Case 1:19-cv-04610-LMM Document 181 Filed 11/16/21 Page 1 of 28

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION

M ICHAEL T. C HRISLEY AND

J ULIE H. C HRISLEY Civil Action No.

v. 1:19-CV-04610-LMM
J OSHUA W AITES

United States’ Motion to Intervene and Motion for Stay of Discovery

The United States of America, by Kurt R. Erskine, Acting United States

Attorney, and Thomas J. Krepp and Annalise K. Peters, Assistant United States
Attorneys for the Northern District of Georgia, respectfully submits this motion

to intervene in this case, pursuant to Rule 24(a) and (b) of the Federal Rules of
Civil Procedure, and for a stay of discovery until such time as the criminal
charges against Todd and Julie Chrisley are resolved.
Todd and Julie Chrisley, the plaintiffs in this case, are seeking to depose Mark
Braddock, a key witness in the Government’s criminal case against the Chrisleys.
That criminal case has been specially set for trial before United States District
Judge Eleanor L. Ross on May 16, 2022. Because the deposition of Mr. Braddock
and further discovery practice in this case would interfere with the
Government’s criminal case and the specially set criminal trial, the United States

seeks a brief stay of discovery in this case. Defendant Joshua Waites consents to
a discovery stay, and the Chrisley plaintiffs oppose it.

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A. Background
1. The Pending Criminal Case Against Todd and Julie Chrisley
In 2017, the United States Attorney’s Office, IRS Criminal Investigations (IRS-
CI) and the FBI began investigating Michael Todd Chrisley (“Todd Chrisley”)
and Julie Chrisley for bank fraud, wire fraud, and federal tax offenses.1 As a

result of the investigation, on August 13, 2019, a grand jury sitting in the
Northern District of Georgia returned an indictment against defendants Michael
Todd Chrisley (“Todd Chrisley”), Julie Chrisley, and their accountant, Peter
Tarantino. (See N.D. Ga. Case No. 1:19-CR-297-ELR-JSA, Doc 1). The case has
been certified and specially set for a jury trial before United States District Judge
Eleanor L. Ross on May 16, 2022.

The charges in the indictment flow from three different fraud schemes
committed by the Chrisleys: a bank fraud scheme, a wire fraud scheme, and
federal tax offenses. In Counts 1 through 6, the Chrisleys are charged with

conspiracy to commit bank fraud, in violation of 18 U.S.C. § 1349, and five counts
of bank fraud, in violation of 18 U.S.C. § 1344. Specifically, the indictment alleges
that from 2007 through 2012, Todd Chrisley, Julie Chrisley, and “Co-conspirator

A” (i.e., Chrisley’s former business partner Mark Braddock), conspired to

defraud multiple banks by submitting false personal statements and fabricated
banking documents when applying for millions of dollars’ worth of loans. Mark

1The United States Attorneys Office and the FBI had previously investigated
the Chrisleys for bank fraud based upon the allegations, as set forth below, by
Mark Braddock.

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Braddock was Todd Chrisley’s business partner during most of the time period
of the bank fraud offenses and participated in the fraud with the Chrisleys until
he and Todd Chrisley had a falling out around 2012. At trial, Braddock will be a
key Government witnesses on the bank fraud charges. To date, the United States
has produced to the Chrisleys six reports summarizing in detail interviews of
Braddock. (See Reports of Braddock Interviews, attached hereto under seal as
Exhibit A).
In Counts 7 and 8 of the indictment, the Chrisleys are charged with wire fraud

and wire fraud conspiracy, in violation of 18 U.S.C. §§ 1343 and 1349. The
indictment alleges that in 2014, Todd and Julie Chrisley conspired to defraud a
California property owner by sending fabricated banking and financial
documents when applying to rent the house. Federal investigators obtained
copies of the fraudulent documents sent by Julie Chrisley from three sources:
(1) from Julie Chrisley’s Gmail and Google Drive account (pursuant to a federal

search warrant), (2) from the property owner’s listing agent who received the
fraudulent documents that Julie Chrisley emailed, and (3) physical copies of the
cut-and-taped fraudulent documents, which the Georgia Department of Revenue

(DOR) originally seized from a warehouse rented by the Chrisleys when

executing a levy for unpaid state taxes. Josh Waites, the defendant in this civil
case, was part of the DOR personnel involved in the seizure of the Chrisleys’
property. Many months later, the federal prosecution team obtained a federal
search warrant for the materials and property that the DOR had seized from the

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Chrisleys and found the fraudulent documents during the execution of the
search at the DOR.2

Finally, in Counts 9 and 10 of the indictment, the Chrisleys are charged with
conspiracy to defraud the United States, in violation of 18 U.S.C. § 371, and tax
evasion, in violation of 26 U.S.C. § 7201. The charges allege that from
approximately 2009 through 2018, Todd and Julie Chrisley, and their accountant,
Peter Tarantino, conspired to defraud the IRS. Over a ten-year period, they
evaded back taxes owed by Todd Chrisley, and then failed to file tax returns or

pay taxes for tax years 2013 through 2016.

