United States v. Pimental

199 F.R.D. 28, 2001 U.S. Dist. LEXIS 2343, 2001 WL 197836
CourtDistrict Court, D. Massachusetts
DecidedFebruary 20, 2001
DocketNo. CR. 99-10310-NG
StatusPublished
Cited by5 cases

This text of 199 F.R.D. 28 (United States v. Pimental) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Pimental, 199 F.R.D. 28, 2001 U.S. Dist. LEXIS 2343, 2001 WL 197836 (D. Mass. 2001).

Opinion

MEMORANDUM AND ORDER RE: RECONSIDERATION OF DISCOVERY RULINGS

GERTNER, District Judge.

Defendants Arthur L. Pimental and Loretta R. Pimental (“the Pimentals”) are charged with one count of conspiracy, in violation of 18 U.S.C. § 371, and fourteen counts of mail fraud, in violation of 18 U.S.C. § 1341. The Pimentals have moved for dismissal of the indictment on various grounds. I held a hearing on the motion to dismiss on September 7, 2000. At the conclusion of the hearing, I took the motion under advisement pending the resolution of the Pimentals’ related motion for discovery, which was then still pending before the Magistrate Court.

On September 25, 2000, the Magistrate Court denied all but one of the Pimentals’ requests for discovery. They now move for reconsideration of portions of the Magistrate Court’s rulings on discovery. Their numerous discovery requests seek information defendants believe will support their motion to dismiss.

For the reasons stated below, the Pimentals’ motion [docket #49] is GRANTED as to their Rule 6(e) request (i.e., discovery request number one), but DENIED as to their remaining requests. The government is ORDERED to produce the Rule 6(e) discovery by March 16, 2001. If necessary, the Pimentals shall file supplementary briefs in support of their motion to dismiss no later than April 6, 2001. The government has until April 20, 2001 to file a reply brief.

I. BACKGROUND

A. The Defendants

The Pimentals are a husband and wife team who own a steel business. The government alleges that the Pimentals made false statements to their insurers about the type of work their employees performed in the steel business. For example, the government contends that the Pimentals falsely informed insurers that the Pimentals’ employees erected concrete structures when, in fact, the employees erected steel structures. The government also claims the Pimentals under-reported employee salaries. Through means of these misrepresentations, the government alleges, the Pimentals reduced their workers’ compensation premiums, thereby defrauding insurers of hundreds of thousands of dollars.

B. The Investigation

On September 29, 1999, a federal grand jury indicted the Pimentals on one count of conspiracy, in violation of 18 U.S.C. § 371, and fourteen counts of mail fraud, in violation of 18 U.S.C. § 1341. The investigation leading up to the indictment, the government admits, was carried out jointly by the Federal Bureau of Investigation (“FBI”) and the Insurance Fraud Bureau of Massachusetts (“IFB”). Indeed, the government acknowledges that the IFB performed the preliminary investigation into this matter and ultimately referred the case to the United States Attorney’s Office (“USAO”) for prosecution.

1. The Insurance Fraud Bureau

By way of emergency legislation in December 1996, the Massachusetts legislature authorized two private voluntary associations of Massachusetts insurance carriers, the Automobile Insurance Bureau of Massachusetts (“AIB”) and the Workers’ Compensation Rating and Inspection Bureau (“WCRIB”) of Massachusetts,1 to create an insurance fraud bureau “for the prevention and investigation of fraudulent insurance transactions.” Mass. St.1996, ch. 427, § 13. The AIB and WCRIB, in turn, created the IFB pursuant [30]*30to that authorization. Commonwealth v. Ellis, 429 Mass. 362, 708 N.E.2d 644, 646 (1999) [hereinafter “Ellis ”].

The IFB is governed by a board of fifteen members, five from the governing committee of each rating bureau and five public officials.2 Mass. St.1996, ch. 427, § 13(a). The AIB and the WCRIB provide all of IFB’s funding, which is borne equally by the two private insurance bureaus. Mass. St.1996, ch. 427, § 13(c). The legislation authorizes IFB personnel to gain access to various information and records, if relevant to an IFB investigation and if used solely for IFB purposes, such as Department of Revenue records and certain criminal offender record information. Mass. St.1996, ch. 427, § 13(d).

Every insurer “having reason to believe than an insurance transaction may be fraudulent” must advise the IFB of the matter. Mass. St.1996, ch. 427, § 13(e). “Whenever IFB’s executive director is satisfied that a material fraud, deceit, or intentional misrepresentation has been committed in an insurance transaction,” the executive director “shall refer the matter to the attorney general, the appropriate district attorney or the United States attorney” for prosecution. Mass. St.1996, ch. 427, § 13(h).

2. IFB’s Involvement in Grand Jury Proceedings

During the Pimental investigation, the USAO filed an ex parte motion on the District Court’s Miscellaneous Business Docket (“MBD”). The motion sought the District Court’s leave to disclose grand jury materials “to outside experts assisting” the Pimental investigation, namely, IFB investigators and data analysts. The request was made pursuant to Federal Rule of Criminal Procedure 6(e)(3)(A)(ii) (“Rule 6(e)”), which authorizes disclosure to “such government personnel (including personnel of a state or subdivision of a state) as are deemed necessary by an attorney for the government to assist an attorney for the government in the performanee of such attorney’s duty to enforce federal criminal law.” The government disclosed to the District Court that IFB “is a state-chartered, privately funded, investigative entity, established by the Automobile Insurance Bureau of Massachusetts and the Workers’ Compensation Bureau of Massachusetts pursuant to a grant of authority from the Massachusetts Legislature.” Judge Saris summarily granted the government’s motion, signing a form order proposed by the government.

Consequently, IFB employees had some (as yet undetermined) access to grand jury materials and influence on the grand jury. For instance, IFB investigators helped the USAO present the case to the grand jury. Scott S. Faragi (“Faragi”), a criminal investigator employed by IFB, was one of the four witnesses who appeared before the grand jury. In fact, Faragi’s testimony comprised the bulk of the testimony heard by the grand jury.3 Prior to convening the grand jury, Faragi had interviewed each of the other three witnesses who testified.

C. The Motion to Dismiss the Indictment

After learning of IFB’s extensive involvement in the investigation and other facts, the Pimentals moved to dismiss the indictment against them.

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Related

United States v. Pimental
380 F.3d 575 (First Circuit, 2004)
United States v. Pimental
204 F.R.D. 223 (D. Massachusetts, 2001)
United States v. Mazzola
183 F. Supp. 2d 195 (D. Massachusetts, 2001)
In Re Grand Jury Proceedings
158 F. Supp. 2d 96 (D. Massachusetts, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
199 F.R.D. 28, 2001 U.S. Dist. LEXIS 2343, 2001 WL 197836, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-pimental-mad-2001.