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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

CASE NO. 09-060129-CR-ZLOCH

UNITED STATES OF AMERICA,

Plaintiff,

vs.

THOMAS RAFFANELLO,

Defendant.

_______________________________/

DEFENDANT THOMAS RAFFANELLOS MOTION TO DISMISS THE

SUPERSEDING INDICTMENT AND MEMORANDUM IN SUPPORT THEREOF

Pursuant to Rules 4, 12, and 65(d)(1)(C)1 of the Federal Rules of Civil Procedure, Rule

12 of the Federal Rules of Criminal Procedure, 28 U.S.C. 754,2 and the Due Process Clause of

1 Fed. R. Civ. P. 65(d) provides, in pertinent part: Contents and Scope of EveryInjunction and Restraining Order. (1) Contents. Every order granting an injunction and every

restraining order must: . . . (C) describe in reasonable detail--and not by referring to thecomplaint or other document--the act or acts restrained or required.

2 28 U.S.C. 754 provides, in pertinent part:

A receiver appointed in any civil action or proceeding involving property, real, personal or mixed, situated in different districtsshall, upon giving bond as required by the court, be vested withcomplete jurisdiction and control of all such property with the rightto take possession thereof. . . .

Such receiver shall, within ten days after the entry of his order ofappointment, file copies of the complaint and such order ofappointment in the district court for each district in which propertyis located. The failure to file such copies in any district shall divestthe receiver of jurisdiction and control over all such property inthat district.

Id. (emphasis added).

Case 0:09-cr-60129-WJZ Document 64 Entered on FLSD Docket 09/30/2009 Page 1 of 22

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the United States Constitution, the Defendant, Thomas Raffanello (Raffanello), moves this

Court to enter an Order dismissing the Superseding Indictment.

The Superseding Indictment is comprised of three separate counts. (DE 29). The first

count charges criminal conspiracy in violation of 18 U.S.C. 371. (Id. at 1-10). The second

count charges Obstruction of Proceeding Before the SEC. (Id. at 10-11). The third charges

Destruction of Records in Federal Investigation. (Id. at 11-12). Each count is predicated

upon: (a) the United States Securities and Exchange Commission Complaint [filed in the

Northern District of Texas as Case No. 3-09CV0298-L]3; [and], (b) Court Orders Appointing

Receiver and Prohibiting Document Destruction rendered in that proceeding. (DE 29 at 2 et.

seq.).4

As a result, all charges against Raffanello are directly dependent upon: (1) the underlying

3 Review of the docket from the Texas case reveals that on February 20, 2009, Judge SamA. Lindsay entered an order recusing himself from the case. As a result, the case was randomlyreassigned to Judge David C. Godbey and the case number was modified from 3-09CV0298-L to3-09CV0298-N. See Court Request for Recusal/Order of Recusal (DE 17), Case No. 3-09CV0298-N (N.D. Tex. Feb. 20, 2009).

4See, e.g., DE 29 at 2-3.

6. On or about February 16, 2009, the United States Securities andExchange Commission (SEC) filed a Complaint against SIBL,R. Allen Stanford, and related individuals and entities in the UnitedStates District Court for the Northern District of Texas. . . .

***

7. On or about February 16,2009, based on the application of theSEC, the United States District Court for the Northern District ofTexas, in SEC v. Stanford International Bank, Ltd., et al., Case No.

3-09CV0298-L, issued an order appointing an individual, knownas a receiver (the Receiver). . . .

See also id. at 7 (16. It was part of the conspiracy that, after learning that all documentsand records of SFG and its affiliated entities were ordered to be preserved and that SFGemployees were ordered to cooperate with the SEC and the Receiver, THOMAS RAFFANELLOand BRUCE PERRAUD would . . . .).


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Texas SEC Complaint; (2) whether the SEC Complaint named Stanford Financial Group

Company as a defendant in the original complaint; (3) whether orders appointing the Receiver

authorized the Receivers actions in this case; (4) whether Stanford Financial Group Company

was subject to the original orders appointing the Receiver; and, (5) whether the Receiver

perfected his jurisdiction over Stanford Financial Group Company, its employees (including

Raffanello) and its assets in the Southern District of Florida.

Unfortunately for the Government, the underlying orders upon which it relies, are fatally

flawed. None of the underlying orders applied to Stanford Financial Group Company (including

its assets or employees). And, even if the Orders had covered Stanford Financial Group

Company and Raffanello at times detailed in the Superseding Indictment, they do not in this case

because the Receiver failed to perfect his jurisdiction in the Southern District of Florida.

