged in the indictment). 12 The possibility a core conspiracy existed among the Forest Park managers and owners does not change the conclusion there were separate, distinct conspiracies between the Forest Park managers and owners and the various doctors and other referral sources. See Smith, 82 F. 3d at 1272 (holding that even if the facts showed “the existence of a master, core conspiracy”, this “would not change the character of the agreements with [each of] the service providers”); see also U.S. v. Broce, 488 U.S. 563, 580-81 (1989) (Stevens, J., concurring) (recognizing the existence of a core conspiracy is not inconsistent with the prosecution of a member of that conspiracy for separate illegal agreements with others entered into in furtherance of the overall objective of the core conspiracy). 12 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 17 of 21 PageID 2070 The prosecution of Hillman and Narasov’s separate and distinct conspiracy is barred by the statute of limitations since it was completed more than five (5) years prior to the Indictment. The applicable statute of limitations bars the prosecution of any non-capital offense when an Indictment is not found or an information instituted within five (5) years after such offense was committed. 18 U.S.C.A. § 3282. Because the instant Indictment was returned on November 16, 2016, Hillman and Narasov’s conspiracy must have occurred or continued past November 16, 2011 in order to be statutorily viable for prosecution. The Indictment alleges Hillman and Narasov’s company received kickbacks from Forest Park totaling $190,000 with the last alleged kickback being received on September 17, 2010. There are no allegations in the Indictment Hillman and Narasov received any kickbacks beyond this date or that the conspiracy in which they are alleged to have partaken even continued beyond this date. Thus, it is clear assuming there was even a conspiracy between Hillman and Narasov, the alleged conspiracy was completed more than a year before the earliest date on which the conspiracy could have started to fall within the statute of limitations. As a result, the statute of limitations bars Hillman and Narasov’s prosecution, and the Indictment should be dismissed. B. The Government Cannot Rely on the Presumption Hillman and Narasov’s Participation in the Alleged Conspiracy Continued into the Statute of Limitations Period Assuming the Court determines the Government’s Indictment successfully alleges a single conspiracy that continued into the statute of limitations period, the Government is barred from relying on the presumption that Hillman and Narasov’s participation continued into that period. While the law is well-settled that a defendant’s participation in a conspiracy is presumed to continue until the conspiracy ends or the defendant affirmatively withdrawals, the Government is barred from relying on this presumption when it is directly rebutted by its own evidence. U.S. v. Lazar, No. SSSS 86 CR. 259, 1991 WL 29243, at *2 (S.D.N.Y. Feb. 27, 1991); 13 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 18 of 21 PageID 2071 see U.S. v. Yanotti, 415 F. Supp. 2d 280, 291 (S.D.N.Y. 2005) (holding the presumption of continuity was insufficient to sustain the conviction where there was no evidence of illegal activities within the limitations period). In the nearly identical case of U.S. v. Lazar, the district court held the Government was barred from relying on the presumption to show the defendant’s continued participation in the conspiracy, because the Government’s evidence that the defendant was fired from the conspiracy directly rebutted this presumption. Id. Lazar was charged with knowing participation in a scheme involving the payment of bribes to the New York City Parking Violations Bureau (“PVB”). Id. at *1-2. In 1978, Datacom Systems Corporation, a data processing firm, hired Lazar as a political consultant. Id. Datacom had contracted a substantial amount of its summons collections business from PVB. Id. at *2. As a political consultant, Lazar’s role was to assist Datacom in its dealings with PVB to ensure favorable treatment. Id. In 1979, Lazar began paying bribes from his “own pocket and presumably from the monthly retainer he received from Datacom.” Id. Unhappy he personally had to pay these bribes and taxes on this money, Lazar complained to Datacom. Id. Matters eventually escalated, resulting in an altercation between Datacom’s President and Lazar that resulted in his termination in 1982. Lazar subsequently was replaced, and the conspiracy continued until 1986. Id.at *2-3. Although the conspiracy continued, there was no evidence Lazar had any involvement in the conspiracy after his termination. Id. Despite this, the Government nonetheless claimed it was entitled to the presumption Lazar continued in the conspiracy until at least 1985. Id. Recognizing it was the Government’s burden at trial to prove beyond a reasonable doubt Lazar’s criminal activity continued after his termination, the court acknowledged “the Government is ordinarily assisted in meeting this burden by the court-fashioned presumption that 14 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 19 of 21 PageID 2072 a defendant shown to have been a member of the conspiracy is presumed to have continued as such member until the conspiracy itself has ended.” Id. at *3-4 (emphasis in original).13 Relying on this presumption, the