United States v. Karnezis, Williams, Wells and Bennett, ord No. 3:23-cr-00067, ECF 146: Opinion and Order denying defendants' motions to sever

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An Opinion and Order denying defendants' motions to sever, Document 146 in United States v. Eric Karnezis, Fredrico Williams, Lynisha Wells, and Nikkia Bennett, No. 3:23-cr-00067-IM, in the United States District Court for the District of Oregon, filed January 9, 2026. The opinion states that Defendants Williams, Wells, and Bennett moved to sever their trials from one another, arguing that a joint trial would require the presentation of mutually antagonistic defenses, violate the Confrontation Clause, prevent the presentation of exculpatory evidence, and cause juror confusion. The Court concludes that Defendants do not show a serious risk that a joint trial would compromise a specific trial right, and it DENIES the motions. It bears the signature text /s/ Karin J. Immergut, United States District Judge.

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      Case 3:23-cr-00067-IM         Document 146        Filed 01/09/26      Page 1 of 11




                      IN THE UNITED STATES DISTRICT COURT

                             FOR THE DISTRICT OF OREGON



 UNITED STATES OF AMERICA,                         Case No. 3:23-cr-00067-IM

        v.                                         OPINION AND ORDER DENYING
                                                   DEFENDANTS’ MOTIONS TO SEVER
 ERIC KARNEZIS, FREDRICO
 WILLIAMS, LYNISHA WELLS, and
 NIKKIA BENNETT,

               Defendants.

Meredith D.M. Bateman, Robert S. Trisotto & Julia E. Jarrett, Assistant United States Attorneys,
1000 SW Third Avenue, Suite 600, Portland, OR 97204. Attorneys for the United States of
America.

Ernest Warren, Jr., Warren & Sugarman, 838 SW 1st Ave, Suite 200, Portland, OR 97204.
Attorney for Defendant Fredrico Williams.

Michael R. Levine, Levine & McHenry LLC, 1050 SW Sixth Avenue, Suite 1414, Portland, OR
97204. Attorney for Defendant Lynisha Wells.

Janet Lee Hoffman and Justin T. Rusk, Hoffman Law LLC, 1000 SW Broadway, Suite 1500,
Portland, OR 97205. Attorneys for Defendant Nikkia Bennett.

IMMERGUT, District Judge.

       A grand jury indicted Defendants Eric Karnezis, Fredrico Williams, Lynisha Wells, and

Nikkia Bennett on charges of wire fraud, 18 U.S.C. § 1343, conspiracy to commit wire fraud, 18

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U.S.C. § 1349, and conspiracy to commit money laundering, 18 U.S.C. § 1956(h), for their

involvement in the submission of fraudulent loan applications through the Paycheck Protection

Program (“PPP”). Redacted Superseding Indictment (“Indictment”), ECF 31 ¶¶ 1–2, 47–227.

       Defendants Williams, Wells, and Bennett now move to sever their trials from one

another, arguing that a joint trial would (1) require the presentation of mutually antagonistic

defenses, (2) violate the Confrontation Clause, (3) prevent the presentation of exculpatory

evidence, and (4) cause juror confusion. Williams Mem. in Support of Motion to Sever

(“Williams Mem.”), ECF 111 at 4–5; Bennett Motion to Sever (“Bennet Mtn.”), ECF 115 at 14–

26; Wells Motion to Sever (“Wells Mtn.”), ECF 119 at 3–8. Defendants do not show that “there

is a serious risk that a 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.” Zafiro v. United

States, 506 U.S. 534, 539 (1993). This Court therefore DENIES Defendants’ motions to sever.

                                         BACKGROUND

       In August 2024, a grand jury charged Defendants with one count of conspiracy to commit

wire fraud, 18 U.S.C. § 1349, twenty-one counts of wire fraud, 18 U.S. § 1343, and one count of

conspiracy to commit money laundering, 18 U.S.C. § 1956(h). Indictment, ECF 31 ¶¶ 47–227.

       The grand jury found probable cause that between January 2021 and March 2022,

Defendant Karnezis and his coconspirators defrauded the Small Business Administration out of

millions of dollars by submitting fraudulent PPP loan applications. Id. ¶ 1. Karnezis conspired

with “recruiters,” including Defendant Williams, to gather false business information from

“customers,” such as Defendants Wells and Bennett, and to submit PPP applications using

fabricated documents on behalf of the customers. Id. ¶¶ 2, 4. Customers paid recruiters and

Karnezis for helping them obtain fraudulent PPP loan proceeds. Id. ¶ 5. The PPP loan

applications submitted on behalf of Defendants sought to obtain a total of $3,394,085.48. Id. ¶ 7.
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These applications constituted a small fraction of the at least 1,300 PPP loan applications that

Karnezis submitted, which altogether attempted to obtain at least $178,000,000. Id. ¶ 6.

