United States v. Chaka Fattah, Jr.

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 16-1265
_____________
UNITED STATES OF AMERICA
v.
CHAKA FATTAH, JR.,
Appellant
_____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 2-14-cr-00409-001
District Judge: The Honorable Harvey Bartle, III
_____________
Argued March 7, 2017
Before: SMITH, Chief Judge, HARDIMAN, and
KRAUSE, Circuit Judges
(Opinion Filed: June 2, 2017)
Eric L. Gibson [ARGUED]
Paul L. Gray
Office of United States Attorney
615 Chestnut Street
Suite 1250
Philadelphia, PA 19106
Counsel for Appellee
Chaka Fattah, Jr. [ARGUED]
Philadelphia FDC
700 Arch Street
P.O. Box 562
Philadelphia, PA 19105
Pro Se Appellant
Ellen C. Brotman1 [ARGUED]
Suite F200
150 North Radnor Chester Road
Radnor, PA 19087
Counsel for Court Appointed Amicus Curiae
1
Ms. Brotman was appointed by the Court to serve
as Amicus Curiae on behalf of the defendant. We thank
Ms. Brotman for her excellent advocacy, which she
provided on an expedited basis.
2
________________
OPINION
________________
SMITH, Chief Judge.
On February 29, 2012, law enforcement officers
executed sealed search warrants at the home and office of
defendant Chaka Fattah, Jr. The search occurred more
than two years before Fattah was indicted, but members
of the press had somehow learned about the
investigation; several reporters waited at Fattah’s home
to report the story. How did they find out? At Fattah’s
trial, an FBI agent admitted that he had, over the course
of several months, disclosed confidential information to a
reporter in exchange for information pertinent to the
investigation.
Fattah argues that the FBI agent’s conduct violated
the Sixth Amendment because the pre-indictment press
caused him to lose his job, which in turn rendered him
unable to retain the counsel of his choice. Fattah also
argues that the agent’s conduct violated his Fifth
Amendment right to due process. We conclude that
neither argument prevails. As the Government concedes,
the agent’s conduct was wrongful. We are unable,
however, to conclude that Fattah is entitled to relief.
Fattah also raises a number of additional claims
regarding the sufficiency of the indictment, constructive
amendment of the indictment, improper joinder of
3
counts, and the particularity of the search warrants. We
reject those arguments as well. Accordingly, we will
affirm the judgment of the District Court.
I
On July 29, 2014, more than two years after the
searches and media coverage described above, a grand
jury returned an indictment charging defendant Chaka
Fattah, Jr. with twenty-three counts: one count of bank
fraud, in violation of 18 U.S.C. § 1344; eight counts of
making false statements to obtain loans, in violation of
18 U.S.C. § 1014; one count of making false statements
to settle a loan, in violation of 18 U.S.C. § 1014; three
counts of making false statements concerning loans
insured by the Small Business Administration, in
violation of 18 U.S.C. § 1001; four counts of filing false
federal income tax returns, in violation of 26 U.S.C.
§ 7206; one count of failing to pay federal income tax, in
violation of 26 U.S.C. § 7203; one count of theft from a
program receiving federal funds, in violation of 18
U.S.C. § 666(a)(1)(A); four counts of wire fraud, in
violation of 18 U.S.C. § 1343; and aiding and abetting, in
violation of 18 U.S.C. § 2. A grand jury returned a
Superseding Indictment with minor amendments on
March 3, 2015.
The charges fall into three basic categories.
The first set of charges relate to Fattah’s
fraudulently obtaining and failing to repay lines of credit.
In applying for lines of credit, Fattah represented to
4
various banks that his company, 259 Strategies, LLC,
would use the money for business purposes when in fact
Fattah intended to use the money for personal expenses
like gambling debts, clothing, jewelry, a BMW, and
liquor. Fattah also failed to disclose his outstanding debts
and misrepresented facts about his company’s
operational status and financials. Fattah recruited his
roommate, Matthew Amato, to make similar
misrepresentations to obtain additional lines of credit.
The Superseding Indictment also charges Fattah with
making false statements to avoid repaying some of the
banks.
Second, the Superseding Indictment charged
Fattah with tax evasion. Specifically, Fattah failed to
report certain income from his other businesses,
including income from his sham concierge service,
American Royalty. For example, Fattah accepted $10,000
from an eighteen-year-old after promising that American
Royalty would obtain an American Express black card
for the teenager. Fattah never did so; instead, he kept the
money and failed to report it as income.
And third, the Superseding Indictment charged
Fattah with defrauding the Philadelphia School District
(“PSD”). Fattah’s company, 259 Strategies, contracted
with Delaware Valley High School (“DVHS”), a for-
profit educational provider. Fattah thereafter became
DVHS’s Chief Operating Officer. DVHS, in turn, signed
a $2.1 million contract with the PSD to run the
“Southwest” school for troubled students. Through his
5
position at DVHS, Fattah submitted fraudulent budgets to
the PSD that requested funding for nonexistent jobs and
unperformed services. All told, the PSD overpaid
$940,000 over a two-year period, and Fattah personally
pocketed part of that sum.
Fattah declined representation from the Federal
Community Defender Office for the Eastern District of
Pennsylvania and has proceeded throughout this
litigation pro se. Before trial began, Fattah filed a motion
to dismiss the indictment. Among other accusations,
Fattah alleged that the Government had leaked
confidential information about the investigation to the
press. Fattah argued, inter alia, that the Government’s
conduct violated his Fifth and Sixth Amendment rights.
The District Court denied the motion, concluding that
there was no evidence of a leak.
Trial commenced on October 15, 2015. On
October 27, the FBI agent in charge of the investigation
testified that he did in fact leak confidential information
to a reporter in exchange for background information
about the PSD. The agent explained that he had revealed
the existence of sealed search warrants, provided the time
and location of the search, discussed the content of
undercover recordings, and gave specific information
about Fattah’s business dealings, including the amount of
money he had been paid through his work.
