Opinion
Case No. 2:08-CR-162.
February 18, 2009
OPINION ORDER
This matter is before the Court on alleged victim Nathan Simons' Motion to Unseal or, in the Alternative, Expedited Hearing. Simons moved for this Court to allow immediate access to the file in this case to counsel for Simons, or to hold an expedited hearing on the matter. Simons alleges that as a victim of Defendant, he has a right to be heard at the sentencing date, as well as a right to state a claim for restitution. For the foregoing reasons, this Court GRANTS Simons' Motion to Unseal.
I. BACKGROUND
The complaint against the Defendant in this case was filed on June 9, 2008. A plea agreement was filed on August 25, 2008. On that same date, the Government requested that the information and plea agreement be sealed. On August 26, 2008, the Magistrate Judge ordered the documents to be sealed. On September 4, 2008, the Defendant was arraigned and he entered a guilty plea. On October 28, 2008, this Court issued an Order adopting the Report and Recommendation of the Magistrate Judge urging this Court to accept the Defendant's guilty plea.
On November 5, 2008, Simons filed his Motion to Unseal, in which he alleges that he and his two minor sons lost $36,730.00 as a direct result of Defendant's fraudulent actions. Simons also alleges that Defendant stole Simons' identity and opened numerous accounts in Simons' name, incurring $428,524.25 in charges. Simons contends he has spent 72 hours working to clear a fraction of these charges, and anticipates spending countless more in his quest to clear those that remain. Finally, Simons contends that due to Defendant's fraudulent actions, Simons resigned a position he had for approximately six years at Abbott Laboratories in order to work for Defendant, and that Simons was unemployed from the date of Defendant's arrest, May 30, 2008, until September 2, 2008.
Defendant opposes the Motion to Unseal, due to a threat of future physical harm.
II. LAW ANALYSIS A. Standing
Defendant alleges that Simons is not a victim in this case, and therefore has no standing to bring this action. According to Defendant, the original Pretrial Sentencing Report ("PSR") lists all of the victims in this case and Simons is not listed.
Furthermore, Defendant asserts that Simons was his business partner, as well as his romantic partner. Defendant claims that because each partner has an interest in partnership property, a partner generally cannot be convicted of embezzlement or larceny of partnership property which comes into the partner's possession or under the partner's control during the course of the partnership business by reason of his or her being a partner.
Simons asserts he has suffered losses of $36,730 as the result of stock purchases for himself and his son, a membership unit for his son, a consultation fee, and a deposit for business. He also claims a loss of $1,856.60 based upon hourly compensation for trying to clear his name from credit card debt allegedly incurred when Defendant opened credit cards in Simons' name. Simons also claims loss due to loss of income. In total, he claims he has suffered losses of $50,961.16 as a result of Defendant's fraudulent statements and identity theft. Defendant asserts these alleged losses are not proper restitution in this case because Simons is not a victim.
Under 18 U.S.C. § 3663(a)(2), the term "victim" means:
a person directly and proximately harmed as a result of the commission of an offense for which restitution may be ordered including, in the case of an offense that involves as an element a scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the defendant's criminal conduct in the course of the scheme, conspiracy, or pattern.
Under the Crime Victims' Rights Act ("CVRA") U.S.C. § 3771(e), the term "crime victim" means: "a person directly and proximately harmed as a result of the commission of a Federal offense."
In order to qualify as a victim, a person must be directly and proximately harmed by either: (1) the conduct underlying an element of the offense of conviction; or (2) an act taken in furtherance of a scheme, conspiracy, or pattern of criminal activity, which is an element of the offense of conviction. State v. Blake, 81 F.3d 498 (4th Cir. 1996). Defendant pled guilty to fraud and related activity in connection with access devices, making and possessing counterfeited securities, and bank fraud.
Simons alleges that he suffered losses of thousands of dollars due to Defendant's scheme to defraud Simons and to steal Simons' identity. Simons appears to have been directly and proximately harmed as a result of acts taken in furtherance of Defendant's scheme to commit fraud with access devices, a scheme to deceive persons with the creation of counterfeited securities, and a scheme to obtain money from federally insured financial institutions. This Court does not find it significant that Simons was not named in the PSR as a victim. Therefore, Simons has standing to bring his Motion to Unseal.
B. Right of Access and Right to Restitution
Pursuant to the Crime Victims' Rights Act ("CVRA"), a crime victim has the following rights:
(1) The right to be reasonably protected from the accused.
(2) The right to reasonable, accurate, and timely notice of any public court proceeding , or any parole proceeding, involving the crime or of any release or escape of the accused.
(3) The right not to be excluded from any such public court proceeding , unless the court, after receiving clear and convincing evidence, determines that testimony by the victim would be materially altered if the victim heard other testimony at that proceeding.
