Harvey v. Carter

Full title: GEORGE R. HARVEY, JR., Plaintiff, v. DAVID CARTER, individually, and THE…

Court: United States District Court, D. Colorado

Date published: Mar 3, 2003

Civil Action No. 00-MK-2177 (MJW), (Consolidated with 01-MK-4518 (MJW)) (D. Colo. Mar. 3, 2003)

Opinion

Civil Action No. 00-MK-2177 (MJW), (Consolidated with 01-MK-4518 (MJW))

March 3, 2003

RECOMMENDATIONS ON:

MICHAEL WATANABE, Magistrate Judge

(1) Defendant David Carter's Motion to Dismiss Or, in the Alternative, Amended Motion for Summary Judgment (Docket No. 57);

(2) Defendant David Carter's Motion to Dismiss Plaintiff's First Amended Complaint or, in the Alternative, Motion for Summary Judgment (Docket No. 138);

(3) Defendant United States' Motion to Dismiss or, in the Alternative, Renewed Motion for Summary Judgment (Docket No. 59);

(4) Defendant United States' Motion to Dismiss Plaintiff's First Amended Complaint or, In the Alternative, Motion for Summary Judgment (Docket No. 137);

(5) Plaintiff's Motion for Sanctions Pursuant to Rule 11 and the Inherent Authority of the Court to Regulate the Conduct of Those Who Practice Before It (Docket No. 86);

(6) Defendants' Motion for Sanctions Pursuant to 28 U.S.C. § 1927 (Docket No. 109); and

(7) Plaintiff's Motion for Leave to File Second Amended Complaint Pursuant to Rule 15(a) (Docket No. 136)

MICHAEL WATANABE, Magistrate Judge

This case is before this court pursuant to an Order of Reference to Magistrate Judge issued by District Judge Marcia S. Krieger on May 21, 2002 (Docket No. 55), a Special Order of Reference to Magistrate Judge for Determination issued by Judge Krieger on July 26, 2002 (Docket No. 91), and a Special Order of Reference to Magistrate Judge issued by Judge Krieger on January 10, 2003 (Docket No. 146).

PLAINTIFF'S ALLEGATIONS

The operative pleading in this case is the Plaintiff's First Amended Complaint,¹ which was accepted for filing on September 10, 2002 (Docket No. 145), incorporates the original Complaint (Docket No. 1), adds factual allegations and a fourth claim for relief, and alleges the following.

1 Civil Case No. 01-MK-1518, George R. Harvey, Jr. v. David Carter, individually, and The United States of America, was consolidated with Civil Case No. OO-MK-2177, George R. Harvey. Jr. v. David Carter, individually, and The United States of America, on May 2, 2002 (Docket No. 53 in OO-MK-2177), upon plaintiff's motion in which he asserted that "[b]oth cases involves [sic] the same parties, the same action and the same events." (Docket No. 36 in OO-MK-2177; Docket No. 2 in 01-MK-1518). The Complaint in 01-MK-1518 raises the same Federal Tort Claims Act claims (Malicious Prosecution/Failure to Supervise and Malicious Prosecution/Failure to Train) raised in OO-MK-2177.

Plaintiff, George R. Harvey, Jr., is a resident of Telluride, Colorado, who, on November 3, 1998, was named in three counts of an Indictment returned by a federal Grand Jury in this District which charged him with conspiracy to engage in money laundering and conspiracy. That Indictment alleged that a government informant, Scott Revell a/k/a Scott Olesen (also referred to below as "Olson"), and an undercover government agent, Gary Bass, "stated to . . . Harvey that the currency was derived from the illegal sale of drugs and the income was not reported to the Internal Revenue Service."

Defendant David Carter, an agent of the Criminal Investigations Division of the Internal Revenue Service, testified before the Grand Jury. That testimony included the following questions and answers:

On July 10, 1996:

Q. [By Department of Justice attorney Eric Lisann] . . . and you have identified numerous places where the proceeds — or the cash, rather — is represented to be drug proceeds; is that correct?

A. That's correct.

Q. In both the dealings between Mr. [Serro] and Mr. Zanghi, and in the dealings between Mr. [Serro] and Mr. Harvey; is that right?

A. That's correct.

Q. . . . was it made clear to Mr. Harvey by the undercover agent that the cash was derived from criminal activity, that it was in fact drug proceeds?

A. It was made quite clear. On October 20, 1997:

Q. (By Lisann) Did Scott tell him specifically these were drug proceeds?

A. Yes, he did.

Q. During that conversation did Scott make it clear to . . . Mr. Harvey that this is drug money?

A. Yes, he does, yes.

. . . it was October 15, [1993] when they first met with George Harvey and . . . they were discussing ways to do the transaction and Scott informed George Harvey that the money was drug money, and that he needed a way to conceal his ownership of that money and did not want any of the paperwork coming back to his name so that it could be traceable to his name.

The above testimony constitutes material, false representations to the Grand Juries.² The meetings referred to in the testimony were all recorded, and none of the transcripts establish that Revell or Bass ever told Harvey that the money involved in the transaction came from the distribution of illegal drugs.

2 The grand jury investigation was started before one Grand Jury, but that Grand Jury's term e xpired before an indictment was presented to it. Therefore, on October 8, 1998, Department of Justice ("DOJ") attorney Eric Lisann began anew with another Grand Jury by summarizing testimony, playing tapes, presenting transcripts, and having transcripts read, in whole or in part, to the new Grand Jury (Defs.' Ex. A-41 — A48).

After the Indictment was returned, Harvey was taken into custody (citing the Order Setting Conditions of Release and Harvey Affidavit, Ex. A-2). Harvey was fingerprinted and placed behind bars in a jail cell. He voluntarily disclosed his assets to the government for purposes of applying for bail, and he was released on his own recognizance. There were, however, restrictions placed on his movements, and he was instructed not to leave the State of Colorado. In addition, he was instructed to advise the court, defense counsel, and the U.S. Attorney in writing immediately before any change in address or telephone number. He was also commanded to appear at all proceedings, surrender voluntarily for service of any sentence imposed, and appear in court for trial. If he failed to comply with these conditions of release, Harvey was subject to a fine of not more than $250,000 and imprisonment for not more than five years in addition to the sentence for any other offense determined at trial. If Harvey had not agreed with the conditions of release, the government would have kept him in custody until notified by the Clerk or other judicial officer.

On May 5, 1994, defendant Carter signed an Affidavit in which he stated "the proposed real estate transaction was not completed due to the withdrawal and action of the seller, George R. Harvey, Jr." (Ex. A-3).

On June 15-17, 1999, Revell stated "that if he had to, he would go directly to the defense and discuss his testimony with Harvey and Harvey's attorneys." (Ex. A-4).

The government was concerned that Revell's expected testimony would show that "the November 3, 1 993 conversation with Harvey and the informant's claim to have tape recorded the conversation and provided the tape recording to the FBI gave the defense a claim of Government misconduct in evidence handling and an appearance of withholding exculpatory evidence. (Ex. A-5)."³

3 This claim apparently is in reference to Harvey's claim that "[o]n November 3, 2002 [sic], (after drinking 4-5 martini's [sic] during the previous evenings [sic] conversation, [Harvey] called the undercover agent and left a two (2) minute message on his answering machine that [Harvey] did not want to complete the transaction, the [sic] he did not want to participate in any illegal transaction, and that he wanted to make it very clear his airport hanger could not be used for any illegal activities. . . . This telephone call is confirmed by Plaintiff's long distance phone bill. . . ." (Pl's Resp. to dispositive motions, Docket No. 88 at 7). Harvey further claims that "[a]fter receiving the message, the undercover agent called the government and discussed the message and gave the tape recording to an FBI Special Agent." (Docket No. 88 at 7). According to Harvey, "[o]n June 15 — 17, 1999, Defendant Carter stated in a Memorandum of Contact that the paid undercover informant for the first time disclosed the existence of the November 3, 1 993 tape and threatened to go to Plaintiff's defense attorney in the criminal matter and discuss his testimony about Plaintiff's withdrawal and giving the tape recording of Plaintiff's withdrawal and giving the tape recording of Plaintiff's withdrawal to Plaintiff. . . . On January 19, 2000, the undercover paid informant stated [to plaintiff's private investigator] That's not true, it [the disclosure of the November 3, 1993 tape] was long before that [June 15-17, 1999].'" (citing PL's Ex. A-2, Ex. 1) (Docket No. 88 at 7).

On June 18, 1999, which was the eve of trial, the government-moved to dismiss its case against Harvey.

Based upon the above allegations, Harvey raises the following four claims for relief:

(1) "Bivens Action" . . . "Carter's actions constitute an actionable violation of Harvey's Fifth Amendment constitutional rights as recognized in Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388 (1971)." (Emphasis added). "As a result of Carter's actions, Harvey suffered and will continue to suffer property damages due to loss of business, mental anguish, and emotional distress."

(2) a claim under the Federal Tort Claims Act ("FTCA") for "Malicious Prosecution/Failure to Supervise." "As a result of Carter's actions and the failure of the United States of America to properly supervise Carter's actions, Harvey was maliciously prosecuted and suffered, and will continue to suffer, property damages due to loss of business, mental anguish and emotional distress."

(3) a FTCA claim for "Malicious Prosecution/Failure to Train." "As a result of the United States of America to properly train its agent employee, Harvey was maliciously prosecuted and suffered, and will continue to suffer, property damages, mental anguish and emotional distress."

(4) a cause of action under the common law for malicious prosecution. "Carter's actions constitute an actionable violated of Harvey's Fourth Amendment constitutional right to be free from unreasonable search and seizure as recognized inBivens. . . ." (Emphasis added). "As a result of Carter's actions, Harvey has suffered and will continue to suffer property damages, loss of business reputation, mental anguish, and emotional distress."

Harvey seeks unspecified actual damages, exemplary damages, damages to reputation, damages caused by mental anguish and emotional distress, attorney fees, costs, and pre — and post-judgment interest.

PENDING MOTIONS

The court has been inundated with motions, notices, responses, replies, and voluminous exhibits, every page of which has been very thoroughly and carefully reviewed. Now before the court are the following motions: (1) Defendant David Carter's Motion to Dismiss or, in the Alternative, Amended Motion for Summary Judgment, which was filed on May 28, 2002 (Docket No. 57) (supported by a Memorandum — Docket No. 58); (2) Defendant David Carter's Motion to Dismiss Plaintiff's First Amended Complaint or, in the Alternative, Motion for Summary Judgment and Memorandum in Support, which was filed on September 26, 2002 (Docket No. 138);

(3) Defendant United States' Motion to Dismiss or, in the Alternative, Renewed Motion for Summary Judgment, which was filed on May 28, 2002 (Docket No. 59) (supported by a Memorandum — Docket No. 60); (4) Defendant United States' Motion to Dismiss Plaintiff's First Amended Complaint or, In the Alternative, Motion for Summary Judgment and Memorandum in Support, which was filed on September 26, 2002 (Docket No. 137);⁴ (5) Plaintiff's Motion for Sanctions Pursuant to Rule 11 and the Inherent Authority of the Court to Regulate the Conduct of Those Who Practice Before It, which was filed on July 18, 2002 (Docket No. 86), and which plaintiff later supplemented (Docket No. 94);⁵ (6) Defendants' Motion for Sanctions Pursuant to 28 U.S.C. § 1927, which was filed on August 1 6, 2002, and included a Response to Plaintiff's Supplement to His Motion for Sanctions (Docket No. 109);⁶ and (7) Plaintiff's Motion for Leave to File Second Amended Complaint Pursuant to Rule 15(a), which was filed on September 26, 2002 (Docket No. 136).⁷ The court now being fully informed, makes the following findings, conclusions, and recommendations on these seven motions.

