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November 11, 1977


The opinion of the court was delivered by: BONSAL


 Defendants Provenzano and Bentro move for a dismissal of the superseding and original indictments.

 This criminal proceeding has had a long and tortuous history. On December 9, 1975 an indictment was filed (75 Cr. 1194) charging the defendants Anthony Provenzano, Anthony Bentro and Lawrence Paladino with conspiracy to give or offer money in the form of kickbacks to influence the trustee of the New York State Teamsters Conference Employee Welfare and Pension Benefit Plan to approve a $2.3 million mortgage loan to the owners of the Hotel Woodstock in New York City. The Government filed a Notice of Readiness on January 29, 1976. After the usual pretrial discovery proceedings, the Government informed the Court that its principal witness, Herman Goldfarb, was suffering from a serious heart ailment and requested that the trial be postponed. On August 26, 1976, the trial date was set for November 30, 1976.

 On June 22, 1976 a Grand Jury indicted the defendant Provenzano and others, charging violations of 18 U.S.C. § 1201 including conspiracy to kidnap and kidnapping for the purpose of murder "on or about June 5, 1961." This indictment was assigned to Judge Stewart (76 Cr. 580). By memorandum decision dated October 29, 1976 Judge Stewart dismissed 76 Cr. 580 as barred by the five-year statute of limitations, 18 U.S.C. § 3282, which decision was subsequently affirmed on appeal. On December 9, 1976, while the Government's appeal was pending, pursuant to a stipulation between the Government and the defendants the trial of the original indictment (75 Cr. 1194) was adjourned until after the dismissal of indictment 76 Cr. 580 had been finally upheld or until the trial of said indictment, whichever first occurred. The reason for this was the fear that the publicity engendered by trying the instant indictment first might result in prejudice either to the Government or to the defendant Provenzano in 76 Cr. 580.

 With respect to the defendant Bentro, the Government originally consented to a severance because of his ill health. After further investigation, the Government moved to have Bentro again joined as a defendant with the others, and after a hearing, the motion was granted. *fn1"

 On September 1, 1977 a pretrial conference was held, at which the trial was scheduled for October 3, 1977.

 On September 21, 1977 -- 12 days before the scheduled trial date -- a different Grand Jury handed up a superseding indictment (S 75 Cr. 1194) which changed the status of Paladino from a defendant to an unindicted co-conspirator, added three other names as unindicted co-conspirators who had not been named in the original indictment, and made substantial revisions in the form of the indictment. The remaining defendants, Provenzano and Bentro, moved to adjourn the scheduled trial. After hearing argument on September 27, 1977, the Court concluded that owing to the superseding indictment the interests of justice required another adjournment, and the trial date was adjourned to November 3, 1977.

 On November 3, 1977, the morning of the trial, at approximately 8:15 a.m., Mr. Edelbaum, attorney for the defendant Provenzano, appeared in chambers with a copy of a letter dated October 7, 1977 from the principal Government witness, Herman Goldfarb, to Assistant United States Attorney Barbara Jones, stating that he had received a copy of the letter the day before from the U.S. Attorney's Office as Brady material. A copy of this letter is attached to this opinion.

 In the letter, Mr. Goldfarb stated that he had told Mr. Aronwald (then Attorney-in-Charge of the Justice Department's Organized Crime Strike Force for the Southern District of New York) that the Government didn't have a case against Provenzano and that he had not been looking at Mr. Provenzano when the allegedly incriminating statement on the kickback ("we got to give Rocky ten") was made at his July 11, 1974 meeting with both defendants. (This was the only meeting of the many mentioned in the indictment where Mr. Provenzano was present.) He further stated that Mr. Aronwald had assured him that a verification of the tape made of Mr. Provenzano's voice had come back positive and that Goldfarb's "statement to the Grand Jury would be proper." *fn2"

 The jury panel (the jury having been ordered sequestered) was not brought up to the courtroom so that the defendants could make motions to dismiss the indictment because of the contents of Goldfarb's letter. After reading the Grand Jury minutes in camera, the Court denied the motions since the matter appeared primarily to go to the question of Goldfarb's credibility. However, the defendants' attorneys were permitted to interrogate Mr. Goldfarb without the presence of the Government. Gregory v. United States, 125 U.S. App. D.C. 140, 369 F.2d 185, 188 (1966); Coppolino v. Helpern, 266 F. Supp. 930, 935 (S.D.N.Y. 1967). This interrogation took place the same afternoon, Goldfarb having consented thereto and being accompanied by his lawyer. Following their interrogation, and on the same afternoon, defendants Provenzano and Bentro renewed their motions to dismiss the indictment on the basis of the information obtained by them from Goldfarb. Following the defendants' presentation, the hearing was adjourned until the following morning to give the Government an opportunity to respond.

