District Court urges the DOJ to investigate misconduct by SDNY prosecutors

On February 17, 2021, the district court issued a new order in the continuing saga of United States v. Ali Sadr Hashemi Nejad, 18 Cr. 224 (AJN). A previous opinion detailing the relevant facts was issued on September 16, 2020.

This is a prosecution that began to unravel back in early 2020. In 2018, Mr. Sadr was indicted on charges of conspiracy to defraud the United States, conspiracy to violate the International Emergency Economic Powers Act, bank fraud, and money laundering offenses. The prosecution was handled by AUSAs Andrew J. DeFilippis, Matthew Laroche, David W. Denton, Jr., Emil J. Bove, III, Jane Kim, Michael Krouse, Rebekah Donaleski, Shawn Crowley, and Stephanie Lake.

In March 2020, after a two-week jury trial, Mr. Sadr was found guilty of five counts.

After trial, Mr. Sadr moved for acquittal as a matter of law or, alternatively, a new trial. While that motion was pending, the government determined that further prosecution would not be “in the interests of justice” and took the extraordinary step of asking the district court to vacate the jury verdict and dismiss the charges against Mr. Sadr and his co-defendant.

What happened? In the words of the district court’s September order, the prosecutors “by their own admission repeatedly violated their disclosure obligations and, at best, toed the line with respect to their duty of candor. …[They] made countless belated disclosures …. And when the Court pressed for more information about one of these failures, the Government made a misrepresentation to the Court.”

When the court looked into the matter further, “the Government revealed an array of additional errors, including disclosure failures and new admissions of misconduct related to the Government’s handling of search-warrant returns.”

Briefly, the district court’s post-trial fact-finding revealed the following:

• The case originated with the state district attorney’s office and, contrary to prosecutors’ representations during suppression litigation, federal investigators “were mining the state search-warrant returns for federal crimes without authorization of a warrant.”
• Federal prosecutors neglected to timely disclose certain Rule 16 discovery.
• Federal prosecutors failed to disclose certain exculpatory or possibly exculpatory documents until mid-trial and after trial.
• For one exculpatory document, when prosecutors realized mid-trial that they had not yet disclosed it, but that they wanted to use it, this happened:

AUSA Stephanie Lake sent an email to fellow prosecutors saying “Given what defense did today, I think [the document] could be really valuable to put in. Among other difficulties with doing that is the fact that I don’t know that it was ever produced to defense ….”

In a written chat, AUSA Jane Kim suggested “we can produce it tonight.”

AUSA Lake replied “i’m wondering if we should wait until tomorrow and bury it in some other documents.”

To which AUSA Kim responded, “that’s fine” and proposed some documents to bury it in.

• When prosecutors did disclose this exculpatory document, AUSA Lake emailed it among a group of previously-disclosed documents. It was not identified as a new document.
• In response to a direct question from the court, prosecutors then misled the court as to whether they had identified this as a new document when disclosing it. Specifically, following some manner of discussion among AUSAs Krouse, Bove, and Crowley, AUSA Krouse filed a letter with the misleading statement.

In its February order, the district court stated that it did not find intentional wrongdoing based on the record before it, but leaves further investigation to the Office of Professional Responsibility and urges that office to take up the matter.

The court’s full opinion is under temporary seal and will be made public after the government has the opportunity to request limited redactions.

Unfortunately, courts have repeatedly confronted these sorts of issues with the SDNY U. S. Attorneys’ Office over the past few years. Here is a (by no means exhaustive) round-up of some recent cases:

• United States v. Anilesh Ahuja and Jeremy Shor, No. 18 Cr. 328 (KPF), ECF Docket Nos. 385, 424 (S.D.N.Y. Jan. 13, 2021) (noting untrue representations to the court regarding the government’s communications with a cooperating witness—which were only revealed by a defense post-trial FOIA request—and ordering sworn statements on the matter by members of the prosecution team, AUSAs Joshua Naftalis, Andrea Griswold, and Max Nicholas).
• United States v. Joshua Schulte, No. 17 Cr. 548 (PAC), ECF Docket Nos. 328, 345 at 12 (S.D.N.Y. 2020) (giving jury instruction regarding adverse inference based on government’s failure to timely disclose Brady and Rule 16 material, in trial handled by AUSAs Denton, Matthew Laroche, and Sidhardha Kamaraju).
• United States v. Robert Pizarro, No. 17 Cr. 151 (AJN), ECF Docket No. 135 (S.D.N.Y. May 17, 2018) (postponing trial in matter handled by AUSAs Jason Swergold, Jessica Fender, and Jared Lenow and criticizing prosecutors for delaying production of evidence of a possible alternative perpetrator of the crime until the Friday before the start of trial).
• United States v. Jain, No. 19 Cr. 59 (PKC), 2020 WL 6047812 (S.D.N.Y. Oct. 13, 2020) (granting continuance based on prosecutorial and FBI “negligence” that led to late disclosure of 5 terabytes of discovery and ordering office to undertake “corrective actions” to “ensure that this sorry chapter cannot be repeated,” in matter handled by AUSA Tara LaMorte).
• United States v. Reichberg, No. 16 Cr. 468 (GHW), 2018 WL 6599465, at *3-4 (S.D.N.Y. Dec. 14, 2018) (describing earlier trial postponement that was necessary because of prosecutors’ delayed disclosure of Brady material, in matter handled by AUSAs Kimberly Ravener, Jessica Lonergan, and Martin Bell).
• United States v. Russell, No. 16 Cr. 396 (GHW), 2018 WL 2088282, at *1-2 (S.D.N.Y. May 4, 2018) (granting new trial in case handled by AUSAS Swergold and Amanda Houle based on prosecutors’ “inadvertent” failure to disclose proffer notes, which would have “provided substantial grist for cross-examination” and impeachment of witness).