UNITED STATES DISTRICT COURTDISTRICT OF MASSACHUSETTS

) ORAL ARGUMENT ) REQUESTED

UNITED STATES OF AMERICA ) )

v. ) CRIMINAL NO. 08-10251 JLT )

CAROLYN KRAVETZ AND )BORIS LEVITIN ) 18 U.S.C. § 1341

Defendants. ) (Mail Fraud) ) 26 U.S.C. § 7206(1) ) (Subscribing a False Tax Return)

)

GOVERNMENT'S MEMORANDUM IN OPPOSITION TO DEFENDANT BORISLEVITIN’S PRETRIAL MOTIONS

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TABLE OF CONTENTS

TABLE OF AUTHORITIES.....................................................................................................ii

PRELIMINARY STATEMENT................................................................................................1

BACKGROUND.......................................................................................................................2

ANALYSIS................................................................................................................................3

I. The Indictment Is Sufficiently Particular So As To Inform Defendant of the Nature of the Charges and

Enable Him To Plead Double Jeopardy in the Future........................................3

II. The Indictment Properly Alleges a Violation of 18 U.S.C. § 1341................................................................................................6

A. The Facts Alleged, if Proven, Constitute Mail Fraud .............................................................................................6

B. The Indictment Properly Alleges the Elementsof Intent and Materiality........................................................................10

III. Levitin Has Failed To Make a Strong Showing of Prejudice That Would Result From a Joint Trial..............................................12

IV. The Court Should Uphold the Magistrate Court’sOrder Requiring Disclosure of the Defendant’sRule 17(c) Subpoenas.......................................................................................14

CONCLUSION.........................................................................................................................16

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TABLE OF AUTHORITIES

CASES Page

Hamling v. United States, 418 U.S. 87 (1974)............................................................................3

Ranke v. United States, 873 F.2d 1033 (7th Cir. 1989)...........................................................7,8

United States v. Ail, No. CR 05-325-RE, 2007 WL 1229415 (D. Or. April 24, 2007)...............................................................................15

United States v. Allard, 864 F.2d 248 (1st Cir. 1989).................................................................4

United States v. Barker Steel Co., 985 F.2d 1123 (1st Cir. 1993)...............................................3

United States v. Beckford, 964 F. Supp. 1010 (E.D. Va. 1997)................................................15

United States v. Biaggi, 909 F.2d 662 (2d Cir. 1990).................................................................8

United States v. Black, 129 S. Ct. 2379 (2009)...........................................................................9

United States v. Brown, 295 F.3d 152 (1st Cir. 2002)................................................................3

United States v. Caldwell, 302 F.3d 399 (5th Cir. 2002).....................................................11,12

United States v. Decologero, No. CRIM 01-10373RWZ, 2006 WL 83471 (D. Mass. Jan. 13, 2006).................................................................................15

United States v. Diamont, No. 05-cr-10154, Memorandum (D. Mass. Nov. 22, 2005)..............................................................................15,16

United States v. Doherty, 867 F.2d 47 (1st Cir. 1989)................................................................8

United States v. Dray, 901 F.2d 1132 (1st Cir. 1990).................................................................5

United States v. Finn, 919 F. Supp. 1305 (D. Minn. 1995)....................................................14,15

United States v. Flores-Rivera, 56 F.3d 319 (1st Cir. 1995).....................................................13

United States v. Giampa, No. S 92 Cr. 437, 1992 WL 296440 (S.D.N.Y. Oct. 7, 1992)................................................................................15

United States v. Gobbi, 471 F.3d 302 (1st Cir. 2006).................................................................5

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United States v. Hallock, 941 F.2d 36 (1st Cir. 1991)................................................................6

United States v. Hart, 826 F. Supp. 380 (D. Colo. 1993)..........................................................15

United States v. Horton, 847 F.2d 313 (6th Cir. 1988)...............................................................7

United States v. Kerkman, 866 F.2d 877 (6th Cir. 1989)............................................................8

United States v. LaRouche Campaign, 841 F.2d 1176 (1st Cir. 1988)......................................14

United States v. Martin, 228 F.3d 1 (1st Cir. 2000)....................................................................9

United States v. McLaughlin, 957 F.2d 12 (1st Cir. 1992)........................................................13

United States v. Nachamie, 91 F. Supp. 2d 552 (S.D.N.Y. 2000).............................................15

United States v. Nixon, 418 U.S. 683 (1974).......................................................................14,16

United States v. Paiva, 892 F.2d 148 (1st Cir. 1989)..................................................................6

United States v. Peña-Lora, 225 F.3d 17 (1st Cir. 2000)...........................................................13

United States v. Peterson, 196 F.R.D. 361 (D.S.D. 2000).........................................................14

