Conn's conditions of release

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 1 of 19 - Page ID#: 210

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY CENTRAL DIVISION LEXINGTON UNITED STATES OF AMERICA, Plaintiff, v.

ERIC CHRISTOPHER CONN, Defendant.

) ) ) ) ) ) ) ) )

No. 5:16-CR-22-DCR-REW

RELEASE ORDER

*** *** *** The Court conducted a detention hearing in this matter on April 7, 2016. See DE #28 (Minute Entry Order). The Court previously found that the United States had a right to the hearing under 18 U.S.C. § 3142(f)(2)(A) & (B). See DE #17 (Minute Entry Order). At the hearing, the United States sought Defendant’s detention based on risk of nonappearance and danger. The Court afforded Defendant and the United States all procedural rights provided by the Bail Reform Act. Per FRAP Rule 9(a), for the reasons described in this Order, the Act requires Conn’s release.

The Act’s default result is release in a non-presumption case. 18 U.S.C. § 3142(a)-(c).

The Court ultimately must evaluate whether it can assemble and impose release conditions that will reasonably assure the appearance of the defendant and community / individual safety. The Act requires a progressive evaluation in which the Court imposes the least restrictive potential alternative to detention. Detention based on danger must rest on facts supported by clear and convincing evidence. 18 U.S.C. § 3142(f). A flight-based (or, more accurately, nonappearancebased) detention decision must rest on facts supported by a preponderance of the evidence.

1

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 2 of 19 - Page ID#: 211

United States v. Patriarca, 948 F.2d 789, 793 (1st Cir. 1991); United States v. Curry, No. 6:0682-DCR, 2006 WL 2037406, at *6 (E.D. Ky. Jul. 18, 2006) (unpublished). The analyses are distinct, and conditions that could adequately address flight will not necessarily mitigate danger to a sufficient degree. See United States v. Mercedes, 254 F.3d 433, 436-37 (2d Cir. 2001).

Further, almost any conditional release ultimately depends on a court’s assessment of a defendant’s good faith intentions and predicted compliance with conditions imposed. See United States v. Tortora, 922 F.2d 880, 887 (1st Cir. 1990) (evaluating predicted good faith compliance as critical release component). In the end, any detention decision ultimately turns on the efficacy of potential conditions, which in turn hinges substantially on predicted compliance by a defendant. United States v. Hir, 517 F.3d 1081, 1092 (9th Cir. 2008) (noting “critical flaw” in set of proposed, strict release conditions: “In order to be effective, they depend on [the defendant’s] good faith compliance.”); id. at 1093 n.13 (noting that any set of conditions except a “‘replica detention facilit[y]’” necessarily would “hinge on [the defendant’s] good faith compliance”).

The Indictment charges Defendant with multiple serious offenses rooted in large-scale Social Security fraud, including, generally described by category: (1) conspiracy to commit mail fraud and wire fraud; (2) mail fraud; (3) wire fraud; (4) conspiracy to retaliate against a witness; (5) destruction of evidence; (6) making false statements; (7) conspiracy to launder monetary instruments; (8) § 1957 money laundering; and (9) conspiracy to illegally structure currency transactions. If convicted, Defendant could face a lengthy prison term (up to twenty years of imprisonment on Counts 1-7, 9, and 12).

Evidence Presented At the detention hearing, the United States presented one witness, FBI Special Agent Mary Trotman. SA Trotman, with 27 years of FBI law enforcement experience, described her 2

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 3 of 19 - Page ID#: 212

involvement in the investigation into Defendant Conn. Since June 2015, SA Trotman and other agents participated in interviews with the Social Security Administration’s Office of the Inspector General. Based largely on document review, she explained and described prior statements of a series of former Conn Law Office employees, as memorialized in the interviewing agents’ reports.

