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United States v. Delgado-Ovalle

United States District Court, Tenth Circuit

December 30, 2013

The United States of America, Plaintiff,
v.
Jorge Delgado-Ovalle, Defendant.

MEMORANDUM AND ORDER

J. THOMAS MARTEN, JUDGE

The court has before it defendant Jorge Delgado-Ovalle’s Motion to Dismiss Indictment (Dkt. 139). After holding a hearing on the motion and reviewing the parties’ briefs, the court is prepared to rule.

I. Background

This case arises from the employment of undocumented persons by Advantage Framing Systems, Inc., a company in Spring Hill, Kansas.[1] The court summarizes the relevant facts alleged by the government. Advantage provided local builders and contractors with engineered floor, pre-built wall panel, and roof truss systems, as well as onsite framing erection labor. Defendants James Humbert, Kimberly Humbert, and Charles Stevens II were all owners of Advantage at all times relevant to this case.[2]

From 2005 until February 2013, the owners of Advantage agreed with the other defendants to form a conspiracy to employ undocumented persons not lawfully present in the United States. Hiring undocumented workers allowed Advantage to lower its operating costs by avoiding paying its share of Social Security, workers’ compensation, and unemployment insurance contributions. These savings, presumably, gave Advantage a very literal advantage over competitors, allowing it to place lower bids on contracts.

The remaining defendants, including Ovalle, are undocumented persons who allegedly conspired with the owners of Advantage to hire other undocumented workers. Advantage required its framing crew leaders, like Ovalle, to show proof of liability insurance coverage. After seeing proof of insurance, Kim Humbert would issue a check to the crew leader, who would pay the other undocumented workers in his crew-usually five or six other workers. Advantage’s bank accounts-maintained by the Humberts and Stevens-revealed that checks were issued to more than thirty-two crews for their framing work. Defendants Jose Ramon Caro-Corral, Jorge Uriel Delgado-Ovalle, Angel Arguello-Plata, and Dennis Ericson Portillo served as crew leaders responsible for cashing Advantage checks and paying their crews-which they knew were made up of persons unlawfully present in the United States.[3] Specifically, between April 4, 2011 and December 17, 2012, Advantage issued approximately $419, 688.95 in checks to Ovalle.

Advantage required Ovalle and other crew leaders to attend safety training meetings at its main business location in Spring Hill, Kansas. At one of these meetings, workers were told that if investigators from Occupational Safety and Health Administration (OSHA) conducted an on-site inspection, the workers should tell the investigators that they worked for a subcontractor rather than directly for Advantage. At one training meeting, the Humberts discussed how they practiced running a drill to plan for immigration officials showing up at the office. The Humberts remarked that the “white guys would have no clue what to do while everyone else ran and hid.”

Additionally, the government alleges that the Humberts and Stevens knew that certain workers had provided fictitious names and addresses on their employment documents. While marketing Advantage, James Humbert told a potential investor that an individual was making fraudulent identification documents for Advantage’s undocumented workers and that by the time the government realized his workers were using fake Social Security numbers, the workers were no longer employed by Advantage. The government alleges that Advantage issued checks to crew members who were known to be using fictitious names, including issuing checks to at least three different men using the alias “Jesus Gonzalez.”

On March 15, 2013, a grand jury charged Ovalle and the other defendants with offenses relating to Advantage’s scheme of hiring undocumented wokers. See Dkt. 1. Count one of the indictment charges all defendants with conspiracy under 18 U.S.C. § 371 to “harbor illegal aliens in the United States for commercial advantage and private financial gain, in violation of Title 8, United States Code, Sections 1324(a)(1)(A)(iv) and (a)(2)(B)(ii).” Counts two through eleven allege that the defendants violated 8 U.S.C. § 1324(a)(1)(A)(iv), (v)(II), (a)(2)(B)(ii) and 18 U.S.C. § 2 by “intentionally encourage[ing] aliens . . . for the purpose of commercial advantage and private financial gain, to reside in the United States, knowing and in reckless disregard of the fact that such residence was in violation of law.” Each count identifies a separate undocumented person the defendants allegedly encouraged to reside in the United States. Count thirteen alleges the defendants conspired to launder money in violation of 18 U.S.C. § 1956(a)(1)(B)(i) and § 1956(h), by conducting financial transactions with proceeds of harboring undocumented persons for commercial advantage and private financial gain, while knowing that the property involved in the financial transactions represented proceeds of unlawful activity. Counts fourteen through thirty-one allege that the defendants laundered money in violation of 18 U.S.C. § 1956(a)(1)(B)(i), by issuing checks involving the proceeds of harboring undocumented persons for commercial advantage and private financial gain, while knowing that the property involved in the financial transactions represented proceeds of unlawful activity.[4] The government also seeks forfeiture of any assets the defendants obtained through their crimes.

Ovalle moves to dismiss the indictment, arguing that none of the charges in the indictment allege a crime. The court held a hearing on the motion in Kansas City on November 5, 3013, where attorneys representing the government and Ovalle made oral arguments.

II. Legal Standard

“[R]ule 12 authorizes the district court to resolve before trial only those motions ‘that the court can determine without a trial of the general issue.’ ” United States v. Pope, 613 F.3d 1255, 1259 (10th Cir. 2010) (quoting Fed. R. Crim. P. 12(b)(2)). In a criminal case, the general issue is defined as evidence relevant to the question of guilt or innocence. Id. (internal citation and quotation marks omitted). “Rule 12 permits pretrial resolution of a motion to dismiss the indictment only when ‘trial of the facts surrounding the commission of the alleged offense would be of no assistance in determining the validity of the defense.’ “ Id. (quoting United States v. Covington, 395 U.S. 57, 60 (1969)).

At this stage, an indictment is judged solely for the sufficiency of its charges without regard to the strengths and weaknesses of the government’s case. United States v. Ailsworth, 873 F.Supp. 1450, 1460 (D. Kan. 1994) (citations omitted). Courts regard an indictment sufficient if it sets forth the elements of the offense charged, puts the defendant on fair notice of the charges against which he must defend, and enables the defendant to assert a double jeopardy defense. United States v. Blechman, 782 F.Supp.2d 1238, 1244 (D. Kan. 2011) (internal citations and quotation marks omitted). A court is not to look behind the indictment to see if it is supported by substantial evidence. Ailsworth, 873 F.Supp. at 1460 (citing Costello v. United States, 350 U.S. 359, 363 (1956)). “An indictment should be tested solely on the basis of the allegations made on its face, and such allegations are to be taken as true.” Id. (quoting United States v. Hall, 20 F.3d 1084, 1087 (10th Cir. 1994)). “On a motion to dismiss an indictment, the question is not whether the government has presented sufficient evidence to support the charge, but solely whether the allegations in the indictment, if true, are sufficient to establish a violation of the charged offense.” United States v. Todd, 446 F.3d 1062, 1067 (10th Cir. 2006) (internal citations omitted).

III. Analysis

The court starts by setting forth the specific charges in the indictment, as the word “harboring” has apparently led to some confusion. Next, the court addresses the charges alleging Ovalle “encouraged or induced” undocumented persons to reside in the United States with the knowledge that they were doing so unlawfully. Finally, ...


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