United States v. Agosto, Cr. 3-81-96.
| Decision Date | 29 December 1981 |
| Docket Number | No. Cr. 3-81-96.,Cr. 3-81-96. |
| Citation | 528 F. Supp. 1300 |
| Parties | UNITED STATES of America, Plaintiff, v. Joseph Vincent AGOSTO, Deil Otto Gustafson, Roger Frank Newstrum, Ralph Edwin Bruins, James Louis Bacigalupo, and Joan Lorrain Norris, Defendants. |
| Court | U.S. District Court — District of Minnesota |
James M. Rosenbaum, U. S. Atty., Douglas A. Kelley, Thorwald H. Anderson, Asst. U. S. Attys., Minneapolis, Minn., for plaintiff.
Stanley I. Greenberg, Los Angeles, Cal., Peter J. Thompson, Minneapolis, Minn., for defendant Agosto.
Joe A. Walters, O'Connor & Hannan, Minneapolis, Minn., for defendant Gustafson.
Gordon G. Busdicker and Jerry W. Snider, Faegre & Benson, Minneapolis, Minn., for defendant Newstrum.
Joseph S. Friedberg and Mark W. Peterson, Minneapolis, Minn., for defendant Bruins.
Steven Z. Kaplan and James W. Little-field, Briggs & Morgan, St. Paul, Minn., for defendant Bacigalupo.
Stephen Stein, Goodman, Oshins, Brown & Singer, Las Vegas, Nev., and Douglas W. Thomson, St. Paul, Minn., for defendant Norris.
FINDINGS OF FACT
CONCLUSIONS OF LAW
ORDER
In this recently filed criminal prosecution against six defendants alleging a total of 113 counts of conspiracy, misapplication of bank funds and mail and wire fraud, the government has moved, pursuant to Rule 44(c), Fed.R.Crim.P., for a hearing to determine whether counsel for four of the defendants have an actual or potential conflict of interest and, if so, to order appropriate relief. The government urges that Joe A. Walters, Stephen Stein, Stanley I. Greenberg and Steven Z. Kaplan be disqualified.
The present legal representation of each defendant is as shown in the listed appearance above. The government claims, and defendants do not deny, that each of the following named attorneys now or previously represented in this case the defendants and witnesses named below and that each of the witnesses appeared before the Grand Jury and that each will be called by the government at trial:
Attorneys Clients
1. Joe A. Walters Defendants: Gustafson
Newstrum
Bruins
Philip Williams, accountant for Gustafson
Corporations
Robert Hildreth, accountant for
Gustafson Corp. at Tropicana
Dwain Johnson, C.P.A. who prepared
Gustafson's tax return
Jane McClean, employee of Gustafson
who handled checks
Helen Sundberg, Gustafson's personal
secretary
Gary Talbot, bookkeeper for Gustafson.
2. Stephen Stein Defendants: Norris
Agosto
Michael Tanno, General Manager of
Tropicana.
Albert Bardier, accountant for Production
and Leasing, Ltd., owned
by Agosto.
Mitzi Briggs Smith, one time 80%
owner of the Tropicana.
Harold Hug, comptroller of the
Tropicana.
Jay Brown, law partner of Stein.
3. Stanley I. Greenberg Defendants: Agosto
Norris
Albert Bardier, accountant for Production
and Leasing, Ltd. owned
by Agosto.
4. Steven Z. Kaplan Defendant: Bacigalupo
Victoria Peterson, Summit Bank
bookkeeping supervisor.
Ula Hall, Summit Bank auditor
Barbara Morrow, Summit Bank vice
president.
Rule 44(c) became effective on December 1, 1980, and established a procedure for avoiding the occurrence of events which might otherwise give rise to a plausible post-conviction claim that because of multiple representation the defendants in a criminal case were deprived of their sixth amendment right to the effective assistance of counsel. The new rule requires the court to take "such measures as may be appropriate to protect" a defendant's sixth amendment right to counsel "unless it appears that there is good cause to believe no conflict of interest is likely to arise."
In addition to the authority granted by this rule, the district courts are responsible for the supervision of members of their bars. Fred Weber, Inc. v. Shell Oil Co., 566 F.2d 602, 605 (8th Cir. 1977), cert. denied, 436 U.S. 905, 98 S.Ct. 2235, 56 L.Ed.2d 403 (1978); Central Milk Producers Co-op v. Sentry Food Stores, 573 F.2d 988, 992 (8th Cir. 1978). The district courts are authorized to disqualify attorneys from representing defendants in criminal cases where such representation would violate the Code of Professional Responsibility. Coffelt v. Shell, 577 F.2d 30 (8th Cir. 1978). The district courts are encouraged "to strictly enforce the Code of Professional Responsibility." Central Milk Producers Co-op v. Sentry Food Stores, 573 F.2d at 993.
