Omnibus Pre-Trial Motions — United States v. Adrienne Ponzo

Filed December 2, 2024 in U.S. v. Adrienne Ponzo; one of 14 filings from this case.

Full text

Case 1:24-cr-00267-KMW      Document 51        Filed 12/02/24   Page 1 of 29 PageID: 317




                          UNITED STATES DISTICT COURT

                      FOR THE DISTRICT OF NEW JERSEY
 UNITED STATES OF AMERICA,             :
                                       :          Crim. No. 24-267 (KMW)
             Plaintiff,                :
       vs.                             :          OMNIBUS
ADRIENNE PONZO, et al.                 :          PRE TRIAL MOTIONS
                                       :
                                       :
              Defendant.               :

      OMNIBUS PRE TRIAL MOTIONS ON BEHALF OF DEFENDANT

                               ADRIENNE PONZO

Statement of Facts

      The Indictment in the present case, in general terms, alleges multiple

conspiracies to defraud both the United States Government and unidentified

financial institutions through the federal Paycheck Protection Program (“PPP”).

PPP was part of the Coronavirus Aid, Relief, and Economic Security (“CARES”)

Act, a federal law enacted in or about March 2020 to assist business owners

affected by the pandemic. By way of application, these business owners were able

to obtain forgivable loans for job retention and certain other expenses, provided

that the business owners complied with various requirements and utilized the funds

for certain permissible business expenses. The Indictment further alleges similar

schemes in connection with the Economic Injury Disaster Loan (“EIDL”) Program,

an SBA program that provided low-interest financing to small businesses, renters,


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and homeowners in regions affected by declared disasters. Like the PPP, borrowers

needed to meet certain requirements and use the finds in certain manner in order to

qualify. (Indictment, Count 1, ¶¶ 1q.-y.).

      Although the Indictment charges three individuals, these individuals do not

have equal involvement in the fraudulent schemes, nor has the Government alleged

a conspiracy that involves all three of the Defendants. The allegations of the

Indictment establish a rather vast conspiracy devised by Eric Rivera (“Rivera”) and

James Wessels (“Wessels”), and an unconnected, much smaller scale conspiracy

devised by Rivera and Defendant Adrienne Ponzo (“Ponzo”). In fact, although the

Indictment concerns both PPP and EIDL, the allegations against Ponzo concern

solely two loans obtained pursuant to the EIDL program and do not involve any of

the identified or unidentified co-conspirators, unlike the Rivera/Wessels fraud

which implicates all of the identified or unidentified co-conspirators.

      The Bank Fraud Conspiracy (Rivera and Wessels): The Indictment

alleges that Rivera and Wessels conspired with Co-Conspirator 1 (a branch

manager at Lender-1’s Conshohocken location, with Lender-1 identified as a

financial lender that participated in the PPP), Co-Conspirator 3 (a resident of North

Carolina who owned or controlled Delaware companies), and William Ingram

(“Ingram”) “to financially enrich themselves by obtaining PPP loans that were

intended for small businesses distressed by the COVID-19 pandemic through the


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submission of fraudulent loan applications, for companies with little or no

operations (‘Non-Operating Companies’), that included false statements about the

Non- Operating Companies’ number of employees and payroll expenses, and by

providing false documentation to Lender-1.” This conspiracy involved loan

applications that contained materially false representations, fraudulent IRS tax

forms, and other false documentation to obtain PPP loans, resulting in $5,000,000

in disbursements to Non-Operating Companies. (Indictment, Count 1, ¶¶ 2-16).

      Bank Fraud (Rivera and Wessels): The Government has further alleged

that Rivera and Wessels “did knowingly and intentionally execute and attempt to

execute a scheme and artifice to defraud a financial institution, and aid and abet the

scheme and artifice to defraud a financial institution, that was Lender-1, and to

obtain moneys, funds, credits, assets, securities, and other property owned by, and

under the control of, a financial institution, Lender-1, by means of materially false

and fraudulent pretenses, representations, and promises.” Specifically, these

defendants caused three fraudulent PPP loan applications to be submitted: 1)

$122,000 to King of Aces Barbershop, LLC on 3/19/21; 2) $143,000 to East Coast

Commercial Investment LLC on 4/10/21; and 3) $145,000 to Leader of the Pack

Productions LLC on 4/20/21. The total amount of identified proceeds derived from

the Bank Fraud totaled $410,000. Both the Fraud and the Conspiracy occurred

from January 2021-December 2021. (Indictment, Counts 2-4; Count 1, ¶2).


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      Money Laundering Conspiracy (Wessels only): The Government alleges

that Wessels “did knowingly and intentionally conspire and agree with William

Ingram, CC-2, and others to knowingly conduct and attempt to conduct financial

transactions affecting interstate and foreign commerce which involved the

proceeds of a specified unlawful activity, namely bank fraud, contrary to Title 18,

United States Code, Section 1344.” To accomplish the conspiracy, “William

Ingram and CC-2 received into bank accounts at Lender-1 in the name of Non-

Operating Companies that they controlled at Lender-1, four PPP loans based on

fraudulent PPP loan applications.” Wessels, Ingram and CC-2 also facilitated “the

issuance of fake payroll checks by William Ingram’s and CC-2’s Non-Operating

Companies;” utilized associates and family members to receive the PPP proceeds;

and “printed fake payroll checks and sent them to William Ingram in New Jersey

and CC-2 in New York for further distribution to William Ingram’s and CC-2’s

associates and family member.” In short, Wessels (through Ingram, CC-2 and the

Non-Operating Companies) sought to disguise the proceeds of the unlawful

activity as legitimate payroll expenses. (Indictment, Count 8).

