As highlighted in this prior post, in September 2019 the DOJ announced the unsealing of a criminal indictment against (among others) Paulo Casqueiro Murta in connection with an alleged bribery scheme involving Venezuela’s state-owned and state-controlled energy company, PDVSA. According to the DOJ, Murta (a citizen of Portugal and Switzerland) provided financial services to various co-defendants (including former employees of PDVSA) in connection with various bribery schemes and he was charged with directly violating or assisting others in violating the FCPA and money laundering laws.
As highlighted in this prior post, in July 2022 Judge Kenneth Hoyt (S.D. Tex) granted Murta’s motion to dismiss the charges based on lack of jurisdiction, lack of due process, vagueness, and statute of limitation issues. Because of these various reasons, Judge Hoyt found it unnecessary to decide Murta’s motion to dismiss based on a violation of the Speedy Trial Act.
As highlighted in this prior post, the DOJ appealed the dismissal (along with a related dismissal of a co-defendant) and in February 2023 the Fifth Circuit reinstated FCPA and related charges against Murta (and a co-defendant) holding that – at this stage of the proceedings – the indictment was good enough and also holding that the term “agent” in the FCPA is not unconstitutional.
Back at the trial court level, Murta renewed his motion to dismiss the criminal charges based on a violation of the Speedy Trial Act (an issue – as mentioned above – was not addressed in the original motion to dismiss given the other reasons for dismissal). The motion stated in summary fashion:
“Paulo Murta moves this Court to dismiss the superseding indictment against him because his Sixth Amendment right to a speedy trial has been violated. The Government is prosecuting him for actions it says he took more than a decade ago, yet the Government is still attempting to delay his trial. He was indicted four years ago, but the Government says it still needs more time to prepare. The Government continues to violate Mr. Murta’s constitutional right to a speedy trial, and the Court should dismiss the charges against him.”
As highlighted in this prior post, Judge Hoyt granted Murta’s dismissal motions. The brief order states:
“The court has considered the defendant’s … opposed motions to dismiss the Superseding Indictment based on alleged violations of the Speedy Trial Act and violations of the Sixth Amendment right to a speedy trial, the government’s responses, and the defendant’s reply. After careful consideration, the Court determines that the defendant’ motions should be grated. The motions are granted.
A Memorandum Opinion and Order detailing the Court’s reasoning will be entered within 10 days.”
Judge Hoyt recently issued this opinion in which he has some harsh words for the government.
The following is relevant background from the opinion.
“On February 21, 2022, Murta filed several motions to dismiss, including a motion to suppress any statements attributed to him during a witness interview that was conducted by DHS Agents under Portuguese authority. The government responded to Murta’s motions on March 7, 2022. after which Murta filed replies. However, in February, prior to responding to Murta’s motions, the government raised, for the first time, an issue concerning “classified information” that it had in its possession, had reviewed on two prior occasions and thought it necessary to bring the matter to the Court’s attention. The government followed its announcement with a February 27, 2022, motion for a pretrial conference regarding the matter. At that time, it explicitly claimed that the information implicated the Classified Information Procedures Act (“CIPA”) and that the information [had] arisen in connection with the case during their trial preparation.
The government requested a hearing which the Court provided on March 3, 2022. At the hearing, the government stated that it had learned that the classified information was held by a governmental agency of the United States, “ … and that the information [was] potentially discoverable.” However, the government refused to disclose the name of the agency, the nature of the information, any details claiming that the information implicated national security concerns.
The government also informed the Court that it planned to file an ex parte motion to exclude the information from discovery because of the nature of the information. It insisted, though, that the information was not relevant or helpful to the government or defense in the case. In spite of this announcement, the government requested time to file an ex parte affidavit summarizing the classified information and that the time needed would impact the trial setting. Therefore, it sought a continuance of the trial set for March 21. It estimated that two to three months would be “ample time” for the Court to conclude a CIPA review.
Murta reminded the Court of his pending motion to dismiss the case based on a violation of the STA, and argued for a speedy trial. He also argued that the government’s motion was being filed late, on the eve of trial, and that his motion was ripe for resolution. The Court acknowledged Murta’s concerns but, nevertheless, was compelled to grant the government’s motion to postpone the trial. The Court was of the mind that discovery disclosure issues, relating to the treatment of potentially classified information, warranted a continuance under 18 U.S.C. §§ 3161(h)(7)(A), (B). Therefore, the trial was reset to July 25, 2022.
On May 11, 2022, the government filed a sealed, ex parte — in camera motion for a protective order regarding the classified information and requested that its motion and the classified information not be disclosed to the defense. See [DE 310]. The Court granted the government’s motion on June 10, 2022.”
