The opinion of the court was delivered by: Dora L. Irizarry, United States District Judge
On August 14, 2008, defendants Yevsey Lekhtman, Simon Benimetsky,*fn1 Roman Dudkin and Yelena Raykhman were named in a five-count superseding indictment ("Indictment"),*fn2 charging: (1) conspiracy to embezzle, steal and obtain by fraud and materially false statements funds provided and insured under Subchapter IV of Title 20 of the United States Code, in violation of 20 U.S.C. § 1097(a) ("student aid fraud conspiracy"); (2) a substantive count of fraud in violation of 20 U.S.C. § 1097(a) ("student aid fraud"); (3) theft of public money from the United States Department of Education ("DOE") in violation of 18 U.S.C. § 641 ("theft of DOE funds"); (4) conspiracy to obtain visas by submitting false documents to the Immigration and Naturalization Service and Department of Labor ("DOL") in violation of 18 U.S.C. § 1546 ("visa fraud conspiracy"); and (5) theft of public money from the United States Department of Labor, in violation of 18 U.S.C. § 641 ("theft of DOL funds"). Defendants Lekhtman, Raykhman, and Dudkin were charged in counts one through three; Lekhtman, Dudkin, and Benimetsky were charged in count four; and Lekhtman and Raykhman were charged in count five.
On September 8, 2009, Lekhtman and Raykhman filed an Omnibus Pre-trial Motion ("Omnibus Motion") requesting that the court: (1) suppress all evidence seized pursuant to the execution of a DOL search warrant ("2003 DOL warrant") or, in the alternative, order disclosure of all student academic, attendance, financial aid, and enrollment records ("student records") seized thereunder; (2) suppress all evidence seized pursuant to the execution of a DOE search warrant ("2004 DOE warrant") or, in the alternative, order disclosure of all the student records seized thereunder; (3) compel the government to provide defendants with a bill of particulars; (4) compel the government to produce all evidence favorable to the defense pursuant to Brady v. Maryland, 373 U.S. 83 (1963) and Giglio v. United States, 405 U.S. 150 (1972); (5) suppress any hearsay statements of non-testifying co-defendants that incriminate them pursuant to Bruton v. United States, 391 U.S. 123 (1968), or, in the alternative, sever co-defendant Dudkin from this case; and (6) sever the visa fraud conspiracy count of the Indictment or, in the alterative, sever Raykhman from this case.
On November 17, 2009, the court heard oral argument on the Omnibus Motion and made the following rulings on the record: (1) the court, in large part, denied the defendants' request for a bill of particulars, and granted it, in part by directing the government to provide the defendants, on a rolling basis, with a list of students whose financial aid applications and/or disbursements underlie the allegations the government will seek to prove at trial; (2) regarding Brady, the government was: (a) ordered to turn over the interview notes of the four students who had previously been identified as providing information arguably favorable to the defendants, (b) reminded that Brady material is to be turned over as it is discovered, and (c) ordered to turn over Giglio material within its possession two weeks before the commencement of trial; and (3) in order to address any potential Bruton concerns, the government was directed to submit with its forthcoming motions in limine a redacted version of co-defendant Dudkin's statements that it will seek to introduce at trial.
The issues that remain ripe for the court's consideration are: (1) whether the items seized pursuant to 2003 DOL and 2004 DOE warrants should be suppressed; (2) whether information favorable to the defense in the possession of the Council on Occupational Education ("COE") must be produced by the government pursuant to its Brady obligations; and (3) whether the visa fraud count should be severed from this case, or, alternatively, whether Raykhman should be severed.
For the following reasons, defendants' motions are denied in their entirety.
The charges in the Indictment relate to a not-for-profit vocational training school, Centurion Professional Training ("Centurion" or "the school"), located in Brooklyn, New York. The school was established in 1998 by defendant Lekhtman to provide business and computer training courses. (Superseding Indictment dated August 14, 2008 ("Indict.") ¶ 9; Koenig Decl. ¶ 4--5.) Defendants Yelena Raykhman and Roman Dudkin were employed at Centurion.
