United States v. Abrams

• Decision Date: 13 May 1982
• Docket Number: No. 82 Cr. 80 (CES).,82 Cr. 80 (CES).
• Citation: 539 F. Supp. 378
• Parties: UNITED STATES of America v. Martin B. ABRAMS, et al., Defendants.
• Court: U.S. District Court — Southern District of New York

539 F. Supp. 378

UNITED STATES of America v. Martin B. ABRAMS, et al., Defendants.

No. 82 Cr. 80 (CES).

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

May 13, 1982.

COPYRIGHT MATERIAL OMITTED

Scott G. Campbell, Asst. U. S. Atty., New York City, for plaintiff.

James M. LaRossa, LaRossa, Brownstein & Mitchell, New York City, for defendant Abrams.

Richard Weinberg, Shereff, Friedman, Hoffman & Goodman, New York City, for defendant Gold.

Gustave H. Newman, Newman & Adler, New York City, for defendant Siegal.

Donald Conway, Hackensack, N. J., for defendant Cotler.

Ronald DePetris, DePetris & Stewart, New York City, for defendant Pierce.

MEMORANDUM DECISION

STEWART, District Judge:

Defendants Martin Abrams, Irving Cotler, Michael Gold, Frederick Pierce, and Leonard Siegel are jointly charged with fifteen counts of wire fraud, and one count of endeavoring to obstruct the communication of information regarding a federal criminal offense. In addition, defendant Abrams is charged with another count of obstructing a criminal investigation, and one count of tax fraud; defendant Siegel is charged with endeavoring to obstruct a grand jury investigation and one count of tax fraud; and defendant Gold is charged with two counts of tax fraud. All five defendants have filed various pretrial motions and discovery requests. A number of these requests were discussed at a pretrial conference held May 3, 1982. This Memorandum Decision disposes of all requests still outstanding after the May 3 conference, and summarizes those matters disposed of by agreement at the conference last week.

Severance Motions

Four of the five defendants (Cotler, Gold, Pierce and Siegel) move for severance of their cases from the joint trial of the other defendants. Defendants Gold, Cotler and Pierce assert they will suffer prejudice in a joint trial by virtue of gross disparities in the amount of evidence to be offered against them, as compared to other defendants. Defendants Gold, Pierce and Siegel also claim potential prejudice by virtue of defendant Cotler's criminal record and statements to be introduced against him which, they argue, impermissibly inculpate them. Defendant Gold also asserts that antagonistic defenses bar a joint trial. For the reasons that follow, we deny all requests for severance at this time.

Rule 14 of the Fed.R.Crim.P. provides that "if it appears that a defendant ... is prejudiced by the joinder ... of defendants ... for trial together, the court may ... grant a severance or provide whatever relief justice requires". The decision to sever is a matter left to the sound discretion of the district court. United States v. Aloi, 449 F.Supp. 698, 739 (E.D.N. Y.1977) (citing, inter alia, Opper v. United States, 348 U.S. 84, 95, 75 S.Ct. 158, 165, 99 L.Ed. 101 (1954)). To warrant exercise of the court's discretion, the moving defendant must come forward with a showing that a joint trial would not merely lessen his chances of acquittal, but would in effect deny him a fair trial altogether. Id. (citing United States v. Borelli, 435 F.2d 500, 502 (2d Cir. 1970), cert. denied, 401 U.S. 946, 91 S.Ct. 963, 28 L.Ed.2d 229 (1971)). In determining whether severance is appropriate, a district judge should consider, among other things, the number of counts and defendants, see United States v. Branker, 395 F.2d 881, 887 (2d Cir. 1968), cert. denied, 393 U.S. 1029, 89 S.Ct. 639, 21 L.Ed.2d 573 (1969); disparities in the quantum of proof offered against the various defendants, see United States v. Kelly, 349 F.2d 720, 759 (2d Cir. 1965), cert. denied, 384 U.S. 947, 86 S.Ct. 1467, 16 L.Ed.2d 544 (1966); possible prejudice from the type of evidence (e.g. prior convictions) to be admitted against some of the defendants, see United States v. Figueroa, 618 F.2d 934, 945 (2d Cir. 1980); and the apparent relative culpability of the defendants, see United States v. Gilbert, 504 F.Supp. 565, 571 (S.D.N.Y.1980). The ultimate question for the district court is whether the jury will be able to "compartmentalize" the evidence presented to it, and distinguish among the various defendants in a multi-defendant suit. United States v. Corr, 543 F.2d 1042, 1052-53 (2d Cir. 1976).