After the agent’s testimony, Fattah (through
standby counsel) moved for a hearing to determine
whether the Government violated grand jury secrecy or
6
its obligations under Brady v. Maryland, 373 U.S. 83
(1963). The District Court denied the motion.2
On November 5, 2015, a jury found Fattah guilty
on all counts except one (Count 17, filing a false income
tax return for the year 2009). On February 2, 2016, the
District Court sentenced Fattah to serve sixty months’
imprisonment and five years’ supervised release, and to
pay $1,172,157 in restitution plus a special assessment
fee of $2,125. Fattah timely appealed. By Order dated
January 23, 2017, the Court appointed Ellen C. Brotman
as Amicus Curiae on behalf of Fattah.
II3
We begin with Fattah’s claims that the FBI agent’s
conduct violated Fattah’s Sixth Amendment right to the
counsel of his choice and violated his Fifth Amendment
right to due process. We reject both arguments.
A
Before reaching the merits of the Fifth and Sixth
Amendment issues, we must first address the issue of
2
Fattah does not challenge that denial on appeal.
3
The District Court had jurisdiction pursuant to 18
U.S.C. § 3231. We have jurisdiction pursuant to 28
U.S.C. § 1291.
7
waiver.4 We will not enforce waiver against either party.
“[I]t is well settled that arguments asserted for the
first time on appeal are deemed to be waived and
consequently are not susceptible to review in this Court
absent exceptional circumstances.” United States v. Rose,
538 F.3d 175, 179 (3d Cir. 2008) (quoting United States
v. Lockett, 406 F.3d 207, 212 (3d Cir. 2005)). When
reviewing a district court’s ruling on a pretrial motion,
including a motion alleging “a defect in instituting the
prosecution,” Fed. R. Crim. P. 12(b)(3)(A), we will not
consider any unpreserved arguments absent “good
cause,” Fed. R. Crim. P. 12(c)(3); see United States v.
Joseph, 730 F.3d 336 (3d Cir. 2013); Rose, 538 F.3d at
182. This rule applies to criminal defendants and to the
Government alike. See, e.g., United States v. Tracey, 597
F.3d 140, 149 (3d Cir. 2010) (“[T]he Government waived
4
In criminal procedure, the term “waiver”
ordinarily refers to the intentional relinquishment of a
known right, as distinct from “forfeiture.” See United
States v. Olano, 507 U.S. 725, 733 (1993). However, an
earlier version of Rule 12 provided that a party “waives”
a defense by simply failing to timely raise it. The
reference to waiver was deleted in the 2014 Amendments
to “avoid possible confusion.” Fed. R. Crim. P. 12
advisory committee’s note. To the extent that we repeat
that terminology here, we use it in the sense embodied in
the earlier version of Rule 12 and our case law—to refer
to a party’s failure to raise an argument—not in the sense
of intentional relinquishment.
8
this argument by failing to raise it before the District
Court.”).
This case reaches us in an unusual posture. Fattah
properly raised both his Fifth and Sixth Amendment
claims in a pretrial motion. But at that time, the
Government did not know about the leaks. It defended
against Fattah’s pretrial motion by arguing that the
presence of reporters was insufficient evidence to justify
an evidentiary hearing. The District Court agreed. But at
trial, the agent’s testimony confirmed Fattah’s suspicion.
With the assistance of standby counsel, Fattah filed a
new motion for a hearing. But the new motion did not
reraise the Fifth and Sixth Amendment issues. As a
result, neither the Government nor the District Court
substantively addressed those arguments.
Although the Government does not explicitly
argue waiver, it still complains that Fattah relies on
“arguments that were not presented to the district court at
the appropriate time and were never addressed by the
district court.” Resp. to Amicus Br. 15. We nevertheless
decline to enforce waiver against Fattah because
“requiring a defendant to re-raise the issue[s] . . . would
be an exercise in wasteful formality.” United States v.
Sanders, 485 F.3d 654, 657 (D.C. Cir. 2007). And given
the late-breaking revelation of the agent’s conduct,
combined with Fattah’s failure to reraise the arguments,
we conclude that any waiver by the Government is
excusable for good cause.
We proceed, then, to the merits.
9
B
Fattah’s Sixth Amendment claim is premised on a
novel theory and a long causal chain. The theory is that,
even where the government’s misconduct was
undisputedly not directed towards attorneys’ fees or
intended to interfere with the defendant’s right to
counsel, a defendant may establish a Sixth Amendment
violation by proving that the misconduct reduced his pre-
indictment income and thereby impaired his ability post-
indictment to hire the counsel of his choice. As for the
causal chain, Fattah asserts that the FBI agent spoke to a
reporter, which caused the publication of news stories
about Fattah, which in turn caused DVHS to terminate
Fattah’s employment. According to Fattah, the unrealized
income from that employment—allegedly $432,000 (plus
bonus)—was necessary for him to afford counsel of his
choice. Even if we were to accept Fattah’s far-reaching
theory, we decline to remand for an evidentiary hearing
because Fattah’s claim to unrealized income is
contradicted by his own undisputed statements and
actions.
1
The Sixth Amendment to the United States
Constitution provides, “In all criminal prosecutions, the
accused shall enjoy the right . . . to have the Assistance of
Counsel for his defence.” U.S. Const. amend. VI. The
Sixth Amendment guarantees not only the right to
effective assistance of counsel, see, e.g., Buck v. Davis,
137 S. Ct. 759, 775 (2017), but also the “fair opportunity
10
to secure counsel of [one’s] own choice,” Powell v.
Alabama, 287 U.S. 45, 53 (1932). “The right to select
counsel of one’s choice . . . has been regarded as the root
meaning of the constitutional guarantee.” United States v.
Gonzalez-Lopez, 548 U.S. 140, 147–48 (2006). The Sixth
Amendment protects the “fundamental” right “to be
represented by an otherwise qualified attorney whom that
defendant can afford to hire.” Luis v. United States, 136
S. Ct. 1083, 1089 (2016) (plurality opinion) (citation
omitted).