Consequently: (1) the Receiver had no jurisdiction over Raffanello or the assets of Stanford

Financial Group Company; and, (2) there was no viable complaint, injunction, or restraining

order to which Raffanello was subject. As a result, the Superseding Indictment clearly should be

dismissed. As grounds therefor, Raffanello states more specifically as follows:

(1) At the time of the alleged criminal conduct neither Stanford Financial Group

Company (nor its employees including Raffanello) were named as a defendant in

the underlying civil action on which these criminal charges are based;

(2) At the time of the alleged criminal conduct neither Stanford Financial Group

Company (nor its employees including Raffanello) were named in the Original

Order Appointing Receiver on which these criminal charges are based;


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(3) Neither Stanford Financial Group Company (nor its employees) have ever been

served with a Summons in the underlying civil action upon which all charges are

based;

(4) The Receiver failed to perfect his jurisdiction over either Stanford Financial

Group Company, its assets or employees (including Raffanello) in the Southern

District of Florida, as required under 28 U.S.C. 754;

(5) Any Temporary Restraining Order or Injunction allegedly in existence (during the

period in which the Superseding Indictment claims criminal conduct occurred)

was defective as a matter of law as to both Stanford Financial Group Company

and Raffanello, because any alleged applicable order failed to comply with the

dictates of Rule 65(d), Federal Rules of Civil Procedure;

(6) As a result, there was:

(a) neither jurisdiction over Raffanello;

(b) nor any viable restraining order or injunction to which he was subject, at

the time the alleged criminal conduct occurred.

Based upon the foregoing, all charges against Raffanello lodged in the Superseding

Indictment simply must be dismissed.

STATEMENT OF FACTS AND MEMORANDUM OF LAW

1. Raffanello was an employee of Stanford Financial Group Company, a foreign corporation

doing business in the State of Florida.

2. As such, Stanford Financial Group Company complied with Florida Statutes regarding:

(a) the filing of an annual report naming officers and directors; and,


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(b) the naming of a registered agent, Corporation Service Company 1201 Hays Street,

Tallahassee, Florida 32302 upon whom all service of process (regarding actions

against Stanford Financial Group Company) must be served.5

3. Nonetheless, according to the docket sheet in Case No. 3-09CV0298-N (N.D. Tex.) (the

underlying SEC civil lawsuit upon which these criminal charges are based) a Summons

was never issued for Stanford Financial Group Company.6

4. One reason for the lack of a summons could be that Stanford Financial Group Company

was not a named party in the Initial Complaint (filed February 17, 2009). (See Ex. C).

5. Stanford Financial Group Company was also not named as one of the Companies for

whom a Receiver was appointed in the Original Order Appointing Receiver, signed

February 16, 2009 in Case No. 3-09CV0298-N. (See Ex. D).

6. Instead, it was not until the SEC filed its First Amended Complaint on February 27, 2009

(after termination of the alleged conspiracy defined in the Superseding Indictment) that

Stanford Financial Group (not Stanford Financial Group Company) was added as a party

in an actual complaint in Case No. 3-09CV0298-N. (Ex. E).

5 Fed R. Civ. P. 4(e)(1) provides that an individual may be served within a judicial

district of the United States by following state law for serving a summons in an action broughtin courts of general jurisdiction in the state where the district court is located or where service ismade. See also Fed. R. Civ. P. 4(h), which provides in pertinent part that [u]nless federal lawprovides otherwise ... a domestic or foreign corporation that is subject to suit under a commonname must be served: (1) in a judicial district of the United States; (A) in the manner proscribedby Rule 4(e)(1) for serving an individual; or (B) by delivering a copy of the summons and of the

complaint to an officer, a managing or general agent authorized by appointment or by law toreceive service of process and if the agent is one authorized by statute and the state so requires by also mailing a copy of each to the defendant. A copy of the pertinent information on filewith the Florida Department of State regarding the Stanford Financial Group Company isattached hereto as Ex. A.

6 Copies of the summonses issued in the Texas case are attached hereto as Ex. B.


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7. Even then, Stanford Financial Group was named as a Relief Defendant only. By

designating Stanford Financial Group as a Relief Defendant only, the SEC (by its own

action) indicated that Stanford Financial Group was not alleged to have participated in

conduct upon which the underlying SEC violations (contained in Case No. 3-09CV0298-

N) were based.

