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United States v. Burkhart

United States District Court, S.D. Indiana, Indianapolis Division

October 17, 2017

JAMES BURKHART (01), DANIEL BENSON (02), STEVEN GANOTE (3), and JOSHUA BURKHART aka Justin Barnes (04) Defendant.



         This matter is before the Court on a Motion to Dismiss Counts 3, 13, and 14 through 22 of the Indictment pursuant to Federal Rule of Criminal Procedure 12(b)(3)(B), filed jointly by Defendants James Burkhart (“Burkhart”), Daniel Benson (“Benson”), Steven Ganote (“Ganote”), and Joshua Burkhart a/k/a Justin Barnes (“Barnes”) (collectively, “Defendants”) (Filing No. 67). In a thirty-two count Indictment, the Defendants are charged with violating 18 U.S.C. § 1349 (conspiracy to commit mail, wire, and health care fraud), 18 U.S.C. §§ 1341 and 1343 (mail and wire fraud), 18 U.S.C. § 371 and 42 U.S.C. § 1320a-7b(b) (conspiracy to violate anti-kickback statute), and 18 U.S.C. §§ 1956(a)(1)(B)(i) and 1957 (money laundering). The Defendants ask the Court to dismiss Count 3-Wire Fraud, Count 13-Conspiracy to Violate the Anti-Kickback Statute, and Counts 14 through 22-Money Laundering, because the allegations for these Counts are not plain, concise, or definitive. For the following reasons, the Court DENIES the Defendants' Motion to Dismiss.


         Federal Rule of Criminal Procedure 12(b)(3)(B) allows a defendant to challenge the legal sufficiency of an indictment or information for lack of specificity or failure to state an offense, among other things. Rule 12(b)(3)(B) provides an avenue for defendants to seek dismissal of the indictment or dismissal of specific criminal counts. “Indictments are reviewed on a practical basis and in their entirety, rather than in a hyper-technical manner.” United States v. Smith, 230 F.3d 300, 305 (7th Cir. 2000) (citation and quotation marks omitted). “An indictment is reviewed on its face, regardless of the strength or weakness of the government's case.” United States v. White, 610 F.3d 956, 958 (7th Cir. 2010). The allegations in an indictment are accepted as true. United States v. Moore, 563 F.3d 583, 586 (7th Cir. 2009).

         An indictment “that ‘tracks' the words of a statute to state the elements of the crime is generally acceptable, and while there must be enough factual particulars so the defendant is aware of the specific conduct at issue, the presence or absence of any particular fact is not dispositive.” White, 610 F.3d at 958-59. An indictment is legally sufficient if it (1) states all the elements of the crime charged, (2) adequately informs the defendant of the nature of the charges against him so that he may prepare a defense, and (3) allows the defendant to assert the judgment as a bar to future prosecutions for the same offense. Smith, 230 F.3d at 305. To successfully challenge the sufficiency of an indictment, a defendant must demonstrate that the indictment does not satisfy one or more of these three requirements and that he will suffer prejudice from the alleged deficiency. United States v. Dooley, 578 F.3d 582, 589-90 (7th Cir. 2009). “The test for validity is not whether the indictment could have been framed in a more satisfactory manner, but whether it conforms to minimal constitutional standards.” United States v. Hausmann, 345 F.3d 952, 955 (7th Cir. 2003) (citation and quotation marks omitted).


         The Defendants argue that Counts 3, 13, and 14 through 22 of the Indictment “fall far short of pinning down the specific conduct at issue” to adequately inform them of the nature of the charges against them to allow them to prepare a defense (Filing No. 67 at 2). They explain Criminal Rule 7(c)(1) requires that an “indictment or information must [include] a plain, concise, and definite written statement of the essential facts constituting the offense charged.” Id. (quoting F.R.C.P. 7(c)(1)). The Defendants note that they have the “right to be informed of the charges against [them] and [the] right to be free from conviction without notice and without having meaningful opportunity to defend.” United States v. Vaughn, 722 F.3d 918, 925 (7th Cir. 2013). They contend that Counts 3, 13, and 14 through 22 lack sufficient factual information to allow them to prepare for trial and to assert that the results of the trial in this case bar future prosecution for the same conduct. Asserting that these Counts are not plain, concise, or definitive, the Defendants argue that the Court must dismiss them.

         In response the Government asserts the Indictment is legally proper and sufficiently detailed to inform the Defendants of the charges against them, and their argument to the contrary are meritless. The Government argues that the Defendants have acknowledged in previous motions to continue that they recognize “the nature and extent of the charges, ” (Filing No. 51 at 4), and they have been “active in gathering documentary evidence from numerous record holders for use in their defense, ” (Filing No. 60 at 4), thereby undermining the Defendants' argument that they don't understand the charges and cannot prepare a defense. The Government contends it has gone “above and beyond its obligations” in discovery, which has assisted the Defendants in preparing their defense (Filing No. 71 at 1-2).

         A. Count 3

         The Defendants assert that Count 3 (wire fraud) against Burkhart is fatally flawed because it is based on an alleged interstate telephone conversation between Burkhart and David Mazanowski (“Mazanowski”) at a time when Mazanowski was cooperating with the Government's investigation. To prove a charge of wire fraud, it must be shown that the wire communication was “in furtherance” of the scheme, citing United States v. Weimert, 819 F.3d 351, 355 (7th Cir. 2016). Pointing to United States v. Tanner, 628 F.3d 890, 906 (7th Cir. 2010) and United States v. Villasenor, 664 F.3d 673, 682 (7th Cir. 2011), The Defendants argue that a person cannot conspire with an individual who is cooperating with the Government, and a statement by an individual cooperating with the Government is not a statement by a conspirator. “Because the cooperating individual is not a conspirator, when cooperating with the government, statements by the cooperating individual are not in furtherance of the conspiracy.” (Filing No. 67 at 3.) Specifically, the Defendants assert that, because Mazanowski was cooperating with the Government in August 2015, the alleged telephone conversation between he and Burkhart could not have been in furtherance of any scheme and cannot support a wire fraud charge. They assert this is especially true because Mazanowski initiated the alleged telephone call at the Government's request and under its guidance.

         The Government contends that this argument is based on the false premise that a wire communication with a government cooperator cannot support a wire fraud charge. The Government points out that Count 3 charges wire fraud, not conspiracy, and the Defendants have incorrectly conflated conspiracy with wire fraud, so their conspiracy related cases upon which they rely are inapposite.

         “[M]ailings or telephone calls made or induced by government agents can support a mail or wire fraud conviction.” United States v. Keats, 937 F.2d 58, 64 (2d Cir. 1991); see also United States v. Anderson, 809 F.2d 1281, 1287-88 (7th Cir. 1987) (rejecting argument that a mailing initiated by government informant could not stand as the basis for a mail fraud conviction). Additionally, “courts have flatly rejected the argument that the use of a government agent in a telephone call with the defendant makes the offense of wire fraud legally impossible.” United States v. Scully, 170 F.Supp.3d 439, 461-62 (E.D.N.Y. 2016) (citing United States v. Abdallah, 840 F.Supp.2d 584, 608 (E.D.N.Y. 2012); United States v. Hammond, 598 F.2d 1008, 1010 (5th Cir. 1979); United States v. Sanders, 893 F.2d 133, 138 (7th Cir. 1990)). The Court agrees that the Defendants' argument is legally incorrect.

         The wire fraud statute, 18 U.S.C. § 1343, requires that a defendant,

devised or intend[ed] to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses . . . [and] transmit[ed] or cause[d] to be transmitted by means of wire . . . communication in interstate or foreign commerce, any writings, signs, signals, ...

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