United States District Court, District of Columbia
G. SULLIVAN UNITED STATES DISTRICT JUDGE.
25, 2019, a federal grand jury returned a seven-count
Indictment against Defendant Eghbal Saffarinia (“Mr.
Saffarinia”), a former Assistant Inspector General for
the United States Department of Housing and Urban
Development's Office of Inspector General
(“HUD-OIG”), charging him with one count of
concealing material facts, in violation of 18 U.S.C.
§§ 1001(a)(1) and 2, three counts of making false
statements, in violation of 18 U.S.C. §§ 1001(a)(2)
and 2; and three counts of falsifying records, in violation
of 18 U.S.C. §§ 1519 and 2. See generally
Indictment, ECF No. 1 at 3-18 ¶¶
Saffarinia moves to dismiss the Indictment pursuant to
Federal Rule of Criminal Procedure 12(b). Mr. Saffarinia
separately moves for an Order compelling the government to
identify any known exculpatory information within its
voluminous production, which consists of approximately 3.5
million pages of documents, pursuant to Brady v.
Maryland, 373 U.S. 83 (1963). Upon careful consideration
of the parties' submissions, the applicable law, and for
the reasons explained below, the Court GRANTS IN
PART and DENIES IN PART Mr.
Saffarinia's Motion to Dismiss, and GRANTS IN
PART and DENIES IN PART Mr.
Saffarinia's Motion for Brady Material.
Court assumes the parties' familiarity with the factual
background and the procedural history, which are set forth in
greater detail in the Court's prior Opinion. See
United States v. Saffarinia, No. CR 19-216 (EGS), 2019
WL 5086913, at *1 (D.D.C. Oct. 10, 2019). The Court will
provide an abbreviated overview of the relevant statutory
scheme, and then briefly summarize the allegations set forth
in the Indictment.
The Ethics in Government Act
in the wake of the Watergate scandal, ” Trump v.
Mazars USA, LLP, 940 F.3d 710, 714 (D.C. Cir. 2019), the
Ethics in Government Act of 1978 (“EIGA”), 5
U.S.C. app. 4 §§ 101, et seq., requires
certain government employees to disclose “detail[s],
with certain exceptions, [about] their income, gifts, assets,
financial liabilities and securities and commercial real
estate transactions[, ]” United States v.
Oakar, 111 F.3d 146, 148 (D.C. Cir. 1997) (citing 5
U.S.C. app. 4 § 102; United States v. Rose, 28
F.3d 181, 183 (D.C. Cir. 1994)). Congress imposed these
reporting requirements to “increase public confidence
in the federal government, demonstrate the integrity of
government officials, deter conflicts of interest, deter
unscrupulous persons from entering public service, and
enhance the ability of the citizenry to judge the performance
of public officials.” Id.
end, the EIGA established the Office of Government Ethics
(“OGE”) as a separate agency within the Executive
Branch, see 5 U.S.C. app. 4 § 401(a), which
provides “overall direction of executive branch
policies related to preventing conflicts of interest on the
part of officers and employees of any executive agency,
” id. § 402(a). An employee covered under
the EIGA must file public financial disclosure reports
“with the designated agency ethics official at the
agency by which he [or she] is employed . . . .”
Id. § 103(a). OGE and the employee's agency
have the authority to “ensure compliance with
government ethics laws and regulations[, ]” but the
“primary responsibility” lies with the
employee's agency. 5 C.F.R. § 2638.501; see also
Defs. of Wildlife v. U.S. Dep't of Interior, 314
F.Supp.2d 1, 19 (D.D.C. 2004) (“OGE relies upon the
agencies to perform these functions, but the results of the
agency's investigations and its own conclusions about
whether ethics violations actually occurred are not the final
word if the OGE finds that more needs to be done.”).
EIGA and its implementing regulations, 5 C.F.R. §§
2634 et seq., require members of the Senior
Executive Service (“SES”) to file public
financial disclosure reports. See generally 5 U.S.C.
§ app. 4 § 101(f)(3). Disclosures for SES members are
made using the “OGE Form 278.”
Saffarinia, 2019 WL 5086913, at *8. Each report
“shall include a full and complete
statement” of the required information. 5 U.S.C. app. 4
§ 102(a) (emphasis added). Failure to comply with the
EIGA, its regulations, and the OGE Form 278 may subject the
filer to civil penalties and criminal prosecution.
E.g., 5 U.S.C. app. 4 § 104(a)(1) (outlining
civil penalty for knowingly and willfully falsifying required
information); 5 C.F.R. § 2634.701(b) (substantially
similar); id. § 2634.701(c) (“An
individual may also be prosecuted under criminal statutes for
supplying false information on any financial disclosure
report.”); id. § 2638.501 (stating that
“the [OGE] Director will refer possible criminal
violations to an Inspector General or the Department of
Justice”); OGE Form 278 at 12 (“Knowing and
willful falsification of information required to be filed by
section 102 of [the EIGA] may also subject [the filer] to
criminal charges here stem from Mr. Saffarinia's alleged
falsifications and omissions in his OGE Forms 278.
