Case 2:23-cr-00090-NR Document 260 Filed 03/27/25 Page 1 of 22
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`UNITED STATES OF AMERICA,
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`2:23-CR-90
`v.
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`DREW PIERCE; MARK MARRIOTT;
`JOHN LAENG; and JOHN O’BRIEN,
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`OMNIBUS MEMORANDUM ORDER ON REMAINING PRETRIAL
`MOTIONS
`J. Nicholas Ranjan, United States District Judge
`Before the Court are various pretrial motions filed by Defendants. The Court
`has already granted Defendants’ motion for the issuance of a subpoena (ECF 207);
`the Court issues this omnibus order resolving the remaining motions.
`FACTUAL AND PROCEDURAL BACKGROUD
`At its core, the superseding indictment accuses Defendants of four separate
`schemes to defraud Primary Health Network (PHN) and a related entity, Lewistown-
`MSF, LLC. PHN is a federally qualified health center in Pennsylvania. Lewistown-
`MSF is a related entity1 that served as the project manager in charge of developing a
`federally qualified health center in Lewistown, Pennsylvania. Several of the
`Defendants held relatively high positions with PHN or Lewistown-MSF, and used
`those positions to enter into phony contracts with other corporate entities that they
`owned or controlled, siphoning money from PHN and Lewistown-MSF through the
`other entities to enrich themselves.
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`))
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`Defendants.
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`1 Palu Investment Group, Ltd. was a subsidiary of PHN, and held a 30% interest in
`Lewistown-MSF, LLC. ECF 122, ¶ 3. Defendant Drew Pierce was President of Palu.
`Id. at ¶ 4.
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`As noted, the superseding indictment alleged four separate schemes, which
`comprise the counts.2 The first three schemes are described in reference to the main
`corporate conduit that was used to bill PHN and Lewistown-MSF, and then kick back
`funds to certain Defendants: (1) the TopCoat scheme (counts 1-5); (2) the JDS scheme
`(counts 6-10); and (3) the Excel scheme (counts 11-14). The fourth scheme is referred
`to in the indictment as “the personal benefits” scheme (counts 15-19), as the crux of
`the allegations there was that Defendants Pierce and Marriott defrauded PHN by
`using PHN funds to pay for their own personal expenses, and using PHN employees
`to perform work on their personal properties.
`The Court here summarizes the conspiracy counts in the first two schemes
`(Counts 1 and 6), as those relate to the arguments Defendants make as part of their
`motions.
`TopCoat scheme (Count 1)
`The government alleges that Defendants Pierce, Marriott, Laeng, and O’Brien
`conspired to commit wire fraud by submitting fraudulent invoices to PHN and
`Lewistown-MSF, seeking payments for services performed by TopCoat LLC, even
`though TopCoat had performed no actual work. ECF 122, ¶¶ 17-18. TopCoat was a
`management company owned 50% by Mr. Marriott and 50% by ThreeSDJ LLC. Id.
`at ¶ 10. ThreeSDJ, in turn, was owned 1/3rd by Mr. Pierce, 1/3rd by Mr. Laeng, and
`1/3rd by an unnamed co-conspirator. Id. at ¶ 11. Defendants enriched themselves
`through the fraudulent invoices by causing PHN and Lewistown-MSF to pay amounts
`consistent with the fraudulent invoices. Id. at ¶ 18.
`Mr. Marriott, in his position as PHN’s facilities administrator, created
`fraudulent invoices from TopCoat to PHN and caused PHN to pay TopCoat the
`amounts listed on the invoices. Id. at ¶¶ 19-21. Mr. Pierce, who was a high-level
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`2 The specific counts include wire fraud, mail fraud, filing false tax returns, and
`conspiracy (to commit mail/wire fraud and to money launder).
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`executive at PHN, then used checks from TopCoat to pay the vendors that had
`actually performed the work on the project. Id. at ¶ 23. After paying the vendors,
`Mr. Pierce paid a portion of TopCoat’s profits to Mr. Marriott and ThreeSDJ. Id. at
`¶ 24.
