U.S. v. Pelullo

• Decision Date: 25 February 2005
• Docket Number: No. 02-2710.,No. 02-2808.,No. 02-2957.,02-2710.,02-2808.,02-2957.
• Parties: UNITED STATES of America, Appellant v. Leonard A. PELULLO, Cross-Appellant. United States of America, v. Leonard A. Pelullo Appellant.
• Court: U.S. Court of Appeals — Third Circuit

399 F.3d 197

UNITED STATES of America, Appellant v. Leonard A. PELULLO, Cross-Appellant.

United States of America, v. Leonard A. Pelullo Appellant.

No. 02-2710.

No. 02-2808.

No. 02-2957.

United States Court of Appeals, Third Circuit.

Argued September 28, 2004.

February 25, 2005.

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Christopher J. Christie, United States Attorney, George S. Leone, Chief, Appeals Division, Newark, Norman Gross (Argued), Assistant United States Attorney, United States Attorney's Office, Camden Federal Building and United States Courthouse, Camden, for Appellant/Cross-Appellee United States of America.

Lawrence S. Lustberg, (Argued), Thomas R. Valen, Mark A. Berman, Philip James Degnan, Gibbons, Del Deo, Dolan, Griffinger & Vecchione, A Professional Corporation, Newark, for Appellee/Cross-Appellant Leonard A. Pelullo.

Before ROTH, BARRY and GARTH, Circuit Judges.

OPINION

GARTH, Circuit Judge.

Leonard A. Pelullo was indicted on December 9, 1994. He was convicted by a jury on November 8, 1996, following a six-week trial in the United States District Court for the District of New Jersey, of all 54 counts of the indictment, which charged conspiracy and substantive counts to embezzle funds belonging to an employee benefit plan and to launder the proceeds of that embezzlement. The District Court denied a host of post-trial motions, and imposed a prison sentence of 210 months for each of the money-laundering counts and 60 months for the conspiracy and embezzlement counts, to be served concurrently with the twenty-four year prison sentence previously imposed against Pelullo for prior racketeering and wire fraud convictions in the District Court for the Eastern District of Pennsylvania. The District Court also ordered Pelullo to make restitution in the amount of $898,688 and to forfeit $3,562,987 to the United States.

After the judgment in this case was affirmed by this Court on direct appeal, 185 F.3d 863 (3d Cir.1999) (table decision),¹ Pelullo filed a series of motions for a new trial pursuant to Federal Rule of Criminal Procedure 33. Pelullo essentially argued that the government failed to disclose exculpatory evidence at the time of trial, in violation of its obligations under Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), thus rendering his conviction constitutionally infirm. Additionally, Pelullo filed a motion for collateral relief pursuant to 28 U.S.C. § 2255, contending, inter alia, that the District Court failed to provide the jury with specific unanimity instructions in violation of his rights under the Sixth Amendment.

On May 17, 2002, after consolidating the new trial motions and the § 2255 motion, the District Court granted Pelullo a new trial, concluding that the government had in fact suppressed material information, in contravention of its Brady obligations. The District Court denied Pelullo's request for § 2255 relief, but granted a certificate of appealability with respect to one issue: whether the Court's failure to provide the jury with specific unanimity instructions violated Pelullo's Sixth Amendment rights.

The government has appealed from the grant of a new trial, and Pelullo has appealed from the denial of collateral relief.²

Because we conclude that the District Court erred in the threshold suppression determination prescribed by the Brady analysis, we will reverse the District Court's grant of a new trial. We also conclude that Pelullo's challenge to the jury instructions is procedurally barred by United States v. Frady, 456 U.S. 152, 167, 102 S.Ct. 1584, 71 L.Ed.2d 816 (1982), and we will thus affirm the District Court's denial of his request for collateral relief. Accordingly, we will direct the District Court to reinstate the judgment of Pelullo's conviction and his sentence. In addition, we will remand to the District Court for resolution of the remaining issues raised by Pelullo in his § 2255 motion,³ and direct that the District Court, as a priority matter, give serious consideration to vacating its Order of January 29, 2002, which had released Pelullo on bail.

I.

Pelullo has been the subject of federal criminal prosecutions in the Eastern District of Pennsylvania, the Middle District of Florida, and the District of New Jersey. He has, moreover, been persistent in challenging his various convictions, filing numerous notices of appeal with this Court from both the Pennsylvania and New Jersey prosecutions.⁴ In this appeal, however, which concerns only the New Jersey proceedings, it is the government that is appealing the District Court's grant of a new trial based on the government's purported failure to abide by its Brady obligations. We are thus called upon to revisit the parameters of prosecutorial obligations under Brady. In doing so, and for reasons which will later become apparent, we are mindful of the well-established principle that "the government is not obliged under Brady to furnish a defendant with information which he already has or, with any reasonable diligence, he can obtain himself." United States v. Starusko, 729 F.2d 256, 262 (3d Cir.1984) (citation omitted).

