U.S. v. Mahaffy, 05-CR-613.

• Decision Date: 31 August 2006
• Docket Number: No. 05-CR-613.,05-CR-613.
• Parties: UNITED STATES of America v. Kenneth MAHAFFY, Timothy J. O'Connell, Ralph D. Casbarro, David G. Ghysels, Jr., Robert F. Malin, Linus N. Nwaigwe, Michael A. Picone, Keevin H. Leonard, Defendants.
• Court: U.S. District Court — Eastern District of New York

Page 115

446 F.Supp.2d 115

UNITED STATES of America v. Kenneth MAHAFFY, Timothy J. O'Connell, Ralph D. Casbarro, David G. Ghysels, Jr., Robert F. Malin, Linus N. Nwaigwe, Michael A. Picone, Keevin H. Leonard, Defendants.

No. 05-CR-613.

United States District Court, E.D. New York.

August 31, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Richard F. Albert, Morvillo, Abramowitz, Grand, Iason & Silberberg PC, Jeffrey C. Hoffman, Hoffman Pollok LLP, J. Bruce Maffeo, Elizabeth Nicole Warin, Law Offices of J. Bruce Maffeo, David Bernfeld, Thomas F.X. Dunn, New York, NY, Stephen P. Scaring, Stephen P. Scaring, P.C., Garden. City, NY, Mildred M. Whalen, Federal Defenders of New York, Inc., Brooklyn, NY, for Defendants.

Michael Anthony Asaro, United States Attorneys Office, Eastern District of New York, for United States of America.

MEMORANDUM AND ORDER

GLASSER, Senior District Judge.

INTRODUCTION

In this case, seven defendants—Kenneth E. Mahaffy, Timothy J. O'Connell, David G. Ghysels, Jr., Robert F. Malin, Linus Nwaigwe, Michael A. Picone, and Keevin H. Leonard—have been indicted for conspiracy to commit securities fraud and, in various combinations, with securities fraud, witness tampering, and Travel Act violations. Before the Court are the defendants' motions: 1.) to strike language from the Indictment; 2.) for a bill of particulars; 3.) for severance; 4.) for suppression of Picone's statements; 5.) for suppression of O'Connell's statements; and 6.) for pretrial disclosures. The background allegations are fully stated in this Court's opinion, United States v. Mahaffy, et al., No. 05-CR-613, 2006 WL 2224518 (E.D.N.Y. filed Aug. 2, 2006), familiarity with which is presumed.

DISCUSSION

I. Motions to Strike Language from the Indictment

The Defendants move to strike from the Indictment certain language used to designate sections and subsections. Specifically they challenge the propriety of the following captions, each reproduced exactly as in the Indictment: FRONT RUNING SCHEME; BRIBE PAYMENTS; THE COVER UP; and Lies to Law Enforcement and the SEC. They argue that these captions are "emphasized through underlining and/or in capital letters," that they are "clearly not necessary to establish the charges," and that they "exist merely to sensationalize the allegations and to inflame the jury against the Defendants." (Mahaffy Mem. Supp. Motion at 11).

Rule 7(d) of the Federal Rules of Criminal Procedure provides that "[u]pon the defendant's motion, the court may strike surplusage from the indictment." "[T]he trial court is allowed wide discretion in coping with such motions," United States v. Courtney, 257 F.2d 944, 947 (2d Cir.1958), but these motions may only be granted "where the challenged allegations are not relevant to the crime charged and are inflammatory and prejudicial. If evidence of the allegation is admissible and relevant to the charge, then regardless of how prejudicial the language is, it may not be stricken." United States v. Scarpa, 913 F.2d 993, at 1013 (2d Cir.1990) (internal quotations and citations omitted).

The challenged language is indisputably relevant to the charges; the allegations of front-running, bribery, and lying to investigators are prejudicial only because they are, essentially, the criminal activities with which the defendants are charged. And the use of the term "cover up" is a plain and colloquial designation to differentiate between the initial acts—which resulted in the fraud, conspiracy, and bribery charges—and the subsequent alleged efforts to conceal those crimes. The Court finds unconvincing the suggestion that these captions, which occur with many other captions throughout the Indictment, are improperly emphasized by their having been capitalized or underlined or that they would tend to inflame the jurors. To the contrary, the Government's use of minimal but clearly identified language to demarcate sections and subsections of the Indictment makes the forty-page document more readable and tends to clarify the charges. For these reasons, the motion to strike language from the Indictment is denied.

II. Motions for Bills of Particulars

Defendants seek particularization on the basis of the volume of documents made available to them by the Government, asserting a need to identify, inter alia, "means and methods" of the conspiracy not alleged in the Indictment, the substance of the materially false statements allegedly made by certain defendants, and disclosure of the names of unindicted coconspirators.

