The opinion of the court was delivered by: SWEET
After having been found guilty by jury verdict on all counts with which he was charged,
defendant Leonard Horwitz ("Horwitz") moved in timely fashion for a judgment of acquittal pursuant to Rule 29, Fed.R.Crim.P. or, in the alternative, for a new trial pursuant to Rule 33, and for such other relief as might be found appropriate. With the exception of that part of the application dealing with the asserted denial of due process, Horwitz's motions are denied because no significant authorities have been suggested by Horwitz other than those previously considered and ruled upon by the court in connection with his prior motions.
Horwitz has asserted that he was denied due process of law in that he did not receive a fair trial because of the government's selective exercise of its statutory immunity power. In short, Horwitz claims that the government's broad conferral of transactional immunity on key witness and co-conspirator Norman Brodsky ("Brodsky") was improper in the face of its refusal to grant even a limited use immunity
to potential witnesses Jay Emmett ("Emmett") and Solomon Weiss ("Weiss"), whose testimony would have tended to exculpate Horwitz had they not asserted their Fifth Amendment privilege against self incrimination.
Horwitz is entitled to relief on this ground.
Although this is the first occasion on which this issue has been presented in this context, the court has previously issued a written opinion dealing with related questions. See opinion in this action dated December 21, 1978. At the close of the prosecution's case in the first trial (which resulted in a mistrial when the jury was unable to agree on a unanimous verdict) Horwitz moved for a judicial grant of immunity to Emmett and Weiss or for admission into evidence of Emmett and Weiss' grand jury testimony pursuant to Rule 804(b) (5), Fed.R.Evid. In its December 21, 1978 opinion the court denied that motion, noting that it had to consider what was in the "interests of justice," and that one relevant factor was "the use by the government of a grant of immunity to its witnesses and its denial of such a grant to the witnesses sought to be called by Horwitz." December 21, 1978 opinion at 2.
At the second trial, Horwitz subpoenaed Emmett and Weiss, who took the stand and on the advice of counsel, invoked their Fifth Amendment privilege. The court inquired of the prosecution whether it would be willing to grant a limited use immunity to Emmett and Weiss on the condition that their testimony be confined to matters highly relevant to material issues. The prosecutor responded in the negative, stating that both witnesses were the subject of a continuing investigation.
Horwitz and his co-defendants have, throughout both trials, set forth a number of instances of alleged prosecutorial misconduct other than the government's selective exercise of its immunity power. Indeed, certain admissions of the defendant Eliot Weisman ("Weisman") were suppressed after an improper arrest. As far as Horwitz was concerned, however, the circumstances relating to his arrest and grand jury testimony, the use of Brodsky as a government agent to entrap him, and the publicity given to Emmett's and Weiss' exercise of their privilege, as described above, were all matters which, even collectively, neither rise to the level of prosecutorial misconduct sufficient to provide a ground for the relief herein granted nor compel a finding that the prosecutor acted in bad faith or with a bad intent with respect to Horwitz.
Horwitz was deprived of the due process of law because broad immunity was granted to government witness, Brodsky and, to a lesser extent, Kosman,
while two witnesses to the events at issue sought to be called by Horwitz were unavailable because of the government's failure to grant them even limited use immunity.
As indicated in the court's December 21, 1978 opinion, the principal evidence against Horwitz was provided by Brodsky and Kosman.
As discussed more fully below, both Brodsky and Kosman were granted immunity,
and the major thrust of their testimony against Horwitz was that Horwitz stated that he had paid money to Emmett and Weiss to induce them to cause Warner Communications, Inc. ("Warner") to purchase shares of stock in the Westchester Premier Theatre ("the Theatre") an inducement which was concealed from the investing public. The unfairness stemming from the government's refusal to grant even a limited use immunity to Emmett and Weiss is brought into relief by reviewing the evidence against Horwitz and the government's grant of immunity to its own witnesses.
Brodsky testified that Horwitz was present at a meeting with Ferkoff and Roggen at which $ 220,000 in cash was presented in a black attache case. The cash was then used, according to Brodsky, to purchase stock in the public offering to enable the Theatre to reach the required minimum of subscriptions to complete the public offering. Brodsky also said that Weisman had told him that Horwitz had contacts at Warner, namely Emmett and Weiss, and that Warner's purchase of Theatre stock during the public offering was related to a $ 50,000 payoff to those Warner contacts.
