In the

United States Court of Appeals

For the Seventh Circuit

No. 08-3731

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

KYLE KIMOTO,

Defendant-Appellant.

Appeal from the United States District Court

for the Southern District of Illinois.

No. 3:07-cr-30089-MJR-1—Michael J. Reagan, Judge.

ARGUED JUNE 2, 2009—DECIDED DECEMBER 2, 2009

Before POSNER, RIPPLE and KANNE, Circuit Judges.

RIPPLE, Circuit Judge. Kyle Kimoto was charged with

one count of conspiracy, in violation of 18 U.S.C. § 371,

one count of mail fraud, in violation of 18 U.S.C. § 1341,

and twelve counts of wire fraud, in violation of

18 U.S.C. § 1343. After a ten-day trial, the jury convicted

Mr. Kimoto on all counts. Mr. Kimoto appealed. For

the reasons set forth in this opinion, we affirm

Mr. Kimoto’s conviction and also affirm all aspects of
2 No. 08-3731

A pay-as-you-go debit card operates like a pre-paid telephone 1

or gift card. The card itself has no value until the user loads

funds on it. Unlike a gift card, however, once value has been

loaded on the card, it is accepted wherever that particular

card company’s card (VISA or MasterCard) is accepted.

Porcelli also had marketed the program under the name 2

First American Leisure.

his sentence except for the district court’s enhancement

for the number of victims. With respect to this one

aspect of Mr. Kimoto’s sentencing, we remand to the

district court for further proceedings.

I

BACKGROUND

Kyle Kimoto was president of Assail, Inc. (“Assail”), a

telemarketing firm based in St. George, Utah. In 2001,

Assail began marketing a financial package developed by

another telemarketing company, Rockwell Solutions

(“Rockwell”). The package included a pay-as-you-go

debit card, along with other promotional discounts, and 1

was called “First Financial Solutions.” After Assail ended

its association with Rockwell, it began marketing an

equivalent product developed by the Bay Area Business

Council (“BABC”), which was owned and operated by

Peter Porcelli. Assail also marketed a similar product 2

on its own, under the names Premier One, Advantage

Capital and Capital First.

In making cold calls to consumers throughout the

United States, Assail used “lead lists” with names of
No. 08-3731 3

consumers who either had applied for credit and been

turned down or had a less-than-perfect credit history.

The program was designed to make individuals believe

that the call was in response to a recent credit application and that their applications were now being processed or reconsidered. A telemarketer would call the

prospective buyer and state: “Our records indicate

that within the past 12 months, you filed an application

for a credit card and you are now eligible to receive

your Visa or a MasterCard.” Gov’t Ex. 2a. The telemarketer would proceed to ask about the individual’s

household and monthly income. The customer then

would be put on hold for “computer authorization,”

which consisted merely of the telemarketer placing

the individual on hold; no authorization actually was

occurring. Tr. V at 18. When the telemarketer returned to

the line, he would state: “Mr./Mrs. [Customer Name]

based on your information you are guaranteed to receive

a MasterCard that does not require a security deposit

with an initial pay as you go limit of $2000.” Gov’t Ex. 2a.

The consumer then would be informed that he would be

charged a one-time processing fee of $159.95. The consumer was reminded that nothing “looks better on your

Equifax credit report than a MasterCard.” Id.

If the consumer agreed to purchase the package, she

was transferred to a “verifier.” The processing fee was

a one-time debit of the consumer’s bank account, based

upon oral authorization, and therefore, a recording of the
4 No. 08-3731

No equivalent recording was made of the sales call. 3

In some instances, consumers received no card at all. 4

Despite these representations, none of the companies 5

involved in developing or marketing the package reported

customer activity to Equifax.

verification call was made. The consumer heard an 3

automated disclosure mentioning the pay-as-you-go

MasterCard and advising that there would be no credit

on the card until a payment was made. If consumers

asked questions of the verifier, the verifier attempted

to give responses that confirmed the impression that the

consumer would be receiving a credit card. Tr. V at 29-31.

Assail’s programs spawned thousands of customer

complaints about the cards received. For cards sold in 4

connection with BABC, there were as many as one

hundred thousand customer complaints during a sevenmonth period. For cards sold by Assail through its own

programs, customer service was outsourced to Specialty

Outsourcing Solutions (“SOS”) in Waco, Texas. Assail

provided “rebuttal” scripts for SOS representatives to

use in addressing customer complaints. One of the methods that SOS used in assuaging customers was to

inform them that keeping the card would improve

their credit. At its height, SOS had approximately 5

150 customer service representatives fielding calls for

Assail’s programs; between eighty and ninety percent

of those calls were complaints.

We begin with a prefatory note. Mr. Kimoto’s contentions on this appeal focus on three aspects of the pro-
No. 08-3731 5

ceedings: the sufficiency of the evidence to support his

convictions; the responsibilities of the Government with

respect to the timely disclosure of exculpatory and impeaching evidence; and the fairness of the sentencing

procedure. With respect to each, we shall state the facts

pertinent to the issue and then discuss our assessment

of the merits of Mr. Kimoto’s submission on appeal. 

II

SUFFICIENCY OF THE EVIDENCE

Mr. Kimoto maintains that there was insufficient evidence to convict him on any of the counts of the indictment. He contends that the Government failed to

establish his intent to defraud and that, with respect to

the conspiracy count, the Government failed to show

an agreement between he and Porcelli. We first summarize the evidence presented by the parties to the

district court and then examine Mr. Kimoto’s arguments

in light of this evidence.

A. Background

Mr. Kimoto’s telemarketing activities resulted in

a criminal indictment being returned against him on

June 20, 2007, in the Southern District of Illinois. Count 1

of the indictment charged Mr. Kimoto with conspiracy

to commit mail fraud, wire fraud and money laundering.

Count two charged Mr. Kimoto with mail fraud based

upon the mailing of a “benefits package” to a victim in

the district. Counts three through eight alleged wire
6 No. 08-3731

fraud based upon the telemarketing calls to local victims. Finally, counts nine through fourteen charged

Mr. Kimoto with wire fraud related to the debit transfer

from the consumers’s bank accounts to payment

processors for the processing fee.

1.

Mr. Kimoto’s trial commenced in late March 2008. The

Government’s theory of the case was that Mr. Kimoto

defrauded hundreds of thousands of people by using

deceptive scripts in the marketing of his financial products. See supra pp. 3-4. Government witnesses testified that

both the language employed and the structure of the sales

pitch were designed to make the consumers believe that

they were purchasing a credit card. For example, Shawn

Hatfield, who worked for Rockwell and helped develop the

debit-card program marketed by Assail, testified that the

intent of the sales script was to make consumers “perceive” that “they were being pitched a Master Card credit

card with a credit limit.” Tr. II at 181-82. Hatfield testified

that he later worked with Mr. Kimoto on other programs

developed by Assail and that Assail used “very similar”

scripts for all of its programs; these were designed to

“mislead[] the customer[s]” into believing they would

“receive a credit card.” Id. at 183. He also confirmed that,

with respect to these programs, Mr. Kimoto was responsible for the “[f]ront end,” meaning “sales, marketing,

training.” Id. at 184. Similarly, Porcelli testified that the

sales script for the product marketed in conjunction
No. 08-3731 7

with BABC was designed to “leav[e] the unmistakable

impression in the customer’s mind [that] they are going

to get a credit card.” Tr. III at 25. He further testified:

“That was the way [Mr. Kimoto] told me it had to be

sold and I went along with it.” Id.

The Government proffered additional evidence that

Assail, and specifically, Mr. Kimoto, knew that the

scripts were deceptive because they developed “rebuttal”

scripts for SOS to use in fielding customer complaints.

See Gov’t Ex. 40 & supra p. 4. The four scripted rebuttals

were designed to re-sell the product to the unsatisfied

customer. Customers were told that “having good credit

is very important today and we want you to be able to

benefit from this package.” Gov’t Ex. 40. Customers

were reminded that they were getting “an unsecured

master card, which we report to Equifax, that helps

rebuild your credit in a short period of time.” Id. Customers, who were still unconvinced of the worth of the

product, were asked “what is it about improving your

credit . . . that doesn’t interest you?” Id. The “Final Effort”

included informing the customer that

[t]he reason why we called you in the first place is

because your credit isn’t as good as it could be. With

Advantage Capitals [sic] not only are you going to

have a master card in case of emergencies, but also

you are going to be able to rebuild your credit in a

short period of time. 

Id. Jay Lankford, principal of SOS, testified that Assail

would do “test calls” “to make sure you [we]re using all of

the rebuttals and make sure you were not giving up too

easy on the sale, to try to save the sale.” Tr. IV at 57.
8 No. 08-3731

Mr. Ullman acknowledged, however, that the parties’s 6

(continued...)

Lankford further stated that Assail would “demand[]”

that, if a customer service agent failed to use all of the

rebuttals, that agent be taken off the program. Id.

Finally, the Government produced evidence that

Mr. Kimoto knew that the representations made in the

rebuttal scripts also were false. Roger Howard, co-owner

of Apex Merchant Services (“Apex”), which initially

supplied debit cards to Assail, testified that he told

Mr. Kimoto that the card supplied by Apex was “definitively not a credit card, that there was no credit worthiness” and that “there weren’t any credit agencies that

would report on it.” Tr. VI at 141-42.

Mr. Kimoto defended his actions on the ground that

he was engaged in the legitimate business of selling

debit cards, that the scripts themselves were not deceptive, and that he did his best to ensure that employees

who crossed the line—who affirmatively represented

that the consumer was getting a credit card—were removed. He posited that, as a marketer, he was entitled

to rely on the representations of those creating the

product, but that he had been duped by unscrupulous

criminals, here Porcelli and Howard, into believing that

the products he was selling had credit worthiness. Specifically, he proffered the testimony of Jeff Ullman, who

had introduced Mr. Kimoto to Howard; Ullman testified

that Howard had represented that Apex could supply

a debit card and that the use of the card could be

reported to credit agencies. See Tr. VII at 168-71.6
No. 08-3731 9

(...continued) 6

eventual written agreement did not incorporate a requirement that Apex report to Equifax. See Tr. VII at 180-81.

Paragraph A stated: “Kimoto developed a sales model for the 7

sale of a MasterCard Stored Value Debit Card as a credit card

and targeted consumers with bad or no credit, who had

(continued...)

Mr. Kimoto’s trial lasted for ten days, after which the

jury convicted him on all counts of the indictment.

2.

In a post-trial motion for acquittal and a new trial,

Mr. Kimoto contended that the evidence was insufficient to sustain his conviction. Specifically, Mr. Kimoto

claimed that the Government had failed to establish that

a conspiracy existed. The basis for his claim was

(1) that several scripts entered into evidence specifically

stated that the pay-as-you-go card was not a line of

credit and (2) that there was testimony that he had “zero

tolerance” for misrepresentations. R.58 at 3. Mr. Kimoto

also argued that “[t]here was no testimony from any

witness which would show [he] knew that the scripts

might be misleading, or that customers felt misled.” Id.

at 4. Finally, Mr. Kimoto contended that the Government did not satisfy its burden of proving his participation in any of the overt acts alleged in the indictment.

He claimed that this failure of proof was evidenced in

the jury’s “contradictory verdict” with respect to paragraphs A and B of Count 1 of the indictment. Id. at 4. 7
10 No. 08-3731

(...continued) 7

applied for and had been turned down for a credit card.”