`As part of the conspiracy, Mr. Laeng and Mr. Pierce caused the creation of
`Lewistown-MSF, which was a project manager for the construction of a health center
`in Lewistown, Pennsylvania. Id. at ¶¶ 25-26. Defendants O’Brien, Marriott, and
`Pierce orchestrated a system through which Keystone Tele-Data (an entity allegedly
`controlled by Mr. O’Brien) provided Lewistown-MSF with increasingly inflated bids
`for systems services. Id. at ¶¶ 28-29, 31-33. Keystone Tele-Data entered into a
`contract for systems with TopCoat, through which TopCoat would bill Lewistown-
`MSF the full contracted amount and then TopCoat would pay Keystone Tele-Data a
`lower, contracted amount, even though TopCoat was performing no work. Id. at ¶
`31. Ultimately, Lewistown-MSF paid TopCoat approximately $719,396.02 for
`systems services; in turn, TopCoat paid Keystone Tele-Data $510,000. Id. at ¶¶ 35-
`36. The difference between the payments Lewistown-MSF paid to TopCoat and
`TopCoat paid to Keystone Tele-Data was distributed to Defendants Pierce, O’Brien,
`Laeng, and Marriott through a series of kickbacks. Id. at ¶¶ 37-39.
`JDS scheme (Count 6)
`The government alleges that Defendants Pierce and Laeng conspired to
`commit wire fraud by causing PHN and Lewistown-MSF to pay inflated monetary
`amounts so that Defendants Pierce and Laeng could enrich themselves. Id. at ¶¶ 53-
`54. Defendants Laeng and Pierce used their positions with PHN and Lewistown-
`MSF to further this conspiracy. To enact the conspiracy, PHN entered into contracts
`for services with DC1.3 Id. at ¶ 56. DC1 separately contracted with JDS Healthcare
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`3 DC1 was partially owned by an unnamed co-conspirator (i.e., “Co-Conspirator 2”).
`ECF 122, ¶ 12.
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`Strategies LLC, which was a purported management consulting company owned
`1/3rd by Mr. Pierce, 1/3rd by Mr. Laeng, and 1/3rd by a person referred to as “Co-
`Conspirator 1.” Id. at ¶ 13.
`DC1 agreed to pay JDS 50% of what DC1 received from PHN for consulting
`services, even though JDS performed no work for DC1. Id. at ¶ 55. Defendants Laeng
`and Pierce caused PHN to enter into inflated contracts with DC1 for consulting
`services, fraudulently concealed from PHN that payments to DC1 were actually
`payments to JDS, and then used DC1 and JDS to pay themselves and another co-
`conspirator a portion of the money that PHN paid to DC1. Id. at ¶¶ 56-60.
`Mr. Laeng also caused Lewistown-MSF to enter into a development agreement
`with DC1 and a project management agreement with FQHC-MSF (an entity for
`which Mr. Laeng served as president). Id. at ¶¶ 61-62. Through these agreements,
`DC1 received funds from PHN and Lewistown-MSF both directly and indirectly using
`FQHC-MSF and other accounts as intermediaries. Id. at ¶¶ 64-65. Mr. Laeng and
`Mr. Pierce then used DC1 to pay JDS funds, and used JDS to pay themselves a
`portion of the proceeds. Id. at ¶¶ 66-68.
`DISCUSSION AND ANALYSIS
`Motions to dismiss Counts 1-10 (ECF 162, ECF 172)
`Counts 1 and 6 are each not duplicitous, as alleged
`A.
`Defendants Pierce, Laeng, and Marriott filed a motion to dismiss Counts 1-10
`of the superseding indictment, joined by Mr. O’Brien. ECF 162; ECF 176. Defendants
`argue that Counts 1 and 6 are each duplicitous, because they each allege multiple
`conspiracies, rather than a single conspiracy. Defendants further argue that if
`Counts 1 and 6 fail, then the other derivative counts (Counts 2-5, and 7-10), must fail
`also. ECF 163, pp. 8, 17-18. After careful consideration, the Court will deny the
`motion, without prejudice.
