Letter from United States re: Defendants'… — Letter from United States re: Defendants' Motions to Sever — USA… (Dkt. 72)

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U.S. District Court for the District of New Jersey · No. 1:24-cr-00267-KMW · Doc. 72 · 2025-04-14 · Docket on CourtListener

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U.S. Department of Justice 
United States Attorney 
District of New Jersey 
 
 
 
ALINA HABBA 
                                                                                401 Market Street, Fourth Floor  
United States Attorney                               
                                                                                Camden, New Jersey 08101-2098 
 
                                                            
                   
DANIEL A. FRIEDMAN 
                                                                                Direct Dial: 856.968.4867                    
Assistant United States Attorney 
                                                                                Email:  Daniel.friedman2@usdoj.gov 
 
 
 
April 14, 2025 
 
Honorable Karen M. Williams 
United States District Judge 
Mitchell H. Cohen Federal Courthouse 
One John F. Gerry Plaza, Fourth & Cooper Streets 
Camden, New Jersey 08101 
 
 
Re: 
United States v. Eric Rivera, et al., Crim. No. 24-267 (KMW) 
 
Dear Judge Williams: 
 
 
The Government respectfully submits this letter to address the Court’s question of 
whether the severance motions filed by defendants Adrienne Ponzo and James Wessels 
have been mooted by Ponzo’s guilty plea.  While Ponzo’s motion has been mooted, 
Wessels’ motion has not been mooted and still needs to be decided.  Below, the 
Government explains why it does not believe Wessels’ severance motion has been 
mooted.  Further, while the Government does not believe that severance is required here, 
the Government does not object to the severance of certain counts.  In the event the 
Court determines that severance is appropriate, the Government provides clarity below 
on precisely which counts should be severed and proposes a framework for further 
proceedings. 
 
A. Ponzo’s Guilty Plea Does Not Moot Wessels’ Severance Motion. 
 
Ponzo’s guilty plea means that she will not proceed to trial on the Indictment and 
therefore her severance motion is moot.  See In re Trader, 322 F. App’x 203, 204 (3d Cir. 
2009) (“[W]ithout a trial, Trader’s motions for pre-trial discovery and for severance 
became moot.”).  Wessels, however, also filed a severance motion, arguing that the 
charges relating to the conspiracy joined by Ponzo and Rivera were unrelated to his 
conspiracy, and that he would be prejudiced by evidence of the conspiracy involving 
Ponzo.  ECF No. 53-2.   
 
Ponzo’s guilty plea does not result in any charges being dropped from the 
indictment, because Ponzo was not the sole defendant in any of the counts charged.  With 
that said, some of the counts in the Indictment are now pending solely against Rivera do 
not address conduct by Wessels.  Because each Count that Wessels asserts was misjoined 
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and should be severed remains in the Indictment so long as Rivera remains a defendant, 
the Government acknowledges that Wessels’ severance motion has not been mooted by 
Ponzo’s guilty plea.  Further, while the Government does not believe that severance is 
required under Federal Rules of Criminal Procedure 8(b) and 14, in light of Ponzo’s guilty 
plea, the Government does not object to severance of certain counts as set forth in the 
following section.   
 
B. The Court Should Schedule a Joint Trial of Defendants Rivera and 
Wessels on Counts 1-4, 8-9, and 13-17. 
 
 
If the Court orders severance, it should sever Counts 5-7 and 10-12 and schedule, 
as the first trial, a joint trial of Rivera and Wessels on Counts 1-4, 8-9, and 13-17.  The 
Court should decline to sever Counts 9 and 13-17, which Wessels also appears to seek to 
sever.    
 
The argument that Wessels briefed and advanced at the motions hearing was that 
the Indictment charges two separate conspiracies: (1) a bank fraud conspiracy, involving 
Rivera, Wessels, and others, to defraud Lender-1 by submitting fraudulent Paycheck 
Protection Program (PPP) loans; and (2) a wire fraud conspiracy, involving Rivera, 
Ponzo, and others, to defraud the U.S. Small Business Administration (SBA) by 
submitting fraudulent Economic Injury Disaster Loans (EIDLs).  Wessels argued that 
joinder of these two conspiracies was improper under Rule 8(b) because Wessels was not 
alleged to have participated in the wire fraud conspiracy, and the wire fraud conspiracy 
was not part of the same “act or transaction” as the bank fraud conspiracy.  He also 
argued that he would be prejudiced if the jury heard evidence of a separate conspiracy 
that he did not join. 
 
If the Court credits Wessels’ argument, it should sever the counts involving the 
wire fraud conspiracy from the joint trial of Rivera and Wessels.  That means that the 
Court should sever Counts 5-7 because those counts involve the wire fraud conspiracy 
that Wessels did not join.  The Court also should sever Counts 10-12, because those 
counts charge money laundering transactions involving the proceeds of the wire fraud 
conspiracy that Wessels did not join.   
 
But the Court should decline Wessels’ request to sever Counts 9 and 13-17.  Count 
9 charges Rivera with conspiring to commit money laundering with the proceeds of both 
the bank fraud conspiracy that Wessels joined and the wire fraud conspiracy that 
Wessels did not join.  As such, Count 9 depends on—and is intertwined with—some of 
the same proofs as Wessels’ criminal conduct in the bank fraud conspiracy.  There is no 
reason to sever it. 
 
