Welsh v. Com.

• Decision Date: 07 April 1992
• Docket Number: No. 1407-90-3,1407-90-3
• Parties: Richard E. WELSH v. COMMONWEALTH of Virginia. Record
• Court: Virginia Court of Appeals

Page 451

416 S.E.2d 451

14 Va.App. 300

Richard E. WELSH v. COMMONWEALTH of Virginia.

Record No. 1407-90-3.

Court of Appeals of Virginia.

April 7, 1992.

Gerald T. Zerkin (Kelley H. Brandt, Robert Godfrey, Gerald T. Zerkin & Assoc., on briefs), for appellant.

Eugene Murphy, Asst. Atty. Gen. (Mary Sue Terry, Atty. Gen., Margaret Ann Walker, Asst. Atty. Gen., on brief), for appellee.

Present: BARROW, COLEMAN and MOON, JJ.

COLEMAN, Judge.

Richard E. Welsh entered a conditional guilty plea to one felony count for selling unregistered securities with intent to defraud the purchaser in violation of Code § 13.1-520(A), one misdemeanor count for transacting business as an unregistered agent in violation of Code § 13.1-520(B), and two misdemeanor counts for unlawfully selling securities in violation of Code § 13.1-520(B). Pursuant to a plea agreement, Welsh reserved the right to appeal the trial court's denial of certain pretrial motions. He contends that the trial court erred (1) in denying his motion to dismiss the indictments or, alternatively, in failing to suppress evidence, because the Commonwealth did not demonstrate that the evidence it intended to use against him was not derived from testimony he gave under a federal grant of immunity; (2) in denying his motion for the judge to recuse himself based on the appearance of bias; and (3) in not dismissing the indictments because the charged statutes are unconstitutionally vague and, as applied to him, violate due process. Welsh's contentions are without merit; thus, we affirm his conviction.

The National Caucus of Labor Committees (NCLC) is an organization founded by Lyndon H. LaRouche, Jr. Richard E. Welsh is a member of NCLC and, from the late 1970's until he pled guilty, he worked as an accountant overseeing the accounting functions and financial activities of NCLC and other corporate entities associated with it, including Publication & General Management, Inc. (PGM). From 1984 until February 17, 1987, when Welsh was indicted, NCLC's corporate entities operated with large financial deficits. In order to offset these deficits, the corporations solicited and obtained loans from individuals across the nation. The loans were evidenced by promissory notes and letters of indebtedness issued by the corporations. In soliciting the loans, lenders were misinformed by the agents about the financial condition of NCLC. Richard Welsh, as corporate secretary of PGM, signed many of the promissory notes and letters of indebtedness on behalf of the corporation. Since promissory notes are securities within the meaning of Code § 13.1-501, Welsh was prosecuted for selling unregistered securities and for transacting a securities business without being registered with the Virginia State Corporation Commission.

In order to address Welsh's assignments of error, particularly the claim that Virginia is barred from prosecuting him because it used his immunized testimony to do so, it is essential to consider the related investigations conducted by the federal and other state governments. In 1986, federal authorities and prosecutors from New York and Virginia began investigating the fund-raising activities of individuals and corporate entities associated with Lyndon LaRouche. These investigative efforts culminated in federal and state search warrants being executed on NCLC offices in Leesburg, Virginia on October 6 and 7, 1986. The federal and state authorities seized a large number of documents, most of which were stored at a warehouse in Springfield, Virginia. They examined the seized documents to identify those which might be used in various grand jury investigations and in subsequent prosecutions.

On February 17, 1987, a Loudoun County grand jury indicted Richard E. Welsh on four felony counts of violating the Virginia Securities Act, Code § 13.1-501 et seq., by selling unregistered securities with intent to defraud purchasers.

Sometime during the late spring or early summer of 1987, Assistant United States Attorney Kent Robinson, the lead prosecutor in the Alexandria federal investigation of LaRouche's fund-raising activities, contacted Virginia's Assistant Attorney General John Russell, who was in charge of the Virginia investigation and prosecutions. Robinson informed Russell that he intended to call Welsh to testify before the Alexandria federal grand jury under an order granting Welsh immunity pursuant to 18 U.S.C. §§ 6001 et seq. ¹ Russell told Robinson that this would present no problem for the Virginia prosecutions, provided that a policy of no access to the federal grand jury material was maintained by the federal and Virginia authorities.