4 With respect to these dispositive motions, defendants filed their Notice of Filing Exhibits in Support of Their Amended and Renewed Motions for Summary Judgment and in Support of Defendant United States' Motion to Dismiss (Docket No. 61) (Defs' Ex. A-1 to A-31), Defendants' Notice of Submission of Copies of Unpublished Opinions Cited in Their Motions to Dismiss or, in the Alternative, Motions for Summary Judgment and in Their Associated Memoranda (Docket No. 67), Defendants' Notice of Filing Additional Exhibits in Support of Their Amended and Renewed Motions for Summary Judgment and in Support of Defendant United States' Motion to Dismiss (Docket No. 85) (Defs' Ex. A-32 to A-37), Defendants' Notice of Errata (Docket No. 113), and Defendants' Notice of Supplemental Authority (Docket No. 132).
Plaintiff filed a Response to Defendants' Various Motion to Dismiss or, In the Alternative, for Amended and/or Renewed Summary Judgment (Docket No. 88), and a Response to Defendants' Motions to Dismiss Plaintiff's First Amended Complaint or, in the Alternative, Motion for Summary Judgment (Docket No. 143).
Defendant David Carter filed a Reply in Support of His Motion to Dismiss or, in the Alternative, Amended Motion for Summary Judgment (Docket No. 101), defendant United States filed a Reply in Support of its Motion to Dismiss or, in the Alternative, Renewed Motion for Summary Judgment (Docket No. 102), and the government filed Defendants' Second Notice of Filing Additional Exhibits in Support of Their Amended and Renewed Motions for Summary Judgment and in Support of Defendant United States' Motion to Dismiss (Docket No. 103) (Defs' Ex. A-38 to A-48).
In addition, plaintiff filed a Notice of Objection to Defendants' Exhibits Filed in Support of Their Various Summary Judgment Motions to the Extent They Contain Evidence that Cannot be Considered on a Motion for Summary Judgment (Docket No. 89), to which defendants filed a Response (Docket No. 99), and then plaintiff filed a Reply (Docket No. 116).
Defendants also filed a Response to Plaintiff's Proposed Stipulation of Facts (Docket No. 105), to which plaintiff filed a Reply (Docket No. 117).

5 Defendants filed a Response to Plaintiff's Motion for Sanctions (Docket No. 98), and plaintiff then filed a Reply (Docket No. 111).

6 Plaintiff filed a Response to Defendants' Motion for Sanctions Pursuant to 28 U.S.C. § 1927 (Docket No. 133), and the defendants then filed a Reply (Docket No. 142).

7 Defendants filed a Response to Plaintiff's Motion for Leave to File Second Amended Complaint (Docket No. 140), and plaintiff then filed a Reply (Docket No. 144).

DISCUSSION Motions to Dismiss or for Summary Judgment

Both defendants move to dismiss the Plaintiff's First Amended Complaint pursuant to Fed.R. 12(b)(6) or for summary judgment pursuant to Fed.R.Civ.P. 56.

For purposes of a motion to dismiss pursuant to Rule 12(b)(6), the court must accept all factual allegations in the complaint as true and resolve all reasonable inferences in plaintiff's favor. Morse v. Regents of the Univ. of Colo., 154 F.3d 1124, 1126 (10th Cir. 1998);Seamons v. Snow, 84 F.3d 1226, 1231-32 (10th Cir. 1996). A case should not be dismissed for failure to state a claim unless the court determines beyond doubt that plaintiff can prove no set of facts which entitles him to relief.Hishon v. King Spauldinq, 467 U.S. 69, 73 (1984);Conley v. Gibson, 355 U.S. 41, 45-46 (1957).

Furthermore, Rule 56(c) provides that summary judgment shall be granted "if the plea dings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "A party seeking summary judgment bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, interrogatories, and admissions on file together with affidavits, if any, which it believes demonstrate the absence of genuine issues for trial." Robertson v. Board of County Comm'rs of the County of Morgan, 78 F. Supp.2d 1142, 1146 (D. Colo. 1 999) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323; Mares v. ConAgra Poultry Co., 971 F.2d 492, 494 (10th Cir. 1992)). "Once a properly supported summary judgment motion is made, the opposing party may not rest on the allegations contained in the complaint, but must respond with specific facts showing the existence of a genuine factual issue to be tried. . . . These facts may be shown 'by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings by themselves'" Southway v. Central Bank of Nigeria, 149 F. Supp.2d 1268, 1273 (D. Colo. 2001). However, "[i]n order to survive summary judgment, the content of the evidence that the nonmoving party points to must be admissible. . . . The nonmoving party does not have to produce evidence in a form that would be admissible at trial, but '"the content or substance of the evidence must be admissible'" . . . Hearsay testimony that would be inadmissible at trial cannot be used to defeat a motion for summary judgment because 'a third party's description of a witness' supposed testimony is "not suitable grist for the summary judgment mill"' "Adams v. American Guarantee Liability Ins. Co., 233 F.3d 1242, 1246 (10th Cir. 2000). See Wright-Simmons v. City of Oklahoma City, 155 F.3d 1264, 1268 (10th Cir. 1998).

"Summary judgment is also appropriate when the court concludes that no reasonable juror could find for the non-moving party based on the evidence presented in the motion and response." Southway, 149 F. Supp.2d at 1273. "The operative inquiry is whether, based on all documents submitted, reasonable jurors could find by a preponderance of the evidence that the plaintiff is entitled to a verdict. . . . Unsupported allegations without 'any significant probative evidence tending to support the complaint' are insufficient . . . as are conclusory assertions that factual disputes exist." Id.; Robertson, 78 F. Supp.2d at 1146 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); quoting White v. York Int'l Corp., 45 F.3d 357; 360 (10th Cir. 1995)). "Evidence presented must be based on more than 'mere speculation, conjecture, or surmise' to defeat a motion for summary judgment." Southway, 149 F. Supp.2d at 1274. "Summary judgment should not enter if, viewing the evidence in a light most favorable to the non-moving party and drawing all reasonable inferences in that party's favor, a reasonable jury could return a verdict for that party." Id. at 1273.

Harvey's second, third, and fourth claims for relief are all expressly based upon alleged malicious prosecution. His first claim for relief is more conclusory in that it merely avers that "Carter's actions constitute an actionable violation of Harvey's Fifth Amendment constitutional rights as recognized in Bivens" . . . Given Harvey's factual averments, however, it would appear that the plaintiff is essentially claiming the Carter's actions resulted in a Fifth Amendment violation because probable cause did not support all of the necessary elements of the crimes charged in the indictment.

In his dispositive motions, defendant Carter never expressly addresses Harvey's Fifth Amendment claim contained in the first claim for relief. It appears, however, that Carter may have implicitly addressed that claim when arguing that "[c]ourts in the Tenth Circuit long have recognized that the only tort stemming from allegedly false testimony before a grand jury that may violate the Constitution is the tort of malicious prosecution," and "the only provision of the Constitution implicated by the tort of malicious prosecution is the Fourth Amendment's prohibition against unreasonable seizures." In his response to Carter's motions, Harvey never specifically mentions his Fifth Amendment claim.⁸

8 Harvey does, however, claim in his Response to the dispositive motions that two Tenth Circuit cases "recognize that there is a constitutional right to be free from malicious prosecution in the Tenth Circuit under the Fourth Amendment." (Docket No. 88 at 15) (emphasis added). In addition, Harvey contends that he has "alleged facts squarely on point to both" of these Tenth Circuit cases. (Docket No. 88 at 17).

In any event, Carter asserts that to the extent a claim based upon allegedly false grand jury testimony is actionable at all, a plaintiff must prove all of the elements of the tort of malicious prosecution under the law of the jurisdiction in which prosecution occurred and must also prove that as a result of the indictment returned by the grand jury, the plaintiff was "seized" within the meaning of the Fourth Amendment and that the seizure was "unreasonable." Carter contends that in this case, Harvey has not alleged any facts which, if true, would demonstrate that Carter made with malice the statements to the Grand Jury to which Harvey objects, that those statements caused the Grand Jury to indict Harvey, that the charges brought against Harvey were unsupported by probable cause, that Harvey was somehow "seized" within the meaning of the Fourth Amendment, and that such seizure was unreasonable within the meaning of the Fourth Amendment. In addition, Carter asserts that he is entitled to both absolute and qualified immunity.

Defendant United States asserts that Harvey's negligence claims are derivative of his malicious prosecution claims and that Harvey has not alleged facts which, if true, would sustain the absence of probable cause, causation, and malice elements of malicious prosecution. In addition, the United States asserts that it can be liable only to the extent that its officer also is liable for the underlying intentional tort. Furthermore, the United States argues that none of Harvey's claims are actionable under the FTCA because they all fall within the exception found in 28 U.S.C. § 2680(c), which provides that the FTCA does not apply to "any claims arising in respect of the assessment of tax. . . ."

Both the United States Supreme Court and the Tenth Circuit have observed that there is "an embarrassing diversity of judicial opinion on the question of whether a malicious prosecution claim is actionable under § 1983. . . ." Taylor v. Meacham, 82 F.3d 1556, 1560 (10th Cir. 1996) (quoting Albright v. Oliver, 510 U.S. 266, 270 n. 4 (1994)). The Tenth Circuit, however, has concluded:

that our circuit takes the common law elements of malicious prosecution as the "starting point" for the analysis of a § 1 983 malicious prosecution claim, but always reaches the ultimate question, which it must, of whether the plaintiff has proven a constitutional violation. Following Albright, in the § 1983 malicious prosecution context, that constitutional right is the Fourth Amendment's right to be free from unreasonable seizures.

Id at 1561 (citing Albright v. Oliver. 510 U.S. at 272-72).⁹ Taylor, 82 F.3d at 1561 n. 5. See Jocks v. Tavernier, 316 F.3d 128, 136 (2d Cir. 2003) (requirements of attending criminal proceedings and obeying the conditions of bail constitute a post-arraignment seizure for a § 1983 malicious prosecution claim);Lewis v. Rock, 2002 WL 31194994 (10th Cir. Oct. 3, 2002) (Malicious prosecution plaintiffs, who were each served with a summons to appear in court on misdemeanor charges, failed to put forth sufficient evidence that they were seized for purposes of the Fourth Amendment. The only deprivation of liberty sustained by one plaintiff was that he had to attend two trials, had to appeal his convictions after one of the trials, and was fingerprinted in connection with one of the summons. The only deprivation of liberty sustained by the other plaintiff was that she had to make one, possibly two, court appearances before the charge was dismissed); Technical Ordnance, Inc. v. United States, 244 F.3d 641, 651 (8th Cir. 2001) (Eighth Circuit noted that it had never held that the pretrial restrictions such as those in that case [forced to post bond, summoned to appear before court, and made to answer charges] constitute a Fourth Amendment seizure. Furthermore, the court could not say "that the Albright dictum amounts to a statement of clearly established law."),cert. denied, 534 U.S. 1084 (2002); Britton v. Maloney, 196 F.3d 24, 30 (1st Cir. 1999) ("Absent any evidence that [plaintiff] was arrested, detained, restricted in his travel, or otherwise subject to a deprivation of his liberty before the charges against him were dismissed, the fact that he was given a date to appear in court is insufficient to establish a seizure within the meaning of the Fourth Amendment."), cert. denied, 530 U.S. 1204 (2000); Gallo v. City of Philadelphia, 161 F.3d 217, 220 (3rd Cir. 1998) (While stating it was a "close question," found that the malicious prosecution plaintiff was "seized" as a consequence of a legal proceeding, namely, an indictment, posting $10,000 bond, having to attend all court hearings including his trial and arraignment, reporting to Pretrial Services on a weekly basis, and abiding by travel restrictions.); Murphy v. Lynn, 118 F.3d 938, 945 (2d Cir. 1997) (pretrial restrictions on travel and required attendance at court hearings constituted a seizure).

