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United States v. Cooper

United States District Court, N.D. Texas, Dallas Division

April 2, 2018

UNITED STATES OF AMERICA
v.
JOHN PAUL COOPER, Defendant.

          FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE

          DAVID L. HORAN UNITED STATES MAGISTRATE JUDGE.

         Background

         Defendant John Paul Cooper is charged with Conspiracy to Commit Health Care Fraud in violation of 18 U.S.C. § 1349; Payment of Illegal Kickbacks and Aiding and Abetting Payment of Illegal Kickbacks in violation of 42 U.S.C. § 1320a-7b(b)(2) and 18 U.S.C. § 2; Receipt of Illegal Kickbacks in violation of 42 U.S.C. § 1320a-7b(b)(1); and Payment of Illegal Kickbacks and Aiding and Abetting Payment of Illegal Kickbacks in violation of 42 U.S.C. § 1320a-7b(b)(2) and 18 U.S.C. § 2 in a second superseding indictment filed in this district. See Dkt. No. 289.

         On his arrest on the original indictment, Cooper had his initial appearance on February 23, 2016. See Dkt. No. 12. After a detention hearing on March 1, 2016, the undersigned granted the government's motion for detention and ordered Cooper detained pending trial. See Dkt. Nos. 27 & 28. The undersigned explained at the conclusion of the hearing that

I've carefully considered all of the evidence and the argument of counsel today. Let me first take up the matter of United States of America of versus John Paul Cooper. Mr. Cooper is charged with multiple counts in a 14-count indictment. The Government has moved for pretrial detention, asserting that this case involves a serious risk that Mr. Cooper will flee and a serious risk that he may obstruct justice and asserts there's no condition or combination of conditions that could reasonably - that could be set to reasonably assure his appearance as required or the safety of any other person and the community.
As counsel's arguments already indicated, the Government's burden here is to show by a preponderance of the evidence that there is no combination of conditions that the Court could set to reasonably assure Mr. Cooper's appearance as required if he were released, or by clear and convincing evidence that there's no combination of conditions that could reasonably assure the safety of any other person or the community if he were to be released.
I have, as I indicated, carefully considered the case agent's testimony as well as the other witnesses' testimony and the report of Pretrial Services, and all in light of the factors that Congress has directed the Court to consider as part of the Bail Reform Act, including Mr. Cooper's history and characteristics, the apparent weight of the evidence against him, the nature and circumstance of the offense charged, and other matters.
Here, the evidence shows that witnesses told investigators that Mr. Cooper had stated an intent that he may flee if things were to go south, to flee to Costa Rica, and might do harm to anyone who turned on him and Mr. Cesario. The evidence also shows, through including Government's Exhibit No. 1, a text conversation Mr. Cooper had with his fiancée the night before what turned out to be his arrest, after there's evidence that seizure of a bank account had come to Mr. Cooper's attention, in which he's working at transferring money in advance of possible prosecution, it would seem, and of substantial assets not yet seized and not yet accounted for, including some amount of monies offshore. There's also further evidence through the testimony of the case agent of Mr. Cooper having substantial assets not yet seized or accounted for.
The evidence also clearly shows that Mr. Cooper has a home and vehicle and assets in Costa Rica, and is now indicted and faces a possible substantial prison term.
I have considered all the other evidence, of course, too, including Mr. Cooper's ties to the community and his family here and his life with them, and have considered possible conditions that could be set, including third-party custodians who have been proffered and the possibility of anything, including electronic monitoring, even house arrest.
However, considering all the circumstances and all the evidence here today, I do find that the Government has met its burden by a preponderance of the evidence to show and convince the Court that there is no combination of conditions I could set to reasonably assure Mr. Cooper's appearance as required in light of the particular evidence here. And for that reason, the Government's motion for detention will be granted. A written order will follow.