To argue that the deprivation of income constitutes
a Sixth Amendment violation, Fattah principally relies on
United States v. Stein, 541 F.3d 130 (2d Cir. 2008). In
Stein, the accounting firm KPMG and several of its
employees were under federal investigation for allegedly
creating tax shelters for their clients. At the time, the
Department of Justice had a stated policy of considering
whether a corporation “appears to be protecting its
culpable employees” when deciding whether to bring
criminal charges against the corporation. Id. at 136. In a
meeting with KPMG’s counsel, the prosecutors stated
that they would take this policy “into account” regarding
KPMG’s decision to pay its employees’ legal fees. Id. at
137. The prosecutors’ statements pressured KPMG into
withdrawing financial support for employees who were
indicted. Id. at 139–40.
The district court in Stein found that the
Government pressured KPMG into modifying its policy
in order to “minimize the involvement of defense
11
attorneys,” and, but for that conduct, “KPMG would have
paid defendants’ legal fees and expenses without
consideration of cost.” Id. at 141 (citation omitted). The
district court ruled that the Government violated the
defendants’ Sixth Amendment rights, and the Second
Circuit affirmed. The Second Circuit held that “the Sixth
Amendment protects against unjustified governmental
interference with the right to defend oneself using
whatever assets one has or might reasonably and lawfully
obtain.” Id. at 156. The Second Circuit also held that the
Government’s pre-indictment conduct had “post-
indictment effects,” and therefore implicated the Sixth
Amendment even though the right to counsel attaches
upon indictment. Id. at 153.
Stein tested the outer limits of the Sixth
Amendment’s protection. Fattah would have us extend
those boundaries even further. Unlike Stein, the
Government here undisputedly lacked any “desire” or
“purpose” to “deliberately interfere” with counsel. Id. at
141, 153, 155. Any alleged loss of income would have
been an unintended and incidental consequence of the
agent’s conduct. Also unlike Stein, DVHS decided to
terminate Fattah’s employment5 independent of any
influence from prosecutors. There was no “close nexus”
between DVHS and the Government with regard to the
5
The Government states that it is in possession of
evidence that Fattah was never fired from DVHS, but
instead decided not to return to work. We will, however,
consider only evidence of record.
12
termination. See id. at 146–51. But we need not resolve
the case on that basis. Based on the unique facts of this
case, Fattah’s claim fails for a more fundamental reason.
Fattah’s claim depends on the factual assertion that the
Government deprived him of income that he otherwise
would have “reasonably and lawfully obtain[ed],” id. at
156, but Fattah has failed to make an adequate
preliminary showing to support that assertion. As such,
he would not be entitled to an evidentiary hearing on his
Sixth Amendment claim even if his broad-sweeping legal
theory were cognizable.6
6
On May 17, 2017, a district court denied the
Government’s motion for summary judgment in a
parallel civil matter, Fattah v. United States, No. 14-cv-
1092, 2017 WL 2152171 (E.D. Pa. May 17, 2017). The
court held that “conflicting versions of why and how
Fattah’s business relationship with [DVHS] ended
preclude summary judgment” because “[r]esolution of
the conflict turns on a credibility determination to be
made by the fact finder.” Id. at *9. Our decision in this
case is unrelated to that holding. Our conclusion is based
on the minimal preliminary showing advanced in this
criminal action, combined with gaps in Fattah’s proffer
specific to the Sixth Amendment context. Even if Fattah
ultimately succeeds in his civil action, that would not
mend the many inadequacies in his Sixth Amendment
claim as presented to the District Court in this case. We
describe those inadequacies in greater detail below.
13
2
Because of the procedural posture of this case, the
District Court did not consider whether to hold an
evidentiary hearing on Fattah’s Sixth Amendment claim
after the FBI agent testified. We conclude that, even if
the issue had been reraised and considered by the District
Court, Fattah would not have been entitled to a hearing.
To be entitled to an evidentiary hearing, the
defendant’s moving papers must be “sufficiently specific,
non-conjectural, and detailed to enable the court to
conclude that (1) the defendant has presented a colorable
constitutional claim, and (2) there are disputed issues of
material fact that will affect the outcome of the motion.”
United States v. Hines, 628 F.3d 101, 105 (3d Cir. 2010);
see also United States v. Voigt, 89 F.3d 1050, 1067 (3d
Cir. 1996).
To support his request for an evidentiary hearing,
Fattah relies on an affidavit he filed in the District Court
that attests to the truth of the representations presented in
his pretrial Motion to Quash and Reply Brief. Those
filings, in turn, assert that the Government “caused him
to be without funds he would have earned which
undoubtedly affect[ed] his choice of counsel and ability
to mount a defense.” DDE 34, at 98. Fattah claims that he
“reasonably expected to continually receiv[e] his contract
payments” in the amount of “more than $432,000
($144,000 per year), plus a bonus of $117,000, prior to
trial.” Fattah Br. 15. (internal quotation marks omitted).
14
But as the Government argues, Fattah was
preparing to leave DVHS on his own accord. The record
discloses that Fattah sent an email to the school system
mere days before the searches. The email asked whether
a whistleblower would be entitled to a reward for
revealing fraud. Meanwhile, Fattah had prepared a
business plan to begin his own competing school, called
Dreamchasers. Based on these facts, the Government
argues that Fattah planned to reveal DVHS’s fraud to
eliminate a competitor and void a noncompete clause in
his employment contract. In Fattah’s own words, “when
this all comes out I’m basically effectively resigned. I’m
done. I was going to be on my way out the door anyway.
I wanted to start my own thing and go after some
opportunities.” Supp. App. 89.
Fattah does not dispute that he prepared a business
plan and sent the email. Nor does he deny making the
foregoing statement. Thus, by his own account, Fattah
was “going to be on [his] way out,” id., of the very job
which he now claims he would have remained in for
more than two years. Moreover, by sending the email,
Fattah took a concrete step to undermine DVHS and his
prospects of continued employment at the company.
Accordingly, the undisputed record contradicts Fattah’s
claimed expectation of “continually receiving his
contract payments” from DVHS. Fattah Br. 15.
Fattah attempts to resolve this contradiction by
arguing that there is a material dispute of fact as to when
he would have left DVHS. “My plan was to raise money
15
[for Dreamchasers], and if I didn’t raise that money I
would have stayed at Delaware Valley High School.”