The Chrisleys were arraigned on August 14, 2019. The Chrisleys later filed
various motions to suppress, including a motion to suppress the physically cut-

and-taped fraudulent financial documents that were originally seized by the

DOR with Josh Waites’ involvement. After holding a suppression hearing on the
motion to suppress the fraudulent documents seized by the DOR (discussed in

more detail below), the assigned magistrate judge issued reports and
recommendations on all the defendants’ motions. As stated, Judge Ross has
specially set a jury trial for May 16, 2022.
2. The Chrisleys’ Instant Suit Against Josh Waites
Just two months after the grand jury returned a criminal indictment against
the Chrisleys, the Chrisleys filed the instant lawsuit against Josh Waites, the

2The DOR has never been a part of the prosecution team in the parallel
criminal proceeding against the Chrisleys, hence the federal search warrant for
property that was in the DOR’s possession.

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former Director of the DOR’s Office of Special Investigations. The complaint

alleges that Waites, who was the chief law enforcement officer for the DOR,
abused his office and power in a variety of ways, including that he “aggressively
pursue[d] and prosecute[d] bogus tax evasion claims against the Chrisleys.”
(Doc. 1 at 2). Specifically, the complaint alleges that in 2017, Waites launched an
investigation into the Chrisleys’ state income tax obligations for the years 2009
through 2019, and that, as part of that investigation, Waites “worked with the
federal government, which provided him access to confidential tax information”

from the IRS as well as “certain federal grand jury information” from the
investigation into the Chrisleys. (Id. at 5). The complaint further alleges that
Waites improperly disclosed the Chrisleys’ confidential tax information from the
IRS to an unauthorized third party, Todd Chrisley’s daughter. (Id. at 6-7). The
complaint alleges that Waites’ conduct constituted a violation of federal tax law,
a breach of duty under Georgia law, and intentional infliction of emotional harm,

among other claims.

In March 2020, about five months after the Chrisleys filed this lawsuit, Waites
moved to stay discovery, arguing that the parallel criminal case pending against

the Chrisleys was likely to interfere with his ability to prepare a defense—
namely, that his interrogatories directed to and depositions of the Chrisleys
would “likely lead to [the Chrisleys] invoking their Fifth Amendment
protections.” (Doc. 23-1 at 4). The Chrisleys opposed the motion to stay, arguing
that Waites’ contention was pretextual and that they would not need to invoke
their Fifth Amendment rights. (Doc. 28 at 3). On April 7, 2020, this Court denied

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the motion, finding that “[a]t this time, Defendant’s Motion is too conjectural for
the Court to grant relief” because Waites could not point to any specific instances
where the Chrisleys would invoke their Fifth Amendment rights. (Doc. 32). The
Court noted that it would reconsider whether a stay was necessary or
appropriate if specific issues arose during discovery. (Id.).
Three months later, the Chrisleys had a change of mind about staying
discovery in this case. By their own admission, they perceived that they could
gain a tactical advantage in their criminal case through a limited discovery stay

in this case. In July 2020, the Chrisleys and Waites filed a joint motion to
temporarily stay discovery in light of the then-upcoming suppression hearing in
the parallel criminal case. (Doc. 62). The parties alleged that Waites had
requested the production of certain documents from the Chrisleys that “directly
related to the [upcoming] suppression hearing” in the criminal case. The
Chrisleys “reasonably believed” that the requested documents, which they had

obtained from third parties, were not “available to the prosecutor” (i.e., the
undersigned counsel) and were “essential to Plaintiffs’ defense” in the criminal
case. (Id. at 2). In an apparent effort to evade the Government’s ability to obtain

those documents in the criminal case, the parties requested that the Chrisleys be
permitted to delay production of the documents until after the scheduled
suppression hearing in the criminal case.3 This Court entered a consent order
permitting a delayed document production. (Doc. 64).

3The United States has requested reciprocal discovery from the Chrisley
defendants pursuant to Federal Rule of Criminal Procedure 16(b).

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According to the docket, the Chrisleys and Waites have since marched
forward in discovery in this case. Numerous subpoenas, document requests, and
deposition notices have been issued. Discovery in this case is set to close on
February 1, 2022—less than four months before the Chrisleys’ criminal trial is set
to begin in May 2022.

3. The Criminal Suppression Hearing

As noted above, in the criminal case, the Chrisleys filed a motion to suppress
the evidence that was originally seized by the DOR and later seized by federal

investigators pursuant to a federal search warrant. The Chrisleys alleged, in

relevant part, that (1) the DOR’s levy and seizure of their property violated the
Fourth Amendment because the DOR did not obtain a search warrant and
(2) that various DOR employees, and particularly Josh Waites, committed
misconduct and improperly seized the Chrisleys’ property with an eye towards a
criminal investigation (as opposed to a civil collection action on the levy). The

United States conceded that the DOR’s warrantless seizure had violated the
Fourth Amendment but argued that the evidence should not be suppressed
because the DOR was not criminally investigating the Chrisleys, and in any

event, the federal prosecution team later obtained the evidence only through a
valid federal search warrant.
The court held a two-day suppression hearing in April 2021, during which
several DOR employees testified. Josh Waites was a potential witness but was
not called by either the United States or the Chrisleys. Notably, the Chrisleys’
civil counsel in this case attended and appeared to closely assist their criminal

