Opinion — United States of America v. Derickson Lawrence, E.D. Va. (Document 121)

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Opinion in United States v. Derickson Lawrence, Criminal Action No. 2:23-cr-89, in the U.S. District Court for the Eastern District of Virginia, Norfolk Division, Document 121, filed September 30, 2024. It addresses Lawrence's motion for a new trial (ECF No. 94), which asserts that the government withheld evidence in violation of Brady v. Maryland and raises non-Brady arguments, along with related requests for an evidentiary hearing, trial transcripts, and subpoenas. The Court states that Lawrence has not demonstrated that the Brady evidence, if it even exists, is new or material and has failed to timely raise the non-Brady arguments, and it denies the motions. The opinion recounts a superseding indictment and a jury verdict on all eleven counts on March 22, 2024.

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                          IN THE UNITED STATES DISTRICT COURT
                         FOR THE EASTERN DISTRICT OF VIRGINIA
                                          Norfolk Division


 UNITED STATES OF AMERICA

 V.                                                   Criminal Action No. 2:23-cr-89


 DERICKSON LAWRENCE,
                        Defendant.


                                             OPINION


        This matter comes before the Court on a motion for a new trial filed by the defendant,


 Derickson Lawrence. (ECF No. 94.) Lawrence asserts that, after trial, he discovered new evidence

 that the government wrongly withheld in violation of Brady v. Maryland, 373 U.S. 83 (1963) (the

  'Brady evidence” or '"‘Brady violations”). He also asserts that the Court erred in various other

 ways that support granting him a new trial (the "non-Brady arguments” or "non-Brady grounds”).

 In his pursuit of a new trial, Lawrence makes related requests for an evidentiary hearing, copies of

 certain portions of the trial transcripts, and subpoenas. (ECF Nos. 94, 106, 107.)

        The Court held a hearing on Lawrence’s motions on September 27, 2024. As the Court

 explained at the hearing, Lawrence has not demonstrated that the Brady evidence, if it even exists,

 is new or material.   He has also failed to timely raise the non-Brady arguments. The Court,

 therefore, denies Lawrence’s motions. (ECF Nos. 94,106, 107.)

                                        I. BACKGROUND


                                       A, Offense Conduct

                                        1. Pavcard Scheme


        Lawrence’s company, MarketView Resources, Inc. (“MarketView”), contracted with Both

 Inc., a management company serving various Golden Corral locations, to serve as a payroll

 services intermediary. Both Inc.’s Golden Corral employees had two options for receiving their
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 wages: (1) direct deposit or (2) debit card (“paycard”). For employees who chose the latter option,

 Both Inc. transferred funds into MarketView’s account at Wells Fargo (the “Settlement Account”).


 MarkctView, working in coordination with a third-party paycard vendor, STAR Processing

 (“S'f AR”), then mailed paycards to the employees. The employees used the paycards to withdraw

 their wages from the pooled Settlement Account. MarketView charged Both Inc. approximately

 $3,000 per month for these services.

         Rather than hold the funds for Both Inc.’s employees as he had contracted, Lawrence

 instead transferred hundreds of thousands of dollars from the Settlement Account to his owu


 personal bank accounts and that of his romantic partner. ‘ Both Inc. did not have a way to monitor

 transactions in the Settlement Account, but suspected fraud after receiving complaints from

 employees that their paycards stopped working. A grand jury later indicted Lawrence on nine

 counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of mail fraud, in violation of

  18 U.S.C. § 1341, in connection with this fraudulent scheme.

                                           2. PPP Scheme


         After the grand jury indicted Lawrence for the Paycard Scheme, the government learned

 that he also submitted false statements related to MarketView’s payroll and employees so he could


 obtain funds through the U.S. Small Business Administration’s (“SBA”) Paycheck Protection

 Program (“PPP”). On December 13, 2023, the grand jury returned a superseding indictment

 charging Lawrence with the same ten counts related to the Paycard Scheme, while adding an

 additional wire fraud count for the PPP Scheme.




