U.S. v. Triumph Capital Group, Inc.

• Decision Date: 18 April 2002
• Docket Number: No. CR. 3:00CR217(AHN).,CR. 3:00CR217(AHN).
• Citation: 260 F.Supp.2d 432
• Parties: UNITED STATES of America v. TRIUMPH CAPITAL GROUP, INC. et al.
• Court: U.S. District Court — District of Connecticut

260 F.Supp.2d 432

UNITED STATES of America v. TRIUMPH CAPITAL GROUP, INC. et al.

No. CR. 3:00CR217(AHN).

United States District Court, D. Connecticut.

April 18, 2002.

COPYRIGHT MATERIAL OMITTED

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Nora R. Dannehy, Thomas V. Daily, David A. Ring, U.S. Attorney's Office, Hartford, CT, John H. Durham, Michael

E. Runowicz, William J. Nardini, U.S. Attorney's Office, New Haven, CT, Mark G. Califano, U.S. Attorney's Office, Bridgeport, CT, Linda B. Bridgman, U.S. Securities & Exchange Comm., Boston, MA, David J. Stander, U.S. Department of Justice Criminal Div., Washington, DC, for U.S.

Eathan A. Levin-Epstein, Robert A. Richardson, Garrison levin-Epstein Chimes & Richardson, New Haven, CT, Tracy A. Miner, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., Richard M. Egbert, Law Office of Richard M. Egbert, Boston, MA, William F. Dow, III, Jacobs, Grudberg, Belt & Dow, P.C., New Haven, CT, Tracey A. Miner, Keith P. Carroll, R. Robert Popeo, Cristina D. Hernandez-Malaby, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C., Boston, MA, Donald J. McCarthy, Jr., McCarthy, Schuman & Coombes, Hartford, CT, Richard M. Asche, Russell M. Gioiella, Jack T. Litman, Todd B. Terry, Litman, Asche & Gioiella, New York City, John M. McKenna, Goodman, Rosenthal & McKenna, West Hartford, CT, George C. McMahon, North Quincy, MA, Jeremiah F. Donovan, Terry Donovan, Old Saybrook, CT, for Defendants.

RULING ON MOTIONS FOR SEVERANCE

NEVAS, District Judge.

This is a multi-defendant, multi-count public corruption case arising out of the activities of the former Connecticut State Treasurer, Paul J. Silvester. Pending before the court are severance motions of all five defendants, Triumph Capital Group, Inc. ["Triumph"], Frederick W. McCarthy ["McCarthy"], Charles B. Spadoni ["Spadoni"], Lisa A. Thiesfield ["Thiesfield"], and Ben F. Andrews ["Andrews"]. Specifically, Andrews seeks to be tried separately from McCarthy, Triumph, Spadoni and Thiesfield [the "Triumph Defendants"] and the Triumph Defendants seek to be tried separately from Andrews. McCarthy seeks a trial separate from all other defendants. Triumph wants to be tried separately from Spadoni on the two RICO counts and the obstruction of justice count. Finally, Spadoni seeks to have his trial severed from McCarthy's.

For the following reasons, the motions [docs. #273, #288, #299, #301, and # 364] are DENIED.

FACTS

In count one of the twenty-four count superseding indictment (the "indictment") the Triumph Defendants and Andrews are charged with violating RICO, 18 U.S.C. § 1962(c). Count two charges the five defendants with a RICO conspiracy in violation of 18 U.S.C. § 1961(d). These counts allege that the defendants and two other individuals, Paul J. Silvester ("Silvester"), the former Connecticut State Treasurer, and his close associate Christopher J. Stack ("Stack"), neither of whom are named as defendants in this case, were members of an association-in-fact enterprise and conducted and participated directly or indirectly in the enterprise's affairs through a pattern of racketeering activity consisting of bribery, aiding and abetting bribe receiving, obstruction of justice and witness tampering. The indictment charges that Andrews and the Triumph Defendants corrupted the Connecticut pension investment process by soliciting and paying bribes, rewards and gratuities as consideration for pension fund investments and by funneling campaign contributions to the "Silvester for State Treasurer" Campaign in exchange for the investment of state pension assets.

More particularly, the government alleges that Silvester and Stack had a corrupt arrangement whereby, in return for Silvester's investment of state pension assets with a firm or fund, Silvester directed that firm or fund, including Triumph, to compensate Stack as a consultant and Stack paid Silvester a portion of those consultant fees. It further alleges that Andrews received a consulting contract from a firm or fund in return for Silvester's investment of state pension assets, split the fees with Stack and then Stack kicked back a portion of the money he received to Silvester. In addition, Thiesfield and Stack allegedly accepted consulting contracts valued at approximately $ 2 million from Triumph, McCarthy and Spadoni as consideration for Silvester's investment of state pension assets with a Triumph fund. Further, McCarthy, Spadoni and Triumph allegedly paid $25,000 to Thiesfield and gave financial support to the "Silvester for State Treasurer Campaign" in exchange for an investment of state pension assets in a Triumph-related investment fund.