       In March 2025, Karnezis pled guilty to one count of conspiracy to commit wire fraud in

violation of 18 U.S.C. § 1349. Plea Petition and Order Entering Plea as to Defendant Eric

Karnezis, ECF 86. In August and September 2025, the remaining three defendants filed motions

to sever their joint trial. Williams Motion to Sever (“Williams Mtn.”), ECF 110; Bennet Mtn.,

ECF 115; Wells Mtn., ECF 119. In September 2025, the government filed an omnibus response

to Defendants’ motions to sever, and Bennett and Wells filed reply briefs. Gov’t Resp., ECF 123;

Bennett Reply, ECF 129; Wells Reply, ECF 135. On December 9, 2025, this Court held a

hearing on Defendants’ motions to sever and took the motions under advisement after the

hearing. ECF 144.

                                          STANDARDS

       It is “well-established” that in federal criminal prosecutions, “there is a preference for

joint trials where defendants have been jointly indicted.” United States v. Hernandez-Orellana,

539 F.3d 994, 1001 (9th Cir. 2008). And when codefendants are charged with conspiracy, a joint

trial is “particularly appropriate.” United States v. Jenkins, 633 F.3d 788, 807 (9th Cir. 2011). So

strong is this presumption that “[t]he burden is on the defendant to show ‘clear,’ ‘manifest,’ or

‘undue’ prejudice from a joint trial.” United States v. Mikhel, 889 F.3d 1003, 1046 (9th Cir.

2018) (quoting United States v. Polizzi, 801 F.2d 1543, 1553–54 (9th Cir. 1986)). A district court

should grant a motion to sever “only if there is a serious risk that a 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.” Id. (quoting Zafiro, 506 U.S. at 539).




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                                          DISCUSSION

       Defendants pursue several arguments for why this Court should exercise its discretion to

sever their trial, but they do not demonstrate “a serious risk that a joint trial would compromise a

specific trial right of one of the defendants.” Zafiro, 506 U.S. at 539. Neither do they show “a

serious risk that a joint trial would . . . prevent the jury from making a reliable judgment about

guilt or innocence.” Id. Therefore, this Court denies Defendants’ motions to sever their joint trial.

A. Mutually Antagonistic Defenses

       Defendants are not entitled to sever their joint trial based on mutually antagonistic

defenses because their defenses are only partially antagonistic. “To warrant severance on the

basis of antagonistic defenses, codefendants must show that their defenses are irreconcilable and

mutually exclusive.” United States v. Angwin, 271 F.3d 786, 795 (9th Cir. 2001), overruled in

part on other grounds by United States v. Lopez, 484 F.3d 1186 (9th Cir. 2007) (en banc). This is

a “difficult” burden to meet because it requires more than “‘antagonism between defenses or the

desire of one defendant to exculpate himself by inculpating a codefendant.’” United States v.

Johnson, 297 F.3d 845, 858 (9th Cir. 2002) (alteration omitted) (quoting United States v.

Throckmorton, 87 F.3d 1069, 1072 (9th Cir. 1996)). Rather, defenses are mutually antagonistic

only if “acquittal of one codefendant would necessarily call for the conviction of the other.”

Angwin, 271 F.3d at 795 (quoting United States v. Tootick, 952 F.2d 1078, 1081 (9th Cir. 1991)).

       Wells and Bennett argue that severance is required from Williams because Williams’s

defense is mutually antagonistic to each of their defenses. Bennett Mtn., ECF 115 at 15–17;

Wells Mtn., ECF 119 at 3–4. Likewise, Williams argues that his defense is mutually antagonistic




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to Bennett’s defense. 1 Williams Mem., ECF 111 at 4. Bennett contends that “Mr. Karnezis and

Mr. Williams took her personal information and used it to submit loan applications without her

knowledge or consent.” Bennett Mtn., ECF 115 at 16. Wells also claims that “she acted in good

faith and without criminal intent in providing information to Mr. Williams, which unbeknownst

to her was used by him and Karnezis to unlawfully obtain PPP funds.” Wells Mtn., ECF 119 at 3.

