Free Motion to Sever Counts - District Court of Arizona - Arizona

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BLUMBERG & ASSOCIATES

Bruce E. Blumberg
BLUMBERG & ASSOCIATES
_____________________

45 West Jefferson, Suite 210 Phoenix, Arizona 85003
Office: (602) 277-6180 Fax: (602) 271- 4119

Attorney for Defendant Arizona State Bar Number 010779

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA UNITED STATES OF AMERICA, Plaintiff, vs. HARVEY SLONIKER, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) Case No: 04-CR-820-PHX-FJM DEFENDANT HARVEY SLONIKER'S MOTION TO SEVER DEFENDANTS AND COUNTS AND MEMORANDUM IN SUPPORT OF MOTION

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COMES NOW Defendant, Harvey Sloniker, by and through undersigned counsel, and respectfully moves this Honorable Court, pursuant to Rules 8(b), and 14 of the Federal Rules of Criminal Procedure, to (1) sever his trial from defendants John Desiderio and Tye Sloniker and (2) sever from this case counts 50 (conspiracy to commit loan fraud), 51 through 69 (false statements on a loan and credit application) and counts 70 through 73 (failure to account for and pay over withholding and FICA taxes from all other counts in the indictment) for the following reasons: 1. Under Rule 14(a), it is probable that co-defendants Desiderio and Tye Sloniker will put forth conflicting and antagonistic defenses to the charges in this case, generating the potential for improper inference of guilt by the jury and denying Harvey Sloniker a fair trial. a. To avoid unfair prejudice that could result from an unfair trial, Mr. Sloniker moves for an order pursuant to Rule 14(b) requiring disclosure for in camera review of any

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statements or other evidence that would tend to prove that additional severance orders may be necessary. 2. Counts 50 through 73 are not part of "the same act or transaction or the same series of acts or transactions" as the other counts in the indictment," and are therefore misjoined. Fed. R. Crim. P. 8(b).

RESPECTFULLY SUBMITTED, this 1st day of September, 2005.

BLUMBERG & ASSOCIATES

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45 West Jefferson, Suite 210 Phoenix, Arizona 85003

By:

s/Bruce E. Blumberg

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I. Memorandum in support of Harvey Sloniker's Motion for Severance Background Mr. Sloniker is charged with conspiracy to commit mail and wire fraud, and the government alleges that he devised a scheme to defraud consumers through his telemarketing corporation. The government's case will consist of witnesses and other evidence that they will present in an attempt to establish that there was some form of conspiracy to defraud the consumers, by virtue of misrepresenting to the consumers that they would receive a major credit card in exchange for payments above $200.00, as well as mailings and interstate wire communications in support of those efforts. It is also alleged that Mr. Sloniker engaged in conspiracy to commit money laundering and promotional money laundering by using proceeds from the alleged mail and wire fraud to advance the progress of the alleged mail and wire fraud and conducting financial transactions with the proceeds of the alleged mail and wire fraud for the same purpose. Rule 14 of the Federal Rule of Criminal Procedure safeguards defendants from prejudicial joinder. If a defendant demonstrates prejudice, co-defendants from the case may be severed to provide a fair trial. Joinder of Tye Sloniker ("Tye") and John Desiderio in this case would prejudice

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Mr. Sloniker under Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968), because of the potential for opposing defenses. Since a significant quantity of discovery items have not been provided to Mr. Sloniker, and because Mr. Sloniker has not had the occasion to inspect a great deal of the thousands of pages contained on the disks that have been provided, Mr. Sloniker is not sure if any other grounds for severance exist at this time. The conspiracy to commit loan fraud, false statements on loan and credit applications and tax counts are totally unrelated to this action and will hopelessly prejudice the jury against Mr. Sloniker. If counts are misjoined, the Court, pursuant to Rule 8 of the Federal Rules of Criminal Procedure, is required to sever the unrelated counts. In this case, count 50 (conspiracy to commit loan fraud against defendants Harvey Sloniker, Richard Nail and John Desiderio), counts 51-69 (false statements on loan and credit applications against defendants Harvey Sloniker, Richard Nail and John Desiderio) and counts 70-73 (failure to account for and pay over withholding and FICA taxes against defendants Harvey Sloniker and John Desiderio) are misjoined. The allegations that Mr. Sloniker conspired to submit--and knowingly made--false statements on loan and credit applications and failed to collect, account for and pay over to the I.R.S. over $220,000 of federal income and FICA taxes withheld from his employees has no rational relationship to the antecedent charges. Also, these additional counts involve a different party and demand proof of facts that have little, if anything, in common with any of the other charges. Further, the prejudicial impact of advising the jury that Mr. Sloniker committed the additional law violations, as part of the government's telemarketing fraud case, would be considerable. The ill-defined conspiracy charge that tenuously links these two sets of charges does not cure this prejudice. To avoid a violation of Rule 8, counts 50-73 should be severed from this case and tried separately. Finally, pursuant to Federal Rule of Criminal Procedure 14(b), Mr. Sloniker respectfully requests that this Court order the government to disclose, in camera, witness statements or any other withheld discovery that would bolster the request for severance on Bruton grounds, or provide additional information that supports the basis that counts 50 through 73 are unrelated to the remaining counts in the indictment. II. Argument