United States v. Rainieri, 670 F.2d 702 (7th Cir. 1982)............................................................15

United States v. Reeder, 170 F.3d 93 (1st Cir. 1999)..................................................................5

United States v. Rico Indus., Inc., 854 F.2d 710 (5th Cir. 1988).................................................8

United States v. Rosen, 130 F.3d 5 (1st Cir. 1997)............................................................8,11,12

United States v. Rybicki, 354 F.3d 124 (2nd Cir. 2003).............................................................9

United States v. Sepulveda, 15 F.3d 1161 (1st Cir. 1993).........................................................11

United States v. Serafino, 281 F.3d 327 (1st Cir. 2002)..............................................................5

United States v. Shyres, 898 F.2d 647 (8th Cir. 1990).............................................................8,9

United States v. Smolar, 557 F.2d 13 (1st Circuit 1977)..........................................................5,6

United States v. Sorich, 523 F.3d 702 (7th Cir. 2008)................................................................9

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United States v. Stewart, No. Crim. A. 96-583, 1997 WL 103700 (E.D. Pa. March 4, 1997).............................................................................14

United States v. Tomasetta, 429 F.2d 978 (1st Cir. 1970)..........................................................4

United States v. Urciuoli, 513 F.3d 290 (1st Cir. 2008).............................................................9

United States v. Urlacher, 136 F.R.D. 550 (W.D.N.Y. 1991)...................................................15

United States v. Vega Molina, 407 F.3d 511 (1st Cir. 2005)....................................................13

United States v. Welch, 327 F.3d 1081 (10th Cir. 2003)..........................................................11

United States v. Yefsky, 994 F.2d 885 (1st Cir. 1993).......................................................7,9,10

United States v. Zafiro, 506 U.S. 534 (1993).......................................................................12,13

STATUTES AND RULES

Fed. R. Crim. P. 7........................................................................................................................3

Fed. R. Crim. P. 14....................................................................................................................12

Fed. R. Crim. P. 17..........................................................................................................14,15,16

18 U.S.C. § 2............................................................................................................................1,2

18 U.S.C. § 1341 ...............................................................................................................passim

18 U.S.C. § 1346.........................................................................................................................9

26 U.S.C. § 7206(1).....................................................................................................................2

PRELIMINARY STATEMENT

Defendants Boris Levitin and Carolyn Kravetz were indicted by a grand jury under 18

U.S.C. §§ 1341 and 2 for their alleged participation in an insider/outsider kickback scheme in

which Kravetz authorized payments by her employer on Levitin’s invoices – many of which

were issued for work never performed – in exchange for a kickback of half the proceeds amassed

by Levitin. Through this scheme, the defendants split a total of $396,875 from Kravetz’s

employer. Levitin has now moved to dismiss the indictment (the “Indictment”), primarily

arguing that the charging instrument is too vague and also fails to state a cognizable violation of

the mail fraud statute.

The description of the defendants’ mail fraud scheme in the Indictment is more than

sufficient to afford notice to Levitin of exactly the conduct and crimes with which he has been

charged. Not only does the charging document provide the elements of the charged offense, but

it offers a detailed explanation of the execution of the scheme, including the name of the

victimized company and specific dates and amounts of both the checks which were issued to

Levitin’s company as a result of his invoices, and the checks by which Levitin split the proceeds

with his co-defendant. It strains credulity to claim that this level of detail nonetheless fails to

inform the defendant of what he has been charged and, in fact, Judge Sorokin has already held

that the Indictment is sufficient in this regard.

The defendant’s second attack on the Indictment – that it does not allege a cognizable

violation of the mail fraud statute – is easily refuted by review of the myriad cases which have

upheld mail and wire fraud convictions in similar factual circumstances. In case after case,

under several applicable theories, defendants who engaged in schemes to defraud in which they

kicked back a portion of their proceeds to an accomplice inside the company from which those

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proceeds came have been convicted under 18 U.S.C. § 1341. If the Indictment’s allegations are

proven at trial, there can be little question that the defendants will have been proven guilty of

mail fraud.

The defendant’s final two motions are similarly without merit. The defendant moves to

sever his trial from that of Kravetz’s on the basis of “irreconcilable defenses,” arguing that a

joint trial may impede him from introducing evidence of Kravetz’s prior bad acts. Needless to

say, this argument does not come close to meeting the defendant’s heavy burden of rebutting the

presumption favoring joint trials. Finally, Levitin’s motion to reverse Judge Sorokin’s ruling

that he must turn over to the government Rule 17(c) subpoenas that he has secured through an ex

parte process fails on its face, as there is no good reason for those subpoenas not to be disclosed.

