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United States v. Rudolph

United States District Court, D. Nevada

March 25, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
CRAIG RUDOLPH, Defendant.

ORDER (Mot. Sever-Dkt. #83).

PEGGY A. LEEN, Magistrate Judge.

Before the court is Defendant Craig Rudolph's ("Rudolph") Motion for Severance (Dkt. #83). The court has considered the motion and the United States' Response (Dkt. #98).

BACKGROUND

Rudolph is charged in an Indictment (Dkt. #1) returned December 17, 2014, with conspiracy in violation of 18 U.S.C. § 1349, and thirty-one counts of wire fraud in violation of 18 U.S.C. § 1343. The indictment alleges that Rudolph and his co-Defendants engaged in a false and fraudulent telemarketing scheme by offering to help small business owners obtain and attempt to obtain grants from public and private entities. The Defendants allegedly charged a fee for their services and knowingly made materially false and fraudulent representations and promises to induce business owners to pay their fees. The indictment alleges the conspiracy was carried out between 2007 and 2010, and that the Defendants organized and operating four telemarketing companies-Small Business Funding Co., Inc., Company Funds, Inc., Foundation Research, Inc., and Silver State Holding Company. Rudolph is alleged to have joined Foundation Research as a reloader in 2009, and left in June 2010.

Rudolph seeks to sever the trial of his case from the trial of his co-Defendants on the grounds his defense is based upon antagonistic mutually exclusive defenses with Bausch and the other co-Defendants. Specifically, Rudolph claims that he is connected to his multiple co-Defendants and multiple charges in this case in only a very minor way. His defense will be that once he became aware that Bausch and Rodriques and other employees made extravagant promises to customers of his employer, he withdrew from further involvement by quitting his job. Withdrawal from the conspiracy before committing any illegal acts will likely be antagonistic to the defenses of the other co-Defendants who may have continued in a criminal enterprise. Rudolph is also concerned that he will be faced with statements from other co-Defendants. He cites Krutelwich v. United States, 336 U.S. 440, 445 (1949) for the proposition that a co-Defendant in a conspiracy trial "occupies an uneasy seat." He acknowledges that in Zafiro v. United States, 506 U.S. 334 (1993), the Supreme Court held that severance is not required in a case with multiple defendants with mutually exclusive defenses. However, Zafiro also found that a severance should be granted if there is a serious risk that a joint trial will compromise a specific right of a properly joined defendant or prevent a jury from making a reliable judgment about guilt or innocence. In this case, it is unfair to require individuals who may have only minimal guilt to participate in a joint trial. It gives the government a tactical advantage which is unfair and creates due process concerns for minimally involved defendants such as Rudolph.

The government opposes the motion arguing Rudolph has not met his burden of establishing an antagonistic defense that requires severance. The indictment alleges that the Defendants assume various roles in the fraudulent telemarketing scheme that targeted small business owners. Some of the Defendants acted as leaders and organizers. Some were managers and some were sales people. The indictment alleges that there were two categories of sales people-those who solicited victims to hire the telemarketer companies to perform purported services, and those who later solicited victims to pay for additional purported services. The second category of sales people were known as "reloaders". The indictment alleges that Rudolph was a reloader and knowingly made false statements to customers, participating in the scheme from 2009 to June 2010. Thus, the government disputes that he had only a minor connection to the fraudulent scheme.

The government argues that joinder of Defendants is almost always proper where proof of one conspiracy encompasses all of the Defendants. To obtain severance under Fed. R. Crim. P. 14, a defendant must show clear, manifest or undue prejudice from a joint trial. The Supreme Court has held that when Defendants are properly joined for trial under Rule 8(b), a district judge should grant a severance under Rule 14 only if there is a serious risk that a joint trial would compromise a specific right of one of the Defendants, or prevent the jury from making a reliable judgment about guilt or innocence. The Supreme Court has also held that a defendant is not entitled to severance because he would have a better chance of acquittal if tried separately. The Ninth Circuit has held that antagonistic defenses between Defendants are insufficient. In this case, Rudolph has not come close to meeting his heavy burden. He has not identified one or more defenses of his co-Defenses that are antagonistic to his own, or that his defenses are irreconcilable and mutually exclusive "such that a jury would necessarily disbelieve the court of his defense if it believes the court of the other defense."

The opposition did not address Rudolf's arguments a joint trial may implicate Rudolph's rights under Bruton v. United States, ). 391 U.S. 123 (1968).

DISCUSSION

I. Federal Rule of Criminal Procedure 8(a) (Joinder).

Rule 8 of the Federal Rules of Criminal Procedure permits joinder of offenses or defendants in the same criminal indictment. Rule 8(a) allows for joinder of multiple offenses against a single defendant if the offenses are: (a) of the same or similar character; (b) based on the same act or transaction; or (c) connected with or constituting parts of a common scheme or plan. Fed. R. Crim. P. 8(a). Rule 8 has been broadly construed in favor of joinder because joint trials conserve government funds, minimize inconvenience to witnesses and public authorities, and avoid delays in bringing a defendant to trial. See United States v. Lane, 474 U.S. 438, 449 (1986); United States v. Jawara, 474 F.3d 565, 572 (9th Cir. 2006) (citing United States v. Friedman, 445 F.2d 1076, 1082 (9th Cir. 1971)). Misjoinder of charges under Rule 8(a) is a question of law reviewed de novo. Id. (citing United States v. Terry, 911 F.2d 272, 276 (9th Cir. 1990)).

Generally, a valid basis for joinder must be discernible from the face of the indictment. See Jawara, 474 F.3d at 572 (citing Terry, 911 F.2d at 276, and United States v. VonWillie, 59 F.3d 922, 929 (9th Cir. 1995)). Mere factual similarity between the events is not a sufficient basis for joinder. United States v. Vasquez-Velasco, 15 F.3d 833, 843 (9th Cir. 1994) (interpreting Rule 8(b), which governs joinder of two or more defendants in the same indictment). However, the term "transaction" is interpreted flexibly, and determining whether a "series" exists depends on whether there is a "logical relationship" between the transactions. Id. "A logical relationship is typically shown by the existence of a common plan, scheme, or conspiracy." Id. at 844 (internal citations omitted). A logical relationship may also be shown if the common activity constitutes a substantial portion of the proof of the joined charges. Id.

Rudolph does not claim that the indictment fails to comply with Rule 8(a) or that he was misjoined with his co-Defendants in the indictment. Rather, he ...


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