United States v. Marcello

Decision Date09 January 1981
Docket NumberCrim. A. No. 80-274.
Citation508 F. Supp. 586
PartiesUNITED STATES of America v. Carlos MARCELLO et al.
CourtU.S. District Court — Eastern District of Louisiana

COPYRIGHT MATERIAL OMITTED

John P. Volz, U. S. Atty., E. D. La., L. Eades Hogue, U. S. Dept. of Justice, Albert Winters, Richard T. Simmons, Asst. U. S. Attys., John Voorhees, U. S. Dept. of Justice, New Orleans, La., for United States.

Russell J. Schonekas, New Orleans, La., Henry Gonzalez, Tampa, Fla., for Marcello.

Thomas R. Dyson, Jr., Washington, D. C., Frank DeSalvo, New Orleans, La., for Davidson.

Michael S. Fawer and Matthew H. Greenbaum, New Orleans, La., for Roemer.

Arthur A. Lemann, III, New Orleans, La., for Marinello.

Risley Triche, Napoleonville, La., for Young.

SEAR, District Judge.

I. Introduction

Defendants in a government prosecution resulting from the Justice Department's undercover "sting" operation code-named "BRILAB" have brought various pretrial motions to dismiss the indictment against them or, failing that, to suppress certain evidence which they contend was illegally obtained. The defendants first move to dismiss the indictment because of what they characterize as governmental overreaching and jurisdiction artificially created by the government. They also contend in these motions that prejudicial publicity resulting from leaks to the news media of grand jury proceedings is so pervasive that they are entitled to dismissal of the indictment. In addition, defendant Carlos Marcello seeks dismissal on the ground that he is a victim of arbitrary and discriminatory selective prosecution. In the second group of motions, defendants seek suppression of their recorded communications obtained by the government with the consent of an informer, Joseph Hauser, or pursuant to wiretap orders issued by United States District Judges in the District of Columbia and the Eastern District of Louisiana. In addition to the motions to suppress, the second group of motions includes one brought by Marcello for disclosure of the name of the individual who provided the government with confidential notebooks and telephone logs allegedly stolen from him in a 1977 burglary.

Arguments on the motions to dismiss and other preliminary motions1 were heard on October 6 and 7, 1980. At that time rulings on some of these motions were deferred until the trial or following any post-trial hearings that might be necessary. During the week of December 8, 1980, extensive evidentiary hearings were held on the motions to suppress and defendant Marcello's motion for disclosure. Because of the number of motions, the uniqueness of some, and the necessity of maintaining an orderly record, there is a need to explain my rulings on the motions to suppress and the motion for disclosure, as well as to elaborate on my prior rulings on the motions to dismiss.

II. Background of the Case

On June 17, 1980, defendants Carlos Marcello, I. Irving Davidson, Vincent Marinello, and Charles Roemer were indicted by a federal grand jury in the Eastern District of Louisiana. A fifth defendant, Aubrey Young, was added as a defendant in a superseding indictment issued by the grand jury on August 14, 1980. In the lengthy, twelve-count indictment, the defendants are charged with various violations of federal law allegedly uncovered in a Justice Department undercover operation commonly known as BRILAB. The investigation, whose acronym stands for "bribery-labor," centered upon suspected illegal activities involving public officials, labor unions and reputed organized crime figures in the Southwest. The BRILAB operation in Louisiana lasted about one year from February 1979 to February 1980, a period during which the 1979 Louisiana gubernatorial campaign and election were held. As part of the investigation, two FBI agents posed as representatives of a fictitious Beverly Hills, California firm called Fidelity Financial Consultants. The agents were aided by Joseph Hauser, a cooperating individual who had pleaded guilty on February 5, 1979 to federal charges arising out of his involvement in an insurance swindling scheme.

In this prosecution defendants are charged with involvement in a criminal enterprise for the purpose of obtaining insurance contracts from state and local governments, labor unions, and at least one private business by committing various criminal acts. In general the defendants are charged with (1) a conspiracy to obtain insurance contracts by committing criminal acts in violation of the Racketeer Influenced and Corrupt Organizations (RICO) Act, 18 U.S.C. § 1962(c); (2) a substantive violation of RICO, 18 U.S.C. § 1961(4), in that the defendants were allegedly "associated in fact" as an "enterprise" to obtain insurance contracts by committing criminal acts; (3) violations of the federal mail fraud statute, 18 U.S.C. § 1341; (4) violations of the federal wire fraud statute, 18 U.S.C. § 1343; and (5) interstate travel or transportation in aid of racketeering in violation of 18 U.S.C. § 1952.