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A. The Court should sever Mr. Sloniker from Co-Defendants Tye Sloniker and John Desiderio. Rule 14(a) of the Federal Rules of Criminal Procedure provides that if a defendant is prejudiced by a joinder of offenses or defendants, "the court may order separate trials of counts, sever the defendants' trials, or provide any other relief that justice requires." Fed. R. Crim. P. 14(a). Severance should be granted by a District Court when "there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence." Zafiro v. United States, 506 U.S. 534, 539 (1993). The Court should sever Mr. Sloniker's trial from codefendants Tye Sloniker and John Desiderio because of the probability that they will put forth conflicting and antagonistic defenses. Codefendants have the right to severance when "their defenses are irreconcilable and mutually exclusive." U.S. v. Angwin, 271 F.3d 786, 795 (9th Cir. 2001). See also, Bruton, 391 U.S. 123, 88 S.Ct. 1620 (confrontation clause violated when statements by non-testifying codefendant implicates another defendant in the crime during a joint trial are admitted). Mutually exclusive defenses exist when "acquittal of one codefendant would necessarily call for the conviction of the other." U.S. v. Tootick, 952 F.2d 1078, 1081 (9th Cir. 1991). A Rule 14(a) severance of all of the charges against Tye Sloniker and John Desiderio should be granted. The indictment alleges that Mr. Sloniker acted as the Chief Executive Officer of Corporate Industries, an Arizona telemarketing corporation. He is also alleged to have controlled several businesses. Tye Sloniker is alleged to have functioned as a manager of these businesses, and John Desiderio is alleged to have provided accounting services to Mr. Sloniker and the businesses. The majority of the charges in this case focus on the defendants' alleged execution of a scheme to defraud over 57,000 consumers by misleading them into thinking that they could receive a credit card in exchange for payment in excess of $200.00. Also at issue is the propriety of statements made on loan and credit applications to federal reserve banks. Given the codefendants' business ties to Mr. Sloniker and the businesses, the probability of conflicting defenses is high. Both codefendants have already made statements that tend to incriminate Mr. Sloniker, and thus set the stage for the acquittal of one codefendant at the expense of the other. Since their defenses are mutually

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antagonistic, the result is an unfair trial for each of them. Under these conditions, there is a great probability that the jury will be confused and unjustly infer that the defenses themselves indicates that Mr. Sloniker, Tye Sloniker and Desiderio are guilty. Moreover, the depth of the conflicting and antagonistic defenses in the present case is not entirely known to Mr. Sloniker. Federal Rule of Criminal Procedure 14(b) provides that "[b]efore a ruling on a defendant's motion to sever, the court may order an attorney for the government to deliver to the court for in camera inspection any defendant's statement that the government intends to use as evidence." Fed. R. Crim. P. 14(b). Since Mr. Sloniker has not received all witness statements connected to this case, it is impossible to ascertain whether or not defenses put forth by the remaining defendants are antagonistic as well. For this reason, Mr. Sloniker requests that this Court require the Government to produce for in camera review any statements or other evidence tending to demonstrate that severance is necessary in this case due to Bruton or antagonistic defense issues. B. The Court should sever misjoined charges against Mr. Sloniker. Rule 8(b) of the Federal Rules of Criminal Procedure states that two or more defendants may be charged in the same indictment if the defendants are "alleged to have participated in the same act of transaction, or in the same series of acts or transactions, constituting an offense or offenses." The purpose of joinder of defendants under Rules 8(b) is to promote judicial economy and efficiency. Bruton, 391 U.S. at 132 n. 6, 88 S.Ct. at 1625. Regardless, joinder is not proper in cases that would substantially prejudice the right of the defendants to a fair trial. Id. See, e.g., United States v. Lane, 474 U.S. 438, 449 n.12 (1986) (severance is required unless the Rule 8 standards are met, "even in the absence of prejudice..."). In cases where multiple defendants are charged, Rule 8(b) governs joinder. United States v. Gentile, 495 F.2d 626, 628 n.2 (5th Cir. 1994). In this case, the indictment defies Rule 8(b) by improperly joining counts of conspiracy to commit loan fraud (count 50 against Mr. Sloniker, Nail and Desiderio); false statements on loan and credit applications (counts 51-69 against Mr. Sloniker, Nail and Desiderio); and failure to account for and pay over withholding and FICA taxes (counts 70-73 against Mr. Sloniker).