8. Rather, (according to the SECs designation of Stanford Financial Group as a Relief

Defendant), Stanford Financial Group may at most possibly possess assets generated by

the improper conduct of the other named defendants.7

9. Thus, during the entire time in which the alleged conspiracy and obstruction of justice

occurred in this case (February 16, 2009 through February 26, 2009), Raffanellos

employer, Stanford Financial Group Company:

(a) was not named in the Initial Complaint;

(b) was not named in the original Order Appointing Receiver or the attendant

temporary restraining order, which is the underlying basis for all charges lodged

against Raffanello;

(c) has never been served with a summons as required under Rule 4, Fed. R. Civ. P.;

(d) was not even partially named8 until February 27, 2009 (in the First Amended

Complaint) (Ex. E) filed after the alleged criminal conduct occurred;

7 See, e.g., SEC. v. Cavanagh, 155 F.3d 129, 136 (2d Cir. 1998) (an entity may be namedas a relief defendant in a securities enforcement action without being accused of wrongdoing ifthe entity: (1) has received ill-gotten funds; and (2) does not have a legitimate claim to thosefunds).

8 The correct name is Stanford Financial Group Company not Stanford Financial Group.


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(e) still has not been properly named as a defendant in the underlying civil cause of

action;

(f) was not properly named in a restraining order or properly made subject to the

receivership until the filing of the Amended Order Appointing Receiver, filed

March 12, 2009, after the alleged criminal conduct occurred (Ex. F); and

(g) still has not been made subject to the Receivers jurisdiction in the Southern

District of Florida, because the Receiver failed to properly perfect his jurisdiction

over property and personnel posited or positioned in the Southern District of

Florida as required under 28 U.S.C. 754.

10. In light of the inexplicably improper exclusion of Stanford Financial Group Company as

a named defendant; and, absent the proper provision of service on its registered agent, in

personam jurisdiction over Stanford Financial Group Company was never established in

the Southern District of Florida.

11. Neither was in rem jurisdiction. The original Order appointing the Receiver over assets

of the defendants did not name Stanford Financial Group Company as a defendant. (See

Ex. D). Neither did the attendant restraining order. (Id.)

12. In fact, it was not until the March 12, 2009 entry of an Amended Order Appointing

Receiver that Stanford Financial Group (not Stanford Financial Group Company) was

finally named as an entity over whom a Receiver had been appointed in order to prevent

waste and dissipation of assets. (Ex. F at 1).

13. Even then, mere entry of the March 12, 2009 Order in a Texas district court, did not

establish any authority over Stanford Financial Groups employees or assets here. To

establish such jurisdiction over property posited in the Southern District of Florida, the


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Receiver was required to comply with the dictates of 28 U.S.C. 754. He failed to do so

here.

14. Title 28, United States Code 754 provides in pertinent part that:

A receiver appointed in any civil action or proceeding involvingproperty, real, personal or mixed, situated in different districts shall be vested with complete jurisdiction and control of all suchproperty with the right to take possession thereof.

* * *

Such receiver shall, within ten days after the entry of his order ofappointment, file copies of the complaint and such order of appointment in the district court for each district in which propertyis located. The failure to file such copies in any district shall divestthe receiver of jurisdiction and control over all such property inthat district.

15. Such are the circumstances in the case at bar. The Receiver failed to properly file either

the amended complaint or the amended order of appointment in the Southern District of

Florida.

16. Instead, on February 20, 2009, counsel for the Receiver attempted to file the original

order appointing receiver, a civil cover sheet, a notice of appearance, the original

complaint, and the original temporary restraining order. (See Composite Ex. G). His

attempts at establishing jurisdiction fell far short of the mark.

17. Neither the Original Complaint, the Original Order Appointing Receiver, nor the

attendant Temporary Restraining Order, named Stanford Financial Group as a defendant.

Moreover, all were improperly filed.

18. As a result, the documents were returned to the Receivers counsel by the Clerk of the

Southern District Court. In so doing, the Clerk instructed Receivers counsel how to

properly e-file the documents as a Notice of Filing. (See Ex. G at DE 3, p. 53).


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Unfortunately, for the Government, the Clerks advice went unheeded. So, nothing was

properly filed.

19. Consequently, the case was administratively closed sua sponte by Judge Ungaro on

February 23, 2009. (Ex. G at DE 2).

20. Then: (a) despite the fact that the case had been administratively closed; and, (b) despite

the fact that counsel for the Receiver was advised of the proper procedure for filing by

the Clerk of the Southern District Court; (c) the Receiver on February 25, 2009 (two days

after the case was administratively closed) filed a random Order9 (not an Amended

9Apparently, the Receiver filed a motion with the Northern District of Texas, which was

docketed on February 19, 2009 (according to the CM/ECF heading on the document), seeking toadd Stanford Financial Group as a Relief Defendant. (See Composite Ex. G). TheReceivers motion included no Certificate of Service. See id. Regardless, it appears that theNorthern District of Texas granted the Receivers motion on February 16, which was three daysprior to the date that the CM/ECF header reflects that the motion itself was filed.