      The Wire Fraud Conspiracy (Rivera and Ponzo): The allegations against

Defendant Ponzo pale in comparison to the above allegations in extent, design, and

effect. The Government has alleged that Defendant Ponzo provided assistance to

Rivera in connection with fraudulent loan applications submitted to the SBA


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pursuant to the EIDL program. Specifically, the Government has alleged that

Ponzo “prepared applications for EIDLs on behalf of Non-Operating Companies

recruited by [Rivera] and others,” wherein Ponzo provided materially false

information (including gross revenues for the twelve months preceding January 31,

2020) and prepared “fraudulent bank statements and fraudulent IRS tax documents

for some of the EIDL applications she facilitated.” Ponzo also allegedly, along with

Rivera, “directed some Recruits to transfer ownership of their Non- Operating

Companies to other individuals to increase their chances of obtaining EIDL loans.”

Rivera then compensated Ponzo for her services. The conspiracy is alleged to have

occurred between July 2020- December 2020. (Indictment, Count 5, ¶¶2-10).

      Wire Fraud (Rivera and Ponzo): The Government alleges that Rivera and

Ponzo used “wire communications in interstate and foreign commerce” in order to

“knowingly and intentionally devise and intend to devise a scheme and artifice to

defraud, and aid and abet the scheme and artifice to defraud, the SBA, and to

obtain money and property by means of materially false and fraudulent pretenses,

representations, and promises.” Specifically, the Government asserts that on

11/20/20, there was “payment of approximately $147,100 from the SBA, through

New Jersey, to the bank account of Visionworks Group of America at Financial

Institution-1, representing proceeds of an EIDL loan approved based on a

fraudulent EIDL application” and that on 12/15/20, there was a “payment of


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approximately $141,500 from the SBA, through New Jersey, to the bank account

of King of Aces Barbershop at Financial Institution-2, representing proceeds of …

a fraudulent EIDL application.” (Indictment, Counts 6-7).

      Conspiracy to Engage in Monetary Transactions in Property Derived

from Specified Unlawful Activity and Engaging in Property Derived from

Specified Unlawful Activity (Rivera and Ponzo): The Government has alleged

Rivera and Ponzo “did knowingly conspire and agree with each other and with

others to engage in, or attempt to engage in, monetary transactions, namely,

deposits, withdrawals, transfers and exchanges of U.S. Currency and monetary

instruments, through financial institutions, affecting interstate and foreign

commerce, in criminally derived property of a value greater than $10,000, such

property having been derived from specified unlawful activity.” The conspiracy

was effectuated by depositing “the PPP and EIDL proceeds into bank accounts in

the name of the Non-Operating Companies,” which “represented proceeds of bank

fraud conspiracy, wire fraud conspiracy, bank fraud, and wire fraud.” Once the

funds were deposited into these accounts, Rivera (and not Ponzo) “caused the

Recruits to transfer a portion of those funds from the Non-Operating Companies’

bank accounts to bank accounts controlled by” Rivera. Rivera (and not Ponzo) then

“caused transfers of a portion of the PPP proceeds from bank accounts that he

controlled to bank accounts controlled by CC-3.” (Indictment, Count 9, ¶¶1-5).


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These transfers totaled $158,500 ($72000; $21450; $9000; $12750; $10800;

$7500; $25000). (Indictment Count 9, ¶¶6a-7)

      Finally, with regard to Ponzo, the Government alleges that she (along with

Rivera) “caused transfers of a portion of the EIDL proceeds from bank accounts

controlled by defendant ERIC RIVERA to bank accounts controlled by” Ponzo, yet

the allegations are restricted to one $15,000 wire on November 27, 2020 and one

$14,330 wire on December 17, 2020 from the Precis Laboratory bank account at

Financial Institution-3 to a bank account controlled by Ponzo at Financial

Institution-5. In the substantive Counts, the Government further specifies that

Rivera and Ponzo are collectively responsible for these two wires only. (Counts 10-

17). At most, the allegations of the complaint reveal that Ponzo and Rivera

collectively transferred $29,330 to accounts controlled by Ponzo, yet contains no

detail about the use of these funds, other than the general allegation that “after

defendants [Rivera and Ponzo] received the PPP and EIDL loan proceeds, they

used the funds to pay personal expenses.” (Count 9, ¶¶8-9)

      The Prosecution thereby involves three named Defendants (Ponzo, Wessels,

and Rivera), two co-conspirators charged elsewhere (William Ingram and Yasha

Barjona), three unnamed and uncharged co-conspirators (CC-1, -2, -3) and one

unnamed individual (Individual-1). In terms of victims, the Indictment identifies

six (6) financial institutions (Lender-1 and Financial Institutions -1 through -5) and


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one Governmental Entity (the SBA). The Bank Fraud Conspiracy Count asserted

against Wessels and Rivera involved both of these Defendants, Lender-1, CC-1,

CC-3, “and others.” In terms of the scope of the conspiracy, the Indictment alleges

that Wessels and Rivera caused Lender -1 to “approve[] more than 35 PPP loans

and disburse[] almost $5,000,000 to the Non-Operating Companies.” (Indictment

Count One, ¶¶2-16). The substantive Bank Fraud allegations then focus on three

specific loans obtained through fraudulent PPP application. (Counts Two-Four).