             Lawrence did not always make direct transfers. For example, he sometimes transferred
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 funds from the Settlement Account to an intermediary account that he controlled; transferred the
 funds from the intermediary account to his personal brokerage account; and then transferred the
 funds from his personal brokerage account to his personal checking account.
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                                              B.   Trial


         The govermnenl introduced a wide array of evidence at trial to support its fraud charges

  against Lawrence. For example, the jury heard testimony from victims who were affected by

  Lawrence’s scheme and reviewed Lawrence’s emails and bank transactions.        On March 22, 2024,

 the jury convicted Lawrence of all eleven counts in the superseding indictment.

                                     C. Post-Trial Proceedings

         Nearly three months after trial, Lawrence moved to represent himself during post-trial

 proceedings. After conducting a hearing on June 21,2024, the Court granted Lawrence’s motion.

  In so doing, the Court relieved the Office of the Federal Public Defender ("FPD”) of its duty to

 represent Lawrence but kept the FPD “on the case as stand-by counsel.” (ECF No. 87.)

         Lawrence filed the instant motion for a new trial on August 5, 2024.   Lawrence focuses his

 motion on three alleged Brady violations, arguing that the government withheld information about

 (1) “arrangements” it made with Ellsworth, (2) Both Inc.’s closure of all of its Golden Corral

  locations in December 2019, and (3) Both Inc.’s use of paycard vendors other than STAR. He

 requests an evidentiary hearing on these issues. Lawrence also raises four non-Brady arguments,

 contending that the govermnent made improper statements during closing remarks, and that the

 Court improperly admitted evidence, should have severed the trial for the Paycard Scheme from

 that of the PPP Scheme, and erred when instructing the jury. Lawrence requests an evidentiary

 hearing on these issues, seeks copies of certain trial transcript excerpts so he may review them in

 advance of the requested hearing, and asks for subpoenas to compel the testimony ol certain




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 witnesses at the requested hearing.^ The Court conducted a hearing on September 27, 2024, in

 which it heard arguments from the parties on Lawrence’s requests.

                                          II. DISCUSSION


        Lawrences moves for a new trial based on newly discovered evidence and other grounds.

  Upon the defendant’s motion, the court may vacate any judgment and grant a new trial if the

 interest of justice so requires.   Fed. R. Crim. P. 33(a). At the same time, “these are highly

 disfavored motions that a court should grant only ‘sparingly.        United States v. Ali, 991 F.3d 561
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 570 (4th Cir. 2021) (quoting United Slates v. Palin, 874 F.3d 418, 423 (4th Cir. 2017)). A court,

 therefore, should not overturn a jury’s verdict “except in the rare circumstance when the evidence

 ‘weighs heavily’ against it.   United States v, Smith, 451 F.3d 209,216-17 (4th Cir. 2006) (quoting

 United States v. Perry, 335 F.3d 316, 320 (4th Cir. 2003)). Lawrence’s argument related to the

 alleged Brady violations fails to meet this high standard because he has not presented new, material

 evidence warranting a new trial. His request for an evidentiary hearing, meanwhile, appears as

 nothing more than an impermissible fishing expedition.              Finally, Lawrence has not timely

 requested a new trial on his v\or\-Brady grounds.

                       A. Lawrence^s Claims of Newly Discovery Evidence

        “To establish his entitlement to a new trial based on          newly-discovered evidence, the

 defendant must satisfy a five-prong test by demonstrating that ‘(1) the evidence is newly

 discovered; (2) the defendant exercised due diligence; (3) the newly discovered evidence is not

 merely cumulative or impeaching; (4) the evidence is material; and (5) the evidence would



          ^ Lawrence seeks to subpoena four individuals who testified on the government’s behalf at
 trial: (1) Dodd Ellsworth, (2) Pamela Baker, (3) Gary Carter, and (4) Anthony Sterling. (ECF No.
 94, at 23.) He also seeks a subpoena for Michael Dashiell, a forensic accountant, and separately
 asks the Court for funds to hire Dashiell as an expert to dispute the “actual loss” amount in this
 case. (ECF No. 107, at 4.)
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 probably result in an acquittal at trial/’' AH, 991 F.3d at 571 (quoting United States v, Moore, 709

 F.3d 287, 292 (4th Cir. 2013)). When claiming that evidence was newly discovered because the

 government wrongly withheld it in violation of Brady, a defendant similarly must “show (1) that

 the undisclosed information was favorable, either because it was exculpatory or because it was

 impeaching; (2) that the information was material; and (3) that the prosecution knew about the

 evidence and failed to disclose it.   United States v. Parker, 790 F.3d 550, 558 (4th Cir. 2015); see

