USA v. Avery

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
UNITED STATES OF AMERICA,
Plaintiff,
vs.
MARK J. AVERY,
Defendant.
Case No. 3:07-cr-00028-RRB
ORDER DENYING MOTION
AT DOCKET 195
I. PENDING MOTIONS
At Docket 195 Defendant Mark J. Avery filed a Motion to Dismiss (Statute of
Limitations). The Government has opposed1 and Avery has replied.2 Neither party has
requested oral argument and the Court has determined that oral argument would not
materially assist in resolving the issues presented. Accordingly, the matter is submitted for
decision on the moving and opposing papers.3
II. BACKGROUND
The history of this case is well known to the parties and is repeated here only to the
extent necessary to an understanding of this decision. On March 6, 2007, the Government
filed a sixteen-count information: five (5) counts of Wire Fraud (18 U.S.C. §§ 1343, 1346,
1 Docket 206.
2 Docket 217.
3 D.Ak. LCrR 47.1; D.Ak. LR 7.2(a)(3).
ORDER DENYING MOTION AT DOCKET 195
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18 U.S.C. § 2); ten (10) counts of Money Laundering (18 U.S.C. § 1957(a)); and one (1)
Criminal Forfeiture count (18 U.S.C. § 982(a)(1)).4 On the same date the Government filed
a fully executed Plea Agreement.5 In April 2008, this Court sentenced Avery to 102 months
imprisonment on his guilty plea to the information.6 Avery waived his right to appeal and
no appeal was filed. In February 2011 Avery sought habeas relief claiming his conviction
and sentence were invalidated by the Supreme Court decision in Skilling.7 This Court
denied Avery relief.8 Upon appeal, the Ninth Circuit, finding that the crime to which Avery
pleaded guilty was no longer a criminal offense, reversed and remanded.9
As relevant to the motions sub judice, the Ninth Circuit noted:
We note that while Avery is innocent of honest services fraud, as that
theory has been defined by the Supreme Court in Skilling, Avery's conduct
may still constitute money-or-property based wire fraud. See, e.g., United
States v. Pelisamen, 641 F.3d 399, 406 (9th Cir.2011). If this is the case,
under the terms of the plea agreement the government may be able to
reinitiate criminal proceedings against Avery under the broader money-or-
property based wire fraud prosecution theory alleged in the original
Information. If criminal proceedings are reinstituted, we leave it to the district
court on remand to determine whether Avery's misconduct could trigger
liability under core mail and wire fraud jurisprudence.10
4 Docket 1.
5 Docket 4.
6 Docket 71.
7 Skilling v. United States, 561 U.S. 358 (2010).
8 Docket 119.
9 United States v. Avery, 719 F.3d 1080 (9th Cir. 2013).
10 Id., 719 F.3d at 1085 n.3.
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It further noted:
Because our certificate of appealability is limited to evaluating whether
Avery's habeas claim attacking the basis for his honest services fraud
conviction was procedurally defaulted, we leave it to the district court on
remand to determine what consequences might follow issuance of the writ
granting relief under the honest services fraud theory, should the government
elect to continue prosecuting this case rather than dismissing the
Information.11
Upon remand the Government sought and the Grand Jury re-indicted Avery on
fifteen (15) counts: five (5) counts of wire fraud (18 U.S.C. §§ 2, 1343); and ten (10) counts
of money laundering (18 U.S.C. §§ 2, 1957(a)) on October 17, 2013.12 It is this re-
indictment that Avery seeks be dismissed.
III. ISSUE PRESENTED.
Whether Avery’s re-indictment is barred by the applicable five-year limitation period,
18 U.S.C. § 3282.
IV. DISCUSSION
It is undisputed that the original information was timely. It is also undisputed that
more than five years lapsed between the time Avery committed the offenses (August 16,
2006) and the current indictment was returned (October 17, 2013). The issue before this
Court is whether or not the date governing when the limitations period stopped running was
the date of the initial information (March 6, 2007) or the date of the re-indictment
(October 17, 2013). If the former, Avery is entitled to dismissal; if the later he is not.
11 Id., at 1086 n.5.
12 Docket 172.
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Initially, the Court notes that 18 U.S.C. § 3296 is inapplicable. That section, by its
express terms, deals solely with counts that were dismissed as a result of a plea
agreement. In this case, no counts were dismissed. Avery entered a guilty plea to all fifteen
counts on the information. Likewise, Avery’s argument that the government abandoned
prosecution of the pecuniary fraud charge fails.13 Consequently, the issue before the Court
at this point is whether the superseding indictment in this case relates back to the original
information.
The well established rule in this Circuit is that an indictment tolls the statute of
limitations as to all charges contained therein.14 “A superseding indictment brought after
the statute of limitations has expired is valid so long as the original indictment is still
pending and was timely and the superseding indictment does not broaden or substantially
amend the original charges.”15 Furthermore, the Ninth Circuit noted that the government
13 Avery’s reliance on United States v. Gibson, 490 F.3d 604 (7th Cir. 2007);
United States v. Midgley, 142 F.3d 174 (3d Cir. 1998); United States v. Podde, 105 F.3d
813 (2d Cir. 1997); United States v. McCreary-Redd, 628 F. Supp.2d 764 (E. D. Tenn.