Centurion participated in two governmental financial aid programs: the federal Pell Grant Program and the New York State Tuition Assistance Program ("TAP"). The federal Pell Grant Program, administered and funded by the DOE, provided financial aid grants for eligible students to help them pay for post-secondary education. The Pell Grants were transmitted directly to the educational institution in which the students were enrolled, and did not need to be repaid by the student. (Indict. ¶ 1.) In order to participate in the Pell Grant program, an institution was required to be accredited or approved by an appropriate agency,*fn3 and offer a program leading to an academic or professional degree, vocational certificate or other recognized educational credential. (Id. ¶ 2.) The institution also had to enter into a Program Participation Agreement with the DOE. The Program Participation Agreement conditioned participation on an institution's compliance with all applicable laws and regulations. Participating institutions were required to document student attendance and ensure that a student receiving a Pell Grant was enrolled in, and attending, an eligible program. (Id. ¶ 2.) Once the amount of a student's Pell Grant was determined, the educational institution applied for disbursement of funds from the DOE, and drew down the disbursed funds in stages during the academic year. (Id. ¶ 4.) Institutions were required to promptly refund Pell Grants to the DOE for students who withdrew from school. (Id. ¶ 5.)
The TAP Program, administered by the New York State Higher Education Services Corporation ("NYHESC"), is a state program providing need-based grants to eligible post-secondary students that the students do not need to repay. (Id. ¶¶ 6, 8.) The TAP program is partially funded by the DOE. (Id. ¶ 6.) Like the federal Pell Grant program, in order for an institution to participate in the TAP program, the institution was required to obtain accreditation or approval by an appropriate agency, and offer a program leading to a recognized educational credential. In addition, the institution had to enter into an Agreement to Participate with the NYSHESC. (Id. ¶ 7.) Only students enrolled in and attending an eligible program at a participating institution were eligible to receive TAP grants. (Id. ¶ 8.)
In October 2002, Centurion entered into a Program Participation Agreement with the NYHESC that enabled it to participate in the TAP program. (Id. ¶ 12.) On March 17, 2003, the DOE certified Centurion as eligible to participate in financial aid programs, including the Pell Grant Program, for eligible students in its Computer Programming/Client Server Technology Program (Koenig Decl. ¶ 11 & Ex. C). On March 27, 2003, Centurion entered into a Program Participation Agreement with the DOE, enabling it to participate in the Pell Grant Program. (Koenig Decl. ¶ 13 & Ex. C; Indict. ¶ 12.) On May 29, 2003, Centurion received approval from the DOE to receive Pell funds for its Business Office Management Program. (Koenig Decl. ¶ 14 & Ex. C.)
On November 6, 2003, agents from the DOL executed a search warrant at Centurion. According to the 2003 DOL warrant's supporting affidavit, the warrant was obtained pursuant to a DOL investigation into allegations that Centurion had fraudulently obtained federal funds provided under the Workforce Investment Act of 1998 ("WIA"), and fraudulently sponsored individuals for H1B1 work visas. (Koenig Decl. Ex. D ("2003 Aff.").) The execution of the warrant resulted in the seizure of over 38,000 pages of documents, including all the student academic, attendance, financial aid, and enrollment records Centurion was required to maintain as a TAP and Pell fund recipient. (Omnibus Motion at 7.)
On October 20, 2004, another warrant was executed at Centurion, this time by agents from the DOE. The warrant was obtained pursuant to an independent DOE investigation into allegations that Centurion had, inter alia, falsified its students' records in order to fraudulently obtain student aid funding. (Koenig Decl. Ex. G ("2004 Aff.").) The execution of this warrant resulted in the seizure of thirty-eight boxes of paper documents, as well as computer hard drives and other electronic storage media. (Omnibus Motion at 9; Koenig Decl. Ex. I.)
On August 14, 2008, the government obtained a five-count superseding indictment against the defendants, charging: (1) student aid fraud conspiracy; (2) student aid fraud; (3) theft of DOE funds; (4) visa fraud conspiracy; and (5) theft of DOL funds. The Indictment alleges, among other things, that defendants Lekhtman, Raykhman and Dudkin fraudulently obtained TAP and Pell funds by: (1) causing Pell funds to be drawn down for students who were not enrolled in and attending eligible courses at Centurion; (2) falsifying student attendance records and enrollment agreements by adding false attendance hours and courses to student files; (3) altering enrollment agreements; and (4) manipulating and falsifying other student records to make it appear that students were enrolled in and attending eligible programs at Centurion when in fact they were not. (Indict. ¶¶ 15--16.) The Indictment further alleges that defendants Lekhtman, Dudkin and Benimetsky conspired to submit false and fraudulent statements to the Immigration and Naturalization Service and DOL, claiming that Centurion sought to hire individuals as, inter alia, a computer software engineer and a communications ...