  United States v. Bartko, 728 F.3d 327, 339^0 (4th Cir. 2013) (denying two motions for a new

 trial because the defendant failed to satisfy all three prongs of the Brady test).      “Evidence is

 material if there is a 'reasonable probability that its disclosure would have produced a different

 result.’” Parker, 790 F.3d at 558 (quoting Bartko, 728 F.3d at 340). “[R]ank speculation as to the

 nature of the allegedly suppressed materials . . . cannot establish a Brady violation.” United States

 V. Briscoe, 101 F.4th 282, 297 (4th Cir. 2024) (quoting United States v. Young, 916 F.3d 368, 383

 (4th Cir. 2019)).

        Lawrence advances three claims of newly discovered evidence based on purported Brady

 violations. First, he claims that the government failed to disclose “arrangements” it made with

 Ellsworth. Second, he complains that the government failed to share information about Both Inc.’s

 closure of all of its Golden Corral restaurants around December 2019.       Third, he argues that the

 government wrongly withheld evidence that Both Inc. used paycard vendors other than STAR.

                          1.   The Government's Arrangement with Ellsworth


        Lawrence first asserts that the government wrongly failed to disclose an agreement it made

 not to prosecute Ellsworth in exchange for his favorable testimony. Prosecutors generally must

 disclose immunity deals or other forms of leniency that witnesses receive in exchange for their

 favorable testimony. See Giglio, 405 U.S. at 154-55; Bartko, 728 F.3d at 338. In Bartko, the


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  government failed to disclose the details of proffer and tolling agreements it made with several

  witnesses. See 728 F.3d at 338-39. The defendant argued that this amounted to a Brady violation

 warranting a new trial. See id. 'fhe Fourth Circuit held that the defendant sufficiently showed that

 the agreements “were impeaching and that the prosecution had the materials and failed to disclose

 them,” thus satisfying the first and third elements oiXhQ Brady test. Id. at 338 (proffer agreements);

 see id. at 339 (tolling agreement). The Fourth Circuit did not, however, find this evidence material.

 See id. at 338-39. The proffer agreements constituted “cumulative” evidence, and even without

 them, the defense still thoroughly impeached the witnesses' credibility. Id. at 338-39.           fhe

 testimony of the witness who received the tolling agreement, meanwhile, “was corroborated by

 substantial documentary evidence” and testimony from other witnesses.            Id. at 340 (citation

 omitted). The Fourth Circuit accordingly upheld the district court’s denial of the defendant’s

 several motions for a new trial.


          Lawrence presents even less evidence than the defendant in Bartko to support his request

 for a new trial.    Lawrence posits that Ellsworth had “significant motives” to provide “false

 testimony” favorable to the government in exchange for leniency. (ECF No. 94, at 8, 27.) He then

 offers various theories to explain why no fraud occurred and why Ellsworth must have lied on the

 stand.   But these theories, without any offer of proof, do not rise above mere speculation.^

 Lawrence accordingly fails to show that any new evidence related to an agreement between the

 government and Ellsworth existed.

          Even if the government had offered such a deal to Ellsworth and failed to disclose it,

 Lawrence cannot demonstrate materiality.         At trial, Ellsworth testified about emails he and



          ^ For its part, the government maintains that it neither considered Ellsworth a target of its
 investigation nor offered him any deal for leniency. (ECF No. 100, at 6—7.)

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  Lawrence exchanged.    The government could have admitted this documentary evidence under

 Federal Rules of Evidence 801(d)(2)(A) and (d)(2)(D) even without Ellsworth’s testimony. See

  United States v. Barbee, 524 F. App’x 15, 18-19 (4th Cir. 2013). Moreover, the government

 presented evidence entirely separate from Ellsworth’s testimony, such as bank records and

 testimony from paycard users, to prove Lawrence’s fraud.          Thus, given Ellsworth’s largely

  cumulative” testimony, “there is no reasonable probability that the jury would have reached a

 different verdict.” Barlko, 728 F.3d at 338-39.

