Brief Identifying Keaton Langston As Co-Conspirator 1

Case 2:21-cr-00877-MEF Document 136 Filed 03/14/24 Page 1 of 33 PageID: 840
UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA,

Hon. Michael E. Farbiarz
v. Crim. No. 21-877
DOMINICK GATTO,
THOMAS FARESE
THE UNITED STATES’ MEMORANDUM OF LAW

IN OPPOSITION TO THE DEFENDANTS’ MOTION TO SEVER
VIKAS KHANNA
Attorney for the United States
Acting Under the Authority Conferred
By 18 U.S.C. § 515
970 Broad Street
Newark, New Jersey 01702
(973) 645-2700
On the Brief:
JESSICA R. ECKER
RAY MATEO
Assistant United States Attorneys
DARREN HALVERSON
Trial Attorney
TABLE OF CONTENTS
I. INTRODUCTION............................................................................................................. 1
II. BACKGROUND ............................................................................................................... 2
A. The Conspiracy Alleged in the Indictment ......................................................................... 3
1. The Charges Against Both Farese and Gatto (Counts One and Eight) ........................ 3
2. The Gatto Charges (Counts Nine through Eleven) ....................................................... 5
B. The Evidence to Be Presented at Trial ................................................................................ 5
1. Overview of the Brace Conspiracy ............................................................................... 6
2. Farese and Gatto’s Roles in the Brace Conspiracy....................................................... 8
3. Trials of Farese and Gatto Require Several Overlapping Witnesses.......................... 14
III. ARGUMENT ................................................................................................................... 15
A. Gatto and Farese Properly Were Joined in the Indictment ............................................... 15
B. The Drastic Remedy of Severance Is Not Warranted ....................................................... 17
1. Spillover Prejudice, If Any, Is Insufficient to Justify Severance ............................... 19
2. Judicial Economy Favors a Joint Trial of Farese and Gatto ....................................... 26
IV. CONCLUSION ............................................................................................................... 27

TABLE OF AUTHORITIES
Cases Page(s)
United States v. Alegria,

761 F. Supp. 308 (S.D.N.Y. 1991) ........................................................................................... 21
United States v. Askew,

203 Fed. App’x 414 (3d Cir. 2006)........................................................................................... 16
United States v. Boyd,

180 F.3d 967 (8th Cir. 1999) .................................................................................................... 19
United States v. Bryant,

556 F. Supp. 2d 378 (D.N.J. 2008) ........................................................................................... 21
United States v. Cardascia,

951 F.2d 474 (2d Cir. 1991)...................................................................................................... 23
United States v. Cavale,

688 F.2d 1098 (7th Cir. 1982) .................................................................................................. 16
United States v. Console,

13 F.3d 641 (3d Cir. 1993).................................................................................................. 19, 27
United States v. Crinel,

2016 WL 3877976 (E.D. La. July 18, 2016) ............................................................................ 23
United States v. Curanovic,

2017 WL 4402452 (E.D.N.Y. Oct. 2, 2017) ....................................................................... 23, 25
United States v. Davis,

397 F.3d 173 (3d Cir. 2005)...................................................................................................... 16
United States v. Day,

405 F.3d 1293 (11th Cir. 2005) .......................................................................................... 16, 17
United States v. DePeri,

778 F.2d 963 (3d Cir. 1985)................................................................................................ 19, 26
United States v. Eufrasio,

935 F.2d 553 (3d Cir. 1991)...................................................................................................... 18
United States v. Ferrarini,

9 F. Supp. 2d 284 (S.D.N.Y. 1998) .......................................................................................... 23
United States v. Hart,

273 F.3d 363 (3d Cir. 2001)................................................................................................ 19, 24
ii
United States v. Inigo,

925 F.2d 641 (3d Cir. 1991)...................................................................................................... 19
United States v. Irizarry,

341 F.3d 273 (3d Cir. 2003)................................................................................................ 16, 17
United States v. Jackson,

649 F.2d 967 (3d Cir. 1981)...................................................................................................... 27
United States v. Jimenez,

513 F.3d 62 (3d Cir. 2008)........................................................................................................ 15
United States v. Lane,

474 U.S. 438 (1986) .................................................................................................................. 16
United States v. Lindauer,

2004 WL 2813168 (S.D.N.Y. Dec. 6, 2004) ............................................................................ 24
United States v. Lore,

430 F.3d 190 (3d Cir. 2005)............................................................................................... passim
United States v. Malik,

2009 WL 1922257 (E.D. Pa. July 2, 2009)............................................................................... 20
United States v. McGill,

964 F.2d 222 (3d Cir. 1992)...................................................................................................... 16
United States v. McGlory,

968 F.2d 309 (3d Cir. 1992)...................................................................................................... 18
United States v. Potashnik,

2008 WL 5272807 (N.D. Tex. Dec. 17, 2008) ......................................................................... 23
United States v. Provenzano,

688 F.2d 194 (3d Cir. 1982)...................................................................................................... 19
United States v. Reyeros,

537 F.3d 270 (3d Cir. 2008)...................................................................................................... 18
United States v. Savage,

2012 WL 6609425 (E.D. Pa. Dec. 19, 2012) aff’d 85 F.4th 102 (3d Cir. 2023) ...................... 25
United States v. Somers,

496 F.2d 723 (3d Cir. 1974)................................................................................................ 16, 19
United States v. Spicer,

2013 WL 871952 (E.D.N.Y. Mar. 7, 2013) ........................................................................ 24, 25
iii
United States v. Thompson,

219 F. Supp. 3d 502 (M.D. Pa. 2016) ................................................................................. 23, 27
United States v. Thornton,

1 F.3d 149 (3d Cir. 1993).......................................................................................................... 16
United States v. Urban,

404 F.3d 754 (3d Cir. 2005)................................................................................................ 18, 25
United States v. Valentine,

984 F.2d 906 (8th Cir. 1993) .................................................................................................... 19
United States v. Voigt,

89 F.3d 1050 (3d Cir. 1996)...................................................................................................... 19
United States v. Walker,

657 F.3d 160 (3d Cir. 2011)...................................................................................................... 21
United States v. Ward,

793 F.2d 551 (3d Cir. 1986)...................................................................................................... 24
Zafiro v. United States,