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`I.
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`“Duplicity is the improper combining of separate offenses into a single count.”
`United States v. Steiner, 847 F.3d 103, 114 (3d Cir. 2017). “Duplicitous counts may
`conceal the specific charges, prevent the jury from deciding guilt or innocence with
`respect to a particular offense, exploit the risk of prejudicial evidentiary rulings, or
`endanger fair sentencing.” United States v. Haddy, 134 F.3d 542, 548 (3d Cir. 1998)
`(cleaned up). A count that involves a “course of activity yet a single scheme” is not
`duplicitous. Id. at 549 (concluding that counts that tracked the statutory language
`and included multiple steps in the advancement of a scheme were not duplicitous).
`Additionally, “one conspiracy can involve multiple subsidiary schemes[,]” United
`States v. Fattah, 914 F.3d 112, 169 (3d Cir. 2019), and multiple victims. United States
`v. Miller, 41 F.4th 302, 313 (4th Cir. 2022). “Although its objectives may be numerous
`and diverse, a single conspiracy exists if there is one overall agreement among the
`parties to carry out those objectives.” United States v. Bobb, 471 F.3d 491, 494-95 (3d
`Cir. 2006).
`In determining whether a count is duplicitous, courts “ascertain the allowable
`unit of prosecution to decide whether the indictment properly charges a violation of
`the pertinent statute.” United States v. Root, 585 F.3d 145, 150 (3d Cir. 2009). To do
`this, courts examine “the language of the statute.” Id. For conspiracy, the unit of
`prosecution is “an agreement to commit an unlawful act.” United States v.
`Salahuddin, 765 F.3d 329, 341 (3d Cir. 2014) (cleaned up).
`For a conspiracy count, courts evaluate three factors to determine whether one
`conspiracy or multiple conspiracies exist: “(1) whether there was a common goal
`among the conspirators; (2) whether the agreement contemplated bringing to pass a
`continuous result that will not continue without the continuous cooperation of the
`conspirators; and (3) the extent to which the participants overlap in the various
`dealings.” United States v. Kemp, 500 F.3d 257, 287 (3d Cir. 2007) (cleaned up).
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`The Court finds that the government has alleged a single conspiracy in each of
`Counts 1 and 6. Applying the three Kemp factors noted above, each of Counts 1 and
`6 allege a single unit of prosecution.
`Beginning with Count 1 (the TopCoat scheme):
`First, the conspirators shared a common goal: inducing “PHN and Lewistown-
`MSF to pay TopCoat amounts consistent with the fraudulent invoices, thereby
`enriching themselves.” ECF 122, ¶ 18.
`Second, there was continuous cooperation between the conspirators to achieve
`a continuous result, as the indictment lays out, at least at a high level, how
`Defendants worked together to defraud PHN and Lewistown-MSF. Id. at ¶¶ 19-39.
`Third, similarly, there was some overlap alleged between the conspirators with
`respect to the submission of the phony invoices. The most significant overlap was the
`connection with TopCoat, as that allegedly was the vehicle through which Defendants
`were paid, and at least three Defendants had ownership interests. Id. at ¶¶ 10-11
`(TopCoat owned 50% by Defendant Marriott and 50% by ThreeSDJ, which in turn
`was owned 1/3 by Mr. Pierce, 1/3 by Mr. Laeng, and 1/3 by Co-Conspirator 1), 38
`(Defendants Pierce and Laeng “caused ThreeSDJ to pay out the funds received from
`TopCoat to themselves and to Co-Conspirator 1.”).
`The same goes for Count 6 (the JDS Scheme), although that scheme operated
`slightly differently than the TopCoat scheme.
`As discussed above, under the JDS scheme, Defendants Pierce and Laeng
`would cause payments to go from PHN or Lewistown-MSF to other affiliated or
`captive entities (like DC1 and FQHC-MSF), which would then send a share of the
`money to JDS—an entity that did nothing, and was equally owned by Mr. Pierce, Mr.