According to Brodsky, a complicated set of transactions, briefly here described, involving Horwitz and Warner took place subsequent to the public offering by the Theatre: sometime after June 14, 1973, Horwitz negotiated a transaction which resulted in Warner's purchase of 20,000 shares of Theatre stock in the aftermarket. Horwitz stated that that transaction called for Warner to buy the 20,000 shares at $ 5 per share and to make an additional $ 50,000 payment by means of checks. Horwitz allegedly told Brodsky that a problem had arisen in connection with deciding to whose order such Warner checks should be drawn. Brodsky testified that Horwitz told him that it was decided that Warner would pay the $ 50,000 as follows: (1) a $ 10,000 check would be made payable to Horwitz; (2) a $ 10,000 check would be made payable to Kosman or to someone else; and (3) a $ 30,000 check would be made payable to the Theatre. Regarding the $ 30,000 check, however, Brodsky testified that Horwitz and he (Brodsky), and possibly Weisman, subsequently decided that it should be made payable to Dennis Konner (Brodsky's law partner) and that in that connection a bill would be submitted by Konner to Warner. Horwitz allegedly also told Brodsky that in return for causing Warner to purchase the 20,000 shares in the aftermarket, Emmett wanted $ 20,000 in cash, and Emmett and Weiss wanted additional money to be paid to them at a later date. According to Brodsky, when Horwitz related that the Warner officials wanted the $ 20,000, Brodsky overdrew his checking account, put the cash in a paper bag, and gave it to Horwitz. The government placed in evidence the checks allegedly cashed by Brodsky in this connection.
Brodsky further testified that when he first discussed the Warner transactions with the government, he mistakenly said that he had been present when Weisman gave Horwitz $ 50,000 in connection with Warner's original purchase of Theatre stock. Brodsky's recollection was refreshed, so he said, by his viewing certain documents shown to him by the government. Until he saw those documents he had only a hazy recollection of the transaction.
There was also testimony by Brodsky with respect to a request by Horwitz that Brodsky give to Aaron Gottesman $ 7,500 of a $ 15,000 debt owed by Brodsky to Horwitz.
Other evidence against Horwitz with respect to the securities counts was provided by Kosman, who worked at the Theatre with Horwitz in group and corporate sales. Kosman testified that Horwitz had told him in 1973 that he (Horwitz) had taken an active role at the Theatre and he (Horwitz) had friends and associates including Emmett, Gottesman, and others who bought Theatre stock during the public offering. Kosman also gave testimony which tended to corroborate Brodsky's testimony concerning purchases of Theatre stock by Warner in the aftermarket. Kosman also testified that Horwitz had told him that because Malcolm Tarloff, a Connecticut insurance agent, had purchased Theatre stock during the public offering, he would be given an opportunity to sell a life insurance policy on Weisman's life. Finally, Kosman testified about a conversation he had with Horwitz after the public offering, wherein Horwitz stated that he was nervous about Harry Lipsig, who hadn't received certain additional Theatre stock which he had been promised, according to the government at the time of the public offering.
Other evidence against Horwitz on the securities and securities conspiracy counts consisted of (i) testimony by Ross Carino ("Carino") about a conversation, which took place in an automobile in which Horwitz told Carino that he was on his way to an appointment with a Warner official, and that Emmett would probably get involved in having Warner purchase Theatre stock because Emmett needed money; (ii) statements made by Horwitz and recorded by Brodsky; and (iii) certain documents, such as a July 3, 1973 check for $ 20,000 drawn by Warner and payable to Horwitz.
With respect to the obstruction of justice count, the principal evidence against Horwitz consisted of testimony by Brodsky and tape recordings made by Brodsky. Kosman also testified on the subject as a government witness.
Brodsky testified that in addition to recording his conversations with Horwitz he met with Horwitz at Weisman's suggestion in the fall of 1977 and that Horwitz said that it wasn't his (Horwitz's) place to question Emmett and Weiss' actions in connection with the grand jury investigation, and that they should keep in close contact so ...