United States v. Han
280 F. Supp. 3d 144
| D.D.C. | 2017Background
- Michael S. Han (former chairman/CEO of Envion) solicited nearly $40 million from investors claiming Envion owned a patent and could convert plastic into oil; Envion allegedly never had that patent or the capability to deliver the product.
- A major $20 million transfer was directed to Han’s personal account in October 2010; Han later provided a promissory note for that sum.
- The Indictment (12 counts) charges Han with wire fraud (2 counts), securities fraud (1 count), unlawful monetary transactions (6 counts), tax evasion (2 counts), and D.C. first-degree fraud (1 count); trial set for February 2018.
- Government alleges Han diverted investor funds for personal use (real estate, credit-card payoffs, cash withdrawals) and caused false corporate/individual tax records to be created.
- Han moved pretrial to: (1) obtain a bill of particulars; (2) dismiss tax-evasion counts for improper venue; (3) dismiss D.C. first-degree fraud as duplicative of wire fraud (multiplicity); and (4) dismiss the securities-fraud count for failing to allege a ‘‘security.’’
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Bill of particulars | Govt: discovery and disclosures already provide requested detail; no need to connect every evidentiary dot. | Han: Indictment lacks particulars about false statements, bases for securities charge, and tax amounts. | Denied — indictment + discovery/reverse-proffers provide sufficient detail; bill not a discovery tool. |
| Venue for tax-evasion counts (Counts 10–11) | Govt: tax evasion is a continuing offense; venue proper where affirmative acts with tax-evasion motive occurred or where the ‘‘process of wrongdoing’’ moved. | Han: Indictment does not allege he personally committed acts in D.C.; any D.C. contacts are acts of third parties. | Denied — alleged acts (fax from D.C., false info to D.C. bookkeepers leading to false returns) constitute affirmative conduct with tax-evasion motive and bear substantial contacts with D.C. so venue proper. |
| Multiplicity (Count 12 — D.C. first-degree fraud vs. Counts 1–2 wire fraud) | Govt: statutes have distinct elements; each requires proof of an element the other does not. | Han: First-degree fraud duplicates federal wire-fraud charges. | Denied — Blockburger satisfied: wire fraud requires interstate wires; D.C. fraud requires actual obtaining/causing loss of property. Each has an element the other lacks. |
| Securities fraud (Count 3) — whether promissory notes are "securities" | Govt: Indictment alleges notes were securities; classification is fact-dependent and for trial. | Han: The notes were personal loans, not securities, so Count 3 fails to state an offense. | Denied — whether notes are securities is a mixed fact-law question (Reves factors) inappropriate to resolve on a pretrial facial challenge; indictment adequately alleges the offense. |
Key Cases Cited
- Spies v. United States, 317 U.S. 492 (affirmative acts with tax-evasion motive may constitute tax-evasion conduct)
- United States v. Johnson, 323 U.S. 273 (continuing offenses may be prosecuted where the wrongdoing moves)
- Hyde v. United States, 225 U.S. 347 (constructive presence can satisfy venue)
- Rodriguez-Moreno v. United States, 526 U.S. 275 (venue proper where essential conduct elements occur)
- Blockburger v. United States, 284 U.S. 299 (multiplicity test: each offense must require proof of an element the other does not)
- Pasquantino v. United States, 544 U.S. 349 (wire fraud condemns formation/use of scheme and requires use of wires; success of scheme not required)
- Reves v. Ernst & Young, 494 U.S. 56 (four-factor test to determine when instruments are "securities")
- Hamling v. United States, 418 U.S. 87 (indictment sufficiency standards)