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considering a defendant's request for documents from a non-party executive agency and concluding that no duty to disclose existed under Brady or Rule 16
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Criminal Case No. 05-CR-179-B.
June 21, 2006
MEMORANDUM OPINION AND ORDER
Defendants Arvain Weiss ("Weiss") and Jesus Guevara ("Guevara") (referred to collectively herein as "defendants") were indicted for mail fraud, 18 U.S.C. § 1341 and 2(a); wire fraud, 18 U.S.C. § 1843 and 2(a), and witness tampering, 18 U.S.C. § 1512(b)(3). The charges by plaintiff United States ("Government") all concern an alleged "scheme" to arrange fraudulent home purchases and home mortgages for illegal aliens. Weiss and Guevara filed three discovery motions that are the subject of this Order. One requests a wide range of information from the United States Department of Housing and Urban Development ("HUD") and its agents and sub-units. Two other motions request exculpatory information under Brady v. Maryland, 373 U.S. 83, 87, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963) and impeachment information under Giglio v. U.S., 405 U.S. 150, 154, 92 S.Ct.763, 31 L.Ed.2d 104 (1972). A hearing was held on this motion June 15, 2006. For the reasons stated below, the defendants' motions are DENIED, unless otherwise confessed.
I. BACKGROUND
According to the Superseding Indictment, Weiss, a real estate agent, operated a scheme to obtain fraudulent home loans through HUD. Guevara acted as Weiss's interpreter and assistant. The Government states that Weiss purchased single family homes in the Denver area, made modest improvements to these homes, and then resold them at a considerable price increase to low-income buyers, usually illegal aliens. Weiss arranged these transactions via a Federal Housing Administration ("FHA") program designed to help low-income residents acquire home mortgages. The indictment states that Weiss and Guevara, in order to meet various HUD and FHA requirements to secure these loans, engaged in the following conduct: provided false information regarding the purchaser's social security numbers and citizenship status, supplied false information about the purchaser's qualifications to buy the homes, made false statements and provided false information about the purchasers' source of down payments, provided the money for the down payments from their own funds and stated falsely that they did not do so, told the purchasers not to reveal that Weiss and Guevara had provided the sources of the down payments, and provided false credit letters and credit information.Weiss and Guevara filed a discovery motion making 37 discreet requests for documents and information related to HUD and FHA procedures, oversight and management. Some of these requests concerned the particular transactions and properties at issue in the charges against them and some were broader requests for information, audits and reports on the HUD and FHA programs relevant to the transactions at issue in this case. (This information is herein referred to as the "HUD-related information.") The defendants originally requested this HUD-related information under the authority of Giglio and Brady, although at the hearing, the defendants stated that they also sought this information under Fed.R.Crim.P. 16.
Weiss and Guevara also filed two motions requesting Brady and Giglio materials. These motions seek related cases, the name and last known address of any witness, guilty verdicts, juvenile adjudication or other bad acts, consideration given to government witnesses, evidence of bias, motive or interest, evidence of threats, prior testimony, internal law enforcement files (including some of the HUD information described above), information about the competency of witnesses, false or inconsistent statements, and other information.
II. STANDARD OF REVIEW
A criminal defendant is entitled to discovery under several distinct legal authorities. The Government is required to disclose "evidence favorable to an accused upon request . . . where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution." Brady, 373 U.S. at 87. Similarly, the Government must also disclose any information that may impeach the credibility of a Government witness. Giglio, 405 U.S. at 154.
Disclosure under Brady and Giglio applies only to information that is "material" to the defense. Id. Brady and Giglio do not apply to "evidence possibly useful to the defense but not likely to have changed the verdict." Id. "The criterion of materiality is met only if there is a `reasonable probability' that the outcome of the trial would have been different had the evidence been disclosed to the defense." U.S. v. Gonzalez-Montoya, 161 F.3d 643, 649 (10th Cir. 1998) [ citing U.S. v. Bagley, 473 U.S. 667, 682, 105 S.Ct. 3375, 87 L.Ed.2d 481 (1985)].
In addition to the disclosure requirements of Brady and Giglio, Fed.R.Crim.P. 16(a) governs the Government's discovery obligations. Most relevant to this motion, Fed.R.Crim.P. 16(a)(1)(E) requires the government to allow access to documents and objects "within the government's possession, custody or control" where "(i) the item is material to preparing the defense; (ii) the government intends to use the item in its case-in-chief at trial; or (iii) the item was obtained from or belongs to the defendant."
