UNITED STATES OF AMERICA v. KENNETH NEWCOMBE (2026)

MEMORANDUM ORDER

Defendant Kenneth Newcombe is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, commodities fraud, conspiracy to commit securities fraud, and securities fraud. See ECF No. 1 (“Indictment”). He moves, pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure, to transfer venue to the Central District of California, where he resides. See ECF No. 28. For the reasons stated below, Mr. Newcombe's motion will be granted subject to the fulfillment of certain conditions set forth below.

I. Background

The six charges in this case relate to an alleged scheme to commit fraud in the carbon-credit market. According to the Indictment, Mr. Newcombe was the Chief Executive Officer of CQC Impact Investors LLC (“CQC”), a company that generated carbon credits through emissions-reduction projects and sold those credits to other companies for a profit. See Indictment ¶¶ 2, 21. One of CQC's projects involved installing more efficient cookstoves in Africa and Southeast Asia. See id. ¶ 3. CQC received carbon credits for that project by submitting to an issuer data on how much fuel the cookstoves saved and how many cookstoves were installed and operational. See id.

The Indictment alleges that from at least in or about 2021 through 2023, Mr. Newcombe submitted false and misleading data to the issuer for CQC's cookstove projects in Malawi, Zambia, Angola, Zimbabwe, Thailand, Cambodia, and Vietnam. See id. ¶¶ 31, 33, 34. In particular, Mr. Newcombe submitted false data on the amount of fuel consumed by the new cookstoves (which data were used to calculate the amount of fuel saved per stove) and the percentage of installed stoves that remained operational (which was used to calculate the number of stoves for which CQC could claim emission reductions). See id. ¶¶ 13, 31, 38. As a result of Mr. Newcombe's fraud, the issuer awarded CQC millions more carbon credits than CQC had earned. See id. ¶ 4.

The Indictment further alleges that CQC then sold the carbon credits it had fraudulently obtained to unsuspecting purchasers. See id. Relying on the false data, Mr. Newcombe also allegedly deceived an investor into committing $250 million to CQC. See id. ¶¶ 52, 55. The investor ultimately sent CQC $150 million and Mr. Newcombe $16 million. See id.

II. Discussion

Rule 21(b) of the Federal Rules of Criminal Procedure provides that “[u]pon the defendant's motion, the court may transfer the proceeding ․ against that defendant to another district for the convenience of the parties, any victim, and the witnesses, and in the interest of justice.” Fed. R. Crim. P. 21(b). In deciding whether transfer is appropriate, a district court must consider and balance the nonexclusive factors enumerated by the Supreme Court in Platt v. Minnesota Mining & Manufacturing Co.:

(a) location of the defendants; (b) location of the possible witnesses; (c) location of the events likely to be at issue; (d) location of relevant documents and records; (e) potential for disruption of the defendants’ business if transfer is denied; (f) expenses to be incurred by the parties if transfer is denied; (g) location of defense counsel; (h) relative accessibility of the place of trial; (i) docket conditions of each potential district; and (j) any other special circumstance that might bear on the desirability of transfer.

United States v. Maldonado-Rivera, 922 F.2d 934, 966 (2d Cir. 1990). “No one of these [factors] is dispositive, and it remains for the court to try to strike a balance and determine which factors are of greatest importance.” Id. (cleaned up).

While the Court has considered each of these factors, there is one factor favoring transfer that looms particularly large: Mr. Newcombe's health. Very serious health challenges have already led to the trial of this defendant being significantly delayed, and while Mr. Newcombe has made significant recovery, nevertheless, according to his physicians, a trial in New York poses a substantially greater risk to Mr. Newcombe's health than a trial in Los Angeles (near where he resides) because it would require Mr. Newcombe to be physically separated from his principal treating physicians, who closely monitor his health. See ECF No. 28-3 ¶¶ 10, 13. A trial in New York would also require Mr. Newcombe to travel from California to New York, which might expose him to pathogens that might result in life-threatening illness, and to alter his present routine, including his strict protocol for sourcing and sterilizing food. See id. ¶ 16. Other district courts have found that health issues like these weigh in favor of transfer. See, e.g., United States v. Haley, 504 F. Supp. 1124, 1129 (E.D. Pa. 1981); United States v. Brockman, 2021 WL 28374, at *7 (N.D. Cal. Jan. 4, 2021).

On the other hand, while Mr. Newcombe has counsel in New York and California, responsibility for the Government's side of this complicated case has been lodged with the prosector team from the Southern District of New York, who have already expended a great deal of time and effort not only investigating this case but also preparing for trial. And the undersigned has himself spent a great deal of time familiarizing himself with this case. Furthermore, none of the Platt factors (b) through (i) weighs strongly in favor of transfer.

Under these unusual circumstances, there is an obvious practical solution. If the Government can arrange for its team to be designated by the Department of Justice and the District Court of the Central District of California to try this case in federal court in Los Angeles, the motion to transfer will be allowed. Further, the undersigned will also seek to be designated by the Chief Justice to try this case in that District.¹

Accordingly, the Government is directed to arrange for such a designation, and the undersigned will seek a designation as well. Upon such designations being approved, this Court will transfer this case to the Central District of California for trial. Meanwhile, this case will remain in the Southern District of New York.

III. Conclusion

For the foregoing reasons, Mr. Newcombe's motion to transfer venue will be granted upon the fulfillment of the conditions specified above.

FOOTNOTES

1.   It is also suggested that Mr. Newcombe's New York counsel apply to be admitted pro hac vice in the Central District of California, although, as noted, he already has California counsel.

JED S. RAKOFF, U.S.D.J.