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United States v. Dermen

United States District Court, D. Utah

July 2, 2019




         Before the court is a motion to sever trials filed by defendant Lev Aslan Dermen[1] on May 8, 2019. (ECF No. 289). The government responded in opposition on May 22, 2019 (ECF No. 314), and Mr. Dermen replied on May 29, 2019 (ECF No. 321). With leave of court, the government filed a surreply on June 4, 2019. (ECF No. 332-1). Finally, Mr. Dermen obtained leave to supplement his motion with evidence and arguments not available to him when he filed his motion; he filed his supplemental brief on June 12, 2019. (ECF No. 355). On the basis of these filings, a review of relevant law, and for the reasons below, Mr. Dermen's motion to sever is denied.[2]

         I. ANALYSIS

         Mr. Dermen's motion presents three grounds for severance: (1) that he will be prejudiced by a joint trial due to the admission of evidence relevant to charges not asserted against him; (2) that he will be deprived of his Sixth Amendment Confrontation Clause rights in a joint trial because the government is likely to admit testimonial statements made by non-testifying codefendants; and (3) that if his trial were severed, those same codefendants would actually take the stand at Mr. Dermen's individual trial and offer testimony that exculpates him. Additionally, Mr. Dermen's supplemental brief argues that the government's proffer in connection with a pretrial evidentiary proceeding not concerning his severance further supports his motion to sever.

         A. Misjoinder

         Mr. Dermen repeatedly characterizes his motion as seeking severance due to the prejudice he would face in a joint trial, clearly referring to Rule 14(a), titled “Relief from Prejudicial Joinder.” However, midway through his motion, Mr. Dermen recites authorities that govern motions to sever trials on the basis of misjoinder, which occurs when, under Rule 8 of the Federal Rules of Criminal Procedure, a defendant should not have been joined in an indictment in the first instance.

         After reciting Rule 8 and describing a district court case applying it, Mr. Dermen immediately asserts the first of several arguments that he will be prejudiced by a joint trial. Thus, it is unclear whether Mr. Dermen is arguing that his joinder in this indictment was impermissible under Rule 8, or whether he mistakenly believes that the Rule 8 standard somehow bears on the discretionary Rule 14 standard for severance. The court suspects the latter, but to the extent Mr. Dermen meant to bring a motion seeking mandatory severance on the basis of misjoinder, the court briefly applies the relevant standard to the operative indictment.

         Rule 8 provides that:

The indictment or information may charge 2 or more defendants if they are alleged to have participated in the same act or transaction, or in the same series of acts or transactions, constituting an offense or offenses. The defendants may be charged in one or more counts together or separately. All defendants need not be charged in each count.

Fed. R. Crim. P. 8(b). Rule 8 is construed broadly “to allow joinder to enhance the efficiency of the judicial system.” Caldwell, 560 F.3d at 1212. “The test for a proper joinder is a common thread to each of the defendants.” United States v. Rogers, 921 F.2d 975, 984 (10th Cir. 1990). “In conspiracy cases, the general rule is that persons indicted together should be tried together.” Id.

         Count I of the operative indictment charges Mr. Dermen and every other defendant with conspiring to commit mail fraud. That count forms the heart of this case, alleging that defendants engaged in a years-long scheme to fraudulently obtain refundable fuel tax credits in the amount of $511 million. A holistic review of the indictment reveals that the mail fraud conspiracy is itself the “common thread” between the joined defendants in that the tax fraud scheme that forms the basis of that count is a central evidentiary component of each of the remaining charges (false tax returns, money laundering/concealment, and obstruction of justice). Put simply, there is no charged conduct in the operative indictment that does not grow out of the scheme alleged in Count I. Because the conduct giving rise to the mail fraud conspiracy charge runs throughout the indictment, Mr. Dermen's joinder in this case is well within the parameters of Rule 8.

         B. Prejudice from Joint Trial

         Under Rule 14(a) of the Federal Rules of Criminal Procedure, a court may nevertheless sever properly joined defendants “[i]f the joinder of . . . defendants in an indictment . . . appears to prejudice a defendant.” “Severance is a matter of discretion, not of right, and the defendant bears a heavy burden of demonstrating prejudice to his case.” United States v. Rogers, 925 F.2d 1285, 1287 (10th Cir. 1995) (quoting United States v. Mabry, 809 F.2d 671, 682 (10th Cir. 1987)). “To meet this burden, [a] defendant must demonstrate actual prejudice and not merely a negative spill-over effect from damaging evidence presented against codefendants.” United States v. Wacker, 72 F.3d 1453, 1468 (10th Cir. 1995). That the moving defendant is less culpable or is charged in fewer counts does not suffice to establish actual prejudice caused by a joint trial. Id. “[S]everance ‘should be granted only when there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence.'” United States v. Caldwell, 560 F.3d 1202, 1213 (10th Cir. 2009) (quoting United States v. Zapata, 546 F.3d 1179, 1191 (10th Cir. 2008)).

         “In determining the merits of a motion for severance, the trial court must balance two competing interests by weighing the prejudice to a particular defendant caused by the joinder against considerations of economy and expedition in judicial administration.” United States v. Pack, 773 F.2d 261, 266 (10th Cir. 1985).

         Mr. Dermen contends that he will face actual prejudice by the introduction of evidence that falls into two categories: (1) evidence related to the Davis County Cooperative Society (the “Order”), of which he is not a member; and (2) evidence ...

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