According to Trotman, two former employees—Jamie Slone and Melinda Hicks— alleged that Conn said, in the context of a burgeoning criminal investigation, that he would flee to Cuba to avoid extradition.1 Trotman reported that Jamie Slone said that Conn had previously made requests to wire money outside United States. Hicks reported, according to Trotman, that she was asked to open a safety deposit box in her name to store $240,000 in cash. A former employee named Jeanna Newsome, according to Trotman, also previously confirmed Conn’s prior requests to transfer money overseas. Trotman reported that Newsome said that Conn said he might flee to Ecuador to avoid criminal charges involving Social Security fraud. In the prior interview, Newsome also mentioned that another employee told her that a man named Curtis Wyatt once brought a duffle bag of weapons to the Conn Law Office. Brittany Baker stated that she was aware of money that Conn transferred overseas. Likewise, Sonya McGarry reported knowledge of Conn requests for money transfers overseas, as did another former employee, Sheri Hamilton. Conn may have asked Hamilton to assemble the transfer requests. David Lynch, a former employee, was an occasional travel companion of Conn. Lynch said that Conn at one point related something suggesting, “I’ll be dead before the government charges me.” However, 1

Amy Slone, cousin of Jamie Slone, also reported that Conn previously said that he would flee to Cuba, according to Trotman. Misty Long (sister of Melinda Hicks) likewise reported that Conn said that he would flee law enforcement to Cuba—and that Conn had taken certain preparatory efforts, including online research and purchasing Cuba-related books. Rachel Mitchell, per Trotman, stated that Conn said that he would flee criminal charges to an unspecified location.

3

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 4 of 19 - Page ID#: 213

Trotman confirmed that Lynch did not tell investigators that Conn said he would flee the country, even after years of investigation.

Regarding Conn’s finances, Trotman stated that the SSA deposited roughly $23 million into Conn’s law firm’s operating account from approximately August 2005 to September 2015.

Of this total, Trotman estimated that Conn secured $5.7 million by fraud. Trotman reported approximately $44 million in total Conn revenue during that same period. Trotman also described Conn Western Union wire transfers to overseas locations, stating that FBI examiners discovered a total personal Conn transfer of $28,000 to multiple overseas locations (to approximately 10 different countries).

The Government additionally introduced six exhibits. Exhibit 1 is a 2013 cashier’s check that Trotman said Conn sent to Alex Hughes (d/b/a CG Animations) the proceeds of which Hughes then wired to Cyprus, an overseas location. Hughes is a former contractor for Conn Law Office. Trotman said that Hughes said that the Conn check was an investment in a currency trading venture. The United States used exhibit 2—certain checks involving Conn and his mother—to assert that “Mr. Conn has access to money that is in other people’s accounts.” The Government used exhibit 3—additional checks—to make the same point. Trotman averred that the checks showed behavior consistent with a person holding money for another person. Exhibit 4 shows that Defendant’s home is listed for sale and the current list price (decreased from the original). Exhibit 5 is a Homeland Security-generated report of Conn passport utilization. It shows 141 Conn entries regarding international travel.2 Finally, Exhibit 6 is a receipt for

2

At the hearing, the United States particularly highlighted the August-October 2015 travel to Ecuador, where Trotman said that Newsome said that Conn said he would flee. On cross, Trotman conceded a lack of Thailand on the list despite others’ statements that he has visited that country.

4

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 5 of 19 - Page ID#: 214

shredding services, approved by Newsome, dated after Conn became aware of the SSA investigation. Trotman testified that the shredding involved over 26,000 pounds of documents.

Additionally, Trotman testified to specific conduct principally underlying Counts 8 and 9 of the Indictment. Trotman established that as of May 2011, Defendant Conn (by his own interview) knew of an active criminal investigation. Trotman generally described informant Sarah Carver, a former employee at the Huntington Social Security office, questioning the relationship between Conn and co-defendant former ALJ David Daugherty. Further, Trotman said that several witnesses told law enforcement that then-Chief ALJ Charlie Andrus said, allegedly in response to Carver’s actions, “we need to do something about” Carver. Andrus, per Trotman, conceived of a plan to video-surveil Carver at her home to catch her in violation of home-work conditions. Andrus contacted Conn about this plan, and Conn allegedly participated by using his employees as part of the surveillance. Trotman could not, however, identify Conn’s specific motivation to surveil Carver. Regarding Count 9, Trotman reported that several witnesses told law enforcement of a June 2011 “fire pit” behind the Conn Law Office. Trotman said that a witness identified two named employees as carrying out law office boxes and computers and burning them in this pit.