BACKGROUND

On August 28, 2008, the grand jury returned the eight count Indictment, charging the

defendants Kravetz and Levitin with six counts each of mail fraud under 18 U.S.C. §§ 1341 and

2 and additionally charging Kravetz with two counts of subscribing a false tax return under 26

U.S.C. § 7206(1). The Indictment alleges that the two defendants engaged in a classic

insider/outsider kickback scheme to defraud. Specifically, Kravetz, who from August 2004 to

October 2005 served as the Director of External Communications for Dunkin’ Brands

Incorporated (“DBI”), came to an agreement with her old college friend, Levitin, to direct DBI

business to him in exchange for a kickback of half of the proceeds Levitin collected. And so,

beginning in August 2004, and continuing through October 2005, Levitin submitted directly to

Kravetz fifteen invoices for purported projects, which she duly authorized, thus causing her

employer to issue checks to Levitin, paying his invoices in full. With the exception of one

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project, these authorizations and payments occurred even though Levitin failed to complete the

projects for which he submitted invoices; indeed, he did not perform any work whatsoever on

twelve of them. What he did do, after receiving the DBI checks through the U.S. mails, was kick

back exactly half of the proceeds to Kravetz. So, Kravetz had DBI issue checks to Levitin in the

total amount of $396,875, and Levitin (doing business as Luminophore Inc.), subsequent to each

payment, issued checks to Kravetz totaling $198,437.50.

ANALYSIS

Defendant’s primary bases for moving to dismiss the Indictment are that the charging

instrument is impermissibly vague and that it fails to charge a “cognizable violation” of the mail

fraud statute. (Memorandum of Law in Support of Defendant Boris Levitin’s Pretrial Motions

(“Def. Mem.”) at 9.) However, even a cursory review of the Indictment reveals that it is neither

too vague nor lacking in its allegation of a violation of 18 U.S.C. § 1341.

I. The Indictment Is Sufficiently Particular So As To Inform Defendant of theNature of the Charges and Enable Him To Plead Double Jeopardy In the Future.

Federal Rule of Criminal Procedure 7(c) governs the contents of an indictment, stating

that it must be “a plain, concise, and definite written statement of the essential facts constituting

the offense charged . . . .” Fed. R. Crim. P. 7(c)(1). The Supreme Court and First Circuit have

held that an indictment is sufficient if it “‘first, contains the elements of the offense charged and

fairly informs a defendant of the charge against which he must defend, and, second, enables him

to plead an acquittal or conviction in bar of future prosecutions for the same offense.’” United

States v. Barker Steel Co., 985 F.2d 1123, 1126 (1st Cir. 1993) (quoting Hamling v. United

States, 418 U.S. 87, 117 (1974)). Notice to the defendant is the touchstone of the inquiry, see

United States v. Brown, 295 F.3d 152, 154-55 (1st Cir. 2002); the “test for sufficiency . . . is not

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whether, in hindsight, the indictment or information could have been more complete . . . but

rather whether it fairly identifies and describes the offense.” United States v. Allard, 864 F.2d

248, 250 (1st Cir. 1989) (citations omitted).

Here, there is no question that the Indictment gives notice of, and fairly describes, the

offense being charged. Not only does it contain each of the elements for the offense of mail

fraud, but it contains sections entitled “The Scheme to Defraud” and “Execution of the Scheme,”

which inform the defendant Levitin of what the scheme was and how it was executed, the

number of “projects” for which he submitted invoices to DBI, the dates and amounts of the

checks issued to him by DBI in payment for these invoices, and the dates and amounts of the

checks with which he kicked back half of the proceeds to his cohort, Kravetz. These facts are

more than ample to apprise the defendant of the conduct for which he has been charged; it defies

belief that he would be unable to state a case for double jeopardy if he were charged in the future

with a crime for his conduct relating to the “projects” for which he invoiced DBI and

subsequently sent kickbacks to Kravetz.

Indeed, the First Circuit case cited by the defendant as an example of an impermissibly

vague indictment plainly illustrates the sufficiency of the instant Indictment. In United States v.

Tomasetta, 429 F.2d 978 (1st Cir. 1970), the First Circuit held that an indictment charging

extortionate collection was insufficient when it failed to name the victim, locate the offense with

specificity, and specify the means by which the alleged threats were communicated. Tomasetta,

429 F.2d at 979. The court noted that each of these omissions alone would not necessarily be

fatal to the indictment but, “when taken together, made it unfair to require the defendant to

answer this charge.” Id. at 980-81. The bare-bones indictment described in Tomasetta stands in

1 In this regard, defendant’s citation of United States v. Smolar, 557 F.2d 13 (1st Circuit 1977) isinapposite. That case involved an instruction by the district court to the jury which had the effect ofremoving a crucial allegation from the indictment, thus transforming the offense which went to the juryinto a “significantly different offense from the one charged in the indictment.” Smolar, 557 F.2d at 18.

