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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------- X : : UNITED STATES OF AMERICA, : v. : : FREDERIC CILINS, : : Defendant. : -------------------------------------- X

Index No. S13 Cr. 315 (WHP)

DEFENDANT’S MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS COUNT ONE OF THE SUPERSEDING INDICTMENT

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TABLE OF CONTENTS Page INTRODUCTION ......................................................................................................................... 1 BACKGROUND ........................................................................................................................... 2 LEGAL STANDARD.................................................................................................................... 4 DISCUSSION ................................................................................................................................ 5 CONCLUSION ............................................................................................................................ 17

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TABLE OF AUTHORITIES Page(s) CASES Bank of Nova Scotia v. United States, 487 U.S. 250 (1988) .................................................................................................................15 E.E.O.C. v. Arabian American Oil Co., 499 U.S. 244 (1991) ......................................................................................................... passim Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246 (2004) ...................................................................................................................9 Liparota v. United States, 471 U.S. 419 (1985) .................................................................................................................16 Morrison v. Nat’l Australia Bank Ltd., 130 S. Ct. 2869 (2010) ..................................................................................................... passim Rewis v. United States, 401 U.S. 808 (1971) .................................................................................................................15 United States v. Aguilar, 515 U.S. 593 (1995) ...........................................................................................................12, 13 United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012).........................................................................................................4 United States v. Bodmer, 342 F. Supp. 2d 176 (S.D.N.Y. 2004)......................................................................................16 United States v. Bowman, 260 U.S. 94 (1922) .....................................................................................................................8 United States v. Camiel, 689 F.2d 31 (3d Cir. 1982).......................................................................................................14 United States v. D’Alessio, 822 F. Supp. 1134 (D.N.J. 1993) .............................................................................................15 United States v. Gatlin, 216 F.3d 207 (2d Cir. 2000).......................................................................................................8 United States v. Giffen, 326 F. Supp. 2d 497 (S.D.N.Y. 2004)......................................................................................14

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TABLE OF AUTHORITIES (continued) Page(s) United States v. Gray, 642 F.3d 371 (2d Cir. 2011)............................................................................................. passim United States v. Hiecklen, 858 F. Supp. 2d 256 (S.D.N.Y. 2012)........................................................................................4 United States v. Kernell, 667 F.3d 746 (6th Cir. 2012) .....................................................................................................6 United States v. Lanier, 520 U.S. 259 (1997) ...........................................................................................................15, 16 United States v. Panarella, 277 F.3d 678 (3d Cir. 2002).......................................................................................................4 United States v. Peralta, 763 F. Supp. 14 (S.D.N.Y. 1991).............................................................................................15 United States v. Powell, 680 F.3d 350 (4th Cir. 2012) ...................................................................................................14 United States v. Vilar, 729 F.3d 62 (2d Cir. 2013)...................................................................................................8, 14 United States v. Yielding, 657 F.3d 688 (8th Cir. 2011) ...............................................................................................6, 14 STATUTES 15 U.S.C. § 10(b) ..............................................................................................................................8, 9, 14 § 78b(2) ....................................................................................................................................10 § 78c(a)(17) ..............................................................................................................................10 18 U.S.C. § 1503.......................................................................................................................................12 § 1512(h) ....................................................................................................................................9 § 1513(d) ....................................................................................................................................9 § 1519............................................................................................................................... passim Corporate and Criminal Fraud Accountability Act of 2002 ..........................................................11 U.S. Bankruptcy Code ...........................................................................................................5, 9, 14

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TABLE OF AUTHORITIES (continued) Page(s) OTHER AUTHORITIES 148 Cong. Rec. E463-01 (2002) ........................................................................................................................12 S1,783-01 (2002) .........................................................................................................11, 12, 13 S6,524-02 (2002) .....................................................................................................................11 Fed. R. Crim. P. § 10b-5 .....................................................................................................................................14 § 12(b)(3)(B) ..............................................................................................................................4 S. Rep. 107-146 (2002) ............................................................................................................11, 12

