Opinion
1:22-cr-00369-VSB
07-06-2022
UNITED STATES OF AMERICA v. DHIRENKUMAR PATEL, Defendant.
NOAH SOLOWIEJCZYK Assistant United States Attorney Southern District of New York (212) 637-2473
SEALED ORDER
NOAH SOLOWIEJCZYK Assistant United States Attorney Southern District of New York (212) 637-2473
HONORABLE VERNON S. BRODERICK UNITED STATES DISTRICT JUDGE SOUTHERN DISTRICT OF NEW YORK
WHEREAS an application has been made by the United States of America, with the consent of the defendant, for an order: (i) granting a limited sealing, until further order of the Court, of all documents filed in connection with the proceeding to be held on July 7, 2022, including the Information, the transcript of the proceeding related to Dhirenkumar Patel (the "defendant"), this affirmation and proposed order, and any related order of the Court; (ii) permitting the materials described in (i) to be disclosed to counsel for the defendant and by the Government in connection with its obligations under the Jencks Act and Giglio v. United States, 405 U.S. 150 (1972), and the United States Securities and Exchange Commission ("SEC"); and (iii) temporarily sealing and delaying, until further order of the Court, further docket entries related to the defendant, including notifications of docket entries over the ECF system; and
WHEREAS the Court finds that an active law enforcement investigation may be compromised if the Government's application is not granted, IT IS HEREBY ORDERED that all documents filed in connection with the proceeding held on July 7, 2022, including the Information, the waiver of indictment, the transcript of the proceeding, the Government's affirmation and proposed order, and this Order (collectively, the "Sealed Materials"), shall be sealed until further order of the Court, and, if applicable, retracted and withdrawn from the ECF system;
IT IS FURTHER ORDERED that no further docket entries shall be made relating to the defendant until further order of the Court;
IT IS FURTHER ORDERED that the Sealed Materials may be disclosed to counsel for the defendant and by the Government in connection with its obligations under the Jencks Act and Giglio v. United States, 405 U.S. 150 (1972), and to the SEC; and
IT IS FURTHER ORDERED that the Government shall report to the Court on or before six months after execution of this order regarding the continuing need, if any, to maintain these matters under seal.
SO ORDERED:
NOAH SOLOWIEJCZYK hereby affirms, under penalty of perjury and pursuant to Title 28, United States Code, Section 1746, as follows:
1. I am an Assistant United States Attorney in the office of Damian Williams, United States Attorney for the Southern District of New York, and I am familiar with this matter.
2. By this affirmation, the Government applies for an order of the Court: (i) granting a limited sealing, until further order of the Court, of all documents filed in connection with the proceeding to be held on July 7, 2022, including the Information, the waiver of indictment., the transcript of the proceeding related to Dhirenkumar Patel (the "defendant"), this affirmation and proposed order, and any related order of the Court; (ii) permitting the materials described in (i) to be disclosed to counsel for the defendant and by the Government in connection with its obligations under the Jencks Act and Giglio v. United States, 405 U.S. 150 (1972), and to representatives of the United States Securities and Exchange Commission (the "SEC"); and (iii) temporarily sealing and delaying, until further order of the Court, further docket entries related to the defendant, including notifications of docket entries over the ECF system.
3. Since in or about 2021, the Government has been investigating an insider trading ring responsible for many millions of dollars of profits earned by trading based on material, non-public information ("MNPI") regarding certain corporate acquisitions. The investigation has revealed that there are numerous members of this ring, including defendant Dhirenkumar Patel.
4. Since in or about May 2022, the defendant has been actively cooperating with the Government, including by participating in numerous proffer sessions during which he has disclosed his criminal activities. In the course of those proffer sessions, the defendant has provided the Government with detailed information concerning his criminal activities and former criminal associates, including individuals who have not yet been arrested. The information provided by the defendant has proven to be reliable and has been corroborated by, among other things, further investigation by law enforcement officers.
5. At present, it appears that the defendant's former criminal associates have not confirmed that he is cooperating. However, those associates may be aware of ways to obtain information and documentation about charged defendants, including information regarding whether a defendant is cooperating. For example, docket entries indicating that a defendant has been arraigned on an Information suggest that the defendant is cooperating.
6. The Government anticipates that, on July 7, 2022, the defendant will waive indictment and be arraigned on a four-count Information charging him with (a) conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371; (b) conspiracy to commit securities fraud and wire fraud, in violation of Title 18, United States Code, Section 1349; (c) securities fraud, in violation of Title 15, United States Code, Sections 78j(b) and 78ff; Title 17, Code of Federal Regulations, Section 240.10b-5; and Title 18, United States Code, Section 2; and (d) conspiracy to obstruct justice, in violation of Title 18, United States Code, Section 371. The charges include crimes which other targets may be charged with. Should documents related to the defendant's arraignment---such as the Information or a transcript of the defendant's arraignment proceeding---be made public, there is a risk that the defendant's former criminal associates will seek to intimidate him and his family members, or destroy evidence, in order to avoid being prosecuted.
7. Although there is a qualified right of public access to Court documents, the Second Circuit has recognized that documents may be filed under seal to protect, among other things, a cooperating defendant's safety or to further ongoing law enforcement efforts. See United States v. Cojab, 996 F.2d 1404, 1407-09 (2d Cir. 1993) (affirming sealing order); United States v. Haller, 837 F.2d 84, 88 (2d Cir. 1988) (affirming decision to seal that portion of a plea agreement that referred to a defendant's ongoing cooperation); see also Fed. R. Crim. Pro. 49.1(d) and (e) & advisory committee note (permitting a court to order filings to be made under seal). The Second Circuit has also recognized that even docketing the applications to seal those materials could be prejudicial, and in such cases the applications themselves and related notes to the docket could be sealed. See United States v. Alcantara, 396 F.3d 189, 200 n.8 (2d Cir. 2005).
8. I respectfully submit that compelling security and law enforcement interests support an order directing that all documents and docket entries relating to the July 7, 2022 proceeding in this case be made under seal until further order of the Court. Exposure of the defendant's cooperation would hinder law enforcement officials' ability to continue their investigation of other members of his conspiracy, and ultimately arrest them, without their knowledge that the defendant is cooperating against them. An order granting the relief set forth above would greatly reduce the risk that the defendant's ongoing cooperation with the Government will be exposed.
9. The defendant's cooperation (and the charges against him) will not be kept sealed indefinitely, however. The Government anticipates that, once the defendant's coconspirators have been arrested, for example, the defendant's cooperation will be publicly disclosed. Accordingly, at such time, the Government will inform the Court of that development and move this Court for an order unsealing the filings of this case, and docketing the previously un-docketed entries. In any event, the Government will provide the Court with an update with respect to these matters no later than six months' time from the date of the requested order, and every six months thereafter until the sealed matters are unsealed and the un-docketed items are docketed.
10. Accordingly, the Government requests that the relief set forth in paragraph 2 be granted.
11. The Government understands that the SEC is conducting a parallel investigation into the conduct set forth in the Information. Accordingly, the Government further requests that upon relaying to the SEC that this matter is under seal, it be permitted to inform the SEC of the fact of the defendant's arraignment and provide to the SEC the Information if the Government deems such production appropriate.
12. I have spoken with Edward Y. Kim, counsel for the defendant, regarding this affirmation, and Mr. Kim consents to this request.
13. No prior request for this relief has been made.