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Under Rule 8(b), a series of acts requires more than just "similar acts." United States v. Marioneaux, 514 F.2d 1244, 1248 (5th Cir. 1979). In the Ninth Circuit, whether or not separate offenses are part of a "series of acts or transactions" under Rule 8(b) rests upon whether the counts "naturally flow" from each other or fall into the category of a single conspiracy and thus have a substantial overlap in evidence. United States v. Sarkisian, 197 F.3d 966, 976 (9th Cir. 1999). The conspiracy to commit loan fraud, false statements on loan and credit applications and failure to account for and pay over withholding and FICA taxes counts in this case are misjoined because they do not "naturally flow" from the remainder of the indictment and, especially in the case of the failure to account for and pay over withholding and FICA taxes, are a separate conspiracy than the other counts alleged in the indictment. Conspiracy to Commit Loan Fraud. Count 50 charges Mr. Sloniker, Nail and Desiderio with carrying on loan and credit fraud by making false statements on loan and credit applications. This count is wholly unrelated to codefendants Tye Sloniker, Kindy Jonagan or Robert Shinn and lack any correlation with the conspiracy to commit mail and wire fraud or related charges. The government's professed proof regarding the conspiracy to commit mail and wire fraud counts has nothing to do with Mr. Sloniker and Nail's alleged submission of statements that showed their income and assets were greater than they actually were, nor whether Desiderio prepared false personal and corporate tax returns to bolster those loan and credit applications . The overlap of evidence required by Rule 8 and Sarkisian is nonexistent. False Statements on Loan and Credit Applications. Counts 51-69 charge Mr. Sloniker, Nail and Desiderio with making false statements and overvaluing property in the loan processing and approval process of select Federal Reserve banks. Again, the defendants alleged to have taken part in the mail and wire fraud conspiracy are not charged with counts 51-69, nor are they alleged to have had any role or even knowledge of these acts. Also, the indictment makes no attempt to place counts 51-69 under the umbrella of the mail and wire fraud conspiracy that stems from count 1. Instead, the indictment cryptically states that counts 51-69 were committed "for the purpose of influencing their

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actions."1 Proof of these alleged offenses without a doubt involves different acts, a different alleged conspirator (Desiderio had no role in the mail and wire fraud charges) and a different purpose than defrauding consumers through a telemarketing operation. The false statements on loan and credit applications counts (51-69) against Mr. Sloniker, Nail and Desiderio should be severed from the case against Mr. Sloniker. Failure to account for and pay over withholding and FICA taxes. Counts 70-73 only charge Mr. Sloniker with failing to collect and account for and paying over to the Internal Revenue Service federal income and FICA taxes withheld from employees. These charges serve as a paradigm for severance as well as misjoinder under Rule 8(b). They have nothing--not one iota--to do with the other charges in the indictment, and to prove these allegations, the government will be focusing not on telemarketing fraud, money laundering or even loan fraud. Instead, the proof will rest upon representations personally made by Mr. Sloniker and Mr. Sloniker alone to the I.R.S. Once again the overlap of evidence that 8(b) demands is fictional and lacks any substantial connection to the other charges in the indictment. III. Conclusion For all of the above reasons, Mr. Sloniker respectfully requests that the Court sever Mr. Sloniker from codefendants Tye Sloniker and John Desiderio pursuant to Federal Rule of Criminal Procedure 14(a); require the government to disclose for an in camera inspection any statements or other evidence that would tend to prove that additional severance orders may be necessary in this case, pursuant to Rule 14(b); and, pursuant to Rule 8(b) sever counts 50, 51-69 and 70-73 from this case.

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1

See paragraph 48 of the Indictment filed in this case on August 5, 2004.

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RESPECTFULLY SUBMITTED, this 1 st day of September, 2005.

BLUMBERG & ASSOCIATES

By:

s/ Bruce E. Blumberg

CERTIFICATE OF SERVICE
I hereby certify that on this date, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF System for filing and transmittal of a Notice of Electronic Filing to the following CM/ECF registrants: Michael Bresnehan, Rachel Hernandez, Gary Restaino, Jeanette Alvardo, Thomas Hoidal, Ivan Mathew, Gregory Parzych and the Honorable Frederick Martone.

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