United States v. Michel ( 2022 )

= rea witn Classnicd
es Iaformation Security Officer
Date W/W/\Wry-
)
UNITED STATES OF AMERICA )
). Criminal No. 19-148-1 (CKK)
v. )
) ; j Jerosos$)
PRAKAZREL MICHEL (1) )
) QF ) adsas
) Soe CK Ba eby
MEMORANDUM OPINION
(April 4, 2022)
(AT This matter comes before the Court on the Government’s Classified Ex Parte, In
Camera, Under Seal Motion and Memorandum of Law in Support of Protective Order Pursuant
to Section 4 of the Classified Information Procedures Act and Rule 16(d)(1) of the Federal Rules
of Criminal Procedure (“Motion” or “Mot.”). [SSS
fan) For the reasons that follow, and upon consideration of the briefing, the relevant
authorities, and the entire record, the Court shall GRANT the Motion.
I. (U) Background
(U) On May 2, 2019, a grand jury retumed an eleven-count indictment against Michel
and his co-Defendant, Malaysian national Low Taek Jho (“Low”). Superseding Indictment, ECF
No. 85 at 1. The charges in the Superseding Indictment arise from an alleged scheme between
Michel and Low to funnel money from Low and other straw donors into the 2012 Presidential
C. PAE A LS 7
Election and to conceal the true contributions from the Federal Election Commission (“FEC”).
Id Beginning at some time in 2017, Michel and Low conspired with at least three other
individuals, Elliott Broidy, Nickie Lum Davis (“Davis”), and George Higginbotham—who have
all since either been charged or convicted in this Court or, in Davis’ case, the United States
District Court for the District of Hawaii—“to wage an illegal, back-channel lobbying campaign
to: (1) convince the Administration of the President of the. United States (‘Administration’) and
the United States Department of Justice (‘DOJ’) to drop forfeiture proceedings and related
investigations into Low for the embezzlement of billions of dollars from 1 Malaysia Development
Berhad (‘1 MDB’), a strategic investment and development company wholly owned by the
Government of Malaysia; and (2) convince the Administration and DOJ to send a high-profile
dissident of the [People’s Republic of China] living in the United States back to the PRC.” /@. at
2.
(U) Davis has since pled guilty to one count of aiding and abetting violations of the
Foreign Agents Registration Act. Mem. Of Plea Agreement, ECF No. 15, Case No. 20-cr-68-
LEK (D. Haw. Aug 31, 2020). The Government represents that she continues to cooperate with
the Government in this case and others and appears to suggest that, should this case go to trial,
the Government would call Lum as a witness in its case-in-chief. See Mot. at 4. In the
meantime, the Court has held successive status conferences in this case, most recently on January
11, 2022. At that status conference, the Government, rather cryptically, discussed the possibility
of a discovery dispute that the parties would attempt to resolve prior to the next status
conférence, currently set for April 4, 2022. It appears that the Government intends to resolve the
discovery dispute by this pending Motion.
Il. (U) Legal Standards
(U) In general, the Government must provide a defendant with all exculpatory “material”
relevant to the guilt or punishment of the accused. Brady v. Maryland, 373 U.S. 83 (1963).
Evidence is “material” where, if not disclosed, “there is a reasonable probability that . . . the
result of the proceeding would have been different.” United Staies v. Bagley, 473 U.S. 667, 682
(1985). “Material” evidence includes that which a defendant could use to impeach a government
witness. United States v. Giglio, 405 U.S, 150 (1972), Additionally, by statute, the government
must disclose pretrial statements made by a witness that is related to the subject matter of their
testimony. 18 U.S.C. § 3500(b). Local Rule 5.1 further requires the government to disclose
various categories of information, including Brady material, “regardless of whether the
information would itself constitution admissible evidence” and “in a reasonably usable form
unless that is impracticable.” LCrR 5.1{a). That said, “[a]t any time the [C]ourt may, for good
cause, deny, restrict, or defer discovery for inspection.” Fed. R. Crim. P. 16(d)(1).
(U) Where, however, such material has been classified, the Court looks to CIPA. United
States v. Libby, 429 F. Supp. 2d 46, 48 (D.D.C. 2006) (RBW). CIPA “does not expand or
restrict established principles of discovery and does not have a substantive impact on the
admissibility of probative evidence.” United States v. Sedaghty, 728 F.3d 885, 903 (9th Cir.
2013). Indeed, CIPA stands at equal stature with the Federal Rules of Criminal Procedure
governing criminal discovery, and “contemplates an application of the general law of discovery
in criminal cases to the classified information area with limitations imposed based on the
sensitive nature of the classified information.” United States v. Yunis, 867 F.2d 617, 622 (D.C.