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Defendant Frederic Cilins respectfully submits this motion to dismiss Count One of the superseding indictment for failure to state an offense. INTRODUCTION For almost a year, the government has proceeded against Mr. Cilins under the theory that he criminally obstructed an investigation conducted by a federal grand jury in the Southern District of New York and the Federal Bureau of Investigation, after he first learned of that investigation in the spring of 2013. Now, on the eve of trial, the government has charged Mr. Cilins with conspiracy to commit criminal obstruction. The supposed conspiracy began in 2012, when, as the government admits, he had no intent to obstruct an American investigation— indeed, well before any such investigation had even been contemplated. The charge is instead based on a radical new theory: that Mr. Cilins interfered with a Guinean civil licensing investigation, which somehow amounts to a violation of U.S. obstruction law under 18 U.S.C. § 1519. The government’s unprecedented and breathtaking attempt to federalize protection for investigations spread far and wide throughout the world has no basis in the text of the obstruction statute itself and no support in the case law. It also runs up against the well-established presumption that, absent strong evidence to the contrary, Congress did not intend to give federal statutes extraterritorial reach. Not only does § 1519 contain no textual evidence that Congress meant to give the law a worldwide sweep, the statute’s legislative history also confirms the obvious: that Congress wrote a federal obstruction statute in order to criminalize intentional interference with American investigations. The government’s new conspiracy count is fatally defective and must be dismissed.

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BACKGROUND Mr. Cilins was originally indicted on April 25, 2013, pursuant to an indictment alleging five substantive obstruction offenses. According to that indictment, all of the acts of obstruction, including an alleged violation of 18 U.S.C. § 1519, took place “in or about March 2013, up to and including on or about April 14, 2013.” Indictment at ¶¶ 1-5. Each count related to alleged efforts by Mr. Cilins to obstruct an ongoing investigation by a grand jury in the Southern District of New York and the FBI. Id. According to the criminal complaint filed in connection with Mr. Cilins’s arrest, that investigation began in or about January 2013. Complaint at ¶ 8. Mr. Cilins allegedly first learned of the investigation in April 2013, by means of a ruse designed by the FBI, in which a cooperating witness (“CW”) told him that the FBI had contacted her and informed her of the investigation. Id. at ¶ 19. Thereafter, according to the Complaint, Mr. Cilins interfered with the federal investigation by attempting to destroy documents sought by the grand jury and by seeking to procure false testimony from the CW. Id. at ¶¶ 20-23. For most of the past year, the government and Mr. Cilins have proceeded in accordance with this understanding of the factual allegations underlying the indictment. For example, in its June 2013 Memorandum in Support of Detention Pending Trial, the government wrote that the charges against Mr. Cilins were predicated on his alleged efforts to “obstruct[] a federal grand jury investigation . . . by promising to pay money to an individual under subpoena by the grand jury to destroy documents crucial to that investigation and urging that person to lie to agents of the Federal Bureau of Investigation.” Gov’s Memo. in Support of Detention at 1. One month later, the government stated again that Mr. Cilins was awaiting trial “because he schemed to destroy contracts sought by a federal grand jury in connection with its investigation into corruption.” Gov’s Amended Mot. to Preclude at 1. And as recently as January of this year, the government reiterated that the case against Mr. Cilins is one involving his “efforts to obstruct the

