People v. Kronberg

• Decision Date: 23 April 1998
• Citation: 243 A.D.2d 132,672 N.Y.S.2d 63
• Parties: , 1998 N.Y. Slip Op. 3749, 1998 N.Y. Slip Op. 3750 The PEOPLE of the State of New York, Appellant, v. Marielle KRONBERG, Robert Primack and Lynne Speed, Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

Page 63

672 N.Y.S.2d 63

243 A.D.2d 132, 1998 N.Y. Slip Op. 3749,

1998 N.Y. Slip Op. 3750

The PEOPLE of the State of New York, Appellant, v. Marielle KRONBERG, Robert Primack and Lynne Speed,

Defendants-Respondents.

Supreme Court, Appellate Division,

First Department.

April 23, 1998.

Christine Duisin, of counsel; Edward D. Saslaw and Victor Genecin, on the brief (Dennis C. Vacco, attorney), for appellant.

Susan C. Wolfe and David M. Greenberg, of counsel (Hoffman Pollok & Pickholz LLP, attorneys), for defendants-respondents.

Before SULLIVAN, J.P., and ROSENBERGER, NARDELLI, WILLIAMS and TOM, JJ.

SULLIVAN, Justice Presiding.

The People appeal from two orders, the first of which, entered on or about February 16, 1995, vacated the convictions, after jury trial, of all three defendants of a scheme to defraud in the first degree (Penal Law § 190.65) and, with respect to defendant Primack, the additional conviction of the crime of conspiracy in the fifth degree (Penal Law § 105.05[1] ) on the ground that the People, in the trial of this matter, violated their Rosario obligations.

In its second order, entered on or about December 1, 1995, the trial court held that, had defendant Kronberg's conviction not already been vacated by the order of February 16, 1995, it would vacate the conviction on the additional, independent ground that, at trial, her use immunity had been violated. Defendant Kronberg purports to cross-appeal from certain aspects of the court's rationale underlying its December 1, 1995 order that she views as adverse to her. Kronberg is not aggrieved by that order, and there is no provision in CPL art. 450 authorizing such an appeal (see, People v. Laing, 79 N.Y.2d 166, 581 N.Y.S.2d 149, 589 N.E.2d 372; People v. Goodfriend, 100 A.D.2d 781, 474 N.Y.S.2d 65, affd. 64 N.Y.2d 695, 485 N.Y.S.2d 519, 474 N.E.2d 1187), and we dismiss it.

The defendants were convicted after a nearly four-month trial at which the People presented the testimony of 24 witnesses showing that defendants had used deceptive practices to solicit loans on behalf of various corporations that were part of the Lyndon LaRouche organization. In procuring these loans, the defendants promised high rates of return, knowing that the particular borrower corporation was not making a profit and that the demands of prior lenders for repayment were not being honored.

While defendants Primack and Speed were sentenced, Kronberg's sentence was held in abeyance pending disposition of a pre-trial motion she had made for dismissal of the indictment based on an alleged violation of grants of use immunity she had received in connection with her compelled testimony before a Federal Grand Jury in the Eastern District of Virginia investigating the Lyndon LaRouche organization and at the subsequent trial of LaRouche in the United States District Court. The trial court had directed that a hearing be held on that issue in the event Kronberg were found guilty. After the guilty verdict and during the pendency of the alleged violation-of-use immunity hearings, which were held over a period of three and one-half years, the three defendants moved pursuant to CPL 440.10(1)(f) to vacate their convictions for alleged Rosario violations. Since Kronberg had never been sentenced on the jury's guilty verdict, the trial court deemed her motion a CPL 330.30 application to set aside the verdict. After a hearing, the court, as noted, finding Rosario violations, vacated the convictions of all three defendants. It subsequently vacated Kronberg's conviction on the additional ground that the People failed to prove that their evidence was not derived from her Federal immunized testimony.