Paragraph B stated: “Kimoto put together an international

network of ‘affiliates,’ call centers which made unsolicited

telephone calls to consumers, including consumers in the

Southern District of Illinois, utilizing the marketing plan

and sales scripts developed by Kimoto.” R.53 at 2.

In its ruling denying the motion, the district court

rejected these contentions. The court noted that Clifford

Dunn, Assail’s vice president and manager of its St.

George, Utah office; Tully Herd, an Assail account manager; and Porcelli all testified that Mr. Kimoto intended

to market the debit card as a credit card and that he

knew the scripts were misleading. Turning to the issue

of Mr. Kimoto’s participation in the overt acts, the court

noted that the jury found that Mr. Kimoto had committed the overt acts alleged in paragraph B, but not in A.

The court determined that “any combination of ‘yes’ or ‘no’

answers to these two questions could be consistent

because each alleges separate and distinct facts.” R.72 at

10. The court also observed that “[t]he jury specifically

found that the Government had proven beyond a reasonable doubt that Kimoto had committed four overt

acts in furtherance of the conspiracy, which is more

than sufficient to support their verdict.” Id.

B. Analysis

In seeking to overturn a jury verdict based on the sufficiency of the evidence, Mr. Kimoto faces a “daunting” task.
No. 08-3731 11

United States v. Roberts, 534 F.3d 560, 569 (7th Cir. 2008)

(internal quotation marks and citations omitted). “In

reviewing a challenge to the sufficiency of the evidence,

we do not weigh the evidence, United States v. Bowman,

353 F.3d 546, 552 (7th Cir. 2003), make credibility determinations, United States v. Woolfolk, 197 F.3d 900, 904

(7th Cir. 1999), or resolve testimonial inconsistencies, see

United States v. Hodges, 315 F.3d 794, 799 (7th Cir. 2003).”

United States v. Webber, 536 F.3d 584, 597 (7th Cir. 2008).

Instead, taking the evidence in the light most favorable

to the Government, we “ ‘will overturn a conviction based

on insufficient evidence only if the record is devoid of

evidence from which a reasonable jury could find guilt

beyond a reasonable doubt.’ ” Id. (quoting United States

v. Stevens, 453 F.3d 963, 965 (7th Cir. 2006)).

1. Intent to Defraud

Turning to the first of Mr. Kimoto’s arguments, he

claims that, with respect to every count of the indictment,

the Government was required to prove his intent to

defraud. He further maintains that the Government

attempted to prove this element by showing either that

he intentionally marketed the pay-as-you-go card as a

credit card or that he intentionally misled consumers

into believing that the pay-as-you-go card would result

in credit reporting. According to Mr. Kimoto, the jury

explicitly rejected the first theory by answering “No” to

Paragraph A of the verdict form for Count 1, and there

simply was no evidence presented to support the

second theory. We disagree.
12 No. 08-3731

Indeed, the reason that the jury answered “No” to Paragraph 8

A may be that the language in Paragraph A differed from that

used by some of the Government’s witnesses. As suggested

previously, the jury could have read Paragraph A as stating

that Mr. Kimoto alone was responsible for developing the

sales model. The jury also could have read the interrogatory

as requiring that all of the targeted consumers recently had

submitted a credit application and been turned down. However, Porcelli testified that Mr. Kimoto was the “primary

author” of the sales model, not its sole author. Tr. III at 67

(emphasis added). Similarly, Porcelli testified that the target

consumers were “people with no credit, bad credit or otherwise negative ability to process a transaction on a credit card”;

(continued...)

Paragraph A of the jury verdict form for Count I of the

indictment stated: “Kimoto developed a sales model for

the sale of a MasterCard Stored Value Debit Card as a

credit card and targeted consumers with bad or no

credit, who had applied for and had been turned down

for a credit card”; the jury responded “No” to this statement. R.53 at 2. However, the jury’s rejection of one

or more of the factual allegations contained in

Paragraph A is not inconsistent with its finding that

Mr. Kimoto possessed the requisite state of mind for

fraud. The jury could have believed that Mr. Kimoto

drafted the deceptive scripts used to make sales, but the

jury may not have been convinced that he alone had

“developed a sales model.” Alternatively, the jury may

have questioned whether all of the targeted consumers

“had applied for and had been turned down for a

credit card.”8
No. 08-3731 13

(...continued) 8

he did not testify that every targeted consumer recently had

applied for, and been denied, a credit card. Id. at 58. Porcelli

further explained the target audience accordingly:

You want to use the example of a Chia Pet or Ginsu Knife,

people who call in and want to buy the product over the air.

The positive credit people are the responders who purchased and have a valid credit card. The negative credit

people are the ones who send in a money order or

who don’t have a credit card and ended up not buying, but

they did respond and try to place an order.

Id.

Furthermore, there was testimony from which the jury

could have concluded that Mr. Kimoto intentionally

had misled consumers into believing that the pay-as-yougo card would result in credit reporting. As discussed

previously, Howard, co-owner of Apex, testified that

he told Mr. Kimoto that the card supplied by Apex was

not a credit card, did not have credit worthiness and

could not be reported on. See Tr. VI at 141-42. Additionally,

Porcelli testified that, when Assail switched suppliers

(from Apex to Stonebridge), both Mr. Kimoto and Porcelli

were aware that use of the debit card could not be

reported to credit agencies. See Tr. III at 37 (Porcelli

testifying that Stonebridge told him “flat out that they

did no reporting” and that Porcelli told this to

Mr. Kimoto). Nevertheless, the sales scripts still implied

that the card’s use would be reported. Id. at 41 (Porcelli

testifying that, after switching to Stonebridge, the sales

scripts still read “and nothing looks better on your

Equifax credit report than a Master Card”).
14 No. 08-3731

Essentially, Mr. Kimoto is arguing that the testimony of

Porcelli and Howard should not have been believed.

However, it was the province of the jury “to parse the

facts, to weigh the credibility of each witness and to

disregard the testimony of witnesses it found to be less

credible or not worthy of credence.” Carter v. Chicago

Police Officers, 165 F.3d 1071, 1081 (7th Cir. 1998) (internal

quotation marks and citations omitted). We will not

second-guess its credibility determinations. 

2. Agreement 

Mr. Kimoto also maintains that the evidence was insufficient for the jury to convict him on Count 1, the conspiracy count, because the evidence does not establish

that he and Porcelli entered into a “common agreement”

to defraud. See Appellant’s Br. 25 (quoting United States

v. Gilmer, 534 F.3d 696, 701 (7th Cir. 2008)). Mr. Kimoto

explains that “[e]ven if the jury believed that [he] knew

or should have known the credit reporting representations were false, no evidence was presented that his

purported co-conspirator, Porcelli, shared this knowledge and joined an agreement to make such a misrepresentation.” Id. Mr. Kimoto’s argument must fail for two

reasons. First, it assumes that the only fraudulent statement in the sales script was the reference to Equifax

reporting. However, several aspects of the sales and

verification scripts were designed to mislead the

consumer into believing that they were securing a

credit, as opposed to a debit, card. See Gov’t Ex. 2a
No. 08-3731 15

(script referencing a customer’s application for a credit

card and informing the customer of his eligibility to

receive “your Visa or MasterCard”). Second, it ignores

evidence in the record that both Mr. Kimoto and Porcelli

knew that cards supplied by Stonebridge could not be

reported on, but they nevertheless continued to employ

the script that referenced the card’s use being reported

to Equifax.

There is ample evidence in the record to support the

jury’s conclusion that Mr. Kimoto had the requisite

intent to defraud and that he and Porcelli, in fact,

formed an agreement to commit fraud. Consequently,

there is no basis on which to overturn the jury’s verdict. 

III

DISCOVERY ISSUES

A. Overview

The argument Mr. Kimoto pursues most vigorously is

that the Government either intentionally withheld or

destroyed evidence that was crucial to his ability to

present a complete defense. We begin our consideration

by setting forth the applicable legal standards that

govern this area. We then shall recount the procedural

context in which the district court addressed these standards. With this background, we shall turn to each of

the specific contentions raised by Mr. Kimoto and assess

the district court’s disposition of each. 
16 No. 08-3731

B. Standards

1. Brady v. Maryland

In Brady v. Maryland, 373 U.S. 83, 88 (1963), the Supreme

Court held that “the suppression by the prosecution of

evidence favorable to an accused upon request violates

due process where the evidence is material either to

guilt or to punishment, irrespective of the good faith or

bad faith of the prosecution.” Over the years, the Court

has expanded this duty in several ways. In United States

v. Agurs, 427 U.S. 97, 107 (1976), the Court held that the

duty is applicable regardless of whether there has been

a request by the accused. Later, in United States v.

Bagley, 473 U.S. 667, 676 (1985), the Court made clear

that the duty applies to impeachment evidence as well

as exculpatory evidence. Finally, Kyles v. Whitley, 514

U.S. 419, 438 (1995), established that the duty applies

to evidence known to police investigators even if

unknown to the prosecutor.

The duty of disclosure under Brady, however, is not

unlimited. We have explained that “a Brady violation

only occurs if ‘material’ evidence is withheld, that is ‘if

there is a reasonable probability that, had the evidence

been disclosed to the defense, the result of the proceeding would have been different.’ ” United States v.

Stott, 245 F.3d 890, 901 (7th Cir. 2001) (quoting Bagley,

473 U.S. at 682). “Furthermore, ‘[a]s long as ultimate

disclosure is made before it is too late for the defendants

to make use of any benefits of evidence, Due Process

is satisfied.’ ” Id. (quoting United States v. Ziperstein, 601

F.2d 281, 291 (7th Cir. 1979)).
No. 08-3731 17

Thus, “[t]o establish a Brady violation, the defendant

must prove three elements: (1) the evidence at issue

was favorable to the accused, either because it was exculpatory or impeaching; (2) the evidence was suppressed

by the Government, either willfully or inadvertently;

and (3) the denial was prejudicial.” United States v. Roberts,

534 F.3d 560, 572 (7th Cir. 2008). We review a district

court’s Brady determination for an abuse of discretion.

United States v. Price, 418 F.3d 771, 785 (7th Cir. 2005).

2. Arizona v. Youngblood

There is a difference “between those situations in

which the police fail to disclose to the defendant evidence

that it knows to be material and exculpatory, and those

situations in which police simply fail to preserve potentially exculpatory evidence.” United States v. ChaparroAlcantara, 226 F.3d 616, 623 (7th Cir. 2000). In Arizona v.

Youngblood, 488 U.S. 51 (1988), the Court addressed

the latter situation. In that case, the Court held that,

“unless a criminal defendant can show bad faith on the

part of the police, failure to preserve potentially useful

evidence does not constitute a denial of due process of

law.” Id. at 58. 

In such situations, failure to preserve evidence is not

a violation of due process rights unless the

defendant can demonstrate: (1) bad faith on the part

of the government; (2) that the exculpatory value of

the evidence was apparent before it was destroyed;

and (3) that the evidence was of such a nature that
18 No. 08-3731

the petitioner would be unable to obtain comparable

evidence by other reasonably available means.

Hubanks v. Frank, 392 F.3d 926, 931 (7th Cir. 2004) (citing

Youngblood, 488 U.S. at 58; California v. Trombetta, 467

U.S. 479, 488-89 (1984); United States v. Watts, 29 F.3d 287,

289-90 (7th Cir. 1994)).

