The opinion of the court was delivered by: POLLACK
This case is presently on appeal before a panel of the Court of Appeals (Moore, Hays and Feinberg, C. JJ.) following conviction by a jury of all three defendants of knowingly transporting stolen United States Treasury Bills and of conspiring to do so. 18 U.S.C. §§ 2, 371, 2314.
After hearing argument on a wide spectrum of points of the parties, the Court of Appeals ruled that the convictions were grounded on sufficient evidence, that there were no errors in the reception of evidence, that the criticisms of the charge to the jury were without legal merit, and that the government's summation was not ground for reversal. 482 F.2d 117 (2d Cir. 1973). However, before making a final disposition, the Court of Appeals decided to obtain the rulings of the trial judge on questions raised on appeal under Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963).
In the course of the briefing of the appeals, the defendants Brawer and Ignomirello suggested -- for the first time -- that the government might have suppressed allegedly exculpatory evidence in its possession consisting of certain 1969 statements of three Canadians, the grand jury testimony of one of them and some notes made by the prosecutors of talks with the Canadians. This data was not disclosed to the defendants before or during the trial and it is now claimed that the doctrine of Brady v. Maryland required disclosure thereof. The defendant Kreshik echoed this contention in his reply brief.
The questions thus remanded to this Court were "whether the 1969 statements fit the description of 'exculpatory evidence ' and whether they should have been made available to defendants". (482 F.2d at 136). The Court of Appeals further directed this Court to "[read] and [consider] such material as the government may have had in its files, [and determine] whether this material falls into the category of exculpatory material which 'in any reasonable likelihood [would] have affected the judgment of the jury '." (Id.)
The Court of Appeals said:
Since we have considered carefully all of appellants' various other contentions on appeal and find them to be without merit, and since we are of the opinion that, absent a finding of improper suppression of material evidence on the Brady issue, the evidence justifies affirmance of the judgments of conviction, we will await both a ruling by the district court on the Brady issue and the expanded record before making a final disposition of this appeal. (Id. at 136-137)
Hearings pursuant to this remand were duly held in the District Court. The parties submitted their documentary proofs and the testimony of defendant Kreshik was taken on direct and cross examination; Brawer had testified on the trial and he and Ignomirello were present at the hearings but did not testify. The three Canadians involved in the statements were no strangers to Ignomirello and Brawer, who knew their identity and location since Ignomirello had met and was present at the negotiations with them. There was no claim that Kreshik had met them and at the hearings he sought to throw off any suggestion that he was aware of them or what had transpired with them. He also attempted to deny knowledge of the stolen character of the Bills.
One fact stands out starkly from the hearings. The testimony of the defendant Kreshik in the post-appeal hearings as to his timely awareness of the Canadians and his connection with the scheme and knowledge of the stolen character of the Treasury Bills was plainly incredible. The demeanor evidence and the reasonable inferences to be drawn from his assertions and denials, in the light of all the facts and circumstances disclosed by the trial and hearing records, render his testimony wholly unworthy of belief on his oft repeated assertion in this Court and in the Court of Appeals that he lacked guilty knowledge of who was involved, what was going on and what he was doing to facilitate the criminal venture.
In addition to taking the evidence adduced at the hearings, the Court has read and considered such material as was contained in the government files, as well as certain other documents, to be discussed at length below, which purport to bear in some way upon the characterization and relevance vel non thereof.
Based on the foregoing, and for the reasons indicated hereafter, the Court finds and reports that the 1969 statements and data referred to by the Court of Appeals in no wise fit the description of "exculpatory evidence" as defined in Brady and its progeny.
It is amply evident that in no reasonable likelihood would the disclosure of the questioned statements have affected the verdict of the jury or provided any unknown or unappreciated opportunities to weaken the government's case or to have had an effect on the verdict.
Accordingly, there is no reason why the questioned statements should have been turned over to defendants, either prior to or during the trial.
It is clear from a careful perusal of the trial record that the government established a substantial enough case as to each defendant -- Kreshik, Brawer and Ignomirello -- from which the jury could properly infer their guilt beyond a reasonable doubt, even without the testimony of the witness Maucelli, a coconspirator herein. It is on the question of Maucelli's credibility that defendants base their argument that the 1969 statements are relevant to the present issue. However, since there was a sufficient case apart from his testimony, even assuming both the availability and admissibility of the 1969 statements [each highly questionable at best], defendants' argument is wide of the mark.