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grand jury investigation.” Gov’s Memo. in Support of Its Request to File Its Witness List Two Weeks Before Trial at 4. Then, on February 18, 2014, a little over a month before the scheduled start of trial, the government obtained a superseding indictment. In the new instrument, the government doubled down on § 1519—not only by retaining the substantive obstruction charge under that statute from the original indictment, but by adding a conspiracy charge based on an entirely new theory. Count One of the superseding indictment alleges that Mr. Cilins and unnamed co-conspirators conspired to violate § 1519 by seeking to “obstruct the investigation of allegations that a business entity based outside of the United States . . . had paid bribes to obtain a valuable mining concession in Guinea’s Simandou region.” According to the superseding indictment, the conspiracy allegedly began “in or about 2012,” well before Mr. Cilins supposedly learned of the grand jury and FBI investigation—indeed, before any such American investigation even existed—and well before any of the other counts alleged in either the original or superseding indictment (all of which took place in March or April 2013). Although there was no American criminal proceeding pending or contemplated at the time the conspiracy allegedly began, a Guinean civil proceeding had commenced, and, according to the government, it is that proceeding the indictment alleges Mr. Cilins agreed to obstruct when he joined the conspiracy. In the spring of 2012, the Guinean government initiated a licensing review process to reexamine all existing mining titles and conventions in Guinea to determine whether any adjustments to or withdrawals of the titles were required. Schwartz Declaration, ¶ 2. In October 2012, the governmental committee charged with administering this process elected to open a licensing inquiry into the mining rights held by the “business entity” referenced in the superseding indictment. Id.

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Upon receiving the superseding indictment, counsel for Mr. Cilins called the prosecutors to ask about the theory underlying the new conspiracy count. The government conceded that there was no evidence to suggest that Mr. Cilins was aware of or contemplated an American criminal investigation when he allegedly entered the conspiracy in 2012; the prosecutors candidly admitted that the investigation Mr. Cilins allegedly agreed to obstruct at that time was the Guinean licensing review. The government informed counsel that, in its view, a defendant’s obstruction of a foreign investigation violates 18 U.S.C. § 1519 if the matter is also within the jurisdiction of a department or agency of the United States, regardless of whether the defendant intended to obstruct an American investigation. Id., ¶ 3. LEGAL STANDARD Under Rule 12(b)(3)(B) of the Federal Rules of Criminal Procedure, a defendant may raise by pretrial motion a claim that “the indictment or information [against him] fails to invoke the court’s jurisdiction or to state an offense.” Fed. R. Crim. P. 12(b)(3)(B). Even when an indictment alleges each element of the offense, it nonetheless must be dismissed when “the specific facts alleged . . . fall beyond the scope of the relevant criminal statute, as a matter of statutory interpretation.” United States v. Panarella, 277 F.3d 678, 685 (3d Cir. 2002) (abrogated on other grounds by Skilling v. United States, 130 S. Ct. 2896 (2010)); United States v. Aleynikov, 676 F.3d 71, 75 (2d Cir. 2012) (“[A] federal indictment can be challenged on the ground that it fails to allege a crime within the terms of the applicable statute”); see also United States v. Hiecklen, 858 F. Supp. 2d 256, 263 (S.D.N.Y. 2012) (“Whether or not the indictment charges an offense squarely presents an issue of law determinable before trial”).

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DISCUSSION Count One of the superseding indictment alleges that Mr. Cilins engaged in a conspiracy to violate the federal obstruction statute, 18 U.S.C. § 1519. That provision imposes criminal liability on one who knowingly alters, destroys, mutilates, conceals, covers up, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case. Id. The statute thus contains three general elements, requiring the government to prove that: (1) the defendant knowingly destroyed, falsified, altered, or concealed a record, document, or tangible thing; (2) the defendant did so with the intent to impede, obstruct, or interfere with an investigation or the proper administration of a matter; and (3) the investigation or matter was within the jurisdiction of a department or agency of the United States. At issue here is the second element—the intent requirement. By stating that obstruction may occur “in relation to or in contemplation of” an investigation, the statute makes clear that the investigation need not be pending or even imminent at the time of the offense; the investigation may simply be anticipated. See United States v. Gray, 642 F.3d 371, 377 (2d Cir. 2011) (“Congress rejected any requirement that the government prove a link between a defendant’s conduct and an imminent or pending official proceeding.”). But whether or not an investigation is ongoing or merely just contemplated, obstructive intent with respect to the investigation must still exist: [W]e do not think Congress, in expanding the scope of § 1519 beyond actions directed to a pending matter, eliminated the need for proof of intent to impede, obstruct, or influence a federal matter. In other words, the statute does not impose liability for ‘knowingly destroying any document in contemplation of any [federal] matter,’ without an intent to impede, obstruct, or influence a matter.