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counsel during the two-day criminal suppression hearing. After the hearing and
post-hearing briefing, the assigned magistrate judge issued a report and
recommendation that the Court grant the Chrisleys’ motion to suppress.4

4. Continuing Overlap of Parallel Cases and Deposition Notice for

Mark Braddock
It appears that the Chrisleys’ counsel in this case and their criminal case have
been working closely together since indictment. Most recently, the assigned
magistrate judge in the criminal case, the Honorable Justin S. Anand, held a
Garcia hearing last month to advise the Chrisleys of potential conflicts with their

counsel. At that hearing too, counsel representing the Chrisleys in this civil case
appeared and served as independent counsel advising them on potential
conflicts between them and their attorneys in the criminal case. In short, all of

the Chrisleys’ counsel are working together, and it is clear there has been
information and discovery flowing from their counsel in this case to their counsel
in the criminal case.

And there continues to be overlap in the substance of the Chrisleys’ criminal

and civil cases. Of most concern to the United States is the fact that the Chrisleys
have noticed multiple depositions in this lawsuit, including the deposition of

4The report makes clear that the federal prosecution team in no way
participated in DOR’s constitutional violations or alleged misconduct. The
United States chose not to file objections to the report and recommendation.

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Mark Braddock, who is a key witness in the Government’s bank fraud charges
against the Chrisleys.5

Concerned that the Chrisleys are attempting to use civil discovery in this case
in an attempt to gain an advantage in the criminal case, the United States
contacted the Chrisleys’ civil counsel in an effort to determine what, if any,
relevance Mark Braddock has to the civil case against Waites. After all, Braddock
had a falling out with Todd Chrisley about five years before the Chrisleys allege
that Josh Waites began his improper investigation. And the United States has

disclosed several FBI interview memoranda thoroughly documenting Braddock’s

statements to law enforcement.
According to the Chrisleys, Mr. Braddock has information relevant to this

case because Mr. Braddock, through his counsel, notified the DOR in 2014—three
years before the Chrisleys allege that Josh Waites began his improper
investigation—that the Chrisleys were illegally claiming to be Georgia residents.

(See May 2014 Email Chain, attached hereto under seal as Exhibit B). For his
part, Mr. Braddock maintains that he never had direct contact with the DOR or
any DOR employees, including Josh Waites, other than through his counsel, as
reflected in Exhibit B. However, it is undisputed that Braddock’s counsel
contacted DOR about the Chrisleys’ failure to file state taxes. Accordingly, the
issue that the Chrisleys presumably appear to seek to explore (Braddock’s

5 The deposition was noticed for November 2, 2021, but the Chrisleys agreed
not to proceed on that date when the undersigned counsel informed them of the
Government’s intent to file this motion.

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contact with DOR) is in no way in dispute and it is unclear why a deposition is in

any way necessary.
In an effort to not disrupt discovery in this case but to protect the public’s
interest in the criminal case, the United States proposed to the Chrisleys that Mr.
Braddock provide an affidavit containing information about his communications
with the DOR. The Chrisleys declined that proposal. It appears obvious at this
point that the Chrisleys are seeking to use this Court – and their available civil
discovery remedies – to obtain evidence that they are in no way entitled to

receive in advance of the criminal trial specially set by Judge Ross. Accordingly,
the United States is compelled to file this motion seeking a stay of discovery until
the criminal case is resolved at trial several months from now, in May 2022.
ARGUMENT AND AUTHORITY
A. The United States Should Be Granted Permission To Intervene
The Government seeks to intervene in this case under Rule 24 of the Federal

Rules of Civil Procedure. Rule 24(a)(2) provides for intervention as of right when
the movant “claims an interest relating to the property or transaction which is
the subject of the action, and is so situated that disposing of the action may as a

practical matter impair or impede the movant’s ability to protect its interest.”
Rule 24(b)(2) provides for permissive intervention when the movant “has a claim
or defense that shares with the main action a common question of law or fact.”
The Government respectfully submits that its application satisfies both of those
provisions.

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Courts regularly allow the United States to intervene in civil cases pursuant to
Rule 24 for the purpose of seeking a stay of discovery. See, e.g., SEC v.
Mutuals.com, Inc., No. 3:03-CV-2912-D, 2004 WL 1629929, at *1-2 (N.D. Tex. July
20, 2004) (granting U.S. Attorney leave to intervene as of right to stay discovery
in SEC enforcement action in deference to related criminal case based on law
enforcement interest in preventing use of civil discovery to circumvent criminal
discovery rules, and inadequacy of SEC to protect U.S. Attorney’s interest given
SEC’s obligation to follow civil discovery rules); Se. Recovery Grp., LLC v. BP Am.,

Inc., 278 F.R.D. 162, 167 (E.D. La. 2012) (granting United States leave to intervene
in breach of contract suit arising out of Deepwater Horizon explosion and oil
spill because, “[w]hether characterized as ‘of right’ or ‘permissive’ . . . the
transaction that is the subject of this civil lawsuit is identical to the transaction
that is the subject of the criminal investigation,” “the civil and criminal matters
share common questions of law and fact relating to fraud allegedly perpetrated

by plaintiff and/or its principals and/or their associates,” and “permitting the
broad-ranging discovery planned by the civil parties, “may as a practical matter
impair or impede the [government’s] ability to protect its interest”); SEC v.