As summarized by the Court of Appeals, the facts of the crime are these. On March 6, 1969, the brokerage house of Francis I. duPont & Co. received at its New York offices $342,000 in six-month United States Treasury Bills, issued that same day. One month later, duPont found these bills to have been taken from its possession. At about the time duPont received the bills, i.e., the first week in March, the defendant Kreshik, a priest, approached a banker named Dembe and sought the latter's assistance in the disposition of $262,000 of these securities. Kreshik stated his requirements: The sale must be abroad, and Kreshik would divulge neither the identity of his principal -- a parishioner -- nor that person's reason for desiring to effectuate a foreign sale. Dembe cautioned Kreshik against the possibility that the securities were either stolen or forged. Kreshik responded by personally vouching in all respects for both his principal
and the transaction itself, notwithstanding the fact that Kreshik, according to his own testimony, never saw fit to inquire of his principal concerning the latter's possession of negotiable securities in an amount usually traded only by institutions. None of the actors herein at any time possessed, or requested of one another, any documents evidencing ownership of the Bills.
In all events, Dembe eventually agreed, after satisfying himself that the Bills were at least not counterfeit, to put Kreshik in contact with a person "who has some knowledge of securities in foreign markets." This person turned out to be the defendant Brawer, not theretofore known to Kreshik. After Dembe made the introduction, he departed the scene permanently. In due course, Kreshik delivered the $262,000 face amount of Treasury Bills to Brawer although he testified at the hearings that he neither knew nor ever inquired as to Brawer's background, his phone number, his business or where he lived. According to the position taken by Kreshik's appellate counsel, this was the end of Kreshik's involvement in the transaction. As will be treated more fully below, it is abundantly clear from Kreshik's testimony before this Court at the hearing on remand that this position is not supportable, particularly in light of the facts which are now in the expanded record.
Brawer brought Maucelli1a -- a photographer -- into the picture at this juncture, and thereafter employed him as a combination negotiator/messenger until such time as Maucelli was arrested by the FBI. Brawer outlined certain explicit conditions of the sale to Maucelli. The bills had to be sold abroad, preferably for 90% of the face value, but possibly as low as 85% of face, in what had to be a cash deal, consummated as quickly as possible (within two days at the most), on behalf of but without the disclosure of the identity of the "priest" (Kreshik) for what Brawer intimated might be tax reasons. For their respective parts in the transaction, Brawer and Maucelli were to share equally in 10% of the sales price.
Maucelli promptly telephoned a Canadian, Riel, and arranged to fly to Montreal on Friday, April 11, 1969, after receiving the Bills from Brawer at LaGuardia Airport. Upon his arrival at the airport, Maucelli encountered defendant Ignomirello, who had been requested by Brawer to accompany Maucelli to Canada "just in case." In response to an inquiry from Maucelli, Brawer at this point vouched for the legitimacy of the securities and their absence from any list of stolen securities at that time; he enigmatically refused to certify that they would not be so listed in the future.
In Montreal, Maucelli and Ignomirello met with Riel. Ignomirello "went into the arrangements with J. R. [Riel] and said he was standing in for the owner who preferred to remain anonymous." (Exh. 3501-C). Riel, agreeing to accept a commission of between one and three percent of the face value of the Bills, took the travelers to the offices of North American Express Monorail Company, Ltd., where two officers thereof, Welsch and Bubic, indicated an interest in the securities. Negotiations ensued, during which the Canadians amply manifested an appreciation for the fact that the securities might be stolen.
Arrangements were made for Maucelli and Ignomirello to return to New York and to reestablish contact with Welsch and Bubic at a later time to consummate the sale.
Thereafter, due to Brawer's displeasure at the slow pace of the proceedings, Maucelli traveled to Switzerland to attempt to effect a sale. However, this trip was unproductive.
Upon his return from Europe, Maucelli telephoned the Canadians from the airport in Brawer's presence to ascertain their continued interest in the transaction. Pursuant to this call, Bubic flew to New York and met with Maucelli. Together they proceeded to the Canadian Imperial Bank of Commerce branch in the Wall Street area, where the Bills were deposited. Maucelli and Bubic then flew to Montreal to consummate the deal the next day.