`Laeng, and so-called “Co-Conspirator 1.” Id. at ¶¶ 13, 54. That JDS kickback would
`then be paid back to Mr. Pierce and Mr. Laeng. Id. at ¶ 68.
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`Applying the Kemp factors, the Court finds that the government has alleged a
`single conspiracy as to Count 6.
`First, Defendants Pierce and Laeng (the two Defendants named in Count 6)
`shared a common goal: to enrich themselves by causing PHN and Lewistown-MSF to
`enter into inflated contracts. Id. at ¶¶ 52-56.
`Second, the conspiracy was continuous because Defendants Pierce and Laeng
`entered into agreements, routed payments, and concealed the ultimate receiver of the
`payments such that they enriched themselves by defrauding PHN and Lewistown-
`MSF. Id. at ¶¶ 57-68.
`Third, the participants overlapped because Defendants Pierce and Laeng were
`working in tandem throughout the conspiracy, as well as using the same entities that
`they or their co-conspirators owned or controlled (DC1, FQHC-MSF, and JDS) to
`perpetuate the scheme. Id. at ¶¶ 52-68.
` The crux of Defendants’ duplicity argument appears to be that the victims are
`different (PHN versus Lewistown-MSF), so the conspiracies must be different. ECF
`163, p. 17. But having two victims doesn’t turn one conspiracy into two. Miller, 41
`F.4th at 313 (holding that a conspiracy with three different victims was one
`conspiracy because it involved “the same alleged modus operandi, the same fake
`entities, the same bank accounts, and the same ends”). The ultimate goal and the
`criminal means can be the same: an agreement to use affiliated companies to
`fraudulently funnel funds through false invoices, and skim the differences between
`the cost of the actual work performed and the higher phony invoices.4
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`4 Indeed, if the government is right as to the evidence that it intends to present as to
`Count 1, the shift from TopCoat billing PHN to it instead billing Lewistown-MSF was
`a continuation of the same scheme; it was done to avoid detection when a PHN
`employee grew suspicious over a TopCoat invoice. ECF 195, p. 6. This type of
`evidence reinforces the continuity and commonality of the allegations forming the
`basis for Count 1’s conspiracy: i.e., the three owners of TopCoat using their
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`All that being said, conclusively resolving the duplicity argument at this point
`is premature. The question of whether the counts allege a single conspiracy or
`multiple ones is for the jury. Bobb, 471 F.3d at 494 (“The issue of whether a single
`conspiracy or multiple conspiracies exist is a fact question to be decided by a jury.”).
`Defendants may end up being right once the trial evidence comes in—for example, if
`the evidence reflects that certain Defendants didn’t operate in tandem with others,
`or weren’t aware of the larger scheme, then Counts 1 or 6 could, in fact, be duplicitous.
`See id. (“Where a single conspiracy is alleged in the indictment, there is a variance if
`the evidence at trial proves only the existence of multiple conspiracies.”). But this is
`ultimately a jury issue. Thus, while the Court denies Defendants’ motion to dismiss,
`it does so without prejudice to Defendants requesting jury instructions and verdict
`interrogatories on this issue and otherwise re-raising their arguments during trial.
`For these reasons, the Court finds that each of Count 1 and Count 6 are
`properly alleged and not duplicitous.
`B. Defendants’ other related arguments fail
`Defendants raise other related arguments, but several of them are moot in
`light of the Court’s finding above. The Court, though, addresses three of these
`challenges here.
`First, Defendants argue that the government has not properly alleged a
`scheme to defraud in Counts 1 and 6 as to Lewistown-MSF, as Mr. Laeng was the
`president of Lewistown-MSF and cannot have “defraud[ed] himself.” ECF 163, p. 16.