In argument, the prosecutor emphasized that six persons said that Conn stated, prior to the indictment, that he would flee the United States to avoid criminal charges. Now, the prosecutor argued, Conn actually faces the charges, heightening a risk of flight. The Government asserted that, upon a conviction, under various possible sentencing enhancements, Conn could conceivably face a lifetime prison term. The United States generally emphasized Conn’s

5

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 6 of 19 - Page ID#: 215

extensive travel, foreign language experience, substantial historical income,3 and ability to transfer money (including via third parties) overseas. Finally, the Government reiterated that probable cause, per the grand jury’s indictment, exists as to all counts, including the Counts 8 and 9 allegations, highlighted that Andrus admitted the Carver-related conspiracy, and argued that Conn made efforts to destroy documents after May 2011, when he became aware of a criminal investigation.

On cross, SA Trotman described in more detail her own investigative efforts and the limitations thereof. Defense counsel highlighted certain perceived weaknesses in the testimony, including the dated (and uncertain) timing of the witnesses’ flight-related statements. Trotman said they were likely made before 2013—3+ years ago. Trotman said that she knew of no more recent statements about any Conn intent to flee. Trotman, testifying based on other agents’ reports of the witnesses’ statements, admitted that she did not know if the witnesses were characterizing or quoting Conn’s statements regarding flight. Trotman confirmed that a Conn exwife is abroad and that Conn has always returned home after traveling abroad.4 Defense counsel also questioned Trotman regarding possible witness motives. For instance, Trotman recalled allegations that prior employee(s) forged Conn’s signature on at least one check. Trotman conceded she had not conducted a particular credibility analysis as to the witnesses.

Trotman further testified that she has no evidence that Conn has recently sent money abroad. She stated that she did not know where the Hughes check money (or other money transferred overseas) is today. The agent agreed that she did not have a particular timeline on the noted international money transfers, and she said that one witness pegged transfers to the

3

The Court notes that, on the advice of counsel, Conn did not provide any financial information in the PSR. 4 Trotman, it seems erroneously, testified that Conn has a child that lives abroad.

6

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 7 of 19 - Page ID#: 216

amounts of $10,000 and $20,000. Conn allegedly asked one witness, per Trotman, to transfer $20,000 to help bring a woman to the United States from Thailand. Trotman agreed that the use of that particular wire was not to hide money overseas. As to the checks in the Government’s exhibits #2-3, Trotman agreed that Conn’s mother wrote them and that she (Trotman) had no other checks to show that Conn has “access to other people’s money.” Regarding Conn’s house, the agent likewise agreed that she has no reason to think there is a nefarious purpose behind the attempted sale. Trotman further agreed that the retaliation charge is limited to the alleged scheme against Carver. On shredding, Trotman stated that the Conn Law Firm had shredded documents previously, at least on a limited basis.

Defendant’s own case for release proceeded entirely by proffer. Defendant offered 9 exhibits. Exhibits 1 and 2 are reports by document examiners / handwriting experts. Exhibit 3 generally and allegedly is Jamie Slone’s accounting records of the use of cash at the Conn Law Firm. The defense offered these documents essentially to provide, by inference, possible motive for certain witnesses to make statements against Defendant.