However, Williams argues that “Bennett unjustly demonized [him] and implicated him as the

driving force behind the fraudulent [PPP] loan scheme.” Williams Mem., ECF 111 at 2.

       Although these defenses involve each defendant attempting “to exculpate himself [or

herself] by inculpating a codefendant,” Johnson, 297 F.3d at 858, they are not so antagonistic

such that “acquittal of one codefendant would necessarily call for the conviction” of another

codefendant. Angwin, 271 F.3d at 795. Williams does “point[] the proverbial finger” at Bennett,

Bennett Mtn., ECF 115 at 15, but critically, Williams also points the finger at Bayless Cobb, who

has already pled guilty to conspiracy to commit wire fraud. Williams Mem., ECF 111 at 2–3; see

Plea Petition and Order Entering Plea as to Defendant Bayless Cobb, United States v. Cobb, No.

25-cr-00323 (D. Or. Sept. 9, 2025), Dkt. No. 13. Specifically, Williams claims that Cobb

informed him that he could obtain legitimate PPP loans through Karnezis and that “[b]ased upon

the assurances of Bayless Cobb,” Williams became an “unwitting participant” in the PPP fraud

scheme. Williams Mem., ECF 111 at 2. Thus, even if the jury accepts Bennett’s defense that

“Williams misled her as to the nature of the loan applications,” Bennett Mtn., ECF 115 at 15, the

jury could still acquit Williams by finding that he unknowingly misled Bennett and Wells as a

result of his own “unwitting” reliance on Cobb. Similarly, if the jury were to accept Williams’s



1
 Williams does not appear to seek severance from Wells. Gov’t Resp., ECF 123 at 5 n.2.
Regardless, as discussed below, Williams and Wells do not have mutually antagonistic defenses.

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accusations against Cobb but not against Bennett, then the jury would not be “preclude[d]” from

acquitting Bennett. Throckmorton, 87 F.3d at 1072. Even Bennett herself acknowledges that

Williams does not just point the finger only at her but rather “places all criminally fraudulent

behavior at the feet of Ms. Bennett and others.” Bennett Reply, ECF 129 at 6 (emphasis added).

       For the same reasons, Wells’s and Williams’s defenses are not mutually antagonistic as to

warrant severance. Like Bennett, Wells will attempt to prove that she was “taken advantage of

by Mr. Williams.” Wells, ECF 119 at 3–4; see also Wells Reply, ECF 135 at 1 (“[B]ecause she

was misled and deceived by Mr. Williams as to the purpose and regulations governing the PPP

program, at trial she intends to join the government in vigorously prosecuting him.”). But once

again, Williams will attempt to demonstrate that “Cobb asked [him] for referrals to business

owners who may desire PPP loan[s]” and that “Cobb did the rest with Erik Karnezis to close

seven PPP loans.” Williams Mem., ECF 111 at 3. Under this theory of defense, the jury could

find that Cobb and Karnezis are primarily culpable and that both Wells and Williams lacked the

requisite criminal intent. Therefore, Wells’s and Williams’s defenses are only partially

antagonistic.

       Furthermore, all three defendants point a finger at their fourth codefendant, Karnezis. See

Williams Mem., ECF 111 at 5 (“Erik Karnezis does not know Fredrico Williams, and all of the

fraudulent PPP loan referrals came to Erik Karnezis through the unindicted co-conspirator,

Bayless Cobb.”); Bennett Mtn., ECF 115 at 15 (“[I]t was Mr. Williams who engaged in

misconduct with Mr. Karnezis without Ms. Bennett’s knowledge or agreement.”); Wells Mtn.,

ECF 119 at 3(“[I]nformation . . . was used by [Williams] and Karnezis to unlawfully obtain PPP

funds.”); Bennett Reply, ECF 129 at 5 (“Mr. Karnezis signed all of the various submissions and

documentations as Ms. Bennett without her knowledge, understanding, or permission.”). The



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jury could therefore “pin the blame solely” on Karnezis, who already pled guilty, and acquit his

three codefendants who are on trial. Gov’t Resp., ECF 123 at 13. In sum, because “acquittal of

one codefendant would” not “necessarily call for the conviction” of any other codefendant,

severance is unwarranted based on mutually antagonistic defenses. Angwin, 271 F.3d at 795.

