United States v. Montecalvo

• Decision Date: 21 May 2012
• Docket Number: No. 05–CR–924 (ADS).,05–CR–924 (ADS).
• Citation: 861 F.Supp.2d 110
• Parties: UNITED STATES, v. John MONTECALVO, Defendant.
• Court: U.S. District Court — Eastern District of New York

861 F.Supp.2d 110

UNITED STATES,

v.John MONTECALVO, Defendant.

No. 05–CR–924 (ADS).

United States District Court,

E.D. New York.

May 21, 2012.

Loretta E. Lynch, United States Attorney for the Eastern District of New York, by James Miskiewicz, Assistant U.S. Attorney, Central Islip, NY.

Schiff Hardin LLP, by Patricia A. Pileggi, Esq., of Counsel, New York, NY, for Defendant.

MEMORANDUM OF DECISION AND ORDER

SPATT, District Judge.

Presently before the Court is a motion by the Defendant, John Montecalvo, to dismiss the indictment and all charges against him, with prejudice, for violation of the Speedy Trial Act. Montecalvo's charges arise from a bid-rigging scheme to artificially inflate prices and manipulate the awarding of publicly-funded contracts to repair and resurface roads in Suffolk County. For the reasons set forth below, the Defendant's motion is granted.

I. BACKGROUND

A. Factual Background

Montecalvo is associated with Montecalvo Asphalt Paving Corporation, which lays down asphalt that is manufactured by another company, John T. Montecalvo, Inc. Between July 2003 and September 2005, a group of individuals attempted to gain control of bidding on publicly-funded road repaving projects on Long Island. Montecalvo is alleged to have engaged in collusive conduct with these individuals, with the goal of rigging two separate projects: (1) a contract for the Suffolk County Department of Public Works (“SCDPW”) (“the Suffolk County Contract”); and (2) a contract for the Town of Brookhaven's Division of Purchasing (“the Brookhaven Contract”).

With regard to the Suffolk County Contract, the goal of the conspiracy was to obtain the paving work for William Fehr, Jr. and William Fehr, Sr. The Fehrs allegedly convinced other paving contractors, such as Montecalvo, to either refrain from bidding or to put in higher bids for the work. In exchange, the Fehrs promised to help Montecalvo and another paver, James Haney, to obtain work on the alternative project, the Brookhaven Contract. However, this plan ultimately failed, as the Fehrs were not awarded work on the Suffolk Contract. Instead, William Lyons, an eventual cooperating witness with the Government and his partner, Robert Garone, were awarded the contract.

With regard to the Brookhaven Road Repair Contract, Montecalvo and Haney allegedly agreed with the Fehrs that Montecalvo and Haney would share portions of the road contract as part of the conspiracy. On July 15, 2005, this plan proved to be successful as Montecalvo and Haney were awarded portions of the Brookhaven Contract. However, the contract was rebid on September 27, 2005, and thus the contract was ultimately awarded to the Fehrs' company.

There is some dispute as to Montecalvo's involvement and culpability in connection with the collusion surrounding the two contracts. The Defendant stresses that he was a reluctant participant in the whole scheme and that his involvement was merely a reaction to threatening behavior by the Fehrs. ( See Def. Mem. at 4 (“In order to pressure Mr. Montecalvo to participate in these illegal discussions, the Fehrs told Mr. Montecalvo that they could withstand any price war, and that they could drive him out of business through predatory pricing.”).) According to the Government, a recorded conversation reveals that Montecalvo was an active and willing member of the cartel as far back as 2004 and that the evidence indicates that Montecalvo intended to conspire with the other co-defendants. However, as will be set forth in more detail below in connection with the relevant legal standard, the strength of the Government's case and the Defendant's ultimate culpability is not relevant for the purposes of the present motion.

Montecalvo was arrested on November 23, 2005. Prior to his indictment, Montecalvo met with the Assistant United States Attorney (“AUSA”) assigned to the case and provided a complete and arguably remorseful account of his involvement in the collusive conduct. On December 16, 2005, Montecalvo was indicted along with nine other individual and corporate defendants for two counts of mail fraud conspiracy, in violation of 18 U.S.C. § 1341. Montecalvo was charged with conspiring with each of the co-defendants to defraud the SCDPW and Brookhaven in a scheme to rig the bidding process for publicly-funded construction projects that were meant to be competitively awarded.

