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UNITED STATES v. HILLIARD

May 12, 1977

UNITED STATES OF AMERICA, Plaintiff,
v.
CHARLES W. HILLIARD, DAVID HOOVER, DEAN HOUSE, JOHN OSORIO and JAMES G. RYAN, Defendants



The opinion of the court was delivered by: CONNER

MEMORANDUM AND ORDER

 CONNER, D.J.:

 The miscellany of motions now before the Court addresses a two-count indictment filed on January 17, 1977. Count One of the indictment charges that the present five defendants conspired, from October 1975 through December 1975, to deal in counterfeit United States Treasury Bills in violation of 18 U.S.C. § 371. Count Two charges that defendant Ryan committed perjury, in violation of 18 U.S.C. § 1623, during the course of his December 29, 1975 appearance before a grand jury then investigating suspected activities involving counterfeited Government securities.

 According to the indictment's recital, the alleged conspiracy began with the October 1975 introduction of defendant Osorio to one Dr. Lurie, through the offices of defendant Ryan. Osorio and his co-defendants, the indictment alleges, thereafter entered into certain negotiations with Lurie, their immediate object to purchase, through Lurie, some six million dollars in counterfeited treasury bills, their ultimate goal to acquire, via such financing, control of a North Carolina insurance company.

 I.

 Among the overt acts alleged in the indictment is a November 17, 1975 telephone discussion between Ryan and Lurie, a conversation that, unbeknown to Ryan, was tape-recorded by Lurie, with the tape's thereafter being delivered to the Government. It is the recording of that discussion, punctuated as it was by elliptical references to Lurie's past and contemplated contacts with Osorio, to "a six million dollar package," and to "paper [costing] about twenty points," that forms at once the basis for the perjury count against Ryan and the grounding of the latter's present challenge to that count.

 Count Two, the subject of Ryan's motion to dismiss, rests upon the following portion of Ryan's testimony before the grand jury that ultimately returned the indictment at bar:

 
"Q. Now, the first time Mr. Lurie informed you in any way, shape or form that he was having business dealings with Mr. Osorio, was sometime after December 10; is that correct?
 
"A. Well, actually he has not informed me yet.
 
"Q. And in fact prior to that time, indeed subsequent to that time, this fellow Dr. Lurie never informed you of any dealings he was having whatsoever with Mr. Osorio; is that correct?
 
"A. That is correct."

 In launching his attack upon Count Two, Ryan argues that its dismissal is required under the Second Circuit's ruling in United States v. Jacobs, 531 F.2d 87 (2d Cir.), aff'd on reh., 547 F.2d 772 (2d Cir. 1976). In that case, a Strike Force Attorney had failed to advise the defendant at the outset of her grand jury testimony that she was a "target" of the grand jury's investigation. On the basis of that omission, dismissal of the perjury count arising from defendant's testimony was affirmed on appeal. The absence of a "target" warning, the Court of Appeals unhappily noted, signalled a departure by the Strike Force from long-standing usages of the United States Attorneys in this Circuit, under whose direction the former was obliged to operate during the inquest phase of its cases. On rehearing, the Second Circuit -- although acknowledging that a "target" warning was not dictated by constitutional principle, see United States v. Mandujano, 425 U.S. 564, 48 L. Ed. 2d 212, 96 S. Ct. 1768 (1976) -- nonetheless upheld its earlier disposition, which it characterized as a "one-time sanction," imposed under its supervisory powers, "to encourage uniformity of practice (whatever the practice might be) between the Strike Force and the United States Attorney in the same district." 547 F.2d at 773 (emphasis omitted).

 Citing the recording of his November 17, 1975 conversation with Lurie as proof that he had become a target of the grand jury's inquiry prior to December 29, 1975, and maintaining that he was not advised of such status by the Strike Force attorney who examined him, Ryan urges that we take our instruction from Jacobs and impose a like sanction in the present case. It is enough to note, however, that such invitation is singularly misdirected.

 It may be assumed, for argument's sake at least, that Ryan was indeed a subject of the grand jury's investigation when called to give his testimony and that the warnings offered him preliminarily *fn1" by the Strike Force attorney fell short of the generic "target" warning's mark. For the same purpose, it may be assumed as well that this Court is invested with the "supervisory powers" to which Ryan apparently credits it. One fact nonetheless remains to disclose the ill grace of Ryan's posture here: in December 1976, the Strike Force in this district was officially merged into the United States Attorney's Office. Hence, the avowed "didactic purpose" of the Second Circuit's ruling in Jacobs, i.e., "to make ...


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