      Defendant Ponzo, however, is implicated solely with regard to providing

services on behalf of Rivera in the Wire Fraud Counts, and has no connection to

the allegations of Bank Fraud. In fact, of all the individuals discussed in the

Indictment (i.e. the Defendants, the named conspirators, and the three unidentified

co-conspirators), the Indictment only alleges that Ponzo conspired with Rivera.

Defendant Ponzo has literally no connection, direct or indirect, with any of the

other individuals that participated in the Bank Fraud Conspiracy and the Money

Laundering Conspiracy.

      As the Indictment alleges with regard to the Wire Fraud Conspiracy, Ponzo

provided materially false information on the EIDL applications (but had no

involvement with the PPP applications that generated $5,000,000 in disbursements

from Lender-1) at Rivera’s direction and, in exchange, received compensation for

her role. The substantive Wire Fraud Counts, in turn, contain no allegations at all


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with regard to Ponzo’s conduct. Ponzo was not involved in the recruitment of

individuals, as the Indictment makes clear that Rivera exclusively controlled that

aspect of the alleged conspiracy. (Count 5, ¶¶5-7, 10; Counts 6-7).

      With regard to the money laundering conspiracy, the Indictment alleges that

Rivera effectively dictated the entire Manner and Means of the Conspiracy. Ponzo

involvement is restricted to the following: “defendants ERIC RIVERA and

ADRIENNE PONZO caused transfers of a portion of the EIDL proceeds from

bank accounts controlled by defendant ERIC RIVERA to bank accounts controlled

by defendant ADRIENNE PONZO,” and then identifies two specific transfers, one

amounting to $15,000 and the other to $14,330. The substantive Count thereby lists

these two transfers. (Count 9, ¶¶3-9; Counts 11-12). Notably, none of the

allegations involve Ponzo’s interaction with any identified or unidentified co-

conspirators, other than Rivera, and then only in connection with only two

applications and two transfers.



                                  Legal Argument

I.    BECAUSE THE INDICTMENT IMPROPERLY JOINS MULTIPLE,
      UNRELATED CONSPIRACIES PURSUANT TO FRCP 8(B), THIS
      COURT SHOULD ORDER SEVERANCE OF THE COUNTS
      ASSERTING CLAIMS AGAINST PONZO AND RIVERA, DESPITE
      RIVERA’S INDEPENDENT CONNECTIONS TO OTHER PARTIES.




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       The Indictment in the present case joins multiple, unconnected conspiracies

 simply because Defendant Rivera was a participant in multiple, unconnected

 conspiracies. The Bank Fraud/Laundering Counts asserted against all of the named

 Defendants other than Ponzo (which involve multiple named and unnamed co-

 conspirators) are not sufficiently connected to the Wire Fraud/Laundering Counts

 that involve only Ponzo and Rivera (which involve no other named or unnamed co-

 conspirator). The timing, extent, scope, and participants involved in the separate

 conspiracies are simply too divergent to permit joinder. Accordingly, the Court

 should sever the trial of the Bank Fraud/Laundering involving Rivera and Wessels

 from the trial of the Wire Fraud/Conspiracy charges against Rivera and Ponzo.

       A.     Because of the Lack of Connection Between the Various Conspiracies,
              and the Fact That They Were Not Part of the Same Series of Acts or
              Transactions, the Government Engaged in Misjoinder.

       Joinder of Defendants is governed by Federal Rule of Criminal Procedure

 8(b), which provides:

       (b) Joinder of Defendants. The indictment or information may
       charge 2 or more defendants if they 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. The defendants may
       be charged in one or more counts together or separately. All
       defendants need not be charged in each count.

 To satisfy Rule 8(b), “[i]t is not enough that defendants are involved in offenses of

 the same or similar character; there must exist a transactional nexus in that the

 defendants must have participated in ‘the same act or transaction, or in the same

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 series of acts or transactions.’” United States v. Jimenez, 513 F.3d 62, 82–83 (3d

 Cir. 2008) (quoting Fed. R. Crim. P. 8(b)).

       The “inquiry into whether … defendants were properly joined focuses upon

 the indictment, not upon the proof that was subsequently produced at trial.”

 United States v. Irizarry, 341 F.3d 273, 287 (3d Cir. 2003); United States v. Somers,

 496 F.2d 723, 729 (3d Cir. 1974) (“A Rule 8(b) motion is addressed to the

 pleadings, and not to the proof subsequently adduced.”). It is common for a federal

 indictment to join conspiracy counts and substantive counts, “since the claim of

 conspiracy provides a common link, and demonstrates the existence of a common

 scheme or plan." Irizarry, 341 F.3d at 289 (quoting Somers, 496 F.2d at 730,

 emphasis in original).

