United States v. Khalil
2:22-cr-20200
| E.D. Mich. | May 7, 2024Background
- Sherif Khalil and others are indicted for healthcare fraud conspiracy involving alleged kickbacks and fraudulent medical billings.
- Khalil owns a 25% interest in Spectra Acquisition Corporation (SAC), which allegedly acquired Spectra Clinical Labs, Inc. (SCL); the companies are accused of being used in the fraud.
- Ali Saad, an SAC employee, consulted attorney Keith Soltis regarding Spectra’s corporate structure and SAC/SCL’s relationship with marketers.
- Saad waived the attorney-client privilege with Soltis during a government investigation, and Soltis provided subpoenaed documents and testified before a grand jury.
- Khalil moved for discovery, arguing the government improperly relied on privileged communications between SAC/SCL and Soltis, but did not claim that his own personal privilege was violated.
- The district court denied Khalil’s motion for discovery, finding he lacked standing to assert a violation of the corporation’s privilege.
Issues
| Issue | Khalil’s Argument | Government’s Argument | Held |
|---|---|---|---|
| Standing to assert attorney-client privilege violation | Khalil claims government invaded SAC's privilege by relying on privileged communications and seeks discovery to support a motion for remedy. | Khalil has no standing because he does not hold the privilege; only personal privilege violations confer standing. | Khalil lacks standing; only the client (SAC) can assert privilege, not an individual defendant. |
| Right to discovery of privileged materials | Khalil argues he is entitled to discovery to show the extent of the government’s violation of attorney-client privilege. | Discovery is only available for a violation of personal rights or if material to Khalil’s defense; not for general privilege violations. | Discovery denied; no personal violation or grounds under Rule 16, Brady, or Jencks Act. |
| Remedy for government’s alleged privilege violation | Khalil requests suppression of evidence, disqualification of prosecution, or dismissal of the indictment. | Only remedy when the movant’s own rights are violated; Khalil’s rights were not. | None of the requested remedies available where Khalil’s rights are not personally breached. |
| Dismissal of Indictment under Supervisory Power | Khalil asserts the court can dismiss based on the government’s prejudicial grand jury conduct. | Dismissal requires showing personal rights were violated, not rights of others. | Dismissal not warranted; only available where defendant’s own rights are infringed. |
Key Cases Cited
- United States v. Patej, [citation="95 F. App'x 750"] (6th Cir. 2004) (party must be the holder of the privilege to assert attorney-client privilege)
- Commodity Futures Trading Comm’n v. Weintraub, 471 U.S. 343 (1985) (corporate privilege assertion normally lies with officers/directors but does not extend as personal privilege)
- United States v. Merida, 828 F.3d 1203 (10th Cir. 2016) (corporate privilege belongs to corporation, not to corporate officers)
- Bank of Nova Scotia v. United States, 487 U.S. 250 (1988) (dismissal for non-constitutional error available only in limited circumstances affecting defendant’s rights)
- United States v. Streebing, 987 F.2d 368 (6th Cir. 1993) (dismissal under supervisory power strictly limited to cases involving prejudice to defendant’s rights)