506 U.S. 534 (1993) ........................................................................................................... passim
Rules
Fed. R. Crim. P. 8 ....................................................................................................... 15, 16, 17, 21
Fed. R. Crim. P. 14 ....................................................................................................... 1, 15, 17, 18
Fed. R. Crim. P. 12(b)(3)(D)........................................................................................................... 1
iv
I. INTRODUCTION
The Government respectfully opposes Defendant Thomas Farese’s Motion for Severance
Pursuant to Federal Rule of Criminal Procedure 14 (“Farese Mot.,” Dkt. No. 134) and Defendant
Dominick Gatto’s Motion for Severance Pursuant to Federal Rules of Criminal Procedure
12(b)(3)(D) & 14 (“Gatto Mot.,” Dkt. No. 133) (collectively, the “Motions”). The Motions make
conclusory assertions about the lack of evidentiary overlap and risk of “spillover prejudice” at trial.
Defendants’ Motions wholly ignore, albeit concede based on their narrow scope, that the
Defendants were charged with conspiring to commit wire and health care fraud with co-
conspirators, and thus that they should be tried together.
As explained below, Rule 14 severance is a “drastic” remedy, and the Defendants bear a
“heavy burden” in justifying it, particularly given the strong federal preference for efficient, joint
trials, particularly in conspiracies. As such, severance is reserved for instances that would be so
prejudicial as to result in a “manifestly unfair trial.” United States v. Lore, 430 F.3d 190, 205 (3d
Cir. 2005). For the following reasons, Defendants have not met that high burden.
First, there is no inherent risk of spillover prejudice in this case given the substantial
overlap in evidence that will be necessary to convict each of the Defendants. Farese and Gatto not
only were members of the same conspiracy during the same time, but they also held the same role
within the conspiracy as co-owners of certain fraudulent businesses run in furtherance of the
conspiracy, and knew of each other’s roles therein. Unsurprisingly, in light of the overlap, not
only will many of the Government’s witnesses at trial—including fact witnesses, expert witnesses,
and investigating case agents—be the same, but the substance of their testimony also will be the
same in order to explain to the jury the Defendants’ role in the conspiracy. The fact that some
evidence will be introduced only against either Farese or Gatto, or that Gatto is charged in
additional counts such that more evidence may be introduced against him, are not grounds for
severance.
Second, limiting instructions can cure any spillover prejudice, and the Supreme Court and
Third Circuit repeatedly have expressed a preference for limiting instructions over the “drastic”
measure of severance. Zafiro v. United States, 506 U.S. 534, 539 (1993). Defendants make no
meritorious arguments as to why limiting instructions would not be sufficient.
Finally, principles of judicial economy strongly favor that the Defendants be tried together
because the evidence and witnesses overlap significantly and Farese and Gatto are charged as co-
conspirators, so evidence of acts committed by one will often be admissible against the other.
Accordingly, severance would waste valuable judicial resources.
II. BACKGROUND
On April 21, 2021, Farese and Gatto were charged by complaint, along with three other
co-conspirators, with Conspiracy to Commit Health Care Fraud. See United States v. Farese, et.
al., Mag. No. 21-8049 (JSA). Farese also was charged with three substantive counts of Health
Care Fraud. Id. On November 19, 2021, the Grand Jury returned an eleven-count Indictment
charging both Farese and Gatto with (i) Conspiracy to Commit Health Care Fraud and Wire Fraud
(Count One) and (ii) Conspiracy to Violate the Federal Anti-Kickback Statute (Count Eight). The
Indictment also charges Farese with three substantive counts of Health Care Fraud (Counts Two
through Four), and charges Gatto with (i) three substantive counts of Health Care Fraud (Counts
Five through Seven), (ii) Conspiracy to Violate the Federal Anti-Kickback Statute (Count Nine),
(iii) Conspiracy to Transact in Criminal Proceeds (Count Ten), and (iv) a substantive count of
Transacting in Criminal Proceeds (Count Eleven) (hereinafter, the “Indictment”). (Dkt. No. 64,
“Indict.”)
2
A. The Conspiracy Alleged in the Indictment
1. The Charges Against Both Farese and Gatto (Counts One and Eight)
Counts One and Eight—the counts in which Farese and Gatto are charged together—
comprise 22 pages of the 37-page Indictment and describe in detail (i) the nature of the conspiracy
that Farese and Gatto joined, (ii) the Defendants’ respective roles, and (iii) some of the overt acts
that Farese and Gatto each took in furtherance of that conspiracy. (See Indict. at 1-18; 20-23.)
Specifically, the Indictment alleges that Farese and Gatto were in a conspiracy to defraud
health care benefit programs by causing false claims to be submitted for orthotic braces, such as
back, elbow, and knee braces, that were (i) not medically necessary, (ii) obtained through the
payment of kickbacks and bribes making them not eligible for federal reimbursements, and (iii) not
provided as represented, all with the goal of unlawfully enriching themselves and their co-
conspirators (hereinafter, the “Brace Conspiracy”). (Id. at 17, 21.) As detailed in the Indictment,
Aaron Williamsky and Nadia Levit, who were core members of the Brace Conspiracy, 1 owned and
operated several fraudulent brace supply companies in New Jersey and elsewhere (the “Subject
Brace Companies”). (Id. at 7.) In exchange for an investment in one or more of the Subject Brace
Companies, Farese and Gatto each became co-owners of certain of the Subject Brace Companies
with Williamsky and Levit. (Id. at 8.) Specifically, as provided in the Indictment, following an
investment of approximately $290,000, Gatto purchased Ace Medical Supply, Inc. (“Ace”) and
Lifelong Health (“Lifelong”), two of the Subject Brace Companies. (Id. at 13.) Similarly,
1
On September 18, 2019, Williamsky pleaded guilty to conspiracies to violate the Anti-Kickback
Statute, commit Health Care Fraud, commit Wire Fraud, and to commit International Money
Laundering-Concealment. See Crim No. 19-247, Dkt. 42. On September 25, 2019, Levit pleaded
guilty to conspiracies to violate the Anti-Kickback Statute, commit Health Care Fraud, and commit
Wire Fraud. See id. Dkt. No. 48.
3
following an investment of approximately $500,000, Farese purchased MKS Supply Company
(“MKS”), another one of the Subject Brace Companies. (Id. at 15.)
The Subject Brace Companies were not legitimate businesses, and the co-conspirators,
including Farese and Gatto, engaged in additional false and fraudulent transactions, bribes, and
kickbacks to ensure that they would receive a steady flow of reimbursements from Medicare and
other health care benefit programs. For one thing, both Farese and Gatto attempted to conceal
their involvement with their respective Subject Brace Companies by concealing their ownership
interests in them from Medicare and other insurance programs (hereinafter for simplicity,
“Medicare”) by relying on nominee owners who were paid. (Id. at 10, 13, 15.)
Additionally, the Brace Conspiracy relied on completed, signed doctors’ orders for braces
(“Brace Orders”), which were purchased from various middlemen referred to in the Indictment as
Brace Suppliers, in exchange for a fixed, per-order fee—i.e., a kickback. (Id. at 7-8, 10-11.) As
outlined in Count Eight of the Indictment, each of Farese and Gatto participated in the payment of
kickbacks to Brace Suppliers from one or more of the Subject Brace Companies in which they
were involved. (Id. at 20-23.) Once a Brace Order was obtained from a Brace Supplier, the Subject
Brace Companies arranged for the shipment of the braces to the beneficiary and submitted a
fraudulent claim to Medicare for reimbursement. (Id. at 11-12.)
After the payment of various bribes (to the nominee owners) and kickbacks (to Brace
Suppliers and other “downstream” recipients) necessary to perpetuate the Brace Conspiracy,
Farese and Gatto each received a portion of the Medicare reimbursements paid out to their
respective Subject Brace Companies. For instance, as alleged in the Indictment, between August
2018 and April 2019, Farese and his business partner and co-conspirator, Patsy Truglia, received
approximately $730,000 in profits that MKS Medical Supply generated. (Id. at 17.) Similarly,
4
between May 2018 and April 2019, Ace and Lifelong funneled approximately $864,432 in profits
