US Judge Declines to Immediately Dismiss Adani Indictment, Orders DOJ to Explain Decision

New Delhi: A US federal judge has declined to immediately approve the Donald Trump administration's request to throw out the criminal indictment against billionaire tycoon Gautam Adani and seven other defendants, directing the US Department of Justice (DOJ) instead to provide a detailed factual explanation for its abrupt decision to abandon one of its highest-profile foreign bribery prosecutions.

"The Government's terse, bland and conclusory statement affords the court neither a sufficient basis to reach any conclusion, nor the opportunity to conduct any analysis of the Government's request for dismissal," Judge Garaufis wrote in an order released on Friday (June 26).

The US judge asserted that the DOJ had "failed to meet its obligation to supply adequate reasoning and sufficient facts" to justify dismissing the indictment. Without that information, he wrote, the court could not properly exercise its own discretion and instead “risks abusing its discretion in deciding the motion”.

He directed prosecutors to provide, by July 13, "each reason" for seeking dismissal of the indictment and "sufficient factual support for each basis" before the court considers whether to grant the request.

The ruling marks an unexpected hurdle for the Justice Department, which on May 18 moved to dismiss with prejudice the indictment against Gautam Adani, Sagar Adani, Vneet Jaain and five other defendants. The DOJ had only stated that it had reviewed the case and decided, "in its prosecutorial discretion, not to devote further resources to these criminal charges against individual defendants".

Judge Garaufis noted that Rule 48(a) of the Federal Rules of Criminal Procedure requires that the government's request to dismiss an indictment receive the court's approval and that prosecutors must provide the reasons and underlying facts supporting such a request before the court can exercise its discretion.

Calling Rule 48(a) a "sunshine provision", the judge said prosecutors have an obligation to provide sufficient reasons supporting dismissal. Without that information, he wrote, the court cannot perform its own duty to independently evaluate the request.

Judge Garaufis's insistence on a fuller explanation comes amid wider judicial scrutiny of Justice Department requests to abandon prosecutions during the Trump administration. The New York Times noted that in the federal corruption case against former New York City mayor Eric Adams, the judge, Dale Ho, ultimately dismissed the charges in April 2025 but described the government's justification for seeking dismissal as "unprecedented and breathtaking in its sweep". Quoting George Washington University law professor Thomas Frampton, the Times said judges were "increasingly pushing back and using that power to explore the nonprosecution decisions".

The order also specifically refers to the 15-page submission filed by Adani's lawyers on June 24 supporting the government's motion. The defence had argued that courts possess only limited authority to deny a consensual Rule 48(a) dismissal and detailed what it described as months of legal submissions that persuaded prosecutors the indictment was fundamentally flawed.

Judge Garaufis acknowledged receiving the letter and said he appreciated the defence's arguments. However, he stressed that "it is the Government's obligation to come forward and to provide its rationale for dismissal, including sufficient factual information underlying the Government's decision to abandon the case".

As reported earlier by The Wire, the June 24 filing disclosed that Adani's legal team submitted nearly 500 pages of legal arguments, factual material and expert opinions to the Justice Department between February and April this year. Those submissions included reports from a Harvard Law School securities law professor, a former Securities and Exchange commissioner and acting chairman, a former chief justice of India and a former chairperson of India's Central Electricity Authority.

The New York Times had earlier reported that during an April meeting at the Justice Department, Adani's lawyer, Robert Giuffra, offered a $10 billion investment in the US economy and the creation of 15,000 jobs if the charges were dropped. Citing people familiar with the meeting, the newspaper said prosecutors told Giuffra that the proposed investment would not influence the criminal case.

The filing by the Adani defence team argued that its submissions demonstrated four principal flaws in the indictment. It argued that US securities laws did not apply because the transactions were predominantly foreign, that the statements cited in the indictment were not legally actionable, that there was insufficient evidence linking the defendants to the alleged misstatements, and that prosecutors would be unable to prove the underlying bribery allegations.

The criminal case is one of two parallel proceedings launched by US authorities in November 2024. While the DOJ charged Gautam Adani, Sagar Adani and others with offences including securities fraud conspiracy, wire fraud conspiracy and conspiracy to violate the Foreign Corrupt Practices Act over an alleged $250 million bribery scheme involving Indian state electricity contracts, the Securities and Exchange Commission separately sued Gautam and Sagar Adani for allegedly misleading investors during a 2021 bond offering.

Four days before the Justice Department moved to dismiss the criminal indictment, the SEC announced it had reached a proposed settlement under which Gautam Adani agreed to pay a $6 million civil penalty and Sagar Adani $12 million, without admitting or denying the regulator's allegations. The proposed settlement would also permanently bar them from future violations of specified US securities laws, but still requires Judge Garaufis's approval.

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