United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
JAMES A. BEATY, District Judge.
This matter is before the Court on a Motion to Dismiss Count One of the Second Superseding Indictment [Doc. #63] pursuant to Rule 12(b)(3) of the Federal Rules of Criminal Procedure jointly filed by Defendants Craig Stanford Eury, Jr., and Kenneth W. White (hereinafter "Defendants"), a Motion to Compel Production of the Transcript of the Grand Jury Charging Statement [Doc. #65] jointly filed by Defendants, a Motion to Suppress [Doc. #66] jointly filed by Defendants, a Motion to Strike Surplusage from the Second Superseding Indictment [Doc. #64] filed by Defendant Eury, a Motion to Strike Surplusage from the Second Superseding Indictment [Doc. #67] filed by Defendant White, a Joint Motion for Discovery [Doc. #17]filed be Defendant Eury, and a Joint Motion for Discovery [Doc. #45] joint filed by Defendants.
Defendants are named in an 87 count Indictment, which includes Count One charging Defendants with conspiracy, or aiding and abetting the same, in violation of 8 U.S.C. § 1324(a)(1)(A)(v)(I) and 18 U.S.C. §§ 371 & 2. The Court held a hearing on the above-mentioned Motions on April 16, 2015. During the hearing Defendants indicated that they did not need to address the Joint Motions for Discovery. As to the Motions to Strike Surplusage and Motion to Suppress, the Court made findings as to these during the hearing, which the Court will elaborate on below. At the conclusion of the hearing, the Court informed the parties that an Order would be forthcoming concerning its decision as to Defendants' Motion to Dismiss and Motion to Compel. For the reasons discussed herein, the Court will grant Defendants' Motion to Dismiss, and as a result, will deny Defendants' Motion to Compel as moot. All other Motions are denied as moot, as explained below.
The Second Superseding Indictment (hereinafter "Indictment") was filed against Defendants on September 30, 2014. In Count One of this Indictment, Defendants were charged with a multi-object conspiracy to defraud the United States by obstruction of the immigration laws of the United States in violation of 8 U.S.C. § 1324(a)(1)(A)(v)(I) and 18 U.S.C. §§ 371 and 2. Counts Two through Ten charge Defendant Eury with engaging in monetary transactions with the criminally derived proceeds of visa fraud and inducing aliens to enter and reside in the United States in violation of 18 U.S.C. § 1957. Counts Eleven through Sixteen charge Defendants with a mail fraud scheme and artifice to defraud the clients of International Labor Management Corporation ("ILMC"), The Labor Company ("TLC"), and North Carolina Growers Association ("NCGA") of money and property in violation of 18 U.S.C. § 1341. Counts Seventeen through Eighty-Seven charge Defendants with conducting financial transactions with the criminally derived proceeds of the mail fraud scheme and artifice to defraud in violation of 18 U.S.C. § 1957. The Motions at issue for this Opinion and Order all relate to Count One of the Indictment, the conspiracy count, which will be discussed in greater detail below.
The overall Indictment concerns violations relating to the H-2A and H-2B visa process. The H-2A and H-2B worker programs allow employers to obtain alien workers for specific temporary agricultural jobs and non-agricultural jobs respectively. Both of the programs have a specific application process, requiring that employers complete certain forms and submit such forms to the United States Citizenship and Immigration Services (USCIS). The H-2B worker program caps the number of visas at 66, 000 per fiscal year, but the H-2A program does not have such cap. Prior to January 2009, recruiters and agents were not prohibited from charging a fee to foreign workers seeking visas under these programs as a condition of an offer of H-2A and H-2B employment. In January 2009, however, the United States Department of Homeland Security set forth regulations that prohibited charging such fees as a condition of the offer of employment.
Various companies are alleged to play different roles in the Indictment. Initially, the company that was part of the original Indictment in this matter, ILMC, is a corporation founded by Defendant Eury, that was in the business of preparing and submitting petitions on behalf of client companies to the USCIS for both visa programs. Up until April 2008, Defendant Eury was the President of ILMC, and at all times relevant to the Indictment he exercised control over the management and finances of ILMC. After April 2008, the now unindicted co-conspirator, S.E.F., took on the role as President of ILMC. Harry Wicker, who was also charged in the Indictment, but later pled guilty to a portion of Count One, is also alleged to have served as a consultant for ILMC, but it is not clear during what time frame this occurred or what exactly his role was with ILMC. Another company involved in this Indictment, is TLC, which was also in the business of submitting petitions on behalf of client companies to USCIS for temporary alien workers under the visa programs. The Indictment alleges that Defendants exercised control over the finances and operations of TLC at all times relevant to the Indictment. Similar to ILMC and TLC, NCGA, was also in the business of obtaining visas. NCGA, however, was only in the business of obtaining agricultural worker visas under the H-2A program. Wicker and Defendant White were Deputy Directors of NCGA during all times relevant to the indictment, and Defendant Eury served as NCGA's Executive Director.