to entities controlled by Gatto and his business partners and co-conspirators, Brian Herbstman and
Keaton Langston. 2 (Id. at 18.)
2. The Gatto Charges (Counts Nine through Eleven)
As noted above, Counts Nine through Eleven of the Indictment charge Gatto with
additional crimes related to, but somewhat separate from, the Brace Conspiracy. Specifically,
Gatto is charged with conspiracy to violate the Anti-Kickback Statute (the statute that Farese and
Gatto are charged with violating in Count Eight) for offering and receiving kickbacks in
connection with reimbursements paid for orders for compounded prescription medication
(“Compound Orders”) that Gatto facilitated with many of the same co-conspirators involved in the
Brace Conspiracy, including Williamsky and “CC-1,” i.e., Langston (the “Compounding
Conspiracy”). (Id. at 24-29.) Additionally, Counts Ten and Eleven charge Gatto with illegally
moving the proceeds of the fraud and kickback schemes charged in connection with the Brace
Conspiracy, as opposed to with additional fraudulent conduct not already encompassed by the
Brace Conspiracy. (Id. at 30-34.)
B. The Evidence to Be Presented at Trial
The Indictment’s allegations convey the nature, goal, manner, and means of the Brace
Conspiracy that Farese and Gatto committed. What follows is a brief summary of (1) some of the
evidence that the Government expects to introduce at trial about the Brace Conspiracy, including
2
On November 9, 2021, Truglia pleaded guilty to conspiracy to commit Health Care Fraud, and
was sentenced to 120 months’ imprisonment on May 18, 2022. See Crim No. 21-841, Dkt. Nos.
70, 81. On April 22, 2021, Herbstman pleaded guilty to conspiracies to commit Health Care Fraud
and to violate the Anti-Kickback Statute. See Crim. No. 21-337, Dkt. No. 3.
5
(2) Farese and Gatto’s respective roles in the Brace Conspiracy, and (3) the significant overlap of
both lay and expert witness testimony that the Government will present to establish those facts.
1. Overview of the Brace Conspiracy
The evidence at trial will show that the Brace Conspiracy, and its success as a criminal
enterprise, depended upon various features and intertwining roles of which any owners of the
Subject Brace Companies—and, in particular, Farese and Gatto—necessarily were aware. First,
because the Subject Brace Companies were not legitimate businesses, Williamsky, and Farese and
Gatto as his co-owners, could not disclose their ownership interests in the Subject Brace
Companies to Medicare, and instead relied on third-party nominee owners, who were paid.
Nominee owners served two purposes: (1) for Williamsky and his co-owners to insulate
themselves from legal liability, if their fraudulent conduct were to be detected, and (2), relatedly,
for Williamsky and his co-owners to avoid scrutiny from Medicare for owning and operating
multiple Brace companies, which is itself indicia of fraud, which could delay or terminate the
payment of reimbursements. (Id.)
Second, Williamsky’s and Levit’s operation of numerous brace companies was a necessary
feature of the Brace Conspiracy. That is because, if any of the Subject Brace Companies submitted
too many claims for reimbursement to Medicare, Medicare’s fraud contractors would be alerted
and would investigate the high volume of claims for reimbursements for braces from that particular
brace company. An investigation could slow and eventually stop the flow of reimbursements to
that brace company. By diffusing the number of reimbursements submitted from any brace
company by submitting fewer claims from the different Subject Brace Companies, the co-
conspirators were able to avoid Medicare scrutiny and fraud detection.
6
Third, in that same vein, Williamsky and Levit informed their co-conspirators, including
Farese and Gatto, that it was not safe for one of the Subject Brace Companies to submit more than
approximately 500 Brace Orders to Medicare for reimbursement in a given week without raising
scrutiny from Medicare. The conspirators thus limited Medicare scrutiny by staggering and
limiting the submission of Brace Orders.
Fourth, just because a Brace Supplier sold a Brace Order to the Subject Brace Companies
did not necessarily mean that Medicare would reimburse them for the claim. Rather, the success
of the Brace Conspiracy depended in part on the purchase from Brace Suppliers of “high quality”
Brace Order, i.e., Brace Orders that were likely to result in reimbursements rather than denial by
Medicare because, for instance, the beneficiary had not recently received the same or similar brace.
For that reason, Williamsky and his co-owners, including Farese and Gatto, developed
relationships with certain Brace Suppliers who they believed regularly could provide “high
quality” Brace Orders to their respective Subject Brace Companies in exchange for per-order
fees/kickbacks.
Fifth, because it was necessary to open new Brace companies and purchase more “high
quality” Brace Orders to generate more illicit profits in furtherance of the Brace Conspiracy,
Williamsky’s co-owners, including Farese and Gatto, were expected largely to refrain from taking
disbursements from the profits of their respective Subject Brace Companies. Instead, they were
expected to allow those profits to be reinvested, at least until the companies were self-sufficient,
i.e., until, after all of the expenses of the Subject Brace Companies, the reimbursements from
Medicare were sufficient to cover all of its purchasing needs of new Brace Orders from Brace
Suppliers.
7
Finally, although much of the Brace Conspiracy depended upon evading Medicare’s
scrutiny, the co-conspirators were aware that Medicare often did, eventually, catch on to the fact
that the Subject Brace Companies were committing fraud and, accordingly, would be subject to
audits and eventually shut down. For that reason, Gatto and Farese, knew that the lifespan of any
one of the Subject Brace Companies was only approximately one year. That is consistent with the
life of each of the Subject Brace Companies co-owned by Farese and Gatto, which was from
approximately May 2018 to April 2019, as set forth in the Indictment.
At trial, the evidence will show that both Farese and Gatto fully were apprised of these
features of the Brace Conspiracy, and knowingly and willfully took steps to further it.
2. Farese and Gatto’s Roles in the Brace Conspiracy
As the Indictment alleges, and as the evidence at trial will show, Farese and Gatto agreed
to join the Brace Conspiracy in or around March 2018, at which time they each decided to purchase
ownership stakes in certain of the Subject Brace Companies with Williamsky. Namely, Farese
became a co-owner of MKS and Gatto became a co-owner of Ace, and then Lifelong. Critically,
the evidence at trial will show that (a) Farese and Gatto fully were aware of the nature of the Brace
Conspiracy at the time that they joined it, including the fact that all of the Subject Brace Companies
were co-dependent, for the reasons identified above; (b) Farese and Gatto had the same role in the
Brace Conspiracy and, accordingly, had many of the same incentives, concerns, and frustrations
in relation to their co-conspirators; and (c) Farese and Gatto, admittedly, communicated most
regularly with Williamsky and Levit (who both were at the heart of the Brace Conspiracy), but
8
Farese and Gatto nevertheless had direct contact with each other regarding their membership in
the Brace Conspiracy on certain occasions.
a) Farese and Gatto Understood the Nature of the Brace Conspiracy
Specifically, around the time of joining the Brace Conspiracy, Farese and Gatto each had
extensive communications with Williamsky about how the Brace Conspiracy operated. The
evidence will show that Gatto and Farese knew that Williamsky owned and operated all of the
Subject Brace Companies, and that each brace company was dependent on the larger set of Subject
Brace Companies that Williamsky and Levit owned and operated, without which their investments
in individual Brace companies could not be lucrative.
For example, the evidence will show that Gatto was introduced to Williamsky through
Herbstman, who Williamsky knew through Sean Hogan (a co-conspirator that served as a nominee
owner and co-owner for certain of the Subject Brace Companies). Additionally, Gatto
communicated with Williamsky extensively over a period in mid-April 2018, including over meals
and a plane ride from New Jersey to Florida on Gatto’s private jet, during which Gatto asked
detailed questions about the Brace Conspiracy, and negotiated the share of the profits to which he
would be entitled as a co-owner of certain Subject Brace Companies. Indeed, Gatto obviously
understood the need for, e.g., (i) a nominee owner (because his friend and business partner