9 ln Taylor, the Tenth Circuit noted in a footnote:
As many courts have observed, in many ways Albright muddied the waters rather than clarified them. Albright's discussion about the Fourth Amendment governing pretrial deprivations of liberty is dicta, inasmuch as Mr. Albright never alleged a Fourth Amendment violation. Thus, the Supreme Court specifically avoided deciding whether a Fourth Amendment malicious prosecution claim would succeed.
Moreover, it is unclear how far the Fourth Amendment's protection against unreasonable "seizures" can reach in the pretrial context. In Albright, the petitioner, Mr. Albreight, had voluntarily submitted to the arrest process, and was released after he posted bail. The Supreme Court did not decide, as it did not need to, whether he remained effectively "seized" in that situation. Justice Ginsburg's concurrence suggests a theory under which a person is effectively "seized" for constitutional purposes as long as a prosecution is pending. . . .
In this particular case, however, the "seizure" issue is fairly straightforward, because Mr. Taylor remained in detention, and therefore effectively "seized," throughout the time period in question. arraignment after having been served with a criminal summons (Defs' Ex. A-39), and he was released on his own personal recognizance bond. (Defs' Ex. A-33; court tr. at 5). Harvey was subject to routine processing by the U.S. Marshal Service, which involved fingerprinting and collection of basic information concerning Harvey. (Defs.' Ex. A-39). The absence of certain annotations in Marshal's computer systems indicates that Harvey was not held in detention following this routine processing. (Defs.' Ex. A-39). In addition, despite Harvey's assertions in his Amended Complaint, the release papers and transcript of the hearing before Magistrate Judge Pringle indicate that no restrictions were placed on Harvey's travel. Harvey's release papers and Magistrate Judge Pringle's verbal directions merely contained the usual language about not committing any crimes while on release, requiring that Harvey notify the court and counsel of any change of address or phone number and that Harvey appear in court as directed, and advising Harvey of the statutory penalties if he failed to appear. (Defs.' Ex. 40 — Order Setting Conditions of Release; Ex. A-33 — court tr. at 6-7).
Nevertheless, this court finds it is unnecessary to address the issue of whether Harvey was effectively "seized" post-initial appearance/arraignment for constitutional purposes because as found in the text below, Harvey has not established the absence of probable cause.

In the instant case, Harvey voluntarily appeared for his initial appearance/

While this is a Bivens action against Carter, rather than a § 1 983 action, "section 1 983 suits and Bivens actions are conceptually identical, and federal courts frequently look to section 1983 to fill gaps left by Bivens." Buford v. Leek, 1993 WL 125412, *1 (10th Cir. Apr. 20, 1993) (quoting Grandbouche v. Clancy, 825 F.2d 1463, 1465 (10th Cir. 1987)). See Martin v. Sias, 88 F.3d 774, 775 (9th Cir. 1996) (§ 1983 and Bivens actions are identical except for the requirement of a state actor under § 1983 and federal actor under Bivens):Williams v. Hill, 74 F.3d 1339, 1340 (D.C. Cir. 1996) (bodies of law relating to § 1983 andBivens actions have been assimilated in most respects);Abella v. Rubino, 63 F.3d 1063, 1065 (11th Cir. 1995) ("[C]ourts generally apply § 1983 law to Bivens cases."):Tavarez v. Reno, 54 F.3d 109, 110 (2d Cir. 1995) ("Because the two actions share the same 'practicalities of litigation.' . . . federal courts have typically incorporated § 1983 law into Bivens actions.");Muhammad v. Moore, 760 F. Supp. 869, 870 (D. Kan. 1991) ("Actions under 28 U.S.C. § 1331, so-called Bivens actions, are considered generally analogous to actions brought under § 1983.").

With respect to defendant United States, "[t]he FTCA provides that the United States may be held liable 'under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.' 28 U.S.C. § 1346(b). Consequently, the court ha[s] to interpret and apply the tort law of the state of [Colorado] because all of the alleged wrongful acts occurred there. . . . Because the 'constitutional tort' of malicious prosecution is rooted in the Fourth Amendment, the proper role of state tort law is much less clear." Gordy v. Burns, 294 F.3d 722, 726 n. 3 (5th Cir. 2002) (citing Brown v. United States, 653 F.2d 196, 198-99 (5th Cir. 1981)).

"Under Colorado law, the tort of malicious prosecution has six elements: (1) a criminal case was brought; (2) the criminal case was brought as a result of statements made by the defendant; (3) the criminal case ended in the plaintiff's favor; (4) the defendant's statements against the plaintiff were made without probable cause; (5) the defendant was motivated by malice towards the plaintiff; and, (6) the plaintiff incurred damages." Anthony v. Baker, 808 F. Supp. 1523, 1526 (D. Colo. 1992). See Walford v. Blinder, Robinson Co., 793 P.2d 620, 623 (Colo.App. 1990) (citing Montgomery Ward Co. v. Pherson, 272 P.2d 643 (Colo. 1954)); Lounder v. Jacobs, 205 P.2d 236, 238 (Colo. 1949).

In this case, the Indictment, as it relates to Harvey, charged the following:

COUNT 1 CONSPIRACY TO COMMIT MONEY LAUNDERING

12. Beginning on or about August 23, 1993, and continuing on or about November 4, 1993, within the District of Colorado, and elsewhere, the Defendants,

ANTHONY "TONY' SERRO, JOSEPH PAUL ZANGHI, JR., and GEORGE RAYMOND HARVEY, JR.,

did unlawfully, willfully and knowingly combine, conspire, confederate and agree together and with each other, and with others known and unknown to the grand jury, to commit an offense under Title 18, United States Code, Section 1956, as follows:

to knowingly conduct and attempt to conduct a financial transaction involving transfer of title and the exchange of monetary instruments, which transaction involved what was represented to be currency earned from the unlawful sale and distribution of a controlled substance, and which representation was believed by the defendants to be true, with the intent that the transaction was designed in whole or in part to conceal and disguise the nature, location, source, ownership, and control of the currency earned from the unlawful sale and distribution of a controlled substance, in violation of 18 U.S.C. § 1956(a)(3)(B).

MANNER AND MEANS

The manner and means by which the defendants carried out the conspiracy are as follows:

13. Defendant SERRO offered to launder Olesen's currency by acting as a broker between Olesen and individuals SERRO believed could launder the currency by investing it in property and businesses in Telluride, Colorado. Olesen was an informant under the direction of the Federal Bureau of Investigation and the Internal Revenue Service. Defendant SERRO approached both defendant HARVEY and defendant ZANGHI and advised them that he and Olesen wished to launder large amounts of Olesen's currency through financial transactions that would conceal Olesen's currency, and the source of this currency, from the Internal Revenue Service and other agencies of the United States.

. . .

15. Defendant HARVEY proposed laundering $850,000 of Olesen's currency by selling property in Telluride called Knoll Estates to a corporation formed for Olesen at HARVEY'S direction called Red Hawk Asset Management, Inc. HARVEY was both listing agent for, and part owner of, Knoll Estates. HARVEY directed Olesen to use a false name on the articles of incorporation for Red Hawk in order to further conceal Olesen's connection to the currency. Defendant HARVEY also proposed to defendant SERRO and Olesen that Olesen loan him $300,000 currency to be collateralized by other property owned by HARVEY.

16. Olesen and Gary Bass, a federal law enforcement officer working in an undercover capacity, stated to defendants SERRO, ZANGHI, and HARVEY that the currency was derived from the illegal sale of drugs and the income was not reported to the Internal Revenue Service.

OVERT ACTS

In furtherance of this conspiracy and to effect the objects thereof, the following overt acts, among others, were committed in the District of Colorado:

. . .

19. On September 14, 1993 defendant SERRO apprised Olesen of his dealings with defendant HARVEY and explained that Harvey wanted to invest Olesen's currency and "filter it through him so nobody would see it." Defendant SERRO stated that he also told defendant HARVEY that Olesen "didn't want to show anything to the IRS."

20. Later on September 14, 1993, defendant SERRO organized a meeting with defendant HARVEY and Olesen to propose to Olesen HARVEY's plans for investing approximately $700,000 of Olesen's currency through what defendant HARVEY called a "dummy" corporation that Harvey would create through his attorney Lee Darling. HARVEY's proposal included the purchase by Olesen of property in Knoll Estates and a personal loan by Olesen of $300,000 to HARVEY collateralized by property personally owned by HARVEY. Defendant HARVEY stated he understood Olesen had earned the currency and that Olesen's currency was "undeclared". Defendant HARVEY instructed Olesen "you got to be some fictitious corporation to hide you." Defendant HARVEY explained he could handle the entire transaction for Olesen because "I've got the people out there that can cover our ass." Olesen told defendant HARVEY he was concerned about "jail."

21. Between September 14 and September 16, 1993 defendant HARVEY retained the services of attorney Lee Darling to reserve corporate names for the "dummy corporation" HARVEY proposed to Olesen in their September 14 meeting.

22. On September 16, 1993 defendant SERRO asked Olesen to specify the size of a safe deposit box for defendant HARVEY to obtain to store Olesen's currency.

. . .

25. On October 28, 1993 defendants SERRO and HARVEY met with Olesen and Gary Bass and HARVEY produced a completed "purchase agreement and receipt for earnest money" for the purchase of six lots in Knoll Estates. HARVEY presented two corporate names, including Red Hawk, that he had selected for use by Olesen in purchasing property with currency. HARVEY solicited and received $5,000 currency in earnest money and $1,000 currency for legal fees.

27. On or about October 29, 1993 defendant HARVEY opened with Marty Bregman, owner of Telluride Mountain Title, three independent "title insurance orders". One such order was for property at Knoll Estates to be sold to Red Hawk for $850,000 and the other two orders related to property personally owned by HARVEY to be pledged as collateral by HARVEY to Olesen in exchange for a loan of at least $300,000 currency from Olesen.

28. On November 1, 1993 defendant HARVEY instructed Olesen to "make up" a "fake name" with an address "out of the state of Colorado" to use on corporate documents for Red Hawk Asset Management.

29. On November 2, 1993 defendant HARVEY instructed Olesen to give his "phony name" to his office employee for communication to attorney Lee Darling.

. . .

31. On November 4, 1993 defendant HARVEY met with Bregman and Olesen to complete the planned financial transactions.

All in violation of Title 18, United States Code, Section 1956(h).

COUNT 2 [Conspiracy to defraud the United States] OBJECTS OF CONSPIRACY

32. Beginning at approximately August 23, 1993 and continuing through November 4, 1993, within the State and Federal District of Colorado and elsewhere,

ANTHONY "TONY" SERRO, JOSEPH PAUL ZANGHI, JR., And GEORGE RAYMOND HARVEY, JR.

defendants herein, did unlawfully, willfully, and knowingly conspire, combine, confederate, and agree, together and with each other and with other individuals both known and unknown to the Grand Jury, to commit the following offense against the United States:

To defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful Government functions of the Internal Revenue Service of the Treasury Department by deceit, craft, trickery, or means that are dishonest, in the ascertainment, computation, assessment, and collection of the revenue to wit, individual income taxes and the source of income upon which this tax is computed.

