U.S. v. Klauber

• Decision Date: 29 November 1979
• Docket Number: No. 78-5169,78-5169
• Citation: 611 F.2d 512
• Parties: 5 Fed. R. Evid. Serv. 126 UNITED STATES of America, Appellee, v. Gerald N. KLAUBER, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 512

611 F.2d 512

5 Fed. R. Evid. Serv. 126

UNITED STATES of America, Appellee, v. Gerald N. KLAUBER, Appellant.

No. 78-5169.

United States Court of Appeals, Fourth Circuit.

Argued Sept. 14, 1979.

Decided Nov. 29, 1979.

Michael E. Marr, Baltimore, Md. (Joseph L. Evans, Baltimore, Md., on brief), for appellant.

Herbert Better, Asst. U. S. Atty., Baltimore, Md. (Russell T. Baker, Jr., U. S. Atty., and Joshua R. Treem, Asst. U. S. Atty., Baltimore, Md., on brief), for appellee.

Before HAYNSWORTH, Chief Judge, and WINTER and MURNAGHAN, Circuit Judges.

MURNAGHAN, Circuit Judge:

Gerald N. Klauber was indicted on 26 counts under the mail fraud statute, 18 U.S.C. § 1341, and one count of racketeering under 18 U.S.C. § 1962. ¹ Ten of the mail fraud counts were nolle prossed prior to trial. The jury found Klauber guilty on the sixteen remaining mail fraud counts and on the racketeering count.

The scheme or artifice to defraud and the pattern of racketeering activity asserted against Klauber grew out of his conduct as a partner in the law firm of Fine and Klauber, P.A. The evidence at trial permitted a jury conclusion that Klauber was engaged in a practice in which, with respect to personal injury cases in which he or his firm represented plaintiffs, Klauber sought inflated statements from doctors in which charges were set forth for visits by the plaintiffs which had not actually occurred. Subsequent to settlements with insurance companies based on such inflated statements from doctors, Klauber reduced the amounts actually remitted to the doctors and sometimes diverted amounts received in settlement with respect to one plaintiff's case to a doctor not involved in the case but retained with respect to some other plaintiff.

Klauber principally appeals because the government refused to grant immunity for a witness, Michael Simons, whom Klauber asserted he wished to call on his behalf. Klauber did not actually call Simons to the stand, advancing as his reason the perceived futility, inasmuch as Simons' attorney had stated he would assert the constitutional privilege against self-incrimination as to every substantive question asked, unless Simons were granted use immunity for his trial testimony.

Simons was a former associate in the firm of Fine and Klauber, P.A. He had testified before the Grand Jury investigating the activities of doctors and lawyers in the Baltimore metropolitan area, the Grand Jury which indicted Klauber. Simons' testimony before the Grand Jury had been pursuant to a grant of use immunity. See 18 U.S.C. § 6001 Et seq. Klauber asked the district judge who presided at the trial to require that the government grant use immunity to Simons to testify in Klauber's defense. The request was denied.

Klauber's proffer of what Simons' testimony would have been, had he been granted immunity, was:

1. Simons would have denied having had a conversation with Powell, another former associate of Fine and Klauber, as to which Powell, under informal or "letter" immunity, ² had testified as part of the government's case. Powell's testimony had referred to statements by Simons to him relative to destruction of law firm files in circumstances indicative of guilty motivation.

2. Simons would state that file destruction by the law firm was a normal matter carried out in the ordinary course of business and that he had not wilfully destroyed settlement sheets.

3. Simons would testify that clerks at Fine and Klauber inadvertently destroyed files that the firm intended to retain, and that Klauber had no connection with the destruction of files.

4. Simons would contradict testimony of another witness for the government, Dr. Sobkov, to the effect that Sobkov had discussed with Simons inflated medical bills and back-dated medical reports. The Sobkov testimony to which the proffer was directed had been elicited not by the government but by the defendant himself on cross-examination of Sobkov.