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stark contrast to the Indictment in the case at bar, which includes details such as the victim’s

identity and the specific checks through which the kickback scheme was effected by the

defendants. Moreover, it bears noting that the defendant has gained further information

regarding the nature of the charges in this case through the government’s discovery, which has

included all grand jury transcripts, the FBI’s interview memoranda, and subpoenaed bank

records.

As part of his argument that the Indictment’s vagueness estops Levitin from presenting a

defense, the defendant seems to require that the Indictment present him with the theory on which

the facts alleged will establish mail fraud. (Def. Mem. at 3.) Defendant’s apparent demand that

the government identify and stick with one theory of fraud for trial is a novel one indeed. It is

beyond cavil that the jury can be – and routinely is – instructed on more than one theory under

which the defendant’s conduct can constitute a crime. See, e.g., United States v. Gobbi, 471

F.3d 302, 309 (1st Cir. 2006); United States v. Serafino, 281 F.3d 327, 332 n.5 (1st Cir. 2002)

(jury mail fraud verdict may be based on either deprivation of property theory or deprivation of

honest services theory); United States v. Reeder, 170 F.3d 93, 105 (1st Cir. 1999) (rejecting

argument that jurors had to unanimously agree on “‘the theories and acts of fraud’” in order to

convict, and holding that “[w]hile a jury must agree on all of the elements of an offense, it need

not agree on the means by which all the elements were accomplished.”); United States v. Dray,

901 F.2d 1132, 1135 (1st Cir. 1990) (instructing jury on several alternative theories of mail fraud

was “in full accord with prior precedent”) (dictum).1 Significantly, the Magistrate Court rejected

That case certainly does not stand for the proposition that an indictment charging mail fraud must select asingle theory – deprivation of money versus deprivation of honest services, for example – on which thecase is to proceed.

2 The defendant’s alternative motion for a bill of particulars fails for the same reasons as hisattack on the Indictment as too vague, and was rebuffed by Judge Sorokin accordingly. (See Order at 2.) “The purpose of a bill of particulars is to provide the accused with detail of the charges against him wherenecessary to enable him to prepare his defense, to avoid surprise at trial, and to protect against doublejeopardy.” United States v. Paiva, 892 F.2d 148, 154 (1st Cir. 1989) (citations omitted). Here, where theIndictment, as demonstrated above, contains more than enough information to apprise the defendant ofthe charges against him, a bill of particulars is unwarranted. See United States v. Hallock, 941 F.2d 36,39 n.2 (1st Cir. 1991) (the claim that a “court erred in failing to grant [a] bill of particulars and that theindictment was impermissibly vague . . . are closely related, since there is no need to grant a bill ofparticulars when the indictment is sufficiently specific.”) (citation omitted). Indeed, the First Circuit hasaffirmed the denial of bills of particulars in instances in which the indictments at issue arguably providedfar less detail than the one in the instant case. See, e.g., Hallock, 941 F.2d at 40-41; Paiva, 892 F.2d at155.

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the defendant’s demand that the government identify its theory of fraud in the context of denying

the defendant’s motion for a bill of particulars, stating that “[t]he factual allegations of the

Indictment (coupled with discovery) make sufficiently clear the theories encompassed by the

fraud charges to enable defendant to prepare, to avoid surprise and to protect against double

jeopardy.” (See Memorandum and Order on Pending Motions dated March 20, 2009 (“Order”)

at 2.)

The Indictment lays out the elements of the offense and informs the defendant of the

charge against which he must defend, setting out conduct which, if proven, would establish

liability under the mail fraud statute (as detailed infra). This is all that is constitutionally

required for the Indictment to be sufficient.2

II. The Indictment Properly Alleges a Violation of 18 U.S.C. § 1341.

A. The Facts Alleged, if Proven, Constitute Mail Fraud.

The defendant’s second assertion – that the Indictment does not state a cognizable

violation of 18 U.S.C. § 1341 – also falls wide of the mark. Mail fraud is established through

3 The theories identified herein are intended to provide a non-exclusive listing of examples ofapplicable theories to the instant case. The government reserves the right to request jury instructions onany other applicable theories at trial.

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two basic elements, “the defendant’s participation in a scheme to defraud and the use of the

mails . . . in furtherance of the scheme.” United States v. Yefsky, 994 F.2d 885, 891 (1st Cir.