Dkt. No. 54 at 161-63. And, in the Detention Order, the undersigned explained that

[t]he Court has considered the testimony of the case agent and Defendant's sister and ex-wife and the report of the pretrial services officer, all in light of the factors listed in 18 U.S.C. § 3142(g) - including the nature and circumstances of the offense charged and Defendant's history and characteristics.
For the reasons stated on the record at the hearing, the Court finds, by a preponderance of the evidence, that there is no condition or combination of conditions that will reasonably assure Defendant's appearance as required.
The evidence shows that witnesses told investigators that Defendant and his co-defendant Richard Robert Cesario stated an intent to do possible harm to any associates or employees who turned on them and to flee to Costa Rica if prosecuted. Defendant has a home and vehicle and assets in Costa Rica, and the case agent testified that Defendant has substantial assets that have not yet been seized or accounted for. The evidence also shows that Defendant engaged in a text message conversation with his fiancé the night before his eventual arrest in which he discussed millions of dollars held off-shore and coordinated the transfer of moneys in advance of possible prosecution or seizure by the government. Defendant is now indicted and faces a possibly substantial prison term if convicted.
Based on the facts explained above, and the Court's findings based on those facts, the Court finds that there is no condition or combination of conditions that could be set to reasonably assure Defendant's appearance if Defendant were released. Accordingly, the Government's motion for detention is GRANTED.

Dkt. No. 28 at 2-3.

         Cooper filed a Motion to Revoke or Amend Magistrate's Order of Pretrial Detention [Dkt. No. 194] on December 14, 2016. On January 26, 2017, Chief Judge Barbara M. G. Lynn denied that motion without a hearing, explaining that

Rule 59(a) of the Federal Rules of Criminal Procedure establishes a fourteen day deadline for a defendant to seek review of a magistrate judge's detention order. See Fed. R. Crim. P. 59(a). If the defendant fails to appeal the magistrate judge's decision within fourteen days, the right to review is waived. Id.; see also United States v. Watts, 2010 WL 11452009, at *1 (N.D. Tex. Jun. 25, 2010) (citing United States v. Hoffman, 2009 WL 1068856, at *1 (W.D. Ark. Apr. 21, 2009) and United States v. Tooze, 236 F.R.D. 442, 446 (D. Ariz. 2006)). Any review by the district court following such a waiver is discretionary and not a matter of right. Watts, 2010 WL 11452009, at *1. Defendants Cesario and Cooper filed their Motions well after the deadline prescribed by Rule 59(a). Magistrate Judge Horan entered the detention orders as to these two Defendants on March 1, 2016; yet, Cesario did not file his initial Motion until August 26, 2016, and Cooper did not file his Motion until December 14, 2016. The Court therefore finds that Cesario's two Motions and Cooper's Motion are untimely, and it declines to exercise its discretion to review the magistrate judge's detention orders for these two Defendants.
Alternatively, as to Defendants Cesario and Cooper, and as to Defendants Baumiller and Fuller, the Court may reopen a detention hearing “at any time before trial if the judicial officer finds that information exists that was not known to the movant at the time of the hearing and that has a material bearing on the issue whether there are conditions of release that will reasonably assure the appearance of such person as required and the safety of any other person and the community.” 18 U.S.C. § 3142(f)(2). Having reviewed the parties' Motions and responses, the Court finds that none of the moving parties has shown that any information exists that was not known at the time of their detention hearing and that has a material bearing on whether there are conditions of release that will reasonably assure (1) the appearance of any of the four Defendants who has filed, or is the subject of, a motion to revoke a detention order, as required, and (2) the safety of any other person and the community. With regard to the government's Motion to Reopen the Detention Hearing and to Revoke Pretrial Release of Defendants Fuller and Baumiller, the Court determines that none of the “three additional pieces of information” that have allegedly come to light since December 6, 2016, the date Judge Godbey entered the Order Setting Conditions of Release, warrant reopening the detention hearing. Defendants Fuller and Baumiller, as to whom the December 6 Order applied, could not satisfy the terms of the Order within a reasonable time and, consequently, will not be released.
Finally, the Court is not persuaded that any perceived inequity among the Defendants based on their different financial resources warrants reopening any detention hearing, especially because the Court is not going to allow the release of any of the four Defendants.
The pending Motions pertaining to the custodial status of Defendants Cesario and Cooper [ECF #52, #194, and #204] are DENIED.