MANNER AND MEANS

33. Paragraphs 13 through 16 are hereby incorporated by reference.

OVERT ACTS

In furtherance of this conspiracy and to effect the objects thereof, the following overt acts, among others, were committed in the District of Colorado:

34. Paragraphs 17 through 31 are hereby incorporated by reference.

All in violation of Title 18, United States Code, Section 371.

COUNT 3 MONEY LAUNDERING

Paragraphs 13, 15-22, 25, 27-29, and 31 are hereby incorporated by reference.

On or about August 23 to November 4, 1993, in the District of Colorado, defendants, ANTHONY "TONY" SERRO, and GEORGE RAYMOND HARVEY, JR., with the intent to conceal and disguise the nature, location, source, ownership, and control of currency believed to be the proceeds of a specified unlawful activity, to wit, unlawful distribution of a controlled substance, did knowingly conduct and attempt to conduct a financial transaction affecting interstate or foreign commerce involving such currency represented by Scott Olesen, acting at the direction of a federal law enforcement officer authorized to investigate violations of the money laundering laws, and Gary Bass, a federal law enforcement officer authorized to investigate violations of federal criminal money laundering and tax laws, to be proceeds of the unlawful distribution of a controlled substance.

In violation of Title 18, United States Code, Sections 1956(a)(3)(B) and 2.

(Deis.' Ex. A-1, Indictment, Criminal Case No. 98-CR-410-N, filed November 3, 1998).

Defendants raise several grounds for relief in their dispositive motions. However, not all of these bases need to be addressed herein because this court finds that Harvey has not established the absence of probable cause and thus recommends that summary judgment be entered for the defendants. "The existence of probable cause is a complete defense."Anthony v. Baker, 808 F. Supp. at 1526. "The defendant in a suit based on malicious prosecution may have probable cause for the filing of the charges even though subsequent events may prove such charges to be erroneous. The existence of probable cause is alone sufficient to relieve a defendant of a charge of malicious prosecution."Montgomery Ward, 272 P.2d at 646. "The probable cause standard requires evidence sufficient to persuade a person of ordinary prudence and caution to have a reasonable belief that the defendant committed the crime charged." People v. Moyer, 670 P.2d 785, 791 (Colo. 1983) (en banc). "Whether a given state of facts or circumstances amounts to probable cause for the prosecution, or the contrary, is a question of law for the court."Montgomery Ward, 272 P.2d at 646.

Defendants correctly assert that although the Grand Jury charged Harvey with conspiring to defraud the United States in two ways (Count 2 — concealing income from the IRS, and Counts 1 and 3 — concealing from the Government the source of the cash obtained through illegal drug sales), the testimony to which Harvey objects in his First Amended Complaint relates only to the second — whether he was told that the currency came from the sale of drugs. In the First Amended Complaint, Harvey has not challenged the veracity of any of the evidence presented to the Grand Jury that concerns Count 2, the conspiracy to conceal income from the IRS, which does not require that the defendant know that the currency was the proceeds of the unlawful distribution of a controlled substance. Furthermore, Harvey has not alleged in his First Amended Complaint that probable cause was lacking with respect to Count 2.

In any event, after a very thorough, exhaustive review of the transcripts of the proceedings before the indicting Grand Jury, the transcripts of testimony heard by the first Grand Jury which were made available to the indicting Grand Jury, and the transcripts of the recorded conversations presented to the indicting Grand Jury, this court finds first, that the evidence presented to the indicting Grand Jury supports the challenged statements made by defendant Carter, and second, that even if the court were not to make such a finding, if the challenged statements were excluded, the unchallenged information presented to the indicting Grand Jury was sufficient to constitute probable cause to believe that Harvey committed all three counts of the Indictment. See Wolford v. Lasater, 78 F.3d 484, 498 (10th Cir. 1996) (Circuit agreed that the unchallenged information presented to the grand jury was sufficient to demonstrate a substantial possibility that the plaintiff committed the crimes charged.). See also United States v. Washington, 1998 WL 777072, *4 (10th Cir. Nov. 4, 1998) (In a decision on a direct appeal of a criminal conviction, the Tenth Circuit noted that it has "allowed an indictment to stand even in cases of perjured testimony before a grand jury if independent evidence exists to support the charges on the assumption the grand jury would have returned the indictment without the perjurious testimony.") (citing United States v. Pino, 708 F.2d 523, 530 (10th Cir. 1983)).

Harvey specifically alleges in the First Amended Complaint that none of the transcripts establish that Olson or Bass ever told him that the money involved in the transaction came from the distribution of illegal drugs. A review of the transcripts of the Grand Jury proceedings, however, shows that the indicting Grand Jury was played a tape of and presented with a transcript of a conversation which would provide reason for them to believe that Harvey was made aware of circumstances from which a reasonable person would infer that the money in question did derive from drug sales. The transcript of an October 28, 1993, meeting among Harvey, Olson, and Bass (who was actually IRS agent Gary Taylor) sets forth the following, very telling exchange:

. . .

Bass: Does anyone know about our deal?

Harvey: No, never.

Bass: These people [the other owners of the property] don't know anything.

Harvey: Just a routine closing.

Bass: They haven't been brought in on the —

Harvey: No one —

Bass: — matters previously discussed?

Harvey: If you might think about it, it is dumb. I mean, I — you know, it's the military. It's on a need-to-know basis. They don't need to know.

Olson: Right.

Harvey: There's a lot of what I do for a living as a standard practice that requires me to keep my mouth shut.

Bass: And if they did know, what would they do?

Harvey: I don't know. If they knew that it was to be paid in cash, I think they'd — hey, just another eccentric, rich person.

Bass: Not concerned about the cash. People deal in cash all day. It's legal tender as you've been told. It's the source of the cash, if your people knew it comes from drugs, I mean, what the hell. I mean, are they going to —

Harvey: Look at it this way —

Bass: — pick up the phone here, or what?

Harvey: — I don't know that.

Bass: Make sure.

Harvey: You understand what I'm saying?

Bass: I understand exactly what you're saying.

Harvey: What I'm saying is, I don't know. I can tell that straight, truthfully, to anybody on this planet. I have absolutely no —

Bass: Out of this room, you don't know.

Harvey: Yes.

Bass: You see what I'm saying?

Harvey: Yes.

Bass: Out of this room, you don't know.

Harvey: Well if you look at it really, really technically, I really don't know.

Olson: Technically, he's got a point. Right? Well, right?

Bass: I just don't want any problems.

Olson: I know.

Harvey: I know. I'm just trying to — point is, if somebody asks me point blank, I don't know shit. I really don't.

(Defs.' Ex. A-44, Ex. 1, Grand Jury Ex. DE-2 at 54-55) (emphasis added).

Although in his Response Harvey challenges the veracity of the transcripts of the recordings made by Olson, the defendants correctly note in their Replies that Harvey specifically confirmed during his own Grand Jury testimony that the above-quoted statements were made to him:

Q. [by DOJ attorney Lisann] Could you repeat the question that was asked on the tape, so that I can be sure you heard it?

A. I think it said, Would your people be upset if they knew the source of the cash was drugs?

Q. And that's your voice on the tape, isn't it?

A. That was — I think that was Scott's voice.

Q. But you recognized your voice just prior to that in the conversation?

A. Yes. (Tape playing.)

Q. Is that your voice on the tape, just to be sure?

A. One of the voices, of course, is.

Q. And you recognized the other voice as Scott's?

A. I think so.

Q. And you clearly stated that — the question was put to you, What would your people do if these people knew it was drug money? Do you recall that?

A. Yes.

(Defs.' Ex. A-44, Ex. 1, Grand Jury Ex. DE-2 at 22 — 24) (emphasis added).

The court notes that during a June 16, 1999, trial preparation conference in Harvey's criminal case, at which time Harvey's renewed motion to dismiss was denied, Judge Nottingham stated, "It appears to me that a jury could find that Mr. Harvey attempted to remain knowingly ignorant of all of this."¹⁰ (Defs.' Ex. A-3, court tr. at 17). This court believes that "knowingly ignorant" is an apt characterization.

10 Judge Nottingham stated:
I find no basis on what's been shown to me so far that there was a lie before the Grand Jury. It is true that some of the questions, if they had been objected to and if a judge had been present, would probably have been sustained. They would have the objections sustained in part because the agent is testifying to inferences. The agent is testifying in — as a summary witness, in effect. I do not understand him to be saying that the informer told the defendant, Mr. Harvey, in haec verba, in so many words, that these were drug proceeds. I understood him to be saying to the Grand Jury that Mr. Harvey was given information from which he could and should have known that these were drug proceeds and that these were hidden from the IRS.
So I don't find evidence sufficient for the Court to conclude that Agent Carter knowingly testified falsely before the Grand Jury. I don't find the evidence sufficient at this juncture to conclude that the prosecution participated in the knowing presentation of perjured testimony.
I suspect that this will be what the argument at trial is about. It is for a jury to decide what Mr. Harvey knew. And it can, as usual, draw that conclusion from circumstantial evidence and on the basis of inferences from what Mr. Harvey was told.
From what I see and what has been pointed out to me on this very limited record, it appears to me that a jury could find that Mr. Harvey attempted to remain knowingly ignorant of all of this. If that is the case, that is sufficient for the jury to convict.
(Defs.' Ex. A-3, court tr. at p. 16-17) (emphasis added).

The telling excerpt quoted above was by itself sufficient to provide reason for the indicting Grand Jury to believe that Harvey was made aware of circumstances from which a reasonable person would infer that the money in question did derive from drug sales. However, the indicting Grand Jury was also read Carter's previous Grand Jury testimony in which he related a conversation during which the undercover agent asked Harvey if Harvey would be willing to let his airplane hanger be used to store 300 pounds of marijuana that was being flown into Telluride. (Defs.' Ex. A-42, Ex. 1 A, Grand Jury Ex. DC-1 at 35-36). When Harvey testified before the first Grand Jury (the transcript of which was read to the indicting Grand Jury), he acknowledged that Olson proposed to use Harvey's airplane hanger in Telluride to fly in "dope." (Defs.' Ex. A-44, Ex. 1, Grand Jury Ex. DE-1 at 39-41). While Harvey claims he did not agree to Olson's request to use the hanger, Olson's proposal that he be allowed to use the hanger for that purpose would also provide the indicting Grand Jury with reason to believe that Olson was a drug dealer and thus that the source of the very large sums of currency Olson was seeking to invest derived from drug sales. Harvey also acknowledged in his Grand Jury testimony that during a conversation with Olson, Harvey stated that he had smoked "dope" with the sheriff. (Defs,' Ex. A-44, Ex. 1, Grand Jury Ex. DE-1 at 38).

In addition, Anthony Serro testified before the first Grand Jury with regard to the knowledge that Scott Olson was a drug dealer. The transcript of that testimony was read (except for the advice of rights) and provided to the indicting Grand Jury. (Defs.' Ex. A-42, Ex. 1B). The relevant sections are as follows:

Q: [by DOJ attorney Eric Lisann] What did George [Harvey] say when he was told that this cash was drug proceeds? Were you present when he was told this?

A. It wasn't explicitly said that — basically, George would explain that he talked to his attorney and a tax attorney, and the tax attorney said it was legal tender. It was legal cash. There was no reason why you couldn't put it through the system.