       Multiple conspiracies involving separate defendants, by contrast, may be

 prosecuted within the same indictment only when the “conspiracies were related.”

 United States v. McGurn, 305 F. App'x 879, 880 (3d Cir. 2009). For example,

 prosecution of multiple conspiracies is proper in a racketeering case, “even when

 different defendants are charged with different acts, so long as indictments indicate

 all the acts charged against each joined defendant (even separately charged

 substantive counts) are charged as racketeering predicates or as acts undertaken in

 furtherance of, or in association with a commonly charged RICO enterprise or

 conspiracy.” United States v. Eufrasio, 935 F.2d 553, 567 (3d Cir. 1991). Similarly,


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 where the indictment charges all of the named defendants in a conspiracy count,

 and all defendants are named in the subsequent substantive counts, they are

 properly “linked together,” in the "’same series of acts or transactions constituting

 an offense or offenses’ under Rule 8(b).” United States v. Addonizio, 313 F. Supp.

 486, 498 (D.N.J. 1970).

       In the present case, there are no allegations, however, that similarly connect

 the various conspiracies alleged in the Indictment, and thus the Indictment fails to

 show a “link” between the offenses alleged against the various defendants. Irizarry,

 341 F.3d at 289. The indictment does not allege a criminal plan, scheme, endeavor,

 or enterprise whereby the Bank Fraud alleged between Rivera and Wessels is any

 way related to the alleged Wire Fraud/Conspiracy between Rivera and Defendant

 Ponzo. In sum, the indictment fails to include allegations sufficient to permit either

 a joint trial of the Bank Fraud Counts (Counts 1-4) with the other counts of the

 indictment, specifically the Counts predicated upon Wire Fraud/Conspiracy

 (Counts 5-7) and Money Laundering/Conspiracy (Counts 9, 11-12) asserted against

 Defendant Ponzo. They are wholly distinct conspiracies, involving different

 individuals (other than the fact that Rivera is a part of both conspiracies) and are

 not part of the same act or transaction, or the same series of acts or transactions.

       In addition, the there is no overlap in time between the conspiracies alleged.

 The Rivera/Wessels Bank Fraud Conspiracy and Bank Fraud occurred in January


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 2021 through December 2021. The Rivera/Ponzo Wire Fraud Conspiracy is alleged

 to have occurred between July 2020 through December 2020 and thus was

 completed before the Rivera/Wessels conspiracy began. (Compare Count One, ¶2

 with Count 5, ¶2). The Money Laundering conspiracies are similar, whereby the

 Rivera/Wessels Conspiracy occurred between June 2021 and December 2021 while

 the Rivera/Ponzo conspiracy occurred between November 2020 through June

 2021. (Compare Count Eight, ¶2 with Count 9, ¶2). Finally, the allegations involve

 entirely different loan programs, where the Rivera/Wessels Conspiracy focused on

 PPP whereas the Rivera/Ponzo conspiracy focused on the EIDL. Although the

 programs may be similar, severance would actually promote efficiency as the trials

 would be compartmentalized based on the loan program involved.

       B.     Because the Rivera/Wessels Conspiracies Were Larger, Involved More
              Participants, and Resulted in the Transfer of Far More Funds than the
              Rivera/Ponzo Conspiracy, a Joint Trial Will Result in Prejudicial
              Evidence Introduced Against Ponzo.

       Federal Rule of Criminal Procedure 14(a) permits severance and/or separate

 trials of counts where “the joinder of offenses or defendants in an indictment ... for

 trial appears to prejudice a defendant." Fed. R. Crim. P. 14(a). Such prejudice

 exists sufficient to require severance when “there is a serious risk that 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.” United States v.

 Blunt, 930 F.3d 119, 125 (3d Cir. 2019); Zafiro v. United States, 506 U.S. 534, 539

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 (1993); United States v. Urban, 404 F.3d 754, 775-76 (3d Cir. 2005) (recognizing

 jury's inability to compartmentalize evidence as grounds for severance). Serious

 risk of prejudicial joinder “might occur when evidence that the jury should not

 consider against a defendant and that would not be admissible if a defendant were

 tried alone is admitted against a codefendant.” Id. The “critical issue” is “whether

 the jury will be able to compartmentalize the evidence as it relates to separate

 defendants in view of its volume and limited admissibility.” United States v.

 Scarfo, 41 F.4th 136, 182 (3d Cir. 2022)(citations omitted).

       Courts in this district and elsewhere have also long recognized case

 complexity and practical administrative concerns as bases for severance of a

 criminal trial. In United States v. Gatto, 746 F. Supp. 432 (D.N.J. 1990), the

 Honorable District Court Judge Stanley Brotman found that even where the

 Government alleged a RICO conspiracy, the fact that the indictment also alleged

 multiple additional conspiracies created a concern about the jury's ability to keep

 track of the limiting instructions that would be required. Id. at 451. The jury would

 be asked to distinguish between separate conspiracies, separate conspirators and

 then determine which statements are admissible against which co-conspirators in

 which conspiracies, Id. at 449-50, which is precisely the situation here. Finally,

 Judge Brotman also determined that the fact that the indictment alleged four

 separate conspiracies was a sufficient reason to warrant a severance even though


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 the Gatto case included fewer defendants and fewer counts than were alleged in

 other Federal District Court cases granting severance. Id. at 449.