However, further problems developed. The Canadian bank demanded proof of ownership, and Maucelli telephoned to Brawer from Canada for instructions. Brawer directed Maucelli to represent himself as the owner, but this was unacceptable to the bank. Maucelli checked back with Brawer, and the latter authorized a sale of 65% of face value provided the deal could be consummated that very day. Upon the rejection of this offer, the deal fell through and Welsch and Maucelli journeyed to New York to retrieve the securities previously posted at the bank's branch here. Once in New York, Maucelli phoned Brawer from the airport; during this call, Maucelli put Welsch on the phone and Welsch spoke at length to Brawer whom Maucelli had introduced as "Hal." Upon arrival at the New York branch, Maucelli and Welsch were arrested by the FBI.
At the trial, the foregoing facts, among many others, were adduced through, inter alia, the testimony of Dembe, the banker; Maucelli, the coconspirator; O'Brien, an officer of the New York branch of the Canadian bank; Murphy, an officer of duPont; and the grand jury testimony of the defendant Kreshik, which was read into the trial record. The defense consisted of character witnesses for the defendant Kreshik; the testimony of the defendant Brawer and his son, Idol; the testimony of one Sicherer, a friend of Brawer and former partner of Maucelli; and one Zalon, Maucelli's attorney. Kreshik and Ignomirello did not take the witness stand.
The testimony of Zalon was introduced to show the occurrence of a meeting between Brawer and Maucelli a few weeks prior to the trial. The attorney who represented both Brawer and Ignomirello at the trial, Mr. Horan, was also present at this meeting. Coincidentally, this same lawyer was also counsel to the widow of one Anthony Pirozzi, whose deceased husband had in fact been Kreshik's principal and the source of the Treasury Bills in question, and in whose house the meeting in question took place. In the trial context, the significance of the appearance and testimony of Zalon, who was called as a defense witness by Attorney Horan, was to negate an inference which Mr. Horan believed had been raised concerning certain possibly unprofessional conduct on his part. This dealt with the question of whether, and by whom, threats had been made at the pre-trial meeting between Brawer and Maucelli referred to above.
The government elicited testimony that at this meeting Brawer attempted to persuade Maucelli to seek to withdraw his plea of guilty and stand trial with the other defendants, thus presenting "a united front at the trial." Further, that Brawer offered a monetary reward to Maucelli, the reimbursement of his attorney's fees, and the procurement of the testimony of a psychiatrist to the effect that Maucelli was incompetent at the time of his guilty plea.
Conflicting inferences arising from this meeting were propounded by the parties at the trial. However, a new and wholly different significance has been added thereto by the post-appeal hearings. To set the matter in proper focus requires a chronological account of the manner in which the material which defendants now seek to characterize as Brady matter came into the possession of the government as well as the manner in which the defendants purportedly came to be aware of its existence, and the manner in which they sought to inform the Court of Appeals of its nondisclosure and persuade that Court of its significance.
In April of 1969, following the arrest of Maucelli and Welsch in New York by the FBI, certain statements were taken by American and Canadian law enforcement officers. These were introduced into evidence at the post-appeal hearings before this Court and consist of the following: (1) A sworn statement given under the Canada Evidence Act on April 17, 1969 by Jacques Riel to Canadian law enforcement officials, and marked Exhibit 2 herein; (2) a signed statement given April 24, 1969 by Jacques Riel to agents of the FBI in New York, and marked Exhibit 3 herein; (3) a sworn statement under the Canada Evidence Act given by Ranko M. Bubic on April 17, 1969 to Canadian law enforcement officials, and marked Exhibit 4 herein; (4) a signed statement given on April 18, 1969 by Joseph Welsch to FBI agents in New York, and marked Exhibit 5A, 5B, 5C herein; and also (5) certain testimony given before the grand jury of this District by Joseph Welsch on April 22, 1973 in connection with the investigation of this matter, the minutes of which were marked as Exhibit 6 herein. Furthermore, hand-written notes were made by two Assistant United States Attorneys of their separate interviews with Jacques Riel; these were marked Exhibits 7 and 8. It is undisputed that all of the above items were in the files of the government and were never turned over to any defendant either prior to or during trial.
In the initial stages of the investigation, the government was only aware that some person or persons unknown had attempted to sell stolen Treasury Bills. An investigation was commencing, and any persons having possible exposure to the Bills were being interrogated. It is clear from the geometric progression of the inquiry and from the tenor of the statements obtained that the investigators were exploring and developing all leads as they emerged; furthermore, attention was focusing on the Canadians as possible targets of the inquiry. The statements referred to above were obtained in this context. None of the statements contained evidence of the guilt or innocence of any defendant; none was exculpatory of the defendants.