`This argument fails because it fights the facts in the indictment, and so is not proper
`to decide on a motion to dismiss. United States v. Craig, No. 21-338, 2024 WL 449386,
`at *1 n.1 (W.D. Pa. Feb. 6, 2024) (Conti, J.) (“A motion to dismiss the indictment
`challenges the adequacy of the indictment on its face and is not the appropriate
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`connections at PHN and Lewistown-MSF to obtain payments to which TopCoat
`wasn’t entitled.
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`motion to challenge factual matters.”); United States v. Zielke, No. 17-295, 2020 WL
`758817, at *1 (W.D. Pa. Feb. 14, 2020) (Fischer, J.) (“[A] district court’s review of the
`facts set forth in the indictment is limited to determining whether, assuming all of
`those facts as true, a jury could find that the defendant committed the offense for
`which he was charged.” (cleaned up)). The government doesn’t allege that Mr. Laeng
`was one and the same as Lewistown-MSF or had a 100% interest in that entity. It
`alleges that Mr. Laeng was an officer of that entity, and that he stole from it. See
`ECF 122, ¶¶ 19-39.
`Second, Defendants argue that there was no scheme to defraud in Count 1
`because Lewistown-MSF paid the full budgeted amount for systems to TopCoat. ECF
`163, pp. 15-16. In other words, Lewistown-MSF suffered no losses.
` This argument fails because loss to the victim is not an element of the offenses.
`“The federal wire fraud statute criminalizes ‘any scheme or artifice to defraud, or for
`obtaining money or property by means of false or fraudulent pretenses,
`representations, or promises.’” United States v. Porat, 76 F.4th 213, 218 (3d Cir.
`2023) (quoting 18 U.S.C. § 1343). To allege a scheme to defraud, the government
`must allege that Defendants “engaged in deception [and] that money or property was
`an object of their fraud.” Ciminelli v. United States, 598 U.S. 306, 312 (2023) (cleaned
`up). Count 1 alleges such deception: payment to TopCoat, which was an entity that
`didn’t do any work on the project. That is at the core of the wire fraud statute, not
`loss to any victims. Accord United States v. Woods, No. 22-16, 2024 WL 1354586, at
`*12 (S.D. Ga. Mar. 29, 2024) (compiling cases, and quoting: “Particularly as to the
`charge here, financial loss is not at the core of ... wire frauds. Instead, the penal
`statutes also seek to punish the intent to obtain money or property from a victim by
`means of fraud and deceit. United States v. Maxwell, 579 F.3d 1282, 1302 (11th Cir.
`2009) (rejecting defendant’s sufficiency of the evidence argument where Defendant
`contended United States and county received contracted services and thus suffered
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`no loss); see also United States v. Foster, No. 13-20063, 2014 WL 12687616, at *7 (S.D.
`Fla. Mar. 31, 2014) (rejecting defendants’ Rule 29 challenge to conspiracy to commit
`wire fraud conviction where defendants argued victims suffered no harm because
`conspirators paid back loans and noting that wire fraud statutes do not focus on the
`victim's actual loss but on the defendant’s intent to obtain money or property by
`means of fraud or deceit) (quoting United States v. Artuso, 482 F. App’x 398, 402-03
`(11th Cir. 2012))” (cleaned up)); United States v. Tulio, 263 F. App’x 258, 261 (3d Cir.
`2008) (noting that “the relevant inquiry [under the mail fraud statute] concerns what
`[the defendant] intended—not whether [the victim] was actually deprived of money
`or property.”); United States v. Nagle, No. 09-0384, 2019 WL 1403393, at *5 (M.D. Pa.
`Mar. 28, 2019) (stating that the wire fraud statutes “do not require the government
`to prove either contemplated harm to the victim or any loss, as it is not necessary to
`show that the victim was actually deprived of any money or property.”).5
`Third, Defendants argue that Count 6 does not allege a scheme to defraud
`because there are no allegations detailing why JDS’s inclusion in the development of
`the Lewistown facility was improper, and further that Mr. Pierce had no duty to
`disclose the relationships between the entities. ECF 163, p. 20.