Oral Arg. 9:29; see also Reply Br. 5–6. But according to
that argument, Fattah’s continued employment would be
contingent on whether a hypothetical investor would
have taken an interest in a hypothetical business. For
Fattah’s claim of $432,000 (plus bonus) in lost income to
succeed, the District Court would have been required to
speculate that no investor would have taken an interest in
Dreamchasers over more than two years. Alternatively,
the District Court would have been required to speculate
that, if Fattah had succeeded in raising capital for
Dreamchasers, the FBI agent’s conduct thwarted what
would have otherwise been a comparably successful
business.
Fattah has not claimed to be in possession of any
evidence that would enable the District Court to
determine what contracts, if any, Fattah’s nonexistent
business might have won, or what income, if any, Fattah
might have otherwise earned. Because there is no dispute
that Fattah was going to leave DVHS, and the question of
timing is speculative, Fattah has failed to show the
existence of a material dispute of fact capable of
resolution at an evidentiary hearing. Fattah’s
counterfactual ability to afford counsel is purely
conjectural.
Fattah’s claim is speculative for an additional
reason. The Government executed a search warrant not
only at Fattah’s apartment, but also at his office located
16
in DVHS’s headquarters. DVHS, therefore, did not learn
about the investigation from the news media. The case
agent testified that he thought David Shulick, DVHS’s
CEO, possessed a copy of the warrant, or at least
“discussed receiving copies of the search warrant from
whomever it was served at -- on DVHS.” Supp. App.
370; see Fed. R. Crim. P. 41(f)(1)(B)–(C). Fattah did not
proffer any testimony or other evidence to suggest that
DVHS’s decision to cut ties with Fattah was motivated
by the news reports rather than by DVHS’s independent
knowledge of the investigation.
Finally, the money at issue in Stein would have
directly funded the defendants’ litigation expenses. Here,
Fattah claims that he was deprived of general, fungible
income. Thus, whether the Government in fact
“imped[ed] the supply of defense resources,” Stein, 541
F.3d at 156, turns on both Fattah’s income and his
expenses. The evidence adduced at trial revealed that,
despite his substantial income through DVHS, Fattah had
financial difficulties. He incurred lavish personal
expenses, owed exorbitant gambling debts, and owed
thousands of dollars in unpaid taxes. He used lines of
credit to cover his personal expenses and would take out
one line of credit to cover the last. Thus for Fattah to
have been able to afford the expensive counsel to which
he claims to be entitled, the District Court on remand
would be required to speculate that Fattah would have
either made alterations to his lifestyle or would have been
able to continually circulate lines of credit. Fattah has
made no preliminary showing in support of any such
17
finding. Certainly if Fattah had continued his practice of
lying in order to obtain new lines of credit, access to
those funds would not have been protected by the Sixth
Amendment. See Luis, 136 S. Ct. at 1088 (holding that
the Sixth Amendment protects against “the pretrial
restraint of legitimate, untainted assets”).
We are far from the facts of Stein, where the
Government directly interfered with an employer’s
unconditional payment of legal expenses. Even if we
were prepared to entertain the notion that incidentally
reducing a defendant’s pre-indictment income might
violate the Sixth Amendment—itself a dubious
proposition—the attenuated causal chain alleged in this
case must be supported by a “sufficiently specific, non-
conjectural, and detailed” preliminary showing of a
material dispute of fact. Hines, 628 F.3d at 105. Far from
meeting that standard, Fattah’s undisputed statements and
actions directly contradict the facts proffered in support
of his Sixth Amendment claim. His efforts to resolve the
contradiction rely entirely on “[]conjectur[e].” Id.
Accordingly, we decline to remand for an evidentiary
hearing or otherwise grant relief on Fattah’s Sixth
Amendment claim.
C
Second, Fattah argues that the FBI agent’s conduct
violated his right to due process guaranteed by the Fifth
Amendment. Although the agent’s conduct was
unquestionably wrongful, it does not meet the high bar of
18
outrageous misconduct that would entitle Fattah to relief
under the Fifth Amendment.
1
The Fifth Amendment to the Constitution of the
United States provides that “No person shall be . . .
deprived of life, liberty, or property, without due process
of law.” U.S. Const. amend. V. The Supreme Court has
emphasized that the “touchstone of due process” is
protection against arbitrary government action. Cty. of
Sacramento v. Lewis, 523 U.S. 833, 845 (1998) (citation
omitted). Government action is “arbitrary in the
constitutional sense” when it is “so egregious, so
outrageous, that it may fairly be said to shock the
contemporary conscience.” Id. at 846, 847 n.8 (citation
omitted). “While the measure of what is conscience
shocking is no calibrated yard stick, it does, as Judge
Friendly put it, ‘poin[t] the way.’” Id. at 848 (alteration in
original) (citation omitted).
The conduct of a law-enforcement officer may
violate the Fifth Amendment if it is “so outrageous that
due process principles would absolutely bar the
government from invoking judicial processes to obtain a
conviction.” United States v. Russell, 411 U.S. 423, 431–
32 (1973). For example, in Rochin v. California the
Supreme Court held that an officer violated the Fifth
Amendment when, in order to preserve evidence that the
suspect had swallowed, he ordered a doctor to pump the
suspect’s stomach—a practice the Supreme Court
considered “brutal” and “offensive.” 342 U.S. 165, 174
19
(1952). But “the judiciary is extremely hesitant to find
law enforcement conduct so offensive that it violates the
Due Process Clause.” Voigt, 89 F.3d at 1065. “We must
necessarily exercise scrupulous restraint before we
denounce law enforcement conduct as constitutionally
unacceptable; the ramifications are wider and more
permanent than when only a statutory defense is
implicated.” United States v. Jannotti, 673 F.2d 578, 607
(3d Cir. 1982) (en banc).
