DOJ, Forex Cartel trader clash over exculpatory evidence

The Department of Justice (DOJ) and Richard Usher, a Forex trader known for his participation in the “Cartel” chatroom, have clashed over access to evidence that led to Usher’s acquittal back in 2018.

A letter filed by Usher and the DOJ with the New York Southern District Court on September 17, 2021, reveals that the trader wants the exculpatory evidence preserved, whereas the DOJ insists that the materials have to be destroyed.

Let’s recall that, in January 2017, a grand jury indicted Usher and two other traders for their alleged roles in a conspiracy to manipulate the price of U.S. dollars and euros exchanged in the FX spot market. In connection with that criminal proceeding, Usher entered into a protective order providing that he could use documents disclosed by the government in discovery “only for the purposes of the defense of, and the pursuit of any appeals in, this criminal action.”

The protective order further provided that any documents disclosed to Plaintiff “[s]hall be returned to the Government or destroyed following the conclusion of this case . . . , together with any and all copies thereof.”

In October 2018, a jury acquitted Usher of the criminal charges against him. Because his criminal case had concluded, he was required to “return” or “destroy” all documents that the government had produced to him in discovery, “together with any and all copies thereof.” Instead, Usher retained the documents.

Now, as shown by the letter filed with the Court today, Usher seeks to keep the documents.

Usher says he is merely asking that the Court not order the destruction of the evidence that could potentially be relevant to future litigations in which he may need to defend himself.

Specifically, Usher asks that the Court require the government to hold the files for a period of three years, until such time that he has need for them. At that point, Usher would first reach out to the government, and only if a dispute arises, he would seek relief from this Court.

The trader claims he has suffered through nearly a decade of government investigations and prosecutions that targeted him successively. Those investigations relating to the FX chatroom conduct were both foreign and domestic. Usher has no certainty that his ordeal is finally over.

His experience justifies his caution: the OCC action remained dormant for a year and a half after Usher’s acquittal in the criminal trial – at which point his prosecution commenced anew.

The documents subject to the Protective Order are voluminous – numbering in the millions. During the FX criminal investigation, the DOJ both created and collected these documents from third parties. It is unclear whether most or any of these parties have retained these millions of documents, either in full or in part, which they produced to DOJ seven or eight years ago.

Usher argues that when and if a potential action against Mr. Usher materializes (whether foreign or domestic), retrieving any of these documents from third parties may prove a quixotic endeavor if steps are not taken now to ensure their preservation. Usher says that he may not be able to obtain the same set of documents as before, and third parties would have to go through the renewed burden of conducting searches through their databases.

The DOJ opposes Usher’s motion. The Government notes that Usher makes no attempt to identify particular documents that he finds particularly helpful to him or exculpatory – and “surely, in a pool of 2.8 million records, in a matter in which a grand jury found probable cause to indict Mr. Usher, they cannot all be exculpatory”. Instead, according to the DOJ, Usher seeks to retain access to all 2.8 million criminal discovery records.

According to the DOJ, the Court should also reject Usher’s request that the Government be ordered to retain the entire set of criminal discovery until late 2024, just in case he needs it. A vague and hypothetical desire for another party’s documents is unavailing, the DOJ says.

The DOJ argues that Usher has to return or destroy the entire discovery set by September 24, 2021, or another date preferred by the Court.