Herbstman served that role for one of the Subject Brace Companies that he co-owned with
Williamsky, Lifelong), and (ii) a reliable source of Brace Suppliers from whom to purchase Brace
Orders in exchange for kickbacks (because he and Herbstman introduced Williamsky to Nick
DeFonte and Chris Cirri, who operated Brace Supplier DCX).
Similarly, the evidence will show that Williamsky introduced Hogan and Truglia, who
became friends and business partners, and that Truglia later introduced Williamsky to Farese.
9
Specifically, in early 2018, Williamsky, Farese, and Truglia had a meeting at Truglia’s office in
New Jersey, at which Williamsky explained the Brace Conspiracy to Farese. Following another
meeting with Williamsky and Truglia over dinner in New York City, Farese decided to invest
approximately $500,000 in MKS. Like Gatto, Farese understood the need for a nominee owner
(because Williamsky, Truglia, and Farese decided to use a nominee owner, Magda Soto, for MKS),
and the need for Brace Suppliers (because MKS purchased its Brace Orders from Brace Supplier
Global, which Truglia owned and in which Farese also was financially invested). Additionally,
Farese was aware of the financial arrangements necessary for the Brace Conspiracy to succeed and
participated in several meetings with Williamsky and his employees to review spreadsheets
detailing the MKS finances.
b) Farese and Gatto Had the Same Role in the Brace Conspiracy
The evidence also will show that, as co-owners of one of the Subject Brace Companies,
Farese and Gatto held virtually identical roles in the Brace Conspiracy and, accordingly, had
largely parallel experiences as co-conspirators. At the outset, both Farese and Gatto were active
investors in their respective Subject Brace Companies and spent time both learning about the
fraudulent brace industry generally, and the Brace Conspiracy specifically, from Williamsky and
other co-conspirators and actively negotiating with them about the percentage of the profits to
which Farese and Gato each would be entitled. Additionally, because Farese and Gatto (i)
understood the central role of Brace Suppliers in the Brace Conspiracy and (ii) had substantial
business relationships with other co-conspirators in the Brace Conspiracy, Farese and Gatto both
had preferred Brace Suppliers.
Specifically, Gatto introduced Williamsky to his friends and business associates Cirri and
DeFonte, owners of Brace Supplier DCX, and facilitated the purchase of Brace Orders from DCX
10
for the Subject Brace Companies. DCX sold “high quality” Brace Orders in that they had a low
rate of denial by Medicare. In exchange for making the introduction between Williamsky and
Cirri and DeFonte, Gatto also negotiated with Williamsky that he would receive a kickback for
every Brace Order that a Subject Brace Company purchased from DCX. Gatto also demanded that
Brace Orders purchased from DCX were used first to fill claims submitted by the Subject Brace
Companies that he co-owned, Ace and Lifelong, as opposed to other Subject Brace Companies
like MKS (which Farese co-owned), so that he could profit both from the reimbursement and from
the per-order kickback that he received from DCX. However, when selling Brace Orders, DCX
did not specifically earmark the sales for specific Subject Brace Companies, and, to the extent
there was a surplus, Williamsky and Levit could use Brace Orders purchased from DCX to submit
claims from any of the Subject Brace Companies, in furtherance of the Brace Conspiracy.
Farese, for his part, directed that MKS purchase its Brace Orders from co-conspirator Patsy
Truglia, a Brace Supplier operating under the business name Global, for similar reasons.
Specifically, Farese and Truglia already were in business together in relation to Global before
joining the Brace Conspiracy. By bringing Global into the Brace Conspiracy, Farese stood to
profit both from the Medicare reimbursement for claims submitted from his brace company, MKS,
and for the business that the Brace Order generated for Global. Unlike DCX, however, Brace
Orders purchased from Global were not as “high quality” and had a higher rate of denial by
Medicare. This became a point of tension in the relationship among Truglia, Farese, and
Williamsky, because Farese and Truglia were not pleased with the profits that MKS generated,
and Williamsky believed that the profitability of MKS was directly related to the quality of its
Brace Orders.
11
Not only did Farese and Gatto have similar (albeit slightly different) relationships with
their respective Brace Suppliers in the Brace Conspiracy, but they also shared other frustrations
when it came to the profitability of their respective Subject Brace Companies relative to their
expectations. As noted above, the evidence at trial will show that the profitability of the Subject
Brace Companies depended in part on the re-investment of profits into the purchase of more Brace
Orders, which in turn would lead to more reimbursements. In that sense, to the extent that co-
owners, such as Farese and Gatto, took disbursements prematurely, it would hinder their respective
Subject Brace Company’s ability to generate more profits. The delay in the return on Farese and
Gatto’s respective investments, however, created mutual tension with and suspicion of
Williamsky.
Specifically, in or around December 2018, Gatto, along with an unknown associate,
attended a meeting in New Jersey with Williamsky, Levit, Herbstman, Cirri, and DeFonte, at which
Gatto expressed dissatisfaction with the return on his investments in the Subject Brace Companies.
Gatto expressed suspicions about how Williamsky was handling the profits, which Gatto
characterized as “peanuts” relative to his expectations.
Williamsky had similarly uncomfortable interactions with Farese about the profitability of
MKS. For instance, as noted previously, Williamsky believed that MKS was not as profitable as
it could have been because it submitted Brace Orders purchased from Global, owned by Truglia,
whose orders were often denied by Medicare. When Williamsky expressed this, and even
attempted not to pay Truglia in full for Brace Orders purchased from Global, Truglia threatened
to physically harm Levit. The evidence also will show that Farese was preoccupied with the
profitability (or lack thereof) of MKS and logged into its bank account to monitor activity on a
daily basis.
12
c) Farese and Gatto’s Conduct Overlapped
Finally, and critically, the evidence at trial will show not only that Farese and Gatto had
parallel roles in the Brace Conspiracy, but also that the Defendants and their co-conspirators, were
aware of and interacted with each other during the Brace Conspiracy.
First, the evidence will show that Williamsky, Farese, and Gatto all attended a meeting in
Florida in April 2018 at which various illegal business ventures were discussed, including both
Gatto’s Compounding Conspiracy and the Brace Conspiracy. During the meeting, Williamsky
illustrated for Farese and Gatto how the Brace Conspiracy worked by showing them both an excel
spreadsheet that he received from his employees each day. The spreadsheet detailed the financials
for one of the Subject Brace Companies, including the Brace Suppliers from whom each of the
Brace Orders were purchased, the claim for each Brace Order submitted to Medicare, and the
reimbursement from Medicare, if any. The purpose of showing this spreadsheet was to inspire
confidence in Farese and Gatto in the Brace Conspiracy and in their pending or existing
investments in their respective Subject Brace Companies.
Second, having been introduced at the joint meeting with Williamsky, Gatto and Farese
met again in Florida, this time for Gatto to inquire whether Farese would be interested in investing
in Gatto’s real estate venture. Although there is no evidence that Farese ever made the real estate
investment, the fact that this meeting occurred strongly indicates that Gatto had reason to believe
that Farese had “deep pockets” given his knowledge of Farese’s investment in the Brace
Conspiracy.
Finally, the evidence will show that Gatto’s co-conspirator and right-hand man,
Herbstman, reviewed the financials of his and Gatto’s Subject Brace Companies very closely. At
some point Herbstman developed the belief that Williamsky was stealing from them, and promptly
13
had a meeting with Farese, Truglia, and Hogan. During the meeting, Herbstman conveyed to
Farese and Truglia Hebstman’s belief that Williamsky was stealing from the Subject Brace
Companies and that Farese and Truglia should find a way to carry out the Brace Conspiracy
without Williamsky (but continuing to work with Levit). The evidence at trial will corroborate the