See Indictment, ECF No. 1 at 2 ¶
From 2012 until 2017, Mr. Saffarinia served as HUD-OIG's
Assistant Inspector General for Information Technology
(“IT”), and later as the Assistant Inspector
General for Management and Technology. Id. at 2
¶ 3. As an SES member, Mr. Saffarinia had a “legal
duty” to submit the OGE Forms 278 on May 12, 2014, May
16, 2015, and April 26, 2016, respectively. See id.
at 2 ¶ 4, 18 ¶ 78. Mr. Saffarinia, however, failed
to disclose his liabilities in excess of $10, 000 from
“Person A or his neighbor to his supervisors, agency
ethics officials or counsel, or on his [OGE Forms
278].” Id. at 17 ¶ 75.
A and Mr. Saffarinia were friends from college, and Person A
owned an IT company (“Company A”) in Virginia.
Id. at 3 ¶¶ 6, 9. In 2013, Mr. Saffarinia
received a loan from Person A in the amount of $80, 000, but
Mr. Saffarinia did not report it on his OGE Forms 278.
Id. at 9-10 ¶¶ 37-41, 18 ¶ 78.
Pursuant to a promissory note that was executed in 2015, Mr.
Saffarinia received $90, 000 from his neighbor, but Mr.
Saffarinia did not disclose that liability on his OGE Forms
278. Id. at 17 ¶ 75.
HUD-OIG, Mr. Saffarinia also served as Head of Contracting
Activity, overseeing “procurement review and approval
processes, including IT contracts[.]” Id. at 2
¶ 5. During the period that Mr. Saffarinia received
payments from Person A, Mr. Saffarinia steered government
business, as well as gave competitive advantages, to Company
A, and Mr. Saffarinia disclosed confidential government
information to Person A and Company A. Id. at 3-4
¶¶ 11-12, 4 ¶ 12, 14 ¶ 61. In 2012, Mr.
Saffarinia caused Company B to enter into a business
partnership with Person A and Company A, and Company A later
served as Company B's subcontractor on a multi-year, $30
million IT services contract for HUD-OIG. Id. at 6
¶ 18. In 2013, HUD- OIG approved additional funding in
the amount of $78, 000 for Company A's subcontract with
Company B. Id. at 10 ¶ 42. Company A received
more than one million dollars as Company B's
subcontractor from 2012 to 2015. Id. at 9 ¶ 36.
Saffarinia hired his friend and former business partner,
Person B, as the head of HUD-OIG's new predictive
analytics department. Id. at 3 ¶¶ 7, 9.
And Person B became the sole member of a technical evaluation
panel for a government contract at Mr. Saffarinia's
direction. Id. at 16 ¶ 72. For that contract,
Person B rejected thirteen bid proposals, and HUD-OIG awarded
it to Person A and Company A. Id. From 2013 to 2014,
Mr. Saffarinia caused HUD-OIG to recompete Company B's IT
services contract, and he caused Company C to enter into a
business partnership with Company A in order for both
companies to submit a joint bid for the recompete contract.
Id. at 11 ¶ 47. Mr. Saffarinia directed one of
his subordinates to meet with Person A and Company C's
owner for the formation of the partnership and the submission
of the joint bid. Id. at 12 ¶ 50. HUD-OIG
awarded the recompete contract, which was worth more than $17
million, to Company C. Id. at 11 ¶ 47. Company
A became a subcontractor for Company C, and Company A was
expected to receive roughly nine million dollars.
charges against Mr. Saffarinia fall into three categories:
(1) concealing material facts, in violation of 18 U.S.C.
§ 1001(a)(1) (“Count I”); (2) making false
statements, in violation of 18 U.S.C. § 1001(a)(2)
(“Counts II-IV”); and (3) falsifying records, in
violation of 18 U.S.C. § 1519 (“Counts
V-VII”). See generally Indictment, ECF No. 1
at 3-18 ¶¶ 10-78. Count I alleges that from
“early 2012, and continuing thereafter until at least
in or about mid-2016, in the District of Columbia and
elsewhere, in a manner within the jurisdiction of the
Executive Branch of the Government of the United States,
” Mr. Saffarinia “did knowingly and willfully
falsify, conceal, and cover up by trick, scheme, and device
material facts . . . .” Id. at 3-4 ¶ 11.
Count 1 asserts that Mr. Saffarinia violated §
1001(a)(1) by concealing four facts: (1) “the nature
and extent of [Mr. Saffarinia's] financial relationship
with Person A, including payments from Person A to [Mr.
Saffarinia] totaling at least $80, 000; (2) Mr.
Saffarinia's “unauthorized disclosure of
confidential government information to Person A”; (3)
Mr. Saffarinia's “efforts to steer government
contracts to Person A and Company A-by violating his legal
duty to disclose a financial relationship with Person A,
including on his annual OGE Forms 278”; and (4)
“an actual and apparent conflict of interest in
overseeing government business in which Person A and Company
A had a significant financial interest.” Id.
at 3-4 ¶ 11, 4 ¶ 12.