       In fact, the Third Circuit has recognized that in certain scenarios severing

 trials may in fact preserve, rather than waste judicial resources:

       To be sure, it has ever been the case that no defendant should "be
       deprived of a fair trial because it is easier or more economical." Boscia,
       573 F.2d at 833. Our judicial system does not aim to resolve cases as
       quickly or inexpensively as possible, to the detriment of a criminal
       defendant. To be sure, certain severed trials might require more judicial
       time and energy to adjudicate than would a single joint trial. But even
       that eventuality is not assured; in some cases, severed trials might
       actually conserve court resources. See Zafiro, 506 U.S. at 544-
       45 (Stevens, J., concurring) (declining to endorse "unqualified"
       preference for joint trials, and reasoning that trying certain
       multidefendant cases separately is "not only more reliable, but also
       more efficient and manageable than some of the mammoth conspiracy
       cases which the Government often elects to prosecute").

 United States v. Green, 114 F.4th 163, 173 (3d Cir. 2024). Accordingly, although

 “judicial economy remains a relevant consideration for courts in determining

 whether to sever the joint trials of defendants,” the Third Circuit nonetheless has

 determined that “to the extent that our earlier decisions rest on the notion that there

 is a ‘substantial’ public interest in economically resolving cases in joint trials, we

 are not convinced that concerns of judicial economy should weigh as heavily in our

 severance analysis as they have in prior decades.” Id.

       The present case presents one of those rare scenarios where severing trials

 may in fact lead to a conservation of judicial resources, precisely because the


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 allegations against Rivera and Wessels more complex, involving far more

 witnesses, participants, co-conspirators, transactions and victims. The allegations

 involving Rivera and Wessels contemplate nearly $5,000,000 in disbursements

 from the affected financial institutions, as a result of 35 fraudulent PPP loans, and

 implicate every person mentioned in the Indictment, other than Ponzo. The

 allegations against Ponzo, by contrast, implicate only Rivera, and resulted in only

 two fraudulent applications under the separate EIDL program. In short, a trial of

 Rivera and Ponzo will be far simpler and streamlined and decrease the complexity

 of both trials.

 II.    THE COURT SHOULD ORDER THE GOVERNMENT TO FILE A BILL
        OF PARTICULARS DISCLOSING THE IDENTITY OF THE NON-
        OPERATING COMPANIES, THE “RECRUITS,” AND THE
        UNIDENTIFIED “OTHER INDIVIDUALS.”

        The Third Circuit has ruled that a bill of particulars “inform[s] the defendant

 of the nature of the charges brought against him to adequately prepare his defense,

 to avoid surprise during the trial and to protect him against a second prosecution

 for an inadequately described offense.” United States v. Addonizio, 451 F.2d 49,

 63-64 (3d Cir. 1971). Although Federal Rule of Criminal Procedure 7(f) once

 required a showing of good cause, the 1966 amendments eliminated this

 requirement in order “to encourage a more liberal attitude by the courts towards

 bills of particulars without taking away the discretion which courts must have in

 dealing with such motions in individual cases." Id. at 64 (quoting Notes of

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 Advisory Committee on Rules, 18 U.S.C. Rule 7(f)). Our Circuit has determined

 that the “net result of the change” ultimately “increase[s] the instances in which

 particulars are granted, thus contributing to a desirable decline in the ‘sporting

 theory’ of criminal justice.” Id.

       Pursuant to Federal Rules of Criminal Procedure Rule 7(f), the Court should

 order the Government to file a bill of particulars disclosing the identities of the

 non-operating companies, the recruits and the other individuals mentioned in the

 Wire Fraud Counts. With regard to the Conspiracy, the Government has alleged

 that Rivera “recruited individuals who owned or controlled Non-Operating

 Companies (the ‘Recruits’). At least one of the Non-Operating Companies was a

 New Jersey company and at least one of the Recruits was a resident of New

 Jersey.” Ponzo’s role, in turn, was to prepare fraudulent “applications for EIDLs on

 behalf of Non-Operating Companies recruited by defendant ERIC RIVERA and

 others.” Finally, the Government claims that Ponzo “directed some Recruits to

 transfer ownership of their Non- Operating Companies to other individuals to

 increase their chances of obtaining EIDL loans.” (Count 5, ¶¶4-5)

       Evidence linking Ponzo to any conspiracy is tenuous at best, and the

 identities of the non-operating companies, the recruits and the other individuals

 mentioned in the Wire Fraud Counts are essential to the preparation of Ponzo’s

 defense and to avoid surprise at trial. Ponzo’s entire involvement in the underlying


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 facts is restricted to providing services for Rivera, after he (exclusively and without

 Ponzo’s assistance) recruited the individuals and companies that nominally

 submitted the applications. The Government’s entire case against Ponzo depends in

 substantial part at least upon the testimony of these individuals. Without their

 identity, Ponzo is unable develop legal strategies for refuting the accusations and to

 obtain evidence in support of those legal strategies.