Chestman, 861 F.2d 49 (2d Cir. 1988) (affirming order granting U.S. Attorney leave
to intervene in SEC action pending resolution of related criminal investigation);
SEC v. Nicholas, 569 F. Supp. 2d 1065, 1068 (C.D. Cal. 2008) (granting U.S.
Attorney leave to intervene to seek discovery stay in SEC case during pendency
of related criminal case).

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Such intervention is so common that at least one federal court has opined that
“[c]ourts have almost universally permitted the United States to intervene in
actions such as the present case.” SEC v. Mersky, CIV–A–93–5200, 1994 WL
22305, at *1-*2 (E.D. Pa. Jan. 25, 1994); see also SEC v. Doody, 186 F. Supp. 2d 379,
381 (S.D.N.Y. 2002) (granting U.S. Attorney leave to intervene to seek discovery
stay in SEC case during pendency of related criminal case, observing that “[o]nce
an indictment has been returned, the government often moves for and frequently
obtains relief preventing a criminal defendant from using parallel civil

proceedings to gain premature access to evidence and information pertinent to

the criminal case”). Federal courts have also recognized that intervention is
especially justified where, as here, the United States seeks to intervene “for the
limited purpose of moving to stay discovery.” Twenty First Century Corp. v.
LaBianca, 801 F. Supp. 1007, 1009 (E.D.N.Y. 1992); see also First Merchant’s
Enterprises, Inc. v. Shannon, No. 88-CV-8254-CSH, 1989 WL 25214, at *2 (S.D.N.Y.

1989) (“[W]here the government contends that an ongoing criminal investigation

would be prejudiced were certain civil discovery concerning the same facts and
circumstances to proceed, permissive intervention to argue that claim is

appropriate.”).
Accordingly, the United States should be permitted to intervene in this case
for the limited purpose of seeking a stay of discovery to protect the integrity of
the federal criminal proceedings, as set forth below.

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B. This Court Should Stay Discovery To Protect The Public Interest In Law
Enforcement And The Integrity Of The Criminal Prosecution
The Court should likewise grant the United States’ motion for a full discovery
stay pending the resolution of the Chrisleys’ criminal case set for trial in May
2022. A court “has broad discretion to stay proceedings as an incident to its
power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 706-07 (1997)

(citing Landis v. N. American Co., 299 U.S. 248, 254 (1936)). Despite this discretion,
the Eleventh Circuit appears to require a stay of a “civil proceeding pending
resolution of a related criminal prosecution [] when ‘special circumstances’ so

require in the ‘interests of justice.’” United States v. Lot 5, Fox Grove, Alachua
County, Fla., 23 F.3d 359, 364 (11th Cir. 1994) (quoting United States v. Kordel, 397
U.S. 1, 12 & n.27 (1970)). The Eleventh Circuit has indicated that such “special

circumstances” are present where the civil case was brought in order to obtain
evidence in the criminal case. Kordel, 397 U.S. at 11-12; see also S.E.C. v. Wright,
261 Fed. App’x 259, 263 (11th Cir. Jan. 8, 2008) (indicating that “special
circumstances” would have existed if (1) there was evidence that the party in
the civil case was seeking evidence for the criminal case or (2) the criminal case
was improperly instituted); S.E.C. v. Rand, No. 1:09-CV-01780-AJB, 2010 WL

11549601, at *4 (N.D. Ga. Dec. 14, 2010) (citing Kordel and Wright and noting
same).
Federal courts have granted requests to stay discovery in parallel civil
proceedings in order to protect criminal cases and investigations prior to and
after indictment. See, e.g., Doe v. Smith, No. 3:17-CV-38-TCB, 2017 WL 11584833,
at *2 (N.D. Ga. July 17, 2017) (staying civil § 1983 case pending resolution of

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related criminal case pending against the plaintiff); Sec. & Exch. Comm’n v. Rand,
No. 1:09-CV-01780-AJB, 2010 WL 11549601, at *12 (N.D. Ga. Dec. 14, 2010)
(granting limited stay of discovery in SEC enforcement action pending resolution
of related criminal case); United States v. Any And All Assets Of That Certain
Business Known As Shane Company, 147 F.R.D. 99, 101-102 (M.D.N.C. 1993)
(granting stay of discovery in civil forfeiture action pending federal grand jury
investigation involving same and related facts); Downe, 1993 WL 22126, at *14
(granting stay of discovery in SEC enforcement action pending federal grand

jury investigation); United States v. One 1964 Cadillac Coupe DeVille, 41 F.R.D. 352,
353 (S.D.N.Y. 1966) (“where both civil and criminal proceedings arise out of the
same or related transactions the government is ordinarily entitled to a stay of all
discovery in the civil case until disposition of the criminal matter”).
In exercising their discretion to stay discovery in a civil case in deference to a
criminal proceeding, federal courts are required to balance the civil litigant’s

right to “prepare his case promptly” against the public interest in postponing the
full disclosure sought in the civil case until after the resolution of the criminal
proceeding. Campbell v. Eastland, 307 F.2d 478, 490 (5th Cir. 1962), cert. denied, 371