3. Jencks Act

Finally, we turn to disclosure requirements under the

Jencks Act, 18 U.S.C. § 3500. As we have explained:

The Jencks Act was enacted in response to the Supreme

Court’s holding in Jencks v. United States, 353 U.S. 657

(1957). To ensure the meaningful confrontation of

government witnesses, the Act requires the government, upon the defendant’s motion, to produce statements made by any of its witnesses which the particular witnesses signed, adopted, or approved, and

which pertain to their testimony at trial. 18 U.S.C.

§ 3500(b); see also Fed. R. Crim. P. 26.2; United States

v. Lopez, 6 F.3d 1281, 1288 (7th Cir. 1993). The hope

is that these statements will afford the defense a

basis for effective cross-examination of government

witnesses and the possible impeachment of their

testimony without overly burdening the government with a duty to disclose all of its investigative

material. See United States v. O’Malley, 796 F.2d 891,

900 (7th Cir. 1986); United States v. Snow, 537 F.2d

1166, 1168 (4th Cir. 1976).

United States v. Johnson, 200 F.3d 529, 534 (7th Cir. 2000). 
No. 08-3731 19

Turning to the statutory provision, 18 U.S.C. § 3500(a)

states: 

In any criminal prosecution brought by the United

States, no statement or report in the possession of the

United States which was made by a Government

witness or prospective Government witness (other

than the defendant) shall be the subject of subpoena,

discovery, or inspection until said witness has

testified on direct examination in the trial of the case.

Once a witness has testified on direct examination, however, “the court shall, on motion of the defendant, order

the United States to produce any statement . . . of the

witness in possession of the United States which relates

to the subject matter as to which the witness has testified.”

18 U.S.C. § 3500(b). Subsection (e) defines statement: 

The term “statement”, as used in subsections (b), (c),

and (d) of this section in relation to any witness called

by the United States, means--

(1) a written statement made by said witness and

signed or otherwise adopted or approved by him;

(2) a stenographic, mechanical, electrical, or other

recording, or a transcription thereof, which is a

substantially verbatim recital of an oral statement made by said witness and recorded contemporaneously with the making of such oral statement; or

(3) a statement, however taken or recorded, or a

transcription thereof, if any, made by said

witness to a grand jury.
20 No. 08-3731

18 U.S.C. § 3500(e). If the Government fails to comply

with an order of the court to deliver a witness’s statement, “the court shall strike from the record the testimony of the witness.” Id. § 3500(d). Although not set

forth in the text of the Act itself, courts have held that

relief may not be granted under the Jencks Act without

a showing of prejudice. See United States v. Johnson, 200

F.3d 529, 535 (7th Cir. 2000) (collecting cases).

C. Procedural Context

1. Earlier FTC Proceedings

On January 9, 2003, the Federal Trade Commission

(“FTC”) filed a civil complaint against Mr. Kimoto and

Assail (“FTC action”). The complaint alleged that a

variety of individuals and corporations led by

Mr. Kimoto engaged in a fraudulent telemarketing

scheme in violation of 15 U.S.C. § 45(a). See FTC v. Assail,

Inc., 410 F.3d 256, 259 (5th Cir. 2005). Within a week of

the filing, Mr. Kimoto had contacted Robert Draskovich

“to represent him individually regarding potential

criminal exposure, as well as to work along side

Edward Moore regarding his representation for the

pending case [FTC action].” R.14, Attach. 1 at 2.

On September 22, 2003, Mr. Kimoto, Assail and the FTC

entered into a stipulated judgment. According to the

terms of the stipulated judgment, Mr. Kimoto and

Assail were jointly and severally liable for $106 million;

however, the judgment was suspended to the extent

that the amount exceeded Mr. Kimoto’s assets, which
No. 08-3731 21

We reference these proceedings because they bear on whether 9

Mr. Kimoto had access to certain documents generated in

connection with that action. See infra pp. 58-59. They play no

other role in our consideration of the issues before this court.

The Government refers to this presentation as its 10

“reverse proffer.”

were to be liquidated by an appointed receiver. See

Assail, 410 F.3d at 260. The stipulated judgment also

provided for the court’s retention of jurisdiction to

modify or enforce the order.

One year after entering the stipulated judgment,

the United States District Court for the Western District

of Texas did modify the order. The FTC’s continued

investigation revealed that Mr. Kimoto had attempted

to hide several million dollars in assets from the receiver. On motion of the FTC, therefore, the district

court lifted the suspension on the stipulated judgment.

R.59, Attach. (Final Monetary Judgment as to Defendants

Kyle Kimoto and Assail, Inc.).9

2. Reverse Proffer

As set forth previously, on June 20, 2007, a grand jury

returned a fourteen-count indictment against Mr. Kimoto.

The day before Mr. Kimoto’s arraignment and initial

appearance, his counsel met with Government attorneys

to view an eight-hour PowerPoint presentation.10

During the PowerPoint presentation, the Government

outlined its theory of the case that, in the sales and mar-
22 No. 08-3731

During the initial appearance and arraignment, the trial 11

date was set for August 27, 2007.

keting of a debit card, Assail had used a telemarketing

script, developed and approved by Mr. Kimoto, designed

to mislead prospective buyers into believing that they

actually were purchasing a credit card. The presentation

included excerpts of video interviews with Mr. Kimoto’s

employees, a video interview of Porcelli and video interviews of Porcelli’s employees. As part of its presentation,

the Government also played a number of “verification”

recordings, which contained misleading or deceptive

statements.

3. Motions to Continue

Approximately six weeks later, on August 20, 2007,

Mr. Kimoto’s counsel filed his first motion to continue

the trial date. See R.8. Mr. Kimoto’s counsel stated that 11

he knew “of at least 3,000,000 pages of written discovery

and hundreds of thousands of digital recordings that

need to be examined in preparation for trial.” Id. at 3.

Mr. Kimoto did not request a continuance of a specific

period, but asked for the ability to supplement his

motion in forty-five days based on his initial review of

the documentation. Id. at 4.

The Government did not oppose the motion, but requested a trial date set in February 2008, as opposed to the

open-ended request of Mr. Kimoto. The Government

noted that Mr. Kimoto’s counsel had been involved in
No. 08-3731 23

After filing its original memorandum concerning the trial 12

date, the Government filed a Supplemental Memorandum

that included as an attachment an application for attorneys’

fees that Mr. Kimoto’s counsel had filed in the FTC action. The

application for fees recounted that counsel had spent approximately 592 hours in the representation of Mr. Kimoto in the

FTC investigation, that he had been engaged by Mr. Kimoto

“to represent him individually regarding potential criminal

(continued...)

his defense since 2003, when the FTC brought a civil

action against Mr. Kimoto. The Government also

informed the court that it had made a reverse proffer

by way of the PowerPoint presentation and that it had

“agreed to provide the dozens of hours of video

interviews and the recorded telemarketing calls that it

has in its possession, samples of which were played

during the PowerPoint presentation.” R.9 at 2. It noted,

however, that it was “awaiting defendant providing the

government with an external hard drive upon which to

transfer the electronic evidence.” Id. at 2-3. Finally, it

advised that “there were searches conducted at three

locations and the original documents seized are in an

office in Fairview Heights maintained by the Postal

Inspection Service. These documents are available to the

defendant.” Id. at 3. Although acknowledging the voluminous documentation at the defendant’s disposal, the

Government also informed the court that “the business

records are largely peripheral to the key issues in the

case which depend for the most part on the scripts,

training manuals, contracts and email.” Id. at 4. The 12
24 No. 08-3731

(...continued) 12

exposure, as well as to work along side Edward Moore regarding his representation for the pending case,” and that it

was clear at that time that Mr. “Kimoto could face criminal

prosecution.” R.14, Attach. 1 at 2. The affidavit in support of

the application for fees averred that counsel had spent hours

“[a]nalyzing voluminous materials and documents,” id., Ex. 1

to Attach. 1 ¶ 3, and reflected over forty time entries

dedicated to reviewing documents or other discovery.

In the second motion, in addition to recounting the trials to 13

which he already was committed, Mr. Kimoto’s counsel also

reiterated the voluminous discovery that needed to be

reviewed in preparation for trial. See R.16 at 2.

The defense sent a hard drive to the Government on Septem- 14

ber 24, 2007. See R.42, Ex. E.

district court granted the continuance and set a trial

date of February 4, 2008.

In a teleconference held later in August, Mr. Kimoto’s

counsel, Mr. Draskovich, informed the court that, due

to several other trials scheduled in early 2008, he

would not be able to prepare adequately for Mr. Kimoto’s

trial if it were to commence on February 4, 2008. The court,

therefore, asked Mr. Kimoto’s counsel to file another

motion to continue. Mr. Kimoto’s counsel did file a

second motion, which was granted by the court. 13

Mr. Kimoto’s trial then was rescheduled for March 31,

2008.

On October 22, 2007, the Government provided a hard

drive to Mr. Kimoto’s counsel containing all of the 14

digital and video information that had been reviewed by
No. 08-3731 25

the Government in preparation for the reverse proffer.

Specifically, Postal Inspector Adam Latham wrote to

Mr. Draskovich: “Enclosed you will find the hard

drive with our electronic discovery for the above referenced case. On the disk you will find five data

directories . . . .” R.40, Attach. C. The data directories listed

were “Assail,” “FBI,” “FTC,” “Assail and BABC Videos”

and “VoiceLog.” Id. The origin of all of the information

was provided. Additionally, it was clear that the

discovery did not represent all of the information within

the Government’s possession, but only that which the

Government had reviewed. Specifically, with respect to the

VoiceLog directory, Inspector Latham stated: 

[T]his directory contains digital audio recordings

of BABC, FALC, and Assail program sales verifications that were recorded by VoiceLog. The 750+ files

in this directory are the digital recordings that we

downloaded from VoiceLog’s server—there are

several hundred thousand other verifications that we

did not review.

Id. (emphasis added). Following this disclosure, the

defense did not request the digital discovery in any

other format, nor did it request additional digital discovery. As well, the defense did not seek access to the repository of documentary and digital evidence at the

Fairview Heights facility at that time.

Three months later, on January 29, 2008, Mr. Kimoto

filed his third motion to continue. Again the reason cited

for the requested continuance was the “voluminous
26 No. 08-3731

At this point, the defense team still had not reviewed the 15

evidence located at the Fairview Heights facility.

Mr. Draskovich acknowledged at that time that the 16

VoiceLog verifications received were “just a minute sample of

over 300,000 recordings made.” R.18 at 2.

The Government also argued that, “[w]hile there is sub17

stantial documentary evidence and voluminous verification

calls, what is missing from defendant’s motion is how a

review of all of the records seized from the search and a

review of all the verification recordings is either necessary or

helpful to the development of a defense given the government’s indictment and theory of the case.” R.19 at 6.

paper discovery in this case,” as well as the “extensive 15

digital discovery” received from the Government.

R.18 at 2. The Government objected to the continu- 16

ance primarily on the ground that, although there was

voluminous paper and digital discovery, little of that

material was pertinent to the issues in the case—whether

the scripts used to market the pay-as-you-go card were

fraudulent. Additionally, the Government noted that

Mr. Draskovich had represented Mr. Kimoto in the FTC

action, and, therefore, presumably was familiar with

much of the documentation at issue.17

The district court denied the third continuance. It

acknowledged that there was a great deal of evidence

available to the defense, but noted that Mr. Draskovich

had been involved in the case for some time, that the

Government’s theory of the case was straightforward,

and that there was no suggestion that “the Government

ha[d] shortened [Mr. Kimoto’s] effective preparation
No. 08-3731 27

Prior to this time, in November 2007, Mr. Kimoto had 18

retained a service to review digital evidence. 

time or failed to provide him with necessary discovery

materials.” R.21 at 4.