1993) (citation omitted). The Indictment’s description of a classic kickback scheme, in which

defendant Levitin, with the intent to defraud, received payment authorized by a company insider

for unperformed work, and promptly turned around and sent half of those proceeds to that

insider, Kravetz, presents a set of circumstances which have been held to constitute mail (or

wire) fraud in myriad similar cases, under numerous theories of fraud.3 For one, the Indictment’s

allegation that Kravetz caused DBI to pay Levitin for work he never performed in exchange for a

kickback – all with the intent to defraud (Indictment ¶ 13) – would plainly constitute, if proven, a

scheme to deprive DBI of a tangible property right, namely money. See, e.g., Yefsky, 994 F.2d

at 891 (affirming conviction for conspiracy to commit mail fraud involving, in part, a scheme

where employee received kickbacks from subcontractor on work which was never actually

performed); Ranke v. United States, 873 F.2d 1033, 1039 (7th Cir. 1989) (where subcontractor

provided kickbacks to contractor’s employee in part by issuing extra work orders which were not

performed, contractor was defrauded of its money and offense of mail fraud was established);

United States v. Horton, 847 F.2d 313, 319-20 (6th Cir. 1988) (kickback scheme deprived victim

Chrysler of money when outside supplier, as part of the scheme, did not ship to Chrysler all

items that were paid for, and therefore scheme constituted mail fraud).

Moreover, even in the few instances where Levitin did perform work, the defendants’

pursuit of a kickback scheme with intent to defraud still falls within the purview of the mail

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fraud statute. See, e.g., Ranke, 873 F.2d at 1039 (even if subcontractor performed work, its

payment of kickback to contractor’s employee nonetheless defrauded the contractor, which had

“believed it was paying only for the work that had been performed . . . [and not] for the work

plus [the kickback]”) (emphasis in original); United States v. Kerkman, 866 F.2d 877, 880 (6th

Cir. 1989) (hidden kickback led victim to “part with its control over its money . . . on the basis of

a false premise” and thus constituted mail fraud) (internal marks omitted); United States v. Rico

Indus., Inc., 854 F.2d 710, 714 (5th Cir. 1988) (kickback scheme constituted mail fraud even if

victim received performance under contract because victim was deprived of property rights,

namely the control of its money and the ability to negotiate a more favorable contract); see

generally United States v. Rosen, 130 F.3d 5, 10 (1st Cir. 1997) (affirming mail fraud conviction

for defendant’s deprivation from bankruptcy trustee of accurate information regarding greater

amounts that a potential buyer of a property was willing to pay); United States v. Doherty, 867

F.2d 47, 60 (1st Cir. 1989) (mail fraud conviction affirmed when the defendants deprived the

Commonwealth of Massachusetts of control over how its money was spent); United States v.

Biaggi, 909 F.2d 662, 687 (2d Cir. 1990).

An instructive case is United States v. Shyres, 898 F.2d 647 (8th Cir. 1990), which is on

all fours with the instant matter. There, two defendants, employees of Anheuser-Busch, steered

sales promotion work to the third defendant in exchange for kickbacks, including half the profits

which the sales promotion company garnered. See Shyres, 898 F.2d at 650. The court upheld

the defendants’ conviction for mail fraud, holding that even if all of the invoices submitted by

the defendant represented services actually performed, the defendants had deprived Anheuser-

Busch of intangible property rights, including, inter alia, the “right to control the spending of its

4 The defendant’s well-worn challenge to the constitutionality of 18 U.S.C. § 1346, whichdefines the term “scheme or artifice to defraud” as encompassing the deprivation of the right to honestservices, is an argument which has been rejected time and again. See Rybicki, 354 F.3d at 143 (“Nocircuit has ever held . . . that section 1346 is unconstitutionally vague”); United States v. Sorich, 523 F.3d702, 711 (7th Cir. 2008) (listing cases). Indeed, honest services fraud is well-established and clearlydelineated in the First Circuit. See United States v. Urciuoli, 513 F.3d 290, 294 (1st Cir. 2008) (listingcases involving honest services fraud and noting the limits of that doctrine). It bears noting, however,that the Supreme Court’s granting of certiorari in United States v. Black, 129 S. Ct. 2379 (2009), and theimpending resulting decision, has the potential to alter the landscape of honest services fraud.

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own funds” and “the right to pay for services alone, not for services plus kickbacks.” Id. at 653

(citation omitted).

Finally, kickback schemes such as the one alleged in the Indictment have served as the

foundation for convictions under the mail fraud statute for the deprivation of honest services - in

this case, the duty of honest services that Kravetz owed to DBI. See, e.g., United States v.