Exhibit 4 is a Curtis Wyatt affidavit, in which Wyatt explains and gives input to the “fire pit” and gun-containing duffle bag allegations. In the affidavit, Wyatt also said that Conn does not intend to flee—rather, per Wyatt, Conn intends to stay and fight the charges.5 Exhibit 5 is a 2013 Misty Long affidavit, in which she described the Conn Law Office document retention policy and some intra-office drama. Exhibit 6 is a document production summary, and exhibit 7 is a Hughes email and attached letter giving context to the “advertising” check, which says, among other things, that no money remains from Conn’s foreign investment

5

Wyatt also stated in the affidavit that the FBI has never questioned him. The Government asserted that this statement is incorrect. The prosecutor said that FBI agents did interview Wyatt, and Wyatt invoked his Fifth Amendment rights.

7

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 8 of 19 - Page ID#: 217

today. Exhibit 8 is a Courtnee Hall affidavit, where she states that she did not receive $18,000 from Conn or the Conn Law Firm, counter to other Slone accounting records. Finally, exhibit 9 is a 2003 letter from the Kentucky Bar Association describing ethical obligations concerning document retention.

Defense counsel rehearsed the applicable standards, critiqued the Government’s case, listed pro-release elements favorable to Conn, and sought Defendant’s prompt release.

Analysis The section 3142(g) factors drive the overall analysis. Those factors, which the Court considers as required, here mandate release. The Court finds, based on a full analysis of the record under the Bail Reform Act standards, that the United States failed to justify detention.

The parties’ presentations were wide ranging, and each took full advantage of the inapplicability of the Rules of Evidence to a detention hearing. As the Court indicated at the hearing, it accepts for consideration all information because of the hearing’s informality; however, the quality and nature of proof obviously impact probativeness. Just because information is part of a hearing does not make all hearing information equally persuasive to the Court.

Most of the Government’s evidence reflected multiple hearsay levels. Agent Trotman largely parroted or characterized evidence from aged 302s or other statements taken by other agents, statements based on interviews with witnesses. She generically referenced some affidavits but did not differentiate what proof came from verified sources. SA Trotman, as a once or twice removed speaker relative to the facts, was without the ability to lend much context to the

8

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 9 of 19 - Page ID#: 218

relayed allegations.6 Further, on so many of the critical details central to a detention analysis, the agent simply did not paint anything approaching a granular picture. Thus, Conn allegedly made concerning remarks at some point, four years prior, to the effect that he would leave the country to avoid prosecution, but SA Trotman could not specify dates, quote language, depict context, or provide surrounding elements. Each incriminating suggestion suffered from this deficiency, which extended to the vague insinuations of foreign currency transfers. The only documented instance related to the 2013 Hughes transfer, which the defense put into doubt via its own specific proffer. The Thailand-related transfer had some factual meat to it, but the Government did not suggest any of that money endures for future Conn use. The United States provided utterly no specifics on the alleged $28,000 in personal Conn transfers.

The financial transactions proof was thus mixed. Certainly, the Government reported via bank records that Conn’s firm generated significant income through the years. The Indictment targets a part, but only a relatively small part, of Conn’s overall income as tainted. There is little particular evidence of offshore transfers, and certainly no recent data. There is some recent proof of nominee transactions, but most of that involves Conn’s closest family member, his mother, and in amounts that are not particularly alarming.

As to the obstruction evidence, the testimony related to Judge Andrus and the scheme against Sarah Carver is surely troubling. However, SA Trotman herself struggled to link Conn to any particular untoward motivation. The issue of evidence destruction, as to the timing and details, is incriminating as to Conn and gives the Court significant pause.7 The Indictment targets both of these events, objectively stamping each contention with probable cause. Still, SA 6

For example, the suggestion that Conn had a child living outside the United States evidently was a misstatement, likely (and illustratively) a misinterpretation of another Agent’s remarks.

7 The defense’s pages v. pounds argument on the shred bill was unpersuasive. If it cost $50 to shred a 500-sheet ream of paper, there would be a fire pit on every corner.

9

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 10 of 19 - Page ID#: 219

Trotman cited to no instances of witness intimidation or obstruction outside the 2011-12 events addressed in Counts 8 & 9.8 Of concern, but dated, are adjectives modifying much of the prosecution’s proof.

The travel proof raises risk on several levels but also supports some cross-inferences.