Dkt. No. 211 at 1-3 (footnote omitted). (Judge Lynn explained that, “[i]n November 2016, due to an unavoidable and irreconcilable conflict with the Court's schedule, Judge Godbey held a hearing on the joint Motion to Revoke Detention Order and Release Defendants on Conditions of Pretrial Release, filed by Defendants Fuller and Baumiller. Judge Godbey made certain findings, and following the hearing, entered an Order Setting Conditions of Release, which has the same effect as if the Order was entered by this Court. The Court is familiar with the record and interprets the Order signed by Judge Godbey as if it had entered the same Order itself.” Id. at 2 n.1.)

         On a February 28, 2018 conference call with counsel, Judge Lynn commented - after noting that issues with discovery were leading to a continuance of the expected one-month-long trial to most likely January 2019 - that

the only thing I can say about this discovery is I'm particularly concerned about people that are sitting in custody who have not been convicted of anything and are presumed to be innocent and they are caught in a difficult position of wanting to get out of custody and be acquitted, which may or may not happen, but they also can't afford to go to trial without their lawyers being prepared because that makes it more likely that they will be convicted as opposed to being acquitted.
But the Government has to do 150 percent to get this produced ASAP. I mean, I don't know how much clearer I can be in saying it. I am sympathetic to document production in complex cases. ....
[] I am not trying to make more work for myself or the magistrate judge. But I am not happy about a person being in custody for more than two years without getting a trial. And there if persons who are in that circumstance - because I am hearing from the call that we can't go to trial for nearly a year from now, and if there are people in custody who think that that fact should cause a reconsideration of the custody determination, then you may file such a motion.

Dkt. No. 348 at 11-15.

         Cooper then filed his Second Motion to Revoke or Amend Magistrate's Order of Pretrial Detention on March 5, 2018. See Dkt. No. 342 (the “Motion to Revoke”). Judge Lynn has referred this motion to the undersigned United States magistrate judge under 28 U.S.C. § 636(b)(1). See Dkt. No. 344.

         In the Motion to Revoke, Cooper explains that, pursuant to 18 U.S.C. § 3145(b), he

moves this District Court to conduct a de novo review of the facts in this case relating to the Magistrate's order of March 1, 2016 [Doc. 28], and revoke this order of Detention. By virtue of this order, Mr. Cooper is currently detained awaiting the resolution of the above styled and numbered criminal case. Mr. Cooper moves this Court to release him subject to conditions of release during the pendency of the above styled and numbered criminal case. Mr. Cooper would request oral argument to aid in the determination of this motion. In support of this motion, Mr. Cooper would respectfully show unto the Court as follows.
....
Mr. Cooper was originally charged by Indictment filed on February 18, 2016. [Dkt. 3]. On March 1, 2016 a hearing was held on the Government's motion for detention. After hearing the evidence presented and the arguments of counsel, United States Magistrate Judge David Horan found that the government had met their burden of proof establishing Mr. Cooper as a flight risk and further found that “there is no condition or combination of conditions that could be set to reasonable assure Defendant's appearance if Defendant were released.” [Dkt. 28 at 3]. Judge Horan subsequently signed an order to this effect and remanded Mr. Cooper into the custody of the United States Marshalls pending further proceedings.
The basis for Judge Horan's finding rested significantly on the following relevant facts, as stated within Judge Horan's Detention Order.
The evidence shows that witnesses told investigators that Defendant and his co-defendant Richard Robert Cesario stated an intent to do possible harm to any associates or employees who turned on them and to flee to Costa Rica if prosecuted. Defendant has a home and vehicle and assets in Costa Rica, and the case agent testified that Defendant has substantial assets that have not yet been seized or accounted for. The evidence also shows that Defendant engaged in a text message conversation with his fiancé the night before his eventual arrest in which he discussed millions of dollars held off-shore and coordinated the transfer of moneys in advance of possible prosecution or seizure by the government. Defendant is now indicted and faces a possibly substantial prison term if convicted.
Based on the facts explained above, and the Court's findings based on those facts, the Court finds that there is no condition or combination of conditions that could be set to reasonably assure Defendant's appearance if Defendant were released. Accordingly, the Government's motion for detention is GRANTED.