Throughout 2006, Nicholas Kaizer, Esq., Montecalvo's attorney at the time, engaged in plea negotiations with the assigned AUSA. In or about May 2006, an initial cooperation agreement was drafted and forwarded to Kaizer, along with a financial disclosure affidavit. The Government claims that it was assured by defense counsel that Montecalvo was prepared to enter a guilty plea upon completion of the financial disclosure affidavit. On May 16, 2006, Kaizer emailed the AUSA and wrote: “John Montecalvo informs me that although he is working on the financial affidavit, it will take him two weeks to assemble the required documentation to faithfully be completed.” However, according to the Government, Montecalvo also began to seek supervisory approval from the Government for a deferred prosecution agreement rather than a guilty plea, because a felony conviction would affect his ability to maintain corporate sponsorship for his car racing business. The Government claims that Kaizer informed them that only if the deferred prosecution option was rejected, would Montecalvo be willing to go forward and enter a guilty plea. Time was excluded under the Speedy Trial Act through December 18, 2006.

Ultimately, the Government did not agree to a deferred prosecution. In December 2006, the AUSA again sent a proposed cooperation agreement to Montecalvo's attorney, in response to which he suggested modifications. The AUSA then responded by e-mail that she needed to have the changes reviewed by the other AUSAs, who would then contact defense counsel.

According to Montecalvo, he never received any further response from the Government and that in the ensuing four years, there was no further contact between the U.S. Attorney's Office and counsel for the Defendant. The Government, on the other hand, claims that there were sporadic communications between the U.S. Attorney's Office and defense counsel, but that these oral conversations all took place over the phone and for that reason cannot demonstrate any evidence of these exchanges. Thus, although there is a factual dispute as to whether any oral discussions took place during this approximate four year period, there certainly is, as defense counsel described at oral argument, a seeming four year “black hole” during which the case did not progress.

By late 2009, Montecalvo had retained his current counsel, Patricia A Pileggi, Esq. of Schiff Hardin LLP. On December 10, 2010, the Defendant's counsel contacted the Government to request its consent to a dismissal of the indictment with prejudice. Over the course of 2011, written exchanges and meetings took place in pursuit of that goal. The Government remained willing to extend a cooperation agreement to the Defendant. However, on January 18, 2012, the Government informed the Defendant's counsel that it would not consent to a dismissal with prejudice.

B. Procedural History

On March 26, 2012, the Defendant filed the present motion to dismiss the indictment with prejudice. On April 26, 2012, the government filed its opposition. On May 4, 2012, the Defendant filed a reply. Oral argument was heard on May 18, 2012.

II. DISCUSSION

A. The Speedy Trial Act

The Defendant moves to dismiss the indictment against him, with prejudice, for violation of the Speedy Trial Act. The Government argues that if the indictment is dismissed, it should be dismissed without prejudice because, among other things, the charged crime is serious, the Defendant was not prejudiced, and the delay was inadvertent and not done in bad faith.

Under the Speedy Trial Act, 18 U.S.C. § 3161(c)(1), “the trial of a criminal defendant must generally commence within 70 non-excludable days, see 18 U.S.C. § 3161(h), of the filing of the information or indictment or of the defendant's first appearance before a judicial officer, whichever occurs last.” United States v. Vanhoesen, 366 Fed.Appx. 264, 267 (2d Cir.2010). “If a defendant is not brought to trial within the time limit required by section 3161(c) as extended by section 3161(h), the information or indictment shall be dismissed on motion of the defendant.” 18 U.S.C. § 3162(a)(2). The “[d]efendant bears the burden of proof supporting such a motion.” United States v. Adams, 448 F.3d 492, 503 (2d Cir.2006). Here, the Government concedes that more than six years have passed since the return of the indictment against Montecalvo on December 16, 2005, only one year of which was excluded.

Therefore, since the trial did not commence within the 70 non-excludable days as set forth in the Speedy Trial Act, dismissal of the indictment is warranted. However, the Court must decide whether such dismissal should be with or without prejudice. The determination of whether to dismiss an indictment with or without prejudice is committed to the sound discretion of the district court. See United States v. Giambrone, 920 F.2d 176, 180 (2d Cir.1990).

The Speedy Trial Act states that “[i]n determining whether to dismiss the case with or without prejudice, the court shall consider, among others, each of the following factors: the seriousness of the offense; the facts and circumstances of the case which led to the dismissal; and the impact of a reprosecution on the administration of this chapter and on the administration of justice.” 18 U.S.C. § 3162(a)(1). The Supreme Court has further directed courts to consider the prejudice suffered by the defendant as a result of the delay. See United States v. Taylor, 487 U.S. 326, 334, 108 S.Ct. 2413, 101 L.Ed.2d 297 (1988) (“[T]here is little doubt that Congress intended this factor to be relevant for a...