Regardless, the Receiver failed to file an Amended Complaint which named StanfordFinancial Group Company as a defendant as is required by statute. 28 U.S.C. 754. TheReceiver also failed to obtain or serve a Summons on Stanford Financial Group Company orStanford Financial Group Company at any time. And, the paltry Order which was filed in theSouthern District was legally insufficient. It outlined no prohibited conduct. Instead, itreferenced another order. 28 U.S.C. 754;see S.E.C. v. Smyth, 420 F.3d 1225, 1233 n.14 (11thCir. 2005) (The specificity requirement of Rule 65(d) is no mere technicality; [the] commandof specificity is a reflection of the seriousness of the consequences which may flow from aviolation of an injunctive order. An injunction must be framed so that those enjoined knowexactly what conduct the court has prohibited and what steps they must take to conform theirconduct to the law.) (internal citation omitted); Payne v. Travenol Labs., Inc., 565 F.2d 895,897 (5th Cir. 1978) (accord). See also Schmidt v. Lessard, 414 U.S. 473, 476 (1974) (As wehave emphasized in the past, the specificity provisions of Rule 65(d) are no mere technicalrequirements. The Rule was designed to prevent uncertainty and confusion on the part of thosefaced with injunctive orders, and to avoid the possible founding of a contempt citation on adecree too vague to be understood. International Longshoremen's Assn v. Philadelphia MarineTrade Assn, 389 U.S. 64, 74-76, 88 S. Ct. 201, 206-208, 19 L. Ed. 2d 236; Gunn,supra, at 388-389. See generally 7 J. Moore, Federal Practice 65.11; 11 C. Wright & A. Miller, Federal Practice and Procedure s 2955. Since an injunctive order prohibits conduct under threat of judicial punishment, basic fairness requires that those enjoined receive explicit notice ofprecisely what conduct is outlawed.).


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Complaint) which granted the Receivers Motion to add Stanford Financial Group as a

Relief Defendant in the underlying case. Such filings still failed to comply with either

the directives of the district court clerk, the dictates of 28 U.S.C. 754, or the demands of

Rule 65(d), Federal Rules of Civil Procedure.

21. Therefore, this Superseding Indictment:

(a) is based upon an underlying original complaint and order of appointment, which

did not name Raffanellos employer as a defendant;10

(b) is based upon a complaint which was never served on Raffanellos employer;11

(c) is based upon an Order Appointing a Receiver and an attendant restraining order,

neither of which were filed in the Southern District as required by 28 U.S.C.

754; and,

(d) None of which established jurisdiction over either Stanford Financial Group

Company or its employees, including Thomas Raffanello.12 See United States v.

10

See SEC. v. Ross, 504 F.3d 1130, 1140-41 (9th Cir. 2007) (which: (1) found thereceiver had failed to perfect jurisdiction under 28 U.S.C. 754; and, (2) held the receiver lackedin personam jurisdiction which would have otherwise subjected the defendant to mere civilliability because the difficulty here runs deeper than mere insufficient service of process. TheReceiver never filed a complaint and never named Bustos as a party. . . . In sum, although 22of the Securities Act authorized the district court to exercise in personam jurisdiction overBustos, the Receiver failed to take steps consistent with the Due Process Clause or Rule 4 to perfect the court's potential jurisdiction. Section 22 does not supply the personal jurisdictionneeded to support the judgment.)

11See Ross, 504 F.3d at 1138 ([S]ervice of process is the means by which a court asserts

its jurisdiction over the person. See Benny v. Pipes, 799 F.2d 489, 492 (9th Cir. 1986) (A federalcourt is without personam jurisdiction over a defendant unless the defendant has been served inaccordance with FED. R. CIV. P. 4.); FED. R. CIV. P. 4(k) (stating that [s]ervice of a summonsor filing a waiver of service is effective to establish jurisdiction over the person of a defendant).Service of process has its own due process component, and must be notice reasonably calculated... to apprise interested parties of the pendency of the action and afford them an opportunity topresent their objections. Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314.).