This Court has considered, but rejected, Fifth
Amendment challenges to law enforcement conduct in a
variety of contexts, such as where the Government
allegedly used an undercover agent’s sexual relationship
with a suspect to obtain inculpatory information, see
United States v. Nolan-Cooper, 155 F.3d 221, 232 (3d
Cir. 1998), and where the Government allegedly
interfered with the defendant’s attorney-client privilege,
see United States v. Hoffecker, 530 F.3d 137, 156 (3d
Cir. 2008); Voigt, 89 F.3d at 1066. Claims of outrageous
government misconduct are commonly asserted where an
undercover officer allegedly aided or participated in the
criminal activity charged against the defendant. See, e.g.,
Hampton v. United States, 425 U.S. 484 (1976) (plurality
opinion); Russell, 411 U.S. 423.
This Court has granted relief on a claim of
outrageous government misconduct only once. In United
States v. Twigg, 588 F.2d 373 (3d Cir. 1978), this Court
held that the Government violated the Due Process
Clause when an agent was “completely in charge and
20
furnished all of the [relevant] expertise” to create a
methamphetamine laboratory. Id. at 380–81. In short, the
Government “created the crime for the sole purpose of
obtaining a conviction.” United States v. Dennis, 826
F.3d 683, 695 (3d Cir. 2016) (citation omitted). Since
Twigg was decided, this Court has repeatedly
distinguished,7 and even questioned, its holding. See,
e.g., United States v. Beverly, 723 F.2d 11, 12 (3d Cir.
1983).
2
This is not a case like Twigg, where the
Government’s conduct was intertwined with the
defendant’s. Instead, Fattah and amicus counsel argue
that, because the FBI agent violated (or may have
violated) certain laws, his conduct is so outrageous that it
bars conviction. See Russell, 411 U.S. at 430. We
conclude, however, that the agent’s conduct “is distinctly
not of that breed.” Id. at 432.
First, Fattah and amicus counsel argue that a Fifth
Amendment violation was predicated on a separate
7
See, e.g., United States v. Lakhani, 480 F.3d 171,
182 (3d Cir. 2007); United States v. Pitt, 193 F.3d 751,
761 (3d Cir. 1999); United States v. Driscoll, 852 F.2d
84, 86 (3d Cir. 1988); United States v. Martino, 825 F.2d
754, 762–63 (3d Cir. 1987); United States v. Ward, 793
F.2d 551, 555 (3d Cir. 1986); Jannotti, 673 F.2d at 608–
09.
21
violation of the Sixth Amendment. But as we have
already held, Fattah failed to establish a Sixth
Amendment violation.
Second, amicus counsel argues that the agent
violated Rule 6(e) of the Federal Rules of Criminal
Procedure by disclosing Fattah’s identity as the target of
a grand jury investigation. But the District Court found
that Fattah failed to make a preliminary showing of such
a violation, and Fattah does not challenge that finding on
appeal.8
Third, amicus counsel argues that the officer may
have committed obstruction of justice in violation of 18
U.S.C. § 1503(a). But Fattah and amicus counsel fail to
show an “evil intent to obstruct” the due administration
of justice. United States v. Aguilar, 515 U.S. 593, 599
(1995). See generally United States v. Sussman, 709 F.3d
155, 168 (3d Cir. 2013). On the limited record before us,
we cannot prejudge the commission of this alleged
8
Even if that finding were challenged on appeal,
we note a defendant must show prejudice to win
dismissal of the indictment for a breach of grand jury
secrecy; showing a simple violation of Rule 6(e) is
insufficient. Bank of Nova Scotia v. United States, 487
U.S. 250, 255 (1988). But if defendants could simply
reframe a violation of Rule 6(e) as a violation of the Fifth
Amendment, they could evade Nova Scotia’s prejudice
requirement entirely.
22
offense.9 Such a determination is better left to the
prosecutorial process following a full investigation.
Fourth, amicus counsel argues that the agent may
have violated FBI policy. But the violation of internal
policy alone does not amount to a violation of
constitutional due process. See United States v. Christie,
624 F.3d 558, 573 (3d Cir. 2010) (rejecting a claim of
outrageous misconduct where the Government allegedly
violated guidelines that “do not themselves create rights
for criminal defendants”).
Finally, we are left with the arguments that the FBI
agent disclosed certain confidential information
contained in Fattah’s tax returns in violation of 26 U.S.C.
§ 6103.10 According to Fattah’s opening brief, the
9
Amicus counsel relies on out-of-circuit dicta. See
N.Y. Times Co. v. Gonzales, 459 F.3d 160, 163 (2d Cir.
2006). Regardless, it is not settled that such a violation
would entitle Fattah to relief. See United States v.
Payner, 447 U.S. 727, 737 n.9 (1980) (“[T]he limitations
of the Due Process Clause . . . come into play only when
the Government activity in question violates some
protected right of the defendant.” (quoting Hampton, 425
U.S. at 490)).
10
Amicus counsel adds that the agent may have
committed a misdemeanor under 18 U.S.C. § 1905, and
also declares that the agent lied to the Magistrate Judge
about the importance of confidentiality when he sought
an order placing the search warrants under seal. These
23
Government conceded that violation in a parallel civil
matter. But we are unable to conclude that the disclosure
of this financial information, standing alone or in
combination with any of the above considerations, is “so
outrageous that due process principles would absolutely
bar the government from invoking judicial processes to
obtain a conviction.” Russell, 411 U.S. at 431–32. “[T]he
remedy lies, not in freeing the equally culpable
defendant, but in prosecuting the police” if such a
violation occurred. Hampton, 425 U.S. at 490; see
Jannotti, 673 F.2d at 609; United States v. Walters, 16-
cr-338, slip op. at 18–19 (S.D.N.Y. Mar. 1, 2017).
Accordingly, we conclude that the FBI agent’s
conduct did not violate Fattah’s Fifth or Sixth
Amendment rights. That said, our opinion in this case
should by no means “be construed as an approval of the
government’s conduct.” Beverly, 723 F.2d at 13. To
ensure the public trust, the Government bears a serious
responsibility to investigate any malfeasance and take
appropriate action. We hope that the FBI and
prosecutorial authorities have done just that.
