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United States v. Kimoto

October 10, 2008

UNITED STATES OF AMERICA, PLAINTIFF,
v.
KYLE KIMOTO, DEFENDANT.



The opinion of the court was delivered by: Michael J. Reagan United States District Judge

MEMORANDUM AND ORDER

REAGAN, District Judge

I. Introduction and Procedural Background

On June 20, 2007, the Government charged Kyle Kimoto with one count of Conspiracy, in violation of 18 U.S.C. § 371, one count of Mail Fraud, in violation of 18 U.S.C. § 1341, and twelve counts of Wire Fraud, in violation of 18 U.S.C. § 1343.*fn1 A ten-day jury trial commenced on March 31, 2008, before the undersigned District Judge. The trial culminated on April 18, 2008, with jury verdicts of guilty on all fourteen counts against Defendant Kimoto. (Docs. 33-53).

On August 12, 2008, Kimoto filed Motion to Reconsider, Motion for a Judgment of Acquittal and Motion for New Trial (Doc. 88). The Government timely filed a response opposing Kimoto's motion on August 29, 2008 (Doc. 92). Kimoto filed a reply on September 4, 2008 (Doc. 99). The motion having been fully briefed, the Court now rules thereon, beginning with a factual overview and a reference to the legal standard governing these motions.

II. Summary of Facts

The indictment alleged that Kyle Kimoto and his primary operating company, Assail Inc., with Peter Porcelli and a variety of corporations, engaged in a fraudulent telemarketing scheme.

Consumers with poor or no credit were led to believe that, in exchange for an advance fee, they would receive a pre-approved MasterCard or Visa credit card with a credit limit. Rather than receiving a credit card, consumers generally received either an application for a Stored Value MasterCard (a form of debit card) or an unusable plastic card that looked like a MasterCard credit card emblazoned with the MasterCard logo. As a fee for providing this card*fn2 , Kimoto and his co-conspirators debited each consumer's account $159.99 or more, processing several million dollars in electronic debit charges against consumers' bank accounts. Neither Visa nor MasterCard authorized Kimoto to market credit cards on its behalf, and no consumer received a credit card. Kimoto and his co-conspirators also made it extremely difficult for consumers to cancel recurring charges and obtain refunds. Use of the Stored Value MasterCard was also misrepresented in that purchasers were led to believe that using it would improve their credit scores.

III. Analysis

The Court must first consider its jurisdiction to consider Kimoto's arguments. Kimoto cites no authority nor does he advance any argument as to why the present motion should be considered timely. A motion for judgment of acquittal under Rule 29 may be made within seven days after the jury is discharged, and Rule 33 provides that a motion for a new trial, grounded on any reason other than newly discovered evidence, must be filed within seven days after the verdict or finding of guilty. FED.R.CRIM.P. 29(c)(1), 33(b)(2). A motion to dismiss the indictment must be made before trial except that the Court may hear a claim that the indictment fails to invoke the Court's jurisdiction or to state an offense at any time while the case is pending. FED.R.CRIM.P. 12(b)(3)(B). Furthermore, an untimely post-trial motion that raises additional arguments not contained in previous, timely motions, cannot "relate back" to the previous motions. U.S. v. Holt, 170 F.3d 698, 702-03 (7th Cir. 1999).

The jury in this case returned a guilty verdict on April 18, 2008. On April 24, 2008, Kimoto filed a timely motion for new trial and renewed motion for judgment of acquittal pursuant to Rules 29 and 33. The current motion, however, was filed nearly four months later. The Seventh Circuit has confessed itself to be "at a loss to understand any basis under federal law or rules of criminal procedure for what is typically described as a 'motion to reconsider[.]'"U.S. v. Griffin, 84 F.3d 820, 826 n.4 (7th Cir. 1996). "Rules 29, 33, 34, and 35 of the Criminal Rules do allow motions for judgment of acquittal after a jury verdict of guilty, new trial, arrest of judgment, and correction or reduction of sentence, respectively. None of these mechanisms require the court to reconsider the merits of the underlying judgment." Id.

While doubtful of the timeliness of Kimoto's motion, without more explicit guidance from the Seventh Circuit, the Court is reluctant yet tempted to dismiss the motion in its entirety as untimely. The Court also notes that, with one exception, discussed below, the Government has not advanced this argument. Therefore, the Court will address Kimoto's arguments in turn.

A. Hearsay

Kimoto advances two arguments based on hearsay. He contends that the Court erred in considering the deposition of Charles Davidson, Kimoto's information technology manager, and the video statement of Joel Best, ...


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