Counts II through IV allege that Mr. Saffarinia violated
§ 1001(a)(2) by “willfully and knowingly mak[ing]
and caus[ing] to be made material false, fictitious, and
fraudulent statements and representations in a matter within
the jurisdiction of the executive branch of the Government of
the United States, namely, HUD and OGE” when he
submitted OGE Forms 278 in 2014, 2015, and 2016 that omitted
the loans and payments from Person A. Id. at 17
¶ 76. Count IV also alleges that Mr. Saffarinia made a
false statement by not reporting the payments and loans from
his neighbor on his 2016 OGE Form 278. Id.
Counts V through VII charge Mr. Saffarinia with obstruction
of justice in violation of § 1519, and those counts
allege that Mr. Saffarinia “with the intent to impede,
obstruct, and influence, and in relation to and contemplation
of, the investigation and proper administration of a matter
within the jurisdiction of a department and agency of the
United States, knowingly concealed, covered up, falsified,
and made false entries in a record, document, and tangible
object” when he caused his OGE Forms 278 to be filed
with HUD and OGE. Id. at 18 ¶ 78. These
obstruction charges list Mr. Saffarinia's 2014, 2015, and
2016 OGE Forms 278, alleging that he failed to report his
payments and loans in excess of $10, 000 from Person A and
his neighbor. Id.
Mr. Saffarinia's Motions
October 17, 2019, Mr. Saffarinia filed a motion to dismiss,
see Def.'s Mot. to Dismiss, ECF No. 27, and a
motion for Brady material, see Def.'s
Mot. for Brady Material, ECF No. 28. On October 31, 2019, the
government filed its opposition briefs. See
Gov't's Opp'n, ECF No. 29; see also
Gov't's Opp'n, ECF No. 31. Thereafter, Mr.
Saffarinia filed his reply briefs. See Def.'s
Reply, ECF No. 37; see also Def.'s Reply, ECF
No. 38. The motions are ripe and ready for the Court's
Motion to Dismiss
criminal defendant may move to dismiss an indictment before
trial based on a “defect in the indictment, ”
including for “lack of specificity” and
“failure to state an offense.” Fed. R. Crim. P.
12(b)(3)(B)(iii), (v). “[A] pretrial motion to dismiss
an indictment allows a district court to review the
sufficiency of the government's pleadings, but it is not
a permissible vehicle for addressing the sufficiency of the
government's evidence.” United States v.
Mosquera-Murillo, 153 F.Supp.3d 130, 154 (D.D.C. 2015)
(citation and internal quotation marks omitted). “In
ruling on a motion to dismiss for failure to state an
offense, a district court is limited to reviewing the
face of the indictment and, more specifically, the
language used to charge the crimes.”
United States v. Sunia, 643 F.Supp.2d 51, 60 (D.D.C.
2009) (citation omitted).
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.” Hamling v.
United States, 418 U.S. 87, 117 (1974). The notice
requirement “is established in the Sixth Amendment,
which provides that ‘[i]n all criminal prosecutions,
the accused shall enjoy the right . . . to be informed of the
nature and cause of the accusation[.]'” United
States v. Hillie, 227 F.Supp.3d 57, 69 (D.D.C. 2017)
(quoting U.S. Const. Amend. VI). “A valid indictment
also preserves the Fifth Amendment's protections against
abusive criminal charging practices; specifically, its
guarantees that a criminal defendant can only be prosecuted
for offenses that a grand jury has actually passed up on, and
that a defendant who is convicted of a crime so charged
cannot be prosecuted again for that same offense.”
Brady and Its Progeny
to Brady and its progeny, the government has an
“an affirmative duty to disclose exculpatory evidence
to the defense, even if no request has been made by the
accused.” United States v. Borda, 848 F.3d
1044, 1066 (D.C. Cir.), cert. denied, 137 S.Ct. 2315
(2017). In Brady, the United States Supreme Court
held that “the suppression by the prosecution of
evidence favorable to an accused upon request violates due
process where the evidence is material either to guilt or to
punishment, irrespective of the good faith or bad faith of
the prosecution.” 373 U.S. at 87. “Impeachment
evidence, . . . as well as exculpatory evidence, falls within
the Brady rule.” United States v.
Bagley, 473 U.S. 667, 676 (1985) (citing United
States v. Giglio, 405 U.S. 150, 154 (1972)).
“[C]ourts in this jurisdiction look with disfavor on
narrow readings by prosecutors of the government's
obligations under Brady.” United States v.
Edwards, 191 F.Supp.2d 88, 90 (D.D.C. 2002) (citing
United States v. Paxson, 861 F.2d 730, 737 (D.C.
prove a Brady violation, a movant must establish
three elements: “ The evidence at issue must be
favorable to the accused, either because it is exculpatory,
or because it is impeaching;  that evidence must have been
suppressed by the [government], either willfully or
inadvertently; and  prejudice must have ensued.”
Strickler v. Greene, 527 U.S. 263, 281-82 (1999).