The issue here is whether the multiple representations attempted by Joe A. Walters, Stephen Stein, Stanley I. Greenberg and Steven Z. Kaplan occasion a conflict of interest, or likely future conflict of interest, which will deprive any of the defendants of effective assistance of counsel under the sixth amendment, or whether disqualification is required because of violations of the Code of Professional Responsibility. The court held hearings on November 25 and December 16, 1981 and personally advised each defendant as to his right to effective assistance of counsel. Statements and briefs were filed. Counsel were heard and each submitted proposed findings.
Attorney Walters currently represents defendant Deil Gustafson. Gustafson, through various holding companies, formerly owned a substantial interest in the Tropicana Hotel and Country Club (Tropicana). He also owns the Summit National Bank of St. Paul and the Summit National Bank of Richfield. At various times, he has served as president of the St. Paul bank, and chairman of the board of both banks.
During the grand jury investigation and until after the arraignment in this case, Walters also represented defendant Roger Newstrum, an officer and employee of various Gustafson-owned companies, and at various times, a corporate officer of the Tropicana and vice president and director of the Richfield bank. Until the indictment, Walters also represented defendant Ralph Bruins, who was president and a director of the Richfield bank and a consultant to the St. Paul bank.
In addition to these three defendants, during the grand jury investigation, Walters represented six other Gustafson employees who were either called as witnesses by the grand jury or interviewed by the Federal Bureau of Investigation (FBI). The government has stated these witnesses will be called by the government during trial, and that their testimony will establish the link between defendants Gustafson and Agosto in diverting moneys from the Summit Banks to the Tropicana by the scheme charged in the indictment. The legal fees of all the aforementioned defendants and witnesses represented by Walters are being paid by the Summit Banks.
Gustafson has submitted two affidavits to this court in connection with this motion, and was sworn and testified at the hearing of December 16, 1981. He has expressly declined to attempt to waive his sixth amendment right to effective assistance of counsel.
He states that, based upon his own knowledge and discussions with his attorney, he believes there are no current conflicts arising out of Walter's prior representation of his codefendants and the government witnesses. Specifically, Gustafson takes the position that there is no inconsistency between his defense and that of his codefendants.
The government contends, however, that there is a strong likelihood of inconsistency in the defenses of these individuals. According to the government, Gustafson has asserted through counsel that he was unaware that the relevant checking accounts of the Tropicana were at his banks. The government believes it can prove that Bruins and Newstrum were involved in the allegedly unlawful transactions that are the subject of the indictment. This, the government contends, clearly establishes the inconsistency between the positions that the defendants will likely take at trial. Gustafson suggests, as an alternative to disqualification of Walters, that in the event conflicts arise, he will retain additional counsel to conduct cross-examination of the former clients of Walters.
In connection with Mr. Walters' representation of the codefendants, both Bruins and Newstrum have refused to permit disclosure by Walters of any confidences and secrets reposed in him during his representation of them. They have expressly declined to waive any conflicts arising out of his past representation. The other six witnesses have submitted affidavits stating that they revealed no confidences to Walters during his representation of them. Three of those witnesses, Talbot, Williams and Johnson, assert that they were only called before the grand jury to produce documents. The other three witnesses, Hildreth, Lundberg, and McLean were apparently called before the grand jury to testify as to substantive matters. None of the affidavits purport to waive the attorney-client privilege between the witnesses and Walters.
Attorney Stein currently represents defendant Joan Norris. He has previously represented her on unrelated matters. Additionally, he represented her during proceedings before a Las Vegas grand jury, during which Norris was subpoenaed to produce certain documents of...
To continue reading
Request your trial
-
U.S. v. Agosto
...filed a motion for inquiry concerning possible conflicts of interest of certain defense counsel. After a hearing, the district court, 528 F.Supp. 1300, disqualified three defense counsel. The defendants represented by those three defense counsel, and one defense counsel appeal. We affirm in......
-
United States ex rel. Tonaldi v. Elrod, 82 C 0260.
...and Tonaldi's acquiescence constitute a valid waiver of the right to effective assistance of counsel. Cf. United States v. Agosto, 528 F.Supp. 1300, 1306-10 (D.Minn. 1981); United States v. Garafola, 428 F.Supp. 620, 623-24 (D.N.J.1977), aff'd sub nom. United States v. Dolan, 570 F.2d 1177 ......
-
United States ex rel. Tonaldi v. Elrod
...the specific dangers and could not reasonably predict them so as to intelligently advise the petitioner.11 Cf. United States v. Agosto, 528 F.Supp. 1300, 1306-10 (D.Minn.1981). United States v. Garafola, 428 F.Supp. 620, 623-24 (D.N.J. 1977), aff'd sub nom, United States v. Dolan, 570 F.2d ......
-
United States v. Agosto, Cr. 3-81-96.
...instructions in United States v. Agosto et al., 675 F.2d 965 (8th Cir. 1982). That decision reviewed this court's order of December 29, 1981, 528 F.Supp. 1300, disqualifying attorneys Stein, Greenberg and Walters from further representing defendants in this matter. That order was affirmed a......