U.S. 955 (1963). In the leading case of Campbell v. Eastland, the former Fifth
Circuit observed that in engaging in this flexible inquiry, the public interest in
law enforcement is of paramount importance. Id. at 487. Specifically, the court
opined:

The very fact that there is clear distinction between civil and criminal
actions requires a government policy determination of priority: which
case should be tried first. Administrative policy gives priority to the
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public interest in law enforcement. This seems so necessary and wise

that a trial judge should give substantial weight to it in balancing the
policy against the right of a civil litigant to a reasonably prompt
determination of his civil claims or liabilities.
Id. (emphasis added). The Supreme Court has also recognized “that there is a
lesser public interest in actions for civil damages than, for example, in criminal
prosecutions.” Nixon v. Fitzgerald, 457 U.S. 731, 754 n.37 (1982); see also In re
Grand Jury Proceedings (Williams), 995 F.2d 1013, 1017 (11th Cir. 1993) (“We will
not sacrifice the integrity of a grand jury investigation simply to speed the

disposition of a civil docket.”).

The Campbell court observed that in ruling on such issues, judges “should be
sensitive to the difference in the rules of discovery in civil and criminal cases[,]”
given that in civil cases litigants can employ “a well-stocked battery of discovery
procedures, [whereas] the rules governing criminal discovery are far more
restrictive.” Id. The court explained that

the narrow scope of discovery in criminal litigation is justified by

three considerations . . . peculiar to criminal law. First, . . . a fear that
broad disclosure of the essentials of the prosecution’s case would
result in perjury and manufactured evidence. Second, . . . that
revealing the identity of confidential informants would create the
opportunity for intimidation of prospective witnesses and would
discourage the giving of information to the government . . . [and]
[f]inally, . . . since the self-incrimination privilege would effectively
block any attempts to discover from the defendant, he would retain
the opportunity to surprise the prosecution whereas the state would
be unable to obtain additional facts.
Id. at 487 n.12 (citing Developments in the Law-Discovery, 74 Harv. L. Rev. 940, 1052

(1961)). Consequently, federal criminal discovery is carefully circumscribed by

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the Federal Rules of Criminal Procedure, 18 U.S.C. § 3500, and Supreme Court
decisions. There is no requirement to identify trial witnesses or where
discoverable evidence may be found, and there are no interrogatories, requests
for admission, or requests for the production of documents. See, e.g., United
States v. Conder, 423 F.2d 904, 910 (6th Cir. 1970) (holding that Federal Rules of
Criminal Procedure do not authorize interrogatories or discovery of names of
government witnesses); United States v. Linen Supply Inst. of Greater New York, 18
F.R.D. 452, 453 (S.D.N.Y. 1955) (“The Federal Rules of Criminal Procedure make

no provision for answers to interrogatories.”). After an indictment is returned,

neither the United States nor a criminal defendant has unbridled discretion to
issue subpoenas for documents or testimony, and they may do so only for a
specific evidentiary hearing or trial that has been scheduled. Fed. R. Crim. P.
17(a). To issue a document subpoena under any other circumstances, a criminal
defendant must first file a motion to obtain the approval of the court and make

the requisite showing. See, e.g., United States v. Messercola, 701 F. Supp. 482, 485
(D.N.J. 1988) (describing procedure for obtaining judicial approval for a pretrial
subpoena). And regardless of the situation, a criminal defendant is permitted to

subpoena personal or confidential information about a victim only after the court
gives the victim notice of the subpoena and the opportunity to object or quash it,
and then only with a court order permitting him to serve it. Fed. R. Crim. P.
17(c)(3).
Perhaps most importantly, unlike civil litigation, there are no depositions in
federal criminal cases. Campbell, 307 F.2d at 487 (“18 U.S.C. § 3500 does away

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with any pre-trial discovery of statements of a government witness”); Simon v.

United States, 644 F.2d 490, 498 n.12 (5th Cir. May 7, 1981) (“In criminal
proceedings, depositions may be taken only in exceptional circumstances upon
order of court and after notice to the other parties; and the only authorized
purpose is to preserve evidence, not to afford discovery.”). Instead, “[i]n any
criminal prosecution brought by the United States, no statement or report in the
possession of the United States which was made by a Government witness or
prospective Government witness (other than the defendant) shall be the subject

of subp[o]ena, discovery, or inspection until said witness has testified on direct

examination in the trial of the case.” 18 U.S.C. § 3500; see also Fed. R. Crim. P.
16(a)(2) (“Nor does this rule authorize the discovery or inspection of statements
made by prospective government witnesses except as provided in 18 U.S.C.
§3500”). Because a federal criminal defendant is not entitled to subpoena
potential trial witnesses in order to compel them to provide him with sworn

testimony or other statements in advance of his or her criminal trial, to allow a

criminal defendant to do so in a parallel civil case would be “tantamount to
allowing discovery under Federal Rules of Civil Procedure in a criminal

proceeding,” a result that the former Fifth Circuit recognized it was “powerless,
as was the trial court, to authorize.” Campbell, 307 F.2d at 493 (Bell, J.,
concurring).
In evaluating a stay request, courts balance competing interests. See Landis,
299 U.S. at 254-55. The Supreme Court has provided guidance by noting that
a stay is appropriate “in cases of extraordinary public moment,” so long as the