Relevant to the above issue, in analyzing which periods of time were excludable from the Speedy Trial Act analysis, Judge Hoyt stated:
“On February 21, 2022, Murta filed motions to dismiss based on a STA violation and the Sixth Amendment. The government did not respond at the time, but filed a motion stating that it was in possession of classified information and that a CIPA status conference concerning the information was critical and necessary before going forward in trial. The Court was led to believe that it was a matter of National Security and that the Court must conduct a CIPA examination to determine the admissibility of such information and any terms of disclosure to Murta.
The Court expressed concerns about the timing of the government’s disclosure in light of the government remarks that the information was irrelevant to the trial. After examining the information on two separate occasions, the Court concludes that the cause for delay was unwarranted. The delay requested by the government, therefore, should not stop the 70-day speedy trial clock. No continuance under § 3161(h)(7) may be based on a lack of diligence on the part of the government, in preparing for trial, particularly when the information at issue was at all times in the government’s hands.
The facts establishes that the government sought a delay based on irrelevant classified information that it had access to for an undetermined number of months prior to December 2021. It failed to disclose that it had the information until March 2022, after Murta filed his STA motion. The government admits that it reviewed the classified material on December 1, 2021; and yet failed to notify the Court and the defendants of any potential discovery-related issues for essentially three months. The government’s timing is also suspect. One week after Murta filed his motions to dismiss and less than one month before trial the government hits the “pause button”. The government has failed to offer persuasive evidence or arguments that justify its lack of diligence in timely revealing that it was in possession of classified information, which delay is an act of bad faith that cannot be excused based on negligence or inadvertence. See Fed. R. Crim. P., Rule 16(c)(1) and (2).
The history of the government’s investigation concerning the PDVSA bribery/kickback scheme that began in 2010 supports the Court’s conclusions. Two of Murta’s co-defendants were the subject of the government’s investigation and were indicted in 2017. Two years later, Murta was indicted in a SSI based, primarily, on documents presented to him in a “witness” interview that was conducted by DHS agents under the authority of Portuguese law and its law enforcement authorities. Under these circumstances, the Court finds that the government’s word and conduct breached the wall of credibility, particularly in light of its apparent position that it would “go to mat” with the Court concerning the release of any of the information, including the dates when the government came into possession of it.”
In determining whether dismissal should be with or without prejudice, Judge Hoyt concluded that “dismissal should be with prejudice in light of the government’s intentional and protracted delays.”
Judge Hoyt stated in pertinent part:
“In this case, the government “frittered” away the time, never announcing ready for trial and, it appears in hindsight, relied on the Court to give it cover.
[…]
There is more to be said about the CIPA delay. To what purpose was this disclosure made? The government owes a duty of candor toward the Court and to Murta. To create a faux pas circumstance, drawing the Court into a non-existent discovery matter, is of consequence. It is the government’s duty to determine as early as possible whether Brady/Griglio disclosures exists and make appropriate disclosures. In this duty, the government wholly failed. This factor weighs in Murta’s favor.”
Separately addressing Murta’s motion to dismiss based on Sixth Amendment issues, Judge Hoyt stated:
“On March 3, 2022, the government moved to delay trial for two to three months based on classified information that it said “had arisen.” At the time, trial was only three weeks away, and the government offered no good reason for waiting until the eve of trial to raise the matter, particularly since the information was by their own admission irrelevant, having been in its possession months, perhaps years before revelation.
The evidence also shows that the government began investigating this case at least as early as 2010, and only in 2019 did it indict Murta. In the meantime, the government had access to all pertinent classified information, but failed to examine it or acknowledge possession until February of 2022. Had the government timely raised the issue of classified information, the Court and the parties could have resolved it well in advance of the March 21, 2022, trial date. Therefore, the Court finds that the government’s lack of diligence, an unwarranted hinderance, led to that delay, which weighs in the defendant’s favor.
As stated earlier, in the Court’s view, the government used irrelevant information as a basis to delay the trial and/or to gain a strategic advantage. When the government raised the CIPA issue, it knew that the information was irrelevant to this case and would not be helpful to the defense. The rules pertaining to discovery and disclosure do not require the government to disclose irrelevant data. It is noteworthy that the government notified the Court that a motion to exclude the information would be filed, even before presenting it to the Court for an in camera review. In this respect, the government created a false issue concerning the disclosure of information that it declared potentially discoverable when it never intended to disclose the information.
[…]
The Court concludes that the government intentionally used non-discoverable, irrelevant material as a faux pas basis for delaying Murta’s trial because it was unprepared. Motives and reasons aside, intentional bad-faith delay weighs heavily in Murta’s favor.”
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