 The following morning, November 4, the Government argued in opposition to the defendants' motions, again urging that the indictments were proper and that the only matters which had been raised involved credibility, which was for the jury to determine. The Court reserved on the defendants' motions and directed a brief evidentiary hearing, which was held the same morning. At the hearing, which was held in open court, Aronwald, who had represented the Government before the Grand Jury in connection with the original indictment, and Goldfarb, both testified. Thereafter, the parties submitted briefs in connection with the motions to dismiss, and argument thereon was held on the morning of November 9, 1977.

 The in camera examination of the Grand Jury testimony established that the superseding indictment was based in large part on the transcript of Goldfarb's testimony before the first Grand Jury in December 1975. It seemed to the Court that the Government knew, or should have known, at the time of the superseding indictment that Goldfarb had, to a great degree, recanted his prior testimony given to the first Grand Jury. Moreover, the testimony at the hearing satisfies the Court (1) that Goldfarb had never met or seen Provenzano until the July 11, 1974 meeting, and (2) that a number of matters were discussed at this meeting involving not only the Hotel Woodstock but other deals and Goldfarb was unsure whether the statement as to the alleged kickback was in connection with the proposed Hotel Woodstock loan.

 Following the argument, the Court indicated to counsel that it would dismiss the superseding indictment and would give further consideration to the motion of the defendants to dismiss the original 1975 indictment as well.

 The Fifth Amendment of the United States Constitution guarantees that "[no] person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury." The Supreme Court has repeatedly emphasized that this "constitutional guarantee presupposes an investigative body 'acting independently of either prosecuting attorney or judge.'" United States v. Dionisio, 410 U.S. 1, 16, 35 L. Ed. 2d 67, 93 S. Ct. 764 (1972), quoting Stirone v. United States, 361 U.S. 212, 218, 4 L. Ed. 2d 252, 80 S. Ct. 270 (1959). "[The] institution [of the grand jury] . . . is designed as a means, not only of bringing to trial persons accused of public offenses upon just grounds, but also as a means of protecting the citizen against unfounded accusation, whether it comes from government, or be prompted by partisan passion or private enmity." Ex parte Bain, 121 U.S. 1, 11, 30 L. Ed. 849, 7 S. Ct. 781 (1887) (quoting grand jury charge of Mr. Justice Field); accord, Wood v. Georgia, 370 U.S. 375, 390, 8 L. Ed. 2d 569, 82 S. Ct. 1364 (1962).

 Unfortunately, many commentators feel that the Grand Jury has lost its independence and has become a rubber stamp for prosecutors, no longer providing the protection the framers of the Fifth Amendment had contemplated. Recently, however, the courts have sought to restore this "protective bulwark standing solidly between the ordinary citizen and an overzealous prosecutor." United States v. Dionisio, supra at 16-17. And the Second Circuit has taken the lead.

 Aware of its potential to mislead a Grand Jury, this Circuit has condemned prosecutors' undue reliance upon hearsay before a Grand Jury, particularly where the prosecutor has deceived the grand jurors as to "the shoddy merchandise" they are receiving or where the case involves "a high probability that with eyewitness rather than hearsay testimony the grand jury would not have indicted." United States v. Estepa, 471 F.2d 1132, 1137 (2d Cir. 1972), quoting United States v. Leibowitz, 420 F.2d 39, 42 (2d Cir. 1969). In its attempt to insure the right of the accused "to have the grand jury make the charge on its own judgment," Stirone v. United States, supra at 219, this Circuit has directed that hearsay evidence only be used "when direct testimony is unavailable or when it is demonstrably inconvenient to summon witnesses able to testify to facts from personal knowledge." United States v. Umans, 368 F.2d 725, 730 (2d Cir. 1966).


 Defendants have moved to dismiss the superseding indictment on the grounds that it was presented with hearsay evidence in violation of the chain of decisions culminating with United States v. Estepa, supra. The circumstances surrounding the return of the superseding indictment persuade the Court to agree.

 In obtaining the superseding indictment, the Government utilized the 22-month-old and somewhat dubious Grand Jury testimony of Mr. Goldfarb, even though Goldfarb was in protective custody and available to testify. According to his October 7, 1977 letter to Assistant United States Attorney Ms. Jones, Mr. Goldfarb had expressed his doubts to the Government about the viability of its case against Provenzano before the superseding indictment was obtained. Moreover, at the November 4th hearing, Mr. Goldfarb repeatedly explained that he was not certain but only believed circumstantially of the accuracy of his identification of ...

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