Memorandum Opinion — United States v. Austin (Dkt. 416, W.D. Va.)

Summary

A memorandum opinion of Hon. Thomas T. Cullen in United States v. Jaimeka Michelle Austin, et al., Case No. 7:24-cr-00019, in the U.S. District Court for the Western District of Virginia, entered January 24, 2025 as Document 416. It rules on a sua sponte notice of intent to sever the trials of the remaining 23 defendants (ECF No. 363) and severance motions by Sierra Garrison (ECF No. 367) and Deshawn Lamar Johnson (ECF No. 370), argued on January 10, 2025. The government alleges that from June 2020 Austin communicated with several people about fraudulent PPP applications. The court finds that the defendants were improperly joined in a single indictment and that severance would be appropriate under Rule 14 in any event, and orders severance as outlined in its January 10th order.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Record facts

Full text

Case 7:24-cr-00019-TTC-CKM               Document 416          Filed 01/24/25       Page 1 of 9
                                            Pageid#: 1017


                                                                                           1/24/2025
                        IN THE UNITED STATES DISTRICT COURT
                       FOR THE WESTERN DISTRICT OF VIRGINIA
                                 ROANOKE DIVISION

UNITED STATES OF AMERICA         )                       Case No. 7:24-cr-00019
                                 )
v.                               )                       MEMORANDUM OPINION
                                 )
JAIMEKA MICHELLE AUSTIN, et al., )                       By:     Hon. Thomas T. Cullen
                                 )                               United States District Judge
          Defendants.            )


        This matter is before the court on the court’s sua sponte notice of its intent to sever the

trials of the remaining 23 defendants1 (hereinafter, “Defendants”) (ECF No. 363), Defendant

Sierra Garrison’s motion to dismiss the indictment or to sever (ECF No. 367), and Defendant

Deshawn Lamar Johnson’s motion to sever (ECF No. 370). The court convened the parties—

to the extent it was able, given the sprawling nature of the indictment and the schedules of

nearly 30 attorneys—on January 10, 2025, to hear argument as to whether Defendants can and

should be tried at once (or in manageable groups, as the court originally envisioned), or

whether they were improperly joined in a single indictment. See Fed. R. Crim. P. 8(b). As

explained on the record and in the court’s Order issued shortly after that hearing (ECF No.

384), the court is persuaded that joinder was improper. This Opinion serves to further explain

the court’s rationale in reaching that conclusion.




1 One defendant, Millot Kevin Lexima, entered a plea of guilty on January 10, 2025. Another, Jessica Nicole

Taylor, has entered into a plea agreement with the Government. (See ECF No. 392.)

    Case 7:24-cr-00019-TTC-CKM           Document 416        Filed 01/24/25     Page 2 of 9
                                        Pageid#: 1018



                                               I.

       In June 2020, the Government alleges that Defendant Jaimeka Austin (“Austin”) began

communicating with several people about fraudulent Paycheck Protection Program (“PPP”)

applications. (Indictment ¶ 34 [ECF No. 3].) Around November 2020, and continuing until

approximately May 2021, Austin allegedly began a kickback scheme where she offered to

submit applications and obtain fraudulent PPP loans for other individuals in exchange for

payment. (Id. ¶ 35.) To further this scheme, Austin solicited personal information from these

individuals and, if necessary, helped establish sham businesses on their behalf for an additional

fee. (Id.) The government contends that Defendant Kiearra Gardner (“Gardner”) and another

unnamed co-conspirator assisted Austin with preparing and submitting many of the fraudulent

applications. (Id. ¶ 36.) The applications submitted by Austin and Gardner on behalf of the

loan applicants allegedly contained multiple materially false statements and representations

about the applicant’s business, financials, and proposed use of the PPP funds. (Id. ¶ 38.) The

Government further alleges that the loan applicants each signed promissory notes attesting to

the validity of the information contained in their PPP loan applications, knowing the

information and such statements were false. (Id. ¶ 40.)

       After the allegedly fraudulent loan applications were submitted, many of them were

approved, and the awarded funds were deposited into accounts belonging to the respective

loan applicants. (Id. ¶ 41.) The Government asserts that the loan applicants used the disbursed

funds for unauthorized purposes, including payments to Austin for her role in securing the

loans. (Id.) The Government estimates that at least $1,500,000 in funds were disbursed in

connection with the fraudulent applications overseen by Austin. (Id. ¶ 45.)


