Full title: UNITED STATES OF AMERICA, v. ROBERT J. JESENIK, N. SCOTT GILLIS, ANDREW N. MacRITCHIE, AND BRIAN K. RICE, Defendants.
Court: United States District Court, District of Oregon
Date published: Oct 20, 2022
Facts
In July 2020, a grand jury indicted four individuals: Jesenik, MacRitchie, Rice, and N. Scott Gillis (Gillis). The indictment charged all four with one count of conspiracy to commit mail and wire fraud, 19 counts of wire fraud, one count of conspiracy to commit money laundering, and ten counts of money laundering. The indictment also charged Jesenik and Gillis with one count of bank fraud, one count of conspiracy to commit bank fraud, and one count of making a false statement on a loan application. In May 2022, Gillis pleaded guilty to making a false statement on a loan application and is awaiting sentencing.
In July 2022, a grand jury returned a superseding indictment against Jesenik, MacRitchie, and Rice. Against these three individuals, the superseding indictment charges one count of conspiracy to commit mail and wire fraud, 28 counts of wire fraud, and one count of conspiracy to commit money laundering. The superseding indictment also charges Jesenik with one count of making a false statement on a loan application.
The charges relate to Defendants’ alleged activities when they were affiliated with Aequitas. Defendants allegedly conspired to mislead investors in the Aequitas entities by soliciting investments in notes and funds for the purported purpose of buying trade receivables, when in fact the investments were to be used mostly to pay off earlier investors and defray Aequitas’s operating expenses. Aequitas collapsed in early 2016, owing its investors more than $600 million. Aequitas allegedly had been insolvent from July 2014 through the date of its collapse in February 2016.
Jesenik founded Aequitas in Lake Oswego, Oregon, and served as its Chief Executive Officer. He controlled the structure of Aequitas and had ultimate decision-making authority over its various activities. MacRitchie served as Aequitas’s Chief Compliance Officer and as one of its Executive Vice Presidents. MacRitchie was responsible for the development and implementation of risk management and compliance processes and procedures. He also oversaw accounting, legal, and audit functions, as well as fundraising. Rice was another of Aequitas’s Executive Vice Presidents. He oversaw the solicitation of investments through registered investment advisors (RIAs) and managed those RIAs. These three Defendants remain for trial.
Jesenik, MacRitchie, and Rice, as well as other persons affiliated with Aequitas, allegedly used Aequitas-related entities to solicit investors through the issuance of promissory notes and interests in Aequitas-created investment funds, many of which were purportedly backed by trade receivables in education, health care, transportation, and other consumer credit areas. Defendants allegedly used invested funds not only to pay Aequitas’s operating costs but also to repay other investors. Defendants allegedly made material misrepresentations, half-truths, and omissions when soliciting and discussing investments with investors and investment advisors. Defendants also allegedly used an intercompany loan to Aequitas Holdings, LLC to prop up other Aequitas entities and mislead investors, concealing from investors information that the intercompany loan was significantly under-collateralized and could not be repaid without the occurrence of several speculative contingencies. Individuals allegedly invested more than $400 million between January 2014 and February 2016.
Issue
(1) whether the jury may reasonably be expected to collate and appraise the individual evidence against each defendant; (2) the judge’s diligence in instructing the jury on the limited purposes for which certain evidence may be used; (3) whether the nature of the evidence and the legal concepts involved are within the competence of the ordinary juror; and (4) whether [defendants] could show, with some particularity, a risk that the joint trial would compromise a specific trial right of one of the defendants, or prevent the jury from making a reliable judgment about guilt or innocence.
Decision
The Court DENIES Jesenik’s Motion for Severance of Joint Trial (ECF 205). The Court DENIES Jesenik’s Motion to Sever Count 31 from Counts 1-30 (ECF 207). The Court DENIES Rice’s Motion for Severance (ECF 212). The Court DENIES MacRitchie’s Motion for Severance (ECF 217). The Court DENIES Jesenik and MacRitchie’s Motion to Dismiss Count 1 (ECF 209). The Court DENIES MacRitchie’s Motion to Dismiss and to Strike Surplusage (ECF 216). The Court DENIES Defendants’ Motion to Dismiss based on Statute of Limitations (ECF 221). Finally, the Court DENIES Defendants’ Amended Joint Motion for Disclosure of Coconspirator Statements and James Hearing (ECF 210).
IT IS SO ORDERED.