US v. Aronoff, 78 Cr. 713 (JMC).

• Decision Date: 08 December 1978
• Docket Number: No. 78 Cr. 713 (JMC).,78 Cr. 713 (JMC).
• Parties: UNITED STATES of America, v. Arnold ARONOFF, Jerome Castle and Edward J. Robinson, Defendants.
• Court: U.S. District Court — Southern District of New York

463 F. Supp. 454

UNITED STATES of America, v. Arnold ARONOFF, Jerome Castle and Edward J. Robinson, Defendants.

No. 78 Cr. 713 (JMC).

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

December 8, 1978.

Robert B. Fiske, Jr., U. S. Atty., S. D. N. Y. by Thomas H. Sear and Robert S. Litt, Asst. U. S. Attys., New York City, for plaintiff.

Paul, Weiss, Rifkind, Wharton & Garrison, New York City by Jay H. Topkis, New York City, for defendant Aronoff.

Saxe, Bacon & Bolan, P. C., New York City by Michael Rosen, New York City, for defendant Castle.

Edwards & Edwards, Detroit, Mich. by George C. Edwards, III, Detroit, Mich., for defendant Robinson.

MEMORANDUM AND ORDER

CANNELLA, District Judge:

Motion of defendant Arnold Aronoff, to transfer the instant proceedings against him to the United States District Court for the Eastern District of Michigan, pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure, is denied.

Motion of defendant Edward J. Robinson, to transfer the instant proceedings against him to the United States District Court for the Eastern District of Michigan, pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure, is granted.

FACTS

There are three defendants in this case, Arnold Aronoff, Jerome Castle, and Edward J. Robinson. Aronoff and Robinson have moved under Rule 21(b) for a transfer of their trial to the Eastern District of Michigan, for the convenience of themselves and their witnesses, and in the interest of justice. Castle, however, has not moved for a transfer.

In support of his motion, Robinson avers, inter alia, that he lives and works in the Detroit area, that a lengthy trial in New York will disrupt his business and cause him serious financial and personal hardships, and that a significant aspect of his defense will be the testimony of character witnesses, nearly all of whom are from the Detroit area. (Robinson has disclosed to the Court, in camera, the names and addresses of character witnesses he plans to call.)

Aronoff avers that he lives and works in the Detroit area, and that all of his witnesses are located there or in Florida. He has not, however, provided the Court a list of witnesses with their addresses and the substance of their testimony.

In opposition to both motions, the Government makes essentially two assertions. First, this trial will last at least three and one-half weeks. Consequently, an additional trial will be costly in terms of prosecutorial and judicial resources, and will be a serious inconvenience to the approximately thirty witnesses the Government intends to call. Ten of these thirty witnesses and most of the Government's documentary evidence are located in the New York area. Second, according to the indictment, the activities of the defendants for which they are charged centered in and focused upon New York. In an additional response to Aronoff's motion, the Government points out that in a civil action by the Securities and Exchange Commission against Aronoff, his attorney moved to have the proceedings therein transferred from Washington, D.C., to New York City "so that all of the federal cases against my client and all of the state cases will be in a single city." Transcript of Proceedings at 40, 42, SEC v. Diversified Industries, Inc., No. 76-2114 (D.D.C. June 15, 1977).

Greater detail as to the foregoing facts is provided in the discussion below.

INDICTMENT

The indictment charges the defendants with conspiracy to defraud Penn Dixie Industries, Inc. "Penn Dixie" in connection with the sale of 5,500 acres of Florida land for $6 million. These are approximate figures. Penn Dixie is a publicly held corporation with its principal offices in New York City. The defendants are also charged with one count of wire fraud, 18 U.S.C. § 1343, and one count of mail fraud, 18 U.S.C. § 1341.

According to the indictment, a Cayman Islands trust created by Aronoff "the Aronoff Trust" obtained an option to purchase 12,500 acres of land in Florida for $5.7 million. Aronoff then allegedly agreed to give Herbert Kesselman, father of the defendant Jerome Castle, a 20% interest in 7,000 of the 12,500 acres if Castle would help Aronoff induce Penn Dixie to purchase the remaining 5,500 acres at an inflated price. Castle at the time was president and chairman of the board of Penn Dixie. With the aid of the defendant Robinson, allegedly involved in real estate speculation and Aronoff's friend, Aronoff and Castle successfully induced the Penn Dixie board of directors to purchase the 5,500 acres for $5.9 million, allegedly without ever disclosing: (1) that a trust controlled by Aronoff was the seller; (2) that what Penn Dixie paid for less than half the tract was more than what the trust had paid for the whole tract; (3) that the land was primarily swampland; and (4) that Aronoff and Castle had a secret agreement for the benefit of themselves and Castle's father.