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Bradley, 2008 WL 228064, *10 (S.D. Ga. Jan. 25, 2008) (which referenced SEC

v. Ross, 504 F.3d 1130 (9th Cir. 2007) in: (1) vacating, for lack of personal

jurisdiction a receivership action against individuals who were not parties to an

underlying SEC action; and, (2) spoke to a receivers duty to satisfy certain

statutory filing requirements in order to obtain court jurisdiction over third parties

and thus retrieve property from them):

In personam jurisdiction, simply stated, is the power of the court toenter judgment against a person. In rem jurisdiction is the courts power over property. Before a court may exercise the statescoercive authority over a person or property, some statute must

authorize the act. . . . SincePennoyer v. Neff, 95 U.S. 714, 733-34, 24 L. Ed. 565 (1877) the courts ability to exercise personaljurisdiction has been constrained by the Due Process Clause of theFifth and Fourteenth Amendments. The requirement that a courthave personal jurisdiction represents a restriction on judicial powernot as a matter of sovereignty but as a matter of individual liberty.

Id at *11; see also SEC v. Diversified Corp. Consulting Group, 378 F.3d 1219, 1224

(11th Cir. 2004) (which refused to subject a separate entity to an adverse judgment

because, [t]he SEC . . . took no steps to have the Delaware entity made a party

defendant. The SEC points to no authority, and we are unaware of any, for the

proposition that a party who is not named in the plaintiffs complaint, who is not served

with process, and who never made a formal appearance in the district court may

nonetheless be treated by this court as a party defendant and, as such, bound by the final

12See Ross, 504 F.3d at 1145 (In 28 U.S.C. 754, Congress has granted receivers

authority to protect receivership property, real, personal or mixed, situated in different districts.Once appointed, in order to preserve his claims, a receiver is to file copies of the complaint and[the] order of appointment in the district court for each district in which the property is located.By doing so, a receiver obtains complete jurisdiction and control over receivership property inany district. Id. However, failure to file in any given district within ten days of the receiver'sappointment generally divest[s] the receiver of jurisdiction and control over all such property inthat district.Id.) (quoting 28 U.S.C. 754) (emphasis added).


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judgment of the district court entered.). Thus, under facts similar to those which

occurred in this case, the Eleventh Circuit refused to even impose civil liability. It is not

alone in its stance.

22. Courts, including the United States Supreme Court, have indicated an obvious reluctance

to impose civil liability on individuals who were not named as defendants, not served

with process, or were not subject to the jurisdiction of a receiver who has failed to

comply with 28 U.S.C. 754. See, e.g., SEC. v. Vision Commcns, Inc., 74 F.3d 287, 290

(D.C. Cir. 1996) (By not complying with 754, the receiver failed to establish control

over the property. His failure precluded the district court from using 754 as a stepping

stone on its way to exercising in personam jurisdiction over Vista Vision.). See also

Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350-51 (1999).

In the absence of service of process (or waiver of service by thedefendant), a court ordinarily may not exercise power over a partythe complaint names as defendant. See Omni Capital Int'l, Ltd. v.Rudolf Wolff & Co., 484 U.S. 97, 104, 108 S.Ct. 404, 98 L.Ed.2d415 (1987) (Before a ... court may exercise personal jurisdictionover a defendant, the procedural requirement of service ofsummons must be satisfied.); Mississippi Publishing Corp. v.Murphree, 326 U.S. 438, 444-445, 66 S.Ct. 242, 90 L.Ed. 185(1946) ([S]ervice of summons is the procedure by which a court... asserts jurisdiction over the person of the party served.).Accordingly, one becomes a party officially, and is required to takeaction in that capacity, only upon service of a summons or otherauthority-asserting measure stating the time within which the partyserved must appear and defend.

* * *

Unless a named defendant agrees to waive service, the summonscontinues to function as thesine qua non directing an individual orentity to participate in a civil action or forgo procedural orsubstantive rights.


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23. Such reluctance is rendered more acute where, as in the case at bar, the liability at issue is

not civil in nature. Rather, it is criminal.

24. Based upon the Receivers alleged jurisdiction over Stanford Financial Group Company,

its property and its employees (including Raffanello), and the supposed violation of a

restraining order, the liability at issue is severe criminal sanctions. Thomas Raffanello

is facing thirty years. He is doing so, even though neither Raffanello nor Stanford

Financial Group Company were subject to properly perfected jurisdiction or properly

proscribed conduct as is required under the dictates of 28 U.S.C. 754, Rule 65(d)

Federal Rules of Civil Procedure, and the elementary edicts of our Due Process Clause.

Unfortunately, the errant acts of the Receiver is not limited to this case.

25. In a matter pending in the Middle District of Florida, another individual has expressed

confusion and frustration regarding both the conduct of the Receiver and the perceived

purview of the restraining order. Such comments were expressed in an affidavit from

another former Stanford Financial Group Company employee who emphasized her

opinion that the receivership is extremely disorganized does not communicate

effectively, and has wasted resources. (Ex. H at 3 10). She further indicated:

[O]riginal documents are located in the host office from whichthey originated. I did not consider the documents in our officeessential to what the Receiver was investigating, however asecurity guard was hired to work 24 hours a day seven days a weekto protect these files. In addition, a great deal of cost has beenincurred in shipping of these non-essential record copies toHouston.