Rybicki, 354 F.3d 124, 140 (2nd Cir. 2003) (en banc) (detailing examples of kickback cases

resulting in honest services fraud, such as paying kickbacks in exchange for an employee’s

business and accepting kickbacks from suppliers in exchange for purchases); see generally

United States v. Martin, 228 F.3d 1, 17 (1st Cir. 2000) (“courts . . . have been willing to expand

the doctrine [of honest services] to the employer-employee relationship”).4

The affirmation of mail fraud convictions in case after case in circumstances similar to

the case at bar demonstrate that the facts alleged by the Indictment easily lay the foundation for a

conviction under 18 U.S.C. § 1341, and for the defendant to claim that the Indictment does not

present a “cognizable violation” of that statute is disingenuous. In support of this dubious

proposition, the defendant cites Yefsky (Def. Mem. at 4-5); the portion of that case which the

defendant cites, however, is distinguishable from the instant matter on its facts. In that case, the

indictment had only alleged that the defendant Coogan used his influence with his employer to

5 Moreover, just as the First Circuit held that the government’s discovery revealed the basis ofthe conspiracy charge in question, Yefsky, 994 F.2d at 894, defendant here has also had the benefit ofample discovery to flesh out the Indictment’s charges, to the extent that that is necessary.

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arrange for the signing of a contract, after which the contracting party paid him half the contract

amount. See Yefsky, 994 F.2d at 893. Apparently, the indictment did not contain allegations

that this was a kickback scheme “financed by charging GBPC members for engineering services

that were unnecessary or never were performed or by overcharging for work actually done” - all

of which were facts proven at trial. See id. at 889. While the First Circuit upheld the

defendants’ conviction for mail fraud, it stated that the district court’s approval of that portion of

the indictment had been (harmless) error, as the indictment’s description of that particular

scheme failed to give the defendant notice of the charge against him. Id. at 894. Notably, this

was in contrast with the other charged kickback scheme, which had alleged that defendants had

charged inflated rates for equipment that was the subject of another contract. Id. at 893.

Unlike Yefsky, the Indictment alleges the existence of a scheme between Kravetz and

Levitin to defraud DBI, one in which Levitin failed to complete twelve of the thirteen projects

for which he was paid in full, payments from which he kicked back half the proceeds to Kravetz.

These allegations, “on their face, describe fraudulent conduct” (indeed, much like the second

scheme charged in Yefsky, with which the First Circuit took no issue) and therefore do not

implicate the concerns expressed by the First Circuit as to the charging document in that case.

See id.5

B. The Indictment Properly Alleges the Elements of Intent and Materiality.

The defendant’s further argument that the Indictment fails to allege the elements of intent

to defraud and materiality are similarly unavailing. As an initial matter, to the extent that these

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elements must be specifically alleged in an indictment in the first place, see United States v.

Caldwell, 302 F.3d 399, 409 n.8 (5th Cir. 2002) (while specific intent to commit fraud is an

essential element of mail fraud, it need not be specifically charged in an indictment) (citations

omitted), the Indictment does so. (See Indictment ¶ 13.) Moreover, with regard to intent, it is

difficult to conceive what more the defendant demands with respect to a specific allegation of

that element. See United States v. Sepulveda, 15 F.3d 1161, 1192 (1st Cir. 1993) (indictment

was sufficient when it “specifie[d] the law which [defendant] is alleged to have violated and

elaborates that she, with others, ‘knowingly’ and ‘intentionally’ agreed to act in contravention of

that law.”) After all, even in a trial setting, direct proof of fraudulent intent is often hard to come

by, and the First Circuit therefore “permit[s] the inference of fraudulent intent from

circumstantial evidence.” Rosen, 130 F.3d at 9 (citation omitted).

The defendant, apparently, believes that a mail fraud indictment must be dismissed if it

does not specifically allege that the defendant “contemplated actual or articulable harm” to the

victim. (Def. Mem. at 6.) However, he fails to cite any authority for the proposition that such an

allegation must be included in a mail fraud indictment. To the contrary, the Tenth Circuit has

expressly rejected an identical argument, noting, in the process, that the “notion of harm in a

mail or wire fraud prosecution is important only in the sense that proof of contemplated or actual

harm to the victim or others is one means of establishing the necessary intent to defraud.” See

United States v. Welch, 327 F.3d 1081, 1104-05 (10th Cir. 2003) (citations omitted). And, in

any event, the Indictment’s allegation that DBI was defrauded of $396,875 in a kickback

6 Moreover, the defendant fails to mention that what ultimately needs to be shown in a mail fraudprosecution is “either some ‘articulable harm’ befalling the fraud victim or ‘some gainful use’ of theobject of the fraudulent scheme by the perpetrator[.]” Rosen, 130 F.3d at 9 (emphasis supplied). Here, ofcourse, the Indictment alleges both.

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schemeis more than sufficient to allege “articulable harm” to the victim.6

As for materiality, not only does Paragraph 13 of the Indictment contain an allegation of

this element, but the facts alleged elsewhere in the document compel an inference of materiality.