Government argued it was Lazar’s burden to show he withdrew from the conspiracy. Id. at *5. However, the Court rejected this argument and held Lazar had no such burden because the evidence of his termination rebutted the very presumption on which the Government sought to rely. Id. The court reasoned that because the Government’s own evidence conclusively established Lazar was fired from the conspiracy in 1982 and there was an absence of evidence Lazar participated in the conspiracy after this date, the Government could not rely on this presumption. Id. at *5-6 (“Simply stated, it cannot be the law that the prosecution may avail itself of an evidentiary presumption when the fact to be presumed is contrary to the weight of the evidence at trial.”). Thus, the court concluded, as a matter of law, no rational jury could find Lazar continued to participate in the conspiracy beyond the termination of his employment. Id. Like Lazar, Hillman and Narasov’s continued participation in the conspiracy is directly rebutted by the Government’s undisputed evidence of their termination. See id. Having been terminated from the conspiracy by Forest Park’s management in or around September 2010, Hillman and Narasov did not, and could not, participate in the conspiracy after their termination. See id; see also Yannotti, 415 F. Supp. 2d at 291 (recognizing the “lack of evidence” of activity by defendant during statute of limitations period was “highly probative”). Accordingly, like in Lazar, the Government cannot rely on the presumption Hillman and Narasov continued to participate until the alleged general conspiracy ended in 2013. See Lazar, No. SSSS 86 CR. 259, 1991 WL 29243, at *2; see also Yannotti, 415 F. Supp. 2d at 291 (holding the presumption of 13The Fifth Circuit applies the same presumption of continuity applied in Lazar and Yanotti. See, e.g., U.S. v. Therm-All, Inc., 373 F.3d 625, 632 (5th Cir. 2004) (recognizing there is a presumption of continued participation in conspiracy cases until the conspiratorial purpose is achieved). 15 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 20 of 21 PageID 2073 continuity was rebutted by “the length of the presumption, the proof that the co-conspirators could not have continued with their illegal activities, and the absence of proof regarding the [ ] activities within the statute of limitations period”). “To hold otherwise would eviscerate the requirement the Government prove its case beyond a reasonable doubt and undermine the purpose of the statute of limitations.” Yannotti, 415 F. Supp. 2d at 291. Thus, the Government’s Indictment as to Hillman and Narasov should be dismissed even if there were allegations establishing they were part of the alleged general conspiracy. IV. CONCLUSION In sum, this Court must dismiss the Indictment as to Hillman and Narasov, because the allegations outline a series of individual, distinct conspiracies rather than a single conspiracy with a common goal. To the extent Hillman and Narasov participated in any conspiracy, such conspiracy was complete more than six (6) years prior to the Indictment, as established by the Indictment’s own allegations, and is, therefore, barred by the statute of limitations. However, even if this Court were to find the Government properly pled a single conspiracy, Hillman and Narasov’s prosecution is still barred by the statute of limitations. There are no allegations or evidence Hillman and Narasov’s participation continued beyond September 2010, and the Government cannot rely on the presumption of continuity to meet its burden. V. REQUEST FOR ORAL ARGUMENT Pursuant to Local Rule 47.1(g), Hillman and Narasov request oral argument on the subject Motion and estimate that they will need one hour. Defendants believe oral argument will assist the Court in understanding the factual background giving rise to the Motion and the complexity of the legal issues addressed in the Motion. 16 Case 3:16-cr-00516-D Document 357 Filed 04/21/17 Page 21 of 21 PageID 2074 Respectfully submitted, By: /s/ Oliver Benton Curtis Marlo P. Caddedu, Esq. Oliver Benton Curtis III, Esq. Texas Bar No. 24028839 Florida Bar No. 118156
[email protected] [email protected] Law Office of Marlo P. Cadeddu, P.C. (PHV approved D.E. 96) 3232 McKinney Ave., Ste. 700 Sara M. Klco, Esq. Dallas, Texas 75204 Florida Bar No. 060358 Telephone: 214.220.9000
[email protected] Facsimile: 214.744.3015 (PHV application to be submitted) Broad and Cassel Counsel for Andrew Jonathan Hillman One Biscayne Tower, 21st Floor 2 South Biscayne Boulevard Miami, Florida 33131 Telephone: 305.373.9400 Facsimile: 305.373.9443 By: /s/ Jay Ethington Jay Ethington, Esq. Toby Shook, Esq. Texas Bar No. 06692500 Texas Bar No. 18293250
[email protected] [email protected] 3131 McKinney Ave., Ste. 800 Shook & Gunter Dallas, TX 75204 2001 Bryan Street, Ste. 1905 Telephone: (214) 740-9955 Dallas, TX 75201 Facsimile: (214) 740-9912 Counsel for Semyon Narasov CERTIFICATE OF SERVICE I HEREBY CERTIFY that on April 21, 2017, I electronically submitted the foregoing document with the clerk of the court for the U.S. District Court, Northern District of Texas, using the electronic case filing system of the court. I hereby certify that I have served all counsel and/or pro se parties of record electronically or by another manner authorized by Federal Rule of Civil Procedure 5(b)(2). /s/ Oliver Benton Curtis Oliver Benton Curtis, Esq. 17