Conn has an enduring record of international travel, with some 140 border crossings over many (almost 8.5) years. This, along with his wealth and language facility, and coupled with vague and dated threats to abscond, presents significant risk. However, as the defense established, Conn was travelling in this manner for years before any investigation arose. The numbers show that Conn has travelled at comparable levels both pre- and post-2011. Defendant could live for long periods outside the country—he has done that. Still, Conn has travelled openly, and the Government had no proof suggestive of steps by Conn to prepare to flee. SA Trotman had no statements by Conn, from the time since 2012, expressing any intent to abscond.

The defense case was wholly by proffer, and significant parts of its case rested on documents presented in isolation and without much foundation.9 The Court gleans from these tenders what it can in the relaxed evidentiary rigor of a detention hearing.

8

The Court supposes the United States offered the “bag of guns” proof as suggestion of an intimidating environment at the Conn law firm. The date of the event is very unclear, the defense offered an innocent version, and the proof does not directly implicate Conn. At most, this event is “odd” in multiple respects.

9 For example, the author or origin of the “Jamie Slone ‘Cash Accounting” packet is unknown.

The Court expressly disregards the narratives at the end of defense exhibit 3. The produceddocuments roster has no real indication as to inclusiveness. The affidavits have some probative worth, but the Court notes that the Alex Hughes-related papers are unsworn. The Wyatt affidavit does not square with the destruction timing in Count 9. Some of the defense proof (e.g., expert reports on check signing, affidavits regarding office turnover, cash accounting records and tracking of transactions) supports arguments attacking the credibility of or raising arguable bias as to some (though not all) former Conn employees. This goes into the overall mix from the hearing.

10

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 11 of 19 - Page ID#: 220

§ 3142(g) Factorial Discussion The United States kept its focus on § 3142(f)(2) matters and largely ignored § 3142(g).

The Court earlier assessed (f)(2) only related to the right to a hearing. Once the hearing occurs, the Court focuses on the (g) factors and whether the Government can prove requirements for detention.10 As to (g)(1), Conn faces no charges enumerated in the statute. The Court has considered the nature and circumstances of the indicted conduct, to the extent the Indictment provides and/or the hearing covered specifics. All of the indicted conduct occurred four or more years ago. The financial scope of the alleged crimes is significant and impacts flight risk. However, most of the danger pertains to conduct within Conn’s public benefits practice, an area the Court can protectively restrict via conditions.

Factor (2) involves the “weight of the evidence.” The Sixth Circuit has stated: “This factor goes to the weight of the evidence of dangerousness, not the weight of the evidence of the defendant’s guilt.” United States v. Stone, 608 F.3d 939, 948 (6th Cir. 2010); but cf. Kaley v.

United States, 134 S. Ct. 1090, 1098 n.6 (2014). Pretrial detention is not in any manner punitive, and the evaluation of evidence must relate only to the factors set forth in the Act. Still, case strength as to underlying conduct logically impacts the view of an actor’s dangerousness and the flight-risk calculus a court must undertake.11 Regarding (g)(2) and evidentiary weight, the

10

And the finding of serious risk of flight/obstruction occurred in the context of a preliminary proffer at the arraignment. That finding did occur, but the detention hearing commences, in a non-presumption case, as a blank slate with the burden on the Government.

11 Each detention or release situation is unique, but the Court did read United States v. Nathaniel, No. 09-20215, 2009 WL 2602444 (E.D. Mich. Aug. 21, 2009). Other than the economic scope, that case is very different. The defendant in Nathaniel was a citizen of India and had no legal status in America. Further, the Government in that case provided significant case proof as to the charged fraud. Multiple co-conspirators had already fled the country in that case. The Court sees few parallels between Nathaniel and Conn.