[5] The leading case on the issue in this Circuit is United States v. Torres, 901 F.2d 205 (2d Cir.1990), which concisely states the general principles to be applied:

The function of a bill of particulars is to provide, the defendant with information about the details of the charge against him if this is necessary to the preparation of his defense, and to avoid prejudicial surprise at the trial. A bill of particulars should be required only where the charges of the indictment are so general that they do not advise the defendant of the specific acts of which he is accused. Whether to grant a bill of particulars rests within the sound discretion of the district court. Acquisition of evidentiary detail is not the function of the bill of particulars. So long as the defendant was adequately informed of the charges against him and was not unfairly surprised at trial as a consequence of the denial of the bill of particulars, the trial court has not abused its discretion.

Id. at 234 (internal quotations and citations omitted). "Furthermore, a bill of particulars is not necessary where the government has made sufficient disclosures concerning its evidence and witnesses by other means." United States v. Walsh, 194 F.3d 37, 48 (2d Cir.1999).

In light of Torres, bills of particulars are not routinely granted. Perhaps the most frequent case in which particulars are warranted is where discovery is overwhelmingly extensive and the government fails to designate which documents it intends to introduce and which documents are merely relevant to the defense. In United States v. Upton, 856 F.Supp. 727, 746-47 (E.D.N.Y.1994), for example, this Court granted particulars where the government failed in its discovery to "isolat[e] the documents that are relevant and may be offered at trial which would spare the defendants the task of examining all the documents." Id. at 747. See also United States v. Nachamie, 91 F.Supp.2d 565, 568 (S.D.N.Y.2000) (granting particulars where "[t]he problem ... is not a failure to produce, but a failure to designate."). Where such burdensome discovery exists, the defendant may be unfairly "buried with paper," United States v. Turkish, 458 F.Supp. 874, 882 (S.D.N.Y.1978), and unable to discern from the massive discovery production what part of his conduct was allegedly unlawful. This occurred in United States v. Bortnovsky, 820 F.2d 572, 574 (2d Cir.1987). In Bortnovsky, the government introduced evidence relevant to twelve burglaries, alleging only four unspecified burglaries were fabricated, and thousands of documents, alleging that three unspecified documents were false. Id. As a result, the defendants "were forced to explain the events surrounding eight actual burglaries and to confront numerous documents unrelated to the charges pending" and the government effectively, but impermissibly, shifted the burden of proof. Id. at 575. The discernible principle, then, is that a large volume of discovery warrants a bill of particulars if it obfuscates the allegedly unlawful conduct and unfairly inhibits the defendant's preparation for trial.

The Indictment in this case specifies in Counts Two through Twenty One, and Twenty Three through Thirty Three, the date, volume, price, and source of the allegedly unlawful transactions at issue. And while precise quotes alleged to be false are not identified in the false statement counts, substantial descriptions of them are included. Moreover, in response to defendants' motion, the Government has turned over detailed information about the trades and the block orders that were related to those trades, as well as identified the documents that it intends to introduce as evidence of the Defendants' duties to their employers. Against this background, the Court finds no justification for ordering a bill of particulars, which would "confine[ ] the Government's proof to particulars furnished" and "restrict unduly the Government's ability to present its case." United States v. Feola, 651 F.Supp. 1068, 1132 (S.D.N.Y.1987), aff'd 875 F.2d 857 (2d Cir.1989). The Indictment fairly specifies the allegedly unlawful conduct, and the Government has not dissembled by means of its discovery.

As to the request for a list of unindicted co-conspirators, this Court has observed that "[t]he appellate case law is clear that the refusal of a district court to direct the filing of a bill of particulars as to the names of unindicted co-conspirators is not an abuse of discretion." United States v. Gotti, 784 F.Supp. 1017, 1018 (E.D.N.Y. 1992) (citing Torres, 901 F.2d at 233-34.) See also United States v. Coffey, 361 F.Supp.2d 102, 122 (E.D.N.Y.2005) ("Courts have been highly reluctant to require a bill of particulars when defendants have asked for specific identities of coconspirators or others allegedly involved.") (citing United States v. Rodriguez, 1999 WL 820558 at *2 (S.D.N.Y.1999) (denying motion for a bill of particulars identifying known co-conspirators where the indictment coupled with discovery allowed a defendant "both to prepare his defense and to avoid prejudicial surprise at trial."); United States v. Glisson, 2003 WL 21709502 at *3 (S.D.N.Y.2003) ("denying bill of particulars seeking names of all coconspirators and aiders and/or abettors in light of routine denial of such requests in case law and the sufficiency of information contained in the indictment and obtained through discovery.")). As in Gotti, Defendants here...