See Caldwell, 302 F.3d at 409 (“[i]f the facts alleged in the indictment warrant an inference [of]

material[ity], the indictment is not facially insufficient for its failure to allege materiality in haec

verba.”) (internal marks and citations omitted). Here, the Indictment alleges that Levitin

submitted fifteen invoices to Kravetz, who authorized all fifteen for payment in large part before

any work whatsoever was completed on Levitin’s purported projects. (Indictment ¶¶ 9, 10.) In

fact, these authorizations and payments continued even though Levitin only performed one of the

projects in full. (Indictment ¶ 10.) As a result, Levitin was paid $396,875, half of which he

kicked back to Kravetz. (Indictment ¶ 11.) That all of this information would have been

material to DBI could not be any more obvious.

III. Levitin Has Failed to Make a Strong Showing of Prejudice That Would ResultFrom a Joint Trial.

Levitin has also moved, under Fed. R. Crim. P. 14, for his trial to be severed from that of

his co-defendant on the basis of “irreconcilable defenses.” (Def. Mem. at 12.) There is a clear

presumption favoring joint trials, as they “play a vital role in the criminal justice system,”

serving judicial interests in efficiency, consistency, and fairness. United States v. Zafiro, 506

U.S. 534, 537 (1993) (citation omitted). Accordingly, a defendant seeking severance under Rule

14 must demonstrate more than just a mutually antagonistic defense with his co-defendant, even

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if there is some prejudice shown. See id. at 537-38. “[M]ere fingerpointing among codefendants

. . . normally is not a sufficient ground for severance.” United States v. Peña-Lora, 225 F.3d 17,

33 (1st Cir. 2000) (citations omitted); see United States v. McLaughlin, 957 F.2d 12, 18 (1st Cir.

1992) (citing cases). Rather, in order to overcome the presumption that “persons who are

indicted together are tried together,” Rule 14 requires “a strong showing of evident prejudice” to

obtain a separate trial. United States v. Flores-Rivera, 56 F.3d 319, 325 (1st Cir. 1995). Indeed,

“[i]n order to gain a severance based on antagonistic defenses, the antagonism . . . must be such

that if the jury believes one defense, it is compelled to convict the other defendant.” See Peña-

Lora, 225 F.3d at 33 (internal marks and citation omitted) (emphasis in original).

The thrust of defendant’s argument of antagonistic defenses seems to be that, in a joint

trial, he may not be able to offer evidence of Kravetz’s prior bad acts, which he claims would

corroborate his defense that he was actually Kravetz’s victim and “establish his innocent state of

mind.” (Def. Mem. at 13.) This claim falls far short of establishing the necessity to sever the

trials. While total preclusion of the ability to present one’s defense militates in favor of

severance, mere limitations, “unless unduly prejudicial to a defendant’s ability to muster a

defense, [are] not a sufficient reason to require severance.” United States v. Vega Molina, 407

F.3d 511, 531 (1st Cir. 2005). Indeed, the First Circuit has rejected identical arguments in the

past. See id. (limits placed on defendant’s ability to introduce evidence of co-defendant’s prior

bad acts did not require severance); see also McLaughlin, 957 F.2d at 18 (1st Cir. 1992)

(defendant’s defense that he was “the innocent victim of a scheme” designed by a co-defendant

and that the co-defendant had used the same scheme in the past did not require severance,

particularly where severance motion was not timely made).

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Here, the defendant’s motion for severance amounts to little more than an assertion that

he will point the finger at his co-defendant as the true culprit, and that he will seek to introduce

her supposed prior bad acts to fortify that defense. First Circuit precedent is clear that such an

argument is not enough to establish a defendant’s weighty burden in overcoming the

presumption in favor of joint trials.

IV. The Court Should Uphold the Magistrate Court’s Order Requiring Disclosure ofthe Defendant’s Rule 17(c) Subpoenas.

Finally, defendant seeks to overturn the Magistrate Court’s ruling with regard to certain

pretrial subpoenas issued by the defendant pursuant to Federal Rule of Criminal Procedure17(c).

In the Order, Judge Sorokin ruled that while the defendant could make his application for the

issuance of those subpoenas on an ex parte basis, he was required to disclose a copy of each of

the subpoenas actually issued by the Court. (Order at 3.)

Rule 17(c) permits the issuance of pretrial subpoenas upon a party’s showing of the

factors outlined in United States v. Nixon, 418 U.S. 683, 699-700 (1974). See, e.g., United

States v. LaRouche Campaign, 841 F.2d 1176, 1179 (1st Cir. 1988). That Rule, however, was

“not intended to provide a means of discovery for criminal cases, [and] its chief innovation was

to expedite the trial by providing a time and place before trial for the inspection of subpoenaed

materials.” Nixon, 418 U.S. at 698-99.