                                              -2-

    Case 7:24-cr-00019-TTC-CKM                  Document 416           Filed 01/24/25         Page 3 of 9
                                               Pageid#: 1019



        On June 20, 2024, the Government filed a 142-count indictment against 24 defendants

in connection with the alleged scheme. (See generally Indictment.) Count 1 charges both Austin

and Gardner with conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349. (Id. ¶¶ 46–

50.) Counts 2–82 charge all Defendants with various instances of wire fraud, in violation of

18 U.S.C. §§ 1343 and 2(a). 2 Counts 83–110 charge 16 defendants individually with making

false statements in connection with fraudulent PPP Loan Forgiveness applications, in violation

of 18 U.S.C. § 1001(a)(3) and 2. Counts 111–124 charge 9 defendants with money laundering

in connection with funds derived from unlawful activity including wire fraud and drug

distribution, in violation of 18 U.S.C. §§ 1957 and 2. Counts 125–128 charge Austin with

money laundering in connection with funds derived from unlawful activity including wire

fraud and drug distribution, in violation of 18 U.S.C. §§ 1956(a)(1)(B)(i) and 2. Finally, Counts

129–142 charge 8 defendants with fraud in connection with emergency benefits based on

purportedly fraudulent applications for pandemic relief unemployment benefits, in violation

of 18 U.S.C. §§ 1040(a)(2) and 2.

                                                       II.

        Under Federal Rule of Criminal Procedure 8(b), an indictment “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.” Fed. R. Crim. P. 8(b).

Separate offenses are considered acts within the same series “if they arise out of a common



2 Counts 2–82 each constitute a separate charge for a discrete transmission. Austin is charged in each of these

counts and Gardner is charged in many, but not all, because of their involvement with multiple applications as
the alleged masterminds. While Austin and Gardner are often charged with another of the 22 defendants, when
the remaining 22 defendants are charged for their individual applications in a count with someone else, it is only
ever with Austin and/or Gardner, never with any other co-defendant.
                                                      -3-

    Case 7:24-cr-00019-TTC-CKM           Document 416        Filed 01/24/25      Page 4 of 9
                                        Pageid#: 1020



plan or scheme . . . unified by some substantial identity of facts or participants.” United States

v. Porter, 821 F.2d 968, 972 (4th Cir. 1987). The requirements under Rule 8 are typically not

“onerous” and “permit very broad joinder at the pleading stage.” United States v. Cannady, 924

F.3d 94, 102 (4th Cir. 2019) (cleaned up).

       Importantly, however, a single common hub alone is not enough to join multiple

defendants. Where there is “a series of transactions involving a common denominator” the

government must prove that there is a connection between the other defendants’ offenses.

United States v. Whitehead, 539 F.2d 1023, 1025 (4th Cir. 1976) (internal quotation omitted).

More specifically, the “test of Rule 8(b) is not satisfied and joinder is impermissible” when

“the only nexus between two defendants joined for trial is their participation in similar

offenses, on different dates, with a common third defendant.” Id. at 1026.

                                                  III.

       Twenty-two defendants in this case allegedly dealt with a common denominator—

Defendants Austin and Gardner. There is no allegation that would amount to a “substantial

identity of facts or participants” and allow the court to conclude that all Defendants

participated in the same series of acts. Consider the facts of Whitehead, for example. In that

case, two defendants—Whitehead and Meredith—each separately sold narcotics with a co-

defendant, Jackson, to an undercover federal agent. Id. at 1024. These transactions occurred

13 days apart, and there was no evidence, other than that all three defendants lived in the same

apartment building, that Whitehead or Meredith knew of or aided each other’s independent

conduct with Jackson. Id. The Fourth Circuit found the joinder of Whitehead and Meredith

improper under Rule 8(b) because the alleged criminal conduct was independent, separate, and


                                              -4-

    Case 7:24-cr-00019-TTC-CKM                   Document 416            Filed 01/24/25        Page 5 of 9
                                                Pageid#: 1021



“without concert of purpose” between them. Id. at 1023. Here, as in Whitehead, although

Defendants are charged in crimes of the same nature (e.g., wire fraud), they are independent

crimes, charged in separate counts, and which occurred on numerous different dates. The

Government has alleged little factual overlap or connection among Defendants for these

charges, other than their use of a common middleman operation orchestrated by Austin and

Gardner.