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United States v. Yielding, 657 F.3d 688, 711 (8th Cir. 2011) (emphasis and brackets in original; ellipses omitted); see id. (“the government concedes that the prosecution must show intent to impede, obstruct, or influence the investigation”). In other words, a defendant whose actions interfere with an investigation (whether current or future) does not violate § 1519 unless interfering with the investigation was his goal. See United States v. Kernell, 667 F.3d 746, 75253 (6th Cir. 2012) (“Congressional statements about 1519 strongly support the argument that Congress intended a specific intent to apply throughout § 1519”); see also Gray, 642 F.3d at 378-79 (defendants had requisite intent to impede DOJ investigation where they knew that false reports would be reviewed by DOJ). For the purposes of Count One, the government aims to satisfy the intent element by showing that, among other acts, “[i]n or about 2012,” Mr. Cilins attended a meeting at which he expressed his desire for the CW to make false statements relating to “allegations concerning mining concessions in the Simandou region of Guinea.” Superseding Indictment at ¶ 5a. This supposed meeting took place well before a grand jury was convened in January 2013, and also well before the government’s ruse allegedly informed Mr. Cilins of the grand jury investigation in April 2013. Logic thus dictates—and the government has conceded—that Mr. Cilins could not have had obstructive intent with respect to the grand jury investigation. Indeed, the government has conceded that at the time of the alleged meeting in 2012, Mr. Cilins did not have any intent to obstruct any American investigation. Instead, the government has conceded that the only

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obstructive intent Mr. Cilins could possibly have had in 2012 was an intent to interfere with a Guinean civil licensing investigation into the Simandou mining concessions.1 Accordingly, Count One rests on the premise that § 1519’s intent requirement may be satisfied by the defendant’s intent to interfere with a foreign civil investigation. Indeed, under the government’s theory, the only requisite tie to the U.S. is the requirement that the investigation concern a “matter within the jurisdiction of any department or agency of the United States.” The existence of the grand jury and FBI investigation is unnecessary, as is Mr. Cilins’s knowledge or intent with respect to that investigation. The government’s novel theory finds no support in the text of § 1519 and runs contrary to the presumption against extraterritoriality. Count One should therefore be dismissed. “It is a longstanding principle of American law that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.” Morrison v. Nat’l Australia Bank Ltd., 130 S. Ct. 2869, 2877 (2010) (quotation marks omitted). This principle rests upon the “perception that Congress ordinarily legislates with respect to domestic, not foreign matters.” Id. Accordingly, unless “Congress [has] clearly expressed” its “affirmative intention” that a statute should apply to foreign subject matter, a court “must presume it is primarily concerned with domestic conditions.” E.E.O.C. v. Arabian American Oil Co., 499 U.S. 244, 248 (1991) (Aramco) (quotation marks omitted). The presumption against extraterritoriality is a fundamental, far-reaching canon of statutory

1

On February 12, 2014, the Court denied Mr. Cilins’s motion to compel the government to disclose its trial witnesses four weeks prior to trial, in substantial part because Mr. Cilins did not “tether the events in Guinea in 2008 to his alleged obstruction of a grand jury investigation in 2013, the charges in the indictment.” Memorandum & Order at 2. The superseding indictment, which was filed less than a week later, has now placed events in Guinea squarely at issue.