4. Discovery

On February 27, 2008, members of the defense team

visited the Fairview Heights location to review the evidence in the Government’s possession. Members of the

defense team spent four days reviewing documentation

in both paper and digital form; they had access to all of

the Government’s evidence, consisting of thirty-three

boxes of documents and thirteen hard drives. After the

defense team departed, copying of documents continued

with the cooperation, and under the supervision, of

postal inspection workers.

On approximately March 7, 2008, the defense

retained the services of Daniel Libby, a former naval

cryptologist and expert in computer forensics; the 18

defense engaged Libby’s services for the sole purpose of

reviewing the digital evidence provided. On March 11,

2008, Libby requested that the defense team procure

forensic images of the data turned over by the Government. According to Libby, “[a] forensically sound image”

is a byte image of the hard drive, not simply a copy of

the file system, and “insures that the evidence is not

altered and or tainted during the review” of the digital

evidence. Tr. of Hearing on Motion to Dismiss at 10. Libby

was able to determine right away that the hard drive
28 No. 08-3731

The record is not clear as to when, if at all, this request was 19

received in writing. One of Mr. Kimoto’s counsel states in an

affidavit that he called Assistant United States Attorney

(“AUSA”) Dan Reppert concerning the request, and, when he

did not receive a response, he sent the request by fax (dated

March 13, 2008). See R.30, Ex. 1. AUSA Reppert represents in

the response to the motion to dismiss that he received a voice

mail from defense counsel on March 17, 2008, when he was

in trial. At that time, he misunderstood the nature of the

request; he believed that defense counsel needed a code to

unlock some of the files, and he instructed his assistant to

provide it to defense counsel. According to AUSA Reppert, he

never received a hard copy of the request, and the true nature

of the request was not made known to him until March 21,

2008—the day his trial was completed—when he spoke with

Mr. Draskovich by telephone.

provided by the Government was not a forensically

sound image. Id. at 72.

Sometime between March 12 and March 17, 2008,

defense counsel wrote to the attorney for the Government concerning the forensic images requested by

Libby; counsel for Mr. Kimoto stated: “[W]e have re- 19

ceived a substantial amount of discovery, including, but

not limited to, a hard drive containing extensive documentation. However, we are of the belief this is not a

forensic copy, and does not contain every piece of digital

evidence recovered.” R.42, Ex. K at 1. Counsel requested

a “[f]orensically sound copy . . . of ALL data derived

from Information Systems seized and/or forensically

acquired in this matter.” Id.
No. 08-3731 29

On March 21, Mr. Draskovich and AUSA Reppert spoke

over the telephone. During this conversation, Mr.

Draskovich informed AUSA Reppert that he had been

operating under the belief that the hard drive provided

to him in October 2007 was a complete, forensically

sound copy of all of the digital information in the Government’s possession, rather than just the materials that

the Government had reviewed in preparation for the

reverse proffer. Although AUSA Reppert did not believe

that there was any genuine question concerning what

had been provided, based either on the digital information contained on the hard drive or on the cover

letter accompanying the hard drive, he reluctantly

agreed not to oppose a motion to continue should one

be filed. Instead of seeking a continuance to review the

additional materials, however, Mr. Kimoto filed a

motion to dismiss on March 24, 2008.

Nevertheless, in response to the request made by

the defense, the Government sent all of its original

digital evidence, not copies, by Express Mail directly to

Libby for his review. Libby stated that “this [wa]s the

first time in [his] career that the Government ha[d] ever

provided original evidence.” Tr. VI at 25.

5. Motion to Dismiss

In his motion to dismiss, Mr. Kimoto first recounted

the defense team’s review of the digital evidence provided by the Government. He stated: 

Because of the voluminous nature of the digital discovery, Counsel retained . . . ProSearch Strategies, Inc., a
30 No. 08-3731

Mr. Kimoto’s motion, however, did not provide the date 20

that his counsel was informed by ProSearch that the digital

discovery provided “did not appear to be a complete

forensic copy.” R.30 at 3.

company specializing in collecting, preserving, processing, culling, reviewing and producing digital

information. . . . 

Upon beginning their work, ProSearch advised

Counsel that the discovery provided to the defense

did not appear to be a complete forensic copy, and

that such was necessary to verify the data as accurate

and unaltered.

R.30 at 2-3.20

Mr. Kimoto’s motion then went on to explain the

efforts of his team to locate two e-mails, which had been

discussed at length in the reverse proffer provided by

the Government. Mr. Kimoto described the discussion of

the e-mails in the reverse proffer as follows:

Mr. Aronson and Assistant United States Attorney

Bruce Reppert spent almost seven minutes

specifically addressing two emails sent from Peter

Porcelli to Alan Aronson on or about July 23, 2002 and

August 6, 2002. According to the Government (in the

video), these emails laid out Mr. Porcelli’s scheme

for changing company names to avoid prosecution.

These emails indicated that new companies would

be formed every four to six moths [sic] in different

cities with different CEO’s [sic], would market the
No. 08-3731 31

Specifically, Mr. Kimoto argued: 21

It is important to note that this case revolves around the

realm of digital forensics and e-discovery, and that such are

difficult concepts for many to understand. E-discovery

and digital forensics are important because they are the

only way to verify that a complete record of the alleged

(continued...)

exact same thing as the previous companies, would

all be controlled by Mr. Porcelli, and would sit dormant once the complaints got too high. According to

the testimony, these emails were between Mr. Porcelli

and Mr. Aronson only.

R.30 at 4.

According to Mr. Kimoto, despite an exhaustive search,

his team could not locate the e-mails anywhere in the

digital materials provided by the Government. In all,

Mr. Kimoto claimed that his computer experts could find

only approximately one hundred Porcelli e-mails, compared to the thousands that Mr. Kimoto believed must

have existed. According to Mr. Kimoto, “[t]he missing

emails . . . are clearly exculpatory because they show the

presence of a conspiracy between Mr. Porcelli and Mr.

Aronson outside the presence or knowledge of Mr.

Kimoto, and they have strong impeachment value against

Mr. Porcelli, a key government witness.” Id. at 12 (emphasis in original). Additionally, Mr. Kimoto argued

that the failure to provide him with a complete forensic

copy of all digital files impaired his ability to prepare

a defense. See id. at 15. Finally, Mr. Kimoto submitted

21
32 No. 08-3731

(...continued) 21

digital crime scene are kept. . . . Without [a forensic record],

there is no way to verify what the source of the data is,

when it was modified, who modified it, who regularly

accessed it, how it was processed, where it was stored, and

how it was networked throughout the workplace. Without

this forensic copy, Mr. Kimoto forced [sic] to look at databases that are not linked properly, and are therefore,

inaccessible. Therefore, he is unable to even reference the

histories of the alleged victim’s [sic] in this case.

R.30 at 15.

Mr. Kimoto also concluded that, based on the significance of 22

the evidence, “[t]here c[ould] be no other conclusion than

that the government has acted in bad faith in failing to

provide Mr. Kimoto with a digital forensic copy of the evidence.” R.30 at 17.

that he should not be punished “because the Government failed to properly preserve or maintain a digital

forensic copy of the data. It was the Government who

raided both BABC and Assail, and waited five years to

prosecute the case.” R.30 at 16.22

In its response, the Government pointed out that it

never had received a request for a forensically sound

image until March 17, 2008. When it did so, the Government agreed to ship all of the original computer images

to Libby’s laboratory; this was done on March 28, 2008,

via Express Mail. The Government also noted that, in

papers filed with the court, Mr. Kimoto stated that he

had retained an investigator, who had been reviewing

digital discovery since November 1, 2007; according to
No. 08-3731 33

Indeed, it was apparent to Libby, who was retained on 23

March 7, 2008, that he needed the forensic files to verify the

authenticity of the digital files.

With respect to the allegation that the Government had 24

“broken links with other computers,” R.40 at 12, the Government explained that it had “encountered this problem while

we were trying to access customer databases in Assail’s electronic files in an effort to identify victims,” id. It further stated

that “[t]here were no network schematics in the Assail records

seized during the search and hence there was insufficient

information from which the database could be reconstructed

given the broken links. To establish that there were broken

links is a far cry from establishing that the government

has ‘destroyed’ anything.” Id.

the Government, “it should have been obvious that the

electronic discovery provided did not consist of complete

‘forensic’ images” because the “imaged hard drive

contain[ed] executable files as well as data and

working files.” R.40 at 11.23

Turning to Mr. Kimoto’s allegation that the Government had destroyed e-mails between Assail and Porcelli, 24

the Government argued that the claim was founded on

nothing more than speculation:

In order to reach this conclusion, the defendant has to

stack an innuendo upon an already large pile of

baseless and gratuitous assumptions. First, the defendant assumes that Bay Area Business Council maintained an email server on premises at their offices

in Tampa. There is no evidence of that. Second, defendant must assume that Bay Area Business Coun-
34 No. 08-3731

cil maintained a policy of archiving their email,

instead of purging it. There is no foundation for that.

Third, defendant must assume that the email server

was on hand and the data intact at the time the

Federal Trade Commission successfully threw Bay

Area into receivership. . . . Fourth, defendant must

assume that Porcelli sent his email through Bay

Area’s email server in the first place. He appears to

have used an internet email account established with

Compuserve. Fifth, defendant assumes that what few

emails the government has used in its case in chief

were recovered from that email server, also an unwarranted assumption as the government found physical

copies printed in Bay Area’s files at the time of take

over.

Id. at 13-14. Focusing again on the e-mails, the Government stated that it was “particularly disingenuous” that

Mr. Kimoto was arguing that a due process violation arose as a result of the Government’s not disclosing

the e-mails. Id. at 16. It stated: 

[T]he emails were featured prominently in the government’s reverse proffer in the video testimony of

Alan Aronson which was exhibited to defendant

and his counsel and in fact provided in toto on the

external hard drive in October. The fact that defense

could not locate the hard copies in the files they

inspected and chose not to specifically request them

from the government does not establish either that

they have been “destroyed” or not properly

disclosed . . . . It can hardly be said that the govern-
No. 08-3731 35

Although not raised in the motion to dismiss, the Government

25

also addressed Mr. Kimoto’s complaint, raised during the

course of trial, that only two-thirds of one percent of the

consumer complaints made to SOS were available in paper

form. Because there was testimony that approximately one

million complaints were lodged, the defense argued, the

Government must have destroyed the remaining several

hundred thousand complaints. The Government responded

that this was a “massive non sequitur.” R.40 at 15. It continued:

Jay Lankford testified that all these complaints should be

on the “server.” Moreover, given the fact that SOS’s

network and Assail’s server in Kansas City were exchanging data on a daily basis, given the fact that Assail’s

offices in Kansas City were never raided, certainly Kimoto

should currently have this data unless, together with

Dunn’s computer and Assails’ [sic] email in St. George

(according to Dunn’s testimony), the data was destroyed

at the direction of Kimoto himself. An examination of the

stack of complaints that defendant introduced suggests

that these are simply selected printouts of what was originally entered electronically in Assail’s system. If they were

original documents, presumably they would have been

handwritten. . . . For some reason, someone decided to

print out the complaints we have.

Id.

ment has failed to “properly disclose” evidence which

is featured in a PowerPoint shown to the defendant.

Id. at 16-17. The Government further argued that 25

Mr. Kimoto “misunderstood” the prosecution’s Brady

obligations; it explained that “[t]he government’s obligation is to make evidence available, which it has done . . . .”

