The opinion of the court was delivered by: TENNEY
Defendants Jerome Allen, Emil V. Hegyi and Sidney Stein move, pursuant to the Sixth Amendment to the United States Constitution and Fed. R. Crim. P. 48(b), to dismiss the within indictment on the grounds that they have been denied their right to a speedy trial and because the Government has unnecessarily delayed prosecution of this case.
From the papers before me, the salient and essentially undisputed facts appear as follows.
On February 27, 1968, the instant indictment was filed against the five defendants named herein. Inasmuch as defendant Davis is deceased and Blauner has already pleaded guilty to one count of the indictment, the three moving defendants are the only ones remaining to be tried.
The indictment is cast in three counts -- the first charging all three movants with conspiring to violate various sections of the federal securities laws (15 U.S.C. §§ 77q(a), 77x, 78i(a)(2) and 78ff(a)) by inducing members of the public to purchase securities of Terminal Hudson Electronics, Inc. (hereinafter referred to as "Terminal") at allegedly inflated prices during the years 1962 and 1963. Defendant Allen is further charged in counts two and three with fraudulently inducing two persons to purchase shares of Terminal in violation of 15 U.S.C. §§ 77q(a) and 77x.
On March 21, 1968, defendant Hegyi pleaded not guilty. Shortly after, on April 29, 1968, he moved pursuant to Fed. R. Crim. P. 7 and 16 for a bill of particulars and discovery and inspection. Presumably because the indictment charged Mr. Hegyi with unlawful activities occurring between June of 1962 and April of 1963, and was returned on the eve of the running of the statute of limitations, the Government was specifically put on notice by defendant Hegyi's memorandum of law, submitted in support of his April 1968 motions for a bill of particulars and discovery and inspection, that he (Hegyi) already felt that he had "suffered severe prejudice by the delay in initiating the prosecution",
and that any further delay would make it "harder . . . to locate witnesses and relevant documents".
The Government was further advised that the broker with whom Hegyi dealt in Terminal stock, who allegedly would have been a witness in his behalf, was dead, and that several brokerage houses referred to in the indictment had gone out of business. Thus, since the prosecution was aware as of April 1968 of the prejudicial consequences which could result from unnecessary further delay in bringing this case to trial,
it would seem that diligent trial preparation was required in order to insure that defense witnesses and evidence, which were available after indictment, not become lost or otherwise unavailable during the post-indictment, pre-trial period. Indeed, in urging that broad discovery be permitted and a liberal bill ordered, counsel for Hegyi contended that because of the existing pre-indictment delay, the death of one potential witness and the loss of some documents, more detailed disclosure of the Government's case was necessary in order to ascertain what evidence would be required for the defense, and so that brokerage houses and others could be cautioned to save pertinent documents.
In February of 1969, Hegyi's pre-trial motions were granted, permitting him broad discovery (his statements and grand jury testimony, and various records and documents referred to in the indictment) and the benefit of a liberal bill of particulars. Since, as indicated supra, counsel for Hegyi indicated his concern about the pre-indictment delay and possible consequences of any further delay, it was obviously incumbent upon the Government to promptly comply with the court's orders of February 1969.
With regard to defendant Allen, the facts concerning the Government's numerous defaults, to be noted infra, are substantially identical to those set forth with regard to defendant Hegyi, except that discovery was not granted and a bill ordered to be furnished until May 5, 1969, approximately two and one-half months later than in the case of Mr. Hegyi.
In early March of 1969, counsel for Hegyi wrote to the Assistant United States Attorney then in charge of this case, requesting permission to inspect and copy those records and documents ordered to be furnished, and inquiring as to when the bill of particulars would be forthcoming.
Although the record is unclear as to whether a response to this letter was ever sent, there is no doubt that discovery was not furnished and the bill was not forthcoming. In September of 1969, another letter was sent by defense counsel to the attorney in charge of the Securities Fraud Unit, explaining the situation and requesting that the assistant in charge of the case telephone him in order to secure information and documents to which Mr. Hegyi was entitled.
Counsel was assured that he could expect a telephone call from the attorney in charge in the "immediate future".
Although there is again no evidence as to whether defense counsel was in fact contacted, it is abundantly clear that nothing was done with regard to permitting discovery or furnishing a bill. At this point it should be noted that despite defense counsel's diligent, albeit futile, attempts to secure that which he was entitled to, he was in no way obliged to twice remind the Government of its duty to comply with court orders.
Early in September of 1970, this case was assigned to me pursuant to this district's recently adopted system for the individual assignment of criminal cases. On September 29, 1970, a pre-trial conference was held in chambers for the purpose of determining the posture of the case and with a view to agreeing upon a date for trial. On the record, Mr. Hegyi's attorney advised the Court of the Government's default with regard to the discovery and bill to which he was entitled.
The assistant then in charge of the case indicated that he was involved in a protracted trial and therefore was not sufficiently informed about the instant matter. He assured the Court and counsel, however, that at the conclusion of the trial in which he was presently engaged he would commence preparation of the bill and attempt to locate and make available the documents and statements discoverable by the defendant. With regard to setting a trial date, Mr. Hegyi's attorney remarked that: "Whatever date is set, the important thing . . . is to get a look at the records. This case itself was brought almost to the day that the statute of limitations was about to run. It involves records of brokerage firms that are out of business. It is very difficult . . . to prepare a case like this where you are starting off with five years from the day the indictment was brought and then you add the two and a half years that have elapsed."
After it became apparent that a trial date could not be set down for the spring of 1971 because of commitments of other counsel, and that a trial could not then be scheduled for January of 1971 because it appeared that discovery could not be completed sufficiently in advance thereof, November 25, 1970 (subsequently changed to November 24) was set by the Court as the date by which the outstanding bills were to be furnished and discovery and inspection completed.
A subsequent conference was scheduled for November 24 in order to determine whether a trial date could then be selected. The Government attorney was advised to seek assistance in complying with the outstanding orders or to request reassignment of this case, since there then still existed the possibility of trying this indictment in January of 1971.
I further indicated that although I was prepared to try this case in January of 1971, the defendants could not, in fairness, be forced to trial when they had not yet had the discovery to which they were entitled in a case that was "fairly ancient insofar as the facts . . . [were] concerned. . . ."
At the November 24 conference, the Court was advised that the Government was still in default of the outstanding orders directing it to permit discovery and furnish bills of particulars. The Government further advised the Court that it would request a severance as to defendant Blauner and that he be tried first. As indicated supra, Mr. Blauner subsequently pleaded guilty to one of the counts in the indictment. Although the November 24 conference was unattended by a court reporter, it is undisputed that the Government was again ordered to comply with the outstanding orders by the end of the year.
On June 18, 1971, approximately eight months after the November 1970 pre-trial conference, and six months after the second deadline set for the Government to comply with the two and one-half-year-old orders of another judge of this court, defendant Hegyi, quite understandably moved to dismiss the indictment as to him. Shortly thereafter, defendant Allen followed suit.
Although the Government is not in default of any orders with regard to defendant Stein, counsel for Stein joined in the other two motions to dismiss, and urged with equal vigor that his client has been severely prejudiced by the Government's ...