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United States v. Babichenko

United States District Court, D. Idaho

July 26, 2019



          Ronald E. Bush Chief U.S. Magistrate Judge.

         Pending before the Court is Defendant Gennady Babitchenko's ("Gennady") Motion to Reopen Detention Hearing (Dkt. 218). Having carefully considered the record, participated in oral argument, and otherwise being fully advised, the Court enters the following Memorandum Decision and Order:


         1. After Gennady's indictment for trafficking and money laundering in mid-August, the Court heard the Government's Motion for Detention on August 28, 2018. (Dkt. 88).

         2. The undersigned found that no set of conditions could reasonably assure Gennady's and the other co-defendants' appearance at trial and detained them as a flight risk under the Bail Reform Act, 18 U.S.C. § 3143(b). (Dkt. 94). Among other things, the Court relied on proffer showing Gennady transferred significant sums of money from the U.S. to Brazil, has traveled on multiple occasions to Brazil, has legal residency status in Brazil, and had said to others that he intended to move to Brazil. Id.

         3. In September 2018, Gennady filed an appeal from the detention order before U.S. District Judge Edward J. Lodge. (Dkt. 98). A hearing was conducted, with additional proffer and argument. (Dkt. 124). On September 25, 2018, Judge Lodge issued a Memorandum Decision and Order denying Gennady's appeal, keeping intact this Court's prior detention order. (Dkt. 128).

         4. On October 22, 2018, the Government filed a Motion for Complex-Case Designation Pursuant to 18 U.S.C. § 3161(h)(7)(ii) and Trial Continuance (requesting that trial be reset from October 23, 2018 to October 1, 2019). (Dkt. 134). Although the Government represented in its motion that no defendants objected to a trial continuance, Gennady subsequently did file an objection as to (1) the length of the continuance (seeking instead only a 90-day continuance), and (2) the Government's complex-case designation efforts. (Dkt. 135).[1]That same day, Judge Lodge granted a 90-day continuance and reset the trial date for January 22, 2019. (Dkt. 136).

         5. On November 27, 2018, new counsel was appointed to represent Gennady pursuant to the Criminal Justice Act, after prior counsel moved to withdraw. (Dkt. 156).

         6. On November 30, 2018, U.S. District Judge B. Lynn Winmill granted the Government's request for complex-case designation, "[g]iven the obvious complexity" of the case, but denied the Government's request for a one-year continuance. (Dkt. 157). Instead, Judge Winmill reset the trial date for June 3, 2019. Id.

         7. On December 6, 2018, Gennady filed a Motion to Continue Jury Trial or Alternatively, to Withdraw and for Substitution of Counsel, requesting a one-month trial continuance from June 3, 2019 to July 29, 2019, (Dkt. 159). On December 11, 2018, Judge Winmill granted the motion and reset the trial date for July 29, 2019. (Dkts. 161, 162).

         8. On January 28, 2019, Gennady filed a Motion for Release Pending Trial, arguing his continued detention violated the Due Process Clause of the Fifth Amendment of the Constitution of the United States. (Dkt. 164). On January 30, 2019, Judge Winmill denied the motion. (Dkt. 166).

         9. On January 31, 2019, Gennady appealed the denial of his motion for release. (Dkt. 167). On March 22, 2019, the Ninth Circuit affirmed, stating in relevant part: "[P]retrial detention in this case has not been excessively prolonged and does not violate due process under the circumstances of this case" and "contentions that anticipated future delays will render [Gennady's] detention unconstitutional are not yet ripe." (Dkt. 192).

         10. On May 15, 2019, the grand jury issued a Superseding Indictment which brought additional charges against Gennady (conspiracy to commit wire fraud, conspiracy to traffic in counterfeit goods, money laundering conspiracy, and money laundering) and correspondingly expanded the scope of the criminal forfeiture allegations. (Dkt. 210).

         11. On May 30, 2019, Gennady filed the at-issue Motion to Reopen Detention Hearing pursuant to 18 U.S.C. § 3142(f)(2), in which he contended that new information had surfaced that was unknown to him at the time of his initial hearing. (Dkt. 218). Among other things, he contended the Government provided incorrect information in its proffer regarding Gennady's alleged plan to move to Brazil. Id. He further stated he is not a flight risk and there are conditions or a combination of conditions that would assure his appearance for further court proceedings. Id. Though acknowledging the Court was previously persuaded by a preponderance of the evidence that there was no set of conditions that would assure his appearance at future proceedings, Gennady argued that such a conclusion is undercut by the newly-discovered information - namely, that the Government erroneously represented to the Court that he had told others that he intended to move to Brazil. Id. Gennady further offers to surrender his U.S. passport and Brazilian residency card to alleviate any flight risk concerns. Id.

         12. During a June 6, 2019 status conference with Judge Winmill, Gennady and other co-defendants asked for a trial continuance to October 2020, citing their need to investigate this alleged massive conspiracy, which would include: (1) international evidence and witnesses, (2) defense experts, and (3) culling through the huge amount of electronic discovery and physical evidence. (Dkt. 231). On July 19, 2019, Judge Winmill agreed to reset the trial date for October 5, 2020, but continued to stress the need to expeditiously proceed to trial and informed the parties that the trial may be reset again, but on an earlier date. (Dkt. 281).

         13. On June 28, 2019, the Court held a hearing on the Motion to Reopen Detention. (Dkt. 256). The Court made certain assessments of the record following the evidence, proffer, and argument, and also informed the parties that the Court was concerned about the due process implications of pretrial detention in this case, given the lengthy period of detention which had already occurred and the even longer period of detention which would occur with an October 2020 trial setting. Id.

         14. On July 8, 2019, the Court requested a written memorandum from each party (1) identifying the expected trial date (the parties were not in agreement as to the expected trial date at the time of the hearing (see supra))- and (2) offering argument on whether the detention to date or continued detention through October of 2020 would violate Fifth Amendment Due Process Clause protections for Gennady. (Dkt. 264).


         15. In Gennady's June 28, 2019 hearing on the Motion to Reopen Detention, new information was provided by the Government including additional proffer, stating:

. After being approached by federal investigators, Igor Babichenko - a brother of Gennady who resides in Florida and has been connected with the financial transfers and Gennady's businesses here in Idaho - traveled with family to Brazil earlier this summer and did not return as scheduled. (Dkt. 268 at p. 36).
. Three people (aside from the person central to the Government's proffer during the initial detention hearing in September 2018) indicated the extended Babichenko family planned to move to Brazil, but the Government said there was no specific information as to whether that specifically included Gennady. Id. at p. 30.
. The Government also offered new evidence (Exhibits 6 -21) of emails, financial statements, and labels for iPhones containing identical IMEI numbers. Id.

         16. At the same hearing, Gennady provided what his counsel contended was "new" information supporting reconsideration of the prior detention order:

. The proffer the Government relied upon regarding Gennady's intention to move to Brazil during the initial detention hearing in September 2018 was inaccurate and misleading. Id. at p. 57.
. Other co-defendants currently out on pretrial release have abided by their release agreement and have not ...

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