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United States v. Menaged

United States District Court, D. Arizona

June 12, 2017

United States of America, Plaintiff,
v.
Yomtov Scott Menaged, Defendant.

          DETENTION ORDER

          Honorable John Z. Boyle United States Magistrate Judge

         The Government requests Defendant be detained as a flight risk and an economic danger to the community. The Court heard argument from the parties on June 6, 2016. The Court has also considered a memorandum/motion, exhibits, and proffers of the parties. The Court finds detention as a flight risk is required under the Bail Reform Act. The Court does not find Defendant is a danger to the community.

         I. Factual and Procedural Background

         Defendant, age 40, is a United States citizen who has lived in the community for the past 15 years. Prior to 2002, he lived in New York. He has two children, ages 15 and 2. He reports that he is in the midst of a divorce, and plans to move from his current home. He has no criminal history. There is no evidence of alcohol or drug abuse. He has three siblings in Arizona, with whom he has weekly contact. Defendant's ex-wife, sister, and mother submitted letters to the Court that strongly speak of him as a loving father and family man. (Exhibits 1-3.) Defendant's family members were present in court for the detention hearing. Defendant maintains close contact with his father, Joseph Menaged.

         Defendant was the owner and operator of furniture store businesses, which include American Furniture and Furniture King. He was also involved in significant real-estate investment in the Phoenix area. According to the declaration of Special Agent Byron Anderton, Defendant used at least two different Social Security Numbers and two separate dates of birth to conduct business transactions. (Doc. 31-1 at 3.) He had signatory authority over at least 28 separate bank accounts from five financial institutions. (Id. at 6.) Between January 2013 through June 2016, Defendant obtained loans related to his businesses totaling approximately $734, 484, 440.67. (Id.) On April 20, 2016, Defendant filed for Chapter 7 bankruptcy in the District of Arizona. As of April 4, 2017, approximately $132, 241, 306.00 in claims were registered against Defendant. (Id.) According to Special Agent Anderton, Defendant “wired or electronically transferred millions of dollars to bank accounts in the names of friends and family members.” (Id. at 9.) Between “2015 and the present, Menaged transferred approximately $1, 033, 808.28 to a Bank United account held in the name of his father.” (Id.) On July 24, 2016, the balance of that account was approximately $2, 403, 673.15. (Id.) Defendant's father is a United States citizen born in Israel. One week after Defendant's arrest, Defendant's father traveled to Israel. Defendant proffers that Joseph Menaged may have traveled to Israel to supervise a real estate sale.

         According to Special Agent Anderton, Defendant was recorded telling another person that Defendant had $30, 000, 000 in an offshore account. (Id. at 7.) The government provided no evidence of an offshore account managed by Defendant. From 2014 to 2017, gambling receipts from Wild Horse Pass Casino in Chandler reflect that Defendant and his wife cashed out approximately $1, 467, 014.000 in gambling funds. (Id. at 9.) Defendant reported to Pretrial Services that he currently has $2, 000 in cash but no checking or savings account. (Doc. 11 at 3.) He reports that he has $250, 000 in credit card debt and a $150, 000 tax lean for unpaid taxes. (Id.)

         The Indictment alleges Defendant was involved in a conspiracy to defraud resulting in losses of “at least $2, 112, 405.97.” (Doc. 3 at 13.) Defendant is charged in all 24 counts of the Indictment. (Id.)

         II. The Bail Reform Act

         The Government seeks the detention of Defendant on the grounds that he is 1) a serious flight risk and no release condition or combination of conditions exist that would reasonably assure his appearance at future court proceedings if released, and 2) an economic danger to the community. After considering the memoranda, exhibits, proffers, argument, and all of the factors set forth in 18 U.S.C. § 3142(g), the Court finds that the Government has proven by a preponderance of the evidence that Defendant is a serious flight risk and no combination of conditions exist that would reasonably assure his appearance at future court proceedings.

         a. Standard of Review

         The Bail Reform Act, 18 U.S.C. §§ 3141-3150, mandates the release of a person pending trial unless the court “[f]inds that no condition or combination of conditions will reasonably assure the appearance of the person as required and the safety of any other person and the community.” United States v. Hir, 517 F.3d 1081, 1086 (9th Cir. 2008) (quoting 18 U.S.C. § 3142(e)). This Court engages in a two-step inquiry before ordering a defendant either be released or detained pending trial. First, the Court must determine whether the defendant presents a “serious risk that [the defendant] will flee, ” if released from custody. 18 U.S.C. § 3142(f)(2)(A)). Second, if the defendant is likely to flee, the Court must determine whether some set of conditions would sufficiently vitiate that risk. 18 U.S.C. § 3142(g). The government bears the burden of showing by a preponderance of the evidence that the defendant poses a flight risk. United States v. Gebro, 948 F.2d 1118, 1121 (9th Cir. 1991).

         In determining whether release conditions exist that would reasonably assure a defendant's appearance, Section 3142(g) requires a district court to consider the following factors:

(1) the nature and circumstances of the offense charged, including whether the offense is a crime of violence, a violation of section 1591, a Federal crime of terrorism, or involves a minor victim or a controlled ...

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