(4) The right to be reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.
(5) The reasonable right to confer with the attorney for the Government in the case.
(6) The right to full and timely restitution as provided in law.
(7) The right to proceedings free from unreasonable delay.
(8) The right to be treated with fairness and with respect for the victim's dignity and privacy.18 U.S.C.A. § 3771(a) (emphasis added). Therefore, Simons asserts that he has the right to reasonable and timely notice of any public court proceeding, the right to not be excluded from any public court proceeding, the right to be reasonably heard at any public court proceeding, and the right to full and timely restitution.
The plea has already occurred in this case. Pursuant to 18 U.S.C.A. § 3771(d)(5), a victim may make a motion to re-open a plea only if:
(A) the victim has asserted the right to be heard before or during the proceeding at issue and such right was denied;
(B) the victim petitions the court of appeals for a writ of mandamus within 10 days; and
(C) in the case of a plea, the accused has not pled to the highest offense charged.
As the plea has already occurred and the victim did not assert any rights until after the proceeding, the plea may not be re-opened.
However, the sentencing has not occurred. Therefore, Simons asserts he has a right not be excluded from that proceeding. In this case, the proceedings are under seal; therefore, they are not public and the rights under the CVRA to not be excluded and to be heard would not appear to apply. "The repeated presence of the word "public" in the CVRA shows that Congress intended that the CVRA not apply to some court proceedings, namely, court proceedings which are not open to the public." U.S. v. L.M., 425 F.Supp.2d 948, 952 (N.D. Iowa 2006). However, Simons challenges the sealing of this case.
The CVRA is different from a predecessor statute, which provided that "[a] victim of crime should have the right to be present at all proceedings related to the offense against him . . ." 42 U.S.C. § 10606(4) (2000)., repealed by Pub.L. No. 108-405, 118 Stat. 2260, 2264 (2004).
Public access to criminal trials is a fundamental right under the First Amendment. U.S. v. Beckham, 789 F.2d 401, 407 (6th Cir. 1986). Criminal proceedings and documents may be closed to the public without violating the First Amendment only if three substantive requirements are satisfied: (1) closure serves a compelling interest; (2) there is a substantial probability that, in the absence of closure, this compelling interest would be harmed; and (3) the closure is narrowly tailored to protect the compelling interest. See Press-Enterprise Co. v. Superior Court of California for Riverside County, 478 U.S. 1, 13-14 (1986); see also Beckham, 789 F.2d at 407 ("[n]ondisclosure of sensitive information is only justified where a compelling interest is shown and the denial of access is narrowly tailored to serve that interest).
In this case, Defendant has requested that this case be sealed so that he can avoid future physical harm. Several courts have recognized that a risk of physical harm to a person may override the presumption of public access. See, e.g., U.S. v. Doe, 63 F.3d 121, 128 (2d Cir. 1995) (recognizing that the danger to a person can be a compelling interest); Application of The Herald Co., 734 F.2d 93, 100 (2d Cir. 1984) (same); Ashworth v. Bagley, 351 F.Supp.2d 786, 789 (S.D. Ohio 2005) (recognizing "the degree of danger to the petitioner or other persons mentioned in the materials" as an interest to be weighed in considering the common law right of access to judicial proceedings and documents). In U.S. v. Raffoul, 826 F.2d 218, 226 (3d Cir. 1987), the court held, "[t]he risk of physical harm (in this case death) is the best example one could imagine of an overriding interest."
Therefore, this Court finds that the risk of physical harm to the Defendant is a compelling interest. And, based on the evidence before this Court, there is a substantial probability that if all documents were unsealed and sensitive information was disclosed, Defendant would be physically harmed. Nevertheless, Simons wants to be able to vindicate his rights as a victim by having access to information so that he can establish the basis for his intended request for restitution, and so that he can speak at Defendant's sentencing to pursue his right to restitution. This Court finds that sealing of the entire case is not narrowly tailored to protect the compelling interest. Rather, only certain documents relating to the Motion to Seal and Motion to Unseal need to be sealed to prevent sensitive information from being disclosed. These documents are irrelevant to Simons' claim for restitution, and irrelevant to this case in general. This sealing of a few documents is narrowly tailored to protect the compelling interest of preventing physical harm to the Defendant.
As this case is now public, Simons is entitled to all the rights under the CVRA. Specifically, he has the right of access to the case, the right to be notified of all future court proceedings (including sentencing), the right to not be excluded from any future court proceedings, and the right to be reasonably heard at any future proceeding involving sentencing.
III. CONCLUSION
For the foregoing reasons, Simons' Motion to Unseal is GRANTED. Simons is to be provided with immediate access to all documents in the record, excepting the few documents remaining under seal, and is to be notified about any future court proceedings.