11

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 12 of 19 - Page ID#: 221

Government offered no proof related to the case itself, other than Counts 8 and 9. As such, the Court can ascribe little force to the argument regarding potential penalties against Conn as to the bulk of the indictment—there simply is no proof by which to measure case strength. The Indictment shows probabilities, which the Court takes into account. Again, the Counts 8 and 9 conduct are matters of concern, but the behavior is dated, the Government has now had many years to accumulate and preserve evidence, and there are no other reported instances of witness intimidation. The Court can protect process integrity via conditions.

The (g)(3) factors are significantly pro-release. Conn is an honorably discharged veteran with no known criminal record other than a 2013 misdemeanor concerning election contributions. He successfully completed probation without incident relative to that matter. Conn shows mental and physical stability, has a long period of stable employment, and has life-long ties in Pike County, to include his aging mother and young daughter and his livelihood.

Defendant has no record of drug or alcohol abuse and remains, at this writing, an active KBA member.

Conn, who is 55 years old and a Kentuckian for most of his life, has never failed to appear to face charges. The defense proffered, without contradiction, that a prior investigating arm of the DOJ (the S.D. of W. Va.) had agreed to alert Conn to any indictment and permit his self-report on process. That prosecuting unit evidently elected against prosecution after a lengthy review. The current prosecutors, who secured an Indictment, chose a different tack, but the fact that another group surveyed the same case, deemed Conn a low non-appearance risk, and ultimately declined prosecution is impactful.

The issue of financial resources (along with travel experience) is the biggest worry for the Court. Conn allegedly generated $5.7 million via the Count 1 fraud conspiracy (and structured 12

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 13 of 19 - Page ID#: 222

over $600,000 per Count 18), and his law practice has been a lucrative one. The suggestion, with some corroboration, of nominee custodians or transferees is also a risk factor. Importantly, though, other than the current Pikeville residence, the Government had no proof of current assets or accounts held or controlled by Conn. With all of the fact-gathering prowess and power of the United States, and despite years in the offing, the hearing simply did not show what funds Conn currently has at his disposal or beckon call. The Court believes it can hedge against flight through a series of traditional and restrictive means.

Finally, regarding the (g)(4) nature and seriousness of danger,12 the Court can craft particular terms that will sharply block Conn from further conduct of the type—both systemic and related to evidence destruction or tampering—alleged in the hearing and Indictment.

The Government has legitimate motivating concerns, and the Indictment shows that Conn probably engaged in the behavior charged. That said, the detention hearing provided essentially no proof of any recency suggesting Conn plans or intends to flee, holds secret assets, has 12

Danger has an expansive meaning under the Bail Reform Act, and fairly encompasses danger that a defendant will seek to subvert justice, through whatever means, and includes potential threats to the integrity of the judicial process. See United States v. LaFontaine, 210 F.3d 125, 134-35 (2d Cir. 2000) (holding that threat of obstruction, with or without violence, can constitute “the type of danger to the community that would support detention” and noting that “obstruction of justice has been a traditional ground for pretrial detention”); see also United States v.

Patriarca, 776 F. Supp. 593, 597 (D. Mass. 1991) (“Danger in this context . . . means more than a risk of physical violence.”); United States v. Ippolito, 930 F. Supp. 581, 583 (M.D. Fla. 1996) (referencing courts’ “inherent authority” to “detain[] defendants to insure the integrity of the trial process” (citing, inter alia, United States v. Graewe, 689 F.2d 54 (6th Cir. 1982) (countenancing bail revocation “if necessary to ensure orderly trial processes” and “when the court’s own processes are jeopardized”), and United States v. Wind, 527 F.2d 672 (6th Cir. 1975))); United States v. Agnello, 101 F. Supp. 2d 108, 114 (E.D.N.Y. 2000) (considering “the defendant’s contempt for court requirements and the danger he poses to witnesses and to the integrity of the criminal justice process”); United States v. Gotti, No. S502CR743(RCC), 2004 WL 405950, at *3-*4 (S.D.N.Y. Mar. 3, 2004) (considering threats to the “integrity of the judicial process” and “integrity of the trial process” in detention analysis); cf. United States v. Giordano, 370 F. Supp.

