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UNITED STATES v. DIOGUARDI

July 13, 1971;

UNITED STATES of America
v.
John DIOGUARDI et al., Defendants


Lasker, District Judge.


The opinion of the court was delivered by: LASKER

MEMORANDUM OPINION

LASKER, District Judge.

 Defendants have made numerous and extensive pretrial applications here. Motions have been made for severance, for the filing of bills of particulars including the disclosure of government informers, for extensive discovery and inspection, and for dismissal or consolidation of certain counts of the indictment as multiplicious. Additionally, motions challenging the grand jury and seeking to inquire into its procedures have been made, along with further miscellaneous motions.

 The indictment contains seventy-two counts. It alleges in count one that the defendants conspired to manipulate the sale of the common stock of Imperial Investment Corporation ("Imperial") and to commit certain offenses against the United States in so doing (18 U.S.C. § 371). It then alleges as to all or some of the defendants (a) that they unlawfully offered Imperial stock for sale using the United States mails in their scheme to defraud (counts two through eleven; 15 U.S.C. §§ 77q(a) and 77x, 18 U.S.C. § 2), (b) that they used instrumentalities of interstate commerce and the mails in the purchase and sale of unregistered Imperial stock in contravention of Rule 10b-5 (17 C.F.R. 240.-10b-5) of the Rules of the Securities and Exchange Commission (counts twelve through twenty-seven and counts twenty-eight through thirty-two; 15 U.S.C. §§ 78j (b) and 78ff, 18 U.S.C. § 2), (c) that they used the mails to sell unregistered securities (counts thirty-three through forty-nine, fifty through fifty-one, fifty-two through fifty-four, and fifty-five through fifty-six; 15 U.S.C. §§ 77e and 77x, 18 U.S.C. § 2), and (d) that they used the mails in furtherance of their scheme to defraud (counts fifty-seven through seventy-two; 18 U.S.C. §§ 1341 and 2).

 The several motions will be treated according to the nature of the relief sought. At the outset it should be noted that defendant Bonodono has adopted the motions of defendants Fusco, Savino and Burke, and together these defendants adopt the motions of the co-defendants to the extent that they are not inconsistent with their own. Defendant Layne was arraigned after the making of these applications, is represented by the same counsel as Bonodono, and has made no pretrial motions. Finally, the government has consented to submit one bill of particulars in response to the several motions and their diverse requests, so that the requests granted as to any one defendant accrue to the benefit of all. The government has agreed to the same arrangement as to the motions for discovery and inspection, except that where a given defendant seeks his own statements in the possession of the government, such statements are to be given only to that defendant.

 MOTIONS FOR SEVERANCE

 Eight of the defendants have moved for a severance pursuant to Rule 14 of the Federal Rules of Criminal Procedure. The guiding considerations for the exercise of the court's discretion in such cases have been ably set forth in United States v. Crisona, 271 F. Supp. 150, 154-155 (S.D.N.Y. 1967). Applying the criteria there enumerated, it is clear that none of the defendants has met the burden of demonstrating prejudice such as to warrant a severance.

 Defendants Fusco, Savino, Burke and Bonodono allege that "their cases have been misjoined with the other codefendants," that the entire case is too complex for a trier of fact to distinguish the evidence as against each individual defendant, and that they will be prejudiced thereby. No facts are presented in support of any of these motions. The experience within this very District has demonstrated the contrary; that is, that judges and juries have competently disposed of cases of the magnitude involved here. The "misjoinder" language (evoked under Rule 14, F.R. Cr. P., but germane to Rule 8, F.R. Cr. P.) is not argued by these defendants, nor do we see any basis for challenging the joinder of offenses or of defendants.

 Defendant Gugliaro moves for severance on the grounds that the complexity of the case is such that a jury will be unable to distinguish one defendant from another and "guilt by association" is threatened; that there may be confessions or admissions of co-defendants; that only by severance is Gugliaro's right to call co-defendants as witnesses protected; and finally, that the cost of a long trial is burdensome.