fact that both Farese and Gatto grew increasingly suspicious of Williamsky’s business practices
over the course of their participation in the Brace Conspiracy.
3. Trials of Farese and Gatto Require Several Overlapping Witnesses
Many of the Government’s witnesses at trial will testify about both Farese and Gatto’s
roles in the Brace Conspiracy. Regarding fact witnesses, for instance, Williamsky and Levit each
likely will testify about many of the topics discussed in Section II.B.1-2, including both Farese
and Gatto’s knowledge that co-dependence among the Subject Brace Companies was a defining
feature of the Brace Conspiracy. Additionally, Hogan and Herbstman likely will testify about their
involvement in the Brace Conspiracy and their respective interactions with Farese and Gatto,
including key meetings and events tending to prove that Farese and Gatto were co-conspirators.
Finally, the Government likely will call Medicare beneficiaries for whom the Subject Brace
Companies submitted Brace Orders. The anticipated testimony of these beneficiaries will provide
examples of the experiences of hundreds of beneficiaries for whom Farese and Gatto’s Subject
Brace Companies submitted false claims.
With regard to expert testimony, the Government likely will call two expert witnesses
common to both Farese and Gatto, including (i) a Medicare fraud investigator, who will interpret
for the jury any Medicare-related documents, including claims and provider authorizations; and
14
(ii) a Medicare administrative contractor that is responsible for braces and who will testify about
indicia and processes relating to determining the medical necessity of the braces.
Lastly, the Government likely will call the same Federal case agents—including Special
Agents from the (i) Federal Bureau of Investigation, (ii) Department of Health and Human
Services, and (iii) Department of Defense—that investigated the Brace Conspiracy and will testify
about steps taken during that investigation.
III. ARGUMENT
A. Gatto and Farese Properly Were Joined in the Indictment
As a threshold matter, Farese and Gatto properly were joined in the Indictment pursuant to
Federal Rule of Criminal Procedure 8, and Defendants do not seriously contend otherwise.
Although the Motions obliquely reference the Rule 8 standard (see Farese Mot. at 4 (stating that
the Defendants did not “participate[] in the same acts or transactions” or “share[] a common goal
or purpose”); Gatto Mot. at 1 (stating the Defendants “did not participate in any of the same acts,
transaction, or series of transactions”), the Defendants moved for severance exclusively under Rule
14’s discretionary standard and not pursuant to Rule 8.
Regardless, any Rule 8 argument would be meritless. Pursuant to Federal Rule of Criminal
Procedure 8(b):
The indictment or information may charge 2 or more defendants if they are alleged
to have participated in the same act or transaction, or in the same series of acts or
transactions, constituting an offense or offenses. The defendants may be charged
in one or more counts together or separately. All defendants need not be charged
in each count.
Joint trials of defendants named in a single indictment are favored because they conserve state
funds, diminish inconvenience to witnesses and public authorities, and avoid delays in bringing
those accused of crime to trial. United States v. Jimenez, 513 F.3d 62, 82 (3d Cir. 2008) (quoting
15
United States v. Lane, 474 U.S. 438, 449 (1986)). Joinder of more than one defendant in a single
indictment is proper under Rule 8 where: the defendants are charged with a conspiracy, see Lane,
474 U.S. at 447; United States v. Thornton, 1 F.3d 149, 152-53 (3d Cir. 1993); the defendants are
charged with offenses arising from the same act or transaction, see United States v. Davis, 397
F.3d 173, 182 (3d Cir. 2005) (defendants found together with guns and drugs); the defendants are
charged with a series of related acts or transactions, see United States v. Askew, 203 Fed. App’x
414, 418 (3d Cir. 2006) (defendants charged in virtually identical schemes committed with
common third party); United States v. Cavale, 688 F.2d 1098, 1107-08 (7th Cir. 1982); or one
defendant’s actions are done in furtherance of a scheme committed with another, see United States
v. McGill, 964 F.2d 222, 241-42 (3d Cir. 1992). Additionally, “joinder of a conspiracy count and
substantive counts arising out of the conspiracy is permitted, since the claim of conspiracy provides
a common link, and demonstrates the existence of a common scheme or plan.” United States v.
Irizarry, 341 F.3d 273, 289 (3d Cir. 2003) (quoting United States v. Somers, 496 F.2d 723, 729-
30 (3d Cir. 1974) (emphasis in Somers) (internal citations omitted)). Indeed, the “mere allegation
of a conspiracy presumptively satisfies Rule 8(b), since the allegation implies that the defendants
named have engaged in the same series or acts or transactions constituting an offense.” Irrizarry,
341 F.3d at 289 n.5 (quoting United States v. Friedman, 854 F.2d 535, 561 (2d Cir. 1988)).
As Rule 8(b) makes clear, each defendant need not be charged in every count, and,
therefore, joinder is appropriate where “an indictment charges multiple defendants with
participation in a single conspiracy and also charges some but not all of the defendants with
substantive counts arising out of the conspiracy.” United States v. Day, 405 F.3d 1293, 1297 (11th
Cir. 2005) (citation and quotation marks omitted).
16
Here, as discussed in Section II.A, Farese and Gatto both are charged as members of the
Brace Conspiracy (in Counts One and Eight), in which they shared similar roles as co-owners,
with Williamsky, of certain of the Subject Brace Companies, all of which were operated with the
common goal of defrauding Medicare by obtaining reimbursement for claims in connection with
medically unnecessary Brace Orders that were procured by bribes and kickbacks. The allegations
in the Indictment thus “presumptively satisf[y] Rule 8(b).” United States v. Irizarry, 341 F.3d 273,
289 n. 5 (3d Cir. 2003). Indeed, Farese and Gatto expressly concede, throughout their Motions,
that the Indictment charges them as being members of the same conspiracy (see, e.g., Farese Mot.
at 6 (acknowledging the Brace Conspiracy as a “broad[] conspiracy involving cooperators
Williamsky and Levit”); Gatto Mot. at 1 (characterizing the Brace Conspiracy as “a vast
conspiracy”; id. at 6 (arguing Farese and Gatto “joined the alleged conspiracy at different times
and were introduced by different alleged co-conspirators”)).
The fact that Gatto also is charged with illegally transacting in criminal proceeds related to
the Brace Conspiracy (Counts Ten and Eleven), and an additional, related Compounding
Conspiracy (Count Nine), is of no moment. Rule 8(b) expressly provides that joinder is proper
even though not all defendants are charged in each count of an indictment. See Day, 405 F.3d at
1297.
B. The Drastic Remedy of Severance Is Not Warranted
Defendants raise two vague arguments in support of severance pursuant to Rule 14: (1) that
there is a risk of “spillover prejudice” due to a lack of overlapping evidence against Farse and
Gatto; and (2) that because of the lack of evidentiary overlap, a joint trial will not spare judicial
resources. Both arguments fail to meet the “heavy burden” necessary to warrant the “drastic
measure[]” of severance. See Lore, 430 F.3d at 205; Zafiro 506 U.S. at 539.
17
The decision as to whether to grant severance “is committed to the sound discretion of the
trial judge,” who must balance the risk of prejudice against the “public interest in joint trials” and
the need to preserve judicial and prosecutorial resources. United States v. Eufrasio, 935 F.2d 553,
568 (3d Cir. 1991) (citation omitted); see United States v. McGlory, 968 F.2d 309, 340 (3d Cir.
1992). Given the “fundamental principle that the federal system prefers ‘joint trials of defendants
who are indicted together’ because joint trials ‘promote efficiency and serve the interests of justice
by avoiding the scandal and inequity of inconsistent verdicts,’” United States v. Urban, 404 F.3d
754, 775 (3d Cir. 2005) (quoting Zafiro, 506 U.S. at 537), the defendant bears the “heavy burden”
of demonstrating that the denial of severance would lead to “clear and substantial prejudice
resulting in a manifestly unfair trial.” Lore, 430 F.3d at 205 (citation omitted).
Rule 14 permits severance where “the joinder of offenses . . . appears to prejudice a
defendant or the government.” Fed. R. Crim. P. 14(a). “[A] district court should grant a severance
under Rule 14 only if there is a serious risk that a joint trial would compromise a specific trial right
of one of the defendants, or prevent the jury from making a reliable judgment about guilt or
