United States District Court, M.D. North Carolina
MEMORANDUM OPINION AND ORDER
OSTEEN, JR., DISTRICT JUDGE
court notes that a number of motions remain pending on the
docket. Additionally, with respect to motions which have been
previously denied, this court finds it appropriate, sua
sponte, to file a written order addressing those to either
clarify this court's rulings from the bench or clarify
the record for purposes of the trial scheduled to begin on
April 30, 2018.
Motion to Dismiss (Doc. 52)
Shannon Drake (“Drake”) filed a Motion to Dismiss
the Superseding Indictment for Insufficient Allegations.
(Doc. 52.) That motion was filed prior to the return of a
Superseding Indictment, (Doc. 85), which is currently the
relevant indictment in this case. As a result, Drake's
motion to dismiss, (Doc. 52), will be denied as moot.
Motion to Quash Subpoenas (Docs. 126, 127)
court previously addressed these motions in part during the
course of a November 9, 2017 hearing on this matter. With
respect to Motion to Quash Subpoenas Issued to James Medford
by the United States and Ronald Keith Earnest, (Doc. 127),
Mr. Medford did appear, (Tr. of Nov. 9, 2017 Hr'g (Doc.
135) at 20). The parties were permitted to interview Mr.
Medford and proffer to the court any relevant information
with respect to his potential testimony and the objection to
his appearance raised in the motion to quash. (Id.
at 22-24.) As a result of the agreed-upon proffer and the
information tendered to the court, this court finds the
motion to quash, (Doc. 127), should be denied as moot.
remaining motion to quash addressed the subpoenas to
individuals requesting testimony and documents. (Doc. 126.)
As to the requested testimony, this court overruled the
objections contained in the motion to quash and permitted the
testimony of the individuals subject to any objections at
that time from interested parties, including GrandSouth Bank
(the “Bank”) and Smith Moore Leatherwood
(“Smith Moore”). (See generally Tr. of
Nov. 9, 2017 Hr'g (Doc. 135).) That testimony is now
completed under the procedure outlined herein, and this court
finds the motion to quash, (Doc. 126), relating to testimony
of individuals should be denied.
motion to quash, (Doc. 126), also objected to the production
of certain records. The objection to the subpoenas as overly
broad or unduly burdensome is overruled. The objection to
Smith Moore's invoices and the entries contained therein
is overruled for the reasons outlined previously; those
invoices have been disclosed. As to the objection to
disclosure of any remaining documents as protected under the
attorney-client privilege, that objection is sustained as
this court has found those documents subject to an
attorney-client privilege existing between the Bank, Drake,
and Smith Moore. (Doc. 266.) As a result, those documents may
not be disclosed by Smith Moore pursuant to the subpoenas
absent the consent of the Bank and Drake. Any further issues
relating to disclosure will have to be resolved by and
between the United States, Drake and her counsel, the Bank,
and the Bank's counsel, Nexsen Pruet. As a result, this
court finds that Smith Moore's motion to quash should be
granted in part as to any further disclosure of records
except as may be required by the Bank and Drake.
Motions to Produce (Docs. 143, 218)
Ronald Earnest (“Earnest”) has filed a motion to
produce documents, (Doc. 143), seeking production of IRS,
FBI, and FDIC Case Reports, (id. at 1). While this
court does not fully agree with the suggested conclusions
that might be reached from an IRS Memo completed on October
27, 2017, (Def. Earnest's Br. in Supp. of Mot. to Produce
Documents, Ex. 1, Memorandum of Conversation (Doc. 144-1) at
1-2), this court finds the requested discovery overly broad
and inclusive of matters and documents not required to be
disclosed, see, e.g., Fed. R. Crim. P. 16(a)(2)
(“[T]his rule does not authorize the discovery or
inspection of reports, memoranda, or other internal
government documents made by an attorney for the government
or other government agent . . . .”). For this reason,
Earnest's motion, (Doc. 143), will be denied.
Defendant Drake's motion to compel discovery, (Doc. 218),
is a request for production that is also overly broad and
inclusive of records not generally subject to disclosure.
Furthermore, as this court has found that Drake did at least
meet the definition of the term “target” in 2013,
the production of additional records on that subject is moot.
Drake's motion, (Doc. 218), will therefore be denied.
Government Motions to Quash (Docs. 192,
motions by the Government to quash certain subpoenas were
addressed in open court prior to the hearings held on
February 8, 2018 and on March 7, 2018. In summary, with
respect to the objection to certain testimony lodged by the
Government based upon the Government's regulations
establishing the circumstances under which a federal employee
may be compelled to testify or produce evidence as set forth
in United States ex rel. Touhy v. Ragen,
340 U.S. 462 (1951). During the course of these two hearings,
this court permitted the calling of the Government witnesses
but limited the testimony to those matters relevant to the
limited purposes of the hearing. (Tr. of Mar. 7, 2018
Hr'g (Doc. 248) at 19.) As a result, this court granted
in part and denied in part the motions to quash for reasons
more fully addressed on the record.
Motions to Dismiss - Multiplicity (Docs. 141, 154, 161,
Earnest filed a Motion to Dismiss Counts Three through
Fourteen Based on Multiplicity. (Doc. 141.) Defendants Robert
Taylor (“Taylor”) and Drake joined in that
motion. (Docs. 154, 168.) Following a hearing on March 8,
2018, this court denied the motions as filed pretrial, but
without prejudice to further motion following the
presentation of evidence. (Tr. of Mar. 8, 2018 Hr'g (Doc.
249) at 35-36.) In summary, this court is unable to
determine, pretrial, whether the separately-charged counts
were “planned or contemplated together” or
whether they are “chronologically and substantively
independent from the other acts charged as the scheme.”
See, e.g., United States v. Colton, 231
F.3d 890, 909 (4th Cir. 2000).
Drake's motion alleging duplicity and the insufficiency
of the pleadings in the Superseding Indictment, (Doc. 161),
was also denied, (Tr. ...