While the "materiality" standard of Rule 16 is not a direct codification of Brady, it is not substantively different. See Fed.R.Crim.P. 16 advisory committee notes on 1974 amendments. Rule 16 includes two other categories of discoverable information in addition to "material" information, to ensure that the Government's disclosure obligation extends to information not otherwise material that was obtained from the defense or that would be used by the prosecution. Id. The materiality language of Rule 16(a)(1)(E)(i) shows that "the drafters of the rule recognized the government's Brady obligation." U.S. v. Jordan, 316 F.3d 1215, 1250 n. 74 (11th Cir. 2003).
III. DISCUSSION
Weiss and Guevara request the HUD-related information under the authority of Brady, Giglio and Rule 16. At issue in this motion is not the HUD/FHA case files for the transactions that are listed in the indictment. The Government has provided this information. The information the defendants seek is outside of and independent of the information used in bringing the charges. The defendants argue that this information will potentially show that HUD, FHA, or mortgage bankers acting for HUD did not follow appropriate HUD procedures when they approved these loans. If this is true, Weiss and Guevara contend, any mis-statements they may have made are not material to the housing transactions. Since materiality is an element of fraud under 18 U.S.C. § 1341, Neder v. U.S., 527 U.S. 1, 25, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999), this evidence potentially undermines a claim against them.
The Government argues that the defendants' request for HUD-related information goes beyond the Government's obligations under Brady, Giglio and Rule 16, both because the requested information is not material to preparing the defense and because the information is not in the possession of the Government. The Government argues additionally that the defendants' requests for Brady and Giglio material go far beyond the Government's obligations. The defendants make the same legal arguments to justify the HUD-related disclosures as they make to support the Giglio and Brady requests. I therefore consider them together.
A. Materiality
The defendants argue that the Government's disclosure obligation is higher than the standards set in Brady and Giglio. The defendants contend that the ABA Model Rules of Professional Conduct, and the Colorado Rules of Professional Conduct, establish a broad prosecutorial duty to disclose all information known to the prosecutor "that tends to negate the guilt of the accused or mitigates the offense." Colorado Rule of Professional Conduct 3.8. Citing Kyles v. Whitley, 514 U.S. 419, 437, 115 S. Ct. 1555, 131 L.Ed.2d 490 (1995), the defendants contend that these rules set a disclosure standard higher than Brady. The defendants proffer further support for this broader standard in U.S. v. Sudikoff, 36 F.Supp.2d 1196, 1198-1199 (C.D. Cal. 1999), which held that the Brady definition of materiality is "not appropriate in the pretrial discovery context" and instead required disclosure of "all evidence relating to guilt or punishment which might reasonably be considered favorable to the defendant's case," and a hearing transcript in U.S. v. Dunn, et al., 03 CR 275N, where Judge Nottingham required the Government in discovery to "produce all material which could reasonably be considered favorable to the defense, or which could be used by the defendant, any defendant, to impeach a Government witness." ( U.S. v. Dunn., Transcript, page 20, lines 19-24.)
I find none of these arguments even remotely persuasive. First, even assuming that the Colorado Rules of Professional Conduct have the authority to expand a defendant's rights in federal court (a proposition that I doubt highly, that the defendants did not even bother to argue, and that is in fact repudiated in the introductory "scope" section of the Colorado Rules of Professional Conduct), the Colorado Supreme Court has specifically rejected the proposition that Rule 3.8(d) contains a materiality standard different from that found in Fed.R.Crim.P. 16 or required under Brady. In re Attorney C, 47 P.3d 1167, 1170-1171 (Colo. 2002.)
Second, the defendants' citation to Kyles is, at best, highly misleading. Kyles stated explicitly that the standard enunciated in the ABA Model Rules does not govern the prosecutor's disclosure requirements. Kyles, 514 U.S. at 437. Rather, the Court stated that "The Constitution is not violated every time the government fails or chooses not to disclose evidence that might prove helpful to the defense." Id. at 436-437. The Court goes on to state that Brady "requires less of the prosecution than the ABA Standards for Criminal Justice." Id. Kyles unquestionably affirms the well-accepted proposition that evidence is material "if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different. " Id. at 433. ( quoting Bagley, 473 U.S. at 682).