Since Klauber did not call Simons to the stand, the contention that he would have asserted his Fifth Amendment right and refused to testify without a grant of immunity from the government is not established as we believe it normally would be required to be for the question Klauber raises to be preserved. ³ However, Klauber's counsel did establish in the record that he had spoken to counsel for Simons and received a flat statement that Simons would not testify as to any aspect of the matter without a grant of immunity covering any topic on which he might be called to give answers. The action of the government at the trial indicated that it accepted the fact that Simons would not testify absent a grant of immunity. We shall, therefore, proceed on the assumption that the point had been properly preserved. However, for future guidance of trial judges and of counsel we point out:

A. Statements of intention are not the same as the actual thing in such circumstances. A witness could well be reluctant to testify and looking for a way to avoid going on the stand, although, especially when he is a member of the Bar, prepared to do his duty in court if actually put on the stand. Such a witness might well state in advance that he would not testify and would invoke the Fifth Amendment in the hopes that he thereby would not be called. Yet, if he were, in fact, summoned and put under oath, he might, indeed, testify. ⁴

B. The right to invoke the Fifth Amendment as to any question put is not absolute. The trial judge in appropriate cases may determine that a foundation for invocation of the Fifth Amendment does not exist. Zicarelli v. New Jersey Investigation Comm'n, 406 U.S. 472, 478 n.12, 480-81, 92 S.Ct. 1670, 33 L.Ed.2d 234 (1972); Hoffman v. United States, 341 U.S. 479 486, 71 S.Ct. 814, 95 L.Ed. 1118 (1951); Cf. Richardson v. State, 285 Md. 261, 265, 401 A.2d 1021, 1023-4 (1979).

We cannot, of course, speculate on what might have happened in either of these two areas had Simons, in fact, been put on the witness stand. However, we cannot say that the testimony proffered by Klauber's counsel would inherently have tended to incriminate Simons.

When we turn to Klauber's assertion of a supposed duty of the government at trial to grant immunity to Simons or of a responsibility of the district judge to invoke sanctions for a refusal of the government to grant immunity, it is important at the outset to highlight the inadequate foundation which exists for the argument. Although Klauber's counsel, by his proffer of what Simons' testimony at trial would be, indicated a detailed knowledge of what Simons stated before the Grand Jury, ⁵ there is nothing in the record to show what Simons' testimony before the Grand Jury actually was. Klauber's counsel did not at the time of trial demand production of Simons' Grand Jury testimony, because, he said at oral argument, he knew the government would not call Simons, so that the Jencks Act, 18 U.S.C. § 3500, would not apply. ⁶

The Jencks Act requires that, where a witness called by the United States has testified on direct, the court, on defendant's motion, shall order the United States to produce any statement (specifically including a statement made by the witness to a grand jury) of the witness in the possession of the United States which relates to the subject matter of the direct testimony of the witness. Perhaps Klauber's counsel felt foreclosed by the language of 18 U.S.C. § 3500(a):

In any criminal prosecution brought by the United States, no statement or report in the possession of the United States which was made by a Government witness or prospective Government witness (other than the defendant) shall be the subject of subpoena, discovery, or inspection until said witness has testified on direct examination in the trial of the case.

However, the prohibition on obtaining the Grand Jury statement contained in that statute is clearly inapplicable in this case since the very fact that the government did not intend to call Simons lifts the Simons Grand Jury testimony out of the definition of the statements as to which the prohibition in 18 U.S.C. § 3500(a) applies. Hence, if an independent basis for obtaining Simons' Grand Jury testimony existed, 18 U.S.C. § 3500(a) was no bar. Whether it would be a bar up until the time when the witness had actually testified at trial if the government had proposed to call Simons as a witness, but the Grand Jury testimony of Simons contained material exculpatory of Klauber, is a question we are not here called upon to address.

Klauber's argument that he was entitled to Simons' testimony at trial, through immunization, has implicit in it the assumption that the testimony would be "material to guilt". If so, the Grand Jury testimony of Simons may have been available to Klauber's counsel under the holding in Brady v. Maryland 373 U.S. 83, 87, 83 S.Ct. 1194, 1196, 10 L.Ed.2d 215 (1963):

We now hold that the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.

See United States v. Driscoll, 445 F.Supp. 864, 866 (D.N.J.1978); But see United States v. Mandel, 415 F.Supp. 1079 (D.Md.1976) (distinguishable since the Grand Jury testimony sought in that case was of a witness whom the government intended to call at trial, whereupon the Jencks Act would have caused the testimony to be made available to the defense).

We speak tentatively to this point, since Klauber's counsel did not at trial demand production of the Grand Jury testimony of Simons, nor assert on appeal that it was error to refuse to make such testimony available to him prior to trial. However, an absence of such actions does reduce the basis for a claim that the district judge should have addressed the request for immunization of Simons at all. It is not impossible that the trial judge, upon the making of a Brady demand for...