United States v. Greenberg

• Decision Date: 24 April 1962
• Citation: 204 F. Supp. 400
• Parties: UNITED STATES of America v. Jacob H. GREENBERG and Morris Mac Schwebel, Defendants (two cases).
• Court: U.S. District Court — Southern District of New York

204 F. Supp. 400

UNITED STATES of America v. Jacob H. GREENBERG and Morris Mac Schwebel, Defendants (two cases).

United States District Court S. D. New York.

April 24, 1962.

Robert M. Morgenthau, U. S. Atty. for Southern Dist. of New York, for the United States; Stephen E. Kaufman, Peter H. Morrison, Asst. U. S. Attys., of counsel.

Paul, Weiss, Rifkind, Wharton & Garrison, New York City, for defendant Morris Mac Schwebel; Simon H. Rifkind, Martin Kleinbard, Arthur B. Frommer, New York City, of counsel.

FREDERICK van PELT BRYAN, District Judge.

Defendant Schwebel moves to dismiss two indictments against him, 61 Cr. 132 and 61 Cr. 133, on the ground that improper outside influences were brought to bear on the Grand Jury which returned them.

Indictment 61 Cr. 132 is in one count and charges Schwebel and a co-defendant Greenberg, who is not before the court, under 18 U.S.C. § 371 with conspiring to violate provisions of the Securities Act of 1933 by the use of the mails and instrumentalities of interstate commerce in dealings in corporate securities of Basic Atomics, Inc.

Indictment 61 Cr. 133 is in 62 counts. The first count charges Schwebel and Greenberg under 18 U.S.C. § 371 with conspiring to violate the same provisions of the Securities Act in dealings in corporate securities of Soil Builders International Corporation. The other 61 counts charge specific violations of various provisions of the Securities Act in these dealings. A motion by Schwebel to dismiss four of these counts as time barred has been granted on consent of the Government.

On these motions Schwebel contends that, during its deliberations, the Grand Jury was informed that the Securities and Exchange Commission had disbarred him from practicing before it and that this disclosure was so highly prejudicial and inflammatory as to prevent the Grand Jury from arriving at an independent determination based upon the relevant evidence which had been presented. He urges that this requires dismissal of the indictments. In the alternative defendant moves for inspection of the Grand Jury minutes to aid him in establishing these charges, or to have the minutes inspected by the court.

Schwebel presents no evidence to support his claim that information as to his disbarment was given to the Grand Jury. He draws the conclusion that this must have occurred because two persons who were concerned in the disbarment proceedings before the Commission testified before the Grand Jury.

One of these was Sidney Goldberg, an attorney on the staff of the General Counsel of the Commission who is said by Schwebel's counsel to have "dramatized his appearance before the Grand Jury by bringing with him a baby carriage or other cart containing the documents to be referred to in his testimony". Apparently Schwebel seeks to draw from this unsupported hearsay statement by his counsel, the source of which is not disclosed, the conclusion that Goldberg informed the Grand Jury that Schwebel had been disbarred by the Commission.

The other witness to whom defendant refers is one Joseph Meyer, named as a co-conspirator but not a defendant in the Basic Atomics indictment. The complete affidavit of Meyer, submitted in support of this motion, reads as follows:

"At the request of the Office of the United States Attorney for the Southern District of New York, I appeared and testified before the Grand Jury which handed down the Indictments in the above proceedings. While giving such testimony, I was questioned concerning testimony that I had previously given to the Securities and Exchange Commission involving these matters."

Since the testimony Meyer gave before the Commission was in the disbarment proceedings brought against Schwebel, Schwebel concludes that the fact of his disbarment necessarily must have been made known to the Grand Jury.

The Government takes the position here that defendant has failed to show that the Grand Jury was advised of Schwebel's disbarment and that even if it had been so advised, this furnishes no ground for dismissal of the indictment. The Government asserts that, under these circumstances, it is not called upon to refute the defendant's unsubstantiated allegations that the Grand Jury knew of his disbarment by disclosing anything which transpired before that body.

The regularity of grand jury proceedings in the federal system is presumed and the burden of proving regularity does not shift to the government merely because defendant makes unsupported claims on a motion attacking the indictment. United States v. Johnson, 319 U.S. 503, 63 S.Ct. 1233, 87 L.Ed. 1546 (1943); United States v. Nunan, 236 F.2d 576 (2 Cir. 1956), cert. den. 353 U.S. 912, 77 S.Ct. 661, 1 L.Ed.2d 665. "An indictment returned by a legally constituted and unbiased grand jury, like an information drawn by the prosecutor, if valid on its face, is enough to call for trial of the charge on the merits. The Fifth Amendment requires nothing more." Costello v. United States, 350 U.S. 359, 363, 76 S.Ct. 406, 100...