In contrast to this limited knowledge on the part of the government, both as to what had happened and who had been involved, the defendants Brawer, Ignomirello and Kreshik were in a position to have a clear view of both what had occurred and who had been involved. Ignomirello, of course, had first hand knowledge of both the identity and the whereabouts of Welsch, Bubic, and Riel, having himself been one of the conspirators who had traveled to Canada and dealt with these men there. Brawer admittedly possessed this same information through Ignomirello, whom he had brought into this matter and whom he characterized as a good and close friend, saying, "Ralph had the entire listings of everybody's address and phone numbers, which we still have." This was clear to the Court of Appeals, which stated that "Brawer and Ignomirello [knew] of [the Canadians] existence" in that "the latter's identity and addresses were known to these two [defendants]." (482 F.2d at 135 & id. at n. 29). As to the knowledge of the defendant Kreshik, the Court of Appeals felt that the argument for a finding of a lack of such knowledge was "more compelling, since there was no evidence that Kreshik did in fact know anything about the Canadians." (Id. n. 29). However, on remand the defendant Kreshik has, by his own testimony, supplied this defect in the proof, if one in fact ever existed. It is now apparent that he too knew -- back in April 1969 -- that one of the places which Brawer (and through him, Maucelli and Ignomirello) had either gone to or dealt with in his efforts to sell the securities was a "Canadian House." In fact, Kreshik was in contact with Brawer at about this time in respect to whom Brawer was meeting with and where Brawer was going.
Furthermore, if he did not previously know what Brawer was up to -- a position impossible to maintain in the face of the record on this proceeding -- Kreshik certainly had it spelled out for him at a meeting of Brawer and Pirozzi arranged and attended by Kreshik in late April or early May 1969. Kreshik had reported to Pirozzi that the man who was selling the Bills had been arrested because they were stolen securities. Pirozzi had denied that the Bills were stolen and had doubted the story of an arrest; he had countered by telling Kreshik that the man to whom Kreshik had given the Bills had taken off with them and had not been arrested and that Kreshik was to answer for them. Kreshik then drove Pirozzi to meet Brawer at a New Jersey diner where Brawer reported to Pirozzi on the dealings with the "house from Canada." Kreshik conveniently was in the men's room -- he said -- while the explanations were being made. Thereafter, Kreshik and Brawer met again, also at an eating place, to confer further.
Sometime after January 1972, having been indicted, Kreshik retained two local New Jersey attorneys to represent him. After speaking to him, and based on information received from him, they went to the New York branch of the Canadian bank which had been involved in the transactions set forth above. This was the same branch where Bubic and Maucelli had deposited the Bills; it was also the same branch where Maucelli and Welsch had been arrested by the FBI upon their return to recover the Bills. O'Brien, subsequently a trial witness for the government, was an officer of this branch. He had personal knowledge of Bubic's identity and participation herein, having dealt with the latter in person at New York on at least one occasion (April 16, 1969) prior to Welsch's arrest at O'Brien's bank. Each of these two Canadians, Welsch and Bubic, had given O'Brien their business cards, which identified them as being associated with the firm of North American Express Monorail Co. Thus, the identity and significance of both Welsch and Bubic who, as principals, were the only Canadians with any conceivable knowledge of the details of a discount offer -- as opposed to Riel, who only acted as a finder -- were readily ascertainable by Kreshik's counsel at the time of their visit to the Wall Street office of the bank. The pre-trial steps of the defense were taken against this background.
On March 1, 1972, Kreshik, through his counsel, demanded of the government, inter alia, the immediate disclosure of any evidence in its possession which might tend to exculpate him under the doctrine of Brady v. Maryland. The trial Assistant United States Attorney responded on March 10, 1972 by a letter to Kreshik's counsel, stating that "the Government, of course, consents to furnish you with any matter exculpatory of your client which might come into its possession during the pendency of this case. At the present time there is none."