       In addition, because there are separate conspiracies alleged with regard to

 money laundering, occurring at different times involving separate and distinct

 individuals, the Government should specify the source of the proceeds that Ponzo

 supposedly laundered. To illustrate, the Government alleges, “It was part of the

 conspiracy that, based on false information and documentation that was included in

 the Non-Operating Companies’ PPP and EIDL applications, the Lender-1 and the

 SBA approved PPP and EIDL loans for the Non- Operating Companies and

 deposited the PPP and EIDL proceeds into bank accounts in the name of the Non-

 Operating Companies. These proceeds represented proceeds of bank fraud

 conspiracy, wire fraud conspiracy, bank fraud, and wire fraud.” The remaining

 allegations of the supposed conspiracy between Rivera and Ponzo then focus

 almost exclusively upon Rivera’s transactions with the identified and unidentified

 co-conspirators, while Ponzo’s direct involvement is restricted to two transfers




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 from Rivera’s bank accounts to Ponzo’s accounts, with no connection to the

 identified and unidentified co-conspirators. (Count 9, ¶¶4-8).

        Notably, Ponzo has not asked for a bill of particulars with regard to the

 unidentified co-conspirators, as the Indictment makes clear that Ponzo had no

 connection whatsoever to these individuals; Ponzo’s entire involvement is

 restricted to receiving instructions from Rivera, acting upon those instructions, and

 then receiving compensation for doing so. As will be established in the following

 section, these allegations compel dismissal of the money laundering counts against

 Ponzo as the allegations establishing potential Wire Fraud/Conspiracy serve as the

 sole basis for the money laundering counts, without any additional conduct

 indicating how the money was actually laundered, engendering a merger problem.

 III.   THE MERGER PROBLEM ANALYZED BY THE SUPREME COURT
        WITH REGARD TO WEALTH ACQUIRING CRIMES COMPELS
        DISMISSAL OF MONEY LAUNDERING COUNTS AGAINST PONZO.

        The Third Circuit has set forth a three-part test for determining the

 sufficiency of an indictment. It must 1) “contain[] the elements of the offense

 intended to be charged, 2) sufficiently apprise[] the defendant of what he must be

 prepared to meet and 3) allow[] the defendant to show with accuracy to what

 extent he may plead a former acquittal or conviction in the event of a subsequent

 prosecution.” United States v. Kemp, 500 F.3d 257, 280 (3d Cir. 2007). Although

 the Government’s failure to set forth the specific acts establishing the essential


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 elements of the statutory offense is thereby one potential basis for challenging the

 sufficiency of the indictment, a defendant may also lodge a successful challenge on

 the ground that “the specific facts alleged ... fall beyond the scope of the relevant

 criminal statute, as a matter of statutory interpretation.” United States v. Panarella,

 277 F.3d 678, 685 (3d Cir. 2002). If the facts set forth in an indictment fail to

 satisfy the elements of the particular offense, the government’s recitation, in

 general terms, of the elements of the offense is insufficient. Id.

       In the present case, the Government has admittedly set forth the proper

 statutory citation, and the correct statutory language, for each of the offenses

 charged. However, based on the allegations of the Complaint, the Government has

 sought to criminalize activity that the Supreme Court of the United States has

 already determined is not a separate criminal offense. In short, the payments made

 from Rivera to Ponzo were in payment for her actions that were the basis for the

 allegations of Wire Fraud/Conspiracy, and thus part of the essential expenses of the

 original alleged conspiracy, as in United States v. Santos, 553 U.S. 507 (2008).

       A.     The Factual Allegations of the Indictment Engender the “Merger
              Problem” Whereby Payment of the Essential Expenses of Wire or
              Mail Fraud Cannot Also be Used as the Basis for Money Laundering.

       The money laundering allegations in the present case further suffer from the

 “merger problem” first identified by the Supreme Court in United States v. Santos,

 553 U.S. 507 (2008). In Santos, defendant Santos operated an illegal lottery in


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 Indiana, and employed a number of helpers to run the lottery. The runners would

 gather bets, keep a portion of those monies as their commission and deliver the

 remainder to people employed as collectors. The collectors would then deliver the

 money to Santos, who would use the funds to pay salaries to his collectors, one of

 whom was respondent Benedicto Diaz. The Government alleged that these

 payments constituted money laundering pursuant to 18 U.S.C. §1956(a)(1) and

 obtained convictions on that basis. Id. at 509-10.

       The Supreme Court agreed that the money laundering convictions should be

 vacated, based upon what it deemed a “merger problem.” The specific issue before

 the Court was whether the term “proceeds” in the money laundering statute

 equated to “profits” or “receipts”. Essentially, the Court ruled that if proceeds

 signified receipts, “nearly every violation of the illegal-lottery statute would also

 be a violation of the money-laundering statute, because paying a winning bettor is

 a transaction involving receipts that the defendant intends to promote the carrying

 on of the lottery.” Id. at 551. Such an interpretation was clearly unwarranted since

 Congress penalized the operation of an illegal lottery by up to five years, while

 money-laundering carries a potential of 20 years in prison. Because of this merger

 of the otherwise two separate crimes, “[p]rosecutors, of course, would acquire the

 discretion to charge the lesser lottery offense, the greater money-laundering




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 offense, or both – which would predictably be used to induce a plea bargain to the

 lesser charge.” Id. at 515-16.