                    2. Both Inc, 's Closure of Several Golden Corral Locations


        Lawrence next argues that the government Improperly withheld information about Both

 Inc.’s closure of its Golden Corral restaurants. Lawrence contends that the government presented


 evidence at trial indicating that Both Inc. operated 22 Golden Corral franchises in 2019, and

 accuses the government of failing to disclose that Both Inc. closed all of these locations by the end

 of that year. In Lawrence’s eyes. Both Inc.’s “rapid shutdown” of Golden Corral locations in

 December 2019 shows that the company had decided to close its locations “much earlier” than

 September 2019, when it discovered Lawrence’s fraud. (ECF No. 105, at 9.)

        Lawrence does not present any evidence to show that Both Inc., in fact, closed all of its

 Golden Corral locations in December 2019.^ Nor does he present any evidence to show that the

 government knew of Both Inc.’s wholesale closures at that time, if they even occurred at all to the



          Lawrence asserts that Ellsworth’s testimony served as the government’s “only source”
 for validating its restitution amount. (ECF No. 105, at 6.) But the government produced other
 evidence, such as Wells Fargo bank statements, to validate the restitution amount. In any event,
 the Court will address restitution with the parties separately.

          ^ The record does not clearly establish how many Golden Corral locations Both Inc.
 operated in December 2019. The record only reflects that Both Inc. operated 22 such locations at
 some point in 2019, that it operated 12 such locations around the time of trial in March 2024, and
 that it closed its restaurants around April 2020 due to the COVID-19 pandemic.
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 degree Lawrence claims. Lawrence also fails to show that he or his prior counsel diligently sought

 to obtain this information, such as by subpoenaing Both Inc. for this information. His speculative

 theory, therefore, fails on numerous grounds.

         In any event, the Court cannot discern how information of the Golden Corral closures

 would have materially affected Lawrence’s defense or would have likely led to an acquittal. If

 anything, this evidence undermines Lawrence’s position.            Lawrence repeatedly asserts that

 MarketView “was 'inextricably intertwined” with Both Inc.’s day-to-day administrative business

 operations.” (ECL No. 94, at 37; see id. at 39.) He then appears to contend that his decision not

 to continue working with Both Inc., coupled with Both Inc.’s high turnover rate, led to “the

 collapse of [Both Inc.’s] business operations.” {Id. at 37.) But the government argued, and the

 jury agreed, that Both Inc. ended the business arrangement with MarketView after it learned ol

 Lawrence’s fraud. And if the two companies were as “inextricably intertwined” as Lawrence

 contends. Both Inc.’s struggles starting in late 2019 do more to bolster the prosecution’s position-

 not Lawrence’s defense—that Lawrence’s illicit funneling of hundreds of thousands of dollars led

 Both Inc. to close at least some of its Golden Corral locations.   Ultimately, whether the restaurants

 were open or closed does not affect the clear showing that Lawrence pocketed the employees’ pay.

 Lawrence, therefore, offers no valid basis for a new trial based on the alleged Golden Corral

 closures.


                            3. Both Inc, 's Use of Other Paveard Vendors


         Lawrence lastly argues that the government improperly withheld evidence of Both Inc.’s

 use of paycard vendors other than STAR. But he points to no actual evidence, such as the names

 of other paycard vendors, to support his suspicion. He also accuses yet another government




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 witness of lying under oath without providing any basis for such an accusation. As before, these

 speculative theories must fail. See Briscoe, 101 F.4th at 297.

         Moreover, even if Both Inc. used other paycard vendors, Lawrence offers no proof—and

 the government does not concede—that the government possessed this information before trial.

 Nor does he detail any efforts he or his then-counsel took to diligently obtain this information,

 such as subpoenaing Both Inc. for this information. And even if Both Inc. used other vendors, it

 does not change the evidence that Lawrence stole money entrusted to him. His request for a new

 trial on this ground accordingly fails.