Third, Sudikoff is by no means controlling authority. The Sudikoff standard of disclosing "all evidence relating to guilt or punishment which might reasonably be considered favorable to the defendant's case." Sudikoff, 36 F. Supp. 2d at 1199, explicitly contradicts United States v. Comosona, 848 F.2d 1110, 1115 (10th Cir. 1988) (the Government need not disclose "facially non-exculpatory evidence" that "might possibly be favorable to the accused by inferential reasoning") and Gonzalez-Montoya, 161 F.3d at 650 (the Government need not disclose evidence that is only "possibly useful to the defense but not likely to have changed the verdict.") I see no reason to abandon well-established binding Tenth Circuit authority in favor of a decision by a district court in California.
Finally, the transcript in U.S. v. Dunn establishes only that Judge Nottingham reached an accommodation between the Government and the defendant in that case for disclosing information "which could be considered reasonably favorable to the defense." Judge Nottingham, after citing U.S. v. McVeigh, 923 F.Supp. 1310, 1313-1314 (D. Colo 1996) for the proposition that the Government should interpret its Brady and Giglio obligations conservatively or else risk becoming "embroiled in litigation after the trial is over," concluded, with the parties' agreement, that for the purpose of that trial, the Government would abide by a "reasonably favorable to the defense" disclosure standard. U.S. v. Dunn, Transcript, pages 20-21. I do not read this as a new interpretation of Brady, and I do not understand Judge Nottingham to suggest that Brady or Giglio require this kind of broader disclosure standard.
In sum, the United States Supreme Court and the Tenth Circuit have stated repeatedly and with clarity that disclosure under Giglio and Brady is only necessary for information that is material. That is the standard that will apply in this case.
Materiality under Rule 16 also requires more than bare relevance. To show materiality under Rule 16, "There must be some indication that the pretrial disclosure of the disputed evidence would enable the defendant significantly to alter the quantum of proof in his favor. U.S. v. Lloyd, 992 F.2d 348, 351 (D.C. Cir. 1993). "Evidence is material as long as there is strong indication that it will play an important role in uncovering admissible evidence, aiding witness preparation, corroborating testimony, or assisting impeachment or rebuttal." Id. See also U.S. v. Ross, 511 F.2d 757, 762 (5th Cir. 1975) ("Materiality means more than that the evidence in question bears some abstract logical relationship to the issues in the case.") So, while Rule 16 materiality may not be identical to Giglio and Brady materiality, it is very close, and certainly not anything like the "reasonably favorable to the defense" or "relevance" standards the defendants advocate for Giglio and Brady, or for that matter, Rule 16.
B. Is the Information Requested by the Defendants Material Under Rule 16 or Giglio/Brady?
Having established the proper standard for materiality under Brady/Giglio and Rule 16, I now consider whether the defendants have shown that the documents requested in their motions meets this standard.
1. Giglio and Brady Material
The Government has already stated that it will provide its witnesses' criminal histories, other acts by them, their prior statements and other impeachment information as required by Brady, Giglio and Bagley. The defendants have not, either in their briefs or at the hearing, offered any specific arguments as to what additional undisclosed information is material under the requirements of Brady and Giglio. This motion is therefore granted, as confessed, and otherwise denied in aggregate. If the defendants can be more specific as to what Giglio or Brady material they believe they are entitled to, and show that it is material to their defense, I will consider such a motion.
2. HUD-related Materials
The defendants seek 37 subcategories of HUD-related information, some overlapping. These range from broad requests such as "any and all information regarding HUD's Community Reimbursement and Fair Lending Program" to specific requests such as "Any and all notes or reports generated by Denver-based HUD inspector David Felz regarding any of the subject properties and/or any conversations Mr. Felz had with Mr. Weiss."
The defendants argue that this material may show that the transactions that they engaged in were flawed prior to their involvement because HUD and FHA did not follow their own requirements. The defendants contend that they have some information to suggest that audits and other HUD reports have criticized these programs and may even show that these specific transactions did not satisfy HUD rules. Under this theory these documents, if they exist, may, they say, enable them to argue to the jury that since these transactions were invalid independent of any action by the defendants, then any mis-statement of fact by the defendants was not material and, therefore, the defendants did not commit fraud.
I note that at this point in this case the defendants do not have to prove the viability of any defense theory, so I will, for the purpose of this motion, assume without deciding that this theory is legally valid.