Q. Did George tell you to tell Scott that he shouldn't state he was a drug dealer, that he should state he was a car salesman?

A. We originally came to the conclusion that Scott was a car dealer, so George felt that Scott should leave it at that. I mean, we alluded that he's a car salesman. He didn't want to know anything else. He was putting blinders on. He wanted to leave it as a car dealer.

Q. But he [Harvey] was doing more than putting blinders on, was he not, because you were in fact present when Scott and George [Harvey] discussed the fact that Scott was a drug dealer, isn't that correct?

A. Correct.

Q. At that time, did George indicate he had any problem with that concept?

A. No.

Q. Did he in fact indicate a desire to do more business with Scott?

A. Yes, he did.

. . .

Q: [by Grand Juror] Did you know that it was drug money before Mr. Harvey or Mr. Zanghi knew?

A. It was all known within that one or two days. It came out. We all made our own opinions on where it came from, but it was never outright said it was dope money until that September day. Everybody was aware of it thereafter, and they still wanted to go through with it.

(Defs.' Ex. A-42, Ex. 1 B, Grand Jury Ex. DE-1 at 14-15, 42) (emphasis added).

In addition, Martin Bregman, who was the head of the title company being used in connection with the proposed real estate transactions, testified before the first Grand Jury concerning the source of the cash. According to the transcript of the indicting Grand Jury's proceedings, the transcript of Bregman's testimony was provided to the indicting Grand Jury, and Lisann read certain portions of that testimony to the indicting Grand Jury, including the following questions and answers:

Q. Did Scott discuss with you his concerns that the source of the cash not be disclosed?

A. He made it obvious that the sources of the money were illegal and that it was evident from his discussion that the money that he was going to be using would be — at least he was saying it was going to be illegal money.

Q. Did he say it would be drug money, in fact?

A. I think so.

Q. Did Mr. Harvey express any surprise at this revelation?

A. I can't remember.

Q. Were you surprised?

A. Yes, I was very startled and taken back.

Q. Did you express that to anybody?

A. No, I didn't.

(Deis.'Ex. A-46, Ex. 1 at 4-5).

It appears from his Response¹¹ that Harvey challenges the existence of probable cause in part based upon his claims that only Carter's testimony was presented to the indicting Grand Jury, that that Grand Jury did not review the evidence presented by the defendants, and that in any event, that evidence was "altered" or "tainted." Harvey contends that "[t]he government wants the Court to believe that Grand Jury 98-1 based it's [sic] decision to indict on a range of 'independent evidence.' On this Record, however, there is no factual basis that any evidence, other than the testimony of Defendant Carter, was presented to Grand Jury 98-1. (See Exhibit A-17)." (Docket No. 88 at 5). Nevertheless, Harvey then claims "[t]he only evidence on the Record presented to Grand Jury 98-1 is a forty-nine (49) minute transcript that is thirty-eight (38) pages long. Mr. Harvey is mentioned on nineteen (19) of the thirty-eight (38) pages. . . . (See Defendants' Exhibit A-17)." (Docket No. 88 at 5) (footnote omitted). Harvey asserts that there is no evidence on the record that transcripts were actually given to the Grand Jury and that there is no evidence on the Record that someone read these "transcripts" to the Grand Jury. (Docket No. 88 at 5, n. 5).

11 The court notes that Harvey's Response and other papers are annoyingly replete with improper usage of plurals and possessives, e.g., "it's" as a possessive, In addition, his Response and Motion for Sanctions are also deficient because in both he references 44 cases that purportedly support one of his arguments, but he actually cites only five of them. Apparently plaintiff's counsel is of the belief that the court and defense counsel are supposed to run his WestLaw search in order to see what cases he located that are allegedly on point.

Based upon the transcripts of the indicting Grand Jury's proceedings, however, these allegations are baseless.¹² This court has carefully reviewed those Grand Jury transcripts (Defs.' Ex. A-41, A-42, A-43, A-44, A-45, A-46, A-47, and A-48). They indicate that the prosecutor, DOJ attorney Lisann, at the very least presented the indicting Grand Jury with not only Carter's previous Grand Jury testimony (which, according to the transcript of the indicting Grand Jury's proceedings, was read to the indicting Grand Jury by Carter himself),¹³ but also the transcripts of the prior Grand Jury testimony of Anthony Serro (which, according to the transcript of the indicting Grand Jury's proceedings, was read to the indicting Grand Jury — except for the advice of rights — by IRS Criminal Investigator Dean Ellison),¹⁴ plaintiff George R. Harvey, Jr. (which, according to the transcript of the indicting Grand Jury's proceedings, was also read to the indicting Grand Jury by Ellison),¹⁵ Martin Bregman (some of the questions and answers of which were read to the indicting Grand Jury by Lisann),¹⁶ Lee Darling (the Denver attorney who prepared the corporate papers at Harvey's request) (many of the questions and answers of which were read to the indicting Grand Jury by Lisann),¹⁷ bank president Bill Dodge,¹⁸ and Bill Roberts (Harvey's attorney in the instant action) (many questions and answers of which were read to the indicting Grand Jury by Lisann),¹⁹ as well as the transcripts of at least two tapes of conversations, the tapes of which were also played to the indicting Grand Jury. (Defs.' Ex. A-44, Ex. 1, Grand Jury Ex. DE-2; Defs.' Ex. A-45, Ex. 1, Grand Jury Ex. DE-3).

12 In an Order issued today, this court is denying the Plaintiff's Motion for Limited Discovery Compelling the Government [to] Produce the Grand Jury Minutes of Grand Jury 98-1 to Show the Evidence the Grand Jury Actually Reviewed, which was filed on August 27, 2002 (Docket No. 121). Given the clear indications in the Grand Jury transcripts that Lisann presented the indicting Grand Jury with the various transcripts noted above, there is no basis for authorizing plaintiff's fishing expedition.

13 See Defs.' Ex. A-42, Ex. 1A at 4 Grand Jury Ex. DC-1.

14 See Defs.' Ex. A-42, Ex. 1 B at 4-5 Grand Jury Ex. DE-1.

15 See Defs.' Ex. A-44, Ex. 1 at 4 Grand Jury Ex. DE-1; Defs.' Ex. A-45, Ex. 1 at 4.

16 See Defs.' Ex. A-46, Ex. 1 at 3-9.

17 See Defs.' Ex. A-46, Ex. 1 at 9-15.

18 See Defs.' Ex. A-46, Ex. 1 at 15-18.

19 See Defs.' Ex. A-46, Ex. 1 at 18-27.

Lisann told the indicting Grand Jurors that "[w]e're not going to have time to read all of the transcripts. We have got them copied, so they are all available to you. I'm going to distribute them and highlight certain portions of them that I have notes on to kind of help out where we were. And I think these are just the main things." (Defs.' Ex. A-46, Ex. 1 at 3). When Lisann started with Bregman's testimony, he specifically referred to the transcript, stating "Let's go directly to page 9 and 10. . . ." (Defs.' Ex. A-46, Ex. 1 at 4). Later, Lisann reached Darling's testimony, at which point he stated, "All right. I'm passing around now the grand jury testimony of Margery Lee Darling. And I'll summarize that as well. . . ." (Defs.' Ex. A-46, Ex. 1 at 9). Lisann then reached Dodge's testimony, at which time Lisann stated, "And we also heard from the president of the Bank of Telluride, Bill Dodge. And I'll pass that around. Should anybody want to read all of these transcripts, they are here, and they are available, as are the transcripts Agent Carter testified to. All of those transcripts are available. What we're trying to do is focus on the key pieces of evidence that would support the indictment." (Defs.' Ex. 46, Ex. 1 at 15). When Lisann reached attorney Roberts, he said, "We also heard from Bill Roberts, who is mentioned on the tape. So I will pass around Mr. Robert's testimony. . . ." (Defs.' Ex. 46, Ex. 1 at 18). At the end of that particular Grand Jury session, one of the Grand Jurors asked Lisann, "Do you want all of these back today?" (Defs.' Ex. 46, Ex. 1 at 29). Lisann responded, "Since it's grand jury material, it can't leave the room. What I would like for you to do is if you get any breaks, you will have the opportunity to read it, because those are the complete transcripts of everything anybody said." (Defs.' Ex. 46, Ex. 1 at 29). See Defs.' Ex. 43, Ex. 1 (Lisann said to the indicting Grand Jury, "Also we'll summarize their transcripts and we will make all of their transcripts available to you.").

In his Response, Harvey also "DISPUTES the accuracy and truthfulness of any Independent evidence' alleged to have reviewed by . . . the Grand Jury that returned an indictment." (Docket No. 88 at 3). Harvey supports this allegation by a footnote in which he claims that one of the government's exhibits, A-18, "is a fabrication. Defendants' [sic] have inserted Plaintiff into a conversation when he was not present. . . . Plaintiff is not introduced into the conversation until page thirteen (13) of the 'transcript.' However Defendants' [sic] 'transcribed' Plaintiff as present in a conversation that takes place on pages five (5) through seven (7). . . ." (Docket No. 88 at 3, n. 4). Later in his Response, Harvey boldly contends that "[e]ven if the government introduces evidence for the first time on Reply, the transcripts and other evidence is tainted." (Docket No. 88 at 5).

It is readily apparent, however, that the sole example Harvey gives to establish alteration fabrication of the transcripts was merely a clerical exhibit assembly error. As explained by the defendants, the page complained of by Harvey is marked as "Page 7 of 38" and was submitted as part Exhibit A-18, which contains 39 pages. That page is identical to the document included as page 7 in Exhibit A-20 and was obviously mistakenly included in Exhibit A-18. Aside from this one example, Harvey's claims of transcript alteration/fabrication are conclusory and nothing more than speculation, conjecture, or surmise, which are insufficient to defeat a motion for summary judgment. Elsken v. Network Multi-Family Sec. Corp., 49 F.3d 1470, 1476 (10th Cir. 1995) ("Conclusory allegations that are unsubstantiated do not create an issue of fact and are insufficient to oppose summary judgment. . . ."); Southway v. Central Bank of Nigeria, 149 F. Supp.2d 1268, 1274 (D. Colo. 2001) ("Evidence presented must be based on more than 'mere speculation, conjecture, or surmise' to defeat a motion for summary judgment."). Furthermore, as noted above, Harvey himself authenticated the key transcript containing Bass's statement concerning the source of the cash.

Although not expressly raised in the First Amended Complaint, in his Response Harvey also seems to assert that there was no probable cause because "[a]t no time did Plaintiff state that the IRS currency transaction reports would not be filed. . . . This is confirmed by the government's own 'transcripts.' . . ." (Docket No. 88 at 19). The defendants, however, correctly respond that the Indictment does not mention currency transaction reports and that Count II (the conspiracy to defraud charge) was not based upon an intent by Harvey and his co-conspirators to avoid filing such reports. (Docket No. 101 at 9; Docket No. 102 at 6). Rather, defendants correctly state that "the basis for the conspiracy charged in Count II of the indictment was that Harvey and his co-conspirators intended, and attempted, to create and use a phony corporation ('Red Hawk Asset Management, Inc.') and a fake name ('Barry Seale') for a non-existent corporate officer in order to conceal from the IRS Revell's identity as the source of the currency to be used to invest in certain real properties." (Docket No. 101 at 9; Docket No. 102 at 6).

This court finds that there was probable cause for Count II. With regard to Harvey's suggested use of a fake name and signature on the corporate papers, in a tape played to the indicting Grand Jury, the following exchange took place:

Harvey: Okay, you must know the problem by now.