Id. at 17.
36 No. 08-3731

After trial commenced, the district court held a

hearing on the motion to dismiss. During the hearing,

Mr. Kimoto presented extensive testimony by Libby and

other witnesses, as well as argument by counsel. The

court denied the motion by oral ruling on April 16, 2008,

which was followed by a written order issued on May 8,

2008. In its order, the district court considered whether

the failure to turn over digital versions of Porcelli’s e-mails

or the failure to supply Mr. Kimoto with a forensic copy

of all of the digital files violated either the duty established in Brady v. Maryland, 373 U.S. 83 (1963), to disclose

exculpatory evidence or the duty established under

Arizona v. Youngblood, 488 U.S. 51 (1988), to preserve

evidence. The district court rejected both claims:

Kimoto’s assertions regarding the “missing e-mails”

do not rise above the level of speculation. What

emerges from the parties’ submissions and from

testimony is not a depiction of any animus toward

Kimoto or any design or purpose to deprive him of

exculpatory evidence but a singularly cooperative

effort by the Government to apprise Kimoto of the

case against him and to provide him with all

relevant discovery.

. . .

Mr. Libby testified that there was nothing unusual

in the way that the files, identified as “native” or

“second generation,” were first provided by the

Government. Libby explained that a forensic image

collects each bit and is a complete representation of

original media. A secondary collection, such as he
No. 08-3731 37

received, is the result of forensic acquisition and

processing of that data. Libby testified that it was

readily apparent that the files were not forensic

images—and did not purport to be—but second

generation files in which data was extracted by the

original examiner and produced to agents in conjunction with their investigation. The Court notes

that Kimoto’s investigator, Robert Lawson, acknowledged that he had received the hard drive from

Kimoto’s counsel on November 1, 2007, and had been

reviewing discovery an average of six hours a day.

The files were also reviewed by Kimoto’s counsel,

Damian Sheets, who professed to be knowledgeable

about computers. Given that it was “readily apparent”

that the files were not forensic images, Kimoto

should have been aware well before March 17, 2008,

that second generation files had been provided.

. . .

Upon inquiry by the Court, Mr. Libby stated that

the hard drives that were sent to him were not those

taken from machines at the time the warrant was

executed but the images that were copied onto the

hard drives. Assistant United States Attorney Reppert

represented that the original hard drives were probably returned and that the warrant language allows

forensic images to be made. This representation is

supported by the testimony of Latham who stated

that the hard drives seized from Specialty Outsourcing Solutions (“SOS”) were returned. Latham

also testified that he received no forensic images

from the Secret Service and that no computer evidence
38 No. 08-3731

was destroyed. The Government cannot turn over

material that is not in its possession. And the hard

drives returned could have been the subject of subpoena so that they may have been available from

their original owners separate and distinct from the

Government.

There is no evidence that the e-mails were printed

and retained rather than being purged or deleted.

There is evidence, however, that Porcelli used

Compuserve for his e-mail in place of or in addition to

using the BABC e-mail server. If that were the case,

the e-mails would reside not on Porcelli’s computer

but on a central Compuserve computer—and again be

subject to subpoena. Furthermore, even if the e-mails

contained evidence of a conspiracy between Porcelli

and Aronson, this does not preclude the possibility

of a conspiracy between Porcelli and Kimoto. The

Court questions the relevancy, and therefore the

admissibility, of e-mails inculpating Porcelli and

Aronson in a conspiracy claimed to be independent

of the Kimoto-Porcelli conspiracy. Nor does the defense’s showing of a conspiracy between Porcelli and

Aronson, of which Kimoto had no knowledge, relieve

Kimoto of his responsibility in the Kimoto-Porcelli

conspiracy. One need not know all his co-conspirators

in order to be guilty of conspiracy. Kimoto had

written scripts and had a history as a telemarketer

prior to his meeting with Porcelli.

R.66 at 7-9. Turning to the alleged loss or destruction of

the hundreds of thousands of customer complaints taken

from SOS, the court stated: 
No. 08-3731 39

Similarly, the court determined that there was no 26

destruction of SOS computer links: 

Kimoto’s counsel represented that he can access nothing

from the SOS data base because the links are broken.

However, there is no basis to conclude that the Government

knew that by disconnecting the computers it would be

dismantling the network and destroying links that could

not be recreated. Mr. Libby testified that agents executing

a search warrant on site would not know in advance if

computers were linked across the “internet backbone” and

could not plan for that. Additionally, he testified that the

agency is limited by the scope of the warrant, and a relational database could not be searched if it were not in

the warrant.

R.66 at 8.

There is no foundation to conclude that Jay Lankford,

a principal of SOS, had copies of several hundred

thousand complaints on hand when the Secret Service

searched the facility. The Secret Service recovered

thirty-three boxes of documents from SOS, all of which

were made available to the defense. Additionally, the

information Kimoto sought may have been available

from another source, since the SOS server exchanged

data on a daily basis with Assail’s server in Kansas

City, the offices of which were not raided.[26]

Actions taken by Assail and Kimoto himself lend

little credence to the argument that e-mails existed

which were important and contained exculpatory

evidence. The Assail information technology director,

Charles Davidson, testified that he destroyed back-up
40 No. 08-3731

tapes and e-mail, and Clifford Dunn testified that

e-mails were purged and that Kimoto ordered

his computer destroyed.

As to motive, the Court finds no bad faith, that is, no

“conscious effort to suppress exculpatory evidence,”

Jones v. McCaughtry, 965 F.2d 473, 477 (7th Cir. 1992),

on the part of the Government with respect to Kimoto’s

allegations. Even if the e-mails had been preserved

and were lost or destroyed by the Government, the

Court cannot infer bad faith because the exculpatory

significance of the e-mails was not apparent, given

the Government’s theory of the case, as thoroughly

outlined to Kimoto. . . . That the Government

invested the e-mails with little importance is made

clear by the fact that in its eight-hour PowerPoint

“reverse proffer,” among the video clips, verification

recordings, images of sales scripts and references to

the law applicable to the case, only three e-mails

were featured. Kimoto chose, possibly for strategic

reasons, not to alert the Government to the nature

of the information he was seeking, which was

certainly reasonable and proper. However, it shows

no bad faith on the part of the Government that it

failed to perceive how this information could be

material and relevant to any defense theory, even if

such information had been in the Government’s

possession.

R.66 at 9-10.

The Court noted that there were two additional

reasons why it should not grant the motion to dismiss.
No. 08-3731 41

First, Mr. Kimoto had not sought a continuance “based

upon Libby’s eleventh hour revelations and the alleged

discovery miscommunication regarding the computer

files that were obtained by the Government . . . and

provided to Kimoto.” Id. at 10. Although the Government had agreed not to oppose a continuance, and the

court previously had indicated that withholding of necessary discovery materials would be a reason for granting

a continuance, “Kimoto elected to forgo the opportunity

to have his expert obtain and review the information

which he now contends is so crucial to his defense.” Id.

at 11. Additionally, the court observed that, although it

was readily apparent that forensic files were not

provided, Mr. Kimoto did not retain Libby until three

weeks before trial and did not seek to obtain forensic

images until two weeks before the trial. The district court

believed that “Kimoto should have raised the problem

of which he now complains much earlier than three

business days prior to the start of trial.” Id. at 11-12.

The court summarized its holding accordingly:

The Government allowed open file discovery and

sent to defense counsel a 500-gigabyte hard drive

loaded with eight of eleven CDs and DVDs, which

included, in the Government’s estimation, all of the

material that underlay its case. According to testimony by Postal Inspector Latham, thirty-three boxes

of evidence, seized from SOS, were made available

to Kimoto; hard drives seized from SOS were returned. In the absence of an articulated request, the

Government had no further obligation.

. . .
42 No. 08-3731

The Court has herein articulated its reasons for its

April 16th Order denying Kimoto’s Motion to

Dismiss (Doc. 46). Kimoto failed to establish that the

Government intentionally withheld electronic evidence for the purpose of depriving him of the use

of that evidence during his trial. Specifically,

Kimoto failed to show bad faith on the part of the

Government, failed to show that the exculpatory

value of the evidence was apparent and failed to

show that he could not have obtained comparable

evidence by other reasonably available means.

Id. at 12 (citing United States v. Watts, 29 F.3d 287, 289-90

(7th Cir. 1994)).

6. Post Trial Motions

In his post-trial motion for acquittal and a new trial,

Mr. Kimoto renewed his argument that the Government’s withholding and/or destruction of evidence impeded his ability to mount a defense. With respect to

discovery, Mr. Kimoto also submitted that he was

entitled to a new trial because the “Government’s failure

to provide any digital evidence and the Government’s

production of only 4,600 of 800,000 physical documents

taken from [SOS] prevented Mr. Kimoto from adequately

preparing his defense.” R.58 at 6 (emphasis in original).

Additionally, Mr. Kimoto claimed, a new trial was warranted because the Government failed to provide him

with exhibits accompanying the video deposition of

James Sierra. These exhibits consisted of e-mails sent by

Roger Howard, a Government witness, and therefore
No. 08-3731 43

constituted material that should have been produced

under the Jencks Act, 18 U.S.C. § 3500.

The court recounted, at the outset, that it had

“exhaustively considered the issue of the Government’s

alleged failure to preserve and to provide physical and

digital evidence in its May 8, 2008 Order denying

Kimoto’s motion to dismiss.” R.72 at 13. Specifically, it

reviewed the testimony of Jay Lankford, principal of

SOS, in detail, as well as that of Postal Inspector Adam

Latham. After this review, the court concluded that

computers and hard drives had been seized from SOS

and were returned. With respect to the documents, the

court held that “Kimoto’s chain of assertions simply

does not link up. There is no evidence that SOS had

nearly 800,000 handwritten customer inquiry forms on

its premises when the federal agents executed their

search warrant or that, if present, the documents were

actually seized by agents or, if both present and seized,

that the documents were destroyed.” Id. at 14-15. Finally,

the court also observed that, based on Lankford’s testimony, “the documents at issue were available to Kimoto

on a database linked to the SOS system in Assail’s

Kansas City offices, which were not raided.” Id. at 15.

Finally, the court also held that “Kimoto [had] provide[d]

no objective reason to believe that the documents would

have been helpful to him.” Id. Indeed, this was doubtful

based on the testimony presented that Mr. Kimoto

had ordered the destruction of thousands of documents,

both digital and in hard copy.

Turning to the alleged withholding of Jencks material,

the district court determined that Mr. Kimoto’s argu-
44 No. 08-3731

Subsequently, Mr. Kimoto filed a motion to reconsider the 27

court’s denial of his motion for acquittal and for a new trial. In

it, he claimed that the court should have considered his

claim under the Jencks Act, not under Brady. The court determined, nonetheless, that Mr. Kimoto knew of the exhibits to

the deposition long before trial and had made no effort to

secure them. Additionally, the court noted that Mr. Kimoto

had not established that the exhibits were in the hands of the

prosecution team and had not established that he had

suffered any prejudice. The court also determined that Mr.

Kimoto’s other arguments were without merit or were untimely.

ment was more appropriately classified as a Brady claim.

The court observed that, although Mr. Kimoto had

entered into a stipulated judgment with the FTC at the

time Sierra’s deposition was taken, Mr. Draskovich remained Mr. Kimoto’s counsel of record. Thus, the document allegedly withheld was available to Mr. Kimoto

through the exercise of reasonable diligence.

