U.S. v. Kwang Fu Peng

• Decision Date: 26 June 1985
• Docket Number: D,No. 1262,1262
• Citation: 766 F.2d 82
• Court: U.S. Court of Appeals — Second Circuit
• Parties: UNITED STATES of America, Appellee, v. KWANG FU PENG, a/k/a "K.F. Peng," Defendant-Appellant. ocket 85-1054.

Page 82

766 F.2d 82

UNITED STATES of America, Appellee, v. KWANG FU PENG, a/k/a "K.F. Peng," Defendant-Appellant.

No. 1262, Docket 85-1054.

United States Court of Appeals Second Circuit.

Argued June 5, 1985.

Decided June 26, 1985.

Robert Polstein, New York City (Polstein, Ferrara & Campriello, Austin V. Campriello, Anthony J. Ferrara, New York City, of counsel), for defendant-appellant.

Martin J. Auerbach, Asst. U.S. Atty., S.D.N.Y., New York City (Rudolph W. Giuliani, U.S. Atty., S.D.N.Y., Stuart E. Abrams, Asst. U.S. Atty., New York City, of counsel), for appellee.

Before FEINBERG, Chief Judge, MESKILL and NEWMAN, Circuit Judges.

FEINBERG, Chief Judge.

Kwang Fu Peng appeals from an order of the United States District Court for the Southern District of New York, David N. Edelstein, J., denying his motion to dismiss an indictment because it subjected him to double jeopardy. Appellant's first trial ended in a mistrial, declared sua sponte by Judge Edelstein after the judge disqualified appellant's counsel from continuing in the case. 602 F.Supp. 298. For reasons stated below, we affirm the order of the district court.

I.

Appellant Peng was arrested in July 1984 on a complaint charging him with interstate transportation of property obtained by theft, conversion or fraud in violation of 18 U.S.C. Sec. 2314. Shortly thereafter, an indictment on this count was returned. It was soon superseded by an indictment that added a count of wire fraud, 18 U.S.C. Sec. 1343. Both of these counts arise out of the same series of transactions, the characterization of which is very much in dispute. The government has alleged that appellant defrauded certain businessmen, including one Geoffrey Harrison Galley, by holding himself out as the representative of a Far Eastern government interested in selling 400 metric tons of gold. Appellant, the government contends, was thereby able to persuade his victims to advance him $200,000 to pay for certain "expenses," a sum that appellant proceeded to convert to his own use. Appellant has at all times maintained that the $200,000 was a non-refundable commission, his to keep even though the proposed deal was never consummated.

Immediately after his arrest, appellant retained Anthony J. Ferrara, Esq., as his counsel. Ferrara continued in this capacity through appellant's trial, which began on January 29, 1985. In his opening, Ferrara argued what appears to have been the theme of his client's defense: "[W]hat this case is all about is an attempt by Geoffrey Harrison Galley, a multi-millionaire from England, to get out of a bad business deal." In support of this characterization, Ferrara noted that even after Peng's arrest, Galley "continued to negotiate in an attempt to resurrect this transaction."

Galley was the first witness called by the government. It is undisputed that at no time during his direct examination was Galley asked for, nor did he give, any testimony relating to post-arrest contacts with Peng or his attorney. During cross-examination, in support of the defense's theory, Ferrara sought to elicit testimony from Galley regarding such post-arrest negotiations. After Ferrara made reference to Peter Skourlis--who, appellant alleges, was Galley's agent in New York--the following exchange took place:

FERRARA: You did talk to Mr. Skourlis about this gold transaction, correct?

GALLEY: No.

FERRARA: You did not talk to him about the gold transaction?

GALLEY: I don't believe an answer yes or no is adequate for the question.

FERRARA: Did you talk to Mr. Skourlis?

THE COURT: Please give the answer you believe is adequate.

GALLEY: Mr. Skourlis approached me and said, "Do you, sir, wish to meet with me," because there was a terrible misunderstanding. Mr. Peng had all the money and had not in fact, touched the money, and he could prove that all the statements that he had made concerning the availability of the gold were true, and so I came to meet you at your office.

FERRARA: I move to strike the response, Judge.

THE COURT: Denied.

FERRARA: Did you offer to discontinue this proceeding, this criminal proceeding, if the money was returned to you?

GALLEY: You said to me--

FERRARA: Answer the question.

GALLEY: No I did not offer to discontinue because it is not my proceeding.

Shortly thereafter, Ferrara focused upon the meeting in his office to which Galley had just alluded:

FERRARA: Did the meeting that we had in my office, did it end with a demand being made upon you for an additional two-hundred-thousand-dollars' payment?

GALLEY: It ended with a threat with [sic] you.

FERRARA: Did it end with a demand?

GALLEY: No, it did not end with a demand; it was a threat.