Id. at 4 10(f).

26. The Affiant is not alone in questioning the conduct of the Receiver. The SEC (the

Plaintiff in the underlying case) has also expressed serious concerns regarding the


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Receivers conduct. To that end, the SEC opposed the Receivers recent fee application,

because, according to the SEC, the Receiver is ma[king] a dire situation worse. SECs

Response To Receivers Motion For Approval Of Second Interim Fee Application And

Procedures For Future Compensation Of Fees And Expenses And Brief In Support, Case

No.: 3:09-CV-0298-N (N.D. Tex. Aug. 27, 2009) at 1 (Comp. Ex. I).

Here, the Receiver has indicated he has secured $81.1 million ofcash on hand as of July 30, 2009. In comparison, he has asked theCourt to pay him and retained professionals roughly $27.5 millionfor services rendered through May 31, 2009. If these requests forpayment are approved, paying the Receiver and his team will havedepleted almost 34% of the currently available Receivership

Estate. In evaluating this percentage, it is worth noting that the bulk of the $81 million were in accounts at the time the Courtentered its freeze, and therefore did not require complicated orextensive work to secure.

Id. at 3 (Comp. Ex. I) (footnote omitted) (emphasis added).13

27. Interestingly, the Receiver has justified his fees in part, by referring to the Superseding

Indictment filed in the instant case. See Superseding Criminal Indictment in Florida

Obstruction Case, http://www.stanfordfinancialreceivership.com/#CriminalIndictment

13 Moreover, according to the SEC, after spending millions of dollars, the Receiver

refused to answer even the most basic of questions regarding the Receivership.

Both the Examiner and the Commission have repeatedly asked theReceiver to identify which customers received interest paymentsand which received only principal, and the respective amounts ofeach. To date, the Receiver has not provided this information.Either the Receiver has the information and is not providing it inthe face of reasonable requests for it, or such information is notcurrently available. It would be surprising if the Receiver had filedcomplaints seeking specified CD proceeds against specificindividuals without having this basic information. Either way, thefailure or inability to explain these circumstances only highlightsthe unreasonableness of the requested fees.

Id. at 5 (Comp. Ex. I).


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(last visited Sept. 29, 2009). See also Comp. Ex. I. The Receiver does so despite the

fact that he followed neither the dictates of 28 U.S.C. 754, nor the directives of Rule

65(d). In failing to do so, the Receiver doomed this particular prosecution prior to its

perceived inception.

28. Such failures by the Receiver are rendered more acute where, as in this case, the only

alleged Order obtained by the Receiver that even names Stanford Financial Group

(prior to the Amended Order of March 12, 2009 obtained by the SEC); refers to a prior

Order; and, fails to detail concise conduct (in the Order itself) which is restrained or

required of Stanford Financial Group Company, or its employees including Raffanello.

As a result, the Order is legally insufficient.

29. Rule 65(d), Fed. R. Civ. P., requires that every order granting an injunction and every

restraining order must: . . . describe in reasonable detail and not by referring to the

complaint or other document the act or acts restrained or required. Fed. R. Civ. P.

65(d)(1). See also Intl Longshoremen's Ass'n, Local 1291 v. Philadelphia Marine Trade

Ass'n, 389 U.S. 64, 76 (1967) (in which the United States Supreme Court held, The

order in this case clearly failed to comply with that rule, for it did not state in specific * *

* terms the acts that it required or prohibited. The Court of Appeals viewed this error as

minor and in no way decisional. We consider it both serious and decisive. . . . The

most fundamental postulates of our legal order forbid the imposition of a penalty for

disobeying a command that defies comprehension.) (emphasis added). Such are the

circumstances here. Title 28, United States Code 754 was ignored. So were the

dictates of Rule 65(d) Federal Rules Civil Procedure. So too, was the rudimentary rubric

of the principles of lenity.


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30. Under the fundamental precepts of lenity, any criminal statute must be strictly construed.

No one may be required at peril of life, liberty or property to speculate as to the meaning

of penal statutes. All are entitled to be informed as to what the State commands or

forbids. Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939). See United States v.

Winchester, 916 F.2d 601, 607 (11th Cir. 1990) (which reversed a sentence based upon

the rules of lenity and strict construction).

31. Lenity also requires that if there is a fair doubt as to whether defendants conduct is

embraced within the prohibition, . . . that the doubt be resolved in favor of the accused.