Another company relevant to the Indictment was Consular Solutions, Inc. ("CSI"). CSI was a Mexican corporation and was in the business of recruiting Mexican workers to work in the United States. It is alleged that Defendants exercised control of the fiances and operations of CSI at all times relevant to the Indictment. Additionally, Application Services and Administrative Program, LLC ("ASAP") is another company involved in the Indictment. It is alleged Defendants directed the incorporation of ASAP, served as or are serving as members of ASAP, and exercised control over the finances and operations of ASAP.
As stated above, Count One charges Defendants with a multi-object conspiracy. Defendants are jointly named in Object One of Count One, but only Defendant Eury is named in Objects Two through Four. The Government asserts that despite this being a multi-object conspiracy, the overarching conspiracy in Count One is to obstruct and circumvent the immigration laws of the United States. In conspiring to obstruct and circumvent the immigration laws, it is alleged that Defendant Eury and S.E.F. took part in various acts through ILMC, which included: (1) falsely petitioning for and obtaining extra H-2B visas above and beyond the actual needs of their clients for the purpose of creating pools of extra visas that they would use for their financial benefit by allowing other employers who could not obtain such visas due to the cap to bring the workers into the United States under the pretense that they would be working for the employer for which the visas had originally been approved; (2) falsely representing to the Department of Labor and USCIS that their client employers had jobs for H-2B workers in greater numbers than actually needed; (3) falsely instructing clients that they needed to petition for H-2B visas above and beyond their needs so Defendant Eury and S.E.F. could use the excess pool for their benefit; (4) charging clients based on ranges of H-2B visas sought rather than the actual numbers to encourage clients to seek more visas than they needed; and (5) directing ILMC employees to prepare false petitions for H-2A workers knowing that the need for the client was a ruse to obtain entry for alien workers in order to take H-2B employment positions. The Indictment contains numerous other instances related to Defendant Eury's and S.E.F.'s role in manipulating the visa application process by creating a pool of extra visas, which were then used for their financial benefit. All of the overt acts set forth in the Indictment relating to this manipulation by Defendant Eury and S.E.F. appear to have been accomplished between June 2006, through February 2013.
The Government additionally alleges that as part of the overarching conspiracy to obstruct and circumvent the immigration laws of the United States, Wicker and Defendants formed ASAP. The Government alleges that ASAP was formed to collect the per-worker fee from ILMC and TLC employer clients after January 2009, under the false pretense that ASAP was collecting a $99.00 per-worker fee charged by CSI in Mexico. This $99.00 fee, however, is actually alleged to have included a fifty percent (50%) mark-up so as to recoup the fees previously charged to workers, but now barred by the regulations promulgated by the United States Department of Homeland Security in January 2009. It is also alleged that Defendants directed ASAP to threaten ILMC and TLC clients with cancellation of workers if they did not pay such fees. Additionally, it is alleged that Defendants also directed NCGA to pay ASAP an $80.00 per-worker fee purportedly charged by CSI. In so doing, the Defendants concealed from NCGA and its members that they would use ASAP to convert approximately fifty percent (50%) of fees paid to ASAP by NCGA to their own benefit. It is alleged that Defendants concealed their interest in and control of TLC, ASAP, and CSI from clients by instructing S.E.F., ILMC, and TLC to represent that they were separate and autonomous entities. The overt acts set forth in the Indictment relating to the illegal fees are alleged to have occurred between 2009 and 2013.
Collectively, Defendants have filed a total of seven Motions in this case, to which the Government has responded. In addition to the parties' briefing, the parties were provided the opportunity to address the Motions at the hearing held on April 16, 2014. The Motions will be discussed in turn below.
A. Motion to Dismiss Count One of the Superseding Indictment
In their Motion to Dismiss Count One of the Superseding Indictment, Defendants argue that Count One, which charges Defendants with a multi-object conspiracy, contains at least two distinct schemes. Defendants assert that one scheme is what they label as "the recruiting fee scheme." This scheme, Defendants state, involves all Defendants and comprises Defendants alleged scheme concerning the per-worker fees paid to ASAP after such fees were prohibited by the Department of Homeland Security's regulations established in January 2009. Defendants assert that the second scheme is what they label "the immigration fraud scheme" (hereinafter "visa manipulation scheme"). This scheme, the Defendants state, involves the overt acts involving only Defendant Eury, S.E.F., and ILMC submitting allegedly false petitions on behalf ...