On March 29, five defendants are supposed go on trial in LA for FCPA violations and money-laundering offenses.
They include a Mexican sales agent, Enrique Aguilar Noriega, who hasn’t appeared in court, his wife, Angela Gomez Aguilar, who’s being held without bail, Lindsey Manufacturing Company, its CEO, Dr. Keith Lindsey, and its CFO, Steve K. Lee.
But last week, the DOJ tried to open what it said was a “new” investigation before a grand jury, by calling five witnesses to testify today, including four current Lindsey employees and the wife of defendant Keith Lindsey.
The defense didn’t buy the “new” investigation story. It alleged intimidation and delaying tactics, and said DOJ prosecutors whipped-up the “new” grand jury investigation a week ago, just after they were denied access to Lindsey employees for pre-trial witness preparation interviews.
Prosecutors had never mentioned the possibility of a superseding indictment to the court or counsel. So defense lawyers suspected the government was attempting to “manufacture” reasons to delay the trial. After reviewing a declaration of one of the DOJ prosecutors filed in camera and under seal, US District Judge Howard Matz apparently agreed.
The judge didn’t quash the DOJ’s grand jury subpoenas, as the defendants had asked. But he did tie both of the DOJ’s hands behind its back. The government can go to the grand jury, he said, but here are the ground rules:
At the upcoming trial, prosecutors can’t use or mention any evidence derived from the testimony of any witness called before any grand jury,
At the grand jury, the government can’t question any witness about any financial or business relationships Lindsey Manufacturing Company had with any of the other individuals and entities named in the indictment, including its former Mexican sales agent and anyone at the state-owned Mexican utility, Comision Federal de Electricidad, where bribes were allegedly paid,
And prosecutors can’t point to or rely upon any evidence it obtains from any new grand jury proceedings to seek or obtain a delay of the trial date.
The lawyer for Lindsey Manufacturing and Dr. Lindsey, Jan L. Handzlik of Greenberg Traurig, also argued that calling the wife of a defendant to testify in grand jury proceedings targeting her husband is barred by the spousal adverse testimony privilege “and common sense.” Describing the tactics of the DOJ prosecutors as “unwise” and “intemperate,” Handzlik argued that the prosecutors’ approach “…at times seems better suited to an organized crime drug conspiracy.”
Was the government planning to improperly use the “new” grand jury proceedings to prepare for the trial? It’s undisputed that the DOJ prosecutors issued the new grand jury subpoenas right after they were denied access to company employees for pre-trial witness interviews. Were the DOJ prosecutors seeking to manufacture reasons to file a new indictment and delay the current trial date? In this case, after all, delay could help the government. Angela Gomez Aguilar is being held in pretrial detention without bond while her husband sits it out in Mexico. That means pressure on both to deal with the feds is building every day.
Download a copy of the defendants’ motion to quash grand jury subpoenas in US v. Noriega et al here.
Download a copy of Judge A. Howard Matz’s February 11, 2011 order (in minutes) here.