United States District Court, N.D. Georgia, Atlanta Division
HONORABLE STEVE C. JONES UNITED STATES DISTRICT JUDGE.
matter appears before the Court for consideration of a
January 31, 2017 Report and Recommendation
(“R&R”) (Doc. No. ) and a September 29,
2017 R&R (Doc. No. ), in which The Honorable
Catherine M. Salinas, United States Magistrate Judge,
recommended that Defendants' Motions to Dismiss the
Indictment (Docs. No. , , , , ) be
denied. Pursuant to 28 U.S.C. § 636(b)(1) and Federal
Rule of Criminal Procedure 59(b)(2), Defendants timely filed
their objections to the R&Rs (Docs. No. [176');">176');">176');">176], [255');">255');">255');">255],
[256');">256');">256');">256]), and this matter is now ripe for consideration. The
Court will “make a de novo determination of those
portions of the report or specified proposed findings or
recommendations to which objection is made.” 28 U.S.C.
February 10, 2016, Defendants were indicted on 24 counts.
Doc. No. . They moved to dismiss the indictment (Docs. No.
, ) and Judge Salinas issued an R&R recommending
denying those motions (Doc. No. ). Defendants objected
to the R&R (Doc. No. [176');">176');">176');">176]), but just four days later a
grand jury returned a superseding indictment (Doc. No.
[178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178]). The following facts are drawn from the superseding
indictment, but the Court also considers the arguments from
the first round of motions to dismiss because they are
fundamentally unchanged by the superseding indictment.
Sterling Currency Group, LLC (“Sterling”) was a
business that sold and exchanged so-called “exotic
currencies.” Doc. No. [178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178], p. 2, ¶3. Between
2010 and June 2015, Sterling was one of the largest sellers
of the Iraqi dinar in the United States. Id. p. 3,
¶6. Defendants Tyson Rhame and James Shaw were the
owners of Sterling. Id. p. 2, ¶3. Defendant
Frank Bell was its Chief Operating Officer. Id.
Collectively, these Defendants are referred to as the
“Sterling Defendants.” Defendant Terrence Keller
was the leader of a group known as “the GET Team”
and ran a website, chat forum, and conference calls.
Id. p. 3, ¶5.
The Alleged Conspiracy
the time period of the conspiracy, the Sterling Defendants
and Keller had a secret arrangement to “pump” the
Iraqi dinar through the GET team. Id. p. 5, ¶9.
Certain “websites, blogs, chat rooms and conference
calls, ” including Keller's, predicted that
“a ‘revaluation' [or ‘RV'] of the
Iraqi dinar would occur imminently.” Id. p. 3,
¶¶5-6. Such a revaluation would have caused
“a sudden, exponential rise in value of the Iraqi dinar
as compared to . . . other relatively stable global
currencies, ” which would have led to
“potentially enormous gains” for individuals who
owned Iraqi dinars. Id. ¶6. Keller falsely
claimed to have information from, and verified by, high-level
confidential sources in the United States government, the
Iraqi government, international organizations, and major
financial institutions, regarding an imminent revaluation.
Id. p. 5, ¶9. Keller and the Sterling
Defendants knew and believed that those representations would
boost sales for Sterling. Id.
Sterling Defendants publicly maintained that they merely had
an advertising relationship with promoters like Keller.
Id. p. 6, ¶11. Keller, in turn, claimed that
any advertising money he received merely covered the cost of
running the GET team. Id. In actuality, Sterling
paid Keller more than $160, 000, which was well in excess of
the cost required to run and maintain the GET team, and
nearly all of which Keller used for his own personal benefit.
Id. p. 7, ¶12 The Sterling Defendants
consistently downplayed the financial benefits to conceal the
pumping relationship and make Keller's false claims seem
more credible. Id.
Sterling Defendants also had financial relationships with
other promoters of the Iraqi dinar who spread the false
notion of an imminent revaluation. Id. ¶13.
These financial arrangements included commissions based on
how much dinar the promoter sold and monthly payments based
upon how much business the promoter directed to Sterling.
Id. The Sterling Defendants knew and believed that
these payments would causes Keller and other promoters to
continue to spread false and misleading information and to
direct business to Sterling. Id. ¶14.