II.

We have jurisdiction over the government's appeal under 18 U.S.C. § 3731 and Pelullo's appeal under 28 U.S.C. §§ 2253, 2255. Pelullo, however, raised a number of issues in his § 2255 motion for collateral relief, only one of which was certified by the District Court for interlocutory appeal under 28 U.S.C. § 1292(b). We granted Pelullo permission to appeal under § 1292(b), thereby establishing appellate jurisdiction only as to that one issue. We express no opinion as to the validity of Pelullo's remaining contentions, which will need to be addressed in the first instance by the District Court upon remand.

We ordinarily review a district court's ruling on a motion for a new trial on the basis of newly discovered evidence for abuse of discretion. See, e.g., Government of Virgin Islands v. Lima, 774 F.2d 1245, 1250 (3d Cir.1985). However, where, as here, the motion for a new trial is based on a Brady claim, which presents questions of law as well as questions of fact, we "will conduct a de novo review of the district court's conclusions of law as well as a `clearly erroneous' review of any findings of fact." United States v. Perdomo, 929 F.2d 967, 969 (3d Cir.1991) (citing Carter v. Rafferty, 826 F.2d 1299, 1306 (3d Cir.1987)). Further, we exercise plenary review over the District Court's denial of collateral relief. United States v. Lloyd, 188 F.3d 184, 186 (3d Cir.1999).

III.

A thorough review of the trial evidence is set forth in the District Court's opinion denying various post-trial claims submitted by Pelullo before his direct appeal in this case, and thus need not be recounted in detail here. See United States v. Pelullo, 961 F.Supp. 736, 744-50 (D.N.J.1997), aff'd, 185 F.3d 863. As such, we begin our background discussion by only briefly recapitulating the salient facts of that factual summary so as to contextualize the Brady issues raised in this appeal.

Pelullo's indictment and subsequent conviction arose from the government's investigation of Pelullo's management of Compton Press, Inc. ("Compton Press"), the Compton Press, Inc. Retirement Plan, and the Compton Press, Inc. Thrift Plan (collectively, the "benefit plans"). At all relevant times, Pelullo controlled Compton Press and, concomitantly, the benefit plans. Through his long-time associate, David Hellhake, and a number of other employees and associates, Pelullo systematically diverted benefit plan assets for his own business and personal uses. Pelullo's modus operandi was to use a complex series of wire transfers, which can be classified in three principal sets of transactions.

1.

In the first of these transactions, Pelullo withdrew over $1.15 million from various brokerage accounts owned by the benefit plans in order to finance an attempted corporate takeover of DWG Corp. (a holding company for Arby's and Royal Crown Cola), as well as to pay for certain personal expenses. He transferred that money to two separate accounts, hiding the true nature of the transactions from the plan Trustees. Pelullo transferred $750,000 to a corporate bank account of Granada Investments, Inc., the company Pelullo used to effect the contemplated takeover. Of these funds, some $70,000 were subsequently filtered into various accounts owned by Pelullo and his family members. Pelullo then transferred $400,000 to Paribas, an investment broker retained by Pelullo to handle the DWG takeover.

2.

The second set of transactions involved efforts to finance the purchase of Ambassador Travel, a bankrupt company, through a Pelullo-controlled entity called Away to Travel South ("ATTS"). Pelullo caused $1.326 million to be transferred from the benefit plans' brokerage accounts, with the bulk of funds going toward the purchase of Ambassador Travel. Much of the money remaining after the ATTS purchase eventually filtered down to Pelullo and his family. Pelullo accomplished this transaction by disguising the transfers as a loan to ATTS.

3.

The third set of transactions focused on the transfer of monies from an annuity contract, the assets of which belonged to the Compton Press, Inc. Retirement Plan. Pelullo, through his subordinates, terminated the contract. He then appropriated the proceeds from the annuity, which totaled $1.4 million, to finance other acquisition projects and personal endeavors.

At issue in this appeal are documents obtained after trial from two distinct sources. The first set of documents was drawn from the hundreds of thousands of business records Pelullo had stored in a Miami warehouse (the "warehouse documents"). These documents had been seized by the FBI in connection with an investigation of Pelullo (unrelated to this case) in the Middle District of Florida ("MDFLA"). Pelullo's lawyers claimed to have received the documents from the United States Attorney's Office ("USAO") in the...