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United States v. Losch

United States District Court, D. Arizona

October 23, 2019

United States of America, Plaintiff,
Kenneth K. Losch, Defendant.



         Pending before the Court is a Discovery Motion filed by Defendant Kenneth K. Losch, wherein Defendant makes requests for 27 categories of discovery. (Doc. 59.) The Court only addresses the categories of discovery that are presently in dispute and refers to each discovery request by the number assigned in Defendant's Discovery Motion.

         1. Defendant's Statements.

         In his Discovery Motion (Doc. 59, at 2), Defendant moves for production of various written and recorded statements made by him, which the Court previously ordered the Government to disclose by July 1, 2019 (Doc. 37.) Defendant also requests “notice of any statements by him which the Government intends to offer at trial…” (Doc. 59, at 2.) The Government responds (Doc. 70, at 4) that it has disclosed the undercover recordings of Defendant, and that it has no other Rule 16 material in its possession to produce.

         Federal Rule of Criminal Procedure 12(b)(4)(B) permits the defendant to request notice of the government's intent to use (in its evidence-in-chief at trial) any evidence that the defendant may be entitled to discover under Rule 16. Fed. R. Crim. P. 12(b)(4)(B). See also LRCrim 16.1(a) (requiring notice of statements of the Defendant which the Government intends to use during the course of trial). Defendant's request for the Government to provide notice of any statements by him that the Government seeks to use is granted. If the Government seeks use at trial any of Defendant's statements that are discoverable pursuant to Rule 16, the Government shall identify the statements and provide notice to Defendant of its intent to use them by January 20, 2020. If Defendant has any objections to the admissibility of such statements, Defendant shall file a motion setting forth his objections, consistent with the deadline for filing pretrial substantive motions. See (Doc. 37); LRCrim 16.1(b).

         2. Brady Material

         Defendant makes a general request (Doc. 59, at 2) for disclosure of all evidence favorable to Defendant on the issue of guilt, including all impeachment and exculpatory evidence, in accordance with Brady v. Maryland, 373 U.S. 83 (1963). Defendant also makes specific requests for two categories of evidence under Brady: 1) all information related to Special Agent William Lace's counterintelligence briefing at AGI on August 20, 2013, including a notebook that might contain Special Agent Lace's notes of the tour (Doc. 59, at 3); and 2) all documents, statements, reports, and tangible evidence regarding C.H.'s[1]communication with the United States Attorney's Office regarding the legitimacy of AGI (Doc. 59, at 3). Only the first category is in dispute.[2]

         In response to Defendant's request (Doc. 59, at 3) for “[a]ll documents, statements, reports, and tangible evidence regarding FBI Special Agent William Lace's August 20, 2013 counterintelligence briefing provided to AGI, ” the Government states that it has produced the PowerPoint presentation given by Special Agent Lace at AGI in 2013, as well as the “theft file” regarding Special Agent Lace's (now closed) investigation into a theft allegation by one of AGI's principal investors. (Doc. 70, at 4); (Doc.72-4, at 3.) The Government also produced a summary of a conversation that prosecutors had with Special Agent Lace, wherein Special Agent Lace described his previous interactions with AGI and his recollections of the AGI tour, including what he observed while on the tour. (Doc.72-4, at 3.) Special Agent Lace, who is presently detailed to Washington, [3] also told prosecutors that he “might have some notes [about the 2013 AGI tour] in a notebook in Phoenix.” (Doc. 72-4, at 3.) Prior to his interview with prosecutors, Special Agent Lace performed a search within the FBI's electronic system and determined that there were no electronically stored notes pertaining to his 2013 AGI tour. (Doc. 72-4, at 3.) But the Government has not, to date, instructed Special Agent Lace to review his notebook, even though the Government and Special Agent Lace both know the precise location of the notebook. (Id.)

         a. The Notebook

         Defendant argues that the notebook “very likely contain[s] exculpatory evidence, including but not limited to, evidence regarding AGI's technology…, statements from witnesses, or Rule 16(a)(1)(A) statements from Mr. Losch.” (Doc. 72, at 4.) Defendant maintains that to the extent the notebook contains notes about AGI's technology, the notebook is material because the Government “has squarely placed in issue” the validity of AGI's technology during that time frame. (Doc 72, at 5.) The Government indicates, however, that it “decline [sic.] to search for notes that might not exist.” (Doc. 70, at 4, n.1.)

