United States District Court, D. Minnesota
H. THOMPSON AND KIMBERLY A. SVENDSEN, UNITED STATES
ATTORNEY'S OFFICE, FOR PLAINTIFF.
WILLIAM J. MAUZY AND KAITLIN EK, MAUZY LAW OFFICE PA, FOR
DEFENDANT RYAN GILBERTSON.
Patrick J. Schiltz United States District Judge
Ryan Gilbertson and Douglas Hoskins are charged with wire
fraud, securities fraud, and conspiracy to commit securities
fraud in connection with an alleged scheme to manipulate the
price of the stock of Dakota Plains Holdings, Inc. This
matter is before the Court on Gilbertson's objection to
Magistrate Judge Hildy Bowbeer's February 20, 2018 order
regarding a number of pretrial motions. In particular,
Gilbertson objects to (1) the denial of his motion for a bill
of particulars and (2) the partial denial of his motion to
compel production of materials under Brady v.
Maryland, 373 U.S. 83 (1963).
magistrate judge's ruling on nondispositive motions may
be reversed only if it is “clearly erroneous or
contrary to law.” 28 U.S.C. § 636(b)(1)(A); Fed.
R. Crim. P. 59(a). Having reviewed Judge Bowbeer's order,
the Court finds nothing clearly erroneous or contrary to law.
The order is therefore affirmed.
respect to Gilbertson's motion for a bill of particulars:
The Court agrees with Judge Bowbeer that the 24-page
superseding indictment-which contains an extensive and detailed
factual description of the alleged fraudulent scheme-is more
than sufficient to enable Gilbertson to prepare for trial.
See United States v. Beasley, 688 F.3d 523, 532 (8th
Cir. 2012) (purpose of bill of particulars is to enable the
defendant to prepare for trial, to avoid the risk of surprise
to the defendant, and to permit the defendant to plead
acquittal or conviction to bar another prosecution for the
same offense). The Court therefore affirms Judge
Bowbeer's denial of Gilbertson's motion for a bill of
respect to Gilbertson's motion to compel Brady
materials: Gilbertson seeks certain evidence in the
possession of the Securities and Exchange Commission
(“SEC”). The SEC investigated the alleged
fraudulent scheme at issue in this case and, in 2016, brought
a civil-enforcement action against Gilbertson. SEC v.
Gilbertson, No. 16-CV- 3779 (DWF/HB). That action
remains pending, although Judge Bowbeer, who is also assigned
to that case, recently stayed further depositions in that
matter until the resolution of this criminal case.
Id. ECF Nos. 103, 112.
has turned over some of its civil investigative and discovery
materials to the prosecution. The prosecution has, in turn,
either produced or agreed to produce all of those materials
to the defense. The SEC has refused, however, to turn over
its notes of untranscribed witness interviews. The Department
of Justice (“DOJ”) participated in three of those
interviews. Consequently, Judge Bowbeer found that the
prosecution has an obligation to review any documents in the
SEC's possession that arose from those three joint
interviews and produce any Brady material to the
defense. With respect to all remaining material solely in the
SEC's possession, however, Judge Bowbeer held that the
prosecution has no obligation to obtain or review it.
Gilbertson objects to this aspect of Judge Bowbeer's
Brady, “the individual prosecutor has a duty
to learn of any favorable evidence known to the others acting
on the government's behalf in the case, including the
police.” Kyles v. Whitley, 514 U.S. 419, 437
(1995). The issue here is whether the SEC “act[ed] on
the government's behalf” in this case-specifically,
whether the SEC acted on behalf of the prosecutors when it
investigated and brought civil proceedings against
Gilbertson. The parties do not dispute the relevant legal
standard: Whether the prosecution has a duty to conduct a
Brady review of materials in the possession of
another government agency depends on a fact-intensive inquiry
into the extent to which the agencies conducted a joint
investigation. See ECF No. 131 at 4
(Gilbertson's objection discussing the “joint
investigation” standard); see generally United
States v. Meregildo, 920 F.Supp.2d 434, 440-44 (S.D.N.Y.
2013) (describing various factors relevant in determining
whether there was a joint investigation).
this standard, Judge Bowbeer carefully reviewed the extent to
which the SEC and the DOJ acted jointly. As noted, Judge
Bowbeer is the magistrate judge both in this case and in the
SEC's civil-enforcement action. She is therefore
intimately familiar with both cases and the nature and extent
of each agency's cooperation with the other. Judge
Bowbeer found that the SEC and the DOJ acted jointly only in
interviewing three witnesses, and she ordered the prosecutors
to obtain the materials relevant to those joint interviews
from the SEC and conduct a Brady review. Otherwise,
Judge Bowbeer found that the SEC's and the DOJ's
investigations were separate and thus that the SEC was not
part of the prosecution team.
does not identify any factual error or other flaw in Judge
Bowbeer's analysis. He simply argues that it is unfair
for the prosecution to “tak[e] a selective approach to
obtaining information and documents [from the SEC].”
ECF No. 131 at 5. But there is no evidence that the DOJ
sought-or that the SEC produced-only evidence that would be
helpful to the prosecution. The SEC took 17 depositions, all
without the involvement of the DOJ; the SEC turned over
transcripts of all of those depositions to the
prosecution, which, in turn, produced them to defendants. The
SEC also conducted more than a dozen informal interviews, all
(save three) without the involvement of the DOJ; the SEC
refused to turn over any of its notes regarding
those interviews to the prosecution on the grounds that those
notes are protected work product. Clearly, then, this is not
a case in which the prosecution has deliberately failed to
review documents to which it otherwise has
access. Cf. United States v. Robinson,
809 F.3d 991, 996 (8th Cir. 2016) (“This attendant duty
to learn of material and favorable exculpatory or impeachment
evidence necessarily anticipates that a prosecutor will have
an opportunity to discover such evidence through the exercise
of reasonable diligence.”).
also cites two cases in which the government violated
Brady by failing to produce evidence relating to SEC
investigations. See United States v. Parker, 790
F.3d 550 (4th Cir. 2015); United States v. Mahaffy,
693 F.3d 113 (2d Cir. 2012). Both of those cases are
Mahaffy, “[t]he prosecutions were products of
close collaboration between the United States Attorney's
Office and the SEC . . . .” Mahaffy, 693 F.3d
at 122. Among other things, attorneys from both offices
worked together as trial counsel in the criminal cases and
the SEC staff attorney who conducted depositions on the
SEC's behalf was designated as an Assistant United States
Attorney. Id. More importantly, the prosecutors
possessed copies of the deposition transcripts that contained
the undisclosed Brady material. Id. at
122-23. Mahaffy is thus a straightforward
Brady case in which the prosecution failed to
disclose exculpatory evidence in its possession.
in Parker, the prosecution failed to disclose the
fact that an important government witness was the subject of
an active SEC fraud investigation. Parker, 790 F.3d
at 556-57. As in Mahaffy, the prosecutors themselves
knew of the impeaching evidence and failed to disclose ...