III
We now turn to Fattah’s four remaining arguments
that (A) various counts of the indictment fail to state an
offense, (B) the Government constructively amended the
additional considerations do not alter our constitutional
analysis.
24
indictment at trial, (C) the Superseding Indictment
improperly joins unrelated charges, and (D) the
Government’s search warrants were impermissibly
broad. We reject each argument.
A
First, Fattah argues that various counts in the
indictment fail to state an offense. See Fed. R. Crim. P.
7(c)(1). Reviewing de novo, we reject Fattah’s argument.
“[A]n indictment is facially sufficient if it (1)
contains the elements of the offense intended to be
charged, (2) sufficiently apprises the defendant of what
he must be prepared to meet, and (3) allows the
defendant to show with accuracy to what extent he may
plead a former acquittal or conviction in the event of a
subsequent prosecution.” United States v. Stevenson, 832
F.3d 412, 423 (3d Cir. 2016) (quoting United States v.
Huet, 665 F.3d 588, 595 (3d Cir. 2012)). We address the
Counts in the same order as Fattah’s brief.
1. Count 12 (Bank Fraud in violation of 18 U.S.C.
§ 1344). Count 12 charged Fattah with misrepresenting to
United Bank that he would use a line of credit for
business expenses when he meant to use the money for
personal expenses. Fattah argues that Count 12 merely
charged breach of contract, not a criminal offense.
According to Fattah, the conduct charged in the
Superseding Indictment is consistent with making
truthful representations at the time he applied for the loan
but later failing to use the funds as promised.
25
But Count 12 properly charged that Fattah
employed “false and fraudulent pretenses, representations
or promises” in order “to obtain” a loan. Supp. App. 18;
18 U.S.C. § 1344. In other words, the Superseding
Indictment plainly charged Fattah with making
representations that he knew to be false or fraudulent at
the time he made them. It then supported that allegation
with specific facts about Fattah’s representations, his
subsequent conduct, and the timing in between.
Fattah relies on several inapposite cases that
address a defendant’s failure to disclose information to a
bank. For example, in United States v. Steffen, 687 F.3d
1104, 1116 (8th Cir. 2012), the Eighth Circuit held that a
charge of bank fraud alleged mere breach of contract
where, after obtaining approval for a loan, the defendant
sold collateral without notifying the bank as required by
the loan agreement. The Eighth Circuit concluded that
the indictment failed to state an offense, in part, because
the “breach of the security agreement was not
accompanied or preceded by express
misrepresentations.” Id.
Here, by contrast, the Superseding Indictment
properly charged that Fattah made express
misrepresentations “to obtain” the loan. Supp. App. 18.
Whether Fattah’s statements were knowing
misrepresentations (as opposed to sincere, unfulfilled
promises) was a question of fact for the jury. The jury,
26
properly instructed, found beyond a reasonable doubt that
Fattah made knowing misrepresentations.11
11
Fattah argues that the Government failed to
prove intent to defraud beyond a reasonable doubt.
Reviewing the evidence in a light most favorable to the
prosecution, Jackson v. Virginia, 443 U.S. 307, 319
(1979), we reject this argument because the Government
introduced ample circumstantial evidence of intent. For
example, within two days of receiving approval for the
loan, Fattah withdrew substantial funds from United
Bank, deposited the funds in his personal checking
account, and then began using the funds for personal
expenses such as paying down gambling debts. The close
timing of events, combined with Fattah moving the funds
in an apparent effort to prevent United Bank from
learning the funds’ true uses, permit an inference that
Fattah never intended to use the loan as promised. That
conclusion is further supported by Fattah’s own
statements, which demonstrate a cavalier disregard for
the funds’ appropriate uses. See, e.g., Supp. App. 82
(“F*** the credit lines; it’s not about credit lines it’s
about figuring out how to make money and having fun
. . . .”); Supp. App. 188 (United Bank lending officer
testifying that Fattah stated “something to the effect of
that it’s his business, his company that he’s entitled to
utilize the funds as he determined”). Thus, based on the
evidence presented, a “rational trier of fact could have
found the essential elements of the crime beyond a
reasonable doubt.” Jackson, 443 U.S. at 319.
27
2. Counts 20–23 (Wire Fraud in violation of 18
U.S.C. § 1343). The wire fraud Counts charge Fattah
with requesting excess funds for DVHS’s budgets and
pocketing the surplus. Fattah repeats his breach-of-
contract argument that the Superseding Indictment
merely charged that he failed to perform all of the
services identified in the budgets, not that he lied to
obtain those funds. We reject this argument for the
reasons provided above.12
3. Count 19 (Theft from a Program Receiving
Federal Funds in violation of 18 U.S.C. § 666(a)(1)(A)).
This Count alleged that Fattah’s scheme to manipulate
DVHS’s budgets defrauded the PSD, an organization that
received more than $10,000 in federal assistance. Supp.
App. 29. Fattah relies on United States v. Copeland, 143
F.3d 1439, 1441 (11th Cir. 1998), and other similar cases
for the proposition that a company does not receive
“Federal assistance,” 18 U.S.C. § 666(b), if it is “engaged
in purely commercial transactions with the federal
12
On Counts 20–23, Fattah’s argument based on
sufficiency of the evidence likewise fails. The
Government introduced sufficient circumstantial
evidence from which a reasonable jury could conclude
that Fattah knew the budgets were false at the time he
submitted them. The evidence included Fattah’s own
tape-recorded statements, records from his computers,
wire transactions from DVHS to 259 Strategies, and
statements from DVHS employees questioning the
veracity of the budgets.
28
government,” Copeland, 143 F.3d at 1441. On that basis,
Fattah argues that DVHS’s contractual relationship with
the PSD was “purely commercial” and therefore outside
the scope of § 666. But DVHS’s contract with the PSD is
irrelevant. The applicability of § 666 turns on the PSD’s
relationship with the federal government, not on its
relationship with DVHS. Fattah does not dispute that the
PSD received sufficient federal assistance to place it
within the ambit of § 666(b). Therefore, defrauding the
PSD amounted to a violation of § 666(a)(1)(A).