The availability of an ex parte process for the issuance of such subpoenas is an open

question which has divided various courts. Though the defendant fails to mention it, a “majority

of courts have refused to allow an ex parte application under Rule 17(c).” United States v.

Stewart, No. Crim. A. 96-583, 1997 WL 103700, at *1 (E.D. Pa. March 4, 1997) (citing cases);

see, e.g., United States v. Peterson, 196 F.R.D. 361, 361-62 (D.S.D. 2000); United States v. Finn,

7 The defendant argues that since “the government lacks standing to quash subpoenas addressedto third parties[,]” there is no rationale for disclosure of the subpoena itself. Given the generalpresumption against ex parte applications, this argument does not carry the day; in any event, thedefendant bases his argument on a faulty premise, since several courts have held that the government doesindeed have standing to move to quash subpoenas to third parties in certain circumstances. See UnitedStates v. Rainieri, 670 F.2d 702, 712 (7th Cir. 1982) (prosecution had standing to move to quash based onits interest “in preventing undue lengthening of the trial, undue harassment of its witness, and prejudicialoveremphasis on [witness’] credibility.”); United States v. Ail, No. CR 05-325-RE, 2007 WL 1229415, at*4 (D. Or. April 24, 2007); United States v. Giampa, No. S 92 Cr. 437, 1992 WL 296440, at *1-2(S.D.N.Y. Oct. 7, 1992). But see United States v. Nachamie, 91 F. Supp. 2d 552, 560 (S.D.N.Y. 2000)(government did not have standing to quash subpoena to third party based on its own interests).

15

919 F. Supp. 1305, 1330 (D. Minn. 1995); United States v. Hart, 826 F. Supp. 380, 381 (D. Colo.

1993); United States v. Urlacher, 136 F.R.D. 550, 555-56 (W.D.N.Y. 1991); see generally

United States v. Decologero, No. CRIM 01-10373RWZ, 2006 WL 83471, at *2 (D. Mass. Jan.

13, 2006) (noting the pitfalls of ex parte applications for Rule 17(c) subpoenas). Other cases

have allowed ex parte applications, albeit often only in “exceptional circumstances.” United

States v. Beckford, 964 F. Supp. 1010, 1030 (E.D. Va. 1997). Indeed, Beckford, a case relied on

by the defendant, noted that “a party seeking to proceed ex parte will have to meet a heavy

burden to proceed in that fashion.” Id.

Even assuming that, contrary to the majority view, an ex parte application is appropriate

for Rule 17(c) subpoenas, there is no reason for the subpoena itself to be shrouded in the

disfavored secrecy of the ex parte process.7 While it is conceivable that the application for the

subpoena may disclose a “roadmap to the defense,” it is difficult to imagine how the subpoena

itself would do so. Indeed, this was acknowledged by Magistrate Judge Dien in the United

States v. Diamont case cited by the defendant. In that case, while the court permitted the

defendant’s ex parte application for Rule 17(c) subpoenas, it concluded that “[w]ith respect to

certain specific subpoenas . . . while the explanation for the subpoena may remain confidential,

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there is no reason to keep the subpoena itself, as authorized by the court, confidential.” United

States v. Diamont, No. 05-cr-10154, Memorandum at 7 n.2 (D. Mass. Nov. 22, 2005).

Accordingly, the Magistrate Court’s ruling in this regard should be upheld.

In fact, if anything, it is the Magistrate Court’s ruling that the government will not be

allowed inspection of the subpoenaed documents which should be overturned. Again, review of

the documents themselves, as opposed to the defendant’s presumably detailed explanation of

why such documents are important to his case, will not reveal the defense’s game plan. And

permitting the government to inspect those documents would advance the goals of Rule 17(c):

expediting the trial itself by permitting pretrial inspection of subpoenaed documents. See Nixon,

418 U.S. at 698-99. Hence, the Court should exercise its discretion to permit both parties to

inspect the documents retrieved by the subpoenas, as contemplated by Rule 17(c). See Fed. R.

Crim. P. 17(c)(1).

CONCLUSION

For all of the reasons set forth above, the government respectfully requests that the

defendant’s motions be denied in their entirety.

Respectfully submitted,

MICHAEL K. LOUCKS,Acting United States Attorney

/s/ Vassili Thomadakis Vassili ThomadakisAssistant U.S. Attorney(617) 748-3100

Date: July 20, 2009

CERTIFICATE OF SERVICE

I hereby certify that this document, filed through the ECF system, will be sentelectronically to the registered participants as identified on the Notice of Electronic Filing onJuly 20, 2009.

/s/ Vassili ThomadakisVassili ThomadakisAssistant U.S. Attorney