 As noted above, this case is not so complex as to suggest that the jury will be unable to distinguish evidence as against individual defendants. It is difficult to fathom why the mere existence (if any) of confessions by co-defendants would be a ground for severance; and, of course, all defendants are protected from the use of confessions of co-defendants by the rule of Bruton v. United States, 391 U.S. 123, 88 S. Ct. 1620, 20 L. Ed. 2d 476 (1968).

 To prevail in his contention that severance is necessary so that he may call a co-defendant as a witness, Gugliaro must make some showing that the codefendant would testify in exculpation. 8 Moore's Fed. Practice para. 14.04 [4] (1970 Ed.). None has been made here, and the speculation that Gugliaro may wish to call a co-defendant who may or may not choose to rely on Fifth Amendment rights (even if called in a separate trial), and may or may not have anything to say which might be exculpatory for Gugliaro, is too remote to permit the granting of a severance at this point. See United States v. Berman, 24 F.R.D. 26, 28-29 (S.D.N.Y. 1959).

 Gugliaro's further contention that the trial will be lengthy and hence costly to him is not in itself sufficient basis for a severance. In any event, the government observes that it would have to adduce much the same evidence against Gugliaro or any single defendant as is necessary for the trial of all together. In the balance between "economy of judicial manpower and the prompt trial of those accused," the scales here weigh in favor of denying defendant's motion. United States v. Kahaner, 203 F. Supp. 78, 80-81 (S.D.N.Y. 1962).

 Defendant Tramunti argues that pretrial publicity as to other defendants is prejudicial to him, and that he will be prejudiced by trial with the other defendants because "of the nature of the charges in this case and the employments and occupations of some of the other defendants" which Tramunti apparently fears would reflect badly upon him, given his "being engaged in the securities business." (Notice of Tramunti, filed February 26, 1971). No additional facts are put forth by Tramunti, but his application takes on additional meaning from the motion of defendant Hellerman, who also moves for a severance because of the publicity and attention allegedly paid by the media to the involvement of "supposedly wellknown 'Mafia figures.'" (Affidavit of Morris Winter, sworn to February 12, 1971). Hellerman adds the further ground that his right to a fair trial is prejudiced because he was the only defendant arrested rather than being given an opportunity to surrender, and because he was linked by adverse publicity to "allegedly notorious figures."

 As to both Tramunti and Hellerman, no showing has been made that the publicity attending the filing of the indictment and pleas in this case was so extensive or damaging as to give rise to any prejudice. Defendants have not pointed to a single article or news item to support their allegations. In the several months since the indictment was filed, whatever impact any publicity may have had has been diluted and will be further diminished in the three months remaining until trial. The fact that Hellerman may have been the only defendant arrested appears immaterial as to the issue of severance.

 Tramunti's additional application for partial severance on the ground that the counts of the indictment are multiplicious is denied. As stated below, the counts are not found to be multiplicitous; but, in any event, there is no showing as to why multiplicity would be a ground for severance here.

 The final motion for severance is made by defendant Frank. He argues that his personal background as an attorney is clear of criminal conduct, that he is charged not with fraud but only with the sale of unregistered securities, that the length and expense of the joint trial will work an undue hardship on him, that he is willing to stipulate to many facts, that the evidence for any trial against him will necessarily be in Florida, that his interests are adverse to those of other defendants and he may well wish to call other defendants to testify or comment on their unwillingness to testify in summation, and that evidence will adversely reflect upon him even though admitted against other defendants only with limiting instructions.

 However well argued Frank's contentions may be, they are not sufficient at this time to warrant severance. The government closely contests Frank's version of the facts and rejects his offer to stipulate, observing that Frank is alleged to be a part of the conspiracy and not merely a seller of unregistered securities. As with Gugliaro, Frank does not know that he will have to call other defendants or that they will contest his version of the facts, specifically his contention that the only co-defendant he ever knew before indictment was Hellerman. If, at trial, Frank has more compelling grounds for this motion, he may renew it; at this point the considerations urged by him are insufficient to warrant a severance.