         The holding in Brady v. Maryland requires disclosure only of evidence that is both favorable to the accused and “material either to guilt or to punishment.” United States v. Bagley, 473 U.S. 667, 674 (1985), citing Brady v. Maryland, 373 U.S. 83, 87 (1963). Kyles v. Whitley further holds that the prosecution has an affirmative duty to learn of, and disclose, any favorable evidence known to “others acting on the government's behalf in this case, including the police.” Kyles v. Whitley, 514 U.S. 419, 437 (1995). The Brady rule extends to impeachment evidence as well as exculpatory evidence. Youngblood v. West Virginia, 547 U.S. 867, 869 (2006), citing Bagley, 473 U.S. at 676. Under Brady, the prosecutor is not required to deliver her entire file to defense counsel, but only to disclose evidence favorable to the accused that, if suppressed, would deprive the defendant of a fair trial. Bagley, 473 U.S. at 675. To challenge the government's representation that it lacks Brady information, the defendant must either “make a showing of materiality under Rule 16 or otherwise demonstrate that the government improperly withheld favorable evidence.” United States v. Lucas, 841 F.3d 796, 808 (9th Cir. 2016). A showing of materiality under Rule 16 requires presentation of facts which would “tend to show that the Government is in possession of information helpful to the defense.” United States v. Stever, 603 F.3d 747, 752 (9th Cir. 2010).

         Here, the Court finds that Defendant has made a sufficient showing of materiality, pursuant to Federal Rule of Criminal Procedure 16(a)(1)(E)(i), for the Court to order the Government to review Special Agent Lace's notebook for potential evidence it is required to disclose. The Government does not deny that it possesses the notebook or that there may be relevant notes inside the notebook. Defendant has identified why Special Agent Lace's notes about the 2013 AGI tour would be material to Defendant in preparing for his defense: the notes could support the inference that AGI's technology in 2013 was, in fact, valid. (Doc. 72, at 3.) Further, the Court notes that Special Agent Lace found it important to search the FBI's electronic system for any notes he may have made about the 2013 AGI tour. The Court declines to treat the notebook any differently. Because the Government has identified the precise location of Special Agent Lace's notebook, the Court's order for the Government to review it for potential disclosures is not overly burdensome.

         It is therefore ordered that the Government review Special Agent Lace's notebook by November 25, 2019. If the Government thereafter determines that disclosure of the notebook's contents is required pursuant to Defendant's request under Rule 16 or Brady, the Government shall disclose the contents consistent with previously set deadlines or the deadlines set herein. Defendant's motion to compel production of the notebook at this juncture is denied without prejudice.

         b. Communications between Special Agent Lace and the prosecution team

         Defendant also requests (Doc. 72, at 6) that the Government disclose all “communications by and between [Special Agent] Lace and other members of the prosecution team about the case and witnesses in the case.” The Government maintains that Special Agent Lace's role in the investigation was “limited” and that he is not part of the prosecution team. (Doc. 70, at 4 n. 4.) Defendant disagrees, stating that Special Agent Lace is a member of the prosecution team because he participated in five witness interviews and assisted with the execution of the search warrant in December 2015. (Doc. 72, at 6.)

         It is ordered that by 5:00 p.m. on November 12, 2019, the parties shall file simultaneous supplemental briefs, not to exceed 3 pages, on this issue. No. Responses or Replies shall be filed. The simultaneous supplemental briefs must address: 1) the precise extent and timing of Special Agent Lace's role in the investigation; 2) Ninth Circuit case law regarding disclosure of communications among members of the prosecution team; and 3) the Government's disclosures to date of communications between Special Agent Lace and members of the prosecution team.

         c. Deadline for Brady disclosures

         Finally, Defendant asks this Court to enter an order for the Government to disclose all Brady material (exculpatory and impeachment) by December 2, 2019 (Doc. 72, at 6). The Government responds (Doc. 70, at 3) that its “position [is] to produce exculpatory information reasonably promptly after discovery” but that “Brady impeachment material is typically disclosed closer to trial.” The ...

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