innocence.” Zafiro, 506 U.S. at 539 (emphasis added). Mere allegations of prejudice or a
defendant’s claim that he is more likely to be acquitted if tried separately are insufficient to justify
severance. Urban, 404 F.3d at 775-76. Courts have explained that potential prejudice to the
defendant can be adequately cured by means less drastic than severance, by, for example, issuing
limiting instructions about the proper use of evidence, see Zafiro, 506 U.S. at 539, and by ordering
the jury to compartmentalize the evidence offered as to multiple defendants and multiple counts,
see Lore, 430 F.3d at 205-06 (affirming denial of severance as jury presumed to follow instruction
to compartmentalize evidence offered as to each defendant and each count); Urban, 404 F.3d at
776; see also United States v. Reyeros, 537 F.3d 270, 286 (3d Cir. 2008).
18
The preference for joint trials is especially strong where the defendants are charged in the
same conspiracy. Such joint trials protect the Government’s case from premature disclosure, while
also “aid[ing] the finder of fact in determining the ‘full extent of the conspiracy.’” United States
v. Voigt, 89 F.3d 1050, 1094 (3d Cir. 1996) (quoting United States v. Provenzano, 688 F.2d 194,
199 (3d Cir. 1982)); see United States v. Inigo, 925 F.2d 641, 656 (3d Cir. 1991) (as it is
“customary” to try co-conspirators together, severance justified “only for compelling reasons”).
Furthermore, as “acts committed by one [co-conspirator] in furtherance of the conspiracy [would
be] admissible against the other” co-conspirator in a separate trial, severance would serve little to
no purpose except to waste public resources. United States v. Hart, 273 F.3d 363, 370 (3d Cir.
2001); see United States v. DePeri, 778 F.2d 963, 984 (3d Cir. 1985) (“[P]ublic resources . . .
would be lost if the same evidence were presented at separate trials.”); see also United States v.
Boyd, 180 F.3d 967, 982-83 (8th Cir. 1999) (joint trial cannot constitute prejudice, as evidence
would have been admissible in separate trials under Rule 404(b)); United States v. Valentine, 984
F.2d 906, 910-11 (8th Cir. 1993). Finally, neither the fact that evidence will be offered at trial on
counts in which the defendant is not charged, United States v. Console, 13 F.3d 641, 655 (3d Cir.
1993), nor that evidence against one defendant may be stronger than that against another, Lore,
430 F.3d at 205; United States v. Somers, 496 F.2d 723, 730 (3d Cir. 1974), entitles a defendant
to the drastic remedy of severance, see Zafiro, 506 U.S. at 539 (even where there is risk of some
prejudice, district court can tailor a “less drastic” remedy, such as use of limiting instructions).
1. Spillover Prejudice, If Any, Is Insufficient to Justify Severance
Farese and Gatto argue that severance is warranted due to the potential “spillover
prejudice” that may result from a joint trial in light of a purported “lack of overlap” of evidence
necessary to convict the Defendants at trial. (Farese Mot. at 4-7; Gatto Mot. at 8-10). Specifically,
19
Farese and Gatto each argue that the fact that they are alleged to have co-owned separate Subject
Brace Companies, and that certain evidence to be introduced at trial (such as claims data,
beneficiary information, and profits) will pertain specifically to their respective Subject Brace
Companies, somehow justifies severance. In particular, the Defendants both reference
“spreadsheets” that the Government has produced in discovery that identify in detail the claims
data associated with each of Ace, Lifelong, which were co-owned by Gatto, and MKS, which was
co-owned by Farese. (Farese Mot. at 3; Gatto Mot. at 3, 9, 11.)
Defendants’ focus on the details of differences in individual Medicare claims—most of
which will be introduced in summary form—ignores entirely the substantial overlap in evidence
that the Government will present at trial, as explained in Section II.B, regarding the Brace
Conspiracy and how Farese and Gatto held analogous roles in the Brace Conspiracy in relation to
their respective Subject Brace Companies. Specifically, the evidence will show that Farese and
Gatto joined the Brace Conspiracy at similar times, in similar ways, and under similar
circumstances, and thereafter held similar roles in the Brace Conspiracy as co-owners of certain
of the Subject Brace Companies, with particular involvement with certain of the Brace Suppliers.
(See supra, Section II.A, II.B.)
As courts routinely hold, “[a] joint trial will aid the finder of fact in determining the full
extent of this conspiracy.” United States v. Malik, 2009 WL 1922257, at *8 (E.D. Pa. July 2, 2009)
(denying severance where the defendants were “indicted together . . . in a single charge of
conspiracy” and “are alleged to have participated in the same series of acts that constitute
naturalization fraud”). As in Malik, trying Gatto and Farese together will aid the jury in
determining the full extent of the Brace Conspiracy in light of their mutual roles.
20
Nor is the fact that Farese and Gatto are charged with separate substantive counts that
correspond with particular fraudulent claims submitted by their respective Subject Brace
Companies somehow indicative of a lack of evidentiary overlap warranting severance. To the
contrary, “where there is some connection between the alleged conspiracy and the counts that
charge [the defendant] alone such that some overlap of evidence can be anticipated at trial, [the
defendant] has not carried his burden for showing a single trial to be prejudicial.” United States
v. Alegria, 761 F. Supp. 308, 312 (S.D.N.Y. 1991). Here, the connection between the conspiracy
and substantive counts is strong.
As such, the facts here bear no resemblance to those in United States v. Bryant, 556 F.
Supp. 2d 378 (D.N.J. 2008), on which Defendants rely (Gatto Mot. at 10-11). There, the Court
concluded that severance was warranted because the joined defendants’ alleged conduct did not
“share a transactional nexus under Rule 8(b)” because it involved two separate schemes with
virtually “no factual overlap,” id. at 465, and no allegations that the co-defendants had any
knowledge of or involvement in each other’s “fraudulent conduct,” id. at 465-66. The factual
circumstances here are entirely distinct, as Farese and Gatto are charged as occupying the same
role in the same Brace Conspiracy, and the evidence will show that they had at least general
knowledge of each other’s fraudulent conduct in furtherance of it.
Moreover, that the Government will introduce some different evidence against co-
defendants in a joint trial is fully anticipated, and not grounds for severance. Indeed, the grant or
denial of severance turns on “whether the jury will be able to compartmentalize the evidence as it
relates to separate defendants in view of its volume and limited admissibility,” which presupposes
that the evidence against joined co-defendants will be distinct. Walker, 657 F.3d at 170; see also
Lore, 430 F.3d at 205 (“We see no reason why, in a joint trial of defendants charged with
21
participating in a conspiracy, the fact that the grand jury charged one defendant separately with an
additional criminal act somehow would interfere with the petite jury’s ability to consider the
evidence against each defendant on each count separately.”).
In their Motions, Farese and Gatto argue that the lack of overlap with respect to claims and
beneficiaries associated with their respective Subject Brace Companies renders
“compartmentalization of evidence and proof for the jury . . . an impossible task.” (Gatto Mot. at
10-11.) As examples, the Defendants warn of serious jury confusion if the Government were to
call as witnesses beneficiaries for whom fraudulent claims were submitted by each of Farese and
Gatto’s Subject Brace Companies, or if the Government were to introduce claims data
“spreadsheets” associated with their respective Subject Brace Companies. (Id.)
But the opposite inference is more natural. Between the two Defendants, the Government
will introduce specific information about just three of the Subject Brace Companies involved in
the Brace Conspiracy, two of which were co-owned by Gatto (Ace and Lifelong), and one of which
was co-owned by Farese (MKS). The fact that the specific claims evidence can be so clearly
delineated with reference to particular Subject Brace Companies, if anything, will make it easier
for the jury to parse and compartmentalize evidence relevant to them and, by extension, to Farese
or Gatto. For instance, although a testifying beneficiary will not “wear a sign stating that his or
her testimony only bears on the counts applicable to Mr. Gatto[]” (Gatto Mot. at 11), the