Olson: Yeah, I heard. Yeah, Tony just called me. I said I'm working on it. So I guess, you know . . . Do you just want to make one up or you want me to make one up or what?

Harvey: I think you can.

Olson: Yeah, I . . .

Harvey: I think, you know, I won't be so crass, but . . .

Olson: I talked to Gary . . .

Harvey: I think you can make up a name. Let me, somewhere or another somebody's [g]ot to notarize that name but I think you can solve that. Hopefully you have somebody that can solve . . . Somebody's got to sign it and sign a fake name.

. . .

Harvey: . . . Think about this, I gotta have a name and address. . .

Olson: Yeah, I got one of those . . .

Harvey: All right and you know it's gotta be signed. It could be a fake signature.

Olson: Sure.

Harvey: They can't trace all of that.

Olson: Right.

Harvey: And get, you know, where you fill in the name and the address and all that kind of stuff. And the, I'll be blunt here, a fake signature and then somebody notarizing that fake signature.

Olson: Uhh-huh.

Harvey: Now here's the problems. I'm just trying to think out loud. The notary . . . You gotta think of ways that this will come back, if it goes back, you know, like down the road if it gets people. If the government starts trying to trace it . . .

Olson: Sure.

Harvey: . . . then they're gonna go back and try to find that person. It's that director or whatever . . .

Olson: Umm-hmm.

Harvey: Well that person doesn't exist so that's not gonna be a problem.

Olson: Right.

(Defs.' Ex. A-45, Ex. 1, Grand Jury Ex. DE-3 at 1, 3, 4) (emphasis added). Harvey testified as follows concerning the tape:

Q. [by Lisann] Do you recall these tapes that we just listened to?

A. Yes, I recall them now.

Q. But you didn't before we went though [sic] those tapes? You were stating you had no recollection of those conversations.

A. i didn't remember it.

Q. But these seem to be fairly significant conversations; do they not?

A. Those are my voices, absolutely, and those are my answers, and that's the truth. The tapes speak for themselves.

Q. And those are significant events; are they not?

A. I suppose that the Jury will determine that.

Q. I'm asking you if, in your mind, you are telling somebody to use a fake name on a legal document is a significant event. Yes or no?

A. Yes, it is.

Q. And yet you are saying that — you advised somebody to break the law, right?

A. I think I'll stick with my statement that that's my voice and that's what I said.

Q. I'm asking you a question. Either you answer the question or assert the Fifth Amendment right.

A. All right.

Q. You don't just say, I'm going to stick with some other answer. Were you not advising somebody to break the law here?

A. It appears to be that.

Q. And that is not significant to you? A. Yes.

Q. Are you stating that you had no recollection of instructing this gentleman to break the law before listening to the tape?

A. I didn't remember it before now. I'm sure it happened. It's obviously on the tape.

Q. I understand that, yes, but is your testimony — are you telling this Grand Jury that you had no independent recollection of instructing this gentleman to break the law?

A. I did not remember this conversation. I'm not denying that it happened.

(Defs.' Ex. A-44, Ex. 1, Grand Jury Ex. DE-1 at 27-29) (emphasis added).

In addition, although also not expressly raised in the First Amended Complaint, Harvey also seems to assert in his Response that there was no probable cause because "[o]n November 3, 2002 [sic], (after drinking 4-5 martini's [sic] during the previous evenings [sic] conversation), Plaintiff withdrew from participation in any illegal activities." (Docket No. 88 at 19). This assertion is apparently based upon Harvey's claim that on November 3, 1993, he left a message on Scott's answering machine.

"In order to withdraw from a conspiracy an individual must take affirmative action, either by reporting to the authorities or by communicating his intentions to his coconspirators. . . . Mere cessation of one's participation in a conspiracy is insufficient to demonstrate withdrawal." United States v. Hughes, 191 F.3d 1317, 1321 (10th Cir. 1999). "The [criminal] defendant bears the burden of establishing withdrawal from a conspiracy." Id. at 1322.

In this case, Harvey did not disclose the conspiracy to the authorities. Even assuming Harvey communicated his intention to withdraw to all of his co-conspirators, evidence was presented to the indicting Grand Jury which could give them reason to believe that Harvey did not, in fact, withdraw. For example, during Harvey's own testimony before the first Grand Jury (the transcript of which was read to the indicting Grand Jury), while Harvey did make reference to leaving Olson a message on his answering machine on November 3, he merely testified that he told Olson during that message "[t]o make absolutely sure that there was no misunderstanding," that he would not let Olson use his airplane hanger to fly in marijuana. Harvey testified, "to be completely sure that there was no misunderstanding on his part, I called him the next day and left a message on his recorder that said, Absolutely not, I don't want anything to do with that. I don't want to have anything to do with it. This was a separate transaction, what we were trying to do." (Deis.' Ex. A-44, Ex. DE1 at p. 39-40, 41) (emphasis added). Significantly, Harvey did not specifically testify that he told Olson that the real estate closings were off the next day.

In addition, Harvey's actions and statements at the subject real estate closings the day after his purported withdrawal could very well be construed as indicating that Harvey had not actually withdrawn from the conspiracy. Carter's testimony before the first Grand Jury, which he read to the indicting Grand Jury, includes the following concerning the scheduled closing on November 4, 1993:

Q. [by Lisann] And what actually happened? What happened at 5:30?

A. Our undercover people went into the title company, and suddenly everything had changed, and now the bank president wanted our undercover guy to come over there. He was going to audiotape and possibly even — was talking about videotaping the transaction. And he wanted to fill out all the forms while he was there and do the whole works, even copy his ID.

Q. Had this ever been discussed before?

A. No, it had not.

Q. In fact, you had had conversations regarding the procedures to be followed the day before this all was supposed to take place.

A. That's correct.

Q. During that conversation nobody said anything about these additional requirements?

A. No, they did not.

. . .

Q. So, when the undercover agent and the people accompanying him showed up with — again, I guess, two large duffel bags stuffed with cash; is that correct?

A. Correct.

Q. It was at the title company or at Mr. Harvey's office?

A. Title company.

Q. At the title company's office, what actually happened when these new requirements were added to the previously agreed-upon procedures?

A. Our undercover people balked at it and said, We can't do it that way, you know. You were going to handle this. So the title guy, Martin Bregman, called George Harvey, and George Harvey came over. And George Harvey was apologizing, saying, The bank just dropped this on me yesterday. In the last 24 hours, they just dropped this on me. I don't know what we can do about all this — kind of stuff.

They got the bank president on the phone, and he was quite adamant that this is the way it was going to be done. In other words, just two days prior to that suddenly, you know, the whole thing was a done deal. The bank president was going to handle the cash. The cash was going to be done. The title company guy, the week before that — about six days before the deal had gone down, we even had a meeting in the restaurant where the title company guy was there, and it didn't seem to be a problem at the time at all with him.

Q. Now, with these new requirements added to the previously agreed-upon procedures, you stated the undercover agent said, I don't want to go through with it under these conditions. And I guess he picked up his money and left at that point; is that correct?

A. That's correct. He bagged it back up and left.

Q. Subsequent to that, or maybe at the conclusion of it, Mr. Harvey said something along the lines of, Maybe we can still work something out, you know, get around to this in the future. Did he make some comment like that?

A. Yes, he did. He said, Hey, you know — our undercover guy says, you know, No hard feelings, you know. We understand you got this thing. He says, you know, Maybe we can work something out where we can do it a different way.

Mr. Harvey says, That would be great. He said, I want to do the deal. He said, you know, This thing was thrown to me. It put me in a bind. All this sort of stuff. He was willing and wanted the guys to come back down and try to work the thing out and do the deal later.

(Deis.' Ex. A-42, Ex. 1 A, Grand Jury Ex. DC-1 at 43-46) (emphasis added).

In addition, Lisann told the indicting Grand Jury:

Scott Olesen carne to the closing at the scheduled time. And it was the same Scott Olesen who had met with Bregman on November 2^nd, and they had a two or three hour dinner together drinking martinis. Olesen didn't drink anything. And he showed up with two duffle bags of currency. He had two people with him carrying the currency, which was also part of the plan. They came in together. And there is nothing indicating any sense of alarm on anybody's part.

Bregman informed them that he had conversations that day or the day before with Bill Dodge, the president of the Bank of Telluride. And Bill Dodge said he would do the closing with all of these additional requirements, which do not normally come up in a closing. And nobody expected to hear that, because Dodge had called the IRS. That's when everything started to come apart, because Olesen said that he didn't want to do that. And Harvey was called. And George Harvey came there also and apologized and said, This is something that was thrown on us within the last 24 hours or so, and I'm sorry, but I will work it out, you know, the next time, because they had this other deal on the table with Harvey at the time. So that's how that [went]. . . .

(Deis.' Ex. A-47, Ex. 1A at 11-12) (emphasis added).

Carter's testimony and Lisann's statements are borne out by the transcript of the tape recording of the conversations that took place after Olson and Bass appeared for the closings with the cash. According to that transcript, Bregman called Harvey and asked him to come over. Bregman is recorded as saying to Harvey "We want to go over the paperwork, and then we'll go ahead and proceed on the deal." (Defs.' Ex. A-26 at 4). Harvey then appeared at that office, and the following exchanges occurred:

Olson: Okay. Our . . . our position is, we want to do the paperwork of the deal here. We'll go down there, you know, with my fake I.D., and run the thing through.

Harvey: Is that okay?

Bregman: Well, you mean . . . all we have to do is go down to the bank, and have Bill [Dodge] take it from there. So . . . .

Bregman: It's not up to me. I mean, we have to go down to the bank, and Bill wants to count the money and have you sign any documentation.

Harvey: All right, well let's do it.

Bass: Let's pause for a second.

Harvey: Okay.

Bass: Let's . . . let's just all relax here for a second.

Harvey: Okay.

Bass: We're here ready to rock and roll. You understand that?

Harvey: Right.

Bass: We told you we were coming back.

Harvey: Right.

Bass: And we came back.

Harvey: Right.

Bass: We lived up to our side of the bargain.

Harvey: Right.

Bass: We ain't walking in a bank where there's cameras, video, la-di-da.

Harvey: Right.

Bass: Not going to happen.

Harvey: Right.

Bass: Do you understand what I'm saying?

Harvey: Totally.

Bass: I mean . . .

Harvey: I hope you understand that the bank put some requirements on us that we didn't know about until about the last 24 hours or so. PGPage 46

Bass: How about this. Let us sign the documents. You do what you want to do with the currency.

Olson: I'll give you my I.D.

Harvey: Let's see. Can we do this or not? No? We can't do it. Okay.

Bass: All right. Let's all pause.

Harvey: We're trying to figure out how, but the bank . . . is it Bill alone or do you know?

Bass: If Bill came down here and talked to us, would that help anything out?

Harvey: We're trying. We're trying. Apparently there was some problem at the bank in the last few months, and he got a little cautious on us.

Bass: Is there a problem with you?

Harvey: Oh, no. No.

Bass: Are you backing up on me?

Harvey: No, no, no. Huh-uh[[negative]]. All we., the only snag we got is the bank.

Bass: Okay. Because, I mean, we sign it, we can leave it with you, you can do anything you want to with it after that. I don't care.

Harvey: You know what his problem is, so you'll know exactly, is we want the bank to give him credit for it. If he can't get credit for it then . . .

Bregman: [[on the phone]] Is Bill Dodge there, please? This is Marty.

Harvey: . . . He doesn't have any way of doing the transaction.