       The Supreme Court made clear, moreover, that the merger problem resulting

 from the interpretation of the money-laundering statute was not restricted to the

 illegal-lottery statute. On the contrary:

       For a host of predicate crimes, merger would depend on the manner
       and timing of payment for the expenses associated with the
       commission of the crime. Few crimes are entirely free of cost, and
       costs are not always paid in advance. Anyone who pays the costs of a
       crime with its proceeds - for example, the felon who uses the stolen
       money to pay for the rented getaway car – would violate the money-
       laundering statute. And any wealth-acquiring crime with multiple
       participants would become money-laundering when the initial
       recipient of the wealth gives his confederates their shares.
       Generally speaking, any specified unlawful activity, an episode of
       which includes transactions which are not elements of the offense and
       in which a participant passes receipts on to someone else, would
       merge with money laundering.

 Id. at 515 (emphasis added). Engaging in a concerted illegal activity, and then

 dividing the proceeds from that illegal activity amongst the various participants,

 simply does not fall within the definition of money-laundering. Id.

       Decisions post-Santos describe precisely how that decision applies in the

 fraud context, as opposed to the illegal lottery scheme. To illustrate, in United

 States v. Abdulwahab, 715 F.3d 521 (4th Cir. 2013), the defendant was charged with

 mail and securities fraud in connection with the sale of life settlement investments,

 which are interests in life insurance policies. The government alleged that the


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 defendant’s payment of commissions to the sales agents constituted money

 laundering. However, these funds were generated from the sale of interests in life

 insurance policies and other investment vehicles and thereby represented the

 expenses of the completed mail and securities frauds. Based on these facts, the

 defendant argued that that his money laundering convictions are barred by the

 “merger problem” identified in Santos since those convictions were based on

 allegations that he paid the expenses of completed frauds with money that the

 frauds generated. Id. at 528-529.

       The Fourth Circuit agreed that the payment of commissions, which were the

 basis for the money laundering counts, were simply part and parcel of the

 underlying mail and securities frauds:

       The money laundering counts at issue concerned commission
       payments to HIC sales agent Tim Bromseth. These payments ... were
       for services that played a critical role in the underlying fraud scheme
       in that it was the promise of payment for services rendered that
       enticed HIC and Bromseth to obtain investors for A & O. As such,
       [defendant] was no different than “the felon who uses the stolen
       money to pay for the rented getaway car” or “the initial recipient of
       the wealth” in “any wealth-acquiring crime with multiple participants
       ... [who] gives his confederates their shares.”

 Id. at 531 (quoting Santos, 553 U.S. at 516). In short, the commission payments

 were essential expenses of the illegal activity. Although the payments may

 constitute evidence of the underlying fraud, they simply do not establish the

 independent crime of money laundering. Id.


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       The Third Circuit, in turn, has specifically held that Santos overturned

 previous Third Circuit law with regard to the definition of proceeds under the

 money-laundering statute. To illustrate, the Third Circuit stated that “the Supreme

 Court, in United States v. Santos, recently clarified that the term ‘proceeds’, as that

 term is used in the federal money laundering statute, applies to criminal profits, not

 criminal receipts, derived from a specified unlawful activity.” United States v.

 Yusuf, 536 F.3d 178, 186 (3d Cir. 2008). The Third Circuit acknowledged that this

 holding overruled standing Third Circuit precedent that had declared “proceeds” as

 synonymous with “gross receipts.” Id. fn 12 (citing United States v. Grasso, 382

 F.3d 160 (3d Cir. 2004)). Courts in the wake of Yusuf have reinforced “that

 ‘proceeds’ also means profits when the ‘specified unlawful activity’ underlying a

 money laundering offense is wire fraud, in violation of 18 U.S.C. § 1343 …”

 United States v. Rashid, 39 F. Supp. 3d 649, 653 (E.D. Pa. 2014).

       In order to obtain a conviction for substantive money-laundering, the

 Government must prove the following elements: “(1) an actual or attempted

 financial transaction; (2) involving the proceeds of [a] specified unlawful activity;

 (3) knowledge that the transaction involves the proceeds of some unlawful activity;

 and (4) ... knowledge that the transaction [was] designed in whole or in part to

 conceal the nature, location, source, ownership, or control of the proceeds of [a]

 specified unlawful activity.” United States v. Richardson, 658 F.3d 333, 337–38


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 (3d Cir. 2011). To prove a conspiracy in violation of section 1956(h), in turn, the

 Government must show: (1) that an agreement was formed between two or more

 persons; and (2) that the defendant knowingly became a member of the conspiracy,

 with the objective to commit money laundering.” United States v. Greenridge, 495

 F.3d 85, 100 (3d Cir. 2007).

       Because the money-laundering statute is intended to punish the intentional

 concealment of illicit proceeds and not just the spending of illicit proceeds, a

 conviction must be supported by “proof that the purpose—and not merely the

 effect—of the [transaction] was to conceal or disguise” the funds. See Cuellar v.