“To satisfy the prejudice component, the defendant must
show that ‘there is a reasonable probability that, had
the evidence been disclosed to the defense, the result of the
proceeding would have been different.'” United
States v. Sitzmann, 893 F.3d 811, 826 (D.C. Cir. 2018)
(quoting Bagley, 473 U.S. at 682); see also
United States v. Gale, 314 F.3d 1, 4 (D.C. Cir. 2003)
(“The defendant bears the burden of showing a
reasonable probability of a different outcome.”).
Court first analyzes Mr. Saffarinia's motion to dismiss,
concluding that: (1) the concealment charge under 18 U.S.C.
§ 1001(a)(1) does not specify the legal duty to disclose
the four allegedly concealed material facts as identified in
the Indictment; (2) the obstruction charges sufficiently
allege that Mr. Saffarinia's falsifications and omissions
in his OGE Forms 278 fall within the reach of 18 U.S.C.
§ 1519; and (3) the rule of lenity is inapplicable in
this case. The Court then turns to Mr. Saffarinia's
Brady motion, concluding that the government must
identify any Brady material within its voluminous
production to Mr. Saffarinia to the extent that the
government knows of any such information.
Motion to Dismiss
Saffarinia advances several arguments for dismissal. First,
Mr. Saffarinia moves to dismiss Count I and Counts V through
VIII on three grounds: (1) the Indictment does not allege a
“trick, scheme, or device” under 18 U.S.C. §
1001(a)(1) as to Count I, Def.'s Mem., ECF No. 27-1 at
18-21; (2) the Indictment fails to allege that he had no
legal duty to disclose at least three of the allegedly four
concealed facts in Count I, id. at 14-18; and (3)
the Indictment fails to allege an “investigation”
or the “proper administration of any matter”
within the meaning of 18 U.S.C. § 1519 as to Counts V
through VII, id. at 22-24. Finally, Mr. Saffarinia
argues that the Indictment should be dismissed because the
charge to the grand jury “appears” to have been
improper. Id. at 34. The Court will address each
argument in turn.
Concealment Charge under 18 U.S.C. § 1001(a)(1)
of the Indictment charges Mr. Saffarinia with a scheme to
conceal material facts. See Indictment, ECF No. 1 at
3-4 ¶ 11. Under Section 1001(a)(1), it is a crime to
“conceal, or cover up by any trick, scheme, or
device a material fact.” 18 U.S.C. § 1001(a)(1). A
violation under Section 1001(a)(1) predicated on concealment
has five elements: (1) the defendant had a duty to disclose
the material information imposed by statute, regulation, or
government form; (2) the defendant concealed or covered up
the facts using a trick, scheme, or device; (3) the concealed
facts were material; (4) the defendant concealed those facts
knowingly and willfully; and (5) the concealed information
concerned a matter within the jurisdiction of the Executive
Branch. E.g., United States v. Bowser, 318
F.Supp.3d 154, 168 (D.D.C. 2018) (Sullivan, J.) (listing the
§ 1001(a)(1) elements); United States v. White
Eagle, 721 F.3d 1108, 1116 (9th Cir. 2013) (same).
Mr. Saffarinia only challenges the first two elements.
See Def.'s Mem., ECF No. 27-1 at 14-21. Before
turning to those elements, the Court will address the
parties' disagreement as to the applicable statute of
Count One Is Not Time-Barred
1001 is governed by the five-year statute of limitations.
See 18 U.S.C. § 3282(a) (“[N]o person
shall be prosecuted, tried, or punished for any offense, not
capital, unless the indictment is found . . . within five
years next after such offense shall have been
committed.”). In this case, the grand jury returned the
Indictment against Mr. Saffarinia on June 25, 2019. See
generally Indictment, ECF No. 1 at 1. Typically, any
criminal conduct before June 25, 2014 would fall outside of
the applicable limitations period. See 18 U.S.C.
§ 3282(a). With the execution of the tolling agreements,
however, the parties agree that the date for the statute of
limitations is May 6, 2014. See Def.'s Mem., ECF
No. 27-1 at 19 n.4; see also Gov't's
Opp'n, ECF No. 31 at 9-10.
Saffarinia contends that “any conduct charged prior to
May 6, 2014 falls outside the limitations period.”
Def.'s Mem., ECF No. 27-1 at 19 n.4. Mr. Saffarinia goes
on to argue that the government must show that
“‘on least one occasion after' the applicable
statute of limitations date, the defendant ‘concealed
or covered up' a material fact.” Id.
(quoting Gov't's Proposed Jury Instructions,
United States v. Craig, Crim. Action No. 19-125
(D.D.C. July 22, 2019), ECF No. 72-2 at 11); Def.'s
Reply, ECF No. 38 at 20 n.5 (noting that “the jury
cannot convict if the government has not proven at least one
act of concealment within the limitations period”). The
government responds that Mr. Saffarinia has been charged with
a single concealment scheme, and “numerous courts,
including this [Court], have held that a scheme to conceal
material facts is not complete for statute of limitations
purposes until the final affirmative act in furtherance of
the scheme is taken.” Gov't's Opp'n, ECF
No. 31 at 9 (collecting cases). Mr. Saffarinia does not
attempt to distinguish the government's cited cases.