2d 1256, 1270 (S.D. Fla. 2005) (“There can be no question that an economic danger . . . falls under the broad umbrella of ‘dangerousness’ as that term is used throughout the Bail Reform Act.”).

13

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 14 of 19 - Page ID#: 223

engaged in obstructive behavior, or continues in the type of conduct addressed by the Indictment.

Rather, over the course of many years of investigation by multiple DOJ compartments, Conn has been actively represented by known, retained counsel, has engaged the DOJ regarding the status of the charges and investigation, and has traveled to Washington, D.C., to appear before Congress and (within weeks of Indictment) to meet with and provide handwriting exemplars.

Whatever Conn may have said to employees in contemplation of a nascent investigation, the passage of years, the evolution of the investigation, and Conn’s current posture indicate that he is well-tied to this District and likely planning to defend himself instead of flee.

The doubts created by Conn’s wealth and travel history are real but reasonably mitigable by strict conditions. Ultimately, release always requires a degree of trust in the good faith intent of a defendant to abide by bond rules. The Court has confidence that a matrix of objective limits and strict terms, coupled with Conn’s history and characteristics, provides adequate assurance of appearance and of public protection.

For the stated reasons, the Court finds that the United States failed to prove13 the requirement of detention. [The USPO, in its studied assessment of Conn, reached the same overall conclusion.] As such, the Bail Reform Act mandates release. The Court has assessed the record, contemplated the risks, evaluated conditions, and determined that the following are the least restrictive release terms that will reasonably assure that Conn will appear in court and not pose a danger. The Court thus DENIES the Government’s oral motion for detention, GRANTS DE #23, and RELEASES Defendant, subject to the following terms and conditions:

13

The Government did not prove irremediable flight risk based on facts supported by a preponderance and did not prove irremediable danger risk based on facts supported by clear and convincing evidence.

14

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 15 of 19 - Page ID#: 224

--

Defendant shall surrender any and all passports to the USPO prior to release; Defendant may not otherwise apply for or secure a passport or other international travel permission during the release period.

--

Defendant shall report to the United States Probation and Pretrial Services Office, as directed, for supervision to commence immediately upon release. Defendant shall follow all instructions and details of supervision as set forth by the USPO.

--

Defendant’s travel shall be restricted to the Eastern District of Kentucky. He may not leave the E.D. Ky. without prior Court approval.

--

Defendant shall be placed on home incarceration, at the address provided in the PSR. The USPO shall monitor that home incarceration via an active GPS monitoring unit, the cost of which Conn will bear. During the home incarceration term, Conn may leave the premises only for reasons preapproved by the USPO, and the Court limits such preapproval to matters of urgent personal and family necessity.14 Any departure must be on and per a schedule strictly established by USPO. For any requested travel outside the District, pre-approval by the Court itself is required; at this point, the Court is unlikely to allow travel outside the District.

--

Defendant may not move or relocate without prior USPO approval. The address for supervision shall be the address stated in the PSR.

--

Defendant shall not use alcohol.

14

The only exception is in the event of a true medical emergency. A medical emergency is an emergency requiring a 911 call and Defendant’s (or a family member of his household’s) transportation to a local hospital in an ambulance. In the event of a medical emergency, Defendant must contact the USPO at the earliest possible moment to explain the status and take further instruction.

15

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 16 of 19 - Page ID#: 225

--

Defendant shall not possess a firearm, destructive device, other dangerous weapon, or ammunition. There shall be no such articles in Defendant’s residence.

The USPO shall appropriately confirm that the residence contains no such articles.

--

Defendant shall not use or possess any controlled substance except in strict compliance with medical orders provided to the USPO.

--

Defendant shall participate in good faith in any medical or psychiatric treatment referral by the USPO.

--

Defendant shall immediately report to the USPO any formal interaction with law enforcement.

--

Except through his counsel of record, Defendant shall have no direct or indirect contact with any known case witness (to include any witness the United States chooses to identify), alleged victim in the case, or co-defendant. The no-contact rule extends to all former Conn Law Office employees from the indicted period.