Moreover, there would be no prejudice to Wessels by including Count 9 at trial, 
because the Government would not offer any proofs involving the wire fraud conspiracy 
that Wessels did not join.  Instead, when proving Count 9, the Government would only 
present evidence that Rivera laundered the proceeds of the bank fraud conspiracy that 
Wessels himself joined.  Similarly, the paragraphs of Count 9 corresponding to the wire 
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fraud conspiracy could be redacted before the jury receives it, leaving only the 
paragraphs about laundering the proceeds of the bank fraud conspiracy.   
 
In the same vein, Counts 13-17 charge Rivera with laundering the proceeds of the 
bank fraud conspiracy that Wessels joined.  Evidence of the wire fraud conspiracy that 
Wessels did not join would not be needed to prove Counts 13-17, and the Government 
would not present any such proofs at trial. 
 
Although Wessels is not charged in Counts 9 and 13-17, the proceeds that form the 
basis of Counts 9 and 13-17 are derived from his Specified Unlawful Activity because 
they were acquired through the bank fraud conspiracy that Wessels joined.  Joining 
these Counts is appropriate because Rivera and Wessels “are alleged to have participated 
in the same act or transaction, or in the same series of acts or transactions, constituting 
an offense or offenses.”  Fed. R. Crim. P. 8(b).  If the EIDL fraud and the laundering of 
EIDL fraud proceeds are severed, all of the remaining counts involve the bank fraud 
conspiracy in which both defendants participated.  Joinder of these counts is appropriate.  
The joinder rule does not require every defendant to be charged in every count.  See id. 
(“The defendants may be charged in one or more counts together or separately.  All 
defendants need not be charged in each count.”). 
 
It is common and permissible for money laundering and the underlying offense 
that generate the proceeds to be charged in the same indictment; indeed the merger 
doctrine exists because money laundering and the Specified Unlawful Activity are 
regularly charged together.  It is similarly common for individuals to be charged with 
committing the underlying offense but not the subsequent laundering.  In United States 
v. Walker, 392 F. App’x 919, 925-26 (3d Cir. 2010), the Third Circuit affirmed the denial 
of severance motions brought by one defendant who was charged with drug trafficking 
conspiracy but not money laundering, and by another defendant who was charged with 
money laundering but not drug trafficking conspiracy.  “[T]he money laundering 
conspiracy and the drug-trafficking conspiracy were interrelated” because the laundered 
property was the proceeds of the drug trafficking conspiracy.”  Id.  The Third Circuit 
found that the jury was able to compartmentalize the evidence, especially given that “the 
Government structured the testimony to set apart the money laundering case.”  Id.  
Similarly, in United States v. Lyttle, 460 F. App’x 3, 8 (2d Cir. 2012), an indictment 
charged three defendants with wire and mail fraud, but only two of the defendants with 
money laundering.  The Second Circuit upheld the district court’s denial of severance of 
the money laundering count, stating that the court’s repeated instructions to the jury 
that the defendant was not charged with money laundering was sufficient to remove any 
prejudice.  Id.; see also United States v. Hosseini, 679 F.3d 544, 552-53 (2d Cir. 2012) 
(affirming denial of motion for misjoinder under Rule 8(b) where defendant was charged 
with money laundering but not drug conspiracy); United States v. Marzano, 160 F.3d 
399, 401 (7th Cir. 1998) (no misjoinder or severance where drug offenses related to 
laundering); United States v. Acosta, 2012 WL 3887534, at *3 (S.D. Fla. Sept. 7, 2012) 
(“[T]he conduct charged in the money laundering counts regards proceeds allegedly 
acquired during the drug-trafficking activity charged in Counts 1 through 8. Thus, all of 
the counts in the Superseding Indictment are ‘connected’ for purposes of Rule 8(a) and 
(b).”).  There are no grounds for severing the money laundering counts that flow from 
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Wessels’ PPP fraud from the counts charging his fraud.  Indeed, even were severance 
ordered, evidence about the subsequent laundering of the fraudulently obtained funds 
would be admissible at trial because that evidence is intrinsic to the charge of bank fraud 
conspiracy or, at a minimum, admissible as non-propensity evidence of Rivera’s motive 
and knowledge. 
 
Rivera and Wessels should jointly be tried on counts relating to their bank fraud 
conspiracy (Counts 1-4); on Wessels’ conspiracy to launder the proceeds of the PPP 
conspiracy charged in Count 1, which Rivera has not moved to sever (Count 8); and on 
the counts related to Rivera’s laundering of the proceeds of the PPP conspiracy that both 
Rivera and Wessels are charged with in Count 1 (Counts 9 and 13-17).  The remaining 
counts would be severed and would be the subject of a second trial involving only Rivera.   
 
Consistent with the above analysis, if the Court determines that severance is 
appropriate, the Government respectfully requests that the Court set a trial date in 
September 2025 for the joint trial on Counts 1-4; 8-9; and 13-17.  The Government 
expects that the joint trial would last approximately two or three weeks.  The second 
trial, against Rivera only on Counts 5-7 and 10-12, could be set for a date after the 
completion of the joint trial.  Thank you for your consideration. 
 
Respectfully submitted, 
 
 
 
 
 
 
 
 
ALINA HABBA 
 
 
 
 
 
 
 
United States Attorney 
 
 
/s/ Daniel A. Friedman  
 
By:  
DANIEL A. FRIEDMAN 
 
JASON M. RICHARDSON 
Assistant U.S. Attorneys 
 
cc:  
All counsel of record (via ECF) 
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