III. Motions to Dismiss

Among the motions argued by the defendants on October 6 and 7, 1980 were four whose determination they contend requires extensive evidentiary hearings. First, the defendants seek to dismiss the indictment on grounds of "governmental overreaching" and prosecutorial misconduct. They contend that the acts charged in the indictment were all part of a scheme initiated, controlled, planned and executed by the government itself in violation of their constitutional rights to due process of law. Second, the defendants submit that the indictment should be dismissed because federal criminal jurisdiction was artificially created by the government, which they argue concocted, created and supplied the interstate commerce aspects necessary to allege a federal offense. Third, defendant Marcello seeks to dismiss the indictment as to him on grounds that the government engaged in discriminatory selective prosecution. Marcello contends that for years government prosecutors have arbitrarily labeled him as chief of a Louisiana organized crime syndicate and boss of the "Mafia" or "La Cosa Nostra." Marcello argues that this false label prompted the government to create the scheme charged in the indictment for the express purpose of fraudulently inducing Marcello in particular into the scheme in violation of his Fifth and Fourteenth Amendment rights to due process and equal protection of the law. Finally, defendants seek dismissal of the indictment on grounds that they were severely prejudiced by government-initiated leaks to the press. They contend that these leaks enabled newsmen to write and broadcast reports about the pending BRILAB grand jury investigation creating unfair and prejudicial pre-indictment and pre-trial publicity which rendered further proceedings fundamentally unfair. Alternatively, the defendants ask that the government officials responsible for the news leaks be held in contempt pursuant to Fed.R.Crim.Pro. 6(e).

Each of these motions contemplates a broad evidentiary hearing at which the defendants would examine government officials, witnesses and documents in hopes of establishing prosecutorial misconduct so egregious that the resulting indictment must be dismissed as a violation of defendants' constitutional rights. In anticipation of the contemplated evidentiary hearings, the defendants subpoenaed the Attorney General of the United States, one of his chief deputies, the director of the FBI and one of his assistants, United States attorneys, FBI agents, and the government's chief witness and informer, Joseph Hauser. In addition, they subpoenaed members of the press whose news stories appeared prior to and during the grand jury investigation and which defendants contend prejudiced them.

A) Governmental Overreaching and Artificially Created Jurisdiction

The motions alleging governmental overreaching and artificially created jurisdiction share a common legal basis and require substantially similar proof. For each of these motions, defendants seek an evidentiary hearing to elicit the testimony of government officials and informers who were involved in the BRILAB investigation or its supervision. The threshold issue in the resolution of these motions is whether claims of governmental misconduct and artificially created jurisdiction present cognizable defenses to a criminal prosecution. I find that each does.

Ordinarily, a criminal defendant's allegation of governmental overreaching or prosecutorial misconduct arises in the defense of entrapment. When a defendant pleads the defense of entrapment, he has the burden of showing that law enforcement officials induced him to commit a crime that he was not predisposed to commit and that the government implanted the criminal design in his mind. United States v. Russell, 411 U.S. 423, 433, 436, 93 S.Ct. 1637, 1643, 1645, 36 L.Ed.2d 366 (1973); United States v. Anderton, 629 F.2d 1044, 1047 (5th Cir. 1980); United States v. Wolffs, 594 F.2d 77, 79-80 (5th Cir. 1979). A claim of governmental overreaching, however, is a distinct and different defense in which the defendants contend that the government's involvement in the BRILAB scheme was so pervasive and outrageous that due process principles or the court's power of supervision over the criminal justice system require that the indictment be dismissed.

The Supreme Court on two occasions has declined to reverse a criminal conviction on grounds of governmental overreaching. There is language, however, in United States v. Russell, supra, and in the concurring and dissenting opinions in Hampton v. United States, 425 U.S. 484, 96 S.Ct. 1646, 48 L.Ed.2d 113 (1976), suggesting that the Court might be willing to accept the defense of governmental misconduct in an appropriate case. In Russell, the Court upheld the conviction for illegal manufacture of drugs even though an undercover agent had supplied him with an essential ingredient. The Court stated, however:

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