Government will easily avoid confusion by orienting the jury, eliciting from the witness whether
the claim was submitted on their behalf by Ace, Lifelong, or MKS. Moreover, the testimony of
any given beneficiary will be relevant evidence against both Farese and Gatto to the extent that the
Government can establish that telemarketers and Brace Suppliers commonly targeted beneficiaries
on similar demographic bases.
22
Farese also argues that severance is warranted in light of the “disproportionate amount of
evidence and charges” expected to be introduced against Gatto, as compared to Farese. (Farese
Mot. At 6; id. 2-3). But courts uniformly hold that a “quantitative disparity in the evidence is
clearly insufficient in itself to justify severance.” United States v. Potashnik, 2008 WL 5272807
*7 (N.D. Tex. Dec. 17, 2008) (citation and quotation marks omitted); see also United States v.
Crinel, 2016 WL 3877976, at *7 (E.D. La. July 18, 2016) (noting it is “well accepted that a
quantitative disparity in the evidence against a particular defendant is not sufficient grounds to
justify severance”); see also United States v. Ferrarini, 9 F. Supp. 2d 284, 290 (S.D.N.Y. 1998)
(“[I]t is well established that defendants who played a minor role in a conspiracy may be tried with
those who played a larger or dominant role.”) (citing United States v. Cardascia, 951 F.2d 474,
483 (2d Cir. 1991)).
Nor is this a case where a risk of prejudicial spillover could arise because the defendants
are charged with crimes that are qualitatively different in nature. To the contrary, both Gatto and
Farese are charged with fraud and corruption charges related to the submission of false and
fraudulent Medicare claims. See Crinel, 2016 WL 3877976, at *7 (E.D. La. July 18, 2016)
(denying severance of defendants charged with violating the Anti-Kickback Statute where
defendants merely received different types of kickbacks because “[r]egardless of how the fraud
was carried out . . . it is not so different or less culpable as compared to the other defendants such
that a joint trial would result in prejudicial spillover”); United States v. Thompson, 219 F. Supp.
3d 502, 515 (M.D. Pa. 2016) (denying severance where charges against co-conspirators were not
“disproportionately prejudicial or dissimilar in nature” from each other; “[r]ather, [the co-
defendants] f[ell] in generally the same strata [and] used similar means to bring about the
conspiracy’s illicit objective.”); United States v. Curanovic, 2017 WL 4402452, at *6 (E.D.N.Y.
23
Oct. 2, 2017) (rejecting argument that severance was warranted where only one defendant was
charged in connection with “weapons trafficking” because his co-defendant “is similarly charged
with a crime of violence . . . [which] counters his concern regarding undue prejudice”). And as
described supra, Section II.B.2, Farese and Gatto occupied the same role within the Brace
Conspiracy, and the evidence that the Government will introduce against each of them will be
similar in character, albeit not identical. Cf. United States v. Ward, 793 F.2d 551, 556 (3d Cir.
1986) (“Participants in a single conspiracy should ordinarily be tried together for purposes of
judicial efficiency and consistency, even if the evidence against one is more damaging than that
against another.”).
It bears mentioning that, notwithstanding Defendants’ conclusory allegations that there is
“a complete lack of overlap between the proof against [] Gatto and [] Farese” (Gatto Mot. at 8),
Defendants fail to identify a single piece of evidence that would be admissible against one of them
but not the other. This is not surprising given that “acts committed by one [co-conspirator] in
furtherance of the conspiracy [would be] admissible against the other.” See Hart, 273 F.3d at 370.
Indeed, even the claims “spreadsheets” that both Farese and Gatto cite as evidence of a lack of
evidentiary overlap likely would be admissible against both Farese and Gatto individually, as they
tend to prove that the various Subject Brace Companies acted in coordination with each other by,
e.g., not exceeding a certain number of claims per week and purchasing Brace Orders only for
Medicare beneficiaries, as described in Section II.B.1-2. See United States v. Spicer, 2013 WL
871952, at *3 (E.D.N.Y. Mar. 7, 2013) (“Evidence adduced against one alleged coconspirator is
‘neither spillover nor prejudicial’ if it would be admissible at a separate trial against the movant as
an act of a co-conspirator in furtherance of a conspiracy due to the nature of conspiratorial illegal
activity.”); United States v. Lindauer, No. 03-CR-807, 2004 WL 2813168, at *3 (S.D.N.Y. Dec.
24
6, 2004) (“Because proof of the full nature and scope of a conspiracy is admissible even at the trial
of lesser participants, a defendant cannot claim improperly prejudicial spillover from the
introduction of such proof.”) (citation omitted).
Moreover, to the extent that Defendants do have specific concerns about the admissibility
and potential undue prejudice of particular pieces of evidence at trial, such concerns may be
addressed in forthcoming motions in limine in advance of trial. See Spicer, 2013 WL 871952, at
*4 (noting that “denying [a defendant’s] motion to sever does not obviate his ability to seek
exclusion of any [potentially prejudicial evidence] at trial pursuant to Rule 403”).
Even if spillover prejudice plausibly were asserted, severance would not be the appropriate
remedy because “less drastic measures, such as limiting [jury] instructions” would “suffice to cure
any risk of prejudice” from a joint trial. See Zafiro, 506 U.S. at 539. Limiting instructions
routinely are deemed sufficient to avoid spillover prejudice, especially where, as here, the evidence
readily can be compartmentalized as to each defendant. See United States v. Savage, 2012 WL
6609425, at *9 (E.D. Pa. Dec. 19, 2012), aff’d 85 F.4th 102 (3d Cir. 2023) (denying severance
where co-defendant “offered only conclusory assertions and hypothetical situations” as to the risk
of spillover prejudice and “failed to demonstrate that a jury will be unable to separate the evidence
and apply it only to the specific Defendants against whom it is offered”); see also Curanovic, 2017
WL 4402452, at *5 (finding that where co-defendants are charged with conduct that is factually
distinct, it is “unlikely that the jury would be unable to follow a limiting instruction to consider the
evidence separately for each defendant, and that there is no basis in the instant case to undermine
the well settled recognition that juries follow the instructions given by the trial judge.”). Courts
unanimously “presume that the jury will follow limiting instructions and will be able to
25
compartmentalize the evidence and issues.” Savage, 2012 WL 6609425, at *9 (citing Urban, 404
F.3d at 775-76). Defendants offer no basis to diverge from that presumption in this case.
2. Judicial Economy Favors a Joint Trial of Farese and Gatto
Defendants argue that because of the lack of evidentiary overlap between Gatto and Farese,
the “considerations of judicial economy” that typically justify joint trials is not present here (Gatto
Mot. at 11). To the contrary, in light of the substantial overlapping evidence that the Government
will produce at trial, as explained in Section II.B, severance of the trial of Farese and Gatto would
serve little purpose except to waste public resources because much of “the same evidence [would
be] presented at separate trials.” DePeri, 778 F.2d at 984. In particular, not only will the
Government call many of the same fact witnesses at trial, as set forth above in Section II.B.3, but
the subject of those witnesses’ testimony also will substantially overlap with regard to, e.g., how
the Brace Conspiracy operated, how Farese and Gatto held the same roles within the Brace
Conspiracy, and the discrete instances in which Farese and Gatto’s conduct overlapped. Likewise,
the Government’s case agents will provide testimony about the course of the investigation of the
Brace Conspiracy, and certain expert witnesses will testify about Medicare claims, medical
necessity, and other topics that are common and relevant to both Defendants. Thus, “the
recognized public policy in favor of joint trials of alleged co-conspirators” readily applies to the
26
facts of this case, and Defendants do not begin to meet their burden to justify deviation from
“general rule.” Thompson, 219 F. Supp. 3d at 516 (quoting Console, 13 F.3d at 655). 3
IV. CONCLUSION
For the reasons set forth above, the Court should deny the Defendants’ Motions in their
entirety.
Respectfully submitted,
VIKAS KHANNA
Attorney for the United States Acting
Under the Authority Conferred by
18 U.S.C. § 515
By: /s/ Jessica R. Ecker