On July 22, 1987, Welsh made the first of several appearances before the Alexandria grand jury and testified under a federal grant of immunity. He further testified before the federal grand jury in Alexandria at various times in 1987 and 1988.

In addition to the Alexandria federal grand jury investigation, a federal grand jury in Boston, Massachusetts indicted several LaRouche fund-raisers. A trial on those indictments began in December, 1987. Assistant United States Attorney John Markham was the lead prosecutor in the Boston trial; he was assisted by Assistant United States Attorney Mark Rasch. Markham called Richard Welsh as a prosecution witness in the Boston prosecution. When Virginia Assistant Attorney General John Russell learned of Markham's intentions, he contacted Markham in January 1988 to remind him that Welsh was under indictment and was to be tried in Virginia. Russell informed Markham that Virginia authorities could not be exposed to Welsh's immunized testimony in Boston without tainting the Virginia prosecutions. In February and March of 1988, Richard Welsh testified in the federal prosecutions in Boston, again under a federal order granting him immunity.

The Alexandria federal grand jury investigation culminated in numerous indictments and a trial. Once more, Richard Welsh was called as a federal witness, and in November and December of 1988, he testified at the Alexandria trial under an order granting him immunity.

In January 1989, the first Virginia prosecution of a LaRouche "fund-raiser," Rochelle Ascher, took place in Loudoun County. Assistant Attorneys General John Russell and George Chabalewski were the prosecutors. Welsh did not testify in that proceeding. Nothing in the record indicates that in Ascher's prosecution Russell or Chabalewski were exposed to Welsh's immunized testimony or any evidence derived from his testimony.

Contemporaneous with the federal and Virginia investigations and prosecutions, New York authorities were investigating several individuals for their roles in the LaRouche fund-raising activities. Initially, New York Assistant Attorney General Kathryn Law was in charge of the New York investigations and prosecutions, but she left the New York Attorney General's office in July 1988. Her assistant, New York Assistant Attorney General Dawn Cardi, became the lead prosecutor. She was assisted by Assistant Attorney General Rebecca Mullane. Cardi and Mullane had contact with federal and Virginia authorities in preparing the New York cases for trial. They had access to Welsh's immunized testimony in their investigation. They did not, however, call Welsh as a witness during the New York trial, which lasted from April until August, 1989. The New York prosecutors and investigators did not discuss with Virginia authorities Welsh's testimony or anything they had learned from his testimony because they were aware that Welsh was under indictment in Virginia.

In September, 1989, the second Virginia prosecution of a LaRouche fund-raiser, Michael Billington, began. Again, Assistant Attorney General John Russell was the lead prosecutor. He was assisted by Assistant Attorney General Barbara Gaden. Although Welsh did not testify in Billington's case, Billington sought to have him subpoenaed as a witness. During a motion concerning whether Welsh would be subpoenaed, the trial judge and defense counsel discussed the evidence Welsh could present based on his immunized federal Alexandria trial testimony. Russell and Gaden were privy to those discussions. Russell was the lead prosecutor in Welsh's case, which led to this appeal. Gaden, insofar as the record shows, has played no part in the prosecution of Welsh.

Welsh's trial on the Virginia charges was scheduled to begin on April 14, 1990. Prior to trial, Welsh moved to have the court dismiss the indictments against him or to suppress evidence. He argued that the Commonwealth had used and proposed to use his immunized testimony to prosecute him in violation of his fifth amendment right not to be compelled to incriminate himself. Welsh contends that the use of his immunized testimony violated the fifth amendment safeguards announced by the United States Supreme Court in Kastigar v. United States, 406 U.S. 441, 92 S.Ct. 1653, 32 L.Ed.2d 212 (1972). He requested a Kastigar hearing pre-trial to compel the Commonwealth to show that his fifth amendment protection against self-incrimination had not been violated. He also moved that the trial judge disclose any extrajudicial sources of information he had received about the case or, in the alternative, that the trial judge recuse himself due to his extrajudicial comments and communications with others that purportedly showed bias by the judge against Lyndon LaRouche's political organization.

Following a hearing on April 12, 1990, the trial judge denied the recusal motion. The evidentiary hearing on the Kastigar issue began on April 24, 1990. After a hearing lasting several days, the trial court concluded that the Commonwealth had met its Kastigar burden by showing sources for its evidence independent of Welsh's immunized testimony and denied the motion to dismiss the indictment or to suppress any of the proposed evidence.

Welsh entered a conditional guilty plea to one felony and three misdemeanor counts of...