`As stated above, a scheme to defraud requires a scheme to defraud by means
`of false pretenses, representations, or promises. Porat, 76 F.4th at 218. Here, Count
`6 alleges that Defendants perpetuated a scheme to defraud Lewistown-MSF through
`the false representation that payments to DC1 were for work performed by DC1,
`when the payments were really payment to JDS that were being routed through DC1.
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`5 But even if loss were an element of the offenses, whether Lewistown-MSF suffered
`any loss is a factual issue that goes to the nature of the evidence and will have to be
`decided by the jury. For example, was the fully budgeted amount for the services
`money that Lewistown-MSF was obligated to pay, or if the services ended up coming
`in under budget, could Lewistown-MSF have kept the difference or allocated the
`difference to other uses? An answer to that question could go to whether Lewistown-
`MSF suffered loss here.
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`ECF 122, ¶ 66. These allegations show that JDS’s involvement was improper because
`it performed no work and was simply a vessel for Defendants to enrich themselves.
`Id. at ¶ 60.
`As to Defendants’ argument that Mr. Pierce had no duty to disclose,
`Defendants argue that Paragraphs 58 and 66 of the indictment specifically allege that
`Mr. Pierce and Mr. Laeng “fraudulently concealed” that the payments to DC1 were
`routed to JDS. Defendants, relying heavily on United States v. Steffen, 687 F.3d 1104
`(8th Cir. 2012), argue that the indictment does not allege any duty by Defendants to
`disclose the movement of those payments or their relationship with JDS, so there can
`be no fraud here.
`Defendants may have a point if the theory in the indictment was one based
`solely on non-disclosure, like the indictment in Steffen. But the indictment here
`alleges affirmative misrepresentations, which would not require any duty to disclose.
`See, e.g., United States v. Sarfo, No. 23-132, 2024 WL 3706679, at *6 (D. Nev. May
`24, 2024) (denying motion to dismiss and holding that Steffen was not applicable in a
`fraud cause where defendants were “alleged to have made multiple affirmative
`material misrepresentations” despite no duty to disclose), report and recommendation
`adopted, No. 23-132, 2024 WL 3706734 (D. Nev. Aug. 6, 2024). For example, the
`indictment alleges that Mr. Pierce, along with his co-conspirators, made the false
`representation that Lewistown-MSF’s payments to DC1 were for consulting services,
`when really the payments were being funneled to Defendants and their co-
`conspirators through JDS. ECF 122, ¶¶ 56, 63. These are critical allegations and tie
`the conduct at issue here to more than mere non-disclosure.
`For these reasons, these additional arguments for dismissal fail.
`C. Mr. O’Brien’s motion to dismiss (ECF 172)
`Mr. O’Brien filed a separate motion to dismiss (ECF 172), joined by Defendants
`Pierce, Laeng, and Marriott as to section III.C only. ECF 182; ECF 183; ECF 187.
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`Mr. O’Brien’s role in this case is limited to the TopCoat scheme and specifically
`to Counts 1-4. As noted above, the indictment alleges that Mr. O’Brien controlled
`Keystone Tele-Data. As part of the TopCoat scheme, the indictment alleges
`essentially that TopCoat and Keystone would enter into contracts for different
`projects at the Lewistown-MSF. ECF 122, ¶¶ 19-39. TopCoat would obtain an
`inflated rate for the services that Keystone performed, and the difference would be
`kicked back to Mr. Marriott, Mr. Pierce, and Mr. Laeng. Id. at ¶¶ 34, 37-38.
`Additionally, for one project, Keystone provided an inflated price of $510,000 directly
`to Lewistown-MSF, and Mr. O’Brien, through Keystone, paid Mr. Marriott a portion
`of that directly. Id. at ¶¶ 36-37.
`Mr. O’Brien moves to dismiss these counts for three reasons, none of which
`succeed.
`First, Mr. O’Brien argues that Count 1 is duplicitous, but in a different way.