27

D. Mr. Kimoto’s Specific Contentions

1. Forensic Images

Mr. Kimoto first maintains that the Government’s

failure to provide him with complete forensic images of

all digital evidence within its possession constituted a

Brady violation. We cannot agree. Even if we could categorize the forensic images as exculpatory or impeaching, the

district court did not abuse its discretion in determining

that the Government did not withhold this evidence.

Additionally, even if we could conclude that the Gov-
No. 08-3731 45

ernment withheld this evidence, the district court’s conclusion—that Mr. Kimoto was not prejudiced by the

Government’s action—was not an abuse of discretion.

The record is clear that the Government made both its

documentary and digital evidence available to the

defense from the very beginning of this case. In

October 2007, five months prior to trial, the Government

provided the defense with all of the digital evidence that

it had reviewed and used in preparation for the reverse proffer. Although Mr. Kimoto had several individuals working

on the files beginning in November 2007—all purportedly

conversant in digital technology—these individuals either

did not realize that they were not working with forensically sound images or did not communicate the importance

of obtaining a forensically sound image to defense counsel.

Alternatively, they informed defense counsel of their

needs, but no action was taken to secure a forensically

sound image of the digital evidence. Regardless, it was not

until Libby joined the defense team, three weeks before

trial, that he requested forensic files and that the request

was passed on to the Government. It is undisputed that the

Government did not receive a request for forensic files

until, at the earliest, March 11, 2008.

Furthermore, the Government, although skeptical that

there was any genuine confusion about the nature of the

digital material that had been provided to Mr. Kimoto in

October 2007, informed defense counsel that the Government would not oppose a continuance to allow Libby

an opportunity to review the digital evidence. We have

held that “[a]s long as ultimate disclosure is made before
46 No. 08-3731

it is too late for the defendants to make use of any benefits

of evidence, Due Process is satisfied.” United States v.

Ziperstein, 601 F.2d 281, 291 (7th Cir. 1979). Mr. Kimoto,

therefore, was not prejudiced by any action of the Government. By contrast, it was the defense’s failure to

timely request forensic files and its concomitant decision

to forego a request for a continuance that prevented

Mr. Kimoto from being able to secure and review the

files in the format he sought. The district court, therefore,

did not abuse its discretion in determining that the Government’s actions with respect to forensic images

did not constitute a Brady violation.

2. Material not Examined by the Government

Mr. Kimoto also maintains that he is not really complaining about forensic files, but about the Government’s

failure to turn over all digital evidence in a timely fashion. Specifically, Mr. Kimoto contends that the Government

misled him into believing that the one hard drive provided

to him in October 2007 included all digital evidence in the

Government’s possession. We cannot accept this contention. In the letter accompanying the hard drive provided in

October 2007, Postal Inspector Latham stated: “Enclosed

you will find the hard drive with our electronic discovery for

the above referenced case. On the disk you will find five

data directories . . . .” R.40, Attach. C (emphasis added). As

well, Postal Inspector Latham specifically informed Mr.

Kimoto’s counsel that one of the directories contained:

audio recordings of BABC, FALC, and Assail program

sales verifications that were recorded by VoiceLog. The
No. 08-3731 47

750+ files in this directory are the digital recordings

that we downloaded from VoiceLog’s server—there

are several hundred thousand other verifications that we

did not review. 

Id. (emphasis added). Thus, at least with respect to the

VoiceLog recordings, it was readily apparent that there

was significant digital evidence that was not included on

the hard drive. At no time did anyone affiliated with the

prosecution team represent that the hard drive produced

in October 2007 contained all digital evidence in the

Government’s possession.

Furthermore, the record reflects that, if there were any

genuine confusion concerning what was produced in

October 2007, Mr. Kimoto’s counsel either became

aware of, or should have become aware of, this

deficiency prior to March 13, 2008—the first time any

discovery request was submitted to the Government. The

record reflects that Mr. Kimoto had hired investigators

to review digital evidence in November 2007. At oral

argument, counsel represented that, as Mr. Kimoto’s

investigators delved further into the files, it became

“clearer and clearer” to them that certain digital evidence,

which was thought to exist, was not in the materials that

had been supplied. Again, however, no additional

evidence—nor any clarification of what the Government

had produced—was requested until the middle of

March 2008. When the alleged confusion was brought to

the Government’s attention, it agreed not to oppose a

continuance.
48 No. 08-3731

The district court observed that it could not “recall a time . . .

28

when it did not grant a continuance where, as here, it

would have been requested by the defense and the Government indicated it would not object.” R.66 at 11.

Under these circumstances, the district court’s determination that the Government’s actions did not constitute

a Brady violation certainly was not an abuse of discretion.

Again, assuming the existence of some exculpatory evidence somewhere in the digital materials not reviewed

by the Government, the defense was provided these

materials prior to trial and with an offer not to oppose

a motion to continue. In sum, the production was made

“before it [wa]s too late for the defendants to make use

of any benefits of evidence.” Stott, 245 F.3d at 901

(internal quotation marks omitted).

Moreover, even assuming that exculpatory material

was withheld, we have stated that, when a defendant

realizes that exculpatory evidence has been withheld,

the “appropriate course” is to seek a continuance if

“more time to investigate the exculpatory potential of

the evidence” is needed. United States v. Grintjes, 237

F.3d 876, 880 (7th Cir. 2001). Here, the defense realized

before trial that it had misunderstood what the Government had copied onto the hard drive. The Government,

based on this misunderstanding, agreed not to oppose

a continuance. Thus, any prejudice to the defendant

28

was not the product of the Government’s action, but of

Mr. Kimoto’s conscious decision to forego a motion to

continue and to file instead a motion to dismiss.
No. 08-3731 49

In addition to his general claim that there must have

been some, unidentified, exculpatory evidence among that

withheld, Mr. Kimoto identifies two specific pieces of

evidence, which were not disclosed to him prior to trial

and which, he believes, impeded his ability to mount a

defense. The first includes homosexual pornography

stored on Clifford Dunn’s computer. Mr. Kimoto

alleges that “[t]his revelation that Dunn had something

of his own to hide on his computer would have provided an alternative explanation for deletions of data that

Dunn attributed to Kimoto.” Appellant’s Br. 38. This

material, however, was not withheld from the defense,

but was located at the Fairview Heights facility and,

therefore, available to the defense at any time. Had

Mr. Kimoto sought a continuance, it would have been

available for the defense to use at trial. Thus, again,

any prejudice to Mr. Kimoto resulted from his own

failure to review the digital information in a timely

fashion and to seek the court’s assistance when he

realized that there had been a misunderstanding

with respect to the extent of the digital evidence in his

possession.

Mr. Kimoto also references e-mails between Porcelli

and Aronson that evidence a conspiracy between those

two, without direct reference to Mr. Kimoto. Mr. Kimoto

claims that not only was he deprived of the impeachment value provided by these two e-mails, but surmises

that, to the extent that Porcelli’s other e-mails “were

consistent with the little we know about the emails that

were produced, they could only have served to bolster

Kimoto’s case and undermine the Government’s.” Id. at 38-
50 No. 08-3731

39. After the hearing on the motion to dismiss, the

district court found that there was no evidence to support Mr. Kimoto’s conclusion that the Government had

obtained the e-mails referenced in the reverse proffer

from a BABC database. See R.66 at 8. The court specifically

noted that there was evidence that Porcelli used

Compuserve “for his e-mail in place of or in addition

to using the BABC e-mail server.” Id. Furthermore, given

the reference to, and discussion of, the e-mails in the

reverse proffer, it hardly can be argued that the Government withheld this evidence from Mr. Kimoto.

Mr. Kimoto simply assumed that the e-mails used by

the Government existed in digital form and, when they

could not be located, never requested the e-mails from

the Government in any other form.

We only add that we, like the district court, are at a

loss to see how Mr. Kimoto was prejudiced by any action

of the Government. At some point prior to the crossexamination of Porcelli, the defense team either was

provided with hard copies of the e-mails or located

the hard copies of the e-mails among the documents

in its possession. Mr. Kimoto’s counsel then cross-examined Porcelli extensively on the contents of these e-mails.

See Tr. III at 161-75. Clearly, therefore, the disclosure

was made in time for Mr. Kimoto to make use of the

evidence at trial. See Stott, 245 F.3d at 901.

Given that Mr. Kimoto was able to use these “missing”

e-mails in his cross-examination of Porcelli, the crux of

Mr. Kimoto’s argument appears to be that, had he been

able to access the full complement of Porcelli’s e-mail,
No. 08-3731 51

Finally, Mr. Kimoto makes a separate argument, developed 29

fully only in his reply, that there possibly was other digital and

documentary evidence which had not been made available to

the defense prior to trial. See Reply Br. 8. His belief is based on

his post-trial review of the digital and documentary evidence

that the Government provided to him prior to trial. This

argument was not raised before the district court until

Mr. Kimoto filed “Defendant’s Motion to Reconsider Motion

for a Judgment of Acquittal and Motion for a New Trial,” on

August 12, 2008. The district court believed this argument

was an attempt to circumvent the requirement, set forth in

Federal Rule of Criminal Procedure 33(b)(2), that motions for

a new trial be filed within seven days. The court had a sound

basis for that view. We would add that Mr. Kimoto bears

the responsibility for his own failure to secure complete discovery and to review thoroughly that material. It was Mr.

Kimoto’s decision—or that of his counsel—to commence the

review of the extensive documentary and digital evidence

only a few weeks before trial. It also was his decision to

forego a motion to continue that would have allowed his

defense team additional time to review and understand the

original digital evidence sent to Libby on March 28, 2008. The

district court correctly determined that it was these decisions,

rather than any Government attempts at subterfuge, that

has resulted in any prejudice to Mr. Kimoto.

Mr. Kimoto would have discovered evidence of even

greater impeachment value to use during trial. However,

as noted by the Government, this involves a series of

assumptions too weak to support a due process claim.

See supra pp. 33-34 (quoting R.40 at 13).29
52 No. 08-3731

3. Customer Service Records

Mr. Kimoto maintains that hundreds of thousands of

customer service complaints seized from SOS were lost

or destroyed by the Government. Mr. Kimoto further

submits that these records were material because they

were “[c]entral” to his theory that “the great majority of

the customer service calls received by SOS and BABC

were not complaints by consumers claiming to have

been misled into believing that they would receive a

credit card.” Appellant’s Br. 33. Mr. Kimoto acknowledges that 6,366 SOS customer inquiry records were

included in the Government’s documents and made

available to him and that he was able to establish that, of

those 6,366 records, “only 22 identified that the caller

had complained that he believed the product to be a

credit card.” Id. at 34. Nevertheless, he claims “[c]omplete

access to the database would have permitted this point

to be made with considerably more force.” Id. at 35.

We agree with the district court that, under the circumstances presented here, the alleged loss or destruction of

documents by the Government does not constitute a

due process violation. First, we note that the district court

found that, as a threshold matter, Mr. Kimoto did not

establish that the Government destroyed or lost the

documents in question. See supra pp. 38-39. Mr. Kimoto

asserts that “[t]here can be no doubt that these records

existed and were seized.” Appellant’s Br. 33. However,

he has not pointed to the testimony of any witness

which calls into question the district court’s conclusion

that there is no evidence that 800,000 customer com-
No. 08-3731 53

plaints existed in hard copy at the time the Government

raided SOS offices or that, if they did exist, the Government actually took possession of them. See R.72 at 14.