See Def.'s Reply, ECF No. 38 at 19 n.5.
begin, “[s]tatutes of limitations normally begin to run
when the crime is complete.” Toussie v. United
States, 397 U.S. 112, 115 (1970) (quoting Pendergast
v. United States, 317 U.S. 412, 418 (1943)). As the
United States Court of Appeals for the District of Columbia
Circuit (“D.C. Circuit”) has recognized,
“first-year law students (presumably) learn [that] a
criminal offense is typically completed as soon as each
element of the crime has occurred.” United States
v. McGoff, 831 F.2d 1071, 1078 (D.C. Cir. 1987).
“A ‘continuing offense,' . . ., is an
unlawful course of conduct that does perdure.”
Id. And “the statute of
limitations as to prosecutions for continuing offenses runs
from the last day of the continuing offense.”
Id. at 1079 (citation omitted).
D.C. Circuit has held that § 1001 is a continuing
offense for purposes of the statute of limitations.
Bramblett v. United States, 231 F.2d 489, 490-91
(D.C. Cir. 1956). In Bramblett, a member of Congress
was charged with engaging in a scheme to falsify material
facts under § 1001 by submitting a form with false
information to a Congressional office. Id. at 490.
The D.C. Circuit rejected the defendant's argument that
the § 1001 charge was time-barred as a result of the
crime being completed when he filed the false form because
the defendant repeatedly benefited from the falsification
over the course of the scheme. Id. at 490-91.
“By ‘falsifying a material fact, and in leaving
it on file, thereby continuing the falsification in order
repeatedly to partake of the fruits of the scheme,' the
defendant committed a continuing crime of falsification by
scheme that ‘fairly falls within the terms of section
1001.'” United States v. Hubbell, 177 F.3d
11, 13 (D.C. Cir. 1999) (quoting Bramblett, 231 F.2d
at 491). Thus, “the conduct of the defendant which
constituted the scheme did not terminate until the scheme
itself ended.” Bramblett, 231 F.2d at
Court agrees with the government that the Indictment alleges
a “single scheme to conceal that involved multiple
false statements, omissions, and other acts, much of which
occurred within the statutory period.” Gov't's
Opp'n, ECF No. 31 at 9. According to the Indictment, the
alleged scheme began in 2012 and ended in 2016. Indictment,
ECF No. 1 at 4 ¶ 13. Mr. Saffarinia committed a
continuing crime of concealment by scheme, see
Bramblett, 231 F.2d at 491, because Mr. Saffarinia
allegedly left on file in his OGE Forms 278, among other
things, the concealed material facts, including payments from
Person A and the $80, 000 loan, during the alleged scheme,
see Indictment, ECF No. 1 at 4-5 ¶ 13. What is
more, the Indictment alleges that Mr. Saffarinia committed
certain acts in furtherance of the alleged scheme through
2016. See Indictment, ECF No. 1 at 16 ¶ 73. Mr.
Saffarinia's last-filed OGE Form 278 was submitted on
April 26, 2016. Id. at 17 ¶ 76. And the
Indictment asserts that Mr. Saffarinia failed to report his
liabilities in his OGE Forms 278 that were submitted through
HUD. Id. at 4-5 ¶ 13. Although some of the
alleged conduct fell outside of the limitations period,
see id. at 6-16 ¶¶ 18-73, Mr. Saffarinia
is charged with a single concealment scheme that allegedly
ended in 2016, id. at 3-4 ¶ 11. The Court
therefore finds that the allegations in Count I are timely.
Scheme, Trick, or Device
Court next considers whether the Indictment alleges a
“scheme, trick, or device” within the meaning of
§ 1001(a)(1). See United States v. Woodward,
469 U.S. 105, 108 (1985) (“Section 1001 proscribes the
nondisclosure of a material fact only if the fact is
‘conceal[ed] . . . by any trick,
scheme, or device[.]'”); see
also United States v. Safavian, 528 F.3d 957, 965 n.8
(D.C. Cir. 2008) (“[C]oncealment must be accomplished
in a particular way: by a ‘trick, scheme, or
device.'”). Mr. Saffarinia argues that the
Indictment “fails to allege concealment of [the] fact
[that he had a duty to disclose the $80, 000 loan from Person
A on his OGE Forms 278] by means of
a ‘trick, scheme, or device'” because
“[a] trick, scheme, or device requires an affirmative
act of concealment; a mere false statement is not
enough.” Def.'s Mem., ECF No. 27-1 at 18. The
government responds that the Indictment sufficiently alleges
a scheme, trick, or device, and that Mr. Saffarinia's
“specific argument deals with trial proof, not the
sufficiency of the indictment's allegations.”
Gov't's Opp., ECF No. 31 at 7.