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“delay [is] not immoderate in extent and not oppressive in its consequences” and
“the public welfare or convenience will thereby be promoted.” Id. at 707
(quoting Landis, 299 U.S. at 256). Thus, a stay must be “kept within the bounds of
moderation,” so “a stay of indefinite duration in the absence of a pressing need”
will constitute an abuse of discretion. Landis, 299 U.S. at 255, 256. Besides this
general guidance from the Supreme Court, lower federal courts have developed
the following multi-factor balancing test to evaluate whether a stay is
appropriate in the specific situation of parallel civil and criminal proceedings:

(1) the extent to which the issues in the civil and criminal cases
overlap; (2) the status of the case, including whether defendant has
been indicted; (3) the interests of the plaintiff in proceeding
expeditiously versus the prejudice to the plaintiff resulting from the
delay; (4) the interests of, and burden on, the defendant; (5) the
interests of the Court; and (6) the public’s interest.
See Sec. & Exch. Comm’n v. Rand, No. 1:09-CV-01780-AJB, 2010 WL 11549601, at
*4–5 (N.D. Ga. Dec. 14, 2010) (compiling cases and applying the above six-factor

balancing test); see also Yeomans v. Forster and Howell, Inc., No. 1:09-cv-488, 2009
WL 2960387, *1 (M.D. Ala. Sept. 10, 2009); Doe v. City of Demopolis, Civ. Action
No. 09-329, 2009 WL 2059311, *3 (S.D. Ala. July 10, 2009); Scheuerman v. City of
Huntsville, Al., 373 F. Supp. 2d 1251, 1257-58 (N.D. Ala. 2005); S.E.C. v.
Healthsouth Corp., 261 F. Supp. 2d 1298, 1326 (N.D. Ala. 2003). This multifactor
test, like any multifactor test, “is not intended as an exercise in arithmetic.
[Instead i]ts purpose is to make certain that a district court ... expressly considers
those concerns identified ... as inherently relevant,” so “[i]t does not mean that
each such concern must be accorded the same weight, or that still other concerns

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may not in the end be significant.” S.E.C. v. Oakford Corp., 181 F.R.D. 269, 273
(S.D.N.Y. 1998). In this case, every factor weighs in favor of the requested stay.
1. Overlap of Civil and Criminal Cases
“[T]he similarity of issues in the underlying civil and criminal actions is
considered the most important threshold issue in determining whether to grant a
stay.” Love v. City of Lanett, No. 2:09-cv-622, 2009 WL 2525371, *2 (M.D. Ala. Aug.
17, 2009) (quoting Dominguez v. Hartford Fin. Servs., 530 F. Supp. 2d 902, 906-07
(S.D. Tex. 2008)). Here, there is clear and substantial overlap between the

parallel cases. The Chrisleys’ core allegations in this case are that Waites and
other DOR employees unlawfully and improperly launched a criminal
investigation into the Chrisleys, and that Waites and others at the DOR
improperly coordinated with the federal criminal investigation that led to the
2019 indictment of the Chrisleys. Indeed, the overlap cannot be disputed: The
Chrisleys’ counsel in this case attended and assisted during the two-day

suppression hearing in the criminal case in an effort to prove that Waites and the
DOR had acted improperly. And then again, the Chrisleys’ counsel in this case
appeared and assisted during the recent Garcia hearing last month in the criminal

case.
In order to be reasonable and not interfere with this lawsuit, the United States
did not move to intervene and stay discovery at that time. In fact, it has offered
to interview Braddock (even though it is in no way required to do so) about his
purported contact with the Georgia Department of Revenue and/or to obtain an

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affidavit from Braddock about this purported contact. But neither option was
sufficient to the Chrisleys.
With the deposition of Mark Braddock noticed, the Chrisleys are obviously
trying to get an early bite at the apple on cross-examination of a key Government
witness at the criminal trial. See Wright, 261 Fed. App’x at 263 (indicating that
“special circumstances” requiring civil stay would exist if there was evidence
that the party in the civil case was seeking evidence for the criminal case). In
order to prevent the ongoing impermissible use of civil discovery, a stay of

discovery is required.
2. Status of the Criminal Case
Courts generally “recognize that the case for a stay is strongest where the
defendant has already been indicted.” Chao, 498 F. Supp. 2d at 1037-38 (citing
cases). The Chrisleys were indicted on the federal bank fraud and tax evasion
charges just two months before they filed this related lawsuit against Josh Waites.

Not only that, but pretrial litigation is virtually complete in the criminal case, and
the trial has been specially set for May 16, 2022. Discovery is set to close in this
civil case in February 2022—just three months before the criminal trial before

Judge Ross. This is not a situation calling for an indefinite or lengthy stay
pending a criminal grand jury investigation. A short stay of less than six months
is required in order to protect the public’s interest in the criminal case.
Accordingly, this factor weighs strongly in favor of the requested stay.