Finally, all of the defendants allegedly attempted to conceal Silvester's role in sharing in the corrupt payments and their own participation in the criminal activity through obstruction of justice or witness tampering. Specifically, Spadoni and Triumph allegedly obstructed justice by deleting, overwriting or destroying documents and information stored on a laptop computer and diskettes and Andrews allegedly tampered with a witness by counseling and intimidating her to falsely testify before a federal grand jury that the money she contributed to the Silvester for State Treasurer Campaign was her own money.

In the remaining twenty-two counts of the indictment, the Triumph Defendants are named together in six counts alleging violations of 18 U.S.C. §§ 1343 and 1346, mail/wire fraud/theft of honest services (counts 16, 17, and 20 through 23). McCarthy, Spadoni and Triumph are named as codefendants in two counts alleging violations of 18 U.S.C. § 666(a)(2), theft/bribery concerning programs receiving federal funds (counts 15 and 19). Spadoni and Triumph are charged together in one count alleging obstruction of justice in violation of 18 U.S.C. § 1503 (count 24). Thiesfield is charged independently in two counts alleging a violation of § 666(a)(1)(B) (counts 14 and 18). And Andrews is named as the sole defendant in eleven counts: two counts charging violations of § 666 (counts 3 and 7); six counts charging mail/wire fraud/theft of honest services in violation of 18 U.S.C. §§ 1341, 1343 and 1346 (counts 4 through 6 and 8 through 10); one count charging conspiracy to laundering money in violation of 18 U.S.C. § 1956(h) (count 11); one count alleging false statements in violation of 18 U.S.C. § 1001 (count 12); and one count alleging witness tampering in violation of 18 U.S.C. § 1512(b)(1) (count 13).

STANDARD

A court considering severance motions must undertake a two-part inquiry. First, the court must determine whether the defendants were properly joined under Rule 8(b). It must then consider whether joinder substantially prejudices any defendant.

Rule 8(b) provides that multiple defendants (1) may be charged in the same indictment if they are alleged to have participated in the same acts or transactions constituting an offense or offenses, (2) may be charged in one or more counts together or separately and (3) do not all need to be charged in every count. Whether joinder is proper depends largely on the facial allegations in the indictment. See Schaffer v. United States, 362 U.S. 511, 513-14, 80 S.Ct. 945, 4 L.Ed.2d 921 (1960); United States v. Nerlinger, 862 F.2d 967, 973 (2d Cir.1988); United States v. Gallo, 668 F.Supp. 736, 748 (E.D.N.Y.1987). Joinder is appropriate "where two or more persons' criminal acts are unified by some substantial identity of facts or participants or arise out of a common plan or scheme." United States v. Attanasio, 870 F.2d 809, 815 (2d Cir.1989) (quoting United States v. Porter, 821 F.2d 968, 972 (4th Cir.1987)). Joinder is not permitted when the connection between different groups is limited to a few individuals common to each, but where the individuals commit separate acts that involve them in separate offenses with no common aim. See United States v. Carrozza, 728 F.Supp. 266, 270 (S.D.N.Y. 1990), affd, 956 F.2d 1160 (2d Cir.1992).

Joinder of multiple defendants in RICO prosecutions is particularly appropriate even if each defendant is charged with committing different predicate acts as part of the alleged pattern of racketeering activity. Indeed, where a series of acts are properly alleged as a pattern of racketeering activity, those acts "constitute part of a `series of acts or transactions constituting an offense' within the meaning of Rule 8(b)." United States v. Weisman, 624 F.2d 1118, 1129 (2d Cir.1980). Moreover, in RICO prosecutions, there is little danger of prejudice from spillover evidence because evidence is generally admissible against all RICO defendants to prove the existence and nature of the racketeering enterprise and the relationship and continuity of the predicate acts which is needed to establish a pattern of racketeering. See United States v. Diaz, 176 F.3d 52,103 (2d Cir.), cert, denied, 528 U.S. 875, 120 S.Ct. 181, 145 L.Ed.2d 153 (1999). In essence, if the RICO charge is valid, "an indictment charging the substantive crimes alleged as predicate acts along with the RICO claim satisfies the requirements for valid joinder under Rule 8(b)." (United States v. Rastelli 653 F.Supp. 1034, 1041 (E.D.N.Y.1986)); United States v. Persico, 621 F.Supp. 842, 851 (S.D.N.Y.1985) (same); see also United States v. Castellano, 610 F.Supp. 1359, 1396 (S.D.N.Y.1985) (noting that a conspiracy charge "presumptively satisfies Rule 8(b)").

Moreover, where a RICO count sufficiently alleges a pattern of racketeering activity, the defendants charged in the RICO counts can be properly joined in an indictment with defendants who are only charged in the substantive counts relating to the racketeering activity. See United States v. Cervone, 907 F.2d 332, 341 (2d Cir.1990); United States v. Weisman, 624 F.2d at 1129; United States v. Gallo, 668 F.Supp. at 748.

Nonetheless, despite the preference in the federal system for joint trials of defendants who are indicted together, see Zafiro v. United States, 506 U.S. 534, 537, 113 S.Ct....