        The Government resists this conclusion, arguing that it can show the necessary

connections between Defendants. For example, the Government offers that two defendants

are siblings, two share a child, two are half-brothers and roommates, three are otherwise

related, two had a previous romantic relationship, and various others are “friends or are

otherwise linked by past criminal associations.” (Gov. Response at 7 [ECF No. 366].) The

Government also asserts that some defendants’ businesses shared an address, some

applications were submitted on the same day, some applications had identical monetary claims,

and a few defendants were involved in helping or recruiting each other. The Government

concludes that these demonstrated connections are sufficient to sustain the indictment against

all 24 defendants.3 The court disagrees.

        For one, being friends, relatives, or past criminal associates is not sufficient to infer a

connection as to the Defendants in this Indictment in this criminal case. Such social



3 The Government also strenuously asserts that it could have charged all 24 defendants in a conspiracy, but, for

whatever reason, it chose not to do so, and that this choice is irrelevant to the propriety of joinder under Rule
8(b). While the government has an absolute right to exercise its discretion and bring charges in the manner in
which it chooses, it is difficult to reconcile an argument that such a decision is irrelevant with the fact that the
government’s argument relies on some evidence or inferences that all Defendants are complicit in a single
overarching—uncharged—scheme.


                                                       -5-

    Case 7:24-cr-00019-TTC-CKM               Document 416         Filed 01/24/25       Page 6 of 9
                                            Pageid#: 1022



relationships are analogous to the type of impermissible “happenstance” connections

observed in Whitehead. See Whitehead, 539 F.2d at 1025. As to the other purported connections,

though they are more relevant than Defendants’ social and familial connections, they are

simply not enough to justify the joinder of two dozen Defendants. This case is much more

akin to the case of indicting together “two delinquent taxpayers who used the same

accountant,” a circumstance which “approaches the ridiculous.” Whitehead, 539 F.2d at 1025.

        Furthermore, contrary to the Government’s argument, the court believes that this case

is like that of a so-called rimless conspiracy, where, by virtue of their interaction with a

common defendant, other defendants were involved in multiple separate conspiracies, as

opposed to a single overarching conspiracy.4 See Kotteakos v. United States, 328 U.S. 750, 754–

55 (1946). In Kotteakos, 32 defendants were charged in a similar fraudulent loan application

scheme, wherein a single co-defendant—Brown—acted as the common broker and obtained

fraudulent loans for the other defendants in exchange for a commission. Id. at 752–54. Because

the defendants had no connection between them other than that Brown was instrumental in

obtaining the loans in each instance, the Supreme Court found prejudicial error in the

defendants’ joint trial. See id. at 754, 772–73, 775. In such a case, it is easy to “confuse the

common purpose of a single enterprise with the several, though similar purposes of numerous

separate adventures of like character.” Id. at 768–69. While the substance of conspiracy law




4 One example, which the court continues to find instructive and analogous to this case, is a common drug

dealer with numerous, otherwise unrelated, buyers—in which case joinder would not be appropriate. The fact
that all the buyers engaged in the same crime with a common dealer does not, by virtue of that fact alone,
implicate them in a vast drug-distribution scheme with one another.
                                                  -6-

    Case 7:24-cr-00019-TTC-CKM                  Document 416           Filed 01/24/25        Page 7 of 9
                                               Pageid#: 1023



does not equate to the Rule 8(b) standard, it is relevant and greatly informs the court’s analysis

of the insufficient connection between Defendants in this case.

        While this is a close question, and the court acknowledges the Government’s good-

faith arguments to the contrary, the court is persuaded that Defendants are improperly joined5

in the Indictment and will sever Defendants trials.

                                                      IV.

        Beyond misjoinder—which itself necessitates severance—the court has serious

concerns regarding the severe prejudice Defendants would face in a joint trial. (See Order at 1

n.2, Jan. 10, 2025 [ECF No. 384].) Under Federal Rule of Criminal Procedure 14(a), “[i]f the

joinder of offenses or defendants in an indictment . . . appears to prejudice a defendant . . . ,

the court may order separate trials of counts, sever the defendants’ trials, or provide any other

relief that justice requires.” Even if the joinder is proper, “if there is a serious risk that a joint

trial would compromise a specific right of one of the defendants, or prevent the jury from

making a reliable judgment about guilty or innocence,” severance is appropriate. Zafiro v. United

States, 506 U.S. 534, 539 (1993). As here, “[w]hen many defendants are tried together in a

complex case and they have markedly different degrees of culpability, [the] risk of prejudice is

heightened.” Id. In this case, only Austin and Gardner are charged with conspiracy. Any other

defendant tried alongside them would face a severe burden of uncoupling themselves from

the surely copious amounts of evidence introduced against the two alleged ringleaders.6 This


5 The court stresses—as it did at oral argument—that the use of the term “improper” is a term of art and is not

meant to imply any bad faith on the part of the Government.