Cir. 1989). In relevant part, CIPA permits
{t]he court, upon a sufficient showing, [to] authorize the United States to delete specified
items of classified information from documents to be made available to the defendant to
the defendant through discovery under the Federal Rules of Criminal Procedure, to
substitute a summary of the information for such classified documents, or to substitute a
statement admitting relevant facts that the classified information would tend to prove.
CIPA § 4. To do so, the government must first move for ex parte review and, upon granting
such relief, “the entire text of the statement of the United States shall be sealed and preserved in
the records of the court to be made available to the appellate court in the event of appeal.” Jd.
(U) For a substitute summary of information, the Court has wide discretion to approve
suitable substitutions. See Sedaghary, 728 F.3d at 905. These unclassified substitutions “need
not be of ‘precise, concrete equivalence,’ and the ‘fact that insignificant tactical advantages
could accrue to the defendant by use of the specified classified information should not preclude
the court from ordering alternative disclosure.” Jd.
(U) As for deletions, if the information to be deleted is irrelevant or unhelpful to the
defense, the Court’s inquiry is over. Afeija, 448 F.3d at 455. If, however, the information is
relevant, the Court must determine if the privilege claimed by the Government “is at least a
cere uve vurriroce Pouayge wows ee
colorable one.” Yurtis, 867 F.2d at 623. Ifso, then the Court must balance the Government’s
(and public’s) interest in national security against the defendant’s need for the information.
Meija, 448 F.3d at 445 (citation omitted). Special attention must be paid to whether producing
the classified material would implicate the sources and methods used to collect the material.
Yunis, 867 F.2d at 623 (citing CIA v. Sims, 471 U.S. 159, 175 (1985)).
(U) Before continuing, it should be added that a defendant also has a right to file their
own ex parte submission outlining their theory of the defense while the Court reviews the
Government’s classified, ex parte filing. See Sedaghaty, 728 F.3d at 906. Defendant Michel has
made no such filing here.
III. = (U) Discussion
ee _— OP A pe + ee.
q
(U) With these opening remarks, the Court now turns to the classified material at issue.
A. (U) Substitutions
I
(
{
'
{
¢
s
¢
(
|
1
|
(na The Government proposes the following substitution:
The U.S. Government assesses that, during times relevant to this case, EE
had contact with a known intelligence officer affiliated with Israel, ay have
facilitated business contacts for this individual, poteritially to include Chinese investors.
The U.S. Government further assesses that this known intelligence officer devoted
substantial time in recent years to developing investors from Asia for Israeli-owned
business, efforts that included hosting Chinese delegations in Los Angeles.
a The substitution therefore
adequately describes the nature of the acts for which Defendant might seek to impeach ae
while also protecting the national security interest at play.
GE The Government proposes the following substitution:
The United States Government assesses that TE used ee SS
her family’s political networks to route foreign money to political campaigns and to make
other direct payments. as»: affiliations with Chinese political organizations.
EN The substitution therefore adequately
describes the nature of the acts for which Defendant might seek to impeach BB nite also
protecting the national security interest at play.
GN The Goverment proposes the following substitution:
EE ::-d Es 2 point of contact on travel documents. [is a
Chinese national.
DT As such, the Government’s proposed substitution
adequately balances the impeachment value of the material and the national security interests
therein.
(U) The Government proposes the following substitution:
The United States Government assesses that iG and thef family,
together with counterparts in China, are potentially involved in criminal activities,
including the funneling of money from China into the United States and conspiring to
improperly influence U.5. officials.
As such, the Government’s proposed substitution adequately
balances the impeachment value of the material and the national security interests therein.
! : NA AT oe
Fe I AS |
(TEU eee eles Meer a ce ee |
(A
CETTE oleae Sc aL sca col coc as en Nae isa saa
[ee eT
SSS RRR EN ce wns, a
ee
GR The Government proposes the following substitution:
was the subject of a FBI national security investigation intolfoic in
facilitating illegal campaign contributions, unlawful money transfers, and unduly
influencing U.S. officials, including in connection with the Democratic Republic of the
Congo and China. The family have been associated with Elliot Broidy, Prakazrel
Michel, and Jho Tack Low.
As such, the Government’s proposed
substitution adequately balances the impeachment value of the material and the national security
interests therein.
—
—
GE The government's proposed summary reads:
The United States Government assesses [EEN d others may have acted as
foreign agents of the Chinese government. has been instrumental in
arranging meetings between high-level Chinese government officials and senior U.S.
government officials. [jiifmaintains direct contact with influential government
officials in the United States and China. The United States Government assesses that the
Chinese government compensates the amily in exchange for providing access to the
family’s network, which the Chinese government potentially exploits.
