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United States v. Saffarinia

United States District Court, District of Columbia

January 15, 2020

UNITED STATES OF AMERICA
v.
EGHBAL SAFFARINIA a/k/a “EDDIE SAFFARINIA”, Defendant.

          MEMORANDUM OPINION

          EMMET G. SULLIVAN UNITED STATES DISTRICT JUDGE.

         On June 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 ¶¶ 10-78.[1]

         Mr. 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.

         I. Background

         The 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.

         A. The Ethics in Government Act

         “Enacted 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.

         To that 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.”).

         The 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).[2] 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 prosecution.”).[3]

         B. Factual Background

         The criminal charges here stem from Mr. Saffarinia's alleged falsifications and omissions in his OGE Forms 278. See Indictment, ECF No. 1 at 2 ¶ 4.[4] 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.

         Person 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.

         At 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.

         Mr. 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. Id.

         C. The Indictment

         The 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.

         Next, 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.

         Finally, 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.

         D. Mr. Saffarinia's Motions

         On 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 adjudication.

         II. Legal Standard

         A. Motion to Dismiss

         A 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).

         “[A]n 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.” Id.

         B. Brady and Its Progeny

         Pursuant 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. Cir. 1988)).

         To prove a Brady violation, a movant must establish three elements: “[1] The evidence at issue must be favorable to the accused, either because it is exculpatory, or because it is impeaching; [2] that evidence must have been suppressed by the [government], either willfully or inadvertently; and [3] 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.”).

         III. Analysis

         The 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.

         A. Motion to Dismiss

         Mr. 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.

         1. Concealment Charge under 18 U.S.C. § 1001(a)(1)

         Count I 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).

         Here, 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 limitations.

         a. Count One Is Not Time-Barred

         Section 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.

         Mr. 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.

         To 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).

         The 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 492.[5]

         The 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.

         b. Scheme, Trick, or Device

         The 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.

         Mr. 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).

         Here, 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.

         The 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.

         The 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.

         The 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 ¶¶ 37-41.

         Mr. 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.

         In 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).

         In 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).

         Here, 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.

         c. Legal Duty to Disclose

         The 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).

         Neither 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.

         “[T]he 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).

         Consistent 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 Commission).

         In this 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.

         The 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 Court ...


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