--

Outside the presence and involvement of his counsel of record, Defendant may not discuss case particulars (e.g., claims, defenses, witnesses, evidence, theories of defense or prosecution) with any person.

--

Defendant must immediately notify the Kentucky Bar Association of the Indictment (which the Court already has done of its own accord). Defendant must follow any and all restrictions imposed by the KBA as to legal practice. During the pendency of this case, Conn may not actively practice any claim for or involving state or federal public benefits on behalf of any claimant. He also may not practice in the courts of this federal district pending trial in the case.

16

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 17 of 19 - Page ID#: 226

--

The Court imposes a secured appearance bond requirement of $1.25 million and requires that Defendant pledge his Pikeville residence as security, per the mechanics of LCrR 46.1, in the manner specified by the Clerk of Court.

Defendant may not pledge, encumber, transfer, or sell the property acting as security during the bond period.

--

Defendant may, during case pendency, and without prior USPO approval, pay only the normal and recurring expenses for his household, court-ordered child support, and those expenses required for his defense. Conn may not make other payments or transfers without USPO approval. Conn must secure USPO approval for any transfer or transaction, or series of transactions involving the same matter, either by him or by any third party for his benefit, in the total of over $10,000.00 during the pretrial period.

--

To the extent Defendant still has possession, custody, or control of files or records that pertain to the period charged in the Indictment, he shall preserve all such evidence.

--

Defendant may not intentionally have direct or indirect electronic or other contact with any person located outside the United States.

--

Defendant shall not commit any offense of state, federal, or local law.

--

Defendant shall appear in person at all court hearings regarding Defendant in this case, as set by any scheduling orders of the Court. * * * * *

Advice of Penalties and Sanctions is attached.

The parties may appeal this Order under the terms of 18 U.S.C. ยง 3145(a).

17

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 18 of 19 - Page ID#: 227

This the 12th day of April, 2016.

18

Case: 5:16-cr-00022-DCR-REW Doc #: 40 Filed: 04/12/16 Page: 19 of 19 - Page ID#: 228

ADVICE OF PENALTIES AND SANCTIONS TO THE DEFENDANT: YOU ARE ADVISED OF THE FOLLOWING PENALTIES AND SANCTIONS: Violating any of the foregoing conditions of release may result in the immediate issuance of a warrant for your arrest, a revocation of your release, an order of detention, a forfeiture of any bond, and a prosecution for contempt of court and could result in imprisonment, a fine, or both.

While on release, if you commit a federal felony offense the punishment is an additional prison term of not more than ten years and for a federal misdemeanor offense the punishment is an additional prison term of not more than one year. This sentence will be consecutive (i.e., in addition to) to any other sentence you receive.

It is a crime punishable by up to ten years in prison, and a $250,000 fine, or both, to: obstruct a criminal investigation; tamper with a witness, victim, or informant; retaliate or attempt to retaliate against a witness, victim, or informant; or intimidate or attempt to intimidate a witness, victim, juror, informant, or officer of the court. The penalties for tampering, retaliation, or intimidation are significantly more serious if they involve a killing or attempted killing.

If, after release, you knowingly fail to appear as the conditions of release require, or to surrender to serve a sentence, you may be prosecuted for failing to appear or surrender and additional punishment may be imposed. If you are convicted of: (1) an offense punishable by death, life imprisonment, or imprisonment for a term of fifteen years or more – you will be fined not more than $250,000 or imprisoned for not more than 10 years, or both; (2) an offense punishable by imprisonment for a term of five years or more, but less than fifteen years – you will be fined not more than $250,000 or imprisoned for not more than five years, or both; (3) any other felony – you will be fined not more than $250,000 or imprisoned not more than two years, or both; (4) a misdemeanor – you will be fined not more than $100,000 or imprisoned not more than one year, or both.

A term of imprisonment imposed for failure to appear or surrender will be consecutive to any other sentence you receive. In addition, a failure to appear or surrender may result in the forfeiture of any bond posted.

19