Saffarinia is correct that an affirmative act by which a
material fact is concealed is necessary to prove a violation
of the concealment prong of § 1001. Bowser, 318
F.Supp.3d at 169 (citing United States v. London,
550 F.2d 206, 213 (5th Cir. 1977). “The case law is
clear that the deliberate failure to disclose material facts
in the face of a specific duty to disclose such information
constitutes a violation of the concealment provision of
§ 1001.” United States v. Dale, 782
F.Supp. 615, 626 (D.D.C. 1991), aff'd, 991 F.2d.
819 (D.C. Cir. 1993). A defendant's “nondisclosure
[must be] distinguishable from a ‘passive failure to
disclose' or ‘mere silence in the face of an
unasked question.'” Dale, 782 F.Supp. at
626. And “the government bears the burden of
demonstrating more than a mere passive failure to disclose
something; it must show that the defendant ‘committed
affirmative acts constituting a trick, scheme, or
device.'” Craig, 401 F.Supp.3d at 63
(quoting London, 550 F.2d at 213).
Mr. Saffarinia does not suggest that the Indictment is based
on a passive failure to disclose information. See
Def.'s Mem., ECF No. 27-1 at 18-21; see also
Def.'s Reply, ECF No. 38 at 18-19. Rather, Mr. Saffarinia
argues that the Indictment fails to allege a trick, scheme,
or device based on the allegation that he “concealed
the existence of the [$80, 000] loan by falsely stating that
his OGE Forms 278 were truthful and complete.”
Def.'s Mem., ECF No. 27-1 at 21. Mr. Saffarinia seeks to
impose temporal limitations on the alleged acts of
concealment, arguing that the Indictment points to actions
taken before he incurred the $80, 000 debt to “suggest
improper concealment.” Id. at 19. According to
the Indictment, Mr. Saffarinia received his first payment
from Person A on or about June 25, 2013. Indictment, ECF No.
1 at 9 ¶ 37. The Indictment lists more than eight
separate amounts of cash payments from Person A to Mr.
Saffarinia from July 2013 to November 2013. Id. at
9-10 ¶¶ 38-39. Mr. Saffarinia contends that the
pre-June 2013 allegations-his failure to sign a
“Conflict of Interest Acknowledgment and Nondisclosure
Agreement” from GSA's contracting officer,
id. at 6 ¶ 21, and his e-mails to Person A in
June 2012 and July 2012 attaching certain HUD-OIG documents,
id. at 7 ¶¶ 26-27-cannot constitute
affirmative acts to conceal the $80, 000 loan. See
Def.'s Mem., ECF No. 27-1 at 19.
post-June 2013 allegations in the Indictment include Mr.
Saffarinia's efforts to increase Person A's work
hours under Company B's IT contract and cause HUD-OIG to
recompete the IT services contract and encourage Company C to
partner with Person A and Company A on the contract.
Id. at 20 (citing Indictment, ECF No. 1 at 10-14
¶¶ 42-60). The remaining allegations also include
Mr. Saffarinia's actions that gave a competitive
advantage to Person A for a certain contract, and his
disregard of directives from his supervisors to terminate
Person A as a government contractor. Id. (citing
Indictment, ECF No. 1 at 11 ¶ 44, 14-16 ¶¶
61-73). According to Mr. Saffarinia, the post-June 2013
allegations do not amount to concealment of the $80, 000 loan
from Person A. Id. at 20.
government disagrees with Mr. Saffarinia's suggestion
that “the affirmative acts of concealment
‘predate' his duty to disclose.”
Gov't's Opp'n, ECF No. 31 at 8. According to the
government, Mr. Saffarinia took affirmative acts to conceal
“hundreds of thousands of dollars from Person A over a
multi-year period, including the payments made pursuant to
the promissory note in 2013.” Id.
Court is not persuaded by Mr. Saffarinia's arguments
because the Court “must give full effect to the
‘trick, scheme, or device' language in [the
concealment] prong of section 1001 . . . .”
Craig, 401 F.Supp.3d at 63 (quoting London,
550 F.2d at 213). The government argues-and the Court
agrees-that the Indictment alleges “a single scheme to
conceal that involved multiple false statements, omissions,
and other acts.” Gov't's Opp'n, ECF No. 31
at 9. This alleged scheme occurred between 2012 and 2016.
Indictment, ECF No. 1 at 4 ¶ 13. And the Indictment sets
forth allegations within the relevant time period (from 2012
through 2016) that Mr. Saffarinia concealed, among other
things, his payments and the $80, 000 loan from Person A.
See id. at 6-16 ¶¶ 18-73. The Indictment
charges that a purpose of Mr. Saffarinia's scheme was to
conceal, inter alia, “tens of thousands of
dollars in payments from Person A and an outstanding $80, 000
promissory note on which payment was owed to Person A.”
Id. at 4 ¶ 12. Under the “SAFFARINIA
Received $80, 000 from Person A” heading, the
Indictment provides the loan and a list of Mr.
Saffarinia's payments from Person A. Id. at 9-10
Saffarinia's other argument-that his alleged
falsifications or omissions alone do not constitute a trick,
scheme, or device within the meaning of § 1001(a)(1)-is
unavailing. See Def.'s Mem., ECF No. 27-1 at 21.
