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United States v. Brown

United States District Court, M.D. Florida, Jacksonville Division

September 5, 2019

UNITED STATES OF AMERICA
v.
KATRINA BROWN, REGINALD BROWN

          ORDER

          MARCIA MORALES HOWARD UNITED STATES DISTRICT JUDGE.

         THIS CAUSE is before the Court on Defendants' renewed motions to sever. See Defendant's Motions to Sever Defendants and Counts by Providing Officially Exculpatory Testimony (Doc. 215; Renewed Motion), filed on August 27, 2019; Third Motion to Sever the Trial of Reginald Brown from the Trial of Katrina Brown and Memorandum of Law (Out of Time) (Doc. 224; Third Motion), filed on August 29, 2019. The government filed a response in opposition to both Motions on August 29, 2019. See United States' Memorandum Opposing Defendants' Motions to Sever Defendants and Counts (Doc. 225; Response). Thus, the Motions are ripe for review.

         I. Background

         A. Indictment

         On May 23, 2018, a federal grand jury returned a 38-count Indictment (Doc. 1; Indictment) against Defendants Katrina Brown and Reginald Brown. Count One of the Indictment charges both Defendants with conspiring to commit mail and wire fraud in violation of 18 U.S.C. § 1349. See Indictment at 1-39. Counts Two through Fourteen charge both Defendants with aiding and abetting mail fraud in violation of 18 U.S.C. §§ 1341 and 2. Id. at 40-44. Counts Fifteen through Twenty-Seven charge both Defendants with aiding and abetting wire fraud in violation of 18 U.S.C. §§ 1343 and 2. Id. at 44-47. Counts Twenty-Eight through Thirty-Three charge both Defendants with money laundering in violation of 18 U.S.C. §§ 1957 and 2. Id. at 48-50. Counts Thirty-Four and Thirty-Five charge only Katrina Brown with attempted bank fraud in violation of 18 U.S.C. §§ 1349 and 1344. Id. at 50-55. Counts Thirty-Six and Thirty-Seven charge only Katrina Brown with making false statements to a federally insured financial institution in violation of 18 U.S.C. § 1014. Id. at 55-57. Finally, Count Thirty-Eight charges only Reginald Brown with failing to file a Form 1040 in violation of 18 U.S.C. § 1014. Id. at 57-58.

         As the Court has discussed in prior orders, the Indictment alleges that in 2011, Basic Products, LLC and Cowealth, LLC obtained a $2, 652, 600 Small Business Administration loan from lender BizCapital BIDCO I, LLC. See Indictment at 1-4, 7-11. According to the Indictment, Katrina Brown served as a principal for Basic Products and Cowealth, which were both associated with her father's barbecue sauce business, KJB Specialties, LLC. Id. at 1-3. The general purpose of the SBA loan was to finance the purchase of inventory, equipment, and a manufacturing facility for the barbecue sauce business, as well as to provide working capital for the business. See id. at 7-8. Because the SBA loan authorization specified how the loan funds could be spent, BizCapital required Basic Products to submit invoices reflecting its expenditures before authorizing any loan disbursements. Id. at 7-9.

         The Indictment alleges that, in mid to late 2013, when Basic Products failed to perform as projected, Katrina Brown, with the assistance of Reginald Brown, developed a fraudulent scheme to induce BizCapital to disburse the loan funds. Id. at 10-12. Specifically, the Indictment alleges that Katrina Brown created two shell entities (A Plus Training and RB Packaging), for which Reginald Brown served as the principal and opened bank accounts. Id. at 2, 10-13. Katrina Brown is then alleged to have invoiced A Plus Training and RB Packaging for services that were never performed and for products that were never sold, and then to have emailed those invoices to BizCapital for payment. Id. at 2, 10-13. The Indictment alleges that, in reliance on those fraudulent invoices, BizCapital mailed checks directly to A Plus Training and RB Packaging in the amount reflected in the invoices, forming the basis of the counts charging mail fraud. See id. at 14, 40-44. In addition, the Indictment alleges that Reginald Brown deposited the checks into the A Plus Training and RB Packaging bank accounts, forming the basis of the counts charging wire fraud. Id. at 14, 44-47. The Indictment further alleges that Reginald Brown later withdrew the funds from the A Plus Training and RB Packaging bank accounts, and transferred the funds to Katrina Brown, via cash, check, or cashier's check, who then deposited the funds into the Basic Products bank account, forming the basis of the counts charging money laundering.[1] Id. at 14-15, 48-49. The Indictment alleges that both Defendants retained some of the funds for various purposes, including for personal use. Id. at 15.