`Mr. O’Brien argues that Count 1 states two separate conspiracies against him: (1) a
`conspiracy to defraud Lewistown-MSF through inflated bids; and (2) a conspiracy to
`provide Mr. Marriott with a series of kickbacks from Keystone. He argues that these
`were separate unrelated agreements—an agreement to defraud Lewistown-MSF and
`a separate agreement to pay kickbacks to Mr. Marriott. ECF 173, p. 7. The Court
`disagrees.
`Applying the three Kemp factors noted above, there was a single common
`goal—to defraud Lewistown-MSF; there was a clear continuation of conduct here that
`was necessary—e.g., the funds obtained through the inflated bids from Lewistown-
`MSF were paid, in part, by the kickbacks from Mr. O’Brien to Mr. Marriott; and the
`overlap here between the participants is clear.
`Again, if the trial evidence alters the picture painted by the indictment, Mr.
`O’Brien is free to raise his duplicity argument at trial, including by requesting jury
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`instructions and special interrogatories. But, as pled, the indictment alleges a single
`unit of prosecution.
`Second, Mr. O’Brien expressly attacks the facts in the indictment. He alleges
`that there is insufficient evidence to link him to control over Keystone, and that he
`did not participate in the wires, so the wire fraud claims fail. ECF 173, p. 11. The
`problem with this argument is that it asks the Court to weigh the evidence, which it
`cannot do at this stage. Mr. O’Brien invokes exceptions to the rule that the court
`cannot go outside of the four corners of the indictment, but those exceptions do not
`apply here. United States v. DeLaurentis, 230 F.3d 659, 660 (3d Cir. 2000) (exceptions
`include where “there is a stipulated record” or “immunity issues are implicated”).
`Third, Mr. O’Brien argues that Counts 2-4 (the substantive wire fraud counts)
`must be dismissed because he did not transmit those wires or cause them to be
`transmitted. ECF 173, p. 16. That doesn’t matter; “the statute does not require that
`the defendant himself sent the communication or that he intended that interstate
`wire communications would be used.” United States v. Andrews, 681 F.3d 509, 529
`(3d Cir. 2012). It is sufficient that “the use of interstate wire communications was
`reasonably foreseeable.” Id.
`Here, given the allegations as a whole in the indictment, including Mr.
`O’Brien’s control of Keystone, the manner of the scheme, and the three emails
`identified, there is a sufficient basis that the use of wire communications was
`reasonably foreseeable. Any dispute over this is more of a factual one, and therefore
`must be raised at trial. Craig, No. 21-338, 2024 WL 449386, at *1 n.1. As such, the
`Court will deny Mr. O’Brien’s motion.
`II. Mr. O’Brien’s motion for severance (ECF 168)
`Mr. O’Brien requests severance of the counts regarding the TopCoat scheme
`because the distinct schemes are not properly joined under Rule 8(b); in the
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`alternative, he seeks severance from his co-defendants under Rule 14 because he
`would be prejudiced by being tried with them. ECF 168, ¶¶ 1-2.
`Joinder is proper under Rule 8(b)
`A.
`Mr. O’Brien argues that Counts 1-5 (the TopCoat scheme) should be severed
`and tried separately from the rest of the case because the TopCoat scheme is distinct
`from the other schemes in the indictment. ECF 169, p. 6. He argues that the four
`different schemes lack a transactional nexus, allege distinct manners and means,
`involved different co-conspirators and entities, and are not part of the same act or
`transaction and thus are not sufficiently connected to be joined. Id. at p. 11. The
`government argues that Counts 1-5 are properly joined because all four schemes
`alleged in the superseding indictment involve the same victims, same motive, and
`overlapping defendants. ECF 195, pp. 43-44.