 Based upon the above considerations, the motions for severance are dismissed at this time. We are mindful of our "continuing duty at all stages of the trial to grant a severance if prejudice does appear." Schaffer v. United States, 362 U.S. 511, 516, 80 S. Ct. 945, 948, 4 L. Ed. 2d 921 (1960). For the moment, we hold that the moving defendants have failed to establish prejudice of such weight as to support severance now.

 MOTIONS FOR BILLS OF PARTICULARS

 Numerous requests for bills of particulars in the several motions made pursuant to Rule 7(f), F.R. Cr. P., are presented. Although the government has consented to many, a number remain contested.

 The purpose of Rule 7(f) is "to enable the accused to meet the charges presented against him" and accordingly the rule "should be liberally interpreted to carry out this purpose." United States v. O'Connor, 237 F.2d 466, 476 (2d Cir. 1956). Further, as stated in the notes of the Advisory Committee, the 1966 amendments to Rule 7 were intended "to encourage a more liberal attitude by the courts towards bills of particulars without taking away the discretion which courts must have in dealing with such motions in individual cases." See also 8 Moore's Fed. Practice para. 7.06 [1] and [2] (1970 Ed). Criteria for the application of Rule 7 in fraud cases have been collated in United States v. Crisona, supra, 271 F. Supp. at 155-156. At the outset it should be recalled that the proper office of a bill of particulars is not discovery of the government's evidence or legal theory, but to achieve a meaningful clarification of the indictment. See United States v. Louis Carreau, Inc., 42 F.R.D. 408, 411 (S.D.N.Y. 1967); United States v. Klein, 124 F. Supp. 476, 479 (S.D.N.Y. 1954). As to conspiracy indictments, see United States v. Simon, 30 F.R.D. 53 (S.D.N.Y. 1962).

 Applying the relevant principles of law outlined in these authorities to the instant contested requests for particulars the following decisions are made considering each defendant's application separately, after reviewing the common requests as to informants.

 a. Motions for Disclosure of Government Informants

 Defendants Dioguardi and Gugliaro move for identification of any government informers among the co-defendants or co-conspirators. Defendants Fusco, Savino, Burke and Bonodono ask disclosure of whether any informants supplied evidence which they might then move to suppress (request (g), p. 15, and the application at p. 16 under the authority of the Fourth, Fifth and Sixth Amendments to the Constitution).

 Guidance for the determination of these motions comes specifically from Roviaro v. United States, 353 U.S. 53, 58-62, 77 S. Ct. 623, 1 L. Ed. 2d 639 (1957), and United States v. Russ, 362 F.2d 843, 844-846 (2d Cir. 1966). Roviaro instructs that "[where] the disclosure of an informer's identity, or of the contents of his communication, is relevant and helpful to the defense of an accused, or is essential to a fair determination of a cause, the privilege [to withhold disclosure] must give way." Id., 353 U.S. at 60-61, 77 S. Ct. at 628. Here, however, no defendant has made any specific showing as to how either the identity of the informers or the content of their information may be relevant to his defense. In balancing the policy of the privilege against the failure of defendants to show any need for disclosure, the applications are denied without prejudice to renewal if adequately supported.

 b. Requests of Dioguardi

 In addition to the requests consented to, the government shall afford movant an opportunity to copy at his own expense the names of the firms which "entered" the pink sheets referred to in paragraph 8(f) of the indictment. As to request 14, the government shall provide the names of persons to whom false representations were made, but need not disclose the dates and places. United States v. Crisona, supra, 271 F. Supp. at 156.

 The balance of those particulars which have not been withdrawn are denied as seeking evidence, the theory of the government's case, or the names or statements of informants as discussed above.

 c. Requests of Tramunti

 Beyond what the government has consented to, it shall provide the same information as to paragraph 8(s) as ordered above in Dioguardi's request 14. The other requests are denied as improperly seeking the government's evidence. United ...


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