In this case, we have examined not only the parties' motion papers, but also evidence adduced in United States v. Stuckey, SS 81 Cr. 0035 (CES), a previous trial of a Mego employee involved with the fraudulent sale of corporate assets alleged here. On the basis of these materials, we conclude that the danger of prejudice to any defendant by virtue of a joint trial appears minimal at this time. This is not a case of unmanageable proportion: it has twenty counts and five defendants. While large, it is not of the scale considered in United States v. Branker, 395 F.2d at 882 (84 counts and eight defendants) or United States v. Kelly, 349 F.2d at 727 (60 counts and 20 defendants). Nor is this a case where some of the defendants are charged in only a few of the counts, see United States v. Gilbert, 504 F.Supp. at 566, as all of the defendants here are charged in sixteen of the twenty counts. While the government's case undoubtedly contemplates proof of differing types and degrees of involvement in the fraudulent scheme alleged, no defendant appears to be charged with so minor a role that he can be considered an alleged "silent partner", see United States v. Corr, 543 F.2d at 1052, or an "innocent dupe", see United States v. Gilbert, 504 F.Supp. at 570. The indictment alleges that defendant Gold intentionally misrepresented Mego's financial and management situation to independent auditors, and instructed a Mego accountant to conceal William Stuckey's participation in the secret cash sales of Mego merchandise. This latter allegation is supported by testimony of Stephen Weingrow, accountant for Mego, in the Stuckey trial. See Transcript of Trial Proceedings, United States v. Stuckey, SS 81 Cr. 0035 (CES) at 60. The indictment also alleges that defendant Pierce directed William Stuckey to transfer cash proceeds to defendant Cotler, and that Pierce himself gave cash to Cotler on another occasion. We do not, of course, express any opinion as to the guilt or innocence of these defendants as to these charges. But finding that defendants Cotler, Gold and Pierce are charged with substantial participation in the scheme to defraud, we cannot say at the present time that they will be unduly prejudiced by a trial with those who are charged with even greater roles. See United States v. Aloi, 449 F.Supp. at 741. Given the moderate size of the case, careful instructions should be able to neutralize any "spillover" which might occur. We acknowledge defendant Cotler's argument that his status as an outsider may be a source of prejudice (as the jury could erroneously impute evidence of breaches of fiduciary duty offered against the other defendants to him), but we reject it. Marked differences among defendants have been noted to be a source of reduced danger of spillover. See United States v. Papadakis, 510 F.2d 287, 300 (2d Cir.), cert. denied, 421 U.S. 950, 95 S.Ct. 1682, 44 L.Ed.2d 104 (1975) (danger of spillover minimal in joint trial of drug sellers and purchaser). We believe a jury should be able to grasp and apply the relevant distinctions in this case.

We also reject the arguments of defendants Gold, Pierce and Siegel that defendant Cotler's criminal record and statements to the F.B.I. require a severance at this time. The government has indicated that it does not intend to introduce Cotler's racketeering conviction as part of its case-in-chief, but only to impeach Cotler should he take the stand. As yet, Cotler has not indicated whether he will testify or not. It is thus quite possible that the issue of Cotler's conviction will not come up at trial at all. Should Cotler testify (and should we find the conviction admissible under Fed.R. Evid. 609(a)), moreover, we are not convinced by the arguments adduced thus far that this conviction poses the "high risk of prejudice" discussed in United States v. Figueroa, 618 F.2d 934, 946 (2d Cir. 1980). In sum, therefore, we find the risk of prejudice from Cotler's conviction too remote to warrant severance at this time. For similar reasons, we also decline to grant defendants Gold, Pierce and Siegel severance on the basis of Cotler's statement to the F.B.I. that "all you have in your investigation is a bunch of guys who are stealing their companies blind". The present record is not sufficient to determine the statement's admissibility under Fed.R.Evid. 403. Only after that determination is made may we be faced with the statement's effect on the defendants' rights under the Sixth Amendment, see Bruton v. United States, 391 U.S. 123, 137, 88 S.Ct. 1620, 1628, 20 L.Ed.2d 476 (1968), and the efficacy of cautionary instructions in this context. See, e.g., United States v. Wingate, 520 F.2d 309, 314 (2d Cir. 1975). Should we then conclude that the statement is impermissibly inculpatory as those defendants, moreover, the government may choose to forego its use to avoid the need for severance. See United States v. Figueroa, 618 F.2d 934, 944 (2d Cir. 1980). In short, therefore, it is again unclear whether this statement will present any problem at trial at all; if problems do arise, they can be remedied by means short of severance.

Finally, we reject defendant Gold's argument that the possibility of conflicting defenses requires severance at this time. "To obtain severance on the ground of conflicting defenses, it must be demonstrated that the conflict is so prejudicial that defenses are irreconcilable, and the jury will unjustifiably infer that this conflict alone demonstrates that both are guilty." United States v. Davis, 623 F.2d 188, 195 (1st Cir. 1980) (citing United States v. Becker, 585 F.2d 703, 707 (4th Cir. 1978), cert. denied, 439 U.S. 1080, 99 S.Ct. 862, 59 L.Ed.2d 50 (1979); United States v. Robinson, 432 F.2d 1348, 1351 (D.C.Cir.1970); United...