US v. Horn

• Decision Date: 15 December 1992
• Docket Number: Crim. No. 92-59-01-07D.
• Citation: 811 F. Supp. 739
• Parties: UNITED STATES of America v. Richard HORN, et al.
• Court: U.S. District Court — District of New Hampshire

811 F. Supp. 739

UNITED STATES of America v. Richard HORN, et al.

Crim. No. 92-59-01-07D.

United States District Court, D. New Hampshire.

December 1, 1992.

As Revised December 17, 1992.

Order on Motions for Reconsideration December 15, 1992.

COPYRIGHT MATERIAL OMITTED

Margaret Hinkle, Dept. of Justice, Washington, DC, for plaintiff.

Paul Ware, Boston, MA, Robert E. McDaniel, William E. Brennan, Manchester, NH, Steven M. Gordon, Concord, NH, Michael J. Liston, Cerise H. Lim-Epstein, Boston, MA, for defendants.

REVISED ORDER¹

DiCLERICO, Acting Chief Judge.

Defendants have been charged with conspiracy pursuant to 18 U.S.C.A. § 371 (West 1966), bank fraud pursuant to 18 U.S.C.A. § 1344 (West Supp.1992) and false statements pursuant to 18 U.S.C.A. § 1014 (West Supp.1992). The court considers the motion of Defendants Zsofka, Lee and LaCroix (the "Alpha defendants") to dismiss the indictment based on violations of Fifth and Sixth Amendment guarantees (document no. 171) and the motion of Defendants Horn, Patrick Dion and Patricia Dion (the "Horn defendants") to join the other defendants' motion to dismiss for government misconduct (document no. 186).

Facts

The essential facts underlying these motions are undisputed. The government advised defense counsel that approximately 10,000 documents subpoenaed by the grand jury and now in the government's possession were available for inspection and copying at Aspen Systems ("Aspen"), suite 902, 18 Tremont Street, Boston, Massachusetts. Aspen is a private company under contract with the government to maintain and manage documents produced in response to grand jury subpoenas. The fifth floor of 18 Tremont Street is occupied by the Department of Justice New England Bank Fraud Task Force, which is conducting the prosecution in this case. All defendants arranged to have some of the documents copied by an independent company, Nite Rider. In addition, the Alpha defendants or members of their staff went to Aspen on a number of occasions and inspected numerous documents while dictating file memoranda concerning the documents.

On the morning of November 9, 1992, counsel for the Alpha defendants, accompanied by Mr. Schwartz, an expert consultant, went to Aspen for further review of the documents with the specific purpose of locating material for cross-examination, for preparation of defense witnesses and for use in connection with their trial tactics and strategy. Nov. 13 Transcript ("Tr.") 104. During their review of the documents, defense counsel were informed by Carolyn Bergersen ("Ms. Bergersen"), an employee of Aspen, that she would be willing to make an occasional copy for them. Defense counsel asked Ms. Bergersen to make copies of certain documents which amounted to twenty-two pages. Unbeknownst to defense counsel, on the morning of November 9 one of the prosecutors, who appears to be the lead prosecutor in this case, instructed Nancy Barlow ("Ms. Barlow"), a prosecution paralegal, to keep a record of any documents provided to defense counsel. The lead prosecutor's affidavit ¶ 2. When Ms. Barlow asked the lead prosecutor if Ms. Bergersen could do this by making copies for the government of what defense counsel had copied, she agreed. The lead prosecutor's affidavit ¶ 3.

During the latter part of the afternoon, defense counsel suspected that Ms. Bergersen was making two copies of each requested document. Defense counsel asked Ms. Bergersen whether she was making extra copies for the government. She responded that she could not disclose whether she was making extra copies. Defense counsel then called Ms. Barlow and asked whether Ms. Bergersen had been instructed to make duplicate copies of documents selected by defense counsel for copying. She, too, indicated she could not answer the question and referred defense counsel to the lead prosecutor. When defense counsel spoke with the lead prosecutor shortly thereafter, she admitted that duplicate copies were being made for the government.

Defense counsel asked the lead prosecutor to stop having the employee make duplicate copies, alleging it violated the constitutional rights of the Alpha defendants and the provisions of Federal Rule of Criminal Procedure 16. In addition, defense counsel requested the lead prosecutor to turn the copies over to defense counsel. She refused to do so. Defense counsel informed the lead prosecutor that they were filing a motion to seal with the court to determine whether the government was entitled to copies of documents selected by the defendants and asked her to impound and seal the documents pending judicial review of the procedure by which they were obtained. She declined to seal or impound the documents. Defense counsel called the office of the court clerk and learned that the court was unavailable to address this issue immediately. They spoke to the lead prosecutor again and repeated their request that she impound the documents and not show them to anyone, stating clearly how they believed the defendants' rights were being infringed upon. Although she had not yet seen the documents, she refused to comply with the requests of defense counsel.