Furthermore, assuming both the existence and destruction (and/or loss) of the documents, Mr. Kimoto has not

established that “the evidence was of such a nature that

[he] would be unable to obtain comparable evidence by

other reasonably available means.” Hubanks, 392 F.3d at

931. There were over six thousand customer records

from SOS that were in the Government’s possession and

were turned over to Mr. Kimoto. Mr. Kimoto concedes

that the documents were available to him and that

they provided him a basis for arguing that customers

were not confused as to what they were purchasing.

Specifically, Mr. Kimoto’s counsel stated during closing

argument:

Now there ha[s] been a lot of testimony concerning

complaints and the nature of the complaints. . . .

Memories change, especially when they are being

pressed. Documents don’t. The complaints are in

black and white. They don’t change their stories. As

you recall, there is [sic] approximately 6,400 of them.

Of that 6,400, there were only 22 complaints from

people saying that they thought they were getting a

credit card. That is less than one half of one percent.

That happens. There is [sic] occasionally bad agents

that are on the phone and get away with it.

Tr. IX at 55. Here, the Government’s alleged loss or destruction of SOS customer service records did not

prevent Mr. Kimoto from arguing that consumers
54 No. 08-3731

Mr. Kimoto also maintains that the Government used the SOS 30

customer service records at sentencing to calculate the loss for

which Mr. Kimoto was responsible. See Appellant’s Br. 36. He

contends that the Government’s use of these documents not only

establishes that the Government has been disingenuous about

their existence, but the use of the documents at sentencing

constitutes a separate Brady violation. The Government did not

employ any customer service records during sentencing. Postal

Inspector Latham testified that he used a database of

identifiable victims that had been compiled by the FTC; this

database contained only the names and addresses of victims.

The sources for the database do not appear in the record;

however, given that the database only contains victim names

and addresses, it could have been the VoiceLog recordings

or information provided by Global e-Telecom, see Sent. Tr. at 35-

36, both of which were available to the defense. Postal Inspector

Latham also testified that, to compose a similar database

for BABC-related victims, he used a database recovered from

one of Assail’s computers; again, this information was available to the defense. Moreover, all of this information was

entered as evidence at the sentencing hearing without objection

by the defense. See Sent. Tr. at 41. 

There is one additional claim concerning the customer

service records that Mr. Kimoto mentions only in passing in

his briefs before us, but which he pursued more thoroughly

before the district court: When executing search warrants,

Government agents destroyed computer links between Assail

and SOS, rendering digital evidence stored at SOS inaccessible.

(continued...)

were not confused by the sales pitch; his point simply

could have been made with “more force” had the additional documents been available to him.30
No. 08-3731 55

(...continued) 30

As set forth previously, see supra note 26, the district court

concluded that Libby’s testimony established that there was

no intentional destruction of evidence by the Government and

that the manner in which the Government conducted its

searches did not evidence bad faith. The district court employed the correct standard in reviewing Mr. Kimoto’s claim

and supported its finding with evidence from Mr. Kimoto’s

own expert. Its holding on this issue, therefore, was not an

abuse of discretion. 

In sum, we agree with the district court that Mr. Kimoto

has failed to show either that the Government

destroyed any SOS documents or that other comparable

documents were not available to him. The district court,

therefore, did not abuse its discretion in determining that

there were no violations of Brady or Youngblood with

respect to the SOS customer complaints. 

4. Howard’s E-mail

Mr. Kimoto next submits that he was prejudiced by the

Government’s failure to turn over e-mails referenced in a

deposition of James Sierra. Sierra and Howard were coowners of Apex, a company that supplied debit cards to

Assail. In Sierra’s deposition in the FTC action, to which

Mr. Kimoto initially was a party, counsel for the FTC

referenced several e-mails sent or received by employees of Apex. One of those e-mails was from Howard’s

e-mail account and stated that “no fulfillment is paramount [sic] to wire fraud.” R.154, Ex. 3 at 143-44.
56 No. 08-3731

The record does not reflect when the transcript of the deposi- 31

tion was turned over to the defense.

The court initially characterized Mr. Kimoto’s argument

32

concerning the Howard e-mail as more appropriately analyzed

under Brady. However, Mr. Kimoto argued in his motion to

reconsider that the court should have considered this to be

a Jencks Act claim. The district court did so, but similarly

rejected the argument.

The Government produced the Sierra deposition to

Mr. Kimoto before trial. Sierra was not called as a

31

witness, but, when the Government called Howard,

Mr. Kimoto’s counsel objected on the ground that the

e-mail, referenced above, was not provided as required

by the Jencks Act. The district court overruled the objection. When the issue was raised in subsequent filings

with the court, the court addressed Mr. Kimoto’s withholding claim under both the Jencks Act and Brady.

32

The court determined that the document was available

to Mr. Kimoto through other means and that Mr.

Kimoto suffered no prejudice as a result of any withholding.

On appeal, the Government argues, inter alia, that the

e-mail at issue is not a statement within the Jencks Act.

We agree. The Jencks Act defines statement as follows:

(e) The term “statement”, as used in subsections (b),

(c), and (d) of this section in relation to any witness

called by the United States, means--

(1) a written statement made by said witness and

signed or otherwise adopted or approved by him;
No. 08-3731 57

Although not spelled out in any detail, Mr. Kimoto presum- 33

ably is arguing that Howard’s e-mails fall within subsection (e)(1).

(2) a stenographic, mechanical, electrical, or other

recording, or a transcription thereof, which is a

substantially verbatim recital of an oral statement made by said witness and recorded contemporaneously with the making of such oral statement; or

(3) a statement, however taken or recorded, or a

transcription thereof, if any, made by said witness

to a grand jury.

18 U.S.C. § 3500(e). In United States v. Sopher, 362 F.2d 33

523 (7th Cir. 1966), we further have explained that the

term “statement” as used in § 3500(e) refers to

a recorded recital of past occurrences made by a

prospective prosecution witness. From its very

nature, necessarily it is made after those events

have taken place. If a prosecutor, in reliance on

the statement, uses as a witness the maker

thereof as a part of the government’s case, the

statement must be produced for the use of

defense counsel. 

Id. at 525. Thus, in Sopher, we held that the Jencks Act

did not require the Government to turn over the

transcript of a conversation, recorded by a cooperating

witness, during which the defendant accepted a bribe. In

contrast to a witness’s recollection of past events, Sopher

involved “a concurrent tape recording of a conversation
58 No. 08-3731

between the payer and the recipient of an alleged cash

bribe,” which “[wa]s obviously of contemporaneous

sounds.” Id. We continued:

The result is a preservation of a conversation just as

it was spoken. It is direct evidence relevant on the

issue of the alleged guilt of the defendants on trial.

Made when the allegedly extorted bribe money was

being paid, the tape recording in this case is of the

actual voices of the briber and the bribee. It is therefore not a recital of a past occurrence by a prospective

witness and is not within the general purview of

§ 3500.

Id.; see also United States v. Skillman, 442 F.2d 542, 553-54

(8th Cir. 1971) (same). Mr. Kimoto does not seek to distinguish Sopher, nor does he offer any authority suggesting

a different definition of “statement” should apply.

We agree with the district court that Mr. Kimoto’s

claim with respect to the Howard e-mails is better addressed under Brady. However, even under this approach, Mr. Kimoto’s claim fares no better. First, in

the district court, Mr. Kimoto explicitly disclaimed

any reliance on Brady as the basis for seeking Howard’s

e-mails. See R.88 at 11 (“The Court wrongly classified the

demand for emails as a Brady issue as opposed to one

raising rights guaranteed by the Jencks Act.”). Second,

even if we look to the merits of Mr. Kimoto’s Brady claim,

it must fail because Howard’s e-mails were neither

“suppressed” nor “material.” In Ienco v. Angarone, 429

F.3d 680, 683 (7th Cir. 2005), we explained that “[e]vidence
No. 08-3731 59

is ‘suppressed’ for Brady purposes when (1) the prosecution failed to disclose the evidence in time for the defendant to make use of it, and (2) the evidence was not

otherwise available to the defendant through the

exercise of reasonable diligence.”

Mr. Kimoto argues that the deposition was not

available to him because he “had settled the FTC litigation

months before the Sierra deposition was taken, w[as] not

present for the deposition, and never received that discovery.” Reply Br. 12. Nothing in this statement, however,

dispels the notion that, in the exercise of reasonable

diligence, Mr. Kimoto could have obtained the document. He does not claim that he did not receive notice

of the Sierra deposition, nor does he claim that he was not

monitoring the FTC litigation or that he could not have

procured the documents from his co-defendants in that

action. Indeed, although Mr. Kimoto had entered the

stipulated judgment by the time that Sierra was deposed,

that judgment anticipated Mr. Kimoto’s continued cooperation with the court-appointed receiver and provided for

the court’s retention of jurisdiction for purposes of construction, modification and enforcement of the judgment. The court records reflect that, long after the stipulated judgment was entered, Mr. Kimoto was deposed

in the FTC action and also litigated the FTC’s motion to

lift the previously suspended portion of the judgment

against him. Given Mr. Kimoto’s continued involvement

in the FTC action at the time that Sierra’s deposition

was taken, we believe that the deposition was available

to him in the exercise of reasonable diligence.
60 No. 08-3731

Even if we had determined that the Government had sup34

pressed the Porcelli e-mails and the SOS records, the cumulative

effect of this evidence would not have risen to the level of

Brady materiality. Kyles v. Whitley, 514 U.S. 419, 436-37 (1995).

There was substantial testimonial and documentary evidence

to establish that Mr. Kimoto was instrumental in marketing

debit cards in a deceptive manner, did so with an intent to

deceive, and joined with others to accomplish his goals.

Finally, we cannot conclude that the one e-mail attributed to Howard was “material” for Brady purposes. The

Supreme Court has explained that evidence is material

for purposes of Brady “if there is a reasonable probability

that, had the evidence been disclosed to the defense, the

result of the proceeding would have been different.”

Strickler v. Greene, 527 U.S. 263, 280 (1999) (internal quotations marks and citations omitted). In this case, the

defense extensively cross-examined Howard on his

actions, his relationship with Assail and Mr. Kimoto,

and his criminal background. Given that the jury already

was aware of Howard’s criminal history, we do not

believe that an e-mail suggesting that he was engaging

in actions tantamount to wire fraud would have affected

the jury’s decision to accept or reject his testimony.34

In sum, we do not believe that any of the district court’s

rulings on the alleged Brady, Youngblood or Jencks Act

violations constitutes an abuse of discretion. There was

no error, therefore, in denying Mr. Kimoto’s motion to

dismiss, motion for a new trial and motion to reconsider

on those bases.
No. 08-3731 61

IV

SENTENCING

Mr. Kimoto challenges two aspects of his sentencing:

the enhancement for the loss calculation and the enhancement for the number of victims. According to Mr. Kimoto,

“[a] finding that any customer suffered a loss that could

be included under § 2b1.1 depends on whether the customer paid money ‘as a result of’ a mistaken belief

caused by the defendant’s misrepresentation.” Appellant’s

Br. 49. Because, continues Mr. Kimoto, at least some

customers understood that they were receiving a debit

card, as opposed to a credit card, the district court’s

calculation, which assumed that all individuals who paid

the fee were victims, greatly overestimated both the

number of victims as well as the total loss.

The Government counters that loss, for purposes of

§ 2B1.1, is the “greater of actual loss or intended loss.”

U.S.S.G. § 2B1.1 cmt. n.3(A). Furthermore, the application

notes clearly require the district court only to “make a

reasonable estimate of the loss” based upon the “available

evidence.” Id. at n.3(C). Because the district court’s estimate of actual loss is much less than the intended loss,

continues the Government, any error in the calculation

of actual loss is harmless.