Rhame himself also allegedly made misrepresentations to
consumers to buttress the fraud. He told customers
“Sterling would open secure Iraqi dinar exchanges at
airports throughout the United States and Canada within a
matter of hours or days of a revaluation, ” allowing
investors to rapidly reap large profits. Id. p. 4');">p. 4,
¶7. In reality, Rhame knew “Sterling did not have
the capacity to open these airport exchanges in the manner
and timeframe” he represented. Id. ¶8. He
made the representations to bolster the false rumors that a
revaluation was imminent and to encourage customers to
purchase dinars from Sterling “with the expectation
that the company had the capacity to immediately open these
airport exchanges.” Id. ¶7.
superseding indictment charges 36 counts. Doc. No. [178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178');">178].
Count 1 charges a conspiracy to commit mail and wire fraud,
as outlined above. Id. pp. 1-9, ¶¶1-16.
Counts 2 through 6 incorporate the above allegations and
charge Defendants with five specific instances of mail fraud.
Id. pp. 9-11, ¶¶17-19. Counts 7 through 17
likewise incorporate the above allegations and charge 11
instances of wire fraud. Id. pp. 11-12,
¶¶20-22. Count 18 is for an alleged conspiracy to
commit money laundering, and Counts 19 through 30 are
substantive money laundering charges. Id. pp. 12-15,
¶¶23-26. The money laundering charges are
predicated on Defendants' alleged commission of mail and
Counts 31 through 36 are for allegedly providing false
statements to Federal Bureau of Investigation
(“FBI”) special agents during the investigation
of this case, in violation of 18 U.S.C. § 1001.
Id. pp. 16-20, ¶¶27-38. Counts 31 through
34 are for allegedly false statements made by Defendant
Rhame. Id. pp. 16-18, ¶¶27-34. Counts 35
and 36 are for allegedly false statements made by Defendant
Bell. Id. pp. 19');">p. 19-20, ¶¶35-38.
Specifically, Count 35 alleges Bell “falsely stated
that he and Sterling maintained a ‘firewall' with
Iraqi dinar promoters who were ‘hyping' the dinar
and that he affirmatively told the promoters ‘not to
drive business' to Sterling's website.”
Id. p. 19');">p. 19, ¶36. The Government asserts that
this statement is false because Bell “knew that he had
not in fact told [Keller] to stop driving business to the
Sterling website even though [Keller] consistently updated
[Bell] on his promotional efforts.” Id. Count
36 accuses Bell of saying “that he had told [Defendant
Keller], not to promote Sterling.” Id. p. 20,
¶38. Again, this statement is allegedly false because
Bell “knew that he had not in fact told [Keller] to
stop driving business to the Sterling website even though
[Keller] consistently updated [Bell] on his promotional
to Federal Rule of Criminal Procedure 12(b)(3)(B), a
defendant may move to dismiss a count for “failure to
state an offense.” Fed. R. Crim. p. 12(b)(3)(B)(v). The
Court must then determine whether “the factual
allegations in the indictment, when viewed in the light most
favorable to the government, [are] sufficient to charge the
offense[s] as a matter of law.” United States v.
deVegter, 198 F.3d 1324, 1327 (11th Cir. 1999). The
focus is on the facts alleged in the indictment itself, not
outside facts presented by Defendants or facts that need to
be developed at trial. See United States v. Sharpe,
438 F.3d 1257, 1263 (11th Cir. 2006); United States v.
Plummer, 221 F.3d 1298, 1302 n.3 (11th Cir. 2000).
indictment “must be sufficiently specific to inform the
defendant of the charge against him and to enable him to
plead double jeopardy in any future prosecution for the same
offense.” United States v. Cole, 755 F.2d 748,
759 (11th Cir. 1985). To clear this bar, the indictment need
only include language “set[ting] forth the essential
elements of the crime.” Id. An indictment is
sufficient “if it charges in the language of the
statute” and apprises the defendant with reasonable
certainty of the charged offense. Sharpe, 438 F.3d
at 1263; see also United States v. Critzer, 951 F.2d
306, 307 (11th Cir. 1992) (per curiam).