6 This, in turn, would require the court to give limiting instructions throughout the government’s case-in-chief,
as much of the evidence related to Austin’s and Gardner’s perpetration of a multi-faceted fraud scheme would
likely be inadmissible against many individual defendants who are not alleged to have joined or participated in
                                                     -7-

    Case 7:24-cr-00019-TTC-CKM                    Document 416            Filed 01/24/25         Page 8 of 9
                                                 Pageid#: 1024



would no doubt lead to jury confusion and a strong propensity for improper inferences.

Moreover, the defendants tried alongside Austin and Gardner would be subject to that

prejudice arbitrarily and unlike other similarly situated defendants who, for logistical reasons,

would not be tried with the charged conspirators.7 Finally, even defendants tried in groups

without Austin or Gardner would likely face severe prejudice from the jury making

assumptions or inferences about an uncharged conspiracy and the weight of evidence

introduced unrelated to each defendant’s specific crime(s).

         The Government concedes that a joint trial of Defendants would present a “serious

risk of compromise to the jury’s factfinding abilities,” but attempts to mitigate that position in

part by assuring the court that most defendants will plead guilty and that the court should wait

and see whether those concerns will materialize. (Gov. Response at 10–11.) In any event, the

Government proposes trying “related” groups of defendants, instead of a random assortment,

to further mitigate prejudice.8 But none of these proposed measures are sufficient. Defendants

must be able to properly prepare for trial and be aware of what circumstances they are facing

to make informed strategic decisions going forward. Accordingly, the court cannot ensure that

Defendants receive the fair trial to which they are entitled if it leaves them in a limbo that may

affect their fundamental decision-making in this case. As to the Government’s proposal, the


their conspiracy. It would be difficult, if not impossible, for the court to conduct the trial with requisite fairness
and efficiency given this evidentiary conundrum.
7 Under either the court’s current pretrial order or the government’s proposal, Defendants would be tried in

small groups of approximately 6–8 defendants.

8 In making its “related group” proposal, the Government suggests that it could recommend trial groupings
based on its review of the evidence and attendant assessment of potential ties or common threads between
individual defendants. But the rules at issue simply do not vest the Government with that kind of authority,
and the individual defendants would invariably (and justifiably) balk at the Government’s proposed groupings
on due process and other grounds.
                                                        -8-

    Case 7:24-cr-00019-TTC-CKM           Document 416        Filed 01/24/25     Page 9 of 9
                                        Pageid#: 1025



court does not believe that the time and resources necessary to allow dozens of defendants to

argue about the proper break out of specific groups for trial is efficient or warranted. And

regardless, such a proposal would not diminish the prejudicial effects on Defendants identified

above.

         While it may be inconvenient and require some additional effort to try Defendants

separately, “our Government is not one of mere convenience or efficiency.” Kotteakos, 328

U.S. at 773. In this case, such conveniences are outweighed by Defendants’ right to a fair trial.

Accordingly, although it need not rely on Rule 14 to order a severance given the court’s finding

that joinder is improper, the court would find severance appropriate under Rule 14 regardless

of the propriety of joinder.

                                               V.

         For the foregoing reasons, the court finds that Defendants have been improperly

joined in the Indictment, and the court will order severance in the manner outlined by its

January 10th Order. (See ECF No. 384.)

         The Clerk is directed to forward a copy of this Memorandum Opinion to the parties.

         ENTERED this 24th day of January, 2025.



                                                    /s/ Thomas T. Cullen_________________
                                                    HON. THOMAS T. CULLEN
                                                    UNITED STATES DISTRICT JUDGE




                                              -9-

File and source

File

416.pdf

Size

273,213 bytes

SHA-256

fe4e34ec1af78e02ae9eb9cfe21a446848a71ca9c24d08c72b9869ded667a9f9

Our copy

416.pdf