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3. Interests of the Plaintiff in Proceeding Expeditiously Versus the

Prejudice to the Plaintiff Resulting from the Delay
As to the Chrisley plaintiffs, a short stay of less than six months will not
prejudice them. Indeed, they previously sought and obtained a partial stay of
discovery in this case because of the pending criminal case against them. The
Chrisleys have indicated to the undersigned counsel that they oppose this

motion and a stay, but they have not articulated any prejudice they would
allegedly suffer.
As to the interests of the intervenor-plaintiff, the United States submits that a

stay is necessary in order to prevent the Chrisleys from using civil discovery in
order to avoid the limits on criminal discovery. See Rand, No. 1:09-CV-01780-
AJB, 2010 WL 11549601, at *4–5 (considering interests of United States as

intervenor-plaintiff under this factor). The Chrisleys are not permitted to depose
the Government’s key witness Mark Braddock through criminal discovery, but
they are seeking to do so in this case. Further discovery in this case would likely
make available to criminal defendants Todd and Julie Chrisley information that
lies well beyond the narrow scope of criminal discovery. Compare Fed.R.Civ.P.
26(b) with Fed.R.Crim.P. 16. As courts have observed, the Government “has a

discernible interest in intervening in order to prevent discovery in a civil case

from being used to circumvent the more limited scope of discovery in the
criminal matter.” SEC v. Chestman, 861 F.2d 49, 50 (2nd Cir. 1988); see SEC v.
Beacon Hill Asset Management LLC, 2003 WL 554618, at *2 (S.D. N.Y. Feb. 27, 2003)
(staying, among other things, depositions and interrogatories directed at
Government witnesses); Phillip Morris Inc. v. Heinrich, 1996 WL 363156, at *19

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(S.D. N.Y. June 28, 1996) (without stay, targets “may have an opportunity to gain
evidence to which they are not entitled under criminal discovery rules”); SEC v.
Mersky, 1994 WL 22305, at *4 (E.D. Pa. 1994) (granting stay over defendant's
objection and noting that “[t]he United States’ interest in preventing the
defendants from circumventing the limited discovery available in the criminal
proceeding is substantial.”). Shane Company, 147 F.R.D. at 101-02 (granting stay in
civil case pending grand jury investigation because “the same evidentiary
material likely will be involved” in both matters, and thus discovery “could

interfere with the government’s criminal investigation”); Downe, 1993 WL 22126

at *12-13. Depositions and interrogatories at this point in time would effectively
provide an end-run around the constraints imposed by Fed. R. Crim. P. 16 and
the Jencks Act, 18 U.S.C. § 3500.
Moreover, depositions could impair the usefulness of witnesses whom the
Government expects to call at the criminal trial, including Mark Braddock.

Providing a thorough preview of Mr. Braddock’s testimony and then subjecting

him to searching cross-examination at a deposition could impact his usefulness
at the May 2022 trial. See generally WorldCom Securities Litigation, 2002 WL

31729501, at *9 (S.D.N.Y. Dec. 5, 2003) (observing that United States Attorney

“has a significant interest in preserving the usefulness of cooperating defendants
as Government witnesses”); see also SEC v. Mutuals.com, Inc., 2004 WL 1629929, 4
(N.D. Tex. 2004) (granting stay over defendant’s objection and noting that there
is no right to depositions in a criminal case). Indeed, even judges who have
denied broader discovery stays sought by the Government have stayed

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depositions of cooperating witnesses until they have testified at criminal

trials. See SEC v. Saad, 229 F.R.D. 90, 91 (S.D.N.Y. 2005).
A criminal defendant “should not be allowed to make use of the liberal
discovery procedures applicable to a civil suit as a dodge to avoid the restrictions
in criminal discovery and thereby obtain documents he would not otherwise be
entitled to use in his criminal suit,” like deposing key Government witness Mark
Braddock. Campbell, 307 F.2d at 487. This factor weighs in favor of a stay.
4. Interests of, and Burden on, the Defendant

Counsel for defendant Josh Waites has notified the Government that Waites
consents to a stay of discovery pending the outcome of the May 2022 criminal
trial. This factor weighs in favor of the stay as well.
5. Interests of the Court
A court may consider its interest in “efficient administration and judicial
economy.” S.E.C. v. Gordon, No. 09-CV-0061-CVE-FHM, 2009 WL 2252119, at *4

(N.D. Okla. July 28, 2009) (quoting United States ex rel. Gonzalez v. Fresenius Med.
Care N. Am., 571 F. Supp. 2d 758, 763 (W.D. Tex. 2008)). Judicial economy weighs
in favor of staying this case. The Eleventh Circuit has recognized that collateral

estoppel may “prevent relitigation of issues subsequently brought in a civil suit

to the related issues determined in the criminal proceedings.” See In re Fin.
Federated Title and Trust, Inc., 347 F.3d 880, 886 n.5 (11th Cir. 2003). Therefore,
“[a]lthough stays delay civil proceedings, they may prove useful as the criminal
process may determine and narrow the remaining civil issues.” Grand Jury
Proceedings (Williams) v. United States, 995 F.2d 1013, 1018 n.11 (11th Cir. 1993).