United States v. Brand, 775 F.2d 1460, 1465 (11th Cir. 1985); United States v. Johnson,

937 F.2d 392, 399 (8th Cir. 1991) ([c]riminal sanctions should not be imposed for

conduct which is not clearly illegal) (citation omitted); United States v. Porter, 591

F.2d 1048, 1053 (5th Cir. 1979) (accord);Ladner v. United States, 358 U.S. 169, 177-78

(1958) (same).

Lenity, the quality of being lenient or merciful, is an application ofthe common law principle that criminal statutes are to be strictlyconstrued, a rule which is perhaps not much less old thanconstruction itself. United States v. Wiltberger, 18 U.S. (5Wheat.) 35, 43, 5 L. Ed. 37 (1820). The rule rests on the fear thatexpansive judicial interpretations will create penalties notoriginally intended by the legislature. 3 N. Singer, SutherlandStatutory Construction 59.03 (4th ed. 1986). It is an outgrowthof our reluctance to increase or multiply punishments absent aclear and definite legislative directive. Simpson, 435 U.S. at 15,16, 98 S. Ct. at 914. Furthermore, the Supreme Court has statedspecifically that lenity applies not only to interpretations of thesubstantive ambit of criminal prohibitions, but also to the penaltiesthey impose.

United States v. Winchester, 916 F.2d at 607 citing Simpson v. United States, 435 U.S. 6

(1978).


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32. Thus, prior to deprivation of liberty, the dictates of due process demand [t]hat the terms

of a penal statute must be sufficiently explicit to inform those who are subject to it

what conduct on their part will render them liable to its penalties.14Id.

33. Despite these fundamental precepts and the record facts outlined above, the Government

filed a Superseding Indictment against Raffanello. In so doing, the Government claims:

(a) that [o]n or about February 16, 2009, . . . the United States District Court for the

Northern District of Texas . . . issued an order appointing an individual known as

a receiver (the Receiver), to, among other things exercise exclusive possession

custody, and control of SFG [Stanford Financial Group]. . . . (Superseding

Indictment at 3 7);

(b) that the Order Appointing Receiver mandated that [t]he Defendants, their

officers, agents, and employees . . . are hereby restrained and enjoined from

destroying, mutilating, concealing, altering, transferring, or otherwise disposing

of, in any manner, directly or indirectly any . . . documents or records of any kind

that relate in any way to the Receivership Estate or are relevant to this action.

(Id. at 8).

14 See Fasulo v. United States, 272 U.S. 620, 629 (1926) ("before one can be punished, it

must be shown that his case is plainly within the statute"); McNally v. United States, 483 U.S.350, 358-60 (1987) (where there are alternate readings of a criminal statute a court can choosethe harsher one only when Congress has spoken in clear and definite language); Robert Bolt, A

Man For All Seasons Act II, 89 (Vintage 1960) (speech of Sir Thomas More) (The law is acauseway upon which so long as he keeps to it, a citizen may walk safely.). Accordingly, if astatute which either forbids or requires the doing of an act in terms so vague that men of commonintelligence must necessarily guess at its meaning and differ as to its application, [the statute]violates the essentials of due process of law.Lanzetta, 306 U.S. at 453.


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(c) that [i]n that same Order Appointing Receiver, the United States District Court

also mandated that [t]he Defendants, their officers, agents and employees . . . are

hereby enjoined from doing any act . . . to interfere with the Receivers taking

control . . . or to interfere in any manner with the exclusive jurisdiction of this

Court over the Receivership Estate. (Id. at 4 9).

(d) that [o]n or about February 16, 2009, the United States District Court for the

Northern District of Texas . . . issued another [unidentified] order which provided

. . . that SFG [Stanford Financial Group] . . . including their . . . employees . . .

are restrained . . . from destroying . . . any books and records . . . pertaining to, the

financial transactions and assets of SFG (Id. at 4 10) (emphasis added).

34. Such allegations in the Superseding Indictment are misleading at best. Stanford Financial

Group was not named in the Complaint filed February 17, 2009 in the District Court in

Texas. Stanford Financial Group was not named in the Complaint filed by the Receiver

in the Southern District of Florida on February 20, 2009.

35. Moreover, the unexplained order which refers to the addition of Stanford Financial Group

as a relief defendant:

(a) apparently pre-dates the Original Complaint;

(b) was entered in response to a motion which was not filed until several days later

and contained no certificate of service;

(c) was not filed in the Southern District of Florida until February 25, 2009, two days

after the original Southern District filings were rejected and the case

administratively closed; and


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(d) still fails to comply with the dictates of 28 U.S.C. 754 as required to establish

jurisdiction over either Stanford Financial Group Company or Raffanello in the

Southern District of Florida.