`An indictment “may charge 2 or more defendants if they are alleged to have
`participated in the same act or transaction, or in the same series of acts or
`transactions, constituting an offense or offenses.” Fed. R. Crim. P. 8(b). In multi-
`defendant cases, “the tests for joinder of counts and defendants is merged in Rule
`8(b).” United States v. Irizarry, 341 F.3d 273, 287 (3d Cir. 2003) (cleaned up). For
`joinder to be proper, “there must exist a transactional nexus in that the defendants
`must have participated in the same act or transaction, or in the same series of acts
`or transactions[.]” United States v. Jimenez, 513 F.3d 62, 83 (3d Cir. 2008) (cleaned
`up). Multiple schemes that are part of a larger fraudulent scheme can be properly
`joined under Rule 8(b). United States v. Staph, No. 09-42, 2010 WL 2884694, at *6-
`*7 (W.D. Pa. July 21, 2010) (Diamond, J.) (finding that a defendant was properly
`joined with another defendant because the conduct underlying the counts was related
`to the same series of acts and transactions).
`Here, the touchstone of the analysis is really whether the multiple schemes
`alleged are substantively interrelated, and the Court finds that they are. The victims
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`are the same or related; the methods and modes of operation are the same (i.e., the
`use of inflated or phony bids, through captive of controlled companies); the
`participants overlap at least to some degree across the schemes (for example, the
`indictment alleges Mr. O’Brien’s interactions with Mr. Marriott, who had a role in
`the other schemes). The superseding indictment alleges multiple schemes that are
`all a part of the same overlapping fraudulent endeavor. See Staph, 2010 WL 2884694,
`at *7. Thus, Counts 1-5 are properly joined under Rule 8(b).
`The Court will not sever trials under Rule 14
`B.
`Mr. O’Brien argues that even if Counts 1-5 are properly joined, he will suffer
`prejudice if he is tried jointly with his co-defendants. ECF 168, ¶¶ 1-2.
`Even if joinder is proper, a court may sever defendants’ trials if the joinder
`would prejudice a single defendant. Fed. R. Crim. P. 14(a). “Defendants seeking a
`severance bear a heavy burden[.]” United States v. Lore, 430 F.3d 190, 205 (3d Cir.
`2005) (cleaned up). For severance to be granted, a “defendant must pinpoint clear
`and substantial prejudice resulting in an unfair trial.” United States v. Riley, 621
`F.3d 312, 335 (3d Cir. 2010), as amended (Oct. 21, 2010) (cleaned up). “A district
`court’s ruling on a motion for severance is discretionary.” United States v. Mitchell,
`No. 9-105, 2013 WL 12202650, at *9 (W.D. Pa. May 6, 2013) (Cercone, J.). The court
`must balance “the potential prejudice to the defendant against the advantages of
`joinder in terms of judicial economy.” Id. “[A] defendant is not entitled to a severance
`merely because evidence against a co-defendant is more damaging than the evidence
`against the moving party.” United States v. Walker, 657 F.3d 160, 170 (3d Cir. 2011)
`(cleaned up). In criminal trials, juries are presumed to be able to compartmentalize
`evidence, and any remaining prejudice can be cured by an appropriate jury
`instruction. Mitchell, 2013 WL 12202650 at *10.
`Mr. O’Brien argues that he will be prejudiced by a joint trial because the
`schemes alleged in the indictment are complex, there will likely be voluminous
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`evidence, and the charges and evidence against him are only a fraction of the total
`charges and evidence. ECF 169, pp. 12-14. The Court disagrees, for at least three
`reasons.
`First, even assuming the schemes here to be complex and the evidence to be
`voluminous, that isn’t enough reason to sever Counts 1-5. See Walker, 657 F.3d at
`170. Mr. O’Brien has not identified a reason that a jury will not be able to sufficiently
`compartmentalize the evidence other than the fact that the case is complex.
`Second, Mr. O’Brien’s relative culpability also doesn’t move the needle. Mr.
`O’Brien may have been uninvolved in the other schemes, but the Court can provide
`rather straightforward limiting instructions to ensure that actions, evidence or
`statements by others related to those schemes cannot be considered in assessing Mr.
`O’Brien’s guilt. This can also be reinforced and clarified in the verdict form, including
`how questions are phrased and how the form is formatted.
`Third, it is well-settled that judicial economy is served by having a single trial.
`See Mitchell, 2013 WL 12202650, at *9