To support his position, Mr. Saffarinia cites to
Safavian and two out-of-Circuit decisions.
Id. (citing Safavian, 528 F.3d at 967 n.12;
London, 550 F.2d at 212-14; United States v. St.
Michael's Credit Union, 880 F.2d 579, 589 (1st Cir.
1989)); see also Def.'s Reply, ECF No. 38 at 19.
Mr. Saffarinia's assertion-that a false statement
alone cannot constitute a trick, scheme, or
device-is not settled law. See Craig, 401 F.Supp.3d
at 73. In Safavian, the D.C. Circuit noted, in
dicta, the defendant was “correct on the law”
that “a false statement alone cannot constitute a
‘trick, scheme, or device', ” 528 F.3d at 967
n.12 (collecting cases), but that the defendant there waived
the argument on appeal, as acknowledged by Mr. Saffarinia,
see Def.'s Mem., ECF No. 27-1 at 18-19. In
London, the Fifth Circuit did not hold that false
statements could not state an offense under Section 1001. 550
F.2d at 212-14; see also Craig, 401 F.Supp.3d at 73.
St. Michael's Credit Union, the defendants'
convictions under § 1001 arose from the financial
institution's failure to file Currency Transaction
Reports (“CTRs”) with the Internal Revenue
Service (“IRS”). 880 F.2d at 581. The First
Circuit vacated the convictions because the trial judge did
not instruct the jury that the government had to prove
“some ‘affirmative act' of concealment beyond
the failure to file CTRs.” Id. at 589. The
First Circuit held that “[a]bsent other acts that might
form part of a scheme to affirmatively conceal facts from a
federal agency, we do not believe the failure to file CTRs-
standing alone-can support a conviction under §
1001.” Id. at 591. More than twenty-two years
after deciding St. Michael's Credit Union, the
First Circuit clarified that “simple omissions fall
short of constituting affirmative acts of concealment, which
are required to prove a ‘scheme, trick, or
device.'” United States v. Mubayyid, 658
F.3d 35, 69-71 (1st Cir. 2011) (citing St. Michael's
Credit Union, 880 F.2d at 589).
Mubayyid, the defendant-treasurer of a tax-exempt
organization signed and filed IRS Forms 990 in three
different tax years that contained materially false
information about the organization's non-charitable
activities. Id. at 58. The First Circuit affirmed
the defendant's § 1001(a)(1) conviction for scheming
to conceal material facts from the IRS, rejecting his
arguments that the government's evidence was insufficient
and that the government failed to prove a specific scheme.
Id. at 69-71. In doing so, the First Circuit
reasoned that the defendant had a legal duty to disclose and
“by filing the false Form 990s, which he signed under
penalty of perjury, [the defendant] did not passively fail to
disclose material facts; he engaged in an affirmative act of
concealment.” Id. at 70 (citing St.
Michael's Credit Union, 880 F.2d at 590-91).
Mr. Saffarinia's alleged false OGE Forms 278 closely
resemble the defendant's false IRS forms in
Mubayyid. The Indictment alleges that Mr. Saffarinia
concealed certain liabilities in his OGE Forms 278-his
payments and loan from Person A. Indictment, ECF No. 1 at 4
¶ 11. Mr. Saffarinia concedes that the OGE Forms 278 may
have imposed a duty to disclose the $80, 000 loan from Person
A. See Def.'s Mem., ECF No. 27-1 at 18-21. Mr.
Saffarinia does not challenge that the loan and the details
about the loan are material facts that he did not disclose on
his OGE Forms 278. See id. In his own words,
“the Indictment alleges that Mr. Saffarinia concealed
the existence of the loan by falsely stating that his OGE
Forms 278 were truthful and complete.” Id. at
21. The Court therefore finds that the Indictment
sufficiently alleges a scheme to conceal because it contains
allegations that Mr. Saffarinia engaged in affirmative acts
of concealment by actively filing the OGE Forms 278 that
allegedly contained false statements. The Court concludes
that the Indictment alleges a “scheme, trick, or
device” within the meaning of § 1001(a)(1).
Accordingly, the Court DENIES IN PART Mr.
Saffarinia's motion to dismiss.
Legal Duty to Disclose
Court next considers whether the Indictment alleges that Mr.
Saffarinia had a legal duty to disclose the concealed
material facts. The parties disagree as to whether Mr.
Saffarinia had a legal duty to disclose the following four
allegedly concealed facts:
(1) Mr. Saffarinia's unauthorized disclosure of
confidential information to Person A; (2) Mr.
Saffarinia's alleged efforts to steer government
contracts to Person A and Company A; (3) the existence of an
actual or potential conflict of interest; and (4) the nature
and extent of Mr. [Saffarinia's] financial relationship
with Person A.