FERRARA: You would be sued for an additional $200,000?

GALLEY: I would lose another $200,000.

FERRARA: That you owed Mr. Peng an additional $200,000?

GALLEY: Yes.

FERRARA: In accord with your understanding?

GALLEY: It was a threat.

FERRARA: Yes or no?

GALLEY: The exact words--

Here the district judge intervened and, over Ferrara's objections, questioned Ferrara as to the date of the meeting in question. Ferrara placed it in July 1984. The judge then asked Galley to describe the circumstances under which the meeting had taken place. When Ferrara again objected to this line of questioning, the judge asserted: "You opened the door, and the jury is entitled to know all the facts. That is my ruling." At this point, Ferrara moved for a mistrial. The motion was immediately denied, whereupon Ferrara inquired: "Will the court allow me to testify in this proceedings [sic] concerning what happened at the conference?" The judge responded that Ferrara would be permitted to do so only if substitute counsel were retained. The court granted the defense an adjournment to allow this substitution, and the jury was dismissed for the day.

The next day, with the jury absent, the court raised the issue whether Ferrara's disqualification was required by DR 5-102 of the Code of Professional Responsibility, which states that a lawyer "shall" withdraw if he "learns or it is obvious that he or a lawyer in his firm ought to be called as a witness on behalf of his client." N.Y.Jud.L. (app) Code of Professional Responsibility DR 5-102(A) (McKinney 1975). Ferrara announced that, at his client's behest, he wished to continue as counsel and that, if necessary, another lawyer in his firm who had also attended the meeting could take the stand to rebut Galley's testimony. The court heard argument on both the disqualification issue and the question of whether a mistrial would be necessary if Ferrara were to be disqualified. On the latter question, defense counsel asserted that his prior mistrial motion was withdrawn; while the government did not itself make such a motion, the prosecutor noted the court's option of declaring a mistrial sua sponte.

On February 4, again outside the jury's presence, Ferrara proposed a number of alternatives to a mistrial. He volunteered to preview his summation with respect to the July meeting, and suggested that Galley's testimony on this point might be stricken from the record, cautionary instructions given, and the jurors interviewed--all in an attempt to ensure that his own credibility would not become an issue in the case. The court, however, found itself bound by United States v. Cunningham, 672 F.2d 1064 (2d Cir.1982), cert. denied, --- U.S. ----, 104 S.Ct. 2154, 80 L.Ed.2d 540 (1984), to disqualify Ferrara. It also concluded that, under these circumstances, there was a "manifest necessity" to declare a mistrial.

In an opinion and order issued a few days later, Judge Edelstein set out in greater detail the basis for his decision. He found that Ferrara had been placed "in the position of a participant in one of the contested events relating to the alleged fraud." "Thus, even if someone other than Ferrara testifies as to the conversation [with Galley], Ferrara would still be placed before the jury in the dual roles of both advocate and unsworn witness, with personal knowledge of disputed facts." The court went on to note that Ferrara's disqualification would not work the "substantial hardship" on Peng that might justify Ferrara's continuation as counsel. It therefore concluded that "the 'taint' of the trial that would occur if counsel were to remain outweighs the defendant's sixth amendment interest in choice of counsel." On the need for a mistrial, the court relied on two grounds to support a finding of "manifest necessity." "Foremost is the effect on the weight the jury will give to Ferrara's opening statement and examination of Galley once Ferrara is substituted and he or a member of his firm takes the stand." The court also found that the time substitute counsel would need to prepare required declaration of a mistrial.

Soon after the district court issued its order, appellant moved on double jeopardy grounds for the dismissal of the indictment against him. Upon denial of the motion, Peng filed this appeal.

II.

The government argues that because appellant initially moved for a mistrial he should be precluded from asserting a double jeopardy bar to his further prosecution. See United States v. Dinitz, 424 U.S. 600, 607-08, 96 S.Ct. 1075, 1079-80, 47 L.Ed.2d 267 (1976); United States v. Goldstein, 479 F.2d 1061, 1066-67 (2d Cir.), cert. denied, 414 U.S. 873, 94 S.Ct. 151, 38 L.Ed.2d 113 (1973). The record, however, indicates that appellant's motion, never renewed after its denial, was expressly withdrawn on February 1. See United States v. Mastrangelo, 662 F.2d 946, 950 (2d Cir.1981), cert. denied, 456 U.S. 973, 102 S.Ct. 2236, 72 L.Ed.2d 847 (1982). The court here plainly declared the mistrial sua sponte, although the order was entered with at least the acquiescence of the government. In assessing appellant's double jeopardy claim, we must therefore apply the "manifest necessity" standard first enunciated by Justice Story in United States v. Perez, 9 Wheat. 579, 580, 6 L.Ed. 165 (1824). See ...