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UNITED STATES v. KEOGH

September 5, 1968

UNITED STATES of America, Plaintiff-Respondent,
v.
James Vincent KEOGH, Defendant-Petitioner


Weinfeld, District Judge.


The opinion of the court was delivered by: WEINFELD

WEINFELD, District Judge.

The Court of Appeals remanded this matter for an evidentiary hearing limited to the single issue of the four bank deposits in February, 1961, which the FBI report of November 28, 1961 states could not be identified as to source. *fn1" This Court was also called upon to "determine whether the Government's failure to turn over the report was sufficiently serious in its motivations or consequences to warrant the extraordinary relief of coram nobis." *fn2"

 The mandated hearing has been held. It extended over seven days, during which nineteen witnesses testified, a transcript of more than one thousand pages was compiled, and scores of exhibits were received in evidence. With the record now before it, the Court finds that each of the four deposits derived from an innocent source, and that the Government's attorneys were without motivation in failing to turn over the report to the defense.

 I. THE DEPOSITS

 The testimony, buttressed by incontrovertible documentary proof, establishes that the funds deposited on each of the four occasions could not have been the proceeds of the bribe money. Three of the four items were deposited in Erdman's account at the Chemical Bank New York Trust Company, as follows: Date Deposited Amount Feb. 8, 1961 $1,500.00 Feb. 10, 1961 5,539.94 Feb. 17, 1961 7,500.00

 The deposit of February 8. The Chemical account was opened with a $1500 check deposit on February 8, 1961. Morris J. Schutz and Erdman testified as to this item. Schutz, an attorney, had represented without charge an old friend in a personal injury action. *fn3" Erdman was the treating physician. Upon settlement of the case Schutz paid Erdman $1500 for his services by check, as authorized by his client, and thereafter received Erdman's bill for the charge. On January 31, 1961, in remitting the net proceeds to his client, Schutz referred to the payments for medical services. Schutz no longer has the original check; *fn4" however, the available records of the Chemical Bank substantiate the opening of Erdman's account there on February 8 by the initial deposit of Schutz's $1500 check.

 The deposit of February 10. Testimony as to the source of this deposit was given by witnesses from Puerto Rico - Cesar Gonzalez and an attorney, Harry Woods - and by Erdman. Erdman and others, including Woods, owned stock in a land-holding company in Puerto Rico. Gonzalez purchased all of these shares. The total purchase price of each interest was $6,539.94, of which $1,000 was paid on January 27, 1961. The balance of $5,539.94 was paid on February 7, 1961. Gonzales purchased from the Banco de Ponce in San Juan, Puerto Rico, two cashier's checks, one for $3,000 and the other for $2,497.88. The receipts for the bank checks were produced by Gonzales. The two bank checks, together with Gonzales's personal check for $42.06, totalling $5,539.94, *fn5" were delivered to attorney Woods, who forwarded the three checks to Erdman; on February 10, 1961, they were deposited in Erdman's account in the Chemical Bank.

 The deposit of February 17. This is a check deposit of $7500. The check is that of Ruth Wexler, Dr. Erdman's mother-in-law. Explanation is required of this item, but in end result this deposit, too, is beyond challenge.

 In the late 1950's the Erdmans were engaged in the construction of a substantial residence in Kings Point, Long Island, and had advanced to their contractor before its completion some $30,000. The contractor defaulted; the Erdmans engaged sub-contractors to complete the job and for this purpose from time to time borrowed monies from Mrs. Erdman's mother, Ruth Wexler. Repayments were made when convenient. Late in 1960 the Erdmans contracted to sell the Kings Point residence and moved to an apartment in the Riverdale section of New York City. Almost immediately, they were in the market for a house near the wellknown Riverdale schools, but for one reason or another lost several opportunities to purchase.

 On February 16, 1961, approximately $11,000 was owed to Mrs. Wexler. On that day, Mrs. Erdman gave her mother a check for $7500 on account of the loans. The check was drawn against her account at the Meadow Brook National Bank, Great Neck, Long Island, which she still maintained there although then living in Riverdale. Almost immediately an unexpected opportunity presented itself to purchase the much-sought-for home. The broker suggested that a binder in a larger amount than usual would clinch the matter. Thereupon, Mrs. Erdman asked her mother either to return or destroy the check, but Mrs. Wexler had already deposited it in her account. Accordingly, Mrs. Wexler issued her own check to the order of Dr. Erdman in the sum of $7500. *fn6" This is the check deposited to his account in the Chemical Bank, the third item in the report.

 The focus of inquiry at the hearing shifted to the source of the funds in Mrs. Erdman's account at the Meadow Brook National Bank, against which she had drawn the check given to her mother. The thrust of this aspect of petitioner's claim was that these funds were part of the bribe money delivered by Moore to Erdman. The Erdmans testified to the contrary. They said that the deposit to Mrs. Erdman's account was derived from the contemporaneous redemption of United States savings bonds originally inherited from her father. *fn7" Initially, the relevant bank records, including the deposit slips for the month of February when the transaction occurred, could not be located by bank officials. After the Erdmans had given their explanation, a bank official, testifying a second time, swore the bank had no record of any bond redemption by Mrs. Erdman either for February or for the year 1961 although such redemption records were maintained for a period of ten years.

 Needless to say, since up to this point the sole evidence as to the redemption of the bonds was the Erdmans' uncorroborated word, petitioner's attorney was sure he had struck "pay-dirt" and branded their testimony a "wild story." The Erdmans', however, was not the last word. The search was continued by bank representatives; it yielded results. *fn8" At a reopened hearing limited solely to the matter of the bond redemptions, the same bank official produced a microfilm photograph of a deposit slip on February 16 showing that in fact Mrs. Erdman's account had been credited with $7500 as part of the proceeds of a United States savings bond redemption totalling $7,754.18. *fn9" The deposit slip on its face is marked "Bond Redemption." Even more compelling evidence as to the source of this deposit was produced when the Government finally located and introduced photostats of the very bonds, fifteen in all, that had been redeemed at the Meadow Brook Bank, each in Mrs. Erdman's name and each bearing on its face a bank employee's pencilled notation of its value. The redemption value pencilled on the bonds totals $7,754.18, the sum entered on the bank deposit slip. *fn10"

 On June 26, 1961, Mrs. Wexler was repaid $11,376 by a check drawn on the Erdmans' Chase Manhattan account, upon the face of which appears "Repayment of Loan." The check was drawn against the proceeds of the sale of the Kings Point home.

 The deposit of February 6. This is a $1,000 deposit in the Chase Manhattan Bank. Erdman's best recollection is that it was a transfer from another account. *fn11" While not buttressed by the same type of irrefutable contemporary documentation which explains the other deposits, other documentary evidence demonstrates that the item could be of no avail to petitioner. The first installment of bribe money, $5,000, was received by Moore from England and deposited in the Moore Overseas Corporation account on February 3. *fn12" The money was withdrawn on February 7. ...


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