4. Counts 1–7 (False Statements to Obtain Bank
Loans in violation of 18 U.S.C. § 1014). Counts 1–4
charge Fattah with making false statements to four
different banks in order to obtain loans. Fattah reiterates
his breach-of-contract argument, which we reject for the
reasons provided above. Counts 5–7 charge that Fattah
aided and abetted false statements by his friend, Matthew
Amato. According to Fattah, the indictment charges him
with merely knowing Amato would lie to the bank,
which is not a crime. But the Counts properly alleged that
Fattah “knowingly induced and procured” Amato to
commit the offenses. Supp. App. 9–11.
Fattah also raises an argument specific to Count 1.
Count 1 alleges that Fattah used a false tax return to
misrepresent financial information about 259 Strategies
to a bank. Fattah argues that this is improper because the
Government did not separately charge him with filing a
false tax return for that year; such a charge would be
time-barred. But a false tax return plainly constitutes a
29
“false statement or report.” 18 U.S.C. § 1014; see United
States v. Nash, 115 F.3d 1431, 1439 (9th Cir. 1997)
(“[T]he 1985 and 1986 false tax returns were separate
documents that could independently support separate
counts under section 1014.”). The fact that the statute of
limitations lapsed on a separate tax offense does not, as
Fattah argues, render the return “true and correct,” Fattah
Br. 33, for purposes of the charged offense. Cf. United
States v. Forsythe, 560 F.2d 1127, 1135 (3d Cir. 1977)
(holding that the federal statute of limitations governs
RICO charges even if the predicate offenses were time-
barred); United States v. Guerrero, 882 F. Supp. 2d 463,
495 (S.D.N.Y. 2011) (holding that charges for drug-
related murders “are not subject to a statute of
limitations, regardless of whether the underlying
narcotics conspiracy, if charged separately, would be
time-barred” (citation omitted)), aff’d, 560 F. App’x 110
(2d Cir. 2014).
5. Count 8 (False Statements Concerning a Loan
Insured by the Small Business Administration in violation
of 18 U.S.C. § 1001). The indictment charged that Fattah
told a bank that he had an “inability to earn substantial
income.” Supp. App. 12. Though Fattah calls this a
“statement of opinion,” Fattah Br. 34, whether that
statement was a knowing misrepresentation was likewise
a question of fact for the jury. Nor was that statement the
only misrepresentation charged; the indictment also
charged Fattah with misrepresenting the dollar figure of
his income and the operational status of 259 Strategies.
30
Fattah also argues that his statement was protected
by the First Amendment, but it is well established that
“the First Amendment does not shield fraud.” Illinois, ex
rel. Madigan v. Telemarketing Assocs., Inc., 538 U.S.
600, 612 (2003).
6. Count 11 (False Statements to Settle a Bank
Loan in violation of 18 U.S.C. § 1014). Count 11 charges
Fattah with lying in a civil deposition in an effort to
evade repaying one of his creditors. Fattah argues that the
statute does not cover lying in depositions because,
otherwise, “no individual would ever sit for a civil
deposition in state court without invoking their rights to
remain silent.” Fattah Br. 34.
A false statement taken in a deposition is no less a
“false statement or report.” 18 U.S.C. § 1014; see United
States v. Todosijevic, 161 F.3d 479, 483 (7th Cir. 1998).
Nor is it particularly unusual that a statement made in
civil litigation could have criminal consequences. That is
precisely why litigants in civil matters are permitted to
invoke their Fifth Amendment rights. See, e.g., Lefkowitz
v. Cunningham, 431 U.S. 801, 805 (1977) (“[S]ince the
test is whether the testimony might later subject the
witness to criminal prosecution, the privilege is available
to a witness in a civil proceeding . . . .”).
7. Count 13 (False Statements to Obtain a Bank
Loan in violation of 18 U.S.C. § 1014). This Count
charges Fattah with failing to disclose to a bank, inter
alia, his other sources of indebtedness. Fattah argues that
the loan application did not ask for that information. But
31
the loan application did ask for that information, which
Fattah omitted. Supp. App. 434. Fattah insists that he was
not obligated to disclose that information because his
only outstanding loans were in his sham business’s name,
not his own. Even accepting that distinction arguendo,
that argument goes to the sufficiency of the evidence, not
a failure to state an offense. As the Count offers an
alternative theory of conviction (lies about monthly rent
and car payments), we will “assume that the jury
convicted on the factually sufficient theory.” United
States v. Syme, 276 F.3d 131, 144 (3d Cir. 2002).
Accordingly, we conclude that the Superseding
Indictment stated offenses on all Counts.
B
Fattah next argues that the Government
constructively amended the Superseding Indictment by
introducing certain evidence or making certain arguments
that “do not appear in the indictment.” Fattah Br. 35. We
conclude that the Superseding Indictment was not
constructively amended.
An indictment is constructively amended when
“the evidence and jury instructions at trial modify
essential terms of the charged offense” such that “there is
a substantial likelihood that the jury may have convicted
the defendant for an offense differing from the offense
. . . actually charged.” United States v. Repak, 852 F.3d
230, 257–58 (3d Cir. 2017) (quoting United States v.
Daraio, 445 F.3d 253, 259–60 (3d Cir. 2006)). “If a
32
defendant is convicted of the same offense that was
charged in the indictment, there is no constructive
amendment.” United States v. Vosburgh, 602 F.3d 512,
532 (3d Cir. 2010).
First, Fattah identifies certain factual allegations
that were not specifically enumerated in the Superseding
Indictment. For example, the prosecutor said in his
opening statement that Fattah “told Sun Bank that 259
Strategies had one employee. He told Bank of America
they had three employees.” Fattah Br. 35. While the
Superseding Indictment does not specifically allege that
Fattah misrepresented the number of employees at 259
Strategies, at most this constitutes a “variance” from the
facts alleged. Vosburgh, 602 F.3d at 532. Such a variance
constitutes reversible error “only if it is likely to have
surprised or has otherwise prejudiced the defense.” Id.
(quoting Daraio, 445 F.3d at 262). Here, there is no risk
of surprise because the indictment identified a non-
exhaustive list of statements on a single loan
application—statements that would be well known to
their author, Fattah.