Mr. Kimoto acknowledges that intended loss is an

alternative method of calculating loss for purposes of the

Guidelines. However, he maintains that, even if the

district court had adopted an “intended loss” rationale, as

opposed to an actual loss proposed by the Government,

the Government still had to establish that Mr. “Kimoto had
62 No. 08-3731

Application note 3 provides in relevant part: 35

3. Loss Under Subsection (b)(1).--This application note

applies to the determination of loss under sub-

(continued...)

intended to cause the loss the District Court used in

its Guidelines calculations.” Reply Br. 23.

We review a trial court’s calculation of the loss caused

by defendant’s fraudulent conduct for clear error.

United States v. Peterson-Knox, 471 F.3d 816, 821-22 (7th Cir.

2006). A defendant challenging a district court’s loss

calculation must not only demonstrate that it is

inaccurate, but also “outside the realm of permissible

computations.” Id. at 822. In conducting our review, we

turn first to the applicable guideline and the district

court’s application of that guideline to Mr. Kimoto. 

A. District Court’s Guideline Calculation

Section 2B1.1 is the guideline applicable to Mr. Kimoto’s

offenses. Section 2B1.1 instructs the district court to use

a base offense level and to increase the offense level

according to the amount of “loss.” Application note 3

gives further instruction on how to calculate “loss” for

purposes of that guideline; it states that the “general

rule” is that “loss is the greater of actual or intended

loss.” U.S.S.G. § 2B1.1 cmt. n.3(A). It further provides

that “actual loss” is “the reasonably foreseeable

pecuniary harm that resulted from the offense” and

“intended loss” is the “pecuniary harm that was

intended to result from the offense.” Id. at n.3(A)(i) & (ii).35
No. 08-3731 63

(...continued) 35

section (b)(1).

(A) General Rule.--Subject to the exclusions in subdivision (D), loss is the greater of actual loss or intended loss.

(i) Actual Loss.--“Actual loss” means the reasonably foreseeable pecuniary harm that resulted

from the offense.

(ii) Intended Loss.--“Intended loss” (I) means the

pecuniary harm that was intended to result

from the offense; and (II) includes intended

pecuniary harm that would have been impossible or unlikely to occur (e.g., as in a government sting operation, or an insurance fraud in

which the claim exceeded the insured value).

(iii) Pecuniary Harm.--“Pecuniary harm” means

harm that is monetary or that otherwise is

readily measurable in money. Accordingly,

pecuniary harm does not include emotional

distress, harm to reputation, or other

non-economic harm.

(iv) Reasonably Foreseeable Pecuniary Harm.--For

purposes of this guideline, “reasonably foreseeable pecuniary harm” means pecuniary

harm that the defendant knew or, under the

circumstances, reasonably should have known,

was a potential result of the offense.

U.S.S.G. § 2B1.1 cmt. n.3. 

Here, in calculating the number of victims and the

estimated loss, the district court adopted the figures

compiled in the second addendum to the Presentence
64 No. 08-3731

Report (“PSR”). According to the addendum, loss

was estimated at approximately $39 million. This

figure represents the total amount of funds debited

from individual accounts in response to Assail’s

telemarketing calls, less refunds issued. Accordingly,

Mr. Kimoto’s sentence was increased twenty-two levels.

See id. § 2B1.1(b)(1)(L) (instructing that offense levels

should be increased by twenty-two for losses of greater

than $20 million). Additionally, the addendum

estimated over 500,000 victims of Mr. Kimoto’s scheme.

This number represents the number of individuals whose

accounts were debited in response to Assail’s telemarketing calls. Because the number of victims

exceeded 250, Mr. Kimoto’s offense level was increased

by six levels. See id. § 2B1.1(b)(2)(C). With additional

adjustments not at issue on this appeal, Mr. Kimoto’s

offense level was calculated at 45, which was treated as

an offense level of 43—the highest offense level set forth

on the sentencing table. An offense level of 43, regardless of a defendant’s criminal history level, results

in a recommended sentence of life imprisonment.

After accepting the sentencing calculation set forth in

the PSR, the court then determined that, although

Mr. Kimoto had committed “an extremely serious offense,” a life sentence was “simply unreasonable in [its]

view.” Sent. Tr. 138. Accordingly, the court sentenced

Mr. Kimoto to 350 months’ imprisonment. The court

explained:

In this case I am going to sentence him . . . to a term on

Counts 1 through 14 of 25 months per count to be

served consecutively and not concurrently. This is an
No. 08-3731 65

effective sentence of 350 months. . . . 350 months

times 85 percent, assuming he gets credit for good

time, is 297 months. That is about 25 years, which is

roughly half of his life expectancy. So he would get

out roughly at age 58. It is [a] long sentence, substantially less than [a] life sentence, but is a sentence, in

my view, that meets all of the requirements of 18[]

U.S.C. Section 3553(a) and is not greater than

necessary to comply with the need for the sentence to

reflect the seriousness of the offense, to promote

respect for the law and to provide just punishment

for the offense, to afford adequate deterrence to criminal conduct and to protect the public from further

crimes of the defendant. 

Sent. Tr. 148.

B. Estimate of Loss

In challenging the district court’s estimation of loss

before this court, Mr. Kimoto does not dispute the accuracy

of the raw numbers used by the district court. That is, he

does not dispute that Assail took in at least $39 million

from the sale of its products. Instead, Mr. Kimoto maintains that, because of the necessity of establishing causation, this payment figure is not the equivalent of loss.

Although there is no question that the sale of Assail’s

debit card generated the sum employed by the district

court, there is evidence in the record that not every individual who authorized the $159 debit of his account

was deceived by Assail’s sales pitch; there were at least
66 No. 08-3731

Mr. Kimoto believes that the Government’s reliance on 36

“intended” as opposed to “actual” loss “comes too late,” Reply

Br. 22; he stops short, however, of arguing that the reliance

on intended loss has been waived. Our own review of the

record reveals that, while at the district court, the Government raised intended loss as an alternative to actual loss in

its response to Mr. Kimoto’s objections to the PSR and presented

evidence in support of an intended loss calculation during

the sentencing hearing. See Sent. Tr. 74-80. 

some who understood that they would be receiving a

debit card. See Sent. Tr. 53-55. The district court acknowledged that there may have been some individuals who

knew what they were getting; however, because the

raw numbers of individuals and amount of funds were

so great, it believed that the elimination of those few

individuals from consideration would not affect

Mr. Kimoto’s sentencing calculation. Id. at 55.

If we had to rely on the district court’s actual loss

calculation, we might be compelled to remand for a more

considered estimation of the number of individuals who

were not deceived and, as a result, a more definitive

determination that the sentencing calculation would not

have been affected. However, this step is unnecessary.

As referenced previously, the commentary to U.S.S.G.

§ 2B1.1 required the district court to apply the “greater

of” actual or intended loss. U.S.S.G. § 2B1.1 cmt. n.3(A).

If we apply an intended loss figure, it is clear that the

amount of actual loss pales by comparison. Defense 36

counsel represented to the court that Mr. Kimoto pur-
No. 08-3731 67

Mr. Kimoto’s claim that the Government failed to show that 37

he “intended to cause the loss” related to this number of

consumers is without merit. Reply Br. 23. The record is replete

with evidence that Mr. Kimoto wanted to convince every

potential purchaser that what he or she was purchasing was

a credit card. As set forth in the application note, the fact

that some prospective purchasers did not want the card, could

not purchase the card, or were not fooled does not affect

Mr. Kimoto’s intent. See U.S.S.G. § 2B1.1 cmt. n.3(A) (stating

that loss “includes intended pecuniary harm that would

have been impossible or unlikely to occur”).

chased lead lists of potential customers consisting of

approximately 50,000,000 names. It would be inappropriate to use this number to estimate intended loss, however, because testimony also established that telemarketers

anticipate only a small percentage of positive responses

from a lead list; specifically, an “excellent list” would yield

a two-percent return, whereas an average rate for return

would yield a one-percent return. Sent. Tr. 76-80. If, in 37

estimating intended loss, the court employed only an

average rate of return (one percent) and the lowest of the

prices at which an Assail card was offered ($159), the

district court would have arrived at an intended loss

figure of $79,500,000. An intended loss of this amount

corresponds to an offense-level enhancement of 24, as

opposed to the enhancement of 22 levels received by

Mr. Kimoto. An even more modest rate of return of onehalf of one percent yields an intended loss of $39,750,000,

which is very close to the number employed by the

district court for actual loss and which also corresponds
68 No. 08-3731

Any criticism that this method of ascertaining loss is too 38

speculative is irrelevant in this case. As noted above, the

figure used by the district court represented individuals

who actually responded to Assail’s call and actually spent

money on its product. Mr. Kimoto, therefore, was given the

benefit of the doubt by being sentenced as if he intended a

loss based on actual sales—regardless of whether his scheme

anticipated a greater number of purchasers and a greater return.

to an enhancement of 22 levels—the one actually received

by Mr. Kimoto.

38

C. Enhancement for Number of Victims 

We cannot, however, apply the same rationale to the

district court’s offense-level enhancement for number

of victims. Section 2B1.1 defines “victim” accordingly: 

“Victim” means (A) any person who sustained any part

of the actual loss determined under subsection (b)(1);

or (B) any individual who sustained bodily injury as

a result of the offense. “Person” includes individuals,

corporations, companies, associations, firms, partnerships, societies, and joint stock companies.

U.S.S.G. § 2B1.1 definitions. In other words, whereas the

loss calculation can be based on either actual or intended

loss, the estimation of the number of victims is limited to

those who incurred part of the actual loss.

Here, the PSR (adopted by the court) considered all

purchasers, well over 500,000, to be victims. It did not

estimate how many of these individuals purchased
No. 08-3731 69

Assail’s products as a result of Assail’s deceptive sales

efforts. 

There is evidence in the record from which the district

court could have reached a reasonable estimate of victims,

specifically, the customer service records from SOS, the

testimony of Lankford and of Porcelli during trial, as

well as the testimony of Kristen Davis at sentencing. We

are skeptical that, after review of this evidence, the

district court reasonably could conclude that there were

less than 251 individuals who suffered actual loss. However, that is a determination for the district court to

make in the first instance.

Because the district court’s calculation of the number of

victims did not focus on actual loss, and because that

enhancement affects Mr. Kimoto’s sentencing range, we

remand to the district court for a more definite

calculation of the number of victims. If the district court,

after review of the record and based on a reasonable

estimate, concludes that the number of victims exceeds

250, then the original sentence shall stand. If, however, the

court concludes that the number of victims does not

exceed 250, then it must reevaluate its enhancement

pursuant to U.S.S.G. § 2B1.1(b)(2)(C). We emphasize

that this is a very limited remand, confined to the calculation of the number of victims for purposes of

§ 2B1.1(b)(2)(C); no other aspects of Mr. Kimoto’s sentencing should be revisited. 
70 No. 08-3731

Conclusion

For the foregoing reasons, the judgment of the district

court with respect to Mr. Kimoto’s conviction is affirmed.

Additionally, we affirm all aspects of Mr. Kimoto’s sentencing with the exception of the calculation of victims

under U.S.S.G. § 2B1.1(b)(2)(C). We remand that aspect

of Mr. Kimoto’s sentence to the district court for

further findings concerning the number of victims. In

every other respect, the judgment of the district court is

affirmed.

AFFIRMED in part; REMANDED in part

12-2-09