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interpretation, applying to criminal and civil statutes alike. See United States v. Vilar, 729 F.3d 62, 74 (2d Cir. 2013). The Supreme Court recently applied the presumption against extraterritoriality in Morrison. There, shareholders of an Australian company listed on the Australian stock exchange alleged violations of § 10(b) of the Exchange Act based upon fraud by the company’s American subsidiary. 130 S. Ct. at 2875-76. The question presented was whether Congress intended for § 10(b) to apply where “the deception originated” in the United States, but the purchase and sale occurred overseas. Id. at 2884. Scanning the text of the statute, the Court noted that several of its provisions discuss foreign transactions. Id. at 2882 (noting the statute’s “general reference to foreign commerce” and its reference to stock prices “disseminated and quoted throughout the United States and foreign countries”). Nevertheless, the Court concluded that this language fell far short of the “affirmative indication” needed from Congress to overcome the presumption against extraterritoriality. Id. at 2883. The Court summed up the proper approach: “When a statute gives no clear indication of an extraterritorial application, it has none.” Id. at 2878. That straightforward principle dictates the result here.2 In this case, there is no indication in the text of § 1519 that Congress intended the statute apply extraterritorially—certainly not the “clear indication” necessary to overcome the
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United States v. Bowman, 260 U.S. 94 (1922), is not to the contrary. In Bowman, the Supreme Court “was asked to consider criminal charges brought against sailors who, while at sea, conspired to defraud a company owned by the United States.” Vilar, 729 F.3d at 72. The Bowman Court held that the presumption against extraterritoriality did not apply to criminal statutes “enacted because of the right of the government to defend itself against obstruction, or fraud wherever perpetrated, especially if committed by its own citizens, officers or agents.” Bowman, 260 U.S. at 98. As the Second Circuit has made clear, the Bowman exception is limited to “‘crimes against the United States government.” Vilar, 729 F.3d at 73 (quoting United States v. Gatlin, 216 F.3d 207, 211 n.5 (2d Cir. 2000) (emphasis in original)). The actions of a foreign citizen allegedly taken to obstruct a foreign civil investigation clearly fall beyond the scope of the exception.

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presumption. To the contrary, the plain language of § 1519 makes unmistakably clear that it was intended to prevent interference with American investigations only. The text of the statute prohibits interference with “the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11.” 18 U.S.C. § 1519. This is domestic-focused language—especially the reference to a “case filed under title 11,” which refers to the U.S. Bankruptcy Code. It would be bizarre indeed for Congress to write a statute intended to protect the integrity of investigations worldwide by making reference to American—but not foreign—bankruptcy cases. See, e.g., Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 252 (2004) (“Statutory construction must begin with the language employed by Congress and the assumption that ordinary meaning of that language accurately expresses the legislative intent”). That the statute covers obstruction “in relation to or contemplation of any such matter or case” filed under title 11 (that is, in relation to or contemplation of an American bankruptcy case) further reinforces this conclusion. The domestic focus of § 1519 is also demonstrated by comparing its plain text with two other closely related statutes in which Congress explicitly chose to include language giving extraterritorial effect. Both the federal witness-tampering statute and the federal witnessretaliation statute explicitly provide for extraterritorial application: “There is extraterritorial Federal jurisdiction over an offense under this section.” 18 U.S.C. § 1512(h); see 18 § 1513(d) (same). Congress clearly knew how to cover foreign conduct in the obstruction context when it wanted to, and the clear contrast between the language of these statutes is telling. See Morrison, 130 S. Ct. at 2883 (“Subsection 30(a) contains what § 10(b) lacks: a clear statement of extraterritorial effect.”).

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Indeed, § 1519 offers even less evidence of extraterritorial intention than did the securities law considered in Morrison. That statute contained several provisions that arguably suggested a broader scope, including references to trades and communications with a “foreign country” and to “foreign commerce.” See Morrison, 130 S. Ct. at 2882 (discussing 15 U.S.C. §§ 78c(a)(17) & 78b(2)). Although the Supreme Court allowed that the textual references to foreign conduct made a broader interpretation “possible,” the Court nevertheless found these textual cues to be insufficient: “possible interpretations of statutory language do not override the presumption against extraterritoriality.” Id. at 2883. Here, as the discussion above makes clear, the text of § 1519 contains no indication whatsoever of a Congressional purpose to extend American obstruction law beyond those “places over which the United States has sovereignty or has some measure of legislative control.” Aramco, 499 U.S. at 248. The lack of textual support for giving § 1519 a global sweep is unsurprising, as it is hard to imagine why Congress would feel the need to protect foreign investigations conducted by foreign governments, or to punish foreign citizens who do not intend to interfere with American proceedings. In Morrison, there was at least a viable argument for extraterritoriality given the transnational nature of the modern securities market and the United States’ interest in regulating market frauds to protect American investors. Here, the power to criminalize and investigate acts of obstruction is uniquely a part of each country’s sovereign authority. Construing American law to criminalize the obstruction of foreign investigations not only would infringe upon the authority of other countries, but would also risk real conflict with their laws. Congress can enact—and has enacted—laws to punish crimes against the United States government itself; it is for Guinea and other sovereigns to determine whether and how to punish efforts to impede their own domestic investigations.