36. In fact, to date the Receiver has:

(a) failed to properly file the Amended Complaint of February 27, 2009, which

named Stanford Financial Group as a Relief Defendant; and,

(b) failed to file the Amended Order Appointing Receiver dated March 12, 2009

which named Stanford Financial Group as a Relief Defendant subject to the

temporary restraining order and the receivers jurisdiction.

37. As a result, to date the Receiver has still failed to perfect his exclusive jurisdiction over

Stanford Financial Group Company, its employees, agents or assets.15

38. Therefore, under the facts of this case, the law of this Circuit and the general principles of

lenity, it is clear:

(a) that Stanford Financial Group Company was not a named defendant during the

period in which all alleged criminal conduct (obstruction) occurred;

(b) that Stanford Financial Group Company has never been properly served and

therefore was not subject to in personam jurisdiction in the underlying Texas case

(or orders rendered therein);

(c) that neither Stanford Financial Group Company, nor its property and employees

(located in the Southern District) is subject to the jurisdiction or control of the

Receiver (or orders related thereto) because the Receiver failed to comply with

15 Clearly, the Receiver can correct the error now. But, he cannot perfect his jurisdictionretroactively in an attempt to subject Raffanello to criminal sanctions.


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the dictates of 28 U.S.C. 754, and the directives of the Clerk of Court in and for

the Southern District of Florida; and,

(d) that the only alleged order filed by the Receiver on February 25, 2009: (i) failed to

comply with the dictates of Rule 65(d), Federal Rules of Civil Procedure; (ii)

failed to comply with filing requirements of the Southern District; (iii) was filed

in a proceeding which had already been administratively closed; and, (iv) failed

to fulfill the requirements of 28 U.S.C. 754.

Based upon the foregoing record facts, and the law which governs them, an inescapable

consequence of the Receivers conduct to date, is that the Superseding Indictment lodged against

Raffanello is predicated upon an invalid Order and is directed at individuals over whom the

Receiver failed to perfect jurisdiction. As a result, Defendant Thomas Raffanello respectfully

moves this Court to enter an order dismissing the Superseding Indictment with prejudice.

Kendall Coffey, Esq. (Fla. Bar No. 259861)E-Mail: [email protected]

Jeffrey Crockett, Esq. (Fla. Bar No. 347401)E-mail:[email protected]

COFFEY BURLINGTON2699 South Bayshore DriveMiami, Florida 33131Telephone: (305) 858-2900Facsimile: (305) 858-5261

Respectfully submitted,

/s/ Janice Burton SharpsteinJanice Burton Sharpstein (Fla. Bar No. 205362)E-mail:[email protected]

Ari Gerstin (Fla. Bar No. 0839671)E-mail: [email protected]

JORDEN BURT LLP777 Brickell Avenue, Suite 500Miami, Florida 33131-2803Telephone: (305) 371-2600Facsimile: (305) 372-9928


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LOCAL RULE 88.9A CERTIFICATE

Pursuant to Local Rule 88.9A, I hereby certify that counsel for the movant, Janice Burton

Sharpstein, Esq., conferred with Jack B. Patrick, Senior Litigation Counsel, United States

Department of Justice, in a good faith effort to resolve the issues raised in this motion. There

was no resolution.

/s/ Janice Burton Sharpstein

CERTIFICATE OF SERVICE

I hereby certify that on this 30th day of September, 2009, I electronically filed the

foregoing document with the Clerk of the Court using CM/ECF. I also certify that the foregoing

document is being served this day on all counsel of record or pro se parties identified on the

attached Service List in the manner specified, either via transmission of Notices of Electronic

Filing generated by CM/ECF or in some other authorized manner for those counsel or parties

who are not authorized to receive electronically Notices of Electronic Filing.

/s/ Janice Burton Sharpstein


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SERVICE LIST

United States of America v. Thomas Raffanello

Case No. 09-60129-CR-ZLOCH

United States District Court, Southern District Of Florida

Matthew Klecka, Senior Litigation CounselJack B. Patrick, Senior Litigation CounselUnited States Department of JusticeCriminal Division, Fraud Section1400 New York Avenue NWWashington, DC 20005-2107[via Notices of Electronic Filing generatedby CM/ECF]

Edward R. Shohat

Bierman, Shohat, Loewy & Kegerreis, P.A.800 Brickell AvenuePenthouse TwoMiami, Florida 33131[via Notice of Electronic Filing generatedby CM/ECF]

180905v9


Case 0:09 Cr 60129 WJZ

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