On November 9 at 4:37 p.m. the Alpha defendants filed a Motion to Seal Documents Pending Court Review ("Motion to Seal") and served it on the government at 4:46 p.m. by facsimile. Government's Opposition to Defendants' Motion to Dismiss for Governmental Misconduct ("Opposition Memorandum") at 4. On the morning of November 10, Ms. Barlow went to Aspen and retrieved the government's copies of the documents. She left the documents in the lead prosecutor's Boston office.

According to the lead prosecutor's affidavit dated November 18, she received a copy of the Motion to Seal on November 10. The lead prosecutor's affidavit ¶ 8. The affidavit further notes that on November 10 she reviewed the documents herself and showed at least one of them to prosecutor Wendy Warring ("Ms. Warring") and to prosecutor John Chapman ("Mr. Chapman"). The lead prosecutor's affidavit ¶ 7. She also showed several of them to Richard Boire ("Mr. Boire") on November 12. The lead prosecutor's affidavit ¶ 9. Mr. Boire was a closing attorney for the indicted transactions and, as noted by the government, "he is a significant witness because he was an agent of the bank and closed most of the transactions at issue." Opposition Memorandum at 5. Another affidavit executed November 19 by F.B.I. Special Agent John Goglia ("Mr. Goglia") states that he was present and took notes at the November 12 meeting when the lead prosecutor showed Mr. Boire at least one of the documents at issue. Goglia affidavit ¶¶ 4, 6. An affidavit filed by Mr. Boire indicates that he made a copy of one of the documents during his November 12 meeting with the lead prosecutor and Mr. Goglia. Boire affidavit ¶ 7.

The court held a status conference on November 13. During that conference, the lead prosecutor stated that she had reviewed the documents herself. Nov. 13 Tr. 134. In addition, she indicated she had shown them to Mr. Chapman and had shown the documents to one or two witnesses, including Mr. Boire. Nov. 13 Tr. 135-36. She also stated that, upon learning of defense counsels' objection to the procedure, she had discussed the procedure with Assistant United States Attorney for the District of New Hampshire, Peter Papps ("Mr. Papps"), who indicated there was no prohibition against the procedure and that it was done all the time.² Nov. 13 Tr. 125-26.

At the November 13 hearing, the court asked the lead prosecutor whether the copies she had of the documents in question were the only copies. Nov. 13 Tr. 139. She replied "to my knowledge." Nov. 13 Tr. 139. After further discussion, the court ordered the government to file under seal with the court the documents at issue. Nov. 13 Tr. 147. The court instructed the lead prosecutor

In the meantime, you should seal those documents and file them under seal with the court. As long as they've been the subject of this rather extended hearing, they should be made a part of the record under seal, and you should not copy them. You should put them under seal, those copies that you have, and file them with the court.

November 13 Tr. 147 (emphasis added). Defense counsel filed copies of the documents under seal during the hearing (document no. 172). The court also ordered the government to file under seal affidavits of every person who had seen the documents in question. Nov. 13 Tr. 169-70.

At the November 13 hearing, counsel for the Horn defendants orally joined the Motion to Dismiss filed by the Alpha defendants. Nov. 13 Tr. 144, 145, 146.

On November 17 the court held a teleconference with all parties and scheduled an ex parte hearing with defense counsel for November 18. On November 17, the lead prosecutor directed Ms. Warring to file the documents at issue under seal with the court. The lead prosecutor's affidavit ¶ 10. The government filed a set of documents with the court on November 18 (document no. 185).

On November 18 the court conducted a series of hearings in this case. The first was an ex parte proceeding with counsel for the Alpha defendants, who proffered to the court how the documents at issue were selected, their significance to defense tactics and strategy, and the prejudice the defendants incurred due to the government's action.

The second hearing was held with all defense counsel present in chambers and with the lead prosecutor and Ms. Warring on the speaker telephone. Mr. Papps also was present for a portion of the conference. The court informed the government that the Horn defendants had requested an ex parte hearing with the court, the court had granted the request, and the hearing would be held following the conclusion of the present hearing. Nov. 18 Tr. 20. During the course of the second hearing it was revealed by the lead prosecutor that prior to filing the documents at issue under seal with the court the government made copies of the documents...