2007) aff’d, 407 F. App’x 861 (6th Cir. 2010); and Ricks v. United States, 921 F. Supp.2d
501 (E. D. N. C. 2013) is misplaced. In each of those cases the government sought to
reinstate charges that had been dismissed pursuant to a plea agreement that was later
vacated.
14 United States v. Hickey, 580 F.3d 922, 929 (9th Cir. 2009) (citing United
States v. Clawson, 104 F.3d 250, 250–51 (9th Cir. 1996); see United States v. Pacheco,
912 F.2d 297, 305 (9th Cir. 1990) (“[a]n original indictment remains pending until it is
dismissed . . ..”).
15 Hickey, supra (quoting United States v. Italiano, 894 F.2d 1280, 1282 (11th
Cir. 1990) (internal quotation marks omitted)).
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may elect to proceed on either the earlier indictment or the most recently returned
indictment.16
The central question presented herein is whether or not Avery was on fair notice of
the charges.17
Notice to the defendant is the central policy underlying the statutes of
limitation. If the allegations and charges are substantially the same in the old
and new indictments, the assumption is that the defendant has been placed
on notice of the charges against him. That is, he knows that he will be called
to account for certain activities and should prepare a defense.18
In his motion, Avery raises several arguments. Contrary to Avery’s argument, the
charges against him in the most recent indictment do not expand the charges made in the
original information. Indeed, if anything, consistent with the decision of the Ninth Circuit,
the most recent indictment reduces the charges.
Avery’s alternative argument that the additional facts asserted in the current
indictment broaden the charges also fails. The original information alleged that Avery had
defrauded the Trust and May Smith, but did not name the trustees. Avery argues that
adding an allegation that he defrauded the other two trustees of the May Smith Trust
broadens the charges. The Court disagrees.
16 Id. at 930 (citing United States v. Walker, 363 F.3d 711, 715 (8th Cir. 2004);
United States v. Vavlitis, 9 F.3d 206, 209 (1st Cir. 1993); United States v. Bowen, 946 F.2d
734, 736–37 (10th Cir. 1991); United States v. Drasen, 845 F.3d 731, 732 n.2 (7th Cir.
1988); United States v. Stricklin. 591 F.2d 1112, 1116 n.1 (5th Cir. 1979); United States
v. Cerilli, 558 F.2d 697, 700 n.3 (3d Cir. 1977)).
17 Id. at 929.
18 Pacheco, 912 F.2d at 305 (quoting Italiano, 894 F.2d at 1283) (quoted with
approval in Hickey, 580 F.3d at 929).
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To determine whether a superseding indictment substantially
broadens or amends a pending timely indictment, . . . it is appropriate to
consider whether the additional pleadings allege violations of a different
statute, contain different elements, rely on different evidence, or expose the
defendant to a potentially greater sentence.19
Avery contends that the ordinal information did provide sufficient notice that he would be
called upon to defend against allegations that he misled the trustees.
The fatal flaw in Avery’s position is that it is both unexplained and inexplicable how,
to the extent his acts defrauded the Trust itself and its beneficiary, those acts did not also
defraud his co-trustees. It is logical to assume that, because a trust acts through its
trustees, it requires no evidence to establish fraud on the co-trustees in addition to that
required to establish fraud on the Trust itself and its beneficiary, whether the fraud be
based upon commission or omission.20
Avery’s argument that the government initially instituted solely an honest services
fraud charge overlooks the implicit, if not explicit, holding of the Ninth Circuit to the
contrary. While it is true that the Ninth Circuit found that the plea agreement and colloquy
were limited to the “honest services” charge,21 as noted above, it quite explicitly did not so
19 United States v. Liu, 731 F.3d 982, 996–97 (9th Cir. 2013) (quoting United
States v. Yielding, 657 F.3d 688, 704 (8th Cir. 2011) (internal quotation marks omitted)).
20 This assumes that the allegations extend to the co-trustees in their capacities
as such, not in their individual capacities. Should the Government seek to extend the
charges to the co-trustees in their individual capacities, that issue may be raised and
addressed at trial.
21 Avery, 719 F.3d at 1084.
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find with respect to the information. The charge Avery pled to is separate and independent
from any additional charges alleged in the information.22
The Court has considered the other arguments raised by Avery and finds them to
be unpersuasive.
V. ORDER
Accordingly, the Motion to Dismiss (Statute of Limitations) at Docket 195 is
DENIED.
IT IS SO ORDERED this 2nd day of October, 2014.
S/ RALPH R. BEISTLINE
UNITED STATES DISTRICT JUDGE
22 Much, if not most, of Avery’s argument focuses on the scope of the plea
agreement and colloquy. That Avery’s plea was limited to the “honest services” charge in
the information is settled and no longer an issue in contention.
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