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United States v. McCray

United States District Court, N.D. Georgia, Atlanta Division

December 1, 2017

UNITED STATES OF AMERICA
v.
CHRISTOPHER A. MCCRAY

          MAGISTRATE JUDGE'S FINAL REPORT, RECOMMENDATION, AND ORDER

          RUSSELL G. VINEYARD UNITED STATES MAGISTRATE JUDGE

         Defendant Christopher A. McCray (“McCray”) is charged in an indictment with one count of conspiring with unindicted co-conspirators, including a principal of a subcontractor (referred to as “Person #1”), to commit offenses against the United States, in violation of 18 U.S.C. § 371, by engaging in unlawful kickback transactions when he knowingly and willfully solicited and accepted money from Person #1 in relation to a prime contract with the United States, in exchange for improper favorable treatment in connection with a prime contract or subcontract, in violation of 41 U.S.C. § 8702, and with fourteen counts of knowingly and willfully accepting kickback payments totaling at least $75, 000 in return for improper favorable treatment in connection with a prime contract entered into by the United States, in violation of 41 U.S.C. §§ 8702 and 8707. [Doc. 1].[1] McCray has filed a motion to quash the indictment, or alternatively, to dismiss all charges filed against him, [Doc. 25], which the government opposes, [Doc. 31]. For the reasons that follow, it is RECOMMENDED that McCray's motion to quash the indictment, [Doc. 25], be DENIED.

         I. INTRODUCTION

         The instant indictment charges that beginning in August 2012, and continuing through May 2014, McCray, while working as a Country Manager for a company referred to as “Subcontractor #1” at Bagram Airfield, a United States military base located in Afghanistan, [2] conspired to engage in unlawful kickback transactions and actually did accept kickback payments in return for improper favorable treatment in awarding subcontracts in relation to a prime contract entered into by the United States. See [Doc. 1]. In particular, a German company, referred to as “Prime Contractor, ” held a prime United States government contract with the Army and Air Force Exchange Service (“AAFES”) for the movement of AAFES goods to, from, and within Bagram Airfield, and in March 2012, it subcontracted its transportation responsibilities to Subcontractor #1 as a first-tier subcontractor. [Id. at 3 ¶¶ 6-7]. Subsequently, in November 2012, Subcontractor #1 subcontracted, on a second-tier subcontract, the transportation responsibilities on a per truckload basis with an Afghan trucking company, referred to as “Subcontractor #2, ” which was owned by Person #1, and in this same month, “Subcontractor #2 began moving AAFES cargo for Subcontractor #1 on the subcontract.” [Id. at 3 ¶ 8].

         The indictment alleges that McCray, who had “entered into an agreement with Person #1 and Subcontractor #2 to receive kickbacks in the amount of 10% to 15% of the gross revenue that Subcontractor #2 was to earn by moving freight for Subcontractor #1, ” would “arrange to have second tier subcontract work which his employer, Subcontractor #1, had obtained from Prime Contractor, awarded to Person #1 and Subcontractor #2.” [Id. at 3 ¶ 10(a)-(b)]; see also [id. at 4 ¶ 11(a)]. The indictment also details that Subcontractor #2 paid kickbacks to McCray, initially in cash, then by wires to McCray's United States bank account on at least two occasions via an account named “Samy International Transit, ” and then by sending Western Union money orders to McCray's mother, who would deposit the money into McCray's bank accounts, and once to his girlfriend. [Id. at 4 ¶ 10(c)-(d)]; see also [id. at 4-6 ¶ 11(c)-(q)]. Counts Two through Fifteen of the indictment charge that on fourteen occasions between December 2012 and May 2014, McCray “knowingly and willfully accepted and caused to be accepted, kickback payments totaling at least $75, 000 from the owner of Subcontractor #2 and other Subcontractor #2 officials, in return for [his] improper favorable treatment, namely his actions in awarding transportation subcontracts to Subcontractor #2, in connection with a prime contract entered into by the United States[.]” [Id. at 6-8 ¶ 13].

         McCray moves to quash the indictment, [Doc. 25], which the government opposes, [Doc. 31]. McCray has not filed a reply in support of his motion, and his pending motion is now ripe for review.

         II. DISCUSSION

         McCray first moves to quash Count One of the indictment, arguing that it “is predicated upon [him] having conspired with another person to defraud the United States by receiving ‘improper' kickbacks, ” but “[w]ith no evidence of either the existence of a conspiracy, nor proof of an agreement to defraud, nor evidence of any loss to the United States, Count One not only fails as a matter of law, but also fails unless [he] received ‘improper' kickbacks.” [Doc. 25-1 at 3]. McCray next asserts that Counts Two through Fifteen of the indictment must be dismissed because the “‘[k]ickback [s]tatute' is unconstitutionally vague.” [Id.]. In response, the government asserts that the charges in the indictment sufficiently allege a conspiracy and satisfy the statutes upon which the charges are based, and that the kickback statute is not unconstitutionally vague. [Doc. 31].

         1. Legal Standard

         “Federal Rule of Criminal Procedure 7(c) governs the requirements for what must be contained in the indictment to properly charge a crime.” United States v. Ressler, Criminal File No. 1:06-CR-103-1-TWT, 2007 WL 602210, at *2 (N.D.Ga. Feb. 16, 2007), adopted at *1. “Rule 7(c)(1) requires that ‘[t]he indictment or information [] be a plain, concise, and definite written statement of the essential facts constituting the offense charged and [] be signed by an attorney for the government.'” Id. (alterations in original) (quoting Fed. R. Crim. P. 7(c)(1)). “Rule 7(c)(1) further provides that ‘[f]or each count, the indictment or information must give the official or customary citation of the statute, rule, regulation, or other provision of law that the defendant is alleged to have violated.'” Id. (alteration in original) (quoting Fed. R. Crim. P. 7(c)(1)). The charges in the indictment satisfy the procedural requirements of Rule 7, see [Doc. 1], and McCray does not contend otherwise, see generally [Docs. 25 & 25-1]. Instead, he has advanced specific arguments with respect to each count of the indictment, which will be addressed.

         2.Count One of the Indictment

         McCray is charged in Count One with conspiring to commit offenses against the United States by engaging in unlawful kickback transactions, in violation of 18 U.S.C. § 371, which provides:

If two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.

18 U.S.C. § 371. McCray moves to dismiss this conspiracy count, arguing that “[t]he [s]tatute requires proof that two or more persons conspired to commit an offense against the United States, or to [d]efraud the United States” and that the United States “has disclosed in discovery . . . that it believes it can prove that a conspiracy existed between [McCray] and a specifically identified citizen of Afghanistan, ” but that “[a]ccording to counsel for [] the United States, the specifically identified citizen of Afghanistan will not be appearing to testify at the trial of the case” and since McCray “may not [be] force[d] . . . to testify, ” the “United States has produced neither an illegal agreement entered into by [McCray], nor any criminal intent” and therefore, “no illegal overt act can ...


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