US v. Eisenberg

• Decision Date: 26 July 1991
• Docket Number: Crim. No. 89-218.
• Citation: US v. Eisenberg, 773 F. Supp. 662 (D. N.J. 1991)
• Parties: UNITED STATES of America v. Leo M. EISENBERG, Richard S. Cannistraro and Richard O. Bertoli, Defendants.
• Court: U.S. District Court — District of New Jersey

773 F. Supp. 662

UNITED STATES of America v.Leo M. EISENBERG, Richard S. Cannistraro and Richard O. Bertoli, Defendants.

Crim. No. 89-218.

United States District Court, D. New Jersey.

July 26, 1991.

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Robert P. Warren, John M. Fietkiewicz, Asst. U.S. Attys., Newark, N.J., for the U.S.

Barry M. Fallick, Rochman, Platzer, Fallick & Rosmarin, New York City, for defendantLeo M. Eisenberg.

Michael B. Pollack, New York City, for defendantRichard S. Cannistraro.

Franklin M. Sachs, Podvey, Sachs, Meanor, Catenacci, Hildner & Cocoziello, Newark, N.J., for defendantRichard O. Bertoli.

OPINION

LECHNER, District Judge.

                                  TABLE OF CONTENTS
                  Facts ............................................................................... 672
                  Discussion .......................................................................... 680
                          I. Discovery-Related and Miscellaneous Motions .............................. 680
                             A. Motion for Statements of Co-Conspirators .............................. 680
                             B. Motion for List of Government Witnesses ............................... 683
                             C. Motion for Giglio Material ................................... 684
                             D. Motions for Disclosure of Rule 404 Evidence the Government
                                 Intends to Admit ..................................................... 685
                             E. Motion for Identification of Brady Material Among Documents
                                 Previously Produced .................................................. 687
                             F. Motion for Production of Materials Initially Disclosed to the
                                 Defendants But Later Withdrawn ........................................ 688
                             G. Motion for a Bill of Particulars ....................................... 688
                             H. Motion for the Production of Enumerated Documents Characterized
                                 as Brady Material ............................................ 692
                             I. Preservation of Rough Notes and Other Communications ................... 692
                             J. Motion for Transcripts and Tape Recordings ............................. 692
                             K. Motion for an Order Precluding the Admission of Any Testimony
                                 by David O'Connor, Esq., or Marvin Gersten, Esq., Protected by
                                 the Attorney-Client Privilege ......................................... 692
                             L. Motion for an Order Preserving the Right of Bertoli to Make
                                 Applications Under Fed.R.Crim.P. 17(c) for Subpoenas Prior to
                                 Trial ................................................................. 693
                             M. Motion for an Order Preserving Bertoli's Right to Move to Suppress
                                 Wiretap Evidence or Evidence Seized in Searches ....................... 693
                   II. Motion for a Change of Venue as to the Obstruction of Justice
                        Allegations ...................................................................  694
                  III. Motion for Severance ...........................................................  695
                   IV. Motion to Strike Surplusage ....................................................  698
                    V. Motion to Dismiss and for Discovery Based on Allegations of Prosecutorial
                        Misconduct ....................................................................  701
                             A. Motions to Dismiss and for Discovery Based on Specific Allegations
                                 of Prosecutorial Misconduct ..........................................  702
                                1. Alleged Failure to Obtain Approval of RICO Charges .................  702
                                2. Alleged Conflict of Interest .......................................  703
                                3. Allegations as to Improper Sealing of the Indictments ..............  706
                                4. Alleged Misconduct Relating to the Grand Jury Proceedings ..........  707
                                   a. Alleged Disclosure of Bertoli Nolo Contendere Plea .....  708
                                   b. Alleged Mischaracterizations to the Grand Jury of Testimony
                                       Given Before Previous Grand Juries .............................  709
                                   c. Alleged Use of Summaries of Evidence ............................  709
                                   d. Alleged Fed.R.Crim.P. 6(e) Violations ...........................  710
                                   e. Alleged Violation of the Right to Financial Privacy Act .........  712
                             B. Motion to Dismiss and for Discovery Based on Alleged Cumulative
                                 Misconduct ...........................................................  713
                   VI. Motion to Dismiss Based on Prosecutorial Vindictiveness ........................  714
                  VII. Motion to Dismiss Counts 1 through 3 for Failure to State an Offense ...........  717
                

   VIII. Motion to Dismiss Racketeering Acts 5(j) and 5(k) ............................  725
                     IX. Constitutional Challenge to the RICO "Pattern" Requirement ...................  726
                      X. Motion for Recusal ...........................................................  731
                Conclusion ............................................................................  735
                