As such, the
Government’s proposed substitution adequately balances the impeachment value of the material
and the national security interests therein.
I
(U) The Govemment’s proposed substitution reads:
During relevant times to this case, [EEE was in contact with phone numbers
associated with the Chinese government, including senior officials, During this time,
as in contact with a delegation of Chinese government officials who met with
then-President Donald Trump. WB also communicated with the White House in
connection with this delegation. [iijwas also in communication with multiple
individuals convicted from federal crimes and other subjects of federal criminal
investigations.
As such, the Government’s
proposed substitution adequately balances the impeachment value of the material and the
national] security interests therein.
(U) The Government’s proposed substitution reads:
For a multi-year period ending in 2018, sent and/or received thousands
of calls and/or text messages from a phone number belonging to who
fled the Congo in 1998. [sent and received money from Congo and France from at
least 2003 until 2017. Members of thellfamily have an interest in raw materials
mined heavily in Congo, and three companies associated with the are based in the
Congo. Members of thelfamily appear to be transferring money in and out of the
DRC using wire transfers and by physically carrying case.
Accordingly, the Government’s proposed
substitution adequately balances the evidentiary value of the material and the national security
interests therein.
14
Defendant Michel still receives
through this unclassified summary the potential Giglio material while appropriately balancing
any national security interests therein.
—
wn
Between May 2017 and December 2017, had dozens of calls and/or
text messages with a phone number belonging to
the DC city council who served a prison sentence for bribery. previously pleaded
guilty to a misdemeanor for making a contribution to a Senate campaign that-exceeded
federal limits.
Accordingly, the Court finds that the Government’s proposed summary adequately balances the
Giglio import of the production while securing the potential national security interests at issue.
= san AAA a ees e (a —_
The government proposes the following substitution:
The U.S. Government has received information indicating a a
close ties to several senior goverment officials of China and that has been a
source and asset for China’s Ministry of State Security (“MSS”) for a multi-year period
ending in 2016. The U.S. Government also reccived information indicating that the MSS
was using Pras Michel, and Elliott Broidy to influence the U.S. Government in
connection with the extradition of Guo Wengui.
Accordingly, the
substitution adequately balances the national security interest in such information with the Giglio
information available to Michel.
—
~J
wens —
The government proposes the following substitution:
The U.S. Government received information indicating that, according to senior Chinese
government ee an agent for the Ministry of State Security
(“MSS”), and that trained in various intelligence techniques and strategies,
including human collection, technical collection, and cyber activity. The U.S.
Government further received information indicating that [jJwas tasked by the MSS to
perform various intelligence functions inside the United States, of which was
apparently knowledgeable.
GR 4 ccordingly, the Court concludes that this substitution adequately balances
national security with Defendant's interest in Giglio material.
itt
18
ee ee oe aS
The government proposes the following substitution:
The U.S. Government received information indicated that JY family had
ties to China’s Ministry of Security Services in Hong Kong. Further information
identified a location in Los Angeles, CA as a location through which money was routed.
Open source information indicates (Band Hamily are associated with this location,
The U.S. Government also received intelligence training overseas, potentially in China,
and that [iiliis reporting to China’s National Securit ommssion with former-senior
Chinese government officials potentially serving as Ml points of contact.
adequately balances national security with Defendant’s interest in Giglio material.
Accordingly, the Court concludes that this substitution
The Government proposes the following substitution:
19
I ee
The U.S. Government received information indicating that bad
attended a meeting in China in 2017 attended by senior Chinese government officials.
The meeting was also attended by Elliot Broidy. Subsequent travel records show I
as in China at the time of the meeting.
SL EY Serine.
the Court concludes that this substitution adequately balances national security with Defendant’s
interest in Giglio material.
The Government’s proposed redaction would read:
was provided as a U.S. contact for multiple visa applications
submitted between 2005 and 2010 on behalf of Chinese nationals traveling to the United
States, one of whom was married to an individual FBI assesses to be a known intelligence
officer for the Ministry of State Security in China.
GR Accordingly, the Court finds that the proposed substitution adequately balances
national security interests with Michel’s interest in Giglio material.
B. (U) Deletions
SE Accordingly, the Court agrees that
this classified portion would i not add to Michel’s Defense.
IV. (U) CONCLUSION
(UV) For the foregoing reasons, the Court shall GRANT the Motion in its entirety. An
appropriate order accompanies this Memorandum Opinion.
Dated: April 4, 2022 isf
COLLEEN KOLLAR-KOTELLY
United States District Judge
2)