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Thus, by waiting only a few extra months for the trial of the criminal case, the
issues in this case may be narrowed, thereby reducing the amount of discovery
that is needed, and perhaps making a settlement more likely. A discovery stay
will also avoid duplicative and potentially overlapping or conflicting rulings by
different courts.
6. Public Interest
As the chief federal law enforcement official in this district, the U.S.
Attorney’s view of what the law enforcement interest is and whether it warrants

a stay of related civil proceedings should be given some deference. Indeed, the
former Fifth Circuit has opined that the U.S. Attorney’s view should be given
“substantial weight,” and also that the public interest in a criminal prosecution
trumps a civil litigant’s interest in pressing forward with his or her case.
Campbell, 307 F.2d at 490.
The United States believes that the requested stay is in the public interest here

for several reasons. First, since a criminal indictment is pending and trial is
specially set to begin several months from now, it makes sense that civil
discovery should be briefly suspended and any further discovery should take

place in the criminal case, under the careful supervision of the criminal court.
This will prevent the Chrisleys from using civil discovery to manufacture
evidence, impeachment material, and defenses for use in their criminal case. See
Nicholas, 569 F. Supp. 2d 1065, 1072 (citing Campbell, 307 F.2d 478, 487 n.12)
(criminal discovery rules “are purposefully limited so as to prevent perjury and
manufactured evidence, to protect potential witness from harassment and

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intimidation, and to level the playing field between the government and the
defendant, who would be shielded from certain discovery by the Fifth
Amendment”); Morris v. Am. Fed’n of State, County & Mun. Employees, No. 99 CIV.
5125(SWK), 2001 WL 123886, at *2 (S.D.N.Y. Feb. 9, 2001) (“The public has an
interest in ensuring the criminal discovery process is not subverted.”).
Second, allowing the Chrisleys to depose potential witnesses against them,
including Mark Braddock, would adversely impact the integrity of the criminal
proceedings by likely impairing the usefulness of anticipated trial witnesses. See,

e.g., WorldCom Sec. Litig., No. 02 CIV. 3288(DLC), 2002 WL 31729501, at *9

(S.D.N.Y. Dec. 5, 2003) (observing that U.S. Attorney “has a significant interest in
preserving the usefulness of cooperating defendants as Government witnesses”).
Further, not imposing a discovery stay would give rise to the very dangers
that the federal criminal discovery rules are designed to guard against. For
example, if the Court permits the Chrisleys to depose Mr. Braddock, the

Chrisleys will have the opportunity to manufacture impeachment material to

exploit at trial under Federal Evidence Rules 801(d)(1)(a), 607, 608, 611, and 613.
The Chrisleys could do so by intentionally creating inconsistencies in Mr.

Braddock’s deposition testimony with which to impeach him at trial, and by

intentionally eliciting ambiguous responses and information that they could later
attempt to introduce as substantive evidence at trial to create reasonable doubt
where none otherwise exists, to the detriment of the criminal case. One method
of doing so would be to create out of thin air an event, fact, or conversation that
never happened, through clever questioning.

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Third, if the Court allows discovery to continue in this case, it will be allowing
the Chrisleys to use the Fifth Amendment as both a shield and a sword — it
would enable them to “us[e] civil discovery to [their] advantage in the criminal
[case] while taking the Fifth Amendment to avoid testifying” themselves. Beacon
Hill Asset Mgmt., 2004 WL 367673, at *1. At one point, the Chrisleys asked this
Court to stay discovery in this case to avoid the Government learning about the
existence of certain documents in the criminal case. But at the same time, the
Chrisleys seek to exploit a battery of civil discovery procedures to obtain

information otherwise unavailable to them in the criminal case and get a full
preview of the prosecution’s case against them. As such, not only would the
criminal discovery rules be subverted, but the civil discovery rules would also be
undermined through a one-sided exchange of information, and by permitting the
Chrisleys to harass and burden others while hiding behind the Fifth
Amendment.

Finally, a stay of all discovery would serve the public interest by conserving
limited judicial resources. Therefore, for all of these reasons, the Court should
exercise its discretion to stay discovery in this case until the completion of the

criminal case.

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CONCLUSION
For the foregoing reasons, the United States respectfully requests that the
Court grant its motion to intervene and for a stay of discovery in this case
pending the resolution of United States v. Todd and Julie Chrisley, No. 1:19-CR-297-
LMR (N.D. Ga.), and that the Court preliminarily stay discovery in this case
pending the resolution of the United States’ Motion.

Respectfully submitted,

K URT R. E RSKINE
Acting United States Attorney

/s/T HOMAS J. K REPP

Assistant United States Attorney
Georgia Bar No. 346781
thomas.krepp@usdoj.gov

/s/A NNALISE K. P ETERS

Assistant United States Attorney
Georgia Bar No. 550845
annalise.peters@usdoj.gov

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Certificate of Service

The United States Attorney’s Office served this document today by filing it using

the Court’s CM / ECF system, which automatically notifies the parties and counsel
of record.

Counsel for Todd Chrisley

Counsel for Julie Chrisley

Counsel for Peter Tarantino

November 16, 2021

/s/ A NNALISE K. P ETERS

A NNALISE K. P ETERS
Assistant United States Attorney