Prosecutors added insurance fraud and racketeering accusations in a second superseding indictment filed in late September. It is the second time the government has added charges to the original indictment, first filed in February 2008.
The government added a conspiracy to commit insurance fraud charge to the indictment. Explaining the charge, the government argued that Renzi, co-defendant Dwayne Lequire and others willfully embezzled funds and premiums from a risk retention company called Spirit Mountain to pay Renzi’s “substantial personal expenses.” Lequire helped conceal the embezzlement by transferring other funds into accounts of Renzi’s insurance company, Patriot Insurance, including proceeds from a line of credit and the real estate deal at the heart of the corruption case against him, the prosecutors allege.
Renzi is accused of telling executives for Resolution Copper Mining that he would not support a land swap bill unless they bought his former business partner’s property. Another company agreed to the deal, and Renzi pocketed more than $700,000 from it, according to the indictment.
His trial was originally set to begin in September, but a magistrate judge is still hearing pre-trial motions. In a recent hearing, Renzi accused the government of basing its corruption case against him on illegal wiretaps of some 50 privileged phone calls between him and his attorneys.
Renzi complained the FBI deliberately and repeatedly violated his attorney-client privilege by improperly recording, monitoring and in some cases transcribing his calls with attorneys, according to a recent post-hearing memo his lawyers filed with the court.
He is asking the court to dismiss the indictment or portions of it, suppress evidence collected during and after the wiretap “and/or disqualify” the prosecution and investigative teams.
Before recorded conversations are handed over to prosecutors, it is routine for a “taint team” of Justice Department attorneys to review the wiretapped discussions. Renzi’s lawyers argued that prosecutors did not constitute a formal taint team to filter out phone calls between him and attorneys and wrongfully recorded more than 50 phone calls and then used them to obtain key information in their investigation. They also assert that in at least four circumstances, prosecutors ignored a taint adviser’s conclusions that the calls were privileged.
The Justice Department declined to comment on the ongoing criminal matter.
Despite the sweeping charges of prosecutorial misconduct, Renzi has had a poor track record so far in trying to get the charges thrown out for other reasons. A judge rejected Renzi’s attempt to have the majority of the evidence gathered from wiretaps and search warrants, as well as interviews with former aides, barred from being admitted in the trial.
After the judge rejected Renzi’s motion, his attorneys filed a 44-page memo in late September, arguing their case for prosecutorial abuse of his attorney-client privilege.