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United States v. Babichenko

United States District Court, D. Idaho

August 5, 2019




         Pending before the Court is Defendant Pavel Babichenko's (“Pavel”) Motion to Reopen Detention Hearing (Dkt. 252). 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 Pavel's indictment for trafficking and money laundering in mid-August, the Court heard the Government's Motion for Detention on August 31, 2018. (Dkt. 96).

         2. The undersigned found that no set of conditions could reasonably assure Pavel's and the other co-defendants' appearance at trial and detained them as a risk of flight under the Bail Reform Act, 18 U.S.C. § 3143(b). (Dkt. 97). Among other things, the Court relied on proffer showing Pavel's extensive money transfers from the U.S. to Brazil to entities alleged to be controlled by Pavel and other co-defendants; his legal resident status in Brazil, and statements alleged to have been made by him to others that he is seeking to obtain Brazilian citizenship; his repeated travel to Brazil over a period of many years; his alleged direct involvement in the sale of bulk counterfeit goods, with Pavel openly making statements describing the goods as counterfeit; and the large volume of alleged counterfeit goods in Pavel's possession or control. Id.

         3. On September 7, 2018, Pavel filed an appeal from the detention order before U.S. District Judge Edward J. Lodge. (Dkt. 99). A hearing was conducted, with additional proffer and argument. (Dkt. 123). On September 25, 2018, Judge Lodge issued a Memorandum Decision and Order denying Pavel's appeal, keeping intact this Court's prior detention order. (Dkt. 127). Pavel did not appeal.

         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, co-defendant Gennady Babitchenko (“Gennady”) filed 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 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.

         6. 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).

         7. On January 28, 2019, Pavel filed a Motion for Release Pending Trial. He contended that his continued detention violated the Due Process Close of the Fifth Amendment of the Constitution of the United States (Dkt. 165). The motion was based on - indeed expressly relied on - a similar motion filed by Gennady. Id. (citing Dkt. 164)). On January 30, 2019, Judge Winmill denied the motion. (Dkt. 166).

         8. On February 2, 2019, Pavel appealed the denial of his motion for release. (Dkt. 169). 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 [Pavel's] detention unconstitutional are not yet ripe.” (Dkt. 192).

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

         10. On May 30, 2019, Gennady filed a Motion to Reopen Detention Hearing pursuant to 18 U.S.C. § 3142(f)(2). He contended that new information had surfaced that was unknown to him at the time of his initial hearing. (Dkt. 218). On June 4, 2019, Pavel moved to join in that motion, claiming that “[m]any of the same issues the defense would like to present have been argued in the co-defendant's memorandum in support of the motion to reopen detention.” (Dkt. 227) (citing Dkt. 218)). The next day, Judge Winmill denied the motion, without prejudice. (Dkt. 229).

         11. During a June 6, 2019 status conference with Judge Winmill, Pavel and other co-defendants asked for a trial continuance to October 2020. They cited 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).

         12. On June 25, 2019, Pavel filed the at-issue Motion to Reopen Detention Hearing. (Dkt. 252). He made various arguments, including: (1) the Government's initial proffer regarding statements made during undercover purchases were taken out of context, mischaracterizing the nature of his statements and actions; (2) the Government's initial proffer regarding errors on certain packaging was incomplete, without considering Pavel's status as a cell phone wholesaler (purchasing items at auction from the manufacturer but others would package for sale or sell to other distributors) and, thus, his lack of knowledge about such mistakes; (3) the Government's initial proffer regarding checks from an unidentified Philippine bank account originated from a legitimate businesses that has since gone out of business; and (4) the evidence of wire transfers to Brazil and China initially proffered by the Government to reflect that Pavel was a flight risk were legitimate investments and business expenses. Id. Pavel further offers that “[h]e will show up for court, ” owing, in part, to the presence of his extended family in Idaho and his strong ties to the community, and that, separately, “[t]here are incredible tools available and skilled people who can ensure [his] appearance.” Id. On July 5, 2019, the Government responded, arguing that Pavel has failed to demonstrate new and material information as required under § 3142(f) to warrant the reopening. (Dkt. 262).

         13. 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 (see supra)); and (2) offering argument on whether the detention to date or continued detention through October 2020 would violate Fifth Amendment Due Process Clause protections for Pavel. (Dkt. 264).

         14. On July 30, 2019, the Court held a hearing on the Motion to Reopen Detention Hearing. 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 combined with the even longer period of detention which would occur with an October 2020 trial setting.


         15. On July 19, 2019, as requested by the Court on July 8, 2019, each party filed a memorandum (1) identifying the expected trial date; and (2) offering argument on the due process concerns raised by Pavel's detention to date and/or continued detention through October 2020. (Dkts. 283, 284).

         16. The Government relies on three factors to determine if a due process violation exists: (1) the non-speculative length of expected confinement; (2) the extent to which the Government (the prosecution and/or the court system) bears responsibility for pretrial delay; and (3) the strength of the evidence indicating a risk of flight, a threat to the trial process, and/or a danger to the community.” (Dkt. 283) (citing United States v. Aileman, 165 F.R.D. 571, 581 (N.D. Cal. 1996)). With this standard in mind, the Government argued:

• The actual trial date is uncertain, as both the Government and Court aspire to conduct the trial before October 2020. Regardless, lengthier detentions have been found not to violate due process in other complex cases.
• The complexities of the case are due to Pavel's and other co-defendants' actions as their conduct (moving large volume of counterfeit products, creating hundreds of business entities to evade detection, opening hundreds of bank accounts, conducting thousands of wire transfers to obfuscate the source of the funds - involving dozens of coconspirators spread across three continents) was directly responsible for the necessary, complex, and lengthy investigations that have produced voluminous physical and electronic evidence contributing to corresponding pretrial delays
• Pavel and other co-defendants sought lengthy continuances, not the Government.
• Pavel continues to be a flight risk. Financial activity suggests Pavel has plans to relocate to Brazil and is facing serious criminal liability. Pavel is also a risk of flight after his brother Igor fled to Brazil at the end of June 2019, after being approached by the FBI.

         17. Pavel relies on a variety of factors to determine if a due process violation exists, including: (1) the length of detention; (2) who bears responsibility for the delay; (3) the gravity of the charges against him; and (4) the strength of the evidence underlying detention. (Dkt. 284) (citing United States v. Rodriguez, 2012 WL 6690197, at *1 (W.D.N.Y. 2012); United States v. Omar, 157 F.Supp.3d 707, 715 (M.D. Tenn. 2016); United States v. Gelfuso, 838 F.2d 358, 359 (9th Cir. 1988)). Pavel also raises a Sixth Amendment concern. (Dkt. 284). With this standard in mind, Pavel argued:

• By the time trial commences, he will have spent twenty-six months in custody, longer than any court has ever upheld against a due process challenge based on flight risk alone.
• Lengthy pretrial detentions are constitutional only under extraordinary circumstances (dangerous international terrorism threats and/or incorrigibly violent criminal defendants) - none of which applies here.
• His lengthy pretrial detention represents a due process violation for someone with no prior criminal history, who poses no danger, and for whom the evidence of flight risk is a circumstantial opportunity for flight only.
• Because of the Government's approach to prosecuting this case and the lack of organized discovery, the Government bears the responsibility for the delay. Instead of attempting to cogently organize its evidence, the Government has instead “buried him in paper, providing him piecemeal with an amount of data that represents millions of ...

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