Bass: Okay.

Harvey: But what Bill said is, is that if he has a . . . if I got it right from Marty, if he has an I.D., a signature, fill out the form, he's fine. He won't go any deeper than that.

Bass: Even if it's fake?

Harvey: I mean, I don't want to know that. And [[blocked]] don't need to know.

Bregman: [[on the phone]] Hi, Bill. . . . Oh. Hi, Tom.

Bass: Don't mention it?

Harvey: Don't say it.

Bass: But does he know it?

Bregman: [[on the phone]] Okay. I'll just hold.

Harvey: [[blocked]]. I don't want to know. I mean, don't say. I want to . . . I want to be as dumb as possible. Let's keep Bill that way. But he's willing to do that. You know what I'm saying is, is . . .

Bregman: [[on the phone]] Hi Bill. It's Marty. . . . Would . . . would it be any assistance if you came down and discuss this?

Harvey: [[blocked]]. I hope that's okay. We're trying.

Olson: I know.

Bass: It's just that we can't walk around with this [kind of money.] You know what I'm talking about?

Harvey: Sure.

Bass: I mean, we got to do what we got to do. I mean, we got to do the paperwork, and we got to go.

Harvey: I understand.

Bregman: [[on the phone]] Uh-huh [[affirmative]]. . . . Okay, I'm going to cut this short so we don't have any . . . can I put PGPage 48 you on the speaker phone, Bill, so you can tell everybody what's going on? . . . Okay. This is Bill Dodge. Okay Bill.

Dodge: Yes? How are we doing? [[Bill Dodge is identified as speaker "DODGE" for remainder of this transcript.]]

Harvey: Good.

Dodge: As . . . as bank policy, one, I'm going to have myself and another individual here counting these funds. Two, we will pull out the currency transaction report as required by law with valid identification. And since this is a substantial amount of money, I will record the conversations at hand or . . . as . . . as bank policy, and, you know, again, I am one to do things above the law, and any questions of that . . .

Olson: When did that start with the banks?

Dodge: . . . you know? If . . . if we want . . . I don't mind taking the cash, but everything will be above reproach.

Bregman: Thank you, Bill.

Dodge: Okay?

Bregman: All righty.

Dodge: Call me back.

Bregman: Bye bye.

Dodge: Bye. [[Cassette tape side one ends. Side two is blank.]] [[Begin with next cassette tape.]]

Bass: You should have done your homework.

Harvey: He changed it in the last 48 hours.

Bass: That's not my responsibility. We . . . we did what we said we were going to do.

Olson: The guy wants to record us?

Bass: Did you hear what the man . . .

Olson: [[blocked]].

Bass: . . . did you hear what the man said? He's going to walk us into a bank, take our pictures, record our voices, sign whatever. Come on. We're not idiots.

Harvey: They laid that on us in the last 48 hours.

Bass: Are you willing to work? Are you willing to do a deal?

Harvey: I can't take it unless I can go by the book. And I can look the other way as much as possible, and I can still do everything. I said I can do, but this was a new requirement. Right?

Bregman: There's no way that I can get this into my escrow account to . . .

Bass: [Credit].

Bregman: . . . cut checks on. I can't get this . . . l can't credit this to my account so we can . . . so the cash is usable.

Bass: We're just going to leave as friends. We're not . . .

Olson: Marty.

Bass: . . . and we're going to . . . we're going to . . . we're going to cease. We're going to part as friends. We're going to walk away. Nothing's going to happen. We're . . . we're going to . . . we're going to just beat . . .

Olson: Beat feet.

Olson: . . . we're going to take our money. You guys don't call any cops. We're walking out. All of us together.

Harvey: Fine.

Bass: Okay?

Harvey: I'm sorry.

Harvey: I thought we had it solved, but we didn't.

Olson: Maybe you want to change banks. Let me know.

Harvey: You want to wire it next time?

Olson: Let me know.

Bass: That would have been the answer in the beginning.

Harvey: Yeah, it would have been. The very beginning. Well, we'll rethink it. We're sorry guys. . . .

(Defs.' Ex. A-26 at 9-15) (emphasis added).

In sum, this court finds that there was evidence sufficient to persuade a person of ordinary prudence and caution to have a reasonable belief that Harvey was a party to the conspiracy, committed numerous overt acts in support of it, and committed the crimes charged. That evidence includes the "telling" transcript discussed above concerning the source of the funds and the following. Harvey bragged to Olson that he smoked marijuana with the sheriff. Harvey at the very least knew of Olson's desire to use Harvey's airplane hanger to fly in a large quantity of marijuana. Olson was seeking to invest a very large quantity of cold, hard cash (millions of dollars, with a continuous flow of currency).²⁰ Harvey arranged with a Denver attorney to reserve corporation names that Harvey had dreamed up and to create a corporation through which Olson could invest in real estate. Harvey advised Olson to use a false name and signature and out-of-state address on the corporate documents, which would further conceal Olson connection to the cash. On October 28, 1993, Harvey and Serro met with Olson and Bass at which time Harvey produced a completed purchase agreement and receipt for earnest money for the purchase of six lots in Knoll Estates. At that time, Harvey received $5,000 cash in earnest money and $1,000 cash for legal

20 A juror of the first Grand Jury asked Martin Bregman if "[p]rior to this transaction, had you done any other cash-only deals." (Defs.' Ex. A-37, Ex. 1 at 40). Bregman responded:

Now, when we talk about cash in real estate transactions, it's not green bucks, bringing in the green bucks cash, but cash being they were going to pay cash for the property, they were buying a $2 million resort home, they were going to wire in $2 million on the closing date, that's considered a cash deal. We do those all the time.

We deal with very wealthy people and I would — more than half of our deals are cash transactions in the six to seven, eight digit numbers.

(Defs.' Ex. A-37, Ex. 1 at 40). Lisann then asked, "When you say cash transactions, you're talking about — you're not talking about hard currency?" (Defs.' Ex. A-37, Ex. 1 at 41). Bregman responded, "No, they were just carrying the loan back. They are not — when I say — I mean green bucks. Nobody brings in green bucks. I mean even when people bring in their closing funds, they bring in a check. We get a cashier's check." (Defs.' Ex. A-37, Ex. 1 at 41) (emphasis added). Bregman further testified that he had never seen anybody bring in a million dollars in currency for a closing. (Defs.' Ex. A-37, Ex. 1 at 43).

Bank president Bill Dodge testified that in his "11 years at the bank I had never seen a cash closing on a real estate transaction." (Defs.' Ex. A-37, Ex. 2 at 18). fees. On or about the following day, Harvey opened with Martin Bregman (the owner of the title company) three independent "title insurance orders." One of those orders was for property at Knoll Estates to be sold for $850,000 to the corporation Harvey had created for Olson, and the other two orders were for the real estate Harvey personally owned, which was to be pledged as collateral by Harvey to Olson in exchange for a loan of at least $300,000 in cash from Olson. On November 4, 1993, notwithstanding Harvey's claim here that he withdrew from transaction, after Olson and Bass appeared with the cash for the closing of the real estate transactions, Harvey appeared and made statements indicating that the bank president's new requirements for the closings just came up within the past 24 to 48 hours, and Harvey made statements which could be construed as being interested in conducting future business with Olson.

While Harvey may continue to claim, as he did before the first Grand Jury, that he "did not believe that [Olson] was telling [Harvey] that it was drug money" and that he thought that Olson "was a big bullshitter" (Defs.' Ex. A-44, Ex. 1, Grand Jury Ex. DE-1 at 24), this is not the forum to try Harvey's criminal case. The issue here is not whether Harvey was guilty of the three counts of the Indictment. Rather, the issue here is merely whether there was probable cause for the filing of the charges. This court finds that there was such probable cause.

Based upon the above, this court finds that Harvey has not presented a triable issue on his claims and recommends that summary judgment be granted for the defendants on all claims. Motions for Sanctions

In July 2002, Harvey filed a Motion for Sanctions Pursuant to Rule 11 and the Inherent Authority of the Court to Regulate the Conduct of Those Who Practice Before It (Docket No. 86), which he supplemented later that month (Docket No. 94). The following month, the defendants filed a Response (Docket No. 98) to Harvey's motion and later filed their own Motion for Sanctions Pursuant to 28 U.S.C. § 1927 and Response to Plaintiff's Supplement to His Motion for Sanctions (Docket No. 109). Harvey then filed a Reply concerning his motion (Docket No. 111) and a Response to defendants' motion (Docket No. 133). Defendants then filed their own Reply. (Docket No. 142).

Harvey's Motion for Sanctions. Harvey's motion is based upon his claim that the government has done the following: submitted a false affidavit to the court by defendant Carter concerning the transcripts, refused to obey the court's Procedural and Discovery Orders by not stipulating to facts that are not fairly in dispute and by not producing a CD as ordered by the undersigned, and has not followed the requirement of Rule 11 that a party bring only claims or assert defenses that are warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law. In his supplement, Harvey essentially complains about the defendants offering his counsel a safe harbor by providing counsel with notice of their motion for sanctions. Harvey's counsel interprets this as the government seeking "to 'win' by intimidation and school-yard bully tactics." (Docket No. 111 at 3). Upon careful review of all of the filings in this case, however, the court finds no basis for sanctioning the defendants or defense counsel. The court does not agree with Harvey that their actions "show a clear pattern of abuse. A pattern of abuse designed to wear out Mr. Harvey and win on false and incomplete evidence." (Docket No. 86 at 4).

Harvey states that he gave the government notice that the none of the government's exhibits that were submitted in support of its various dispositive motions were legally sufficient because they were not sworn or certified pursuant to Fed.R.Civ.P. 56(e), and only when faced with Rule 11 did the government have Carter swear that he compared the transcripts with copies of the original recordings and determined that the transcripts are complete and accurate. (Docket No. 85). Despite Carter doing so, as in his Response to the defendants' dispositive motions, Harvey claims in his motion for sanctions that these transcripts are "fabrications." (Docket No. 86).

Essentially for the reasons stated in defendants' Response (Docket No. 98), this court finds no basis for sanctions based upon Harvey's allegations concerning these exhibits. For example, as noted in the text above, the example given by Harvey to show the alleged fabrications is very obviously a clerical exhibit assembly error. Given the voluminous submissions in this case, having one page out of order is hardly a federal offense. Harvey's continued harping on this obvious collating error is absolutely ridiculous and a complete waste of this court's and defense counsel's time.

Furthermore, with respect to the government's alleged "refusal" to swear to the accuracy of the transcripts, defendants have explained that they understandably believed that Harvey would not contest the admissibility of those transcripts in these proceedings since in the criminal proceedings, Harvey reviewed all of the transcripts that are now attached to defendants' motions, along with the underlying tapes, and stipulated to the admissibility of those transcripts. However, when Harvey contested the admissibility of those transcripts in this civil proceeding, the defendants submitted a declaration confirming the admissibility of those transcripts.

Harvey also complains that the defendants did not comply with the court's Procedural Memorandum because they did not consult with him prior to filing their dispositive motions, did not identify the burdens of proof in separate sections of their motions, and refused to stipulate to allegedly undisputed facts. This court agrees with the defendants that Harvey's complaints in this respect are ludicrous. Under the circumstances presented here, defendants did not need to consult with plaintiff prior to filing their dispositive motions, and the court finds no deficiency in the content of their motion papers concerning the burden of proof. With respect to the defendants' refusal to stipulate to facts that should not fairly be in dispute, the court has reviewed the Defendants' Response to Plaintiff's Proposed Stipulation of Facts (Docket No. 105) and finds that their responses and refusal to stipulate to plaintiff's proposed stipulation of facts are not unreasonable or baseless. For example, many of the proposed stipulations are supported by Harvey's own affidavit, which was not considered by the Grand Jury and is not relevant concerning the determination of probable cause, which can be analyzed only in the proper context of what was presented to the Grand Jury. With regard to Harvey's complaint that the defendants have not supplied a CD as ordered by the undersigned, this court has since vacated its Minute Order dated July 25, 2002, which concerns the production of that CD (Docket No. 92). (See Docket No. 129).