 United States, 128 S. Ct. 1994, 2005 (2008). As the Third Circuit stated:

       There is a fine line between the concealment inherent in fraud
       offenses and concealment money laundering. "Congress did not enact
       money laundering statutes simply to add to the penalties for various
       crimes in which defendants make money." This Court has found
       that 18 U.S.C. § 1956(a)(1) "addressed this concern, and therefore
       delineated clearly [the difference] between the underlying offense and
       the money laundering offense, by including an intent requirement,"
       namely "the intent to conceal or disguise the nature, source,
       ownership and control of the proceeds of the . . . fraud," as distinct
       from the intent to commit the underlying fraud itself. Even the
       Supreme Court has warned about the danger of reading the money
       laundering statute in a way that would "merge" money laundering
       with the transactions inherent to the underlying crime that generates
       the proceeds to be laundered because "Congress [did not] want[] a
       transaction that is a normal part of a crime it had duly considered and
       appropriately punished elsewhere in the Criminal Code to radically
       increase the sentence for that crime."




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 United States v. Fallon, 61 F.4th 95, 116 (3d Cir. 2023). The money laundering

 statute’s focus upon concealment “would preclude the application of section

 1956 to non-money laundering acts such as a defendant's depositing the proceeds

 of unlawful activity in a bank account in his own name and using the money for

 personal purposes.” United States v. Conley, 37 F.3d 970, 979 (3d Cir. 1994). Our

 courts should “guard the line between fraud concealment and money laundering

 concealment.” Fallon, 61 F.4th at 116.

       Evaluating the evidence in the light most favorable to the Government, the

 present case involves a “wealth-acquiring crime” that required the division of

 criminal receipts between Rivera and Ponzo in compensation for the services she

 provided in connection with the fraudulent applications, much like the payments to

 the runners and collectors in Santos. The facts alleged in support of the money

 laundering counts were neither payments to conceal the fraud, nor were they

 designed to promote future frauds. On the contrary, the way the Government

 framed the indictment establishes a singular “scheme to defraud” that inevitably

 required payments to coconspirators in order to sustain the fraud. In short, like

 Santos and its progeny, the payments used as evidence of money laundering were

 all integral to the fraud itself. In short, the payments made to Ponzo that were

 allegedly retained to perpetrate the fraud, in turn, were simple costs of doing




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 business, again in the same manner that Santos described the payments to various

 participants in that scheme.

       Moreover, the allegations of the Indictment do not even mention

 concealment, but rather merely conclude that it “was further part of the conspiracy

 that after defendants ERIC RIVERA and ADRIENNE PONZO received the PPP

 and EIDL loan proceeds, they used the funds to pay personal expenses.” (Count 9,

 ¶9). That is the exact scenario envisioned by the Court in United States v. Conley,

 where the Third Circuit ruled that §1956 does not apply “to non-money laundering

 acts such as a defendant's depositing the proceeds of unlawful activity in a bank

 account in his own name and using the money for personal purposes.”

       B.     The Money Laundering Counts Should Be Dismissed as
              Multiplicitous As They Rely Upon Proof of the Same Underlying
              Conduct as the Wire Fraud Counts.

       Courts within the Third Circuit have stated that “[m]ultiplicity is the

 charging of the same offense in two or more counts of an indictment,” which in

 turn, "may lead to multiple sentences for a single violation." United States v.

 Tartaglione, 228 F. Supp. 3d 455, 459 (E.D. Pa. 2017)(citing United States v.

 Kennedy, 682 F.3d 244, 254-55 (3d Cir. 2012) and quoting United States v. Carter,

 576 F.2d 1061, 1064 (3d Cir. 1978)). To determine if there is a multiplicitous

 indictment, the Court should first “inquire whether proof of one offense charged




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 requires an additional fact that proof of the other offense does not necessitate.”

 United States v. Caruso, 948 F. Supp. 382, 390 (D.N.J. 1996).

       In the present case, the Wire Fraud Counts and the Money Laundering

 Counts are not multiplicitous per se or by definition, but become so as charged in

 this Indictment as the only allegations supporting the money laundering counts

 comprise the same conduct that supports the Wire Fraud Counts.

 IV.   THIS COURT SHOULD RULE THAT ALL DEFENDANTS ARE
       PERMITTED TO JOIN IN ALL APPLICABLE MOTIONS MADE BY CO-
       DEFENDANTS IN THIS CASE.

       Defendant Ponzo respectfully requests that the Court permit the defendant to

 join in all applicable motions made by co-defendants in this case, and vice-versa.



                                  CONCLUSION

       Wherefore, for the foregoing reasons the undersigned respectfully request

 this Honorable Court to GRANT defendant Ponzo’s motions.

                                              Respectfully Submitted,

                                              /s/ Troy Archie

                                              Troy A. Archie, Esquire

                                              Counsel for Adrienne Ponzo



 Dated: December 2, 2024


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                          CERTIFICATE OF SERVICE



       I certify that a true and correct copy of the within Pre Trial Omnibus

 Motions was served upon the following persons electronically via ECF:

 Daniel A. Friedman, Assistant United States Attorney

 Daniel.friedman2@usdoj.gov

 All Defense Counsel




 Dated: December 2, 2024                      /s/ Troy A. Archie

                                              Troy A. Archie, Esquire




                                         29


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