The opinion of the court was delivered by: Surrick, J.
Presently before the Court are Defendant Barrett Byron Staton's Motion to Compel Disclosure of Grand Jury Minutes and Testimony (ECF No. 87) and Motion to Dismiss Indictment (ECF No. 90). For the following reasons, the Motions will be denied.
On December 9, 2010, a sealed indictment was returned against Defendants Barrett Byron Staton, Matthew Staton and William Haken, Jr. (ECF No. 1.) The indictment charged the three Defendants with a "Scheme and Artifice to Defraud," which Defendants had engaged in from 2002 through 2008. Specifically, Defendants were charged with: conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (Count One); wire fraud, in violation of 18 U.S.C. § 1343 (Counts Two through Five); mail fraud, in violation of 18 U.S.C. § 1341 (Counts Six through Nine); and making a false statement in a loan application, in violation of 18 U.S.C. § 1014 (Count Ten). (Id.) The indictment was unsealed on February 3, 2011. (See ECF No. 3.) Trial was scheduled to commence on May 2, 2011. (ECF No. 28.) All three Defendants moved for a continuance of the trial date. (ECF Nos. 29-31.) Their request was granted, and trial was rescheduled to begin on July 25, 2011. (ECF No. 32.) On June 10, 2011, Defendant Barrett Byron Staton moved to have the case declared "complex" and for a continuance of the trial date. (ECF No. 35.) On June 22, 2011, we granted the motion for a continuance. Trial was rescheduled for February 21, 2012. (ECF No. 36.)
On July 21, 2011, a federal grand jury returned a First Superseding Indictment (hereinafter, "Indictment") against Defendants Barrett Byron Staton, Matthew Staton and William Haken, Jr. (Indictment, ECF No. 38.) This Indictment charged Defendants with engaging in a "Scheme and Artifice to Defraud" from January 2002 to February 2011. (Id.) Defendants were again charged with: conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349 (Count One); wire fraud, in violation of 18 U.S.C. § 1343 (Counts Two through Five); mail fraud, in violation of 18 U.S.C. § 1341 (Counts Six through Nine); and making a false statement in a loan application, in violation of 18 U.S.C. § 1014 (Count Ten). (Id.)
On February 15, 2012, Defendant Barrett Byron Staton filed a motion
for a continuance of the trial date. (ECF No. 66.) On February 22,
2012, we granted this motion. Trial was rescheduled for June 4, 2012.
(ECF No. 70.) On April 11, 2012, a hearing was held, at which
Defendant Haken entered a plea of guilty. (See ECF No. 83 (Minute
Entry).)*fn1 Defendants have filed several pretrial
discovery motions. (See ECF Nos. 87, 89, 92, 93, 95.)*fn2
Byron Staton has filed the instant Motion to Compel Disclosure of Grand Jury Minutes and Testimony (Def.'s Mot. Compel, ECF No. 87) and Motion to Dismiss Indictment (Def.'s Mot. Dismiss, ECF No. 90).*fn3
On May 17, 2012, a conference was held, at which the Government and counsel for Defendants Barrett Byron Staton and Matthew Staton discussed the exchange of discovery materials, and issues related thereto. A telephone conference, in which the Government and counsel for Defendants Barrett Byron Staton and Matthew Staton participated, was subsequently held. During that telephone conference, we granted a continuance and trial was rescheduled to commence on June 18, 2012. Defendants Barrett Byron Staton and Matthew Staton have since filed a joint motion for a continuance of the trial date. (ECF No. 107.) On June 1, 2012, this motion for a continuance was denied. (ECF No. 110.)
The Indictment alleges that from January 2002 to February 2011, Defendants intentionally devised "a scheme and artifice to defraud and to obtain money and property by means of false and fraudulent pretenses." (Indictment ¶ 1.) It alleges that as part of the scheme, Defendant Barrett Byron Staton owned and operated, sometimes through nominees, various office copier broker businesses ("Businesses"). (Id. at ¶ 2.) These Businesses were: (1) Access Business Solutions, Inc. ("ABS"); (2) First Choice Imaging, LLC ("FCI"); (3) First Choice Financial Leasing Company, Inc. ("FCFLC"); (4) NBS Document Solutions, also known as New Business Systems, LLC ("NBS"); (5) World Trade Systems ("WTS"); (6) United Office Products ("UOP"); and (7) Ultra Business Systems, LLC ("Ultra"). (Id.) Defendants Matthew Staton and Haken were employed by each of these Businesses as salesmen. (Id.) Defendant Haken was the nominee owner of FCI and FCFLC from May 2005 to March 2007. (Id.)
The Businesses served as brokers between small businesses or non-profit organizations wishing to obtain new office copiers ("Customers") and financing companies that specialized in funding office copier leases. (Id. at ¶ 3.) Defendants would have the Customers complete a copier lease and an application for financing. Defendants would present the completed and signed lease and application to the financing company. (Id.) If the Customer's credit was acceptable, the financing company would fund the lease by providing to the Business a lump sum payment for up to 125 percent of the value of the leased copier. (Id.) The financing company intended that this lump sum payment would be used by the Business primarily to fund the purchase and installation of the new copier at the Customer's place of business, and that the remainder would serve as the Business' profit. The financing company, in turn, would collect the monthly lease payments from the Customer over the term of the copier lease. (Id.)
Defendants "enticed" Customers to enter into new leases for copiers by offering package deals in which copiers could be leased at significantly lower monthly rates than what their competitors charged, and by offering other valuable discounts, such as unlimited copiers, servicing, maintenance and supplies. (Id. at ¶ 4.) Defendants also offered to "buy out" the Customers' existing copier leases, return the copier to the prior financing company, and include this cost as part of the new and much lower copier lease payment. (Id. at ¶ 5.) In addition, Defendant would alter some leases and financing applications, which the Customers had already signed, to include additional copiers or features that the Customer did not order and ultimately never received. (Id. at ¶ 6.) This practice increased the apparent value of the lease and, as a result, the lump sum payment that the Businesses would receive from the financing companies. (Id.) Ultimately, the Businesses would not pay off the Customer's prior leases, as promised. They would, instead, retain a greater portion of the lump sum payment from the financing companies for their own use. (Id. at ¶ 7.)
Defendants also induced Customers to complete new lease applications under the guise of "refinancing" their leases on existing copiers, then submit the new applications to a different financing company. (Id. at ¶ 8.) The idea behind this scheme was that the refinancing would result in a lower monthly payment. (Id.) As a result of this practice, the Businesses would receive a lump sum payment from the second financing company for the present value of the refinanced copier leases. (Id. at ¶ 9.) However, Defendants failed to pay off the first lease, and instead kept the funds it received. (Id.) As a result of this practice, the Customers became obligated to make two separate lease payments on one copier and the Businesses were able to collect two lump sum payments for each copier. (Id.) Defendants did not return the existing copiers to the financing company as promised. (Id. at ¶ 10.) Instead, Defendants stored the copiers at various locations. (Id.) Defendants would periodically close one Business and reopen it under a different business name in order to perpetuate the fraud. (Id. at ¶ 13.) In some cases, the new Business would be opened under the name of a nominee owner to hide the involvement of Defendant Barrett Byron Staton. (Id.)
In executing this fraudulent scheme, Defendants submitted fraudulent applications to financing companies electronically by facsimile or e-mail. (Id. at ¶ 11.) Defendants would receive payments from the financing companies through interstate wire transfers conducted through financial institutions, or checks ...