After the government advised Kreshik's counsel that there was no material exculpatory of Kreshik in its possession at the time, the parties continued their preparations for trial. In late June 1972, a meeting took place at the home of Pirozzi's widow, Pirozzi having died in the interim. Present were Messrs. Maucelli and Brawer, the trial lawyer for Brawer and Ignomirello, Mr. Horan, and Maucelli's lawyer, Mr. Zalon. According to Brawer's trial testimony on direct examination, Maucelli advised the others that, despite his own belief in his own innocence, he was under great pressure from the Assistant United States Attorney to testify for the government at the trial. In this regard, he stated that, although he was not certain what the prosecutor wanted him to say, he had gotten the feeling that, if he would testify to having offered the Bills at a "cheaper price" -- i.e., a greater discount from face value -- the government would be satisfied. Of course, counsel's reason for bringing this out at trial related to the defense theory, argued to the jury, that any such discount was a pure fabrication on Maucelli's part, probably concocted at the prosecutor's behest. However, Brawer's recital of what Maucelli said at this meeting illustrates the fact that, on the eve of trial, the persons at that meeting -- Messrs. Brawer, Ignomirello, and Horan -- had every reason to believe that at the trial Maucelli would testify regarding the discount, whether true or not. The meeting was tape-recorded by Brawer's representative; Kreshik learned this at the trial.
Shortly thereafter, Mr. Horan, in his capacity as attorney for the widow Pirozzi, spoke with the defendant Kreshik to report, according to the latter, that Mrs. Pirozzi would bring a replevin action, seeking possession of the Bills. Such an action would support a notion that Pirozzi was in fact the true owner of the Bills, -- a peculiar contention made by Kreshik throughout, despite the evidence to the contrary. This also parallels what Maucelli was told at the meeting, just before the trial, with Brawer and Horan, where Maucelli was told that such an action would be commenced in conjunction with the suggested change of his plea of guilty to not guilty. In any event, whatever the true intent of Mrs. Pirozzi in this regard, it is not disputed that Mr. Horan, counsel for two of the three co-defendants about to go on trial, spoke with Kreshik, the only defendant not represented by him, shortly after having been informed by Maucelli that the latter would, in order to placate the prosecutor, testify to an offer of the Bills at a substantial discount from their market value. To believe, as Kreshik would have it, that no mention was made of Maucelli's forthcoming appearance and testimony as a government witness, taxes credulity too far. Under all the facts and circumstances, and on the basis of the demeanor of the witness and probabilities, all of Kreshik's testimony to that effect at the post-appeal hearing is hereby rejected in its entirety as unworthy of belief.
On July 5, 1972 the trial commenced. In his opening remarks to the jury, the prosecutor, in the presence of all defendants and their counsel, made explicitly clear the government's intention to prove that Brawer, acting on authority from Kreshik, had authorized Maucelli to offer the Bills at a substantial discount from their face value, and that Maucelli had done so. On the following day, Thursday, July 6, 1972, the witness Maucelli actually testified about his dealings with the Canadians wherein as a last ditch effort to negotiate a quick sale -- pursuant to authority received from Brawer by phone -- he offered to sell the Bills at 65% of face value, provided, as required by Brawer, the deal could be consummated the same day. Moreover, before the close of Maucelli's direct testimony, the government turned over the material required by 18 U.S.C. § 3500, the Jencks Act, which included a lengthy statement made by Maucelli wherein he stated that Riel had informed him that "if the items were stolen he could still arrange for the sale, but at a greater discount -- 50% of value."
With this material added to what defendants already were informed of, it was crystal clear to all concerned -- Brawer, Ignomirello, and Kreshik, and their respective counsel -- that a proposal of a substantial discount by Maucelli to the Canadians would be a matter to be conjured with in the case. Yet, the authorization by Brawer to Maucelli of such a discount was not questioned by anyone when Brawer was on the witness stand; Brawer's attention was not directed to the claimed authorization from him although he admitted he may have participated in the phone call from Montreal in which it was expressed. After being fully apprised in the premises by the meeting before the trial and the prosecutor's opening statement and Maucelli's statements disclosed pursuant to the Jencks Act, none of the defendants could claim surprise by the damaging testimony of Brawer's authorization to offer the Bills at a deep discount for immediate cash and Maucelli's compliance therewith.
If anyone wanted to, or believed he could, contradict Maucelli on this point, the opportunity and the time to do so were at hand. Brawer, while on the stand, could have denied authorizing Maucelli to make such an offer. No such denial was forthcoming. Clearly all three defendants knew both the identity and whereabouts of the Canadians, particularly Welsch and Bubic, the only persons to whom Maucelli testified the 65% offer was made. Kreshik knew of the Canadians; he had talked with Brawer, and he had been given newspaper clippings on the arrest made at the New York branch of the ...