         The Indictment also alleges that from October 2015 through November 2016, Katrina Brown attempted to defraud a federally insured financial institution to obtain a merchant advance loan by submitting altered bank statements from Basic Products and KJB Specialties. Id. at 50-56. Finally, the Indictment alleges that Reginald Brown failed to file a 2014 tax return. Id. at 56-57.

         B. Procedural History

         At the Defendants' arraignment on June 25, 2018, the Court granted Defendants' unopposed motion to continue the trial to the September 2018 trial term, see Order (Doc. 44), and set a July 31, 2018 motions deadline. See Scheduling Order (Doc. 45) (setting July 31, 2018, as the deadline for all “dispositive motions, motions to suppress and other non-discovery motions”). At a status conference on August 14, 2018, the Court granted Defendants' unopposed motion to continue the trial again, this time to February 4, 2019. See Clerk's Minutes (Doc. 55). The Court also extended the motions deadline to October 19, 2018. Id.

         Both Defendants filed multiple substantive motions before the October 19, 2018 motions deadline, including motions to sever. See, e.g., Defendant Reginald Brown's Motion to Sever the Trial of Reginald Brown From the Trial of Katrina Brown and Memorandum of Law (Doc. 59), filed on October 17, 2018; Defendant Katrina Brown's Motion to Sever Counts Thirty-Four Through Thirty-Seven (Doc. 65), filed on October 19, 2018; Defendant Katrina Brown's Motion to Sever Defendants (Doc. 66), filed on October 19, 2018. Notably, on October 22, 2018, Reginald Brown filed an affidavit completed by Katrina Brown as an exhibit in support of his motion to sever defendants. See Defendant's Notice of Filing Exhibit (Doc. 68; First Affidavit). In the First Affidavit, Katrina Brown averred that “if the motion for severance is granted, I will testify as a wittness [sic] in the trial of Mr. Reginald Brown, in which case, I will provide exculpatory testimony to the Court.” Id. at 3. Katrina Brown further averred that she “did not conspire with Co-Defendant Mr. Reginald Brown in any manner or forms as stated in” the Indictment. Id.

         On December 21, 2018, Katrina Brown's court-appointed counsel (Darcy Galnor) moved to withdraw from the case, see Motion to Withdraw (Doc. 82), and on January 3, 2019, the Court granted the Motion to Withdraw and later appointed a new attorney to represent Katrina Brown (Richard Landes). See Orders (Docs. 87 & 92). At a status hearing held on January 17, 2019, Katrina Brown's newly appointed counsel requested a lengthy continuance to the August 2019 trial term, and the Court granted that request over Reginald Brown's objection. See Clerk's Minutes (Doc. 96). In light of these events, the Court also provided Katrina Brown's new counsel additional time to supplement her pending motions, if appropriate. Id. See also Endorsed Order sua sponte extending deadline to file supplemental briefing to March 7, 2019 (Doc. 108). Katrina Brown did not submit any supplemental briefing.

         On April 3, 2019, the Court entered an order denying Defendants' original motions to sever. See Order Denying First Motions to Sever (Doc. 114). Among other things, the Court determined that Katrina Brown's First Affidavit did not serve as a basis for severing Defendants' trial. In doing so, the Court stated that the First Affidavit consisted of “mere conclusory statements and bare denials” and therefore did “not contain the type of specific and exonerative facts necessary to support severance.” Id. at 13. The Court further found that Reginald Brown's motion to sever was similarly insufficient, as it did not even discuss Katrina Brown's First Affidavit or attempt to establish the need for her testimony at trial. Id.

