The opinion of the court was delivered by: CANNELLA
Motion of defendant Arnold Aronoff, to transfer the instant proceedings against him to the United States District Court for the Eastern District of Michigan, pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure, is denied.
Motion of defendant Edward J. Robinson, to transfer the instant proceedings against him to the United States District Court for the Eastern District of Michigan, pursuant to Rule 21(b) of the Federal Rules of Criminal Procedure, is granted.
There are three defendants in this case, Arnold Aronoff, Jerome Castle, and Edward J. Robinson. Aronoff and Robinson have moved under Rule 21(b) for a transfer of their trial to the Eastern District of Michigan, for the convenience of themselves and their witnesses, and in the interest of justice. Castle, however, has not moved for a transfer.
In support of his motion, Robinson avers, Inter alia, that he lives and works in the Detroit area, that a lengthy trial in New York will disrupt his business and cause him serious financial and personal hardships, and that a significant aspect of his defense will be the testimony of character witnesses, nearly all of whom are from the Detroit area. (Robinson has disclosed to the Court, In camera, the names and addresses of character witnesses he plans to call.)
Aronoff avers that he lives and works in the Detroit area, and that all of his witnesses are located there or in Florida. He has not, however, provided the Court a list of witnesses with their addresses and the substance of their testimony.
In opposition to both motions, the Government makes essentially two assertions. First, this trial will last at least three and one-half weeks. Consequently, an additional trial will be costly in terms of prosecutorial and judicial resources, and will be a serious inconvenience to the approximately thirty witnesses the Government intends to call. Ten of these thirty witnesses and most of the Government's documentary evidence are located in the New York area. Second, according to the indictment, the activities of the defendants for which they are charged centered in and focused upon New York. In an additional response to Aronoff's motion, the Government points out that in a civil action by the Securities and Exchange Commission against Aronoff, his attorney moved to have the proceedings therein transferred from Washington, D.C., to New York City "so that all of the federal cases against my client and all of the state cases will be in a single city." Transcript of Proceedings at 40, 42, SEC v. Diversified Industries, Inc., No. 76-2114 (D.D.C. June 15, 1977).
Greater detail as to the foregoing facts is provided in the discussion below.
The indictment charges the defendants with conspiracy to defraud Penn Dixie Industries, Inc. ("Penn Dixie") in connection with the sale of 5,500 acres of Florida land for $ 6 million. (These are approximate figures.) Penn Dixie is a publicly held corporation with its principal offices in New York City. The defendants are also charged with one count of wire fraud, 18 U.S.C. § 1343, and one count of mail fraud, 18 U.S.C. § 1341.
According to the indictment, a Cayman Islands trust created by Aronoff ("the Aronoff Trust") obtained an option to purchase 12,500 acres of land in Florida for $ 5.7 million. Aronoff then allegedly agreed to give Herbert Kesselman, father of the defendant Jerome Castle, a 20% Interest in 7,000 of the 12,500 acres if Castle would help Aronoff induce Penn Dixie to purchase the remaining 5,500 acres at an inflated price. Castle at the time was president and chairman of the board of Penn Dixie. With the aid of the defendant Robinson, allegedly involved in real estate speculation and Aronoff's friend, Aronoff and Castle successfully induced the Penn Dixie board of directors to purchase the 5,500 acres for $ 5.9 million, allegedly without ever disclosing: (1) that a trust controlled by Aronoff was the seller; (2) that what Penn Dixie paid for less than half the tract was more than what the trust had paid for the whole tract; (3) that the land was primarily swampland; and (4) that Aronoff and Castle had a secret agreement for the benefit of themselves and Castle's father.
In furtherance of their plan, the defendants presented to Penn Dixie an "independent" appraisal of the land at $ 1,075 per acre, an "independent" feasibility study as to the land's development potential, and a development proposal prepared by Aronoff and Robinson, stating that Penn Dixie stood to realize a quick profit of 43%. The indictment charges that all three of these documents were fraudulent, and further charges that Aronoff and Castle caused Penn Dixie to pay Robinson $ 17,000 for a "review" of the feasibility study "so that Robinson could be paid for his role in the fraud." Indictment, Count One, para. 7(i) (filed October 10, 1978).
The indictment also specifies various acts committed by the defendants in the Southern District of New York. As to Robinson, it charges that he prepared or assisted in the preparation of fraudulent documents used by Aronoff and Castle in New York, and that he mailed a fraudulent letter to the New York office of Penn Dixie. As to Aronoff, it charges that he personally arranged the transactions involving the Aronoff Trust, that he prepared or directed the preparation of fraudulent documents used in New York, that he mailed a fraudulent letter to New York, and that in June and November of 1973, and again in January 1974, he met with officers or directors of Penn Dixie in New York, and each time personally conveyed fraudulent information concerning the land deal.
Rule 21(b) of the Federal Rules of Criminal Procedure provides as follows:
For the convenience of parties and witnesses, and in the interest of justice, the court upon motion of the defendant may transfer the proceeding as to him or any one or more of the counts thereof to another district.
While the rule vests broad discretion in the trial court to determine whether the interests of justice dictate a transfer, the exercise of this discretion is guided by ...