The Federal use-immunity statute, 18 U.S.C. § 6002, provides, in pertinent part, "[N]o testimony or other information compelled under [an] order [granting use immunity] (or any information directly or indirectly derived from such testimony or other information) may be used against the witness in any criminal case, except a prosecution for perjury, giving a false statement, or otherwise failing to comply with the order." Once a defendant presents evidence that he or she has been immunized, the prosecution must shoulder "the heavy burden of proving that all of the evidence it proposes to use was derived from legitimate independent sources." (Kastigar v. United States, 406 U.S. 441, 461-462, 92 S.Ct. 1653, 1665, 32 L.Ed.2d 212; Braswell v. United States, 487 U.S. 99, 117, 108 S.Ct. 2284, 2295, 101 L.Ed.2d 98.) Such a showing is required with respect to "any use, direct or indirect, of the compelled testimony and any information derived therefrom." (Kastigar v. United States, supra, at 460, 92 S.Ct. at 1664.) This burden "is not limited to a negation of taint; rather, it imposes on the prosecution the affirmative duty to prove that the evidence it proposes to use is derived from a legitimate source wholly independent of the compelled testimony." (Id.; United States v. Nanni, 59 F.3d 1425, 1432, cert. denied 516 U.S. 1014, 116 S.Ct. 576, 133 L.Ed.2d 499 [2d Cir].) "Neither [the] mere 'assertion that the immunized testimony was not used' nor even proof that the prosecutor 'had no direct or indirect access to the grand jury minutes' is sufficient." (Id., quoting United States v. Nemes, 555 F.2d 51, 55 [2d Cir].) The burden, however, is not insurmountable. (United States v. Nanni, supra at 1432.) In that regard, the court must determine whether the prosecutors would have taken the same steps "entirely apart from the motivating effect of the immunized testimony." (Id. at 1432, quoting United States v. Biaggi, 909 F.2d 662, 689 [2nd Cir], cert. denied 499 U.S. 904, 111 S.Ct. 1102, 113 L.Ed.2d 213.) If they would have taken such steps, there is no violation of the defendant's Fifth Amendment rights.

A summary of the evidence adduced at the Kastigar hearing follows. Four witnesses, Virginia Assistant Attorney General (AAG) John Russell, Assistant United States Attorney (AUSA) Kent Robinson, and New York Assistant Attorney Generals (AAG) Dawn Cardi and Rebecca Mullane, testified for the People, who also presented documentary evidence, including transcripts of the New York Grand Jury proceedings that led to the underlying indictment and transcripts of Kronberg's use-immunized testimony, both before the Federal Grand Jury and at the trial in the District Court.

The transcripts of the New York Grand Jury proceedings showed that the Grand Jury presentation of the instant case was completed more than three months before Kronberg gave her first immunized testimony to the Federal Grand Jury. These transcripts contain the testimony of seven persons who advanced loans to LaRouche corporations and show that, well before Kronberg gave her immunized testimony, the People had extensive evidence that she was actively involved in loan solicitations at a time when she knew that earlier loans were in default, that she had signed promissory notes knowing that the LaRouche corporations needed to borrow from one another to repay their loans.

Kronberg testified before the Federal Grand Jury on December 16, 1987, February 25 and June 21, 1988 and at the LaRouche trial in the Federal District Court on December 1, 1988 as to her role in the early stages of the loan system and in a LaRouche entity known as New Ben Franklin Publishing House (Publishing House) and its publication of a book, Dope, Inc., which was used in the fund-raising efforts. She admitted to signing promissory notes, knowing of the organization's expanding loan problems, and also testified about the blurring of the various LaRouche corporate entities. She was unable, she testified, to explain Publishing House records after the date in 1982 when Richard Welsh, an accountant for the LaRouche organizations, who was indicted on February 17, 1987 by a State Grand Jury in Virginia, took over its financial control. As the available New York Grand Jury transcripts show, these subjects were well known to the New York authorities long before Kronberg's first appearance before the Federal Grand Jury and were thoroughly presented to the New York Grand Jury. Both Elizabeth Sexton and Florence Dean, lenders, testified before the New York Grand Jury that they had loaned money for the publication of Dope, Inc. In both the Federal Grand Jury proceedings and Federal trial, Kronberg testified about the organization's support of LaRouche's living expenses.

In 1986, AUSA Robinson of the Alexandria, Virginia office became involved in an investigation of the financial operations of the LaRouche organizations. At about the same time, John Russell, a Virginia AAG, was conducting a more narrowly focused State investigation, concerned primarily with the loan process. Although there was some overlapping in the investigations, Russell was cooperating with ongoing Federal investigations in Massachusetts and Virginia. He testified, as did Robinson, that on October 5th and 6th, 1986, as the result of the execution of both Federal and State search warrants at LaRouche offices in Virginia, agents seized approximately 400 boxes of documents, including a November 24, 1981 letter from Kronberg to "Dear Lyn" and 3,000 separate loan files relating to LaRouche fundraising activities and documenting the issuance to various lenders of promissory notes, including those signed by Kronberg on behalf of Publishing House. Sometime in December 1986, Russell met with New York AAG Katherine Law, at her request, to discuss, in general terms, their respective investigations. At that time, Law decided not to use any of the documents and evidence seized in the earlier searches.

At around the same time, on December 16, 1986 and one month later, on January 16, 1987, the New York Grand Jury heard from several witnesses, one of whom, Michael Hudson, testified that, in December 1980, LaRouche members acquainted him with Publishing House, described as debt free, and that, after he, his attorney and Kronberg...