         At a status of counsel hearing held on July 31, 2019-less than three weeks before jury selection was scheduled to begin on August 14, 2019-Katrina Brown notified the Court that she wished to represent herself. See Defendant Katrina Brown's Motion for a Status Conference Regarding Representation (Doc. 155); Order Granting Defendant's Motion for a Status Conference Regarding Representation (Doc. 156); Clerk's Minutes (Doc. 164). The Court conducted a lengthy Faretta[2] inquiry the following day, after which the Court determined that Katrina Brown had “knowingly, intentionally, voluntarily, and freely waived her right to counsel” and permitted Katrina Brown to represent herself in all further proceedings. See Order (Doc. 166). Notably, Katrina Brown's decision to proceed pro se prompted Reginald Brown to file a second motion to sever. See Second Motion to Sever the Trial of Reginald Brown from the Trial of Katrina Brown and Memorandum of Law (Doc. 173), filed on August 5, 2019. Among other things, Reginald Brown argued that he now “face[d] the prospect of sitting helplessly by while Ms. Brown flails about trying to be both lawyer and client. This spectacle can only prejudice his case in the eyes of the jury and make it all but impossible for the jury to reach an individualized verdict as to him.” Id. at 2.

         On August 2, 2019, Katrina Brown filed a motion requesting a six-month continuance of the trial, see Defendant's Motion to Continue Trial and Pretrial Motions Dates (Doc. 170), which both the government and Reginald Brown opposed, see United States' Response to Defendant Katrina Brown's Motion to Continue Trial (Doc. 171). At a hearing on the Motion to Continue held on August 6, 2019, the Court denied Reginald Brown's second motion to sever. In doing so, the Court noted that although the Eleventh Circuit has recognized the possibility of prejudice where a defendant is joined for trial with an individual who is proceeding pro se, such a trial is not per se prejudicial. The Court concluded that Eleventh Circuit precedent suggested sufficient precautionary measures the Court could take to prevent prejudice caused by Katrina Brown's pro se status.[3] See United States v. Veteto, 701 F.2d 136, 139 (1983); United States v. Knowles, 66 F.3d 1146, 1160 (11th Cir. 1995); United States v. Brown, 227 Fed.Appx. 795, 799-800 (11th Cir. 2007). The Court also denied Katrina Brown's request to continue the trial for another six months. See Clerk's Minutes (Doc. 176). However, the Court granted a five-week continuance and rescheduled the trial to begin with jury selection on September 18, 2019. See id. In doing so, the Court stated that because the motions deadline had long since passed, and in light of the dispositive motions that already had been filed by her attorneys and ruled on by the Court, the Court would not allow Katrina Brown to file any further dispositive motions. Id. Nevertheless, in light of her recent decision to represent herself, the Court gave Katrina Brown until September 18, 2019, to file proposed jury instructions, id., and until August 21, 2019, to file motions in limine, see Order (Doc. 193).[4] The Court did not extend any of the motions deadlines for Reginald Brown.

         C. The Instant Motions to Sever

         On August 27, 2019, Katrina Brown submitted the instant Renewed Motion, along with a supporting affidavit, see Renewed Motion at 4-10 (Second Affidavit), in which Katrina Brown states that her prior attorneys “refused to assist in preparation of Affidavit to provide exculpatory testimony for Co-defendant Reginald Brown.” See Renewed Motion at 2. She argues that severance is required “for both defendants to see the face of justice . . . .” Id. at 3. In her Second Affidavit, Katrina Brown avers, in relevant part:

I will testify for defense at a separate trial for Codefendant, Reginald Brown if the defendants are severed. I will not testify at a joint trial.
In the fall of 2013, I approached Reginald Brown about incorporating A Plus Training and RB Packaging. I assisted him in that process. I filed and paid the fees associated with the Articles of Incorporation for both A Plus Training and RB Packaging . . . . At the time of its incorporation, it certainly, was my intent for A Plus Training, via Reginald Brown, to ...

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