Def.'s Mem., ECF No. 27-1 at 16 (citing Indictment, ECF
No. 1 at 2-3 ¶ 5, 3-4 ¶ 11, 5 ¶ 16).
party disputes that a “conviction under §
1001(a)(1) requires a legal
obligation-imposed by statute, regulation, or form-to
disclose material facts.” Id. (citing
Safavian, 528 F.3d at 964); see also
Gov't's Opp'n, ECF No. 31 at 4. The parties agree
that Mr. Saffarinia's legal duties arose from three
sources: (1) the EIGA; (2) the OGE regulations, 5 C.F.R.
§§ 2634, et seq.; and (3) the OGE Form
278. See, e.g., Saffarinia, 2019 WL
5086913, at *8; Gov't's Opp'n, ECF No. 31 at 5;
Def.'s Reply, ECF No. 38 at 11. Mr. Saffarinia's
primary argument is that the Indictment fails to identify a
legal duty to disclose the four allegedly concealed facts,
and that the three sources-the EIGA, the OGE regulations, and
the OGE Form 278-do not require the disclosure of those
facts. See Def.'s Mem., ECF No. 27-1 at 16;
see also Def.'s Reply, ECF No. 38 at 11.
Court must first decide, as a matter of law, whether [a
legal] duty [to disclose] existed.” United States
v. Crop Growers Corp., 954 F.Supp. 335, 345 (D.D.C.
1997). “Concealment cases in this circuit and others
have found a duty to disclose material facts on the basis of
specific requirements for disclosure of specific
information.” Safavian, 528 F.3d at 964
(emphasis added). The D.C. Circuit has explained that this
specificity is rooted in the Due Process Clause of the Fifth
Amendment to the United States Constitution, which requires a
criminal defendant to have “fair notice . . . of what
conduct is forbidden.” Id. (quoting United
States v. Kanchanalak, 192 F.3d 1037, 1046 (D.C. Cir.
1999)). “[T]his ‘fair warning' requirement
prohibits application of a criminal statute to a defendant
unless it was reasonably clear at the time of the alleged
action that defendants' actions were criminal.”
Kanchanalak, 192 F.3d at 1046. Vague standards and
the “ethical principles” embodied in them did not
impose a clear duty to disclose information.
Safavian, 528 F.3d at 964-65; see also
Saffarinia, 2019 WL 5086913, at *8 (discussing the
holding in Safavian).
with Safavian, courts have recognized that a
defendant's duty to disclose specific information must be
found in statutes, regulations, or government forms. See,
e.g., White Eagle, 721 F.3d at 1117 (“[A]
conviction under § 1001(a)(1) is proper where a statute
or government regulation requires the defendant to disclose
specific information to a particular person or
entity.”); Craig, 401 F.Supp.3d at 64-68
(holding that defendant had a legal duty to disclose under
the Foreign Agents Registration Act (“FARA”) and
the FARA registration form); Crop Growers Corp., 954
F.Supp. at 346-48 (holding that defendants did not have a
duty to disclose whether they violated campaign finance laws
in mandatory filings to the Securities and Exchange
case, Mr. Saffarinia does not dispute-and the Court
agrees-that he had a legal duty to disclose the $80, 000 loan
from Person A and “certain ancillary details, such as
the interest rate, the date of maturity, etc.” on his
OGE Forms 278. Def.'s Mem., ECF No. 27-1 at 17. Indeed,
Section 102(a)(4) of the EIGA provides, in relevant part,
that “[e]ach report filed . . . shall include a full
and complete statement with respect to . . . [t]he identity
and category of value of the total liabilities owed to any
creditor other than a spouse, or a parent, brother, sister,
or child of the reporting individual or of the reporting
individual's spouse which exceed $10, 000 at any time
during the preceding calendar year, ” subject to
certain exclusions. 5 U.S.C. app. 4 § 102(a)(4). Section
2634.305 of the OGE regulations contains nearly identical
language. See 5 C.F.R. § 2634.305(a)
(“[E]ach financial disclosure report filed pursuant to
this subpart must identify and include a brief description of
the filer's liabilities exceeding $10, 000 owed to any
creditor at any time during the reporting period, and the
name of the creditors to whom such liabilities are
owed.”). And the OGE Form 278 unambiguously provides
that “[the EIGA] requires [the filer] to disclose
certain of [his or her] financial liabilities, ”
including to “[i]dentify and give the category of
amount of the liabilities which [the filer], [his or her]
spouse or dependent child owed to any creditor which exceeded
$10, 000 at any time during the reporting period.” OGE
Form 278 at 10.
Indictment makes clear that Mr. Saffarinia's legal duty
was imposed by the EIGA, the OGE regulations, and the OGE
Form 278. See Indictment, ECF No. 1 at 2 ¶ 4.
On its face, the Indictment alleges that Mr. Saffarinia had a
legal duty to disclose the specific information of the $80,
000 loan from Person A. See Indictment, ECF No. 1 at
2 ¶ 4, 4 ¶¶ 11-12. And Mr. Saffarinia concedes
that he had a “duty to disclose liabilities over $10,
000 owed to any one creditor at a time within the annual
reporting period (along with ancillary details concerning the
debt) . . . .” Def.'s Reply, ECF No. 38 at 11. The