Nevertheless, the defendants still must make a "prima facie" showing of materiality in order to obtain these documents under Rule 16. U.S. v. Buckley, 586 F.2d 498, 506 (5th Cir. 1978). There must be a "showing of a tenable relationship between the materials sought and the preparation of the defense." U.S. v. Poindexter, 727 F.Supp. 1470, 1480 (D.D.C. 1989). The connection cannot be "remote and tenuous." Id. Here, even granting the viability of the defendants' theory, I am required to make too many intuitive leaps and inferences to reach a conclusion of materiality. I must first assume that these audits and reports exist. I must then assume that these audits address the transactions at issue in this case. I must then assume that these documents contain findings that show HUD officials mis-handled these particular transactions. I must then assume that these errors somehow nullified or voided the transactions. This chain contains too many leaps of faith and logic to satisfy the requirement of materiality.
The defendants state that they have good reason to believe that audits critical of these programs exist. They argue that until they have these documents they are unable to provide any more specific information to support their request. However, the Government is not obliged to provide information that the defendants can, with reasonable effort, find on their own. U.S. v. Senn, 129 F.3d 886, 892-893 (7th Cir. 1997). HUD audits and reports are publicly available, and the defendants have not demonstrated that they cannot obtain this information independent of the prosecution. Moreover, the discovery burden on the Government cannot be "unduly burdensome," and discovery requests must be "sufficiently specific . . . to show the Government what it must produce." See United States v. Marshall, 532 F.2d 1279, 1285 (9th Cir. 1976). To extend the Government's discovery or disclosure obligations to hunt for information the defendants believe may exist, and which may be helpful to the defendants only through a complex chain of inferences is to impose an unreasonable burden on the Government.
The Government has acknowledged its obligations under Brady, Giglio and Rule 16. It has an open file policy on this case, and it has responded in detail to the defendants' specific requests, providing some, searching for others, and not providing others on various grounds. (Government's Response to Defendant Weiss's Reply at 10-12.) The Government has provided the HUD case files on the specific transactions that are the basis of the charges in this case. Moreover, at the hearing, the defendants seem to have narrowed their request to audits and reports that show that the officials who approved these loans did not follow their own procedures. The Government has, indeed, exceeded its duty, stating that it has requested that specific information from HUD, and that HUD is in the process of gathering it. (In providing this information, the Government does not concede that any of the HUD-related information is required under Brady, Giglio or Rule 16.)
Because the defendants have not met their burden to show materiality, the defendants' motion for disclosure of HUD-related materials is denied. I note that it is possible that some subset of this information may meet the materiality standard. If, in the course of the Government's disclosures, the defendants become aware of specific information that they can show is material to their defense, they may request it at that time.
3. HUD related material not in possession of the Government
The Government asserts, additionally, that it is not obliged to search for information held by other Government agencies not involved in the prosecution. United States v. Pelullo, 399 F.3d 197, 216 (3d Cir. 2005). Citing Kyles 514 U.S. at 437, the defendants argue that the Government's disclosure obligation under Brady extends even to information held by other Government agents, including HUD. However, Kyles held only that this obligation extended to "others acting on the government's behalf in the case." Id. The Government's disclosure obligation applies only to "information possessed by the prosecutor or anyone over whom he has authority," U.S. v. Meros, 866 F.2d 1304, 1309 (11th Cir. 1989) (holding that prosecutors were not under a Brady obligation to "undertake a fishing expedition" for records in other jurisdictions). The Government need not "learn of information possessed by other government agencies that have no involvement in the investigation or prosecution at issue," Pelullo, 399 F.3d at 216 (holding that the prosecutor was not obliged to seek out documents the Department of Labor held in a separate civil proceeding against the defendant).
The defendants here have not shown that HUD acted as the prosecutor's agent in this case, and the disputed information is not HUD case files developed for this investigation. Rather, the defendants seek information independent of these charges which they believe may prove relevant or helpful for independent reasons. Since this information is not part of the investigation underlying the charges against them, and HUD did not gather this information as an agent of the prosecutors, it is outside of the scope of Brady/ Giglio or Rule 16.
Therefore it is so Ordered that:
1) Defendants' motion for disclosure of Brady and Giglio material (Dockets 73 and 78) are GRANTED, as confessed, and otherwise DENIED;
2) Defendants' motion for additional discovery relating to real estate transactions and HUD/FHA policies and procedures (Docket 76) is DENIED.
DONE and ORDERED.