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United States v. Reed

United States District Court, E.D. Louisiana

January 9, 2017

UNITED STATES OF AMERICA
v.
STEVEN REED

         SECTION “L”

          ORDER & REASONS

         Before the Court is Defendant Steven Reed's Motion for Partial Reconsideration, requesting that the Court address his argument that he was denied a fair trial due to the Court's refusal to sever the hospital counts against Walter Reed from the conspiracy counts against both Steven Reed (“S. Reed”) and Walter Reed (“W. Reed”). (R. Doc. 356). The Government opposes the Motion. (R. Doc. 363). Steven Reed, upon leave of the court, timely filed a reply. (R. Doc. 369). Having considered the parties' briefs and applicable law, the Court now issues this order and reasons.

         I. BACKGROUND

         From 1985 to January 12, 2015, W. Reed served as the District Attorney for Louisiana's 22nd Judicial District. S. Reed is his son. On April 23, 2015, the United States Government filed an eighteen-count indictment charging Defendants W. Reed and S. Reed with conspiracy to commit wire fraud and money laundering, as well as substantive counts of wire fraud, money laundering, false statements on income tax returns, and mail fraud. On October 22, 2015, the Government filed a superseding indictment (the “Indictment”), adding an additional wire fraud count (Count 8) against W. Reed.

         The gravamen of the conspiracy and wire fraud counts (Counts 1-8) is Defendants' alleged improper personal use of campaign funds. The jury found that W. Reed solicited campaign funds from donors on the premise that the funds would be used to facilitate his reelection, and then used those funds for personal expenses unrelated to his campaign or the holding of public office. Specifically, the wire fraud counts alleged that, inter alia, W. Reed used campaign donations to (i) recruit potential clients for his private legal practice, (ii) pay off various expenses incurred by S. Reed, (iii) pay for private and personal dinners, (iv) purchase flowers for personal reasons, (v) overpay his son for work allegedly performed on behalf of the Campaign, and (vi) host a housewarming party for friends and family unrelated to the Campaign or the holding of public office. Further, W. Reed and S. Reed were charged with engaging in money laundering (Counts 9 and 10) when they caused two service providers for a campaign-related event to make payments to entities controlled by S. Reed in a manner that would disguise the payments as legitimate expenses when, in fact, the payments were for the Defendants' personal benefit. S. Reed was only charged with conspiracy to commit wire fraud, one count of wire fraud (Count 7) and money laundering.

         In addition to the wire fraud and money laundering counts, the Indictment also alleged that W. Reed engaged in mail fraud when, in exchange for legal representation by the District Attorney's office, he deposited payments made by the St. Tammany Parish Hospital (the “Hospital”) into his own personal bank accounts for private use. According to the Indictment, he arranged for checks to be sent to the District Attorney's office and then deposited them into his personal bank account when he knew these funds were actually intended for the Office of District Attorney. Finally, the Indictment alleges that W. Reed underreported his income on his tax returns for four years (Counts 11-14).

         An eleven-day jury trial took place from April 19-May 2, 2016. After trial, the Jury found W. Reed guilty as to counts one-nine and eleven-nineteen, and S. Reed guilty as to counts one, seven, and nine. (R. Doc. 247). Both W. Reed and S. Reed were found not guilty as to count ten. Id. Both W. Reed and S. Reed filed motions for arrest of judgment, acquittal, and a new trial. The Court denied their motions. (R. Doc. 353). S. Reed then filed a Motion for Reconsideration, arguing the Court did not adequately address his arguments that the Court's failure to sever the hospital counts against W. Reed from the conspiracy counts against W. Reed and S. Reed denied S. Reed a fair trial. (R Doc. 356-1).

         II. PRESENT MOTION

         A. S. Reed's Arguments

         S. Reed's motion avers that the Court did not consider his post-trial arguments in its Order, but instead focused its analysis on S. Reed's pretrial misjoinder and severance motions. (R. Doc. 356-1). S. Reed believes that the Court's analysis is insufficient, because his post-trial motion addressed what happened at trial while the Court only re-addressed arguments the parties made pretrial.

         S. Reed cites to United States v McRae, arguing that even if the need for severance was not clear before trial, it may yet be made clear after all the evidence has been presented. 702 F.3d 806, 828 (5th Cir. 2012). S. Reed further argues that because his defense relied on the testimony of W. Reed, he was denied a fair trial when W. Reed's credibility was impeached at trial due to testimony regarding the hospital counts, which inarguably did not involve S. Reed. (R. Doc. 356-1 at 1-2). The Government's case against W. Reed for the hospital counts, he argues, “necessarily undermined his defense because it discredited the witness on whom he relied to present his defense, ” namely, W. Reed. (R. Doc. 356-1 at 2). But for the government's impeachment of W. Reed, S. Reed avers he would have been exonerated. (R. Doc. 356-1 at 2).

         Though the Court instructed the jury that each defendant's guilt should be considered separately and individually, S. Reed avers that the instruction was insufficient to cure the problem. Though he was in no way involved in the hospital counts, the Government's successful efforts to discredit W. Reed on those counts arguably tainted W. Reed's testimony in support of S. Reed for the conspiracy counts. (R. Doc. 356-1 at 2-3). S. Reed argues that the Court did not properly address the impeachment that occurred at trial, and requests a reconsideration of the Court's ruling on his severance arguments.

         B. Government's Arguments

         The Government opposes S. Reed's motion, contending that S. Reed's arguments are a distinction without a difference and that he seeks relief from a failed trial strategy. (R. Doc. 363 at 1). Specifically, S. Reed's choice to link his defense to his father's testimony was a ...


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