Dkt. 28 at 2-3. Mr. Cooper remains in the custody of the United States Marshals.

Since the time of this detention hearing, numerous other defendants have been added to the case and numerous Superseding Indictments have been filed. Discovery in this case has exceptionally complex and arduous, and the addition of more defendants to the Indictment has caused trial in this matter to be delayed multiple times.
It has become readily apparent, through both a conference call with the Honorable Judge Barbara Lynn, as well as through subsequent email correspondence between both defense counsels, as well as the Government, that trial in this matter will not proceed until at least late January of 2019.
Discovery in this case is not yet complete. While it is our understanding that the Government continues to work diligently to produce full discovery to all defendants in this case, it was revealed in the conference call with Judge Lynn on Wednesday, February 28, 2017 that the Government does not have an estimated timeframe for when discovery will be complete. Therefore, even the trial setting of late January next year is, at best, a guess subject to moving further.
As of the filing of this motion, Mr. Cooper has been incarcerated for over two years even though he is constitutionally afforded a presumption of innocence. Based on the newly learned information, his incarceration will span more than three years before getting the opportunity to try this case before a jury.
....
Pursuant to 18 U.S.C. § 3145(b), this Court retains the authority to review a Magistrate's order detaining a defendant in a federal criminal case. Specifically, the Court has the obligation to review pretrial detention to ensure that a Defendant's due process rights are not being violated by the trial's delay. “Detention in a particular case might become excessively prolonged, and therefore punitive in relation to Congress' regulatory goal [of preventing danger to the community].'” United States v. Hare, 873 F.2d 796, 800 (5th Cir. 1989) (quoting United States v. Salerno, 481 U.S. 739, 747 n.4 (1987)).
Like other circuits, we find that the due-process limit on the duration of preventive detention requires assessment on a case-by-case basis, for the clause establishes no specific limit on the length of pretrial confinement. In determining whether due process has been violated, a court must consider not only factors relevant in the initial detention decision, such as the seriousness of the charges, the strength of the government's proof that the defendant poses a risk of flight or a danger to the community, and the strength of the government's case on the merits, but also additional factors such as the length of the detention that has in fact occurred or may occur in the future, the non-speculative nature of future detention, the complexity of the case, and whether the strategy of one side or the other occasions the delay.

United States v. Hare, 873 F.2d 796, 801 (5th Cir. 1989) (internal citations omitted).