Harvey also complains about the defendants noting in their motions that they may bring an interlocutory appeal if Carter is denied qualified immunity and that they may seek to disqualify Harvey's counsel as a material witness should the Bivens claim against Carter not be resolved through the dispositive motions. This court sees nothing improper by defense counsel making these notations in their motion papers. The Tenth Circuit "can review certain denials [of summary judgment] when they involve qualified immunity." Garrett v. Stratman, 254 F.3d 946, 951 (10th Cir. 2001). With regard to the disqualification of counsel, during the undercover investigation, Harvey suggested that Olson speak with Harvey's tax attorney, Bill Roberts, who now represents Harvey in this action. Olson did, in fact, contact Roberts, and their conversation was tape recorded. Roberts later testified before the first Grand Jury. Portions of his testimony were read to the indicting Grand Jury, and the transcript was provided to them to read. Under the circumstances, the court does not agree with Harvey's interpretation of the defendants' notation concerning a possible motion for disqualification as constituting a threat for an improper purpose.

Finally, the court agrees with the defendants that the remainder of Harvey's allegations consist of legal argument concerning the merits of the dispositive motions which were more properly included in his Response to those motions. Furthermore, the court does not find that the defendants' arguments in their dispositive motions were not warranted by existing law or the establishment of new law.

In sum, the court finds no basis for imposing sanctions on the defendants or their counsel.

Defendants' Motion for Sanctions. Defendants move for the imposition of sanctions upon Harvey's counsel pursuant to 28 U.S.C. § 1927, seeking fees and costs generated in the course of responding to certain motions and documents which were filed by Harvey's counsel. Section 1927 provides that "[a]ny attorney . . . who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 U.S.C. § 1927. "Section 1927 awards are appropriate 'only in instances evidencing a serious and standard disregard for the orderly process of justice.' . . . 'Actions are considered vexatious and unreasonable if the attorney acts in bad faith . . . or if the attorney's conduct constitutes a reckless disregard for the duty owed by counsel to the court.' "Sanqui Biotech Int'l, Inc. v. Kappes, 179 F. Supp.2d 1240, 1243 (D. Colo. 2002). "Sanctions are appropriately imposed under § 1927 on counsel . . . who continue to pursue claims that are no longer reasonable." Id. at 1244.

The court has plodded through the numerous filings in this case. The amount of motion practice in this case has been excessive and unwarranted. In a polite manner of speaking, it appears that this case has turned into a grudge match. It is very tempting to impose § 1927 sanctions on Harvey's counsei, particularly in view of some of his misrepresentations and transcript language taken out of context, his frequent outlandish characterizations of the government's motives, his ridiculous repeated reliance upon an obvious collating error as his example of transcript fabrication, and the like, and the court believes that counsel may very well have come perilously close to crossing the line. However, it is recommended that sanctions not be imposed at this time based upon the matters complained of in the sanctions motion.²¹ Nevertheless, as stated below, it is recommended that Harvey's counsel be sanctioned based upon his filing of the motion to file a second amended complaint. If today's recommendations concerning the dispositive motions are not approved, and this type of behavior were to continue after the case continued forward, then this court would seriously reconsider the issue of imposing § 1 927 sanctions.

21 The court notes that the month after the defendants moved for sanctions, Harvey filed a Motion to Strike the Fourth Round of Motions to Dismiss and Motions for Summary Judgment (Docket No. 134). In that motion, Harvey asserts, inter alia, that "the government [did not] confer to discuss why it believes its pending Third Round of Summary Judgment Motions is defective," and Harvey requested "that the pleadings be stricken as they raise no new issues and are a waste of the Court's and our time." (Docket No. 134 at 2). Plaintiff's motion to strike, however, is itself a waste of the court's time.
In a Minute Order filed September 10, 2002 (Docket No. 129), this court granted the Plaintiff's Motion for Leave to Amend Complaint Pursuant to Rule 1 5(a) and the Court's Procedural Memorandum, which was filed on June 11, 2002, and thus accepted the tendered First Amended Complaint for filing. Accordingly, the defendants were required to answer or otherwise respond to the First Amended Complaint, which they did on September 26, 2002, by filing their Motion[s] to Dismiss Plaintiff's First Amended Complaint or, in the Alternative, Motion for Summary Judgment and Memorandum in Support (Docket Nos. 137 and 138), in which they merely adopted and incorporated by reference the substance of their earlier dispositive motions (Docket Nos. 57 and 59). Based upon this chain of events, Harvey's motion to strike these motions is without merit.

Motion for Leave to File Second Amended Complaint

Harvey moves pursuant to Fed.R.Civ.P. 15(a) to file a Second Amended Complaint (Docket No. 136). Defendants filed a Response (Docket No. 144), and Harvey filed a Reply (Docket No. 144).

Harvey first seeks to add as a party defendant DOJ attorney Eric Lisann, who presented the case to the Grand Jury, based upon his purported unauthorized disclosure of confidential taxpayer information in violation of 26 U.S.C. § 6103(a), (h)(4), on November 3, 1998, when he was presenting the case to the indicting Grand Jury, and on August 8, 2002, in the instant civil action when defense counsel Christopher La Rosa of the DOJ disclosed the entire Grand Jury record for the first time. Harvey complains that during the Grand Jury proceedings, when asked by a grand juror if the undercover operation was "entrapment," Lisann stated in his response, "In fact, Harvey ran afoul with the IRS by not paying all of the payroll taxes on a business he ran, and not paying off al of his self-employment taxes in the past, which would all be relevant to show, you know, the amount of predisposition he has to commit these acts." (Docket No. 136 at 2, citing Docket No. 1 03, Ex. A-47, Ex. 1 A. at 14 In. 18, p. 15 In. 9). Harvey contends that the case before the Grand Jury and the instant civil action are not cases related to tax administration and that no Order has been requested or issued in this case pursuant to 26 U.S.C. § 6103(i).

In addition, Harvey claims that defendant Carter made two disclosures of confidential taxpayer return information, namely, when he disclosed to Lisann the existence of a deficiency or liability by Harvey for payroll and self-employment taxes.

Harvey contends in his motion that "[u]nder 26 U.S.C. § 7431 (a)(2), Plaintiff may bring a cause of action in a district court of the United States against any person who is not an employee of the United States who violated 26 U.S.C. § 6103. Since Mr. Eric Lisann is no longer an employee of the United States, he is a proper party. Under 26 U.S.C. § 7431 (a)(1), Plaintiff may bring a cause of action in district court against the United States for the unauthorized disclosures by Defendant Carter and Mr. La Rosa." (Docket No. 136 at 5).

"Although Fed.R.Civ.P. 15(a) provides that leave to amend shall be given freely, the district court may deny leave to amend where amendment would be futile." Jefferson County Sch. Dist. No. R-1 v. Moody's Investor's Servs., Inc., 175 F.3d 848, 859 (10th Cir. 1999) (citations omitted). "A proposed amendment is futile if the complaint, as amended, would be subject to dismissal for any reason, including that the amendment would not survive a motion for summary judgment." Watson v. Beckel, 242 F.3d 1237, 1239-40 (10th Cir. 2001) (citing id, at 858-59; Bauchman v. West High School, 132 F.3d 542, 561 (10th Cir. 1997)). Substantially for the reasons stated in the defendants' thorough Response, which need not be repeated herein, it is recommended that the motion be denied.

The court notes that it is particularly troublesome that even though as noted by the defendants 26 U.S.C. § 7431 (a)(2) applies only to disclosures made "by a person who is not an employee of the United States" (emphasis added), and even though Harvey alleges that Lisann was a "DOJ attorney" when he made the disclosure to which Harvey now objects, Harvey nevertheless seeks to name Lisann as a defendant because he is no longer an employee of the United States. Defendants correctly assert in their response that Lisann is not a proper party defendant and that Harvey's suggestion that Lisann can be named as a defendant because is no longer in federal service "is, at best, mistaken and disingenuous." (Docket No. 140 at 10). "Disingenuous" is putting it mildly. Vexatious and unreasonable is more like it, and accordingly, it is recommended that Harvey's counsel be sanctioned pursuant to § 1 927 based upon the filing of this groundless and frivolous motion.

WHEREFORE, for the foregoing reasons, it is hereby

RECOMMENDED that Defendant David Carter's Motion to Dismiss or, in the Alternative, Amended Motion for Summary Judgment, which was filed on May 28, 2002 (Docket No. 57) be GRANTED. It is further

RECOMMENDED that Defendant David Carter's Motion to Dismiss Plaintiff's First Amended Complaint or, in the Alternative, Motion for Summary Judgment, which was filed on September 26, 2002 (Docket No. 138), be GRANTED. It is further RECOMMENDED that Defendant United States' Motion to Dismiss or, in the Alternative, Renewed Motion for Summary Judgment, which was filed on May 28, 2002 (Docket No. 59) be GRANTED. It is further

RECOMMENDED that Defendant United States' Motion to Dismiss Plaintiff's First Amended Complaint or, In the Alternative, Motion for Summary Judgment and Memorandum in Support, which was filed on September 26, 2002 (Docket No. 137), be GRANTED. It is further

RECOMMENDED that the Defendants' Motion for Sanctions Pursuant to 28 U.S.C. § 1927 and Response to Plaintiff's Supplement to His Motion for Sanctions, which was filed on August 16, 2002 (Docket No. 109) be DENIED. It is further

RECOMMENDED that the Plaintiff's Motion for Sanctions Pursuant to Rule I1 and the Inherent Authority of the Court to Regulate the Conduct of Those Who Practice Before It, which was filed on July 18, 2002 (Docket No. 86) be DENIED. It is further

RECOMMENDED that the Plaintiff's Motion for Leave to File Second Amended Complaint Pursuant to Rule 15(a), which was filed on September 26, 2002 (Docket No. 136), be DENIED. However, it is further

RECOMMENDED that Plaintiff's counsel, William A. Roberts, Esq., be sanctioned pursuant to 28 U.S.C. § 1927 based upon his filing of Plaintiff's Motion for Leave to File Second Amended Complaint Pursuant to Rule 15(a) (Docket No. 136), and thus that the defendants be awarded the reasonable fees and costs expended in having to respond to this motion. NOTICE: Pursuant to 28 U.S.C. § 636(b)(1)(C) and Fed.R.Civ.P. 72(b), the parties have ten (10) days after service of this recommendation to serve and file written, specific objections to the above recommendation with the District Judge assigned to the case. The District Judge need not consider frivolous, conclusive, or general objections. A party's failure to file and serve such written, specific objections waives de novo review of the recommendation by the District Judge, Fed.R.Civ.P. 72(b) , Thomas v. Arn , 474 U.S. 140, 148-53 (1985), and also waives appellate review of both factual and legal questions. Makin v. Colorado Dep't of Corrections , 183 F.3d 1205, 1210 (10th Cir. 1999); Talley v. Hesse , 91 F.3d 1411, 1412-13 (10th Cir. 1996). ;