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The plain language of § 1519 is thus clear: A defendant is guilty of obstruction only if he intends to obstruct an American investigation. This conclusion is fatal to the government’s attempts to apply the statute to the alleged obstruction of a Guinean civil licensing investigation. See Gray, 642 F.3d at 377 (“The words of the statute are unambiguous, and, thus, judicial inquiry is complete”) (quotation marks omitted). The legislative history of § 1519 also reinforces the conclusion that Congress did not intend for it to apply to obstruction intended to impede foreign investigations only. The language that became § 1519 was originally introduced by Senator Patrick Leahy in the wake of the collapse of Enron as part of the Corporate and Criminal Fraud Accountability Act of 2002 (“the Act”). See 148 Cong. Rec. S1,783-01, at S1,785 (2002) (statement of Sen. Patrick Leahy). Senator Leahy explained that the Act was intended to “restore accountability” in our markets and to “ensur[e] that the corporate fraud and greed that have been on display in the Enron debacle can be better detected, prevented and prosecuted.” Id. at S1,785-86. Less than two months later, the Judiciary Committee reported that the purpose of the Act was to provide prosecutors and the government with the tools to address domestic criminal acts, like those involved in Enron, that had undermined American investors’ confidence in the stock market: The majority of Americans depend on capital markets to invest in the future needs of their families—from their children’s college fund to their retirement nest eggs. American investors deserve action. Congress must act now to restore confidence in the integrity of the public markets and deter fraud artists who believe their crimes will go unpunished. Restoring such accountability is the aim of the Corporate and Criminal Fraud Accountability Act of 2002. Accountability and transparency help our markets work as they should, in ways that benefit investors, employees, consumers and our national economy. The Enron debacle has arrived on our doorstep, and our job is to make sure that there are adequate doses of accountability in our legal system to prevent such occurrences in the future, and to offer a constructive remedy and decisive punishment should they occur. The time has come for Congress to rethink and reform our laws in order to prevent corporate deceit, to protect investors and to restore full confidence in the capital markets.

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S. Rep. 107-146, at 11 (2002); see also 148 Cong. Rec. S6,524-02, at S6,539-40 (2002) (statement of Sen. Patrick Leahy) (expressing the desire to protect the “middle-age couple . . . [now] fac[ing] the question of whether they can even keep their home, whether they will have the money to visit their grandchildren” and to “punish criminals” who put them in this position). Clearly Congress was legislating in response to a known, domestic evil—fraudulent accounting by domestic companies such as Enron that had hurt American workers and investors. In particular, Congress intended § 1519 to “clarify and plug holes in the existing criminal laws” by allowing prosecutors to bring criminal charges for the destruction of documents in contemplation of a future federal investigation. 148 Cong. Rec. S1,783-01, at S1,786; see also 148 Cong. Rec. E463-01, at E463 (2002) (statement of Rep. John Conyers) (same). Prior to the adoption of § 1519, the courts had narrowed a number of existing obstruction statutes (such as 18 U.S.C. § 1503) to require that the government be able to “tie the obstructive conduct to a pending or imminent proceeding or matter.” S. Rep. 107-146, at 15. A prominent example was United States v. Aguilar, 515 U.S. 593 (1995), which had imposed a “nexus” requirement for obstruction prosecutions—requiring the government to show that the defendant’s obstructive behavior had “a relationship in time, causation, or logic with the judicial proceedings.” Id. at 599. The practical effect of this “burdensome proof requirement[]” was made clear in the prosecution against Arthur Andersen, a high-profile case of document-shredding that was a subject of intense congressional focus during the drafting and debate over § 1519. S. Rep. 107146, at 6-7 (citing Aguilar). Congress noted that the nexus requirement had forced the government to proceed under the legal fiction that the defendants had violated the federal witness-tampering statute—rather than the obstruction statute—as Arthur Andersen’s destruction