JESSICA R. ECKER
RAY MATEO
Assistant United States Attorneys
By: /s/ Darren Halverson

DARREN HALVERSON
Trial Attorney
Dated: March 14, 2024

Newark, New Jersey
cc: Seth Levine, Esq.

Paul Murphy, Esq.
Sarita Kedia, Esq.
3
Additionally, because of the substantial overlap in evidence and witness testimony, severance
would create a “tactical disadvantage to the government from disclosure of its case” to whichever
of Farese or Gatto were tried second. United States v. Jackson, 649 F.2d 967, 973 (3d Cir. 1981).
27
CERTIFICATE OF SERVICE
I certify that, on March 14, 2024, I caused service of the foregoing on all counsel of
record through the Court’s electronic filing system.
/s/ Jessica R. Ecker

JESSICA R. ECKER
Assistant U.S. Attorney
28

Brief Identifying Keaton Langston As Co-Conspirator 1

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Case 2:21-cr-00877-MEF Document 136 Filed 03/14/24 Page 1 of 33 PageID: 840

UNITED STATES DISTRICT COURT

UNITED STATES OF AMERICA,

v. Crim. No. 21-877

THE UNITED STATES’ MEMORANDUM OF LAW

II. BACKGROUND ............................................................................................................... 2

A. The Conspiracy Alleged in the Indictment ......................................................................... 3

2. The Gatto Charges (Counts Nine through Eleven) ....................................................... 5

B. The Evidence to Be Presented at Trial ................................................................................ 5

1. Overview of the Brace Conspiracy ............................................................................... 6

2. Farese and Gatto’s Roles in the Brace Conspiracy....................................................... 8

3. Trials of Farese and Gatto Require Several Overlapping Witnesses.......................... 14

III. ARGUMENT ................................................................................................................... 15

A. Gatto and Farese Properly Were Joined in the Indictment ............................................... 15

B. The Drastic Remedy of Severance Is Not Warranted ....................................................... 17

1. Spillover Prejudice, If Any, Is Insufficient to Justify Severance ............................... 19

2. Judicial Economy Favors a Joint Trial of Farese and Gatto ....................................... 26

IV. CONCLUSION ............................................................................................................... 27

United States v. Alegria,

United States v. Askew,

United States v. Boyd,

United States v. Bryant,

United States v. Cardascia,

United States v. Cavale,

United States v. Console,

United States v. Crinel,

United States v. Curanovic,

United States v. Davis,

United States v. Day,

United States v. DePeri,

United States v. Eufrasio,

United States v. Ferrarini,

United States v. Hart,

United States v. Inigo,

United States v. Irizarry,

United States v. Jackson,

United States v. Jimenez,

United States v. Lane,

United States v. Lindauer,

United States v. Lore,

United States v. Malik,

United States v. McGill,

United States v. McGlory,

United States v. Potashnik,

United States v. Provenzano,

United States v. Reyeros,

United States v. Savage,

United States v. Somers,

United States v. Spicer,

United States v. Thompson,

United States v. Thornton,

United States v. Urban,

United States v. Valentine,

United States v. Voigt,

United States v. Walker,

United States v. Ward,

Zafiro v. United States,

Fed. R. Crim. P. 8 ....................................................................................................... 15, 16, 17, 21

Fed. R. Crim. P. 14 ....................................................................................................... 1, 15, 17, 18

Fed. R. Crim. P. 12(b)(3)(D)........................................................................................................... 1

conspirators, and thus that they should be tried together.

meritorious arguments as to why limiting instructions would not be sufficient.

Accordingly, severance would waste valuable judicial resources.