Government Hints at Further Charges in EFI Fraud Case



According to recent court filings in the case against the remaining five defendants in the Sterling Financial/Equipment Finance loan fraud case, Zane David Memeger, U.S. Attorney, and Nancy E. Potts, Assistant U.S. Attorney, have requested that the court enter a protective order providing the defense may use investigative materials produced in discovery only for preparation for trial and only at trial and any sentencing hearings, and may not disclose the information to third parties except as required to prepare for trial.

The documents note the discovery materials “also include allegations and facts relating to uncharged criminal conduct by a person/people other than the defendants and which are still the subject of an on-going grand jury investigation.”

In its motion, the government said it is concerned that without the requested protective order in place, discovery materials could become the subject of future media reports, thus unnecessarily dragging into the media spotlight former employees and customers who are not named in the indictment, and creating unfair prejudice to any uncharged individuals.

The government also argued that if defense counsel provides copies of the discovery materials to the defendants, “they could be used to commit further acts of fraud, whether by the defendants or others.”

Since the initial indictment in November 2010, three of the eight defendants, all former executives of Equipment Finance, Inc., have pleaded guilty and are awaiting sentencing. The remaining five defendants are scheduled for trial on October 25, 2011 after it was determined earlier this year that the case is so complex it did not quality under the Speedy Trial Act.

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Terry Mulreany
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