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United States v. Arnold

United States District Court, M.D. Tennessee, Nashville Division

January 4, 2017

UNITED STATES OF AMERICA
v.
ROBERT F. ARNOLD, JOE E. RUSSELL, II and JOHN VANDERVEER

          MEMORANDUM OPINION AND ORDER

          KEVIN H. SHARP UNITED STATES DISTRICT JUDGE

         Defendant Robert F. Arnold has filed two Motions to Dismiss, while Defendants Joe E. Russell and John Vanderveer have filed Motions to Join in Arnold's requests for dismissal. The Motions to Join will be granted, but the Motions to Dismiss will be denied.

         I.

         Defendants are charged in a fourteen count Indictment alleging conspiracy (Count One), wire fraud (Counts Two through Five), honest services fraud (Counts Six through Ten), bribery (Counts Eleven and Twelve), extortion (Count Thirteen), and witness tampering (Count Fourteen). Defendant Arnold requests dismissal of the wire fraud and some of the honest services fraud counts by way of separate Motions to Dismiss.

         The first Motion to Dismiss is directed at Counts Two through Five. Those Counts incorporate by reference the allegations underlying the conspiracy charge and go on to allege that, from June 2013 to May 2015, Defendants devised and intended to devise a scheme and artifice to defraud and obtain money and property from Rutherford County by means of materially false and fraudulent pretenses, representations, and promises. It is further alleged that, in support of the scheme, Defendants caused to be transmitted the following wire communications in interstate commerce:

Count

Date

Wire Communication

2

October 30, 2013

RUSSELL sent an email to a representative of a jail in Alabama, stating that the JailCigs program had been “quite successful” in Rutherford County and that “we have a good relationship with the vendor which is why I am doing this favor for him.”

3

April 3, 2014

RUSSELL sent an email to a supplier based in China, to negotiate a wholesale purchase of e-cigarettes.

4

December 7, 2014

RUSSELL sent an email to a supplier based in China, to negotiate a wholesale purchase of e-cigarettes.

5

April 9, 2015

ARNOLD forwarded to RUSSELL and VANDERVEER an email in which a journalist from The Murfreesboro Post posed a number of questions about JailCigs, including whether “the sheriff's office or jail ha[s] a contract with Jail Cigs” and how much money has been paid to Rutherford County, in light of ARNOLD's statement to “TV reporters [that] some of the revenue from Jail Cigs goes into the county's general fund.”

         (Docket No. 1, Indictment ¶ 49).

         Noting that an essential element of a wire fraud case is that interstate wire communications be “in furtherance of” the purported scheme to defraud, United States v. Faulkenberry, 614 F.3d 573, 581 (6th Cir. 2010), Defendant Arnold argues that “[t]he wire communications at issue here . . . had no meaningful connection to the alleged scheme to obtain money and property from Rutherford County” because “[n]one of the emails in question was directed to an employee or agent of Rutherford County[.]” (Docket No. 141 at 1). Moreover, none of the e-mails “‘were designed to lull the victims into a false sense of security, postpone their ultimate complaint to the authorities, and therefore make the apprehension of the defendants less likely than if no mailing had taken place.'” (Id. at 4, quoting Faulkenberry, 614 F.3d at 582).

         The second Motion to Dismiss is of similar ilk, but directed at Counts Seven through Nine. Those Counts also incorporate by reference the overarching conspiracy and allege that during the same time frame, Defendants devised a scheme to deprive Rutherford County and its citizens of their right to the honest services of Defendants through bribery and kickbacks. The Indictment further alleges that, for purposes of executing the scheme, Defendants caused the following to be transmitted by way of wire communication:

Count

Date

Wire Communication

7

August 6, 2014

RUSSELL sent an email on behalf of JailCigs to a JailCigs customer stating, “After polling all of the opposing candidates, this program will end if Sheriff Arnold is not reelected. If you value the right of the person you know at RCADC to continue being allowed to use our products, then please get everyone you know to the polls to vote for Sheriff Robert Arnold.”

8

September 8, 2014

RUSSELL sent an email to the county attorney-in response to the county attorney's advice to bid out the contract with the e-cigarette vendor and submit any donations or commissions received from the vendor to the county commission-asking, “If no donations are being made or expected to be made by the vendor, then what? Does it still need to be bid out?”

9

September 8, 2014

RUSSELL sent an email to the county attorney stating, “So, best advice is to bid out or at least have some type of contract with any donations going to General fund? The current vendor is the only one we know of with this business model.”

         (Indictment ¶ 52).

         Noting again that an essential element of a wire communication is that it be in furtherance of the scheme to defraud, Defendant Arnold argues that the above three emails had “no meaningful connection to the alleged scheme to deprive Rutherford County and its citizens of their right to Defendant's honest services through bribery and kickbacks.” (Docket No. 142 at 2). That is, “[w]hile they can be viewed as ‘incident' to the alleged scheme. . ., they cannot be viewed as having ‘served any useful step, purpose, or role in furthering of the scheme, '” and, in actuality, “were superfluous to the scheme.” (Id. at 4, quoting United States v. Hartsel, 199 F.3d 812, 818 (6th Cir. 1999).

         II.

         At the end of his second Motion to Dismiss, Defendant Arnold asserts that “[p]erhaps, at this pleading stage, the government can articulate how the Counts Seven, Eight, and Nine emails furthered the alleged scheme . . . but it is not obvious, nor is it unreasonable to ask.” (Id. at 5). The same, however, can be said about the first Motion to Dismiss - it is not unreasonable to ask - but ...


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