                        B. Lawrence’s Requestfor an Evidentiary Hearing

         Lawrence requests an evidentiary hearing to “firm up'' and “bolster" his largely speculative

 theories. (ECF No. 94, at 38, 52.) In connection with this request, he also seeks copies of portions

 of the trial transcripts and subpoenas to compel the testimony of certain individuals. “Just as the

 district court has broad discretion in resolving a new trial motion, so too does it enjoy discretion

 whether to hold an evidentiary hearing on the motion.        United States v. Smith, 62 F.3d 641, 651

 (4th Cir. 1995). “This is because ‘the acumen gained by a trial judge over the course of the

 proceedings’ makes the court ‘well qualified’ to rule on a motion for a new trial without an

 evidentiary hearing." United States v. Tzeiiton, 370 F. App’x 415, 421 (4th Cir. 2010) (quoting

 United States v. Hamilton, 559 F.2d 1370, 1373-74 (5lh Cir. 1977)). To that point, courts should

 not allow defendants to engage in post-trial fishing expeditions in search of Brady violations. See

  United States v. Wol,f 860 F.3d 175, 193 (4th Cir. 2017).

         Here, the government introduced numerous witnesses from wide-ranging backgrounds, as

 well as hundreds of exhibits—including Lawrence’s own emails and bank records—to support his

 conviction. Lawrence seeks to undercut this evidence by raising alternative defense theories and



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  by alleging various Brady violations. Since Lawrence produces no actual evidence to support his

  theories, however, his request tor an evidentiary hearing, along with those lor copies of the trial

  transcripts and subpoenas, appears as nothing more than an improper fishing expedition.^ The

  Court will not grant an evidentiary hearing.

                              C. The Timeliness of Lawrence ^s Motion

         Finally, Lawrence has not timely raised his won-Brady grounds for a new trial.             If a

  defendant relies on newly diseovered evidence as the basis for his new trial motion, he must file

  the motion within three years of the verdict. Fed. R. Crim. P. 33(b)(1). The defendant otherwise

  must move for a new trial on any other ground within fourteen days of the verdict, Fed. R. Crim.

  P. 33(b)(2), unless he shows “excusable neglect,” United States v. Farris, 834 F. App'x 811. 812

  (4th Cir. 2021). When determining whether to consider a late filing for excusable neglect, courts

  must analyze “[1] the danger of prejudice [to the opposing party], [2] the length of the delay and

  its potential impact on judicial proceedings, [3] the reason for the delay, including whether it was

  within the reasonable control of the movant, and [4] whether the movant acted in good faith.” Id.

  {(\ViOXmg Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380, 395 (1993). The

  defendant’s reason for the delay carries the most weight in a court’s analysis. See id.

         Lawrence moves for a new trial not only based on newly discovered evidence, but also

  based on other evidence that he deems “impoitant for the Court’s consideration.” (ECF No. 94, at

  59.) Specifically, he argues that (1) the Court improperly admitted evidence, (2) the Court should

  have severed the trial for the Paycard Scheme from that ol'the PPP Scheme, (3) the government

  made improper statements during closing remarks, and (4) the Court erred when instructing the



         ^ In his reply, Lawrence also requests an evidentiary hearing to address the proper amount
  of restitution in this case. As noted, the Court will address restitution with the parties separately.
  See supra note 4.
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  jury. The Court doubts these grounds have merit. But even if they do, Lawrence did not move for

  a new trial on these bases within the timeframe that Rule 33 requires.   Because these grounds do

  not arise from newly discovered evidence, Lawrence had fourteen days to raise them.             Yet.

  Lawrence moved for a new trial more than four months after the jur>' entered its verdict.   The I'PD

  represented Lawrence for three of those months, yet never filed a motion for a new trial, whether

  for newly discovered evidence or otherwise. And even after the Court granted Lawrence's request

  to represent himself in post-trial proceedings, he waited another six weeks to file the instant

  motion. Lawrence offers no excuse for this delay, so his request for relief on alternative grounds

  must fail.


                                        III. CONCLUSION


          For the reasons set forth above and as stated from the bench, the Court denies Lawrence’s


  motion for a new trial. (ECF No. 94.) For those same reasons, the Court also denies Lawrence’s

  related motions for an evidentiary hearing, for copies of the trial transcripts, and for subpoenas.

  (ECF Nos. 94, 106, 107.)

          The Court will issue an appropriate Order.

          Let the Clerk send a copy of this Opinion to Lawrence and to all counsel of record.



                                                                            Isl   UC
  Date; 7^6    September 2024                               John A. Gibncy, Jr. / ) /
  Richmond. VA                                              Senior United States D'mrki Judge




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