B. Confrontation Clause

        Defendants next argue that a joint trial would violate their Confrontation Clause rights,

but their arguments do not justify severance because any potential violations of Bruton v. United

States, 391 U.S. 123 (1968), may be avoided by redacting statements that implicate Bruton and

providing accompanying limiting instructions. In Bruton, the Supreme Court “held that a

defendant is deprived of his Sixth Amendment right of confrontation when the facially

incriminating confession of a nontestifying codefendant is introduced at their joint trial.”

Richardson v. Marsh, 481 U.S. 200, 207 (1987). In Richardson, the Supreme Court “declined to

expand the Bruton rule to a redacted confession that inculpated the defendant only when viewed

in conjunction with other evidence.” Samia v. United States, 599 U.S. 635, 649 (2023). In Samia,

the Court clarified that the admission of a codefendant’s confession that replaces the defendant’s

name with “neutral references to some ‘other person’” and is “accompanied by a limiting

instruction” that the confession be used only against the codefendant declarant “falls outside the

narrow exception Bruton created.” Id. at 653 (brackets omitted) (quoting Richardson, 481 U.S. at

208).

        Defendants argue that a joint trial would violate their Confrontation Clause rights because

they would not be able to cross-examine their codefendants about incriminating confessions. See

Williams Mem., ECF 111 at 5; Bennett Mtn., ECF 115 at 17–19; Wells Mtn., ECF 119 at 7.

Williams points to interviews recorded by federal agents in which Bennett “unjustly demonized”

him and “implicated him as the driving force behind the fraudulent [PPP] loan scheme.”
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Williams Mem., ECF 111 at 2. Bennett points to “numerous statements where [Mr. Williams]

attempts to position Ms. Bennett as primarily responsible for collecting and assembling

‘customer’ information.” Bennett Mtn., ECF 115 at 18. Bennett also refers to Wells’s statements

that inculpate Bennett, such as Wells’s assertion that “Bennett may have been the one to fill out a

loan forgiveness application submitted in [Wells’s] name.” Id. Wells seconds Bennett’s claims

that they “have made statements incriminating each other.” Wells Mtn., ECF 119 at 7.

       Defendants’ Confrontation Clause concerns fail because if any party seeks to introduce a

statement that implicates Bruton, then the statement must be redacted and a limiting instruction

must be provided in accordance with Samia. 2 See Hernandez-Orellana, 539 F.3d at 1001

(finding no Confrontation Clause violation from the district court’s denial of severance because

“the government was required to redact any damaging statements”). Indeed, instead of severing a

trial in response to a Bruton problem, “less drastic measures, such as limiting instructions, often

will suffice to cure any risk of prejudice.” Zafiro, 506 U.S. at 539 (citing Richardson, 481 U.S. at

211). In short, Defendants’ speculative concern that Confrontation Clause violations will occur at

trial do not support severance. Rather, if any defendant seeks to introduce a codefendant’s

statement that implicates Bruton, all parties should confer and provide this Court a redacted

statement and an accompanying limiting instruction that are in accordance with Samia.




2
  During the hearing on Defendants’ motions, ECF 144, the government represented that it would
not seek introduction of any statements implicating the Bruton doctrine at trial. But even if the
government does not introduce such statements, Defendants may seek to introduce such
statements against each other. To the extent any defendant seeks to introduce statements of a
codefendant that implicates Bruton, the proponent must identify and disclose the statements to
codefendants and the government at least twenty-one days in advance of the pretrial conference.

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       Bennett and Wells also argue that they will be prejudiced by the other’s invocation of the

marital communications privilege, 3 Bennett Mtn., ECF 115 at 19–20; Wells Mtn., ECF 119

at 7–8, but their arguments fail for two reasons. First, this privilege, which “protects from

disclosure private communications between spouses,” “does not apply to statements made in

furtherance of joint criminal activity.” United States v. Banks, 556 F.3d 967, 974 (9th Cir. 2009)

(first quoting United States v. Griffin, 440 F.3d 1138, 1143–44 (9th Cir. 2006); and then quoting

United States v. Marashi, 913 F.2d 724, 731 (9th Cir. 1990)). Thus, Bennett and Wells could not

invoke this privilege to prevent the other from testifying about “communications having to do

with present or future crimes in which both spouses are participants.” Marashi, 913 F.2d at 730;

see Bennett Reply, ECF 129 at 15 (recognizing this).