Moreover, a detainee is entitled to reopen his detention hearing if he presents new and material evidence bearing on the issue whether there are conditions of release that will reasonably assure his appearance at trial. United States v. Hare, 873 F.2d 796 (5th Cir. 1989). Under the Bail Reform Act, “[t]he hearing may be reopened, before or after a determination by the judicial officer, at any time before trial if the judicial officer finds that information exists that was not known to the movant at the time of the hearing and that has a material bearing on the issue whether there are conditions of release that will reasonably assure the appearance of such person as required.” 18 U.S.C. § 3142(f)(2)(B); see also, United States v. Stanford, 341 Fed.Appx. 979, 984 (5th Cir. 2009). The delays that this case has experienced (and will likely continue to experience) constitute a material change in circumstance that requires a reexamination of the detention issue in light of the newly learned information.
When reviewing a Magistrate's order of detention, the district court acts de novo and must make an independent determination of the proper pretrial detention or conditions for release. United States v. Reuben, 974 F.2d 580, 585 (5th Cir. 1992); United States v. Fortna, 769 F.2d 243, 249 (5th Cir. 1985). Under the Bail Reform Act, a defendant shall be released pending trial unless a judicial officer determines that release will not reasonably assure the appearance of the person as required or will endanger the safety of any other person or the community.” United States v. Hare, 873 F.2d 796, 798 (5th Cir. 1989). “[T]he lack of reasonable assurance of either the defendant's appearance or the safety of others or the community is sufficient; both are not required.” Fortna, 769 F.2d at 249 (citation omitted). “[I]n determining whether there are conditions of release that will reasonably assure the appearance of the person as required, ” a court must consider: “(1) the nature and circumstances of the offense charged ...; (2) the weight of the evidence against the person; (3) the history and characteristics of the person ...; and (4) the nature and seriousness of the danger to any person or the community that would be posed by the person's release.” 18 U.S.C. § 3142(g). In ascertaining whether risk of flight warrants detention, “the judicial officer should determine, from the information before him, that it is more likely than not that no condition or combination of conditions will reasonably assure the accused's appearance.” Fortna, 769 F.2d at 250 (citation omitted).
....
A. The non-speculative nature of Mr. Cooper's future detention offends due process.
The future detention being faced by Mr. Cooper in this instance is non-speculative. It has been stated by Judge Lynn that the trial in this case will not occur prior to at least late January of 2019. Therefore, it is a certainty that, if not released, Mr. Cooper will have been detained for at least 36 months prior to proceeding to trial. This delay has not been caused by any decision or action on behalf of Mr. Cooper, but rather due to additional defendants being added, each time causing newly appearing counsel to rightfully request for continuances. It has also been caused by the continuing delays in producing full discovery. Although the Government continues to work diligently in providing all discovery to all Defendants, it is nevertheless troubling that they could not provide an estimated timeframe as to when discovery in this case would be complete. Therefore, even the late January trial date currently anticipated by Judge Lynn is optimistic at this point, and could potentially be pushed even further into the future.
If trial were to proceed in late January (the current optimistic goal), Mr. Cooper will have been detained for three years having not been convicted of any wrongdoing. Such a lengthy detention, when examined alongside the other factors in this case, would far exceed the regulatory purposes of pretrial detention and cross into the realm of being punitive in nature. As such, Mr. Cooper requests this Court to revoke the Magistrate's Order of Pretrial Detention.
B. Conditions exist that could reasonably assure Mr. Cooper's future appearance.
When this issue has been analyzed in the past by the Fifth Circuit, the analysis focusing on weighing the Hare factors (identified above) to determine if the regulatory purpose of the detention (that is “securing [Cooper's] appearance against the real risk that he would flee the Court's jurisdiction”) is outweighed by the punitive nature of such a lengthy detention of an otherwise presumed innocent individual. United States v. Stanford, 722 F.Supp.2d 803, 809 (S.D. Tex. 2010), aff'd, 394 Fed.Appx. 72 (5th Cir. 2010). Here, any “real risk' of Mr. Cooper's fleeing has been completely mitigated and removed by the Government's aggressive and exhaustive seizure of all of Mr. Cooper's assets. In short, since the time of his initial arrest and detention hearing, the Government has successfully seized almost every available asset belonging to Mr. Cooper, leaving him with ostensibly zero financial resources.
Mr. Cooper no longer poses any “real” risk of fleeing. Nor is he a danger to the community. All of the assets and financial resources, including those located in Costa Rica, that gave the Court concern at the time of Mr. Cooper's initial detention hearing have been successfully identified and either seized by the Government, or at least made subject to forfeiture. Further, Mr. Cooper is able and willing to comply with any conditions or restrictions the Court feels are appropriate to assure his appearance at all future proceedings. His sister, Carolyn McCall has indicated that she is willing to allow John to move into her home, and to serve as a third-party custodian. Mr. Cooper is willing to submit to GPS monitoring, home detention, strict reporting requirements, and whatever other conditions this Court would feel necessary to ensure his compliance.
....
Mr. Cooper is ready and willing to agree to any reasonable conditions this Court feels are necessary to assure his future appearances. This includes maintaining a third-party custodian, surrender of any and all passports or travel documents, electronic monitoring, or home confinement. Substantively all of Mr. Cooper's assets, both domestic and abroad have been seized by the government over the pendency of this action. Any flight risk he may have presented ...

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