In furtherance of their plan, the defendants presented to Penn Dixie an "independent" appraisal of the land at $1,075 per acre, an "independent" feasibility study as to the land's development potential, and a development proposal prepared by Aronoff and Robinson, stating that Penn Dixie stood to realize a quick profit of 43%. The indictment charges that all three of these documents were fraudulent, and further charges that Aronoff and Castle caused Penn Dixie to pay Robinson $17,000 for a "review" of the feasibility study "so that Robinson could be paid for his role in the fraud." Indictment, Count One, para. 7(i) (filed October 10, 1978).

The indictment also specifies various acts committed by the defendants in the Southern District of New York. As to Robinson, it charges that he prepared or assisted in the preparation of fraudulent documents used by Aronoff and Castle in New York, and that he mailed a fraudulent letter to the New York office of Penn Dixie. As to Aronoff, it charges that he personally arranged the transactions involving the Aronoff Trust, that he prepared or directed the preparation of fraudulent documents used in New York, that he mailed a fraudulent letter to New York, and that in June and November of 1973, and again in January 1974, he met with officers or directors of Penn Dixie in New York, and each time personally conveyed fraudulent information concerning the land deal.

DISCUSSION

Rule 21(b) of the Federal Rules of Criminal Procedure provides as follows:

For the convenience of parties and witnesses, and in the interest of justice, the court upon motion of the defendant may transfer the proceeding as to him or any one or more of the counts thereof to another district.

While the rule vests broad discretion in the trial court to determine whether the interests of justice dictate a transfer, the exercise of this discretion is guided by both constitutional history and case law.

In United States v. Johnson, 323 U.S. 273, 276, 65 S.Ct. 249, 251, 89 L.Ed. 236 (1944), Mr. Justice Frankfurter wrote:

Questions of venue in criminal cases . . are not merely matters of formal legal procedure. They raise deep issues of public policy in the light of which legislation must be construed.

As he and many other judges have recognized, it can be a hardship for a defendant to face trial far away from home and from "appropriate facilities for defense." Id. at 275, 65 S.Ct. 249. It has been stated, therefore, that as a matter of policy, a defendant should ordinarily be tried, whenever possible, where he resides. See, e. g., Hyde v. Shine, 199 U.S. 62, 78, 25 S.Ct. 760, 50 L.Ed. 90 (1905); United States v. Cashin, 281 F.2d 669, 675 (2d Cir. 1960).

These sentiments are, for sure, well founded. One of the grievances listed by the draftsmen of the Declaration of Independence was that the King had assented to legislation "For transporting as beyond Seas to be tried for pretended offenses." But regardless of whether the drafters of the Constitution believed that a defendant ordinarily ought to face trial at home,¹ they chose to subordinate that policy to another and sometimes competing policy. Article III, section 2 provides in part:

The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed . . ..

The Sixth Amendment provides:

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed, which district shall have been previously ascertained by law . . ..

It would appear then that where a colonist had gone to England and while there engaged in criminal conduct, even our forefathers would not have considered it unfair to transport him there for trial.

Despite the diminished importance of constitutional venue limits under Rule 21,² the constitutional language is yet pertinent to illustrate that the historical principles underlying venue policy are fairness and justice generally; the defendant's home district is relevant only as far as considerations of fairness and justice demand. This is the import of the Supreme Court's statement in Platt v. Minnesota Mining & Manufacturing Co., 376 U.S. 240, 84 S.Ct. 769, 11 L.Ed.2d 674 (1964), that the location of a corporate defendant's home has "no independent significance in determining whether transfer to that district would be `in the interest of justice,' although it may be considered with reference to such factors as the convenience of records, officers, personnel and counsel." Id. at 245-46, 84 S.Ct. at 772. While it is true that in Platt, the Court had before it a corporate defendant, the general principles it stated are applicable to individual defendants as well. See, e. g., United States v. McManus, 535 F.2d 460, 463 (8th Cir. 1976), cert. denied, 429 U.S. 1052, 97 S.Ct. 766, 50 L.Ed.2d 769 (1977); United States v. Williams, 437 F.Supp. 1047, 1050-51 (W.D.N.Y.1977).

The Court in Platt also quoted a set of...