       Second, the potential exclusion of any statements due to the invocation of this privilege

does not rise to the level of “‘clear,’ ‘manifest,’ or ‘undue’ prejudice from a joint trial.” Mikhel,

889 F.3d at 1046 (quoting Polizzi, 801 F.2d at 1553–54). Bennett and Wells each speculate that

“in presenting her defense that she was misled by Mr. Williams, [she] may present evidence of

discussions between her and [her spouse] to put those matters in context.” Bennett Mtn., ECF

115 at 20; Wells Mtn., ECF 119, at 8. For example, Bennett claims that she may present marital

communications “about matters involving Mr. Williams to put her work as his scrivener in

context.” Bennett Reply, ECF 129 at 16. Even assuming that such contextual statements were not

made in furtherance of joint criminal activity, their exclusion does not establish “‘clear,’




3
  In her motion to sever, Bennett also raised an argument based on the marital testimonial
privilege. Bennett Mtn., ECF 115 at 20; see United States v. Montgomery, 384 F.3d 1050, 1056
(9th Cir. 2004) (“The witness spouse alone holds th[is] privilege and may choose to waive it.”).
Bennett withdrew this argument in her reply brief. Bennett Reply, ECF 129 at 15 n.3.

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‘manifest,’ or ‘undue’ prejudice” Mikhel, 889 F.3d at 1046 (quoting Polizzi, 801 F.2d at 1553–

54). 4

C. Exclusion of Evidence

          Bennett and Wells also briefly argue that joinder with Williams will prevent them from

introducing evidence related to Williams’s “military history records, including the nature of his

less than honorable discharge, and his predatory behavior against women.” Bennett Mtn., ECF

115 at 25; see Wells Mtn., ECF 119 at 4. Bennett and Williams also plan to present evidence that

they were victims of sexual assault while in the military, Bennett Mtn., ECF 115 at 4; Wells

Mtn., ECF 119 at 5, as well as potential evidence of Williams’s court martial for obstruction of

justice, see Gov’t Resp., ECF 123 at 24. As to evidence of Williams’s conduct, such evidence is

likely inadmissible under Federal Rule of Evidence 404(b). For any impeachment evidence,

Bennett and Wells have not shown such evidence would be excluded from a joint trial. And, as

to evidence of past sexual assaults, such evidence is likely inadmissible under Rule 401. See

Gov’t Resp., ECF 123 at 25 (“[T]here is no evidence that any of their prior experiences with

sexual misconduct has anything to do with their PPP fraud scheme.”). In any event, the exclusion

of what is, at best, tangentially relevant evidence to the crimes at issue in this case does not

constitute manifest prejudice as to warrant severance.

D. Juror Confusion

          Finally, Bennett and Wells argue that in a joint trial, “jurors are likely to cumulate

evidence in a way that risks confusing Williams’s culpability for an independent assessment of


4
  Williams also argues that “the government should produce Erik Karnezis an[d] Bayless Cobb to
avoid prejudice and uphold Fredrico Williams Confrontation [Clause] rights.” Williams Mem.,
ECF 111 at 5 (capitalization altered). If Williams intends to move to compel Karnezis and Cobb
to testify at trial, Williams must comply with L.R. 7. Regardless, the government “intends to call
both of them[, Karnezis and Cobbs,] to testify at trial.” Gov’t Resp., ECF 123 at 13 n.5.

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[their] guilt or innocence.” Bennett Mtn., ECF 115 at 21; Wells Mtn., ECF 119 at 5. Bennett also

speculates that jurors may do the same with respect to evidence against Wells. Bennett Mtn.,

ECF 115 at 24–25. These arguments fail because they amount to an attack on “the law’s broader

assumption that jurors can be relied upon to follow the trial judge’s instructions.” Samia, 599

U.S. at 646. In this case, the jury may reasonably be expected to collate and appraise the

individual evidence against each defendant, and this Court will instruct the jury on the limited

purposes for which certain evidence may be used). In sum, Defendants have not shown a

“serious risk that a 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.” Zafiro, 506 U.S. at

539.

                                          CONCLUSION

        Defendant Williams’s motion to sever, ECF 110; Defendant Bennett’s motion to sever,

ECF 115; and Defendant Wells’s motion to sever, ECF 119, are DENIED.



        IT IS SO ORDERED.

        DATED this 9th day of January, 2026.


                                                      /s/ Karin J. Immergut
                                                      Karin J. Immergut
                                                      United States District Judge




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