Presently before the court are the pre-trial omnibus motions of defendantsLeo M. Eisenberg("Eisenberg"), Richard S. Cannistraro("Cannistraro") and Richard O. Bertoli("Bertoli")(collectively, the "Defendants").¹

Bertoli moves to dismiss Counts 1 and 2 of the Superseding Indictment, which charge the Defendants with violations of the Racketeer Influenced and Corrupt Organizations Act("RICO"), 18 U.S.C. §§ 1962(c) and (d), respectively, on the ground that the RICO"pattern" requirement is unconstitutionally vague.²In addition, Bertoli moves to dismiss Counts 1, 2 and 3, the last of which charges the Defendants with conspiracy to commit securities fraud in violation of 18 U.S.C. § 371, for failure to state an offense.Bertoli moves to dismiss the Superseding Indictment based on alleged prosecutorial misconduct, or in the alternative, for discovery of grand jury materials.

In addition, Bertoli moves pursuant to Fed.R.Crim.P. 16 for discovery of statements made by unindicted co-conspirators, for notice pursuant to Fed.R.Crim.P. 12(d)(2) of the Government's intention to introduce under Fed.R.Evid. 404(b) evidence of other crimes, wrongs or acts by Bertoli ("Rule 404(b) Evidence"), for a list of witnesses the Government intends to call at trial, for impeaching material with respect to Government witnesses and for exculpatory evidence under Brady v. Maryland,373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215(1963)("Brady" material).In addition, Bertoli moves for an order precluding certain testimony by David O'Connor, Esq., and Marvin Gersten, Esq., on the ground that it is protected by the attorney-client privilege, or in the alternative for identification by the Government of the anticipated testimony of David O'Connor, Esq., and Marvin Gersten, Esq., pursuant to Fed.R.Crim.P. 12(d)(2).

Bertoli also seeks an order preserving his right to make applications, as necessary under Fed.R.Crim.P. 17(c), for subpoenas prior to trial, an order preserving his right to move to suppress wiretap evidence or evidence seized in searches or the fruits thereof, an order striking purported surplusage from the Superseding Indictment, an order compelling the Government to identify the Brady material contained among documents it has thus far produced, an order compelling the Government to preserve notes of its interviews of Bertoli and an order compelling the Government to produce for inspection and copying materials previously produced by the Government but later withdrawn by the Government.Bertoli also moves for a Bill of Particulars pursuant to Fed.R.Crim.P. 7(f).

Defendant Eisenberg moves for severance of his trial from that of Cannistraro, for transfer of the charges of obstruction of justice, set forth in Counts 4, 5 and 6 of the Superseding Indictment, to the Eastern District of New York and for pre-trial disclosure of all Rule 404(b) Evidence.Defendant Cannistraro moves to dismiss the Superseding Indictment against him as violative of his due process right to be free from vindictive prosecution and for recusal of the court pursuant to 28 U.S.C. § 455.³

By letter, dated 19 March 1991, Eisenberg joined in Bertoli's motions to dismiss portions of the Superseding Indictment and his motions relating to discovery⁴ and for a Bill of Particulars.See 19 March 1991 Eisenberg Letter.⁵ Counsel for Eisenberg reiterated at oral argument, held 3 July 1991, that Eisenberg joined in only Bertoli's motions to dismiss, for discovery and for a Bill of Particulars.3 July 1991Tr. at 13.By letter, dated 3 April 1991, Bertoli joined in Cannistraro's recusal motion and Eisenberg's severance motion.See 3 April 1991 Bertoli Letter.⁶

Facts

On 16 June 1989, an Indictment was returned against the Defendants and sealed by order of Magistrate Judge Stanley R. Chesler.Government Briefat 3 n. 1.On 29 September 1989, the instant six-count Superseding Indictment⁷ was returned against the Defendants and sealed by Magistrate Judge Chesler.⁸It was unsealed on 5 October 1989.Count 1 of the Superseding Indictment charges the Defendants with racketeering activities involving Monarch Funding Corporation("Monarch") in violation of RICO,18 U.S.C. § 1962(c).Count 2 charges the Defendants with conspiracy to commit racketeering in violation of RICO,18 U.S.C. § 1962(d).Count 3 charges the Defendants with conspiracy in violation of 18 U.S.C. § 371 to commit securities fraud in violation of section 10(b) of the Securities Exchange Act of 1934("Section 10(b)"), 15 U.S.C. § 78j(b) and Securities and Exchange Commission("SEC")Rule 10b-5 promulgated thereunder ("Rule 10b-5"), 17 C.F.R. § 240.10b-5....