Second, Fattah identifies arguments and evidence
that he claims to be irrelevant or prejudicial. For
example, Fattah complains that the Government
introduced evidence “intended to inflame the jury” by,
inter alia, highlighting his $15,000 bill at the Capital
Grille restaurant (Br. 36, 40), highlighting his gambling
losses of $125,280 (Br. 37), referring to Fattah as a “son
of privilege” and as “Congressman Fattah’s son” (Br.
33
38), referencing Fattah’s condominium at the Ritz
Carlton (Br. 40, 43), and calling Fattah an “unqualified
[college] dropout” (Br. 41). Fattah also argued that the
Government adduced evidence irrelevant to the crime
charged. For example, he asserts that any evidence about
how he used the lines of credit is irrelevant because the
crime was completed at the time Fattah made the
misrepresentation (Br. 35–36, 38, 44). But these
objections to relevance and prejudice are quintessentially
evidentiary arguments governed by Rules 401, 402, and
403 of the Federal Rules of Evidence. The time to object
to and appeal the admissibility of that evidence has
passed. Far from constructively amending the
Superseding Indictment, the evidence at issue (and the
Government’s fair commentary on that evidence) provide
circumstantial illustration of Fattah’s motive,
opportunity, intent, and knowledge regarding the crimes
charged.
And third, Fattah argues that the Government
amended the Superseding Indictment by introducing
evidence of uncharged crimes. For example, the
Government introduced evidence that Fattah stole money
from clients of his sham concierge service, American
Royalty. That theft was not charged in the Superseding
Indictment; instead, the evidence was offered to show the
existence of income that Fattah failed to report on his tax
return and to his creditors. See Fed. R. Evid. 404(b).
Again, this did not change the theory of the prosecution
or modify essential terms of a charged offense. As we
have held, introducing evidence of other crimes does not
34
constructively amend the indictment when the jury is
properly instructed. See Daraio, 445 F.3d at 260
(“Although we agree with Daraio that the government
presented a significant amount of evidence concerning
her prior tax non-compliance beyond that charged in the
indictment, the district court’s instructions ensured that
the jury would convict her, if at all, for a crime based on
conduct charged in the indictment.”).
Accordingly, we conclude that the Superseding
Indictment was not constructively amended.
C
Next, Fattah argues that the indictment improperly
joins three distinct categories of crime: bank fraud, tax
fraud, and fraud on the Philadelphia School District. We
reject this argument as well.
Under Rule 8(a) of the Federal Rules of Criminal
Procedure, an indictment may include multiple counts
that “are of the same or similar character, or are based on
the same act or transaction, or are connected with or
constitute parts of a common scheme or plan.” Fed. R.
Crim. P. 8(a). “If the reviewing court determines that
counts have been improperly joined, it must then apply a
harmless error analysis, reversing the trial court if the
misjoinder resulted in actual prejudice to the defendant.”
United States v. McGill, 964 F.2d 222, 241 (3d Cir.
1992).
35
Reviewing de novo, we conclude that the charges
were properly joined for three reasons. First, the offenses
were of a “similar character.” Fed. R. Crim. P. 8(a). Each
involved a series of false representations about business
entities owned or represented by Fattah. Those
misrepresentations were calculated to either steal or
avoid paying certain funds. Second, the charged offenses
were interrelated “parts of a common scheme or plan.”
Id. For example, Fattah would use false tax information
to convince banks to offer him loans. Similarly, both the
fraud on the PSD and the bank fraud had the effect of
transferring ill-gotten gains to 259 Strategies, which
Fattah used as his personal bank account. Thus, the
different offenses represent different components of a
single “enrichment scheme,” and “[j]oinder under this
rationale is acceptable.” McGill, 964 F.2d at 241. And
third, this circuit does not have a per se prohibition on
joining tax and non-tax charges. See id. (“Joinder of tax
and non-tax claims is not unusual.”).
Nor was Fattah prejudiced. Fattah has not
explained how the joinder of these counts impaired the
fairness of his trial, nor has he argued that the jury would
be unable to “compartmentalize the evidence.” United
States v. Walker, 657 F.3d 160, 170 (3d Cir. 2011)
(citation omitted). The District Court instructed the jury
that “[e]ach count and the evidence pertaining to it must
be considered separately,” Supp. App. 254, and “juries
are presumed to follow their instructions,” Richardson v.
Marsh, 481 U.S. 200, 211 (1987).
36
We therefore conclude that the joinder of counts
was not improper.
D
Finally, Fattah argues that the search warrants
executed at his home and office were overly broad.
Specifically, he asserts that the search warrants were not
particularized because they permitted the Government to
seize business records spanning time periods not covered
by the indictment. Reviewing de novo, we reject this
argument.
Under the Fourth Amendment, “a warrant may not
be issued unless . . . the scope of the authorized search is
set out with particularity.” Kentucky v. King, 563 U.S.
452, 459 (2011). But the particularity requirement “must
be applied with a practical margin of flexibility.” United
States v. Sawyer, 799 F.2d 1494, 1508 (11th Cir. 1986).
“This flexibility is especially appropriate in cases
involving complex schemes spanning many years that
can be uncovered only by exacting scrutiny of intricate
financial records.” United States v. Christine, 687 F.2d
749, 760 (3d Cir. 1982).
In this case, the warrant authorized the seizure of a
number of document types, including “[a]ll financial
records,” [a]ll checks paid to employees for wages,”
“[a]ll tax records,” and other similar documents. Supp.
App. 74–75. That level of particularity is consistent with
what we approved in Christine: “all folders . . . all checks
. . . all general ledgers (and) all correspondence . . . .”
37
687 F.2d at 753 (alterations in original). “By directing the
searching officers to seize all of these items, the
magistrate, rather than the officer, determined what was
to be seized.” Id.
Thus, based on the complex nature of the crime
charged and appropriate direction provided by the
Magistrate Judge, we conclude that the warrants satisfied
the particularity requirement.
IV
For the foregoing reasons, we will affirm the
judgment of the District Court.
38