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of documents had taken place prior to the initiation of a federal investigation or the issuance of a federal subpoena. Id. at 7. Section 1519 was a direct Congressional response to Aguilar and other cases requiring a nexus to a pending federal investigation; it was meant to enable the government to prosecute individuals for destroying documents without having to satisfy a “technical requirement that a judicial proceeding was already underway or that the documents were formally under subpoena.” 148 Cong. Rec. S1,783-01, at S1,786. Courts interpreting § 1519 regularly acknowledge this as the primary purpose of this statute. See, e.g., Gray, 642 F.3d at 377 (“Thus, in enacting § 1519 Congress rejected any requirement that the government prove a link between a defendant’s conduct and an imminent or pending official proceeding”). But the target was domestic obstruction, such as in the Arthur Andersen case. The legislative history gives no indication that Congress meant to broaden federal obstruction law to encompass obstruction intended to impede foreign investigations. Indeed, it would be absurd to argue that Congress contemplated giving § 1519 the expansive sweep that the government advocates here. Under the government’s novel theory, it could bring an obstruction charge against any foreigner who intentionally interferes with any foreign investigation—whether criminal or civil—so long as the subject-matter arguably falls “within the jurisdiction of any department or agency of the United States.” Even a purely local matter could give rise to criminal liability in the U.S., as long as the government can point to some potential jurisdictional tie.3 For example, under the government’s theory, a video
3

The Second Circuit’s decision in Gray shows just how stunningly broad the government’s position is in this case. In Gray, the Court of Appeals considered whether § 1519 applied to the obstruction of an investigation conducted by a privately owned detention center that housed federal inmates. 642 F.3d at 372. The Court concluded that it did, given the responsibility of the Department of Justice for federal inmates:
(cont'd)

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bootlegger in Beijing who lies to city inspectors about the source of his merchandise during a licensing investigation would violate § 1519, because the FBI has jurisdiction to investigate international piracy. For good reason, then, every single case identified by counsel has involved obstruction of an American investigation. See, e.g., United States v. Powell, 680 F.3d 350 (4th Cir. 2012) (obstruction of Chapter 11 bankruptcy proceeding); Yielding, 657 F.3d at 698 (obstruction of FBI investigation); Gray, 642 F.3d at 378 (obstruction of DOJ investigation). And similar attempts by the government to give extraterritorial scope to other criminal statutes have been rejected. See, e.g., Vilar, 729 F.3d at 76 (“[I]t would be clear or obvious error to apply Section 10(b) and Rule 10b-5 to extraterritorial criminal conduct in light of Morrison . . . .”); United States v. Giffen, 326 F. Supp. 2d 497, 506 (S.D.N.Y. 2004) (“[T]his Court finds that Congress did not intend that the intangible right to honest services encompass bribery of foreign officials in foreign countries”). The outcome here should be no different. At the time the conspiracy was allegedly entered into—and indeed throughout all of 2012—Mr. Cilins and his co-conspirators could only have intended to impede, obstruct, or interfere with a civil licensing investigation that was being
________________________ (cont'd from previous page)

[Defendants] overlook the fact that [the private detention center] contracted with the U.S. Marshals Service, an agency within the DOJ, to house federal prisoners. The warden of [the detention center] is required by the terms of that contract to report allegations of excessive force to the Marshals Service. Id. at 378. The Court then explicitly reserved the question “whether § 1519 would apply to private investigations outside the unique circumstances of th[e] case.” Id. at 378 n.6. If the Gray Court had read the statute as broadly as the government advocates here—to cover any investigation anywhere in the world—it is hard to imagine the Court would have taken such great care to emphasize the federal aspects of the investigation or would have reserved the question whether the statute applies to purely private American investigations.

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conducted exclusively by the Guinean government. Such an intent is beyond the scope of the obstruction statute. That the indictment appears to allege overt acts in 2013 at the time Mr. Cilins allegedly was made aware of the federal investigation is of no matter. The Court may not rewrite the government’s indictment in order to save it. See, e.g., United States v. Camiel, 689 F.2d 31, 39 (3d Cir. 1982) (stating that a court “may identify the flaws in the current indictment but correcting those flaws is beyond our power. An indictment may not be amended, changed, or altered in any material respect except by resubmission to the grand jury. This Court can neither act for a grand jury, nor speculate whether a grand jury would have indicted the named defendants had it realized that the indictment as written was overbroad.”). Indeed, where an indictment, or a count in an indictment, is obtained based on the presentation to the jury of “misleading statements of law,” such “defects in the grand jury presentation” create “‘grave doubt that the decision to indict was free from the substantial influence’ of the errors” and require dismissal. United States v. Peralta, 763 F. Supp. 14, 21 (S.D.N.Y. 1991) (quoting Bank of Nova Scotia v. United States, 487 U.S. 250, 256 (1988)); see United States v. D’Alessio, 822 F. Supp. 1134, 1145 (D.N.J. 1993) (concluding that while striking problematic references “might yield an indictment which successfully charges an intangible rights fraud scheme,” a court could not do so as it would not produce an indictment that “charge[s] the same intangible rights fraud scheme returned by the grand jury” (emphasis in original)). Finally, to the extent the Court sees any ambiguity as to whether § 1519 applies to foreign investigations, the rule of lenity requires resolving that ambiguity in favor of Mr. Cilins. As the Supreme Court has explained, when construing an ambiguous criminal statute, a court must adhere to the rule of lenity, which “ensure[s] fair warning by so resolving ambiguity in a criminal statute as to apply it only to conduct clearly covered.” United States v. Lanier, 520 U.S.

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259, 266 (1997) see also Rewis v. United States, 401 U.S. 808, 812 (1971) (“ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity”). By doing so, the courts provide clear notice of the “conduct rendered illegal” by the statute and “‘strike[] the appropriate balance between the legislature, the prosecutor, and the court in defining criminal liability.’” United States v. Bodmer, 342 F. Supp. 2d 176, 181 (S.D.N.Y. 2004) (quoting Liparota v. United States, 471 U.S. 419, 427 (1985)). Here, the text and statutory history of § 1519 clearly indicate that the statute does not apply to a foreigner’s interference with a foreign government’s investigation into its own domestic affairs. To apply the statute to just such a case would be more than just novel—it would literally be without precedent. And as the Supreme Court has explained, “due process bars courts from applying a novel construction of a criminal statute to conduct that neither the statute nor any prior judicial decision has fairly disclosed to be within its scope.” Lanier, 520 U.S. at 266; see Bodmer, 342 F. Supp. 2d at 189 (dismissing criminal count in light of the rule of lenity).

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CONCLUSION For the reasons set forth above, Mr. Cilins respectfully requests that the Court dismiss Count One of the superseding indictment. Dated: New York, New York March 4, 2014 COOLEY LLP By: /s/ William J. Schwartz William J. Schwartz Annika M. Goldman

1114 Avenue of the Americas New York, New York 10036 Phone: (212) 479-6000 Email: wschwartz@cooley.com and Bruce H. Lehr Lehr, Fischer, Feldman, Levi & Mendez 1401 Brickell Avenue, Suite 910 Miami, Florida 33131 Phone: (305) 377-1777 Michelle Smith Law Office of Michelle Smith, P.A. 827 Menendez